July 3, 2014

The United States District Court for the Eastern District of Pennsylvania has issued a 45 page opinion in the matter of Montgomery County, Pennsylvania Recorder of Deeds v. MERSCORP and MERS, Case No. 2:11-cv-06968-JCJ. The opinion was just filed July 1, 2014.

The opinion traces the history of promissory notes and mortgage instruments in Pennsylvania and the statutory recording requirements incident to such transfers. Five questions were presented on cross-motions for summary judgment. MERS’ Motion for summary judgment was denied in its entirety, while the Plaintiff Recorder of Deeds’ Motion for summary judgment was granted in part.

The Court noted, on page 28 of the opinion, that “the most challenging issue” in the case was whether the MERS Defendants have been the transferor or transferee of unrecorded secured debt and if not, whether they are the proper parties who are subject to the mandates contained in the (Pennsylvania) recording statutes.

The Court noted that the MERS Defendants had repeatedly taken the position that MERS did not and does not negotiate or transfer promissory notes secured by mortgages. The Court then noted MERS’ inconsistent statement that “It is MERS that serves as the mortgagee of record in the public land records as the “nominee” for a lender (noteholder) and its successors and assigns.” The Court found that in contradiction to its own argument, MERS initially admits that it is in fact involved with the transfer of the note by virtue of its service as the mortgagee of record as the nominee for a lender/noteholder, and that when required to facilitate a foreclosure, MERS itself can become a note-holder.

We also know that MERS assignments almost always have the phrase that the mortgage or DOT is assigned “together with the note or other evidence of indebtedness”, which is also contradictory to the position taken by MERS that it does not negotiate or transfer mortgage-related notes.

MERS filed the Declaration of William C. Hultman, who has testified in numerous MERS-related cases. The Court found, in citing to specific deposition testimony of Hultman, that MERS is both named as the mortgagee and acts as agent for the lenders, including both the original lender and any downline claimed holders of the note. The Court found that MERS is “clearly” involved with the transfer of the note and mortgage. The Court also found that MERS is an agent of the lenders.

The Court ultimately concluded that the MERS Defendants are those who may be liable for and subject to the mandates of the Pennsylvania Recording Statutes, and also found that because over the years that the number of documents recorded by MERS has steadily increased that this has caused a decrease in the amount of recording fees collected by the County Recorders of Deeds, resulting in financial injury to Community Legal Services, the Legal Aid Network, and the Housing Alliance, all of which receive much of their funding from the collection of recording fees.

The Recorder also retained two expert witnesses, one of whom found that there were missing assignments that should have been recorded, that the MERS Milestones data was incomplete AND IN CONTRADICTION TO SECURITIZATION DEAL DOCUMENTS, and that title to the property had been corrupted by MERS’ failure to record a complete chain of title.

The second expert stated in his Declaration that licensed title agents have no access to information in MERS bar codes, which means that title searchers and consumers are denied the ability to ascertain who currently owns the note secured by a MERS mortgage and that neither the borrower nor the courts can ascertain the chain of events OR EVEN THE VALIDITY OF A TRANSACTION. The result is an “erosion of Pennsylvania’s land records and THE INABILITY TO EVALUATE THE MARKETABILITY OF TITLE AND CREDIT WORTHINESS OF THE CONSUMER. (note: we have capitalized the words above for emphasis).

The Court also noted the Recorder’s testimony that over the past several years, a number of residents who were facing foreclosure didn’t know who owned their mortgage or to whom they should be making their mortgage payments, and the Recorder attributed this to the fact that MERS is not recording all of the note assignments with the results of both a loss of revenue and land title records being incomplete.

The Plaintiff’s testimony showed that as a result of a forensic audit that a MERS-affiliated mortgage was transferred on average between 4 and 12 times, resulting in a loss to the county of $15.7 million in unpaid recording fees. The Court highlighted the testimony of MERS representative R. K. Arnold in a case in Alabama and held that the testimony was tantamount to an admission that by maintaining the recording system in Pennsylvania that the county recorders confer a benefit on MERS which MERS appreciates but does not pay for.

The Court granted the Recorder’s Motion for Summary Judgment on the claim for Declaratory Judgment, and held that the assignment or transfer of a promissory note secured by a mortgage on real estate is equivalent to a mortgage assignment, and that the MERS’ Defendants’ failure to create and record documents evincing these transfers violates Pennsylvania statutory law, thus determining that MERS was liable for damages and that the amount of damages will be taken up at trial.

This is a “Milestone” opinion. MERS’ inconsistent positions, myths, and fallacies have finally been debunked by a Federal court, and MERS’ liability for damages has been proven as well by a Federal Declaratory Judgment. Our congratulations to counsel for the Recorder who filed and continues to pursue this case, and to the Pennsylvania Federal court for this landmark decision which will hopefully start to “tear down the MERS wall.”

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 2, 2014

The Florida Third District Court of Appeal has upheld the dismissal of a foreclosure action filed by Bank of New York Mellon (BNYM) which was dismissed due to BNYM’s repeated violations of court Orders. Jeff Barnes, Esq. represented and continues to represent the homeowner through his Firm. W. J. Barnes, P.A., as he does in all cases.

In June of 2010, a Key West, Florida Circuit Court Judge dismissed the foreclosure action upon finding that BNYM had violated multiple court Orders including discovery and pretrial Orders, and conditioned any re-filing of the action on compliance with the prior Orders. Three (3) years later, BNYM, using a different law Firm, re-filed the action without complying with the prior Orders including the Order which placed the conditions on any re-filing. The homeowner filed a Motion to Dismiss the re-filed case, which was granted. At that hearing, the Judge found that the conduct of BNYM was appalling.

BNYM appealed the decision.  The homeowner filed an appeal brief explaining why the dismissal was proper by the Circuit Judge, and why BNYM was incorrect in its arguments.

The Florida appeals court affirmed the decision today without opinion. The homeowner may now assess his attorneys’ fees in defending the case against BNYM.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

June 19, 2014

We have two separate cases involving Branch Banking & Trust (BB&T) in two separate states (Tennessee and Delaware) where matters which have occurred demonstrate that BB&T cannot be trusted. Jeff Barnes, Esq. represents the borrowers in both actions, assisted by local counsel Andrew Farmer, Esq. in the Tennessee case, and local counsel Stephen Brauerman, Esq. in the Delaware case.

In the Tennessee case, the borrowers had a series of construction loans which had been originated by a lender which was thereafter bought by BB&T. The series of loans involved several parcels of real estate being developed as part of a planned resort community. For a period of three years (from 2006 through 2009), BB&T continually amended the time for performance of payments under the loans on request of the borrowers without ever threatening default or foreclosure. The requests for extensions of time to make payments were the result of numerous factors incident to construction issues.

At some time in 2009, BB&T notified the borrowers that there was an error in the loan documents which had been prepared by the bank, and that as a result, BB&T did not have perfected lien rights against the properties. BB&T requested that the borrowers jointly participate in legal proceedings to reform the loan documents to correct the errors. The borrowers agreed to do so on the condition that the relationship between them and BB&T as to extending the time for performance (payment) on the loans, which BB&T had been doing with the borrowers for the prior 3 years, did not change. BB&T agreed to this.

The proceeding to reform the documents to correct the bank errors consummated. However, shortly thereafter, BB&T refused to grant any modifications to the time for the borrowers to make payments under the loans, and thereafter declared the borrowers in default and initiated foreclosure proceedings. It is thus more than evident that BB&T lied to the borrowers so that BB&T could (a) correct bank errors in the loan documents which errors resulted in BB&T having no lien rights so that (b) BB&T could then set up the borrowers for foreclosure. The borrowers have sued for fraud in the inducement/misrepresentation, breach of contract, unjust enrichment, and injunctive relief to enjoin any foreclosure activity.

The original foreclosure Complaint in the Delaware case had been filed by MERS. The homeowner challenged the Complaint on the grounds that MERS was not one of the specific parties identified in the applicable Delaware statute governing who is entitled to institute a foreclosure. That action was dismissed.

BB&T filed a subsequent action and prevailed on summary judgment, which the homeowner appealed. However, the form of the Memorandum Opinion did not conform to the proper form of a final order which Delaware law permits to be appealed. The homeowner’s counsel, Mr. Brauerman, and BB&T’s counsel thus negotiated a stipulation dismissing the appeal without prejudice to permit the trial court to enter the proper form of Order so that the summary judgment ruling could be appealed.

However, BB&T’s counsel did not include the homeowner’s counsel (Mr. Brauerman) on the form of Order submitted to the Court, only listing, as the borrower’s counsel, an attorney who had previously represented the borrower but who had left the law Firm representing the borrower long before. That attorney had not been involved in the negotiation of the stipulation and his name was not on the stipulation. At all times, BB&T’s attorney only dealt with Mr. Brauerman as to the agreement to dismiss the appeal without prejudice, which BB&T’s counsel knew was being done so that the trial court could enter an appealable form of Order, and was thus on notice that Mr. Brauerman fully intended to appeal the summary judgment decision (as he had already done as to the Memorandum decision which granted BB&T’s Motion for Summary Judgment).

As a result of BB&T’s counsel placing the name of an attorney who did not represent the borrower on the Order and not including Mr. Brauerman’s name on the Order, no notice of the proposed Order nor the Order itself were provided to Mr. Brauerman. The homeowner only learned of the existence of the (erroneous) Order when the property was posted for sale, which was after the appeal period had already expired.

The homeowner filed a Rule 60 Motion to vacate the Order. Incredibly, BB&T’s counsel took the position that the time for appeal had expired and thus the homeowner could not appeal, period. The court apparently saw through the unethical and prejudicial actions of BB&T’s counsel and granted the homeowner’s Rule 60 Motion, vacating the infirm Order.

BB&T’s conduct in these two cases is reprehensible and beyond atrocious: lying to homeowners in Tennessee so BB&T could try to steal valuable resort property, and trying to take advantage of a BB&T-manufactured misleading court filing situation in Delaware. The moral: Beware BB&T!

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

June 6, 2014

We have been dealing lately with a flood of “substitution” related claims: where the foreclosing party is suddenly requesting that another party be “substituted” as the “new” foreclosing party which new party has allegedly inherited the interest in a mortgage loan through nothing more then an unverified, undocumented assertion of the attorney for the party seeking to foreclose. Such “substitutions” beget numerous issues which affect defenses, discovery, readiness for trial, and the progress of a foreclosure. Three recent cases from three different states demonstrate the numerous problems with these claimed “substitutions.”

As those of you who follow this website are aware, Colorado foreclosures begin with a “Rule 120” proceeding where the party seeking to foreclose files a Motion for an Order Authorizing Sale (“OAS”). The standard for this probable cause proceeding is low, but there is case law from the Colorado Supreme Court which permits the assertion of “real party in interest” defenses at a 120 proceeding. The Judge presiding over the 120 proceeding must take these defenses into account if timely and properly raised.

Recently, a situation came up where in a case where the foreclosing party sought to “substitute” the 120 movant (U.S. Bank National Association as trustee for a securitized mortgage loan trust) with Citibank, N.A. based on a claimed “transfer” of the Note and Deed of Trust (DOT) to Citibank. However, no Affidavit was filed to support the claimed transfer; no documentation was filed evidencing what was transferred, when the alleged transfer occurred, or by what means it took place; and no attorney consenting to the transfer on behalf of Citibank filed any papers in the case. The homeowner, who is represented by Mr. Barnes, challenged the transfer.

Colorado case law requires that any challenged transfer be the subject of an evidentiary hearing, and that the court must make detailed findings of fact and conclusions of law as to the alleged transfer sufficient to permit review by a court of appeals. The Judge in the case granted with substitution without an evidentiary hearing despite being presented with the binding law at the hearing, and thus the matter is now on appeal.

In Florida, JPMorgan Chase has recently sought to substitute a private trust, through “MCM Capital Partners LLC, its trustee”, as the foreclosing Plaintiff in two separate cases where the homeowner is represented by Mr. Barnes. As with the Colorado case, no Affidavit was filed evidencing the alleged transfer; no documentation was filed demonstrating what was transferred, when the alleged transfer occurred, and by what means it occurred; and no evidence of any kind has been presented to prove the alleged transfer. However, the case is set for trial, which presents several problems.

First, the homeowner is now being forced to trial with a last-minute change of the party seeking foreclosure through an undocumented transfer. Due process requires that the homeowner be permitted to amend his pleadings to include defenses as to this alleged and undocumented transfer, and to conduct discovery on the alleged transfer as to what was transferred, when it allegedly occurred, how it occurred, the source of authority for the transfer, and what documents evidence the transfer. Was it a bogus MERS Assignment? Was it an impermissible transfer to a securitization trust? Was the transfer in violation of law?. The homeowner has filed a Motion to amend his defenses.

Second, the case is also no longer in a posture to be tried, as the foreclosing party is amending its pleading as to who is seeking to foreclose and by a different theory [that being now a multiple transfer of interests in the Note and Mortgage to yet another downline party]. Forcing the case to trial would result in an illegal “trial by surprise” and a denial of basic fundamental rights.

In Tennessee, a homeowner represented by Mr. Barnes and local Tennessee counsel John Higgins, Esq. filed an action for Declaratory Relief to determine the rights in a Note and DOT which was originated by one party but sought to be enforced by another. In Tennessee (as in all states), one must name, in a Declaratory Relief action, all parties who may claim an interest in the matters sought to be declared, or who may have an interest in the Declaratory Judgment being sought, or who may be affected thereby.

The originating bank filed a Motion to Dismiss claiming, again in unsworn fashion and without any documentation being filed, that it no longer had any interest in either the Note or the DOT as it had transferred same. The Tennessee Court, at a hearing today, denied the originating bank’s Motion to Dismiss because (a) the Complaint stated a cause of action for declaratory relief, and (b) there was no admissible evidence of the claimed transfer which may have otherwise entitled the originating bank to be dismissed from the action.

The bottom line of all of this is that requests to substitute the foreclosing party should never be taken lightly, and strict proof, by admissible evidence, must be demanded as to any claimed transfer. Never take as gospel or otherwise a naked assertion by a foreclosing party’s attorney that the claimed substitution is “simple”.

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Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

June 4, 2014

FDN has today added its 45th law Firm to its network. Shikha Parikh, Esq. Managing Attorney of Paradigm Law, P.L.C. in Fairfax, Virginia has joined the network for foreclosure defense cases in Maryland and Virginia. She is licensed in both Virginia and Maryland state and Federal courts. We welcome Ms. Parikh to the team.

In addition, existing network attorney Elizabeth Lemoine, Esq. of Makler, Lemoine & Goldberg, P.C. of Portland, Oregon and Jeff Barnes, Esq. are litigating issues related to reverse mortgages, which are governed by the HECM statute (12 USC sec. 1715z-20) and the implementing regulations (24 CFR part 206). Reverse mortgage lenders are taking the position that “non-borrowing” spouses of reverse mortgage borrowers can be foreclosed upon after the death of the “borrowing” spouse, thus literally kicking the surviving spouse into the street. The litigation centers around the regulations which provide that the term “homeowner” under the Statute includes the spouse of the homeowner, and that the loan is not due and payable until the death of both the borrower and the spouse, the same of the home, or the occurrence of other events specified in the regulations.

The foreclosing party, Reverse Mortgage Solutions, Inc., has taken the position that it can foreclose on the widow of the homeowner borrower notwithstanding the regulations and a Federal court’s finding that the Senate Report of the Committee on Banking, Housing, and Urban affairs stated that the Statute intended to defer any repayment obligation until the death of the homeowner and the homeowner’s spouse.

The law is unsettled on the remedy for statutory violations. AARP Foundation Litigation Group has filed an action in Federal Court in the District of Columbia against HUD on behalf of several “non-borrowing” surviving spouses, and the work which Mrs. Lemoine and Mr. Barnes are doing may, like their prior work in the MERS area which wound up establishing the law as to MERS in Oregon, shape the law for homeowners and spouses who have a reverse mortgage.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 19, 2014

A preliminary injunction has been entered precluding Bank of New York Mellon (BNYM), as trustee of a securitization trust, from attempting to continue with post-foreclosure proceedings in a situation where the MERS Assignment attempted to transfer the interests in the DOT to BNYM over a year after the original lender went out of business. The homeowner is represented by Jeff Barnes, Esq. and local Tennessee counsel John F. Higgins. Esq. Mr. Barnes drafted the Complaint, Affidavit, and Motion for a TRO and Preliminary Injunction, while Mr. Higgins argued the matters in court.

BNYM claimed to have acquired the right to enforce the DOT by virtue of two (2) MERS Assignments, the first of which attempted to assign the DOT 14 months after the original lender ceased business operations. MERS then, two years and 7 months thereafter, attempted for a second time to assign the DOT to BNYM. MERS listed the maximum principal indebtedness, for purposes of the Tennessee Recordation Act on this Assignment, as zero, thus arguably admitting that the loan had been paid off prior to the Assignment.

MERS also “substituted” the original trustee, and in the Appointment of Substitute Trustee claimed that the homeowner had executed the DOT “payable to the order of MERS”, which is a complete falsehood as MERS never, ever, lends money; does not extend credit; is never owed any money; and does not collect any money on mortgage loans as admitted by its own counsel in numerous reported decisions nationally.

The homeowner filed a Complaint for Wrongful Foreclosure, Injunctive Relief, and other relief. The Court originally granted a TRO against any further disposition of the property and today granted a preliminary injunction finding that (a) BNYM faled to respond to the allegation of the TRO Motion and (b) the MERS Assignments were attempts to transfer an interest years after MERS would have been permitted to do so.

This decision is important as it is based, in part, on the fact that the MERS Assignments were executed years after the original lender, for whom MERS claimed to be the “nominee”, was out of business. This decision thus shows that MERS has no authority to act as a “nominee” for a defunct entity.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 15, 2014

FDN Los Angeles, California-based attorney Douglas E. Klein, Esq. has obtained what can only be described as a miracle ruling from the California 4th Appellate District in the matter of Bert G. Cotton v. MERS, Number E054291 (Opinion filed April 10, 2014). Mr. Klein represents the homeowner, whose complaint seeking to invalidate a nonjudicial foreclosure (which had been filed by a prior attorney) was dismissed without leave to amend. Mr. Klein took the case over for the appeal, as the homeowner’s prior counsel had withdrawn from the case.

The case involves numerous entities, including MERS, WaMu, and JPMorgan Chase (JPM), which claimed that it had acquired “certain assets” of WaMu and now held the “servicing rights” to the loan. MERS substituted the original trustee in 2008 and assigned the Deed of Trust (DOT) to JPM in 2009. Significantly, the homeowner was only asked at the closing to sign the DOT; he was never asked to sign, and thus did not sign, a Note.

The Defendants filed demurrers (the California form of a Motion to Dismiss) the claims for wrongful foreclosure, declaratory relief, violations of California Civil Code sec. 2923.5 and 2924, conversion, and unfair competition under California Business and Professions Code sec. 17200. The trial court sustained the demurrer without leave (permission) for the homeowner to amend his complaint, and entered a judgment of dismissal.

The appeals court reversed the trial court decision, holding that it is error for a trial court to sustain a demurrer without leave to amend if the party seeking to amend demonstrates a reasonable probability that the defect alleged in the demurrer can be cured by amending the complaint; that such a showing can be made for the first time on appeal; and that it is not relevant whether the party seeking to amend will be able to prove the allegations, citing prior published decisions of the appeals court.

The homeowner, through Mr. Klein, requested that the appeals court take judicial notice of the Glaski decision, which it did, holding that judicial notice of California decisional law is mandatory.

The holding states that the issue that the homeowner seeks to raise is not whether the holder of the DOT authorized MERS and the trustee sale company (California Reconveyance Corporation) to foreclose, but rather whether any of the Defendants had any interest in the DOT to begin with. The Court noted that the Gomes decision does not preclude claims that challenge a foreclosure based on specific allegations that an attempt to transfer the DOT was void.

The Court ultimately concluded that the homeowner established a reasonable probability that he can amend his complaint to allege claims for wrongful foreclosure, unfair competition, and violations of statutes based on fraudulent practices in the foreclosure.

Bravo to Mr. Klein for obtaining this more than significant ruling in what appears to be a case of first impression (that is, there are no other appellate opinions on the specific issues in this appeal and this decision is thus the first on those issues).

At this time, the ruling has been stamped that it is not to be published in the official reports. However, the reported cases which support the decision have no such caveat, and Mr. Klein is making a request to the appeals court that the decision be published. As those who follow this website will recall, a similar situation occurred with the Glaski opinion when it was first released. After it was certified for publication on request of Glaski’s counsel, the banks fought hard to seek to “de-publish” it, which requests were, as we all know, denied by the appeals court. This decision is equally important and should be published especially as it relies in part on Glaski and other published decisions.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 13, 2014

A Palm Beach County, Florida Circuit Judge has denied a Motion for Summary Judgment filed by New York Community Bank (NYCB). Jeff Barnes, Esq. represents the homeowner. Mr. Barnes filed the Brief in opposition to the MSJ and argued the matter in the Palm Beach County court.

NYCB was not the original lender. There is no endorsement of any kind on the Note. NYCB filed two “Allonges”, the first of which identified another bank which was not identified in the Complaint, the MSJ, or the Plaintiff’s Affidavit. Multiple stamps of different banks appeared on this Allonge.

The second Allonge was signed twice by one Christine Ackley, who simultaneously claimed to be the “attorney in fact” for the FDIC as assignor as well as the “authorized agent” for NYCB as assignee. No corporate resolution, conflict of interest waiver, or any other document was filed by NYCB authorizing Ms. Ackley to wear both hats on the same day in the same document for 2 different entities where she herself purported to represent both the transferor and the transferee.

The Affidavit filed by NYCB had no facts on personal knowledge as to how NYCB came to own or hold the Note as required by Florida case law.

Jeff Barnes, Esq., www.ForeclosureDefensenationwide.com

May 8, 2014

A Philadelphia, Pennsylvania Court of Common Pleas Judge has denied a Motion for Summary Judgment filed by Bank of America/BAC Home Loans Servicing, L.P. The loan was originated by America’s Wholesale Lender (AWL, a warehouse arm of the former Countrywide) and was allegedly transferred to BAC Home Loans Servicing, L.P which later “merged into” BOA.

The homeowner is represented by Jeff Barnes, Esq. and local Pennsylvania counsel Lawrence Granite, Esq. Mr. Barnes drafted all of the Briefs and argued the matter in person in the Philadelphia court. It is known that oral argument on summary judgment Motions is almost nonexistent in Philadelphia foreclosure cases. The Court itself ordered oral argument after the Briefs were filed.

BOA took the typical position of “we have the Note, endorsed in blank”, etc. The claimed “endorsement” bore the name/stamp of Michelle Sjolander, who has testified under oath in a deposition in another case that she never signs endorsements and never places them on promissory notes. The “endorsement” was also undated and had no other authenticating information.

The only date of any claimed transfer of the Note and Mortgage was the April 14, 2011 MERS Assignment. However, the Plaintiff’s designated representative, who was deposed by Mr. Barnes, testified that he did not even know if AWL was even in existence as of the date of the MERS Assignment. Further, none of the MERS cases cited by BOA dealt with the precise issue. The homeowner’s briefs set forth the national state of the law as to MERS, and also pointed out that BOA failed to negate the homeowner’s affirmative defenses, which alone preclude summary judgment.

The case now proceeds to full trial in June.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

May 5, 2014

The Dorchester County, South Carolina Court of Common Pleas entered an Order on the homeowner’s Motion for Summary Judgment in a judicial foreclosure case which, although denying the Motion, identified issues relating to the claimed transfer of the loan to a securitization where US Bank is the claimed “trustee”.  The homeowner is represented by Jeff Barnes, Esq. and local South Carolina Bill Sloan, Esq. Mr. Barnes took the deposition of the Plaintiff’s representative, wrote the brief, and argued the matter before the Court.

The homeowner alleged that the MERS assignment, executed by known robo-signer Jeffrey Stephan some 16 months after the original lender filed Bankruptcy, transferred nothing, and thus all subsequent transfers (including one to GMAC, which also filed Bankruptcy) were legal nullities. The Court found, in its written opinion, that there are genuine issues of material fact regarding ownership of the Note and mortgage and as to the subsequent transfers. The Court also noted that US Bank failed to provide its “additional evidence” to the homeowner prior to the hearing and reminded US Bank that is has a continuing duty to comply with the homeowner’s discovery requests under South Carolina law.

Separately, the United States Court of Appeals for the 9th Circuit reversed the U.S. District Court’s ruling which had granted summary judgment to Deutsche Bank and Ocwen Loan Servicing on the homeowner’s LIBOR-based claims, which included a claim that the homeowner would not have entered into the loan transaction had she known that the Defendants were manipulating the LIBOR rate. The Court found that the homeowner adequately alleged injury-in-fact necessary for Article III standing (to sue in Federal court).

The Court clarified that the injury occurred when the loan was made, not upon payment of LIBOR-affected interest. The Court thus remanded the case for further proceedings on the homeowner’s claims under the Sherman Anti-Trust Act and her state law claims for fraud and breach of the covenant of good faith and fair dealing. This is significant, as the opinion essentially lends support to a claim arising out of an intentional non-disclosure relating to what the monthly payment would really be, which a homeowner needs in order to make an informed decision as to whether to enter into the loan transaction or not before any loan documents are signed.

The case is Galope v. Deutsche Bank National Trust Company as Trustee Under the Pooling and Servicing Agreement, etc., 9th Circuit Case No. 12-56892 (opinion of March 27, 2014). The homeowner is represented by Lenore L. Albert, Esq. of Huntington Beach, California.

One word of caution: the case is stamped “Not for Publication”, so it can only be used if permitted by law in the particular jurisdiction where it is sought to be used. It is, however, a large step in the right direction.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com