February 17, 2010

At approximately 8:00 a.m. PDT today, an Oregon court entered a Temporary Restraining Order stopping the sale of a home in Oregon based upon the court filings of FDN attorney Jeff Barnes, Esq. through local Oregon counsel Lesley Haskell, Esq. This is the third foreclosure sale which FDN has stopped in the state of Oregon since January 22, 2010.

This case is particularly disturbing and insidious. Counsel for Northwest Trustee Services had appeared at the TRO hearing on February 16 and presented to the Court what it claimed to be an Assignment of Mortgage to the securitized mortgage loan trust (with HSBC Bank as “trustee”) from Wells Fargo. The same attorney represented both Wells Fargo and HSBC in connection with the “Assignment”, which assigned a toxic, nonperforming loan from Wells Fargo to the securitized mortgage loan trust, which is a violation of the trust agreements and also a violation of rules and regulations of the Securities and Exchange Commission governing securitized mortgage loan trusts (and may further constitute one or more violations of attorney regulation rules of practice in the State of Oregon). The attorney thus assigned a known toxic asset from one client to another without any evidence of consent or knowledge of this act by the clients.

This case demonstrates that history does indeed repeat itself, as this case is strikingly similar to a prior decision in New York involving Deutsche Bank as trustee of a securitized mortgage loan trust where Deutsche Bank accepted an assignment of a toxic, nonperforming loan which was 142 days in default at the time of the assignment and where the same law Firm represented MERS as the assignor in the transfer of the toxic loan and Deutsche Bank (as “trustee”) as the assignee thereof. In addition to voiding the MERS assignment, Judge Arthur M. Schack compelled the plaintiff’s attorney to show whether MERS and Deutsche Bank were aware of the simultaneous representation by Plaintiff’s counsel, whether both consented to such representation, and an explanation of why Deutsche Bank would purchase a toxic loan from MERS. Judge Schack also wondered whether Deutsche Bank violated a corporate fiduciary duty to the noteholders of the securities collateralized by the trust when it purchased a loan which was 142 days in default at the time of purchase, and whether the noteholders were made aware of this action as well.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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