SUMMARY JUDGMENT DENIED TO BNY IN AWL SECURITIZATION CASE IN TENNESSEE

September 11, 2016

Summary judgment was denied to Bank of NY as the claimed “trustee” of a 2005 CWALT (Countrywide) securitization involving America’s Wholesale Lender (AWL) in Sevierville, Tennessee on Friday, September 9, 2016. after extended argument before the Court. Jeff Barnes, Esq. represents the homeowners together with local TN counsel and Tennessee State Representative Andrew Farmer, Esq. Mr. Barnes drafted all of the legal memoranda and argued the case before the Court last Friday.

Both sides had filed Motions for Summary Judgment: the homeowners on the basis that AWL never existed (per the findings of the St. Lucie County, FL Circuit Court in the Dimant  decision), and BNY based on a “blank endorsement” theory. After extensive briefing and argument, the Judge stated: “the issues in this case are greatly disputed. There are issues as to whether the lender existed; who owns and loan; and whether it has been paid off”.

This is a significant victory in multiple respects: it calls into question the alleged “existence” of AWL, which claims in the Deed of Trust to be “a corporation organized and existing under the laws of the State of New York” which the Dimant court found not to be true, and in fact determined that AWL never existed at all. One of the significant legal issues is whether a non-existent lender may (a) transfer any interest in the Note and mortgage instrument (here, a DOT) to anyone, and (b) whether a downline transferee may seek to enforce an interest which the original alleged “lender” never had.

Another significant issue is whether the loan has been paid off through credit enhancements, outright insurances, or otherwise (e.g. though a credit default swap), which directly affects BNY’s claim of the alleged amount owed. The homeowners’ expert, former Wall Street securtization professional Richard Kahn, has already testified that there are protections in place to pay in the event of borrower defaults, and that the borrowers paid for these protections.

The case now proceeds to trial, which is set as “number 1” beginning Monday, October 17, 2016.

Jeff Barnes, Esq/, www.ForeclosureDefenseNationwide.com

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