April 17, 2014

In what appears to be another showing of contempt for homeowners and the laws of the State, a Florida Circuit Court Judge today permitted a substitution of the FDIC as the Plaintiff in a foreclosure action with the Bank of New York as the claimed “trustee” of a securitized mortgage loan trust without any proof or evidence of a transfer of either the Note or the Mortgage from the FDIC to BNY while also simultaneously granting the homeowners’ Motion to file amended Affirmative Defenses but refusing to cancel the trial date which is scheduled for April 22, 2014 (5 days from now) with a brand-new Plaintiff.

Under Florida Rules of Civil Procedure, an action cannot be even requested to be set for trial until 20 days after the last pleading is served. After that occurs, a request can be made for a trial date, but the trial date cannot be for at least 30 days following the date of the request.

As the Court granted the homeowners’ Motion to assert a new pleading in the form of amended affirmative defenses based on the change of the Plaintiff, the action was, today, no longer able to be set for trial, and due process codified in the Florida Rules of Civil Procedure and case law would not permit the case to even be set for trial until sometime in June, 2014 at the earliest.

However, the Manatee County, Florida Circuit Judge refused to continue the trial. When asked what his legal basis for this was, he replied “Because I am a Circuit Court Judge”. Apparently this Judge has unilaterally anointed himself with the power to ignore and refuse to comply with the Florida Rules of Civil Procedure and Florida due process case law.

This type of conduct is exactly the “disparate treatment” we have repeatedly discussed on this website, and is a classic example of why oversight must be immediately implemented in foreclosure courts to insure that the law is complied with, and if a Judge refuses to comply with Court rules or the law, that Judge must not be permitted to handle foreclosure cases.

This example is not the norm, and most Judges we have seen are fair and abide by the rules of law and procedure. However, this example does point to a recent trend of certain Judges to ignore the law and do whatever they want in order to grant a judgment in favor of the “banks”.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 15, 2014

The Gallatin County, Montana District Court has rejected US Bank’s Motion to reduce a punitive damage award assessed against it by a jury, upholding the $5,000,000.00 award as well as the $1M compensatory damages award on the homeowner’s fraud and constructive fraud claims. The case is McCulley v. US Bank, Cause No. DV09-562C (Montana 18th Judicial District Court). The Order denying US Bank’s Motion to reduce the punitive damage award was entered yesterday, April 14, 2014.

The facts of this case are beyond shocking. The 22-page opinion sets out how US Bank intentionally lied to the Court and the homeowner about the underlying transaction and the existence of documents, withheld documents, made the homeowner sign three versions of the loan application while lying to the homeowner that she would receive a specific loan, switching the loan at the last minute, and then foreclosing in order to make a profit of over $350,000.00. The Court also found that the homeowner went from a healthy and athletic individual to one who was severely depressed and attempted a near-successful suicide because of the actions of US Bank.

The Court found that all of the factors to uphold the punitive damages award had been satisfied under Montana law, and that the $5M award was well within US Bank’s ability to pay without serious consequences to it given that US Bank’s Form 10-Q filing with the SEC showed that its net worth was $41,552,000.000 (that’s over $42 and a half BILLION dollars), and that US Bank had a net income for the nine months ending 09/30/13 of over $4.26 billion.

It is thus no wonder why the banks fight requests for jury trials with such vigor. They know that if regular people see the kind of fraudulent conduct which the banks engage in that there will be serious consequences.

We thank one of our clients for bringing this decision to us today.

Jeff Barnes, Esq., www.ForclosureDefenseNationwide.com

April 14, 2014

We have said that the banksters trade mortgage loans like baseball cards. No one seems to know, from one day to the next, who owns the loan. More disturbing is that it now seems that different banks are claiming ownership of the same loan.

Last week, we defended a Rule 120 hearing in Colorado. The “Movant” who in 2013 filed the Petition for an Order Authorizing Sale was U.S. Bank as Trustee for a securitization trust. However, on March 14, 2014 (just 3 weeks before the hearing), the law Firm representing the “Movant” advised the homeowner that U.S. Bank no longer had any interest in the Note or the Deed of Trust, which had been “sold or otherwise transferred” to Citibank, N.A. The law Firm representing U.S. Bank moved to substitute Citibank, N.A. as the moving party without any notice to Citibank.

No documents showing any sale or transfer of the loan were ever produced, and there was no affidavit or testimony from anyone at Citibank as to the alleged sale or transfer, yet the hearing proceeded. The Judge has held off issuing an Order Authorizing Sale pending an issue relating to the appeal of the substitution of Citibank for U.S. Bank.

In a separate case in Florida (which is on appeal), we received two letters today: one from Nationstar dated April 2, 2014 stating that the owner of the loan is U.S. Bank as Trustee for LXS Series 2006-11, located in St. Paul, Minnesota. A second letter dated April 4, 2014 (just 2 days after the date of the Nationstar letter) from the law Firm representing Nationstar in the appeal stated that the owner of the loan is Bank of America, N.A. as Trustee for Lehman XS Trust Mortgage Pass-Through Certificates Series 2006-11 located in Charlotte, North Carolina.

Who is lying? What we suspect is that BOTH U.S. Bank and Bank of America have made claims for payment from the trust, credit default swap policies, and/or other insurance policies on the same “defaulted” loan, in however many tranches the loan was (allegedly) assigned to. Note that the designation of the trust was in “long form” on one letter and “short form” on another. This is probably so that the claims come in under a different reference and so both are paid.

Another scam so that now different banks can get paid on the same loan?

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

April 1, 2014

No April Fool: Florida courts are railroading foreclosure cases to trial on a “rocket docket”, apparently at the behest of the Supreme Court of Florida to clear the court dockets of foreclosures. This has lead, predictably, to myriad problems.

As we previously discussed on this website, homeowners in foreclosures are and have already been subjected to disparate treatment, separate and apart from other general civil litigants, by having their cases relegated to special “foreclosure dockets” and procedures. One Florida court has even enacted procedures which, by Court Order, automatically deny all motions directed to the pleadings, find that the case is ready for trial, and set the case for trial. Further, no motions, other than those requiring the presentation of evidence, are even set for hearing: the court rules on motions on the papers alone. As the only real “evidentiary” motions are those requesting summary judgment (which are usually filed by the “banks” or servicers), it is the banks and servicers which get the hearings; homeowner motions compelling discovery or to compel a deposition of the representative of the “bank” or servicer do not get a hearing.

In other parts of Florida, “docket calls”, with upwards of 90 cases on the morning calendar, are being scheduled, and 5-minute foreclosure trials are set unless any attorneys say they need more time. Homes are thus being foreclosed on at the trial rate of 12 or more homes per hour on “trial days”.

Meanwhile, the “banks” and servicers have let the cases sit for years, do not respond to discovery, and then try to ask for summary judgment when a trial order is issued. Of course, THEY get a hearing.

Another phenomenon that has been occurring recently is that the attorney for the bank or servicer is being replaced with another law Firm as soon as the trial order is issued. The problem this causes is that when a request is made to the “new” law Firm as to outstanding discovery which is overdue or to schedule the deposition of the bank/servicer’s representative, the response is “we will get back to you.”  Sometimes they do, sometimes they don’t; meanwhile, the trial date comes closer and closer.

We understand the frustration of the Supreme Court, but it is not the fault of the homeowners, who should not be treated like cattle to the slaughter and should be afforded the rights of all other civil litigants. Meanwhile, the daily disparate treatment continues…..

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 17, 2014

Those of you who follow this website know that Lawrence Nardi, the former WaMu mortgage manager who testified under oath that there was no schedule of mortgage loans, no assignments, no Allonges, and no endorsements as to any mortgage loans allegedly purchased by JPMorgan Chase from the FDIC, now works for Bank of America. Apparently the shuffle continues.

The United States Government has filed a lawsuit as to a scheme by Countrywide known as “The Hustle” which removed roadblocks to having mortgages approves so that Countrywide could sell as many mortgages as possible to Fannie and Freddie. The lawsuit states that Rebecca Marione, the person who ran The Hustle for Countrywide as the Chief Operating Officer of Countrywide’s subprime lending division, was repeatedly warned that The Hustle would generate excessive quantities of fraudulent or otherwise seriously defective loans that were ineligible for sale to Fannie or Freddie. However, the President of Countrywide’s subprime lending division ignored the information, continued with The Hustle as planned, and restricted the publication of quality review reports.

Marione no longer works for Countrywide or Bank of America, where she stayed after the 2009 “acquisition” by BOA of whatever assets were available for purchase from Countrywide. Where is she now? SHE RUNS THE “INDEPENDENT FORECLOSURE REVIEW” DEPARTMENT FOR JPMORGAN CHASE.

So, the executive who “looked the other way while her company removed every removed every speed bump, road block, and toll gate” (read: the regulations as to the proper origination and sale of mortgage loans under the law) is now in the position of reviewing whether all of the proper procedures were followed during the foreclosure process.

Is it thus any wonder that less than 1% of all mortgage loans “evaluated” by the “Independent” Foreclosure Review are found to have any issues?

The former inspector general for TARP has this to say: “Finding out that the person running it for JPMorgan Chase is a person whose conduct in the run-up to financial crisis was allegedly so egregious that she somehow managed to be one of the only people actually named in a case brought by the Department of Justice goes beyond irony…It speaks volumes to the banks’ true intent and lack of concern for homeowners when addressing the harm that they caused during the foreclosure crisis.”

Sounds like a class-action against the “Independent” Foreclosure Review folks may be in order for perpetrating a fraud on the American public for at least an intentional nondisclosure of a conflict of interest.

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

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 28, 2014

On Tuesday, February 25, 2014, a Pinellas County (St. Petersburg) Florida Judge denied a Motion for Summary Judgment filed by JPMorgan Chase Bank NA in connection with a WaMu origination. Jeff Barnes, Esq. represents the homeowner and argued the Motion in person in court on Tuesday.

JPM claimed to have come into the right to enforce the Note and Mortgage through “a chain of mergers” (JPM’s Complaint, paragraph 4). As we all know, there was never any “merger” between WaMu and JPM; the deal structure was an asset purchase (and also the purchase of certain defined liabilities) from the FDIC, and that JPM acquired whatever assets the failed WaMu had in its inventory as of September 25, 2008 which were set forth in the deal documents. As we also know, WaMu had sold off almost all of its originations into securitizations prior to its failure, so the most that JPM would have acquired from the FDIC consisted of servicing rights, if that.

The 330-page deposition of former JPM and WaMu mortgage management employee Lawrence Nardi (which deposition was taken in another Florida case) was filed by the homeowner. Mr. Nardi, who was with WaMu through the time that it failed and then through the period during the FDIC asset purchase and thereafter remaining with JPM, testified under oath that there was never, ever, a mortgage loan schedule in connection with the asset purchase, and that it never existed. He also testified that there is no evidence of any transfer of any mortgage loans from WaMu to JPM: no assignments, no allonges, and no endorsements.

The homeowner also filed a excerpt from JPM’s Motion for Summary Judgment in a case filed against it and the FDIC by Deutsche Bank in the District of Columbia Federal Court, where JPM admits that it was NOT the “successor in interest” to WaMu, and that it only purchased certain defined assets and liabilities. This admission, of course, is in direct contradiction to the position taken by JPM in thousands of foreclosures nationally where it asserts that it is the “successor in interest” to WaMu.

The Judge recognized the issue of material fact where JPM is taking the position that it has the right to enforce the Note, but JPM’s own former management employee testified under oath that there is no evidence of any transfer of any mortgage loans from WaMu to JPM and no schedule of any mortgage loans purchased from the FDIC.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 18, 2014

In a 33-page decision, the Arizona Court of Appeals reversed the trial court’s dismissal of a homeowner’s Complaint challenging a foreclosure instituted by Deutsche Bank as Trustee of an IndyMac securitization. The decision in Steinberger v. IndyMac was issued on January 30, 2014. The Court of Appeals accepted jurisdiction of a Special Action filed by the homeowner from her case which she had filed in the Maricopa County Superior Court.

The case concerned a loan which had been given to an 87 year old homeowner. The Court found that the allegations in the Complaint that the loan contained terms which were unusual, one-sided, oppressive, and not explained to the borrower properly constituted claims for procedural and substantive unconscionability. The Court also held that a claim of negligence per se was permissible where the homeowner alleged that the substitution of trustee was recorded knowing that that the person who signed it did so without authority, and that the MERS Assignments were made to entities which were known not to exist at the time of the assignments.

The Court also permitted a claim for negligent performance of a duty in connection with the loan mod process where the homeowner was told that he had to be in default in order to have a loan mod made; he went into default based on this representation; and through the negligence of the defendant the loan mod was never made, thus creating a default and subjecting the homeowner to foreclosure.

However, perhaps the most significant portion of the holding is toward the end, where the Court permitted the claim for payment/discharge of a debt on the homeowner’s allegation that OneWest had been paid all or at least 80% of the amounts claimed due under the loan due to an FDIC Shared Loss Agreement which was attached to the Complaint. The Court permitted the claim even though, at the pleading stage, it was not clear whether the agreement applied to the particular loan.

The Court found, however, that “the agreement does appear to provide that, in exchange for OneWest’s assumption of IndyMac Federal’s loans, the FDIC would reimburse OneWest at 80% for any default in payments on these loans.” The homeowner alleged that this agreement, “combined with insurance coverage and/or other sources of reimbursement”, has resulted in OneWest’s either being paid in full on the Note or having received 80% of the payments due on the Note.

This setoff against the amounts claimed due on the loan, in securitization cases due to insurance and other sources, is a matter we have been advancing since 2008. We have had discovery on these issues repeatedly compelled, through never produced: the banks will take a dismissal or attorneys’ fees against them rather than produce this information. This case is the first that we know of which now permits an affirmative claim to be made against a foreclosing “bank” that it has been paid in full from third party sources.

Bravo to the Arizona Court of Appeals for taking the time and effort to debunk so many “bank attorney myths” in foreclosure cases.

We thank one of our dedicated readers for this opinion, a copy of which is available upon e-mail request.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 14, 2014

FDN attorneys stopped an eviction in Tennessee literally the day before it was to take place. The homeowner had been challenging the foreclosure pro se. A court order had scheduled an eviction to take place on Wednesday, February 12, 2014.

FDN Tennessee counsel John Higgins, Esq. and Jeff Barnes, Esq. were retained late in the afternoon on Friday, February 7, 2014. Mr. Barnes prepared the Complaint to challenge the underlying foreclosure, Emergency Motion for TRO and Preliminary Injunction with memorandum of law, and client affidavit, while Mr. Higgins prepared the Petition for Writ of Certiorari and Chancery Court filings. Mr. Higgins filed all papers on Tuesday, February 11. The TRO was granted and the eviction stopped literally hours before it was to take place the next day.

In New Mexico, the Supreme Court yesterday issued its 18-page opinion in the matter of Bank of New York v. Romero, which reversed the foreclosure judgment of the District Court and also reversed the Court of Appeals’ decision which had affirmed the District Court’s judgment. The case involved an alleged transfer of the homeowner’s loan to a securitization through an after-the-fact MERS assignment and a claim that the “endorsements”, which appeared on the second version of the Note (presented at trial) somehow gave BONY the right to enforce. None of the endorsements were to BONY.

The Supreme Court found the MERS assignment had no validity and transferred nothing for several reasons, and also held that the testimony of the bank’s witness, who simply reviewed records, did not provide any evidence that a transfer had in fact occurred. The opinion further discusses the predatory aspect of the loan and how it violated New Mexico’s “anti-flipping” statute, which also precludes giving someone a loan without the lender investigating facts which should have been readily available as to the homeowner’s ability to repay the loan notwithstanding any provisions in the loan documents.

The full opinion is available online, or by e-mailing us a request for an electronic copy. We thank several of our followers for sending us this opinion.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 7, 2014

For the 9th time, FDN attorneys in New Jersey have obtained a dismissal of a foreclosure action which was originally filed by foreclosure mill Zucker Goldberg and Ackerman, but with the case being later transferred to foreclosure mill Phelan Hallinan. The reason for this 9th dismissal was the same as the others which preceded it: the Plaintiff’s steadfast refusal to comply with discovery. Local New Jersey counsel Michael Jacobson, Esq. of the Cooper Levenson Firm represented the homeowners, assisted by consulting counsel Jeff Barnes, Esq.

The Zucker Firm has a long history of intentionally refusing to comply with discovery. In fact, in one case in Morris County where Mr. Barnes represented the homeowners, the Judge, during a Case Management Conference, specifically directed the attorney for Zucker to comply with the homeowner’s discovery by producing documents responsive to Mr. Barnes’ Request for Production and producing a representative for deposition. The Zucker attorney stated to the Judge “We’re not going to do that. We object to the discovery, so we are not going to produce it and are not going to produce a representative for deposition.” The Judge stated that she would dismiss the case if the discovery and representative were not produced. Zucker did not produce the discovery or a representative, and the case was dismissed.

Separately, on February 3, 2014, the Rhode Island Supreme Court has issued its opinion in the matter of Chhun v. MERS, No. 2012-298-Appeal, which reversed the Superior Court’s granting of a Motion to Dismiss which had been filed by MERS, Deutsche Bank, Aurora Loan Services LLC, and Domestic Bank. The homeowners had sued for declaratory relief, quiet title, and punitive damages, alleging that the MERS Assignment had no effect as it was signed by someone who was an employee of Aurora (and not MERS), and that MERS did not order the assignment to Aurora. The Court found that these allegations satisfied the requisite pleading standard and reversed the Superior Court’s ruling.

The Superior Court had taken the position that the homeowners did not have standing to challenge the assignment. The homeowners challenged Aurora’s authority to foreclose and asserted that the mortgage was not validly assigned.The Supreme Court found that these allegations stated a claim for which relief could be granted.

This decision is further evidence of the evolution of the recent body of case law nationally which is consistently permitting homeowners to challenge assignments. The decisions in Horace (Alabama), Hendricks (Michigan), Williams (Hawaii), Johnson, Naranjo, and Glaski (California), Erobobo (New York), Saldivar (Texas), and the recent Cosajay decision from the Rhode Island Federal court demonstrate where the law is heading on this issue. Further, the Drouin case from the New Hampshire Federal court distinguishes “attacks” on assignments from no assignment having occurred as a matter of fact in situations where the original lender was out of business long before the assignment.

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

Finally, oral argument was conducted in the Oregon Court of Appeals on Wednesday, February 5, 2014 per our prior post. The Court took the matter under submission and will issue an opinion in the coming months.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 9, 2014

As those of you who follow this website know, Mr. Barnes previously brought to the appellate courts of Oregon the issue of whether MERS was a “beneficiary” under the Oregon Trust Deed Act (“OTDA”, Oregon’s non-judicial foreclosure statute). As those of you who follow this website know, Mr. Barnes prevailed at both the Court of Appeals level and in the Supreme Court of Oregon in the Niday v. MERS litigation that MERS is not the beneficiary under the OTDA, with the Supreme Court imposing proof requirements on MERS as to any claim of any alleged “agency” relationship with anyone.

As those of you who follow this website also know, Mr. Barnes prevailed on the very same issue in the Supreme Court of Montana, which also likewise declared that MERS is not the “beneficiary” under Montana’s Small Tract Financing Act (Montana’s non-judicial foreclosure statute), and also imposed proof of agency requirements on MERS as well. That case is now the law of the land in Montana.

Now, for the second time in 18 months, Mr. Barnes is bringing another set of issues of statewide importance in foreclosure litigation to the Oregon Court of Appeals for the first time, as there is no Oregon appellate law on the issues. On February 5, 2014, the Court of Appeals will hear arguments as to the discovery and admissibility of securitization documents and issues in judicial foreclosure cases, including the relevance of the PSA and loan transfer requirements related to transfers of mortgage loans to securitization trusts. The argument includes the recent body of law permitting attacks on alleged transfers of mortgage loans to securitization trusts as set forth and explained in the recent Glaski (CA Court of Appeals), Erobobo (New York), Saldivar (Texas bankruptcy Court), and Cosajay (Rhode Island Federal court) decisions on these issues.

In the case on appeal, the motion Judge in the trial court case had compelled the production of securitization documents from Deutsche Bank prior to trial. Deutsche Bank did not comply with the motion judge’s order. The different Judge who conducted the trial stated, on the record, that she was unfamiliar with the issues but would discuss the matter with fellow Judges over lunch. After lunch, the trial Judge decided that the ruling by the Motion Judge was not essential to trial and did not permit the introduction of the securitization issues; waffled on the limited admissibility of the PSA; and precluded cross-examination on several issues related to the alleged transfer of the loan to the securitization trust.

These issues, like those as to MERS in the Niday case, are those of “first impression” in Oregon, meaning that there is currently no Oregon appellate-level law on the issues, and thus the decision will be one of statewide importance.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com