September 21, 2014

A New Jersey Chancery Judge has denied final summary judgment to PennyMac Corp. which attempted to foreclose on a WaMu-initiated loan which PennyMac claimed to have inherited by assignment from the FDIC through an interim assignment to PennyMac’s predecessor-in-interest (which is another “PennyMac” entity). The Court also ordered that the homeowner take the depositions of known robo-signer Cynthia Riley and the appropriate witnesses from JPMorgan Chase, PennyMac, and any other witnesses deemed material by the homeowner’s counsel.

Michael Jacobson, Esq., local NJ counsel for the homeowner, argued the matter on the Brief and opposition papers research and drafted by Jeff Barnes, Esq. who was also retained by the homeowner.

As those of you who follow this website know, JPM claimed to have purchased all of WaMu loans and loan commitments from the FDIC pursuant to a Purchase and Assumption Agreement (P&AA) executed on September 25, 2008 (the day WaMu failed and went into FDIC Receivership). As it is also known, there is more than one version of the P&AA, and WaMu went into bankruptcy the next day (on September 26, 2008). Thus, whatever was not “sold” to JPM would have been a part of the WaMu Bankruptcy Estate.

PennyMac claimed that the FDIC assigned the loan to it on September 3, 2013, which was almost 5 years after JPM claims to have purchased the WaMu loans from the FDIC as set forth within the now infamous Affidavit of Robert Schoppe, which JPM has used around the United States in alleged support of its claim to have purchased all WaMu mortgage loans from the FDIC when WaMu failed.

PennyMac attempted to support its summary judgment request with a Certification (form of Affidavit in NJ) from a “Default Specialist” of the servicer who never worked for WaMu, or JPM, or the FDIC, or PennyMac. The Certification did not state the date that PennyMac acquired the loan, and the “screen shot” provided with the Certification (in alleged support of the “acquisition” of the loan) showed “Deutsche Bank Authentication”. The effective date of the “Power of Attorney” post-dates the alleged “acquisition date” in the “screen shot.” Further, the Certification does not contain any information on personal knowledge, and equivocates as to how the information in the “records reviewed” were created.

The Note bears an origination date of 2005, and contains a stamp “signed” by robo-signer Cynthia Riley who testified in a deposition taken in a Florida foreclosure case that she never endorsed any notes or put any endorsement stamps on notes from 2004 through 2006.

In denying PennyMac’s request for final summary judgment, the Judge stated that he was “very intrigued” by these issues, and ordered that the homeowner take the depositions of Cynthia Riley, the appropriate person(s) from JPM, and any other depositions necessary (which would include the depositions of those from the FDIC and the two PennyMac entities involved with the alleged “transfer”).

This ruling now permits a homeowner to inquire, under oath, of those witnesses who were involved with what JPM allegedly purchased from the FDIC; what, if anything, the FDIC retained following the September 25, 2008 P&AA; and into the issues as to how a loan which JPM has told the world was part of its acquisition from the FDIC was somehow “assigned” to PennyMac Corp.’s predecessor-in-interest 5 years after the alleged JPM acquisition and then assigned to PennyMac Corp. or otherwise transferred by a claimed “endorsement” which the alleged signer thereof stated under oath she did not place on the Note and did not sign.

This should be very interesting.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 18, 2014

One of our readers sent us an article from the Tampa (Florida) Tribune newspaper about the “goal” of the Florida government to “rid the courts of 256,000 foreclosure cases per year”. The article highlights the undisputed fact that Judges are railroading foreclosure cases through the system (Judges issue Pretrial Orders stating that the time set aside for the trial is “5 minutes”); ignoring evidence; subjecting those in foreclosure to rules and procedures which are not forced on other civil litigants; refusing to continue (reschedule) foreclosure trials even when the attorneys for the bank and the homeowner agree to it (as they are attempting to work out a loan modification); and generally trampling on homeowners’ constitutional rights.

The article highlighted a certain Judge who refused to hear a motion to vacate a judgment which JPMorgan Chase obtained on a loan which it did not even own. The disclosure that the loan had been previously sold to another entity was not made until after the judgment had been obtained. Despite this undisputed fact, the Judge refused to act.

In one case I have, I recently filed a Motion to amend my client’s affirmative defenses due to new matter which arose and gave rise to adding this to the client’s defenses. Such motions are routinely granted, and do have the effect of rendering a case not “at issue” and thus incapable of being set for trial. The bank attorney’s sole argument was the effect of granting the motion; no objection to the substance of the motion or the proposed defenses was made. When the Judge asked if granting the Motion would bump the November trial date, I responded that the law so provided. The Judge then said “Well, then, I am denying the Motion.” When I asked him the reason why (so that a record of error could be made for appeal), his response was: “Mr Barnes, I do not have time to do that now. I have a whole room of people here waiting.”

So, here is proof positive that the interests of real justice bow to the not-real interests of the State in continuing with the “rocket dockets”, which ONLY benefit the banksters. Remember, any servicer who forecloses on a Fannie or Freddie loan gets a 27 point “kicker” from the government.

The alleged “excuse” for the actions of the courts and Judges is that they are under “pressure” from the state Government to “clear out all of these foreclosure cases.” This is beyond reprehensible, and is bad karma that will eventually come back to haunt those who spew it.

Judges are sworn to uphold the law, not to become robotic slaves to some Government which is apparently beholden to the banksters. Judges are not to ignore the law and the Constitution so that the banks can be rewarded with essentially stolen homes arising out of a fiasco which they themselves created in the first place. It is surprising that no Judge has come forward and refused to engage in what amounts to violations of civil rights.

All of the elements of a civil rights violation case are there: you have a “state actor” (Judge) who is engaging in “disparate treatment” (subjecting “foreclosure” litigants to “special” rules which do not apply to civil litigants in non-foreclosure cases and which “rules” fly in the face of due process and the enacted rules); thereby creating a “suspect class” (“foreclosure people”) who are being deprived of their civil rights with no rational relation to any legitimate state interest. Eliminating due process protections to homeowners so that foreclosure cases can be ramrodded through the system and thus line the pockets of the banksters who created the morass from the beginning is not action “rationally related to a legitimate state interest.”

Florida is not the only state where this is occurring or where it has occurred. Several years ago, one of our readers, who was a police detective, could not figure out why homeowners in Phoenix were being essentially lined up for the slaughter, and why the Judges just ignored the law. The detective did some digging, and found out that the Circuit Judges’ Pension Fund had invested heavily in mortgage-backed securities, so with every foreclosure, their pension fund (allegedly) took a hit.

The short-sightedness of the “rocket docket” procedure, which apparently no one thought through, is that with millions of homeowners being removed from their homes, the property goes into decay; local markets, etc. no longer have their customers and go out of business; neighborhoods become blighted and ransacked by poachers; and the economic base of the neighborhood goes to zero.

So, in the end, the unconstitutional rewarding of property to the banks through unconstitutional court processes will give the states who engage in these actions exactly what they deserve: more bankruptcies; more dilapidated real estate; more crime; and more economic blight. Of course, the Government will blame it all on “those damned homeowners who didn’t pay their mortgage” instead of rightfully blaming the banksters for failing to be reasonable and work with a homeowner to keep them in their home and thus maintain the neighborhood. But then again, we all know what bank lobbyists are capable of.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 9, 2014

A New Jersey Chancery Judge has denied Wells Fargo’s Motion for Summary Judgment in a case where there are five (5) “Assignment of Mortgage” documents, all on different dates, and all cited by WF in its Complaint. WF has requested that the Court declare that 3 of the Assignments are void and of no effect. Essentially, WF wants to pick and choose which Assignments fit its theory of inheriting an interest in the Note and Mortgage, but without any legal basis for making such a novel request.

The homeowner is represented by Jeff Barnes, Esq. and Michael Jacobson, Esq. of the Cooper Levenson Firm in Atlantic City, NJ. Mr. Barnes prepared the legal briefing and argued the matter last Friday, September 5.

The first assignment was by MERS from the original lender to EMC Mortgage, which was a subsidiary of the long-defunct Bear Stearns. WF likes this and the 4th Assignment, which is from EMC to WF. However, EMC was long out of business as of the time of the 4th Assignment, and there is no evidence as to how the Note and Mortgage traveled the five different paths per the five different Assignments. WF also presented no law which permits a court to disregard any assignment in favor of another, so that the “chosen” assignments fit the theory of transfer of the foreclosing party.

In his oral disposition of the motion, the Judge stated “I wish this Note could talk to us”, to explain how it went from the original lender to WF. Unfortunately, the Note cannot, and WF presented no evidence as to how the Note and Mortgage physically traveled from the original lender to WF.

Summary judgment was denied. The Court also made note of a loan modification to the borrower which was signed by MERS, which was curious as MERS is not a lender and does not have the authority to modify a loan.

Jeff Barnes, Esq., www/ForeclosureDefenseNationwide.com

August 29, 2014

As those of you who follow developments in foreclosure law know, the Lisa Blumfiel case in Colorado resulted in a written decision by Colorado Federal Judge Martinez that Colorado’s Rule 120 process, by which a non-judicial foreclosure is instituted through a non-adversarial “show cause” type proceeding, may be unconstitutional. The process does not permit any discovery or any appeal of an adverse decision, and only requires the “bank” to present minimal evidence in order to be entitled to the entry of an “Order Authorizing Sale” (OAS) to schedule a trustee’s (foreclosure) sale of someone’s property. Although a homeowner may assert real party in interest defenses in a Rule 120 hearing, there is no pre-hearing discovery, so the homeowner is at a distinct disadvantage while the “bank” is given all of the advantages. This is another form of what is called “disparate treatment” by a “state actor” (the Court) which treatment is illegal under the Federal civil rights laws.

The homeowner may file a separate action if an OAS is entered following a Rule 120 hearing and may challenge the foreclosure, but of course this requires the homeowner to expend significant effort (and money) filing a separate lawsuit, seeking a TRO to stop the sale, then seeking to convert the TRO to a preliminary injunction, and post a bond to preclude any sale while the foreclosure challenge proceeds. This process turns “innocent until proven guilty” on its head: the homeowner is presumed guilty as a result of the 120 hearing, and must thereafter “prove” that the bank has no authority to foreclose and pay for the privilege of doing so by posting a bond.

We are challenging this process in both the Colorado Court of Appeals and in a separate Federal action, based in part upon the concerns of Judge Martinez and upon the due process infirmities in the entire Rule 120 procedure. The local foreclosure mill which was handling the case for the “bank” was recently removed and replaced with a national law Firm, so apparently the bank is concerned.

On the continuing issue of homeowners being treated differently than other civil litigants, we recently had a situation where our client (represented by Mr. Barnes) sought to amend his defenses to the foreclosure based on recent case law which now permits a homeowner to assert defenses when they have been told that they had to be “behind” in their mortgage payments to be considered for a loan mod, only to rely on this and not make payments but with the “bank” thereafter telling them that they do not qualify for a loan mod because they are in “default.” When the homeowner attempts to make up the payments, the “bank” refuses to accept payments and returns any payment made, “as the matter is now in foreclosure.” This results, of course, in a fraudulently manufactured foreclosure.

Motions to amend defenses are routinely granted. Here, however, the motion was denied because granting it would have, as a matter of law, removed the case from the trial calendar. That is a simple downline effect of the granting of such a motion even though, as here, our client did not request that the November trial date be stricken. The attorney for the “bank” filed no opposition to the Motion, but argued that the Motion was filed for the simple purpose of delaying the trial (again, even though no such relief was requested in the Motion).

The Judge denied the Motion without explanation. When he was questioned by Mr. Barnes as to the reason for the denial (so that a proper record could be made for appeal purposes), the Judge responded by saying “I don’t have time to explain that; I have a whole courtroom of people here. Goodbye.”

How long would the “explanation” as to the reason for denying the Motion have taken, 2 seconds? Remember, the attorney for the “bank” filed NO OPPOSITION to the Motion. Thus, the ONLY reason for the denial was due to the legal effect of the case being removed from the trial calendar, which is not a recognized legal reason to deny due process by failing to permit an amendment to defenses.

Significantly, during the course of the 50+ hearings that were in front of this one, the same Judge repeatedly denied JOINT AND AGREED Motions filed by attorneys for banks and homeowners to continue trials as the homeowner was in a loan mod or other reason. It is unfathomable that the Judge denied agreements reached between the attorneys simply because the Judge wants to railroad trials through the system.

What needs to happen is that petitions to the rules committees need to be made, and demands need to be made to the various state legislatures to enact statutes precluding a Judge from refusing to honor agreements of the very attorneys on the case which agreements are designed to, for example, try to settle a case through a loan mod. If all states had anti-dual tracking statutes as California and Hawaii do (which prohibit maintaining or advancing a foreclosure case if the homeowner is in loan mod negotiations), a lot of this nonsense would probably be avoided. High time the other states smell the coffee and start protecting the interests of the very people who elect the legislators to begin with.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

August 11, 2014

In a searing, 6-page opinion which does not mince words, The Hon. Jean Johnson, Circuit Judge of the 4th Judicial Circuit for Duval County (Jacksonville-area) Florida finds and holds that JPMorgan Chase and its attorneys Shapiro & Fishman committed fraud on the court through misrepresentations involving a fraudulent assignment and claims which JPM and S&F knew were fraudulent when filed. The law Firm of Parker & DuFresne, P.A. represented the homeowner. S&F was represented at the hearing on the homeowners’ Motion to Dismiss the foreclosure With Prejudice by the Greenberg Traurig Firm. The matter is styled JPMorgan Chase Bank National Association v. Pocopanni, Case Number is 16-2008-CA-3989.

WaMu had filed a foreclosure action through S&F in 2008 alleging that WaMu was the owner and holder of the Note, which had been originated by another bank. As alleged evidence of this, WaMu submitted an Assignment of Mortgage which represented to the Court that the mortgage was assigned from the original lender to WaMu. However, this directly contradicted a prior assignment from 1992 which assigned the mortgage to Fleet Real Estate Funding Corporation without recourse. On the same day, Fleet assigned the mortgage to Fannie Mae and reserved no right in the mortgage.

On July 5, 1996, Fannie Mae, also represented by S&F, filed a Lis Pendens to what the Court termed a “prequel” to commencing a foreclosure action. Then, on August 20, 1996, another assignment of mortgage was filed showing an assignment from Fleet to Fannie Mae. This assignment was also prepared by S&F. The Court noted that the Fannie Mae lookup tool shows that the current owner of the note and mortgage is Fannie Mae, and thus concluded that: “it is now undisputed that the plaintiff [JPM] is not, nor has ever been, the owner and holder of the Defendants’ note and mortgage.”

Judge Johnson thus found that “WaMu, with the assistance of its previous counsel Shapiro & Fishman, submitted the Assignment when WaMu and Shapiro & Fishman actually knew that only Fannie Mae was entitled to foreclose on the Mortgage, and that WaMu never owned or held the note and Mortgage.” The ruling goes on to find that “Shapiro & Fishman had itself prepared a false assignment of mortgage” and also found “by clear and convincing evidence that WaMu, Chase and Shapiro & Fishman committed fraud on this Court.” Further, “The Court finds that Shapiro & Fishman, at all times material, filed the Complaint, the Assignment, and the Motion for Substitution (of the Plaintiff) with actual knowledge that the averments and representations made in those papers were false.”

The Judge also stated that “these acts committed by WaMu, Chase and Shapiro & Fishman amount to a ‘knowing deception intended to prevent the defendants from discovery essential to defending the claim’ and are therefore fraud”, and dismissed the foreclosure with prejudice.

Kudos and bravo to Judge Johnson for exposing this fraud on the record. As those of you who follow this website know, one of our clients obtained an attorneys’ fee award against S&F’s client in another case in connection with a dismissal of the case by the Judge on Motion of Mr. Barnes. S&F appealed the decision and lost. Rather than paying the attorneys’ fee award, S&F continues to battle our client and refuses to pay the award even though it lost the appeal of the dismissal. A hearing on the matter is thus being scheduled.

Jeff Barnes, Esq., www/ForeclosureDefenseNationwide.com

August 6, 2014

A trustee’s (foreclosure) sale has been stopped in Williamson County, Tennessee on Motion of the homeowner who is represented by Jeff Barnes, Esq. and local TN counsel John Higgins, Esq. This is the second sale which has been stopped by Mr. Barnes and Mr. Higgins in TN in a span of 11 days.

The case involves an origination by America’s Wholesale Lender (which stopped doing business in 2008) and an alleged transfer to a 2005 securitization Trust via MERS. Nationstar Mortgage LLC sought foreclosure as the servicer to the Trust.

Nationstar’s attorneys Rubin & Lublin PLLC sent a letter to the homeowner claiming that she had a loan with MERS. This statement was not only false in fact (as MERS does not lend money, is not the “Lender” on the Note, and is never a “lender”), but was also made more than six months after the Court of Appeals of Tennessee issued its decision in the MERS v. Ditto (No. E2012-02292-COA-R3-CV, opinion issued January 2, 2014) which held that MERS has no independent or protected interest despite MERS being named as the “beneficiary” or “nominee”.

To further confound the matter, on May 2, 2014, Nationstar advised the homeowner that the foreclosing party is The Bank of New York Mellon FKA The Bank of New York as successor Trustee to JPMorgan Chase Bank, N.A. as trustee for the Structured Asset Mortgage Investments II Trust. However, 7 weeks later (on June 23, 2014), Nationstar’s attorneys Rubin & Lublin claimed that an entity styled Bank of New York Mellon Corporation as the Trustee for the Structured Assets Mortgage Investments II, Inc. was the foreclosing party. The letter advised that the sale was scheduled for August 7, 2014.

It gets worse. On July 7, 2014, Nationstar sent a letter to the homeowner claiming that JPMorgan Chase Bank as Trustee for a trust with a different description was the owner of the loan. Four days later, Nationstar’s attorneys sent a letter to the homeowner again claiming that the homeowner had a loan with MERS, and again claimed that BNY “Corporation” as trustee for the Trust “Inc.” was foreclosing. There is no explanation for the change in entities, or how the loan rights went first to the 2005 Trust for either of the BNY entities, then to JPM, then back to BNY.

Accordingly, the Court, on papers researched and drafted by Mr. Barnes and filed by Mr. Higgins who handled the TRO proceeding, stopped the sale.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

August 1, 2014

The Court of Appeals of New Mexico, in reversing a summary judgment in favor of The Bank of New York as the claimed “trustee” of a Countrywide securitization trust, has reaffirmed existing New Mexico case law that MERS cannot assign promissory notes, and that production of a Note with an “endorsement in blank” after the filing of the Complaint does not satisfy the standing requirement even if the foreclosing party is in possession of the Note. The decision in The Bank of New York Mellon, etc. v. Lopes, Docket No. 32,310 was issued on July 22, 2014.

BNY argued that the MERS assignment of mortgage entitled BNY to enforce the Note. The Court rejected that argument citing the New Mexico Supreme Court’s opinion in Bank of N.Y. v. Romero, 320 P.3d 1 (NM 2014), which held that MERS is merely a nominee for the lender and as such lacked any authority to assign the Note.

BNY then attempted to introduce the Note with a claimed “blank endorsement” at the summary judgment hearing, which had not been attached to the Complaint as of the time that suit was filed. BNY also claimed that it was the “holder” by mere possession of the Note. The Court also rejected that argument, stating that “possession is not necessarily sufficient to make one a holder”, again citing the NM Supreme Court’s Bank of N.Y. v. Romero decision.Summary judgment was reversed because BNY did not establish that it had standing at the time that the Complaint was filed.

Significantly, the Court noted that the Note was not payable to BNY, and that the “endorsement” was stamped by Michelle Sjolander, who we all know to be an admitted robo-signer who has testified under oath in a deposition that she never signed endorsements to notes.

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

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 29, 2014

I have wanted to comment on this for some time, but let it go thinking that maybe the situation would change. It has somewhat, but not to the extent that one might think in view of the emerging law in foreclosure litigation.

For the past six years, I have all too often been asked this question by Judges across the US: “But, Mr. Barnes, your client did not pay the mortgage, right?” Of course, I then have to explain that we may deal with that issue if AND AFTER we get past the standing issue, which is the threshold issue which must be resolved before any claims of “defaults” or “amounts due” are approached. That is, “Your Honor, we first have to resolve whether these people on the other side even have the right to be here or request any relief.” It has been and continues to be a difficult hurdle. However, more and more Judges are getting it.

The problem is that, as one Judge told me years ago, “Mr. Barnes, I pay my mortgage and I do not know who owns it, so why should your client get away with not paying his?” My response is that maybe, Your Honor, you should question who owns your loan and whether or not you owe what the servicer claims you owe. You may be overpaying. The Judge offered to recuse himself and hire me to find out. Naturally, I declined for obvious reasons.

The law on standing is pretty clear in the 30+ states I have worked in since 2008. The problem is that the “we have the Note, therefore we win” mantra of the “bank” attorneys too often carries the day. We actually have two cases on appeal at this time where our expert (a former Wall Street national securitization manager for one of the largest investment banks and who actually put securitizations together and had the responsibility for making sure that the securitizations complied with Federal laws and regulations) testified, without any rebuttal or any cross-examination, that pursuant to public filings and documents from the involved parties that the foreclosing “bank” does not, did not, and could not own the loan. Notwithstanding that unrebutted evidence, the Judge signs the “form” boilerplate Final Judgment of Foreclosure anyway.

This results in more appeals being filed, thus causing an additional burden on the courts and expending of taxpayer dollars to show the appeals court that the trial Judge did not follow the evidence or the law. Even if the appeal does not result in a reversal, the time, expense, and labor involved drains the public coffers, all because the Judge did not follow the law in the first instance. For some reason, some Judges just cannot rule against a bank, and others never met a bank they didn’t like.

Those of you who have followed this website since 2008 know what a fight this has been. The fight is now progressing to the legislatures and the higher appellate courts. In California, for example, one division of an appeals court recently filed an opinion which essentially insulted the intelligence of the Judges who issued the Glaski opinion (which came from another division of the California appeals courts), with the rhetoric being mocking and demeaning. What will this lead to? You got it: more litigation, and thus more draining of taxpayer dollars.

Judges: don’t be afraid of the evidence. Don’t be afraid of the law. Don’t be afraid to rule against the banks. If the facts and the law do not support the bank’s claim, it is ok to rule against the bank. In fact, the 4th District Court of Appeal in Florida issued one decision where the Court essentially said to the trial court whose decision it reversed: in case you didn’t hear us the first time, we are telling you again, as we did before, that you are wrong, and thus the summary judgment is reversed because the bank did not satisfy its burden for the same reason as in the prior appeal on the same issue.

We need more appeals courts to adopt this stance of following the law, and more trial court Judges to follow those appellate rulings.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 24, 2014

A trustee’s (foreclosure) sale has been stopped in Davidson County, Tennessee with the entry of a Temporary Restraining Order on Motion filed by the homeowner against Nationstar Mortgage LLC, MERS, and the law Firm acting as the substitute trustee. The homeowner is represented by Jeff Barnes, Esq. and local Tennessee counsel John Higgins, Esq., who also recently stopped another sale in Tennessee on a case where he and Mr. Barnes were retained (see webpost of May 19, 2014)

The original lender had been sold to Discover Bank in 2012. Two years later, MERS attempted to assign the Deed of Trust (DOT) to Nationstar, which advised the homeowner in 2013 that the “servicing” of the loan had been transferred to Nationstar from Bank of America (BOA). Nationstar did not identify the owner of the loan. The MERS Assignment also purported to transfer the Note. It is well known that MERS never originates loans and does not own promissory notes, and as such it cannot transfer something it does not own.

The Complaint and Motion for Temporary Restraining Order and Preliminary Injunction filed by the homeowner (prepared by Mr. Barnes at the request of Mr. Higgins and the homeowner) set forth that the Court of Appeals of Tennessee had issued a decision in January of 2014 holding that MERS has no independent interest in real property or any protected interest in real property, and as a “nominee” only holds “bare legal title”. The homeowner thus alleged that the MERS Assignment was a legal nullity and Nationstar was thus precluded from foreclosing.

The Court initially set the bond to stop the sale at $90,000.00, but on request of Mr. Higgins, reduced the bond amount to just over $900.00 as there was no evidence that Nationstar would suffer damages of $90,000.00 during the time that any sale was not permitted, and as Nationstar’s standing to even seek the remedy of foreclosure is being challenged by the homeowner’s lawsuit.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 7, 2014

The Maine Supreme Judicial Court has further debunked MERS’ alleged authority, vacated a foreclosure judgment, and affirmed sanctions against the attorney for Bank of America (which filed the foreclosure action) in its July 3, 2014 opinion in the matter of Bank of America v. Greenleaf, No. 2014 ME 89. The 24 page decision explains why BOA did not have standing to foreclose on the Mortgage despite having possession of the Note endorsed in blank, which the Court found only gave BOA the right to enforce the debt evidenced by the Note.

The Court held: “The interest in the note is only part of the standing analysis, however; to be able to foreclose, a plaintiff must also show the requisite interest in the mortgage…Thus, whereas a plaintiff who merely holds or possesses – but does not necessarily own – the note satisfies the note portion of the standing analysis, the mortgage portion of the standing analysis requires the plaintiff to establish ownership of the mortgage.” (original emphasis, case citations omitted here).

The Court then analyzed the MERS language in the Mortgage in the context of the purported MERS assignment to BAC. The Court concluded that “notwithstanding its reference to MERS as the ‘mortgagee of record’, the mortgage in fact granted to MERS ‘only the right to record the mortgage’ as the lender’s nominee, and ‘having only that right, MERS did not qualify as the mortgagee pursuant to our foreclosure statute.” The Court held that MERS did not have any right to foreclose on the property, and that the Mortgage only conveyed to MERS the right to record the Mortgage as nominee for the original lender. Thus, the MERS assignment to BAC only transferred what MERS had, which was a right to record the mortgage, period. The series of assignments demonstrated “the right to record the mortgage as nominee, but no more”.

The Court concluded that BOA lacked standing to seek foreclosure, and vacated the trial court’s foreclosure judgment.

The Court also affirmed the award of sanctions against BOA’s attorney who failed to comply with Maine’s civil procedure rules governing filings on summary judgment and had “inappropriately sought to create a foundation for the admission of the Bank’s business records by submitting an affidavit of his knowledge of the Bank’s recordkeeping practices” and other matters about which he lacked personal knowledge.

The Court also concluded that that the representative of BOA (who testified that she is a bank employee who testifies at trials) did not testify as to the requirements for the admissibility of the bank’s records under the business records exception to the hearsay rule (Rule 803(6)). There was no testimony as to how long or in what capacities she worked for the bank, what type of familiarity with the records were required for her job as “litigation liason”, and that her first encounter with the “Account Information Statement” (which BOA attempted to admit into evidence) was through obtaining the document from the law firm representing BOA in the foreclosure case and not through BOA. The Court found that the requirements of Rule 803(6) were not supported by the record.

This is the second recent decision which is finally unraveling the MERS myths which have been perpetrated on the courts nationwide for far too long. Brave to the Maine Supreme Court!

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com