March 9, 2015

An Orange County (Orlando), Florida Judge dismissed a foreclosure filed by Citibank NA as alleged “trustee” for a WaMu securitization. The Plaintiff had failed for eight (8) months to respond to the homeowners’ requests for admissions, and filed a Motion just 8 days before trial asking to be excused from “technical admissions.” The trial Judge did not accept Citi’s argument that there would be “no prejudice” to the homeowners by letting Citi off the hook for its failure to comply with discovery, as the deeming of the admissions (due to Cit’s failure to respond thereto) materially affected the homeowners’ trial preparation (as they relied on the matters being deemed admitted by law), and relieving Citi of its discovery obligations at trial would have amounted to severe prejudice to the homeowners.

Jeff Barnes, Esq. represents the homeowners, who are now entitled to payment of their attorneys’ fees and costs from Citi as they were the prevailing parties in the action and as Florida law provides for the assessment of a homeowner’s attorneys’ fees and costs against the foreclosing party even if the case is dismissed without prejudice.

Mr. Barnes will also be arguing issues relating to MERS (e.g. whether a MERS assignment transferred any interest, the alleged equating of a MERS assignment to an endorsement, and whether the presence of these issues precluded summary judgment) in the Supreme Court of Delaware on Wednesday, March 11, 2015. Several of the issues in the appeal are of “first impression”, meaning that there is currently no Delaware case law “on point” as to those issues. Mr. Barnes represents the homeowner in the multi-tiered appeal.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 23, 2015

(Mr. Barnes has been traveling and in numerous trials since the last post)

An Oregon Federal Judge has compelled the production of significant documents related to the defense of a foreclosure over the objection of counsel for Nationstar (the servicer seeking to foreclose). The documents compelled include the MERS Milestone Report; loan notes from all servicers; the “collateral” (origination) file from origination to present; any assignments of the Deed of Trust; and, most importantly, all documents as to the “who, when, and where the endorsements were placed on the Note.” The quoted language is from the Court Order itself.

As we all know, foreclosing parties routinely travel on the “we have the Note with an endorsement” mantra and argue that this is the be-all and end-all. Until now, there were only two states which specifically permitted challenges, by appellate decisions, to the authority and authenticity of alleged “endorsement stamps” on Notes: North Carolina (the Bass decision), and Florida (numerous decisions beginning with the McLean v. JPMorgan Chase Bank N.A. decision and others which have consistently followed it). The issues surrounding the timing and authority of the placement of the claimed “blank endorsements” on Notes relates directly to standing, including whether the foreclosing party had standing at the time that the foreclosure was filed and whether any interest in the Note was ever legally transferred.

Unfortunately, the Supreme Court of North Carolina reversed Bass, but fortunately the Florida appellate courts have consistently reaffirmed McLean and reversed final judgments in foreclosure cases where there were unresolved issues surrounding the claimed “endorsements.” The U.S. District Court for the District of Oregon has now followed suit, and rightfully so. We thank our local Oregon counsel for bringing this decision to us.

Today, a Clackmas county, Oregon Judge denied Nationstar’s Motion to Strike the homeowners’ defenses related to the authenticity and authority of the alleged endorsements on the Note made by the bankrupt Lehman Brothers in a US Bank securitization case. Counsel for Nationstar in this case was the same as in the Federal decision mentioned above. The ruling was consistent with the reasoning of the ruling in the Federal case which deemed the issues related to the authenticity of the Note including the authority to place the stamps on the Note to be relevant to the homeowner’s defense to the foreclosure. Jeff Barnes, Esq. represents the homeowner with local Oregon Counsel Elizabeth Lemoine, Esq.

These developments are of national importance, and show that at least two states are no longer going to blindly accept the “endorsement” theory without question and without issue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 23, 2015

Jeff Barnes, Esq. of W. J. Barnes, P.A. has been retained by the homeowner in a foreclosure case pending in the U.S. Virgin Islands. The Plaintiff has just recently sought to file an Amended Complaint. The case involves multiple alleged transfers of the loan and a MERS Assignment “signed” by Michelle Sjolander, who has testified in a prior deposition that she did not execute such documents.

Separately, the Florida 4th District Court of Appeal reversed a final judgment of foreclosure in a securitization case, holding that the plaintiff failed to demonstrate the chain of transfers of the loan where there was no endorsement on the Note. The decision in Murray v. HSBC Bank USA NA as Trustee, etc., No. 4D13-4316, was just issued two days ago on January 21, 2014. The court found that there was no evidence of a transfer from the original lender (Option One California) to the interim party Ace Securities Corp. as the securitization depositor.

HSBC argued that the PSA identified the Option One entity as a “successor” to Option One Mortgage Corporation and that Option One transferred its interest to HSBC through the PSA. The court disagreed.

This portion of the holding is important, as it shows that the borrower may challenge a transfer made allegedly in accordance with the PSA, notwithstanding the Castillo decision from the Florida 3d District Court of Appeal which held only generally, and without any specific facts, that a borrower cannot complain of noncompliance with the PSA.

Florida thus remains split on the issue of whether a borrower may assert defenses based on matters within the PSA, which conflict will remain unless and until the matter is taken to the Supreme Court of Florida for resolution of the conflict between the 3d and 4th appellate district courts.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 17, 2015

The Florida Third District Court of Appeal has issued a decision which upheld a statute of limitations defense where the prior dismissal was without prejudice and where the subsequent filing was beyond the statutory period for initiating an action where the prior action claimed an acceleration of the amount due under the Note. The decision in Deutsche Bank National Trust Co. v. Beauvais, issued December 17, 2014, sets up a conflict between two Florida appellate courts as to the use of the statute of limitations defense. The Florida 3d District Court of Appeal sits in Miami-Dade County. The 4th District Court of Appeal, which sits in Palm Beach County, previously issued a decision providing that the statute of limitations defense does not apply even with a prior acceleration and regardless of whether the prior dismissal was with or without prejudice.

The Beauvais decision distinguished the 4th DCA decision, and explained that when a prior dismissal is with prejudice, it operates as an “adjudication on the merits” and thus destroys any issue as to acceleration and thus use of the statute of limitations defense. By contrast, when the prior dismissal is without prejudice, the prior acceleration is preserved and keeps the statute of limitations clock ticking.

This has a direct effect on the thousands of cases previously filed by David Stern which were left in limbo when his Firm closed years ago. Many other Firms have since picked up “old Stern files” which were dismissed without prejudice due to, e.g., lack of record activity, but which filings contained an acceleration. These cases are prime targets for use of the statute of limitations defense for foreclosure cases in at least 2 Florida counties for now, and possibly for use in 62 other counties as well.

Florida has 67 counties and 5 appellate court districts. Beauvais is presently binding on foreclosure cases in Miami-Dade and Monroe (Florida Keys) counties, while the 4th DCA decision is binding on foreclosure cases in Broward, Palm Beach, and Martin counties. Any other foreclosure in any other Florida county is up for grabs, and the Judge can accept either decision if they want, but are not bound to do so.

Beauvais has set up what is called “conflict certiorari jurisdiction” to the Florida Supreme Court to decide who is right. Until the Supreme Court sorts the matter out, there is uncertainty in most of Florida as to the use of the statute of limitations defense where a prior dismissal occurred of an action which accelerated the note balance and where the subsequent filing is outside of the statutory period.

Separately, there is no secret that Ocwen Loan Servicing has become the target of several official investigations in several states for fraudulent foreclosure practices. As most of you also know, the “servicer wars” between Ocwen, SPS, SLS, Bayview and Nationstar have resulted in Ocwen getting the lion’s share of the servicing contracts. Thus, if Ocwen folds, there will be literally tens of thousands of foreclosure cases left up in the air.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 7, 2015

It is with great sadness that we advise that our family member and best friend Keith Goldwater passed away yesterday. He was 58, and lost his life suddenly and without warning from cardiac arrest.

Keith was not only the most trusted employee that W. J. Barnes, P.A. ever had. He was also the kindest, most caring soul that any of us had ever known. No matter how tired he was, no matter how hard he worked, he always took care of what needed to be done, whether for family or work, and never said a word about it. Although suffering from diabetes and a host of other illnesses over the years, Keith never, ever complained, and was there whenever you needed him. His unflinching loyalty and trustworthiness were second to no person in the entire universe.

So long, my friend.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

December 26, 2014

My family and I want to extend congratulations to my wife, Ruth Barnes, on the release of her cookbook Sharing Morocco. Ruth dedicated over four years to this beautiful book, which is over 300 pages and has more than 100 recipes with gorgeous full-color photographs for each recipe.

We are very proud of Ruth and all of us are looking forward to her new journey and future cookbooks as well. As Ruth’s husband, I am more than proud of her dedication, unending creativity, and tireless efforts to make her dream a reality. The book is available on amazon.com, barnesandnoble.com, and many other websites.

Happy holidays to everyone.

Jeff Barnes

December 21, 2014

Many readers have been e-mailing us about why the last post was in late October. This is because between then and last week, Mr. Barnes was in the process of preparing seven appellate briefs (two in the United States Court of Appeals for the 10th Circuit, and one each for the Colorado Court of Appeals and the Colorado Supreme Court, and one each in the United States Court of Appeals for the 6th Circuit, the Florida 1st District Court of Appeal, and the Florida 3d District Court of Appeal); preparing for 6 trials (Atlantic City, New Jersey and various parts of Florida); and attending hearings in South Carolina and Tennessee.

In South Carolina, the homeowner (represented by Jeff Barnes, Esq. and local counsel Bill Sloan, Esq.) was granted leave to amend a Declaratory Judgment action involving a bankrupt lender, multiple assignments of mortgage, a US Bank securitization, and multiple questionable transfers of the Note based on matters in documents which were finally produced in discovery by the foreclosing party in response to a Court Order which had granted a Motion to Compel filed by Messrs. Barnes and Sloan. Although the matter was complicated enough already, in the week before the hearing, the new servicer sent two letters to the homeowner, each stating that the loan had been sold. The problem is that each letter stated that the loan had been sold to a different entity. The Court thus permitted further amendment to add the two new alleged owners of the loan over vociferous objection of counsel for the existing defendants.

In a Tennessee case involving BB&T where the borrower is represented by Jeff Barnes, Esq. and local counsel Andrew Farmer, Esq., the Court had previously dismissed the borrowers’ action against BB&T on a statute of frauds theory involving three years of negotiations between BB&T and the borrowers as to renewals of construction notes and release of certain other property. BB&T claimed that there was nothing in writing as to the agreements and thus BB&T was entitled to foreclose.

A second action was filed by BB&T involving a lien subordination claim as to certain of the properties involved in the first action. BB&T moved to dismiss the borrowers’ counterclaim on the same basis that it had advanced for dismissal of the borrowers’ earlier declaratory relief action. However, BB&T never caused an Order to be entered in the prior case, and in the months between the hearing on the borrowers’ case and the lien subordination case, the borrowers made a search through three (3) years of e-mails between them and BB&T which revealed that BB&T agreed to renew the construction notes and to release a certain parcel of land. Mr. Barnes argued that these e-mails debunked BB&T’s “statute of frauds” theory and provided the written evidence as to date, time, and identity of the BB&T loan officer who notified the borrowers that the loan renewals had been approved by BB&T and that BB&T also agreed to release the specific parcel which was under contract so that the borrowers could realize a net after paying off all liens to BB&T.

The Court granted Mr. Barnes’ request to amend the Counterclaim in the lien subordination case, and also agreed to treat the amendment as a request to reconsider the dismissal of the borrowers’ case.

At one of the trials (in Clay County, Florida), the Plaintiff’s witness (who was the alleged representative for the securitization “trustee” bank but who was actually an employee of the servicer) testified that the Note and Mortgage had been timely and properly transferred to the Trust in accordance with the provisions of the PSA. When Mr. Barnes questioned the Plaintiff’s witness as to the documentary proof of that transfer, the witness stated that the documents were not presented at trial. The Judge requested post-trial briefing.

The trial in Atlantic City remains unresolved, with post-trial briefs to be submitted in January, 2015. Two of the other Florida trials also remain unresolved, with post-trial briefing also to be done in January.

One of the other Florida trials was continued in view of what appears to be a potential fraud on the court involving manufactured “originals” of the Note and Mortgage in a case which was originally filed by the law offices of David J. Stern (who surrendered his law license and was disbarred for engaging in fraudulent manufacturing of foreclosure filings). Mr. Barnes argued that there was no evidence that the Plaintiff who filed the Complaint (Private Capital Group LLC) had standing at the time that the Complaint was filed. The attorney for the current Plaintiff (Roundpoint Mortgage) told the trial Judge that “the Complaint attached a copy of the Note with the endorsement”. Upon examining the Court file in response to this statement, the trial Judge stated that there was no copy of any Note or endorsement attached to the Complaint, and in fact that the Complaint contained a count for “Lost Note.”

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 24, 2014

Homeowners in Florida received some substantial justice with the Final Judgment entered on October 16, 2014 in the matter of Bank of America v. Nash, Seminole County, Florida Case No. 59-2011-CA-004389. The Court found, from the testimony of BOA’s witness, that despite the endorsement in blank by Countrywide dba America’s Wholesale Lender (AWL), no such corporation was ever formed by Countrywide, or BOA, or any of their related corporate entities or agents. BOA’s witness also testified that AWL never had a lender’s license in Florida and did not have authority to do business in Florida as a New York Corporation. The homeowner was represented by John G. Pierce, Esq. of Orlando, Florida. Butler & Hosch, P.A., also of Orlando, Florida, represented BOA.

BOA’s witness also testified that he had no knowledge of the existence of any document transferring any interest in the Note or Mortgage from the Lender to FNMA, which was alleged in the Complaint to be the owner of the Note and Mortgage when the Complaint was filed.

The Court found that the Note and Mortgage were void because AWL was not in fact incorporated in 2005 or ever by either Countrywide or BOA or any of their agents; that the “alleged mortgage loan” was void and invalid because AWL was not a licensed mortgage lender in Florida; that BOA and its predecessors did not have the right to receive payment on the loan because the loan was invalid and void because the mortgagee did not exist; and that the “alleged Assignment of Mortgage” was invalid because MERS had no authority to assign a loan which it did not own and was only a nominee for a non-existent corporation.

The Court thus found that BOA had no standing to bring the action and no legal right to attempt to claim ownership of the Note or the Mortgage or any right as servicer for some unknown entity or to collect monies. The Court thus found that the homeowner was entitled to recover all monies paid by the homeowner to BOA or its predecessors in interest in addition to attorneys’ fees and costs. The Court entered a judgment against BOA for almost $76,000.00.

This decision thus finally exposes the fantasy that was “America’s Wholesale Lender”, and the fraud perpetrated by Countrywide and BOA across the US in all cases where it claims that the lender was AWL and that MERS allegedly transferred an interest which it (a) did not own, and (b) could not have had as it could not be a nominee of a corporation which did not exist.

Separately, the Superintendent of the NY Department of Financial Services has uncovered what he has characterized as “serious issues” with Ocwen Loan Servicing’s systems and controls, including backdating that created situations where borrowers facing foreclosure received letters from Ocwen that specified a cure date for a claimed default which had passed months before the homeowners received the cure letters. Here, then, is proof positive that Ocwen, through the use of the U.S. Mails, intentionally manufactured fraudulent defaults for the purpose of thereafter pursuing fraudulent foreclosures and defrauding homeowners (RICO, anyone?). Ocwen’s stock plummeted as much as 24% and had been halted twice in view of these findings.

We thank our dedicated readers for sending us the Nash decision and the update on Ocwen.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 20, 2014

The Save Your Home America alliance has invited FDN attorneys to be exhibitors and speakers at their world convention which is being held in the Los Angeles Fairplex (in the Los Angeles County Fairgrounds complex) this Saturday, October 25, 2014. FDN attorneys Jeff Barnes, Esq, Jason Estavillo, Esq., and Douglas Klein, Esq., and paralegal E. Daniel Gyurec of the law offices of Joseph L. DeClue, Esq. will be manning the FDN booth at the convention, and Mr. Barnes has been invited to speak on the issues related to MERS in view of his wins against MERS in the Supreme Courts of Oregon and Montana.

Mr. Klein handles foreclosure defense primarily in Southern California including the United States Bankruptcy Courts in Los Angeles and San Diego, in addition to litigation in Los Angeles, Riverside, San Diego, and San Bernadino counties. Mr. Estavillo handles foreclosure defense cases in the San Francisco Bay area, while Mr. Gyurec’s Firm (Joseph L. DeClue, Esq.) handles cases in Orange County and Southern California. As those of you who follow this website know, Mr. Barnes handles foreclosure defense in numerous other states around the United States (and as Messes. Klein, Estavillo, and DeClue handle California cases).

The Convention begins at 9:00 a.m. and runs until 6:00 p.m. Come and meet us on Saturday!

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 2, 2014

Since its release in 2010, the U.S. Court of Appeals for the 6th Circuit’s decision in Livonia Properties Holdings LLC v. 12840-12976 Farmington Holdings LLC, 399 F. App’x 91 (6th Cir. 2010) has been misused by bank and servicer attorneys, and erroneously interpreted by many courts, for the alleged proposition that a homeowner never has standing to challenge an assignment to which the homeowner was not a party. Notwithstanding that the assignment is an attempt to transfer the homeowner’s mortgage or Deed of Trust to another party, the banks and servicers consistently take the position that the homeowner is not a “party” to the assignment.

The 6th Circuit has finally clarified Livonia Properties in Slorp v. Lerner Sampson et al., No. 13-3402 (6th Cir., opinion issued September 29, 2014), which reversed an adverse decision to the homeowner made by the Ohio Federal District Court and permitted the homeowner to assert numerous claims including a claim under the Federal RICO Act. The Court stated that its Livonia Properties opinion “has confounded some courts and litigants”, and admitted that the sweeping rule which was quoted and which endorsed the general statement was done “perhaps inartfully.”

The Court also stated that it “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”, and “Thus, a non-party homeowner may challenge a putative assignment’s validity on the basis that it was not effective to pass title to the putative assignee” (citing several other cases). In reversing the District Court, the 6th Circuit permitted Slorp (the homeowner) to challenge the assignment by asserting that “Bank of America (the putative assignee) held neither his mortgage nor the attendant promissory note when it filed the foreclosure action because the parties lacked the authority to assign his mortgage to Bank of America when they purported to do so”, and “That distinction makes all the difference”.

The Court held that because Slorp alleged that the assignment was fraudulent and that Bank of America therefore did not hold title at the time of the foreclosure that Livonia Properties did not bar his suit, and stated “in fact, it supports it.”

This is a milestone decision of more than significant importance. This decision needs to be given to every Judge in every case where the homeowner challenges an assignment in the manner which Slorp did and the bank or servicer attorney counters with the misinterpretation of Livonia Properties in an argument that the homeowner allegedly lacks standing to challenge the assignment. In fact, we urge counsel in those states whose appellate courts have come to the same erroneous reasoning to seek to vacate any decision which denied a similar challenge to an assignment based on the misapplication and misreading of Livonia Properties.

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

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com