February 17, 2012

In response to our prior post as to the proposed dates for the next foreclosure defense seminar, the date which has been most requested is Friday, March 16, 2012. We are thus holding that date for the next seminar, and will confirm it and the location shortly (which will be in the Beverly Hills, CA area). Interested attorneys and paralegals may request a Registration Form through the “Contact Us”  link above or by e-mailing us at [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 17, 2012

Philip A. Lehman, Assistant Attorney General for the Consumer Protection Division of the North Carolina Department of Justice, has issued an “Executive Summary” of the settlement between the state attorneys’ general and the five leading bank mortgage servicers. The last section of the summary, that being Section VII, is the most important, and confirmes the matters in our previous post (below) discussing the limited effect of the settlement:

    ” VII. …Claims based on these areas of past conduct by the banks cannot be brought by state attorneys general or banking regulators. The Release applies only to the named bank parties. It does not extend to third parties who may have provided default or foreclosure services for the banks. Notably claims against MERSCORP, Inc. or Mortgage Electronic Registration Systems, Inc. (MERS) are not released. Securitization claims, including claims of state and local pension funds, and including investor claims relating to the formation, marketing, or offering of securities, are fully preserved. … Of course the Release does not affect the rights of any individuals or entities to pursue their own claims for relief.”

As such, the settlement only precludes actions by state attorneys general for the type of claims which were in their lawsuits which were settled, and has no effect on actions against third-party trustee sale companies (e.g. ReconTrust, Trustee Corps, Regional Trustee Services, Northwest Trustee Services, etc.), MERS, or others who provided “default or foreclosure services”. Claims of individuals are also not affected, which include both affirmative claims and defensive claims in both judicial and non-judicial states.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 13, 2012

We have been receiving literally dozens of e-mails from homeowners inquiring as to what effect the bank settlements with various attorneys general will have on their foreclosure cases. Answer: NONE, for several reasons.

First, the Attorney General claims were just that: claims by attorneys general against the banks. Private litigants were not parties to the litigation, so they are not parties to any settlement. In fact, it has already been reported that the settlements have no effect on and do not preclude an individual pursuing legal relief against a lender.

Second, the settlements are not even finalized yet. They have to be filed in court, and once they are, the states which filed the lawsuits will be free to enact whatever procedures, processes, requirements, etc. they wish as to whether a homeowner “qualifies” for any settlement proceeds. As we all know from the loan mod scam, this process can take months or even years, and there are a million ways that a homeowner can be found to ultimately not “qualify”.

Third, and perhaps most revolting and insidious, is that several of the states have ALREADY announced that portions of the settlements will be diverted to state budgets. Specific instances include Wisconsin’s announcement that it plans to use $25.6 million of the settlement money to “plug holes in the state’s budget”, while Missouri has announced that it plans to put $40 million of the settlement money into the state’s “general fund”.

So, once again, the homeowners get nothing. In fact, it has been separately announced that because the attorney general lawsuits have been resolved that the banks will be ramping up individual foreclosures, obviously now because they will not have state governments and attorneys general examining what they do. Sad, but unfortunately true.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 9, 2012

In view of the number of recent requests we are receiving as to when our next foreclosure defense seminar will be held, we are holding Friday, March 9, 2012 and Friday, March 16, 2012 open for the seminar at this time. As always, the seminar will only be open to attorneys and paralegals associated with law Firms.

The seminar will be held in the Beverly Hills, CA area. The date to be chosen will depend on which date is most requested by interested parties, who may e-mail us at [email protected] or by filling our an inquiry form on the “Contact Us” link above.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 8, 2012

In an opinion released today on JPM’s Motion for Clarification, the Florida 4th District Court of Appeal has reversed a summary judgment which was entered in favor of JPM, which is the claimed “trustee” of a securitized mortgage loan trust. The opinion clarifies the importance and necessity of evidence as to when an endorsement is placed on a note for purposes of standing to sue.

A MERS Assignment of the “lost note” from the (bankrupt) American Brokers’ Conduit was executed three days after the lawsuit was filed. JPM later managed to “find” the original “lost” note, and filed the note with an undated “special endorsement” to JPM by American Brokers’ Conduit.

The important point of this opinion is that the Court focused on the fact that the “special endorsement” to JPM on the note was undated, and that JPM’s Affidavit in support of its motion for summary judgment contained no evidence or information was to when JPM became the owner of the note. As such, this Florida appellate court has finally dug deeper into the “endorsement” argument used by “banks”, and has held that there has to be evidence as to when the endorsement was placed on the note and that this evidence must show that the plaintiff had the right to enforce the note on the date that the suit was filed (citing a 2011 opinion from a Vermont court in support of its conclusion).

The last sentence of the opinion is perhaps the most significant: “An evidentiary hearing may also be required if there is disputed evidence on an issue, such as to the date the note was endorsed to Chase.” All too often, the “endorsements” do not bear a date as to when the endorsement was placed on the note, which this opinion now makes clear is an issue of material fact which precludes summary judgment.

What the opinion did not discuss was the issue of whether MERS, as the alleged “nominee” of the bankrupt American Brokers’ Conduit, even had the authority to execute the Assignment, or under what authority the bankrupt American Brokers Conduit could have placed the undated endorsement on the note to begin with.

We thank one of our dedicated readers for providing a copy of this opinion to us today.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 7, 2012

A Sussex County, Delaware Court has entered an Order finding that Bank of New York Mellon as Trustee of a First Horizon securitized mortgage loan trust failed to comply with the Court’s prior order compelling discovery, and has also assessed sanctions against BNYM for the the homeowner’s having to bring a Motion for Sanctions against BNYM for violation of the Court’s discovery Order. The Order also provides that if BNYM continues to not comply with the prior Order that the case will be dismissed with prejudice.

The homeowneer is represented by Jeff Barnes, Esq. and local Delaware counsel Paul G. Enterline, Esq. We believe this to be the first case in Delaware where securitization-related discovery is being compelled under the threat of a dismissal with prejudice for noncompliance with a prior discovery order. Mr. Barnes has already had several foreclosure cases dismissed in Florida and New Jersey for a foreclosing Plaintiff’s failure to comply with discovery, and he has also obtained court orders assessing attorneys’ fees against “banks” for noncompliance with discovery.

The foreclosing Plaintiff styles itself as the trustee for a series of pass-through certificates by a division of a Tennessee bank “Master Association” in its capacity as trustee under a Pooling and Servicing Agreement and assignee of MERS. As such, all issues as to the securitization including the PSA and MERS’ involvement are implicated by virtue of the Plaintiff’s self-chosen denomination.

It is common knowledge that Joseph Biden III, the Attorney General of Delaware, has sued MERS in a 91-page Verified Complaint sounding in deceptive trade practices which have lead to improper foreclosures. We expect many of the issues in the Biden lawsuit to be raised in the Sussex County litigation.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 2, 2012

The Supreme Court of Ohio has officially approved FDN’s Foreclosure Defense Seminar for CLE credits under Rule X of the Supreme Court Rules for the Government of the Bar of Ohio. The approval was issued by letter dated January 20, 2012 which we received today.

We are planning the next seminar to take place some time in March, 2012 in New Jersey, and a second seminar to be scheduled in the Los Angeles, California area in April, 2012.

Separately, Mr. Barnes has caused the third denial of a Plaintiff’s Motion for Summary Judgment in a case pending in Orlando, Florida. At the first hearing on the same motion, the Court told the Plaintiff’s counsel on the record that the Plaintiff did not own the note, and thus the case was going to trial. Mr. Barnes was thereafter retained, and Plaintiff moved for summary judgment again after objecting to and not producing discovery. The Court, on the record, said that “discovery is incomplete, so you win on that issue.” Although Mr. Barnes made numerous attempts to coordinate a hearing on the Plaintiff’s discovery objections with counsel for Plaintiff (which counsel is from Florida Default Law Group in Tampa), no cooperation was ever received.

Undaunted, Plaintiff moved for summary judgment a third time. Mr. Barnes filed an opposition setting forth the two prior denials and reasons therefor. The Court denied the Motion for a third time.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 1, 2012

In what appears to be a direct attack on the alleged authority of “robo-indorsements”, the Court of Appeals of North Carolina has issued an opinion dated December 6, 2011 In The Matter of the Foreclosure of Deed of Trust executed by Tonya R. Bass, Case No. COA11-565, which upheld the trial court’s dismissal of a foreclosure attempted by U.S. Bank National Association as Trustee, which claimed to be the “holder” of the Note based on a blank, unsigned indorsement. The opinion is approximately 23 pages, and sets forth a detailed analysis of the issues surrounding the burden of a foreclosing party to demonstrate “holder” status, which is required as to a foreclosure proceeding brought under NCGS 45-21.16(d).

North Carolina’s nonjudicial foreclosure procedure under the Statute is initiated by the filing of a Petition by the foreclosing party and a preliminary hearing before the Clerk of the Court who determines whether there is sufficient evidence from the Petitioner to satisfy the four separate 45-21.16(d) factors to justify the entry of an Order authorizing a foreclosure sale. The Statute provides for an automatic right of appeal before the presiding Judge as to the Clerk’s determination, and an automatic stay of the sale pending the outcome of the appeal.

The trial court, on such appeal, takes evidence and determines whether all four of the statutory factors have been met to warrant a sale. The trial court’s determination may then be appealed to the Court of Appeals of North Carolina, which is what occurred in the Bass case.

The promissory note in the Bass case contained three stamps purportedly indorsing and transferring the note among prior lenders and ultimately to U.S. Bank. The attack was on the first endorsement, which was a stamp without a handwritten signature. The Court first went through the method by which someone can acquire “holder” status under North Carolina law, and also what constitutes proof thereof. The holding specifically states “Moreover, an indorsement does not prove itself, but must be established…by proper testimony. Our Supreme Court has specifically held that a stamp may constitute an indorsement, but only if the stamp is executed by a person having the intent and authority to do so.”

The Court found that U.S. Bank’s witness had no personal knowledge of the prior transfers of the note beyond what was reflected in records which she reviewed. The trial court concluded that U.S. Bank was not the “holder” of the note as there was no evidence or testimony that the blank, unsigned indorsement was placed on the note by someone with authority to do so, and thus U.S. Bank failed to satisfy subpart (a) of NCGS 45-21.16(d). The trial court dismissed the foreclosure, which dismissal was upheld by the Court of Appeals.

Bravo to the Court of Appeals to North Carolina for holding a foreclosing bank to its burden of proving the validity of indorsements on promissory notes. We all too often see courts blindly accepting the “well, it is a blank indorsement which makes the note fully negotiable” argument being made by “banks” and servicers, with no evidentiary burden whatsoever being placed on the foreclosing party to prove that the blank indorsement was placed on the note by someone with authority to do so.

We hope that other states will see the importance of this decision and adopt the evidentiary burden placed on foreclosing party by the Court of Appeals of North Carolina. We thank one of our dedicated followers for bringing this case to our attention.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 26, 2012

The issue of whether MERS can be a “beneficiary” under the Oregon Trust Deed Act was argued by Jeff Barnes, Esq. in the Oregon Court of Appeals in Salem, Oregon on January 17, 2012. Mr. Barnes, admitted pro hac vice, represents the homeowners who appealed an adverse summary judgment ruling which was entered in the course of their action to challenge a non-judicial foreclosure. Although Federal and Bankruptcy courts in Oregon had, at the time of the summary judgment hearing, found that MERS was not a beneficiary in construing the Act, the pro tem trial court’s position as the Oregon decisions was: “not in my book”. The appeal is the first of its kind requesting an appellate determination in Oregon as to whether MERS can legally be a “beneficiary” under the Act.

Mr. Barnes also represents homeowners who are filing an action for damages under Washington’s post-foreclosure remedies statute, which permits homeowners to file claims for damages arising out of fraud and misrepresentation; failure of a trustee to comply with the Washington Deed of Trust Act; and certain other circumstances. There is no appellate case law in Washington as to the requirements for pleading a cause of action under the statute or how damages are quantified. The case will thus seek court determinations on these issues. Local counsel John Sterbick, Esq. will be working with Mr. Barnes on the case.

We have also been receiving many inquiries relating to the now infamous loan mod scam where the bank or servicer tells the homeowner that they have to be three months behind in their payments in order to be considered for a loan mod, but thereafter tell the homeowner that they cannot be considered for a loan mod because they are in default and have been referred for foreclosure. Of course, the “bank” or servicer never puts the requirement in writing, so they can later deny it and claim “statute of frauds” as a defense. The fact that this same modus operandi has been used by different “banks” and servicers in so many different states to manufacture homeowner defaults tells us that this is a well-entrenched pattern of fraudulent activity on the part of the “banks” and servicers to concoct fraudulent foreclosures.

Per a prior post, Mr. Barnes has already filed one action in Florida against Bank of America arising out of this scam, and he will shortly be filing a second action in Colorado where the same scam was perpetrated upon the homeowner by Citimortgage. In view of the number of inquiries we receive on this issue, we expect more such lawsuits to be filed in the near future.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 12, 2012

We previously advised on this website that in a case pending in the Tennessee Federal Court where the homeowner is represented by Jeff Barnes, Esq. and local counsel John Higgins, Esq. that Defendant Bank of America’s Motion to Dismiss the Plaintiff’s Complaint for Declaratory Relief was denied, as was a subsequent Motion by BOA for the Court to “Reconsider” its denial of BOA’s Motion to Dismiss. The Court determined that BOA had not shown that it owned the Plaintiff’s mortgage loan despite alleging that it purchased the loan in 2005. Defendant BOA took the position that it owned the loan throughout the motion stage of the litigation, with the Motion to Reconsider having been denied on September 29, 2011.

However, just over one month later on November 3, 2011, counsel for Defendant BOA admitted to Plaintiff’s counsel, in an e-mail, that “The Bank of New York Mellon, N.A. is the current holder of the Note.” There was no information, however, as to (a) when Bank of New York came into ownership of the Note; (b) by what manner, means, or vehicle BONY came into ownership of the Note; (c) under what circumstances BONY came into ownership of the Note; or (d) when BOA knew that BONY was the alleged owner of the Note.

The Plaintiff is filing a Motion to amend his Complaint to now add BONY as a Defendant. The Amended Complaint also contains a claim for unjust enrichment to the extent that any payments made to Defendant BOA by Plaintiff which were not legally entitled to be demanded or retained by BOA, and any payments which were transferred to BONY without any authority, be returned to the Plaintiff. The Court in a pending case in California (the Javaheri case) has previously determined that the Plaintiff may state such a cause of action to the extent that any payments made to a third party (who was not the original lender) under circumstances where there was no right for that third party to demand or accept payments from the homeowner gives rise to a claim for unjust enrichment.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com