SUMMARY JUDGMENT DENIED TO JPM BASED ON ISSUES RAISED BY NARDI DEPOSITION

February 28, 2014

On Tuesday, February 25, 2014, a Pinellas County (St. Petersburg) Florida Judge denied a Motion for Summary Judgment filed by JPMorgan Chase Bank NA in connection with a WaMu origination. Jeff Barnes, Esq. represents the homeowner and argued the Motion in person in court on Tuesday.

JPM claimed to have come into the right to enforce the Note and Mortgage through “a chain of mergers” (JPM’s Complaint, paragraph 4). As we all know, there was never any “merger” between WaMu and JPM; the deal structure was an asset purchase (and also the purchase of certain defined liabilities) from the FDIC, and that JPM acquired whatever assets the failed WaMu had in its inventory as of September 25, 2008 which were set forth in the deal documents. As we also know, WaMu had sold off almost all of its originations into securitizations prior to its failure, so the most that JPM would have acquired from the FDIC consisted of servicing rights, if that.

The 330-page deposition of former JPM and WaMu mortgage management employee Lawrence Nardi (which deposition was taken in another Florida case) was filed by the homeowner. Mr. Nardi, who was with WaMu through the time that it failed and then through the period during the FDIC asset purchase and thereafter remaining with JPM, testified under oath that there was never, ever, a mortgage loan schedule in connection with the asset purchase, and that it never existed. He also testified that there is no evidence of any transfer of any mortgage loans from WaMu to JPM: no assignments, no allonges, and no endorsements.

The homeowner also filed a excerpt from JPM’s Motion for Summary Judgment in a case filed against it and the FDIC by Deutsche Bank in the District of Columbia Federal Court, where JPM admits that it was NOT the “successor in interest” to WaMu, and that it only purchased certain defined assets and liabilities. This admission, of course, is in direct contradiction to the position taken by JPM in thousands of foreclosures nationally where it asserts that it is the “successor in interest” to WaMu.

The Judge recognized the issue of material fact where JPM is taking the position that it has the right to enforce the Note, but JPM’s own former management employee testified under oath that there is no evidence of any transfer of any mortgage loans from WaMu to JPM and no schedule of any mortgage loans purchased from the FDIC.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

INCREDIBLE DECISION FROM ARIZONA COURT OF APPEALS: HOMEOWNER PERMITTED TO DEFEND FORECLOSURE BASED ON CLAIM OF PAYMENT AGAINST LOAN BY THIRD PARTY SOURCES, PROCEDURAL AND SUBSTANTIVE UNCONSCIONABILITY, NEGLIGENCE PER SE, AND NEGLIGENT ADMINISTRATION OF A LOAN MOD

February 18, 2014

In a 33-page decision, the Arizona Court of Appeals reversed the trial court’s dismissal of a homeowner’s Complaint challenging a foreclosure instituted by Deutsche Bank as Trustee of an IndyMac securitization. The decision in Steinberger v. IndyMac was issued on January 30, 2014. The Court of Appeals accepted jurisdiction of a Special Action filed by the homeowner from her case which she had filed in the Maricopa County Superior Court.

The case concerned a loan which had been given to an 87 year old homeowner. The Court found that the allegations in the Complaint that the loan contained terms which were unusual, one-sided, oppressive, and not explained to the borrower properly constituted claims for procedural and substantive unconscionability. The Court also held that a claim of negligence per se was permissible where the homeowner alleged that the substitution of trustee was recorded knowing that that the person who signed it did so without authority, and that the MERS Assignments were made to entities which were known not to exist at the time of the assignments.

The Court also permitted a claim for negligent performance of a duty in connection with the loan mod process where the homeowner was told that he had to be in default in order to have a loan mod made; he went into default based on this representation; and through the negligence of the defendant the loan mod was never made, thus creating a default and subjecting the homeowner to foreclosure.

However, perhaps the most significant portion of the holding is toward the end, where the Court permitted the claim for payment/discharge of a debt on the homeowner’s allegation that OneWest had been paid all or at least 80% of the amounts claimed due under the loan due to an FDIC Shared Loss Agreement which was attached to the Complaint. The Court permitted the claim even though, at the pleading stage, it was not clear whether the agreement applied to the particular loan.

The Court found, however, that “the agreement does appear to provide that, in exchange for OneWest’s assumption of IndyMac Federal’s loans, the FDIC would reimburse OneWest at 80% for any default in payments on these loans.” The homeowner alleged that this agreement, “combined with insurance coverage and/or other sources of reimbursement”, has resulted in OneWest’s either being paid in full on the Note or having received 80% of the payments due on the Note.

This setoff against the amounts claimed due on the loan, in securitization cases due to insurance and other sources, is a matter we have been advancing since 2008. We have had discovery on these issues repeatedly compelled, through never produced: the banks will take a dismissal or attorneys’ fees against them rather than produce this information. This case is the first that we know of which now permits an affirmative claim to be made against a foreclosing “bank” that it has been paid in full from third party sources.

Bravo to the Arizona Court of Appeals for taking the time and effort to debunk so many “bank attorney myths” in foreclosure cases.

We thank one of our dedicated readers for this opinion, a copy of which is available upon e-mail request.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

EVICTION STOPPED AT LAST MINUTE IN TENNESSEE; NEW MEXICO SUPREME COURT VACATES FORECLOSURE, ESTABLISHING STATE LAW ON RESTRICTIONS ON MERS AND ALLEGED TRANSFERS OF LOANS TO SECURITIZED TRUSTS

February 14, 2014

FDN attorneys stopped an eviction in Tennessee literally the day before it was to take place. The homeowner had been challenging the foreclosure pro se. A court order had scheduled an eviction to take place on Wednesday, February 12, 2014.

FDN Tennessee counsel John Higgins, Esq. and Jeff Barnes, Esq. were retained late in the afternoon on Friday, February 7, 2014. Mr. Barnes prepared the Complaint to challenge the underlying foreclosure, Emergency Motion for TRO and Preliminary Injunction with memorandum of law, and client affidavit, while Mr. Higgins prepared the Petition for Writ of Certiorari and Chancery Court filings. Mr. Higgins filed all papers on Tuesday, February 11. The TRO was granted and the eviction stopped literally hours before it was to take place the next day.

In New Mexico, the Supreme Court yesterday issued its 18-page opinion in the matter of Bank of New York v. Romero, which reversed the foreclosure judgment of the District Court and also reversed the Court of Appeals’ decision which had affirmed the District Court’s judgment. The case involved an alleged transfer of the homeowner’s loan to a securitization through an after-the-fact MERS assignment and a claim that the “endorsements”, which appeared on the second version of the Note (presented at trial) somehow gave BONY the right to enforce. None of the endorsements were to BONY.

The Supreme Court found the MERS assignment had no validity and transferred nothing for several reasons, and also held that the testimony of the bank’s witness, who simply reviewed records, did not provide any evidence that a transfer had in fact occurred. The opinion further discusses the predatory aspect of the loan and how it violated New Mexico’s “anti-flipping” statute, which also precludes giving someone a loan without the lender investigating facts which should have been readily available as to the homeowner’s ability to repay the loan notwithstanding any provisions in the loan documents.

The full opinion is available online, or by e-mailing us a request for an electronic copy. We thank several of our followers for sending us this opinion.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

FDN ATTORNEYS OBTAIN DISMISSAL OF 9TH CASE IN NEW JERSEY; RHODE ISLAND COURT PERMITS HOMEOWNERS TO ATTACK MERS ASSIGNMENT

February 7, 2014

For the 9th time, FDN attorneys in New Jersey have obtained a dismissal of a foreclosure action which was originally filed by foreclosure mill Zucker Goldberg and Ackerman, but with the case being later transferred to foreclosure mill Phelan Hallinan. The reason for this 9th dismissal was the same as the others which preceded it: the Plaintiff’s steadfast refusal to comply with discovery. Local New Jersey counsel Michael Jacobson, Esq. of the Cooper Levenson Firm represented the homeowners, assisted by consulting counsel Jeff Barnes, Esq.

The Zucker Firm has a long history of intentionally refusing to comply with discovery. In fact, in one case in Morris County where Mr. Barnes represented the homeowners, the Judge, during a Case Management Conference, specifically directed the attorney for Zucker to comply with the homeowner’s discovery by producing documents responsive to Mr. Barnes’ Request for Production and producing a representative for deposition. The Zucker attorney stated to the Judge “We’re not going to do that. We object to the discovery, so we are not going to produce it and are not going to produce a representative for deposition.” The Judge stated that she would dismiss the case if the discovery and representative were not produced. Zucker did not produce the discovery or a representative, and the case was dismissed.

Separately, on February 3, 2014, the Rhode Island Supreme Court has issued its opinion in the matter of Chhun v. MERS, No. 2012-298-Appeal, which reversed the Superior Court’s granting of a Motion to Dismiss which had been filed by MERS, Deutsche Bank, Aurora Loan Services LLC, and Domestic Bank. The homeowners had sued for declaratory relief, quiet title, and punitive damages, alleging that the MERS Assignment had no effect as it was signed by someone who was an employee of Aurora (and not MERS), and that MERS did not order the assignment to Aurora. The Court found that these allegations satisfied the requisite pleading standard and reversed the Superior Court’s ruling.

The Superior Court had taken the position that the homeowners did not have standing to challenge the assignment. The homeowners challenged Aurora’s authority to foreclose and asserted that the mortgage was not validly assigned.The Supreme Court found that these allegations stated a claim for which relief could be granted.

This decision is further evidence of the evolution of the recent body of case law nationally which is consistently permitting homeowners to challenge assignments. The decisions in Horace (Alabama), Hendricks (Michigan), Williams (Hawaii), Johnson, Naranjo, and Glaski (California), Erobobo (New York), Saldivar (Texas), and the recent Cosajay decision from the Rhode Island Federal court demonstrate where the law is heading on this issue. Further, the Drouin case from the New Hampshire Federal court distinguishes “attacks” on assignments from no assignment having occurred as a matter of fact in situations where the original lender was out of business long before the assignment.

We thank one of our dedicated followers for bringing the Chhun decision to our attention today.

Finally, oral argument was conducted in the Oregon Court of Appeals on Wednesday, February 5, 2014 per our prior post. The Court took the matter under submission and will issue an opinion in the coming months.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com