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FLORIDA APPELLATE COURTS HOLD THAT POSSESSION OF NOTE WITH UNDATED STAMP DOES NOT PROVE STANDING

August 21, 2015

August 21, 2015

This time of year is generally slow in foreclosure litigation as many of the Judges and attorneys are on vacation. However, the Florida appellate courts have been issuing opinions reversing foreclosure judgments on almost a weekly basis.

For years, mere possession of an alleged note with a “blank endorsement” (which we call a “stamp”) was enough to carry the day to prove standing without any evidence of authority or authentication of the stamp and despite homeowner defenses challenging the alleged “endorsement”. In many jurisdictions, it still is.

However, the Florida appellate courts have taken the lead in delving into the real issues surrounding the alleged “endorsements”, none of which are ever dated. In the recent opinion of Kelly v. Bank of New York as Trustee for CWALT, Inc. ALT 2007-25, Florida 1st District Court of Appeal Case No. 1D13-2778 (opinion issued July 14, 2015), the Court reversed the final judgment of foreclosure finding that BNY had failed to prove standing on multiple grounds, and despite testimony from the representative of a prior servicer that the “collateral file” was sent to foreclosure counsel prior to the filing of the Complaint.

The Court held that where the plaintiff files the original note after filing suit, an undated blank endorsement on the note is insufficient to prove standing at the time the initial complaint was filed, citing to Tilus v. AS Michai LLC, 161 So.3d 1284 at 1286 (Fla. 4th DCA 2015). The Court further held that when a plaintiff asserts standing based on an undated endorsement, it must show that the endorsement occurred before the filing of the complaint through additional evidence, citing to Lloyd v. Bank of NY Mellon, 160 So.3d 513 at 515 (Fla. 4th DCA 2015).

The Court found that the only “additional evidence” was the testimony from a mortgage resolution associate for a prior servicer who did not testify as to when the endorsement occurred. The fact that the testimony established only that the original plaintiff was in possession of the note at the time the complaint was filed was not enough to establish standing in the absence of evidence as to when the endorsement occurred.

We have found that in addition to these stamps not being dated, there are often situations where (a) the stamp is not even on the signature page of the note but was placed on the back of one of the pages; (b) the alleged signor of the stamp was not an employee of the entity whose name appears with the stamp; (c) that the signature on the stamp is one of many variations of the signature of the signer; and (d) that there are multiple versions of the note, both with and without stamps and filed at different stages of the litigation.

Just two days ago, the Florida 4th District Court of Appeal issued its opinion in Perez v. Deutsche Bank National Trust Company, etc., Case No. 4D13-4812, which reversed another final judgment of foreclosure involving Ocwen where the representative testified that the note was provided to Deutsche Bank at the time that the securitization trust was created in connection with the PSA. However, the representative did not know when Ocwen requested the note.

The Court held that Deutsche Bank failed to establish standing because no evidence was introduced showing that the note was transferred to Deutsche Bank prior to the inception of the lawsuit. Like prior cases, the “endorsement” was undated. The representative was unable to testify when the note was endorsed, and the PSA was not introduced into evidence. The Court also held that even if the PSA had been introduced into evidence, this would be insufficient to establish standing as there was no evidence that the indorsee had the intent to transfer any interest to the trustee, citing to Balch v. LaSalle Bank, N.A., 2015 WL 641534 (Fla. 4th DCA, Aug. 5, 2015).

The Perez Court also cited to Jarvis v. Deutsche Bank, 40 Fla. L. Weekly D1416 (Fla. 4th DCA, June 17, 2015) which held that evidence that the note was physically transferred into a trust prior to Deutsche Bank filing its complaint does not, by itself, establish standing.

These decisions finally deal with the real issues as to what proof of standing is all about, and dispel the myth that mere possession of a note with a blank and undated stamp is enough to take away someone’s home. Bravo and kudos to the Florida appellate courts. The rest of the courts in this country should take notice and hold foreclosing parties to their evidentiary burdens.

We thank several of our dedicated followers for bringing these important appellate decisions to our attention.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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SECOND TENNESSEE JUDGE IN ONE WEEK RULES AGAINST BANK OF NEW YORK IN SECURITIZATION CASE

July 27, 2015

July 27, 2015

Last Friday, July 24, a Franklin (Williamson County), Tennessee Circuit Judge ruled against BNY, denying its Motion to Dismiss and staying a foreclosure. Per our prior post, last Monday, July 20, a Circuit Judge in Dandridge (Jefferson County), Tennessee also ruled against BNY denying its motion to dissolve a restraining order precluding any sale of the property during the course of the homeowners’ challenge to the foreclosure. The homeowners in that case are represented by Jeff Barnes, Esq. and local TN counsel Andrew Farmer, Esq.

The Franklin case involves MERS and BNY as the alleged trustee of a Countrywide securitization where two separate trusts are claiming ownership of the loan (a CWMBS and a CWALT). Jeff Barnes, Esq. represents the homeowners together with local TN counsel John Higgins, Esq. Mr. Barnes and drafted the opposition to BNY’s Motion to Dismiss, and the Judge issued his ruling in open court without any oral argument, although counsel for BNY repeatedly challenged the Judge’s oral pronouncement that he was denying BNY’s motion.

The MERS issues are currently on appeal in Tennessee following the Ditto decision which, like many other appellate courts throughout the US, held that MERS has no independent interest in real property and no protected interest in real property by being named beneficiary or nominee, and cited case law that MERS is contractually prohibited  from exercising any rights with respect to mortgages including foreclosure.

The rulings on Monday and Friday of last week, in both eastern and middle Tennessee, demonstrate that Tennessee courts are no longer blindly accepting the “we have the Note, therefore we win” position consistently taken by the “banks” and servicers.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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TENNESSEE JUDGE DECLINES TO DISSOLVE RESTRAINING ORDER PRECLUDING SALE OR TO REQUIRE POSTING OF BOND IN AWL CASE

July 21, 2015

July 21, 2015

Yesterday, a Dandridge (Jefferson County), Tennessee Circuit Court Judge declined, for the second time in 30 months, to dissolve a restraining Order precluding any nonjudicial sale and also declined to require the homeowners to post a bond as a condition of precluding any sale in a Bank of NY securitization case involving America’s Wholesale Lender (AWL) as the alleged original lender. The Judge’s ruling reiterates the Court’s previous denial of the same request made by BNY back in 2012.

Jeff Barnes, Esq. represents the homeowners together with local TN counsel Andrew Farmer, Esq. Mr. Barnes wrote the responsive brief and argued the matter yesterday in the Jefferson County courthouse in Dandridge, TN.

The homeowners originally filed suit in 2010 challenging BNY’s alleged right to seek a non-judicial foreclosure. The Circuit Court Judge entered a restraining order on Motion of the homeowners prepared and filed by Mr. Barnes. No bond was required as Rule 65.05(1) of the Tennessee Rules of Civil Procedure provides that a bond is for the payment of costs and damages which the party being enjoined may be shown to have suffered while being enjoined. The intent of the Rule is that there has to be evidence of such damages, which go in part into the future. BNY presented no such evidence, and the homeowners are challenging BNY’s standing to seek any relief at all.

BNY had also previously filed a Motion to Dismiss the homeowners’ Complaint, which Motion was denied. BNY had also moved to stay discovery, which was also denied.

In the 30 months since the entry of the original restraining Order, BNY did nothing to appeal or otherwise challenge the Order, and presented no evidence of any alleged damages being suffered while being enjoined from selling the property during the pendency of the litigation. The Judge stated “the Defendant [BNY] is no worse off than it was back in 2012″.

The homeowners are not only challenging BNY’s lack of standing to seek any relief due to no evidence of a lawful transfer to the securitization trust, but also that the loan may have been paid down or paid off from insurances, credit default swaps, and the like. They are also challenging any alleged right to enforce the loan in view of the Nash decision from Florida which found that AWL never existed and the loan was thus void resulting in no valid obligation to enforce. The Judge stated that “these are legitimate questions”.

In the end, the Judge stated that he had not been presented with any evidence by which he could calculate a bond, especially as the question of who owns the loan remains unanswered, and thus continued the imposition of the restraining Order without the requirement of a bond.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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OREGON COURT DENIES SUMMARY JUDGMENT IN BANK OF NEW YORK SECURITIZATION CASE; PERMITS EXPERT TESTIMONY ON ISSUE OF LOAN TRANSFER AND AUTHENTICITY OF TRANSFER DOCUMENTS AND HOLDS THAT BORROWER HAS STANDING TO ATTACK ALLEGED ASSIGNMENT AND TRANSFER OF LOAN FROM AMERICA’S WHOLESALE LENDER

July 10, 2015

July 10, 2015

Yesterday, an Oregon Circuit Court Judge issued a detailed, multi-page ruling denying BONY’s Motion for Summary Judgment in a case involving a purported transfer of a loan (allegedly) originated by America’s Wholesale Lender to a securitization trust. The ruling is of statewide significance for several reasons, including the fact that there is presently no Oregon appellate law on the issues.

Jeff Barnes, Esq. represents the homeowners together with local Oregon counsel Philip Anderson, Esq. The Motion was argued in open court by Mr. Barnes, who drafted the responsive papers, on June 25, with the ruling being issued late yesterday afternoon.

Oregon has four issues in a judicial foreclosure, the first being whether the foreclosing party is the “PETE” (person entitled to enforce). The Court denied BONY’s MSJ on this threshold requirement, and based on the arguments made by Mr. Barnes and the filing of an ORCP 47E Affidavit as to an expert witness, permitted the homeowners to present expert testimony as to the authenticity and legal relationships involved in the transaction, citing a recent (2015) Oregon appellate decision on the issue of the scope and requirements of Rule 47E Affidavits.

BONY had argued that no expert testimony was needed in what it called “a simple foreclosure case” The 2015 case sets forth that such Affidavits need only to contain certain language and are evaluated in view of the theory of the case. This case involves numerous complex issues including but not limited to the America’s Wholesale Lender issues (previously discussed on this website) and the securitization issues, including the legitimacy of any alleged transfer under the factual circumstances of the case.

The second and perhaps most important ruling was that the Court, in denying summary judgment on BONY’s claim that the homeowners did not have standing to challenge the sale, transfer, and assignment of the Note and DOT, held that the homeowners do have such standing “to challenge the legitimacy of Plaintiff’s claim that they, as the alleged assignee, possessor, and holder of the Note and Deed of Trust, are the proper party to enforce them.”

This ruling is in accord with the U.S. Court of Appeals for the 6th Circuit’s October, 2014 opinion in the Slorp v. Lerner decision (previously discussed on this website) which clarified the flawed and improperly narrow interpretation of the 6th Circuit’s prior opinion in the 2010 Livonia Properties case, which bank and servicer attorneys (erroneously) argued precluded homeowner challenges to assignments and transfers of mortgage loans. The 1st Circuit Court of Appeals is also in accord pursuant to its holding in the Cosajay decision, which held that its “decision finding standing is buttressed by Defendants’ extreme and incongruous argument that would allow Ms. Cosajay no relief because she is not a party to the assignment.”

The case now progresses to full trial on the merits, including the issues involving the alleged “loan” by America’s Wholesale Lender; whether there was any interest to transfer, etc.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FLORIDA APPELLATE COURT REVERSES FINAL JUDGMENT IN FAVOR OF JPMORGAN CHASE AND DIRECTS ENTRY OF FINAL JUDGMENT IN FAVOR OF HOMEOWNERS; AMERICA’S WHOLESALE LENDER ISSUES BEING BROUGHT TO FORE IN TWO STATES

July 9, 2015

July 9, 2015

We hope everyone had a safe and happy July 4th holiday. Mr. Barnes recently completed a month-long “tour of duty” throughout the US involving trials and hearings in several states including Florida, Oregon, Tennessee, Illinois, and Colorado, and is preparing for another battery of court appearances in New Jersey, Colorado, Florida, and Tennessee.

The Florida 4th District Court of Appeal has reversed a Final Judgment of Foreclosure which a Ft. Lauderdale, Florida Circuit Judge had entered in favor of JPMorgan Chase Bank; dismissed the foreclosure due to lack of standing; and directed that judgment be entered in favor of the homeowner in the matter of Wright v. JPMorgan Chase Bank N.A., 4th DCA Case No. 4D14-565. We thank one of our dedicated followers for bringing this case to our attention.

The case is of particular interest as the original Note was in favor of Chase Bank USA, which JPM claimed to be its wholly-owned subsidiary. JPM argued that it obtained servicing rights over the loan and that as the parent company of the wholly owned subsidiary, it had the right to enforce a Note in favor of its subsidiary.

The 4th DCA disagreed, holding that Chase Bank was a separate legal entity and as such, the parent company could not exercise the rights of a subsidiary, citing two appellate decisions on this issue. The Court held that absent evidence that the loan was purchased by JPM, it could not enforce the Note. JPM did not introduce any purchase agreement or other evidence that it had acquired the Note.

The Florida 4th DCA has consistently been one of the few appellate courts in the entire country to really examine the issues involved in foreclosures and hold the foreclosing party to its legal burdens. Other Florida appellate courts are recently beginning to do likewise.

We have been receiving many inquiries since our publication on the America’s Wholesale Lender issues raised by the Nash decision in Florida. Mr. Barnes currently has cases pending in two states on the issue of whether AWL ever legally existed and thus whether any alleged “successor” thereto may seek to enforce a Note in favor of a non-existent, unlicensed mortgage “Lender.”

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FORECLOSURE MILL BUTLER & HOSCH SHUTS DOWN

May 18, 2015

May 18, 2015

Butler & Hosch, which was (according to the press) one of the largest foreclosure mills in the country, has shut down and has filed an Assignment for the benefit of creditors. The Firm was based in Orlando, Florida and had offices in numerous states and was prosecuting approximately 60,000 foreclosure cases, having admittedly picked up “many files from the defunct Law Offices of David J. Stern”.

The press has stated that its 700 employees were “stunned” at the news, which was apparently delivered at 5:00 p.m. last Thursday in a conference call with an attorney from another large law Firm which handles foreclosures in Florida.

Thus, those 60,000 cases will be in limbo until the former clients of B&H retain another law Firm, which may be difficult as many of the files are most likely infected with David Stern problems (e.g. fraudulently manufactured documents, bogus assignments, backdated notaries, fraudulent claims, etc.).

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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HOW “BANK” LAWYERS HAVE PERVERTED THE CASE LAW

May 11, 2015

May 11, 2015

As our readers know, whenever a homeowner seeks to challenge an assignment of mortgage (or deed of trust), “bank” attorneys chant the mantra “the borrower has no standing to challenge an assignment as he is not a party to it”, allegedly relying on the body of case law which stemmed from the decision of the US Court of Appeals for the 6th Circuit in Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, 399 F. App’x 97 (6th Cir. 2010).  Unfortunately, many courts across the US jumped on the bandwagon, apparently having never actually read the full opinion or the 6th Circuit’s more recent decision in Slorp v. Lerner et al., No. 13-3402 (6th Cir. September 29, 2014), which clarified the erroneous application of Livonia Properties (with citation to several post-Livonia Properties decisions) and which the 6th Circuit itself stated (as to the Livonia Properties case) ”has confounded some courts and litigants”.

In partially reversing the trial court, the 6th Circuit held the following:

The sweeping rule that the district court extrapolated from Livonia Properties dwarfs our actual holding in that case. The district court in Livonia Properties stated that an individual “who is not a party to an assignment lacks standing to challenge that assignment”, and our Livonia Properties opinion quoted and endorsed that general statement, perhaps inartfully. But we quickly limited the scope of that rule, clarifying that a non-party homeowner may challenge the validity of an assignment to establish the assignee’s lack of title, among other defects. See also Carmack v. Bank of N.Y. Mellon, 534 F. App’x 508-511-12 (6th Cir. 2013)(”Livonia’s statement on standing should not be read broadly to preclude all borrowers from challenging the validity of mortgage assignments under Michigan law.”) Thus, a non-party homeowner may challenge a putative assignment’s validity on the basis that it was not effective to pass legal title to the putative assignee. See Conlin v. Mortg. Elec. Registration Sys., 714 F.3d 355,361 (6th Cir. 2013); …see also Woods v. Wells Fargo Bank, N.A., 733 F.3d 349, 353-354 (1st Cir. 2013)(”the debtor may also question a plaintiff’s lack of title or right to sue”). (emphasis added)

The Slorp opinion went on to distinguish the facts in Livonia Properties to clarify that the homeowner lacked “standing” to assert that the assignment was not properly recorded or suffered from some technical defects that prevented the assignee from establishing chain of title, but that in the Slorp case, the homeowner alleged that Bank of America, the putative assignee, held neither the mortgage nor the note when it filed the foreclosure action because the parties lacked the authority to assign his mortgage to Bank of America. The court stated: “That distinction makes all the difference”.

However, “bank” attorneys have consistently taken the position that the rejected “sweeping” rule applies. Without a proper argument from the homeowner to highlight the error, courts across the US have gone along with this erroneous non-principle of law. In fact, we just reviewed a decision from a state supreme court which was recently issued (and issued well after Slorp) which still clung to the erroneous “Livonia Properties” rule, without even mentioning the later cases which clarified the error.

In a second example, a District Court of Appeal in Florida previously issued the same type of “sweeping” rule stating that a borrower has no standing to challenge noncompliance with the PSA, grounded on the same argument (that the borrower is not a party to the PSA contract). Although the opinion deals ONLY with PSAs, “bank” attorneys have taken the position that this “rule” applies to prospectuses, SEC 15D filings, SEC interim reports, and all manner of documents relating to securitization trusts. Thus, once again, the “bank” attorneys have perverted the actual holding of case law, and without proper opposition, the courts are again “drinking the Kool-Aid”.

Granted, many courts do not have full-time law clerks to really dig into the arguments made by the “banks” and servicers, but there should be at least a minimal inquiry. A simple WestLaw search on Livonia Properties would have revealed the subsequent decisions which clarified and limited it. The fact that this is apparently not being done is a sad commentary on the system, and leads the public to question the integrity of and distrust the judicial system.

Jeff Barnes, Esq.

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MASSIVE FORECLOSURE FRAUD ON PART OF DAVID J. STERN MAY BECOME SUBJECT OF ACTIONS TO VACATE TENS OF THOUSANDS OF FORECLOSURES

May 7, 2015

May 7, 2015

Jeff Barnes, Esq. has been approached by several homeowners who were the victims of fraudulent foreclosure actions filed by the Law Offices of David J. Stern to institute litigation to vacate the foreclosures based on evidence from numerous sources including official investigations against the Stern law Firm. Mr. Barnes has been presented with depositions and other documentary evidence demonstrating the massive pattern of corporate fraud engaged in by the Stern law Firm acting as agent for numerous “banks” and servicers, who knew or should have known of the fraud but did nothing about it other than to cause it to continue.

Mr. Barnes has been requested to file an action naming the Stern law Firm, its employees who manufactured the fraudulent documents and foreclosure foreclosure papers, and the banks and servicers who used the Stern law Firm to perpetrate the fraudulent foreclosures which numbered in the tens of thousands.

Florida law provides that a judgment can be opened or vacated if it was obtained by fraud, or if it is void, and also has a “crime/fraud” exception to the attorney/client privilege which does not protect communications between a party and its attorney if those communications were made in furtherance of the perpetration of or for the purpose of committing a crime or fraud even if the crime or fraud is not consummated. Fla.Stat. sec. 90.502 as explained in First Union National Bank v. Turney, 824 So.2d 172 (Fla. 1st DCA 2001). Obviously the fraudulent Stern foreclosures were “completed”.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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LANCASTER COUNTY, NEBRASKA DISTRICT COURT DENIES BANK OF AMERICA’S MOTION TO DISMISS CLAIMS FOR DECLARATORY RELIEF, QUIET TITLE, ACCOUNTING, CONVERSION, AND INJUNCTIVE RELIEF

April 23, 2015

April 23, 2015

A District Court Judge in Lancaster County, Nebraska has denied Motions to Dismiss filed by Bank of America which were directed toward the homeowner’s claims against BOA and the alleged substitute trustee for declaratory relief, quiet title, accounting, conversion, and injunctive relief. The homeowner is represented by Jeff Barnes, Esq. and local Nebraska counsel Doug Ruge, Esq. Mr. Barnes prepared the Complaint; Mr. Ruge prepared the Brief in opposition to the Motion to Dismiss.

The Court entered a narrative order which made a very important specific finding and legal distinction. The Order recites that the homeowner is not asserting that the holder of the Note and DOT could not assign them, but rather that she is questioning whether what was done actually accomplished that goal. The case involved an alleged MERS assignment. The Court held that the homeowner is entitled to a determination that the party to whom she pays is the party to who she owes the money, and that the other causes of action spring from the possibility of a finding that the defendants are not the proper parties to proceed with the foreclosure.

This is a very significant ruling. It distinguishes the bank and servicer mantra that borrowers do not have standing to challenge assignments (which, by the way, they do pursuant to the recent Slorp decision from the U.S. Court of Appeals for the 6th Circuit which clarified their prior opinion in Livonia Properties which the 6th Circuit held “confounded courts and litigants” across the country).

The Court’s reasoning provides a sound basis for the assertion of an action for declaratory relief and all of the other causes of action alleged while also clarifying an important legal distinction as to a challenge to an alleged transfer of a Note and DOT.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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FINAL JUDGMENT ENTERED FOR HOMEOWNERS IN KEY WEST, FLORIDA SECURITIZATION CASE

April 8, 2015

April 8, 2015

A Monroe County (Florida Keys) Circuit Judge has today entered Final Judgment in favor of the homeowners in a securitization case where Citibank was the “indenture trustee” for a Bear Stearns securitization. Jeff Barnes, Esq. represented the homeowners and tried the case in Key West on February 10, 2015.

The homeowners’ expert witness Richard Kahn (www.fpg-usa.com), who was the former national product manager for Merrill Lynch’s mortgage-backed securities division on Wall Street whose responsibilities included insuring that all mortgage loans transferred to securitization trusts complied with the trust documents and applicable laws, testified that the Plaintiff did not and never came into any interest in the Note or Mortgage. Citibank offered no countervailing expert and presented no evidence to rebut the expert’s testimony.

The Court found that the homeowners’ affirmative defenses of lack of the Plaintiff acquiring any interest in the Note and Mortgage were not proven to be legally insufficient and were not rebutted by the preponderance of the evidence, and thus the homeowners prevailed on these affirmative defenses. The Court found that the Plaintiff never acquired standing to have instituted the action.

Under Florida law, the homeowners may now seek recovery of their attorneys’ fees and costs as well from Citibank.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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