December 2, 2010

A Pennsylvania Superior court, in an appeal from an Order of the Court of Common Pleas of Allegheny County, has reversed a trial court order which denied the borrowers’ motion to set aside a sheriff’s sale and strike a default judgment in favor of Wells Fargo as the trustee of a securitized mortgage loan trust. The case, Wells Fargo Bank N.A. as Trustee for the MLMI Trust Series 2005-FF6 v. Lupori, 2010 PA Super 205 (November 12, 2010) was confined to one issue: that being whether the trial court committed error as a matter of law in denying the borrowers’ motions because the record on the date of judgment lacked any evidence whatsoever to establish that Wells Fargo was the real party in interest and possessed standing to prosecute the foreclosure. The court held that the trial court so erred.

The Court noted that the Complaint alleged an assignment of the mortgage loan from First Franklin to First Franklin Financial Corporation, but made no mention of any other assignment, and nowhere in the Complaint did Wells Fargo identify itself as the owner of the mortgage. In opposing the borrowers’ motions, Wells Fargo asserted that it received an assignment of the Corporation’s rights to the mortgage on April 1, 2005. The Court found, however, that the Complaint did not comply with Rule 1147(a)(1) of the Pennsylvania Rules of Civil Procedure, and that the April 1, 2005 assignment was not in the record at the time of the default judgment, thus warranting reversal of the trial court’s order.

In reversing the trial court’s order, the Court cited to Pennsylvania law which holds that where a defect or irregularity is apparent from the face of the record, the prothonotary will be held to have lacked the authority to enter a default judgment and the default judgment will be considered void.

The Court noted in footnote 2 of its opinion that “The alleged assignment from the Corporation to Wells Fargo predates the assignment from the Bank to the Corporation. Wells Fargo argues on appeal that its assignment from the Corporation was a valid equitable assignment, despite the Corporation’s lack of an interest in the mortgage at the time it purportedly assigned the mortgage to Wells Fargo.” As the Court disposed of the matter on other grounds, the Court stated that “we need not reach this issue”.

We will thus say here what the Court hinted at with its descriptive language but which it declined to reach: the “purported” assignment to Wells Fargo was a fraud, period. It is readily apparent that Wells Fargo dummied up a fraudulent assignment in an attempt to cure the standing issue after the fact. Here, then, is proof positive of fraudulent conduct on the part of Wells Fargo in an attempt to sustain a foreclosure attempt, as we have seen time and time and time again across different jurisdictions in our cases.

We laud the Pennsylvania court for holding Wells Fargo to its burden and exposing this fraud to the public. 

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

December 1, 2010

FDN announces that its mortgage loan and securitized mortgage loan trust investigation research Center and team are now in place and fully operational. The Center is located in Boca Raton, Florida and is being staffed by multiple paralegals who are associated with the FDN network of attorneys and who have been trained in the use of specialized software and access to databases which not only track the history of a loan, but also identify which tranches of a securitized mortgage loan trust the loan has been placed into and whether the loan actually made it into a particular trust (notwithstanding any alleged “assignment” to a trust by a foreclosing party, MERS, or otherwise).

Loan and securitized trust investigations are available at any stage of a foreclosure proceeding provided the requisite information as to the loan (e.g. loan number) and name of the trust are provided.

For more information, please e-mail us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 

November 24, 2010

FDN will be releasing and making available the first edition of the Foreclosure Defense Attorney Handbook for attorneys and paralegals. The Handbook is designed for attorneys and law Firms interested in foreclosure defense or beginning a foreclosure defense practice.

Handbook topic areas will include:

   (a)  Initial case screening and client objectives;

   (b)  identifying preliminary defenses in foreclosure documents (judicial and non-judicial foreclosures);

   (c)  assignments of mortgages (judicial) and Deeds of Trust (non-judicial);

   (d)  Substitutions and Notices of Trustee or Foreclosure Sale (non-judicial);

   (e)  MERS

   (f)  The Complaint, Temporary Restraining Order, and Preliminary Injunction (non-judicial proceedings);

   (g)  The Answer, defenses, and Counterclaim (judicial proceedings);

   (h)  Discovery (Requests for Production, Interrogatories, and Requests for Admissions);

   (i)  Defending Motions to Dismiss and Motions for Summary Judgment.

Cost of the Handbook is $295.00 which includes 2-day Priority Mail shipment. Available only to attorneys and paralegals. Order forms are available on e-mail request. Please include state bar identification and number (if attorney) or name and address of law Firm affiliation (if paralegal). Shipments will begin Monday, December 6, 2010. Handbooks will be shipped within approximately 48-72 hours from receipt of completed order form and payment.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 22, 2010

A November 18, 2010 article in the Boulder (Colorado) Weekly newspaper has attempted to alert homeowners in Colorado of an impending foreclosure crisis about to hit the state. The article also discusses the importance of what is known as a “Rule 120” hearing, which is a hearing where the foreclosing party requests the court to set a foreclosure sale date. The Rule permits the homeowner to oppose the request, and if there is no opposition, it makes defending the foreclosure much more difficult.

The problem with Rule 120 as it is worded is that it is very restrictive, only asking if there is a default and if the borrower is in the military. Fortunately, the Colorado Supreme Court issued an opinion back in 1989 stating that such a restrictive reading of the rule is improper, and that a court should permit matters such as the defense that the foreclosing party is not the real party in interest to be raised at the Rule 120 hearing.

Unfortunately, it seems, from the article, that Colorado District Court judges are not following the ruling of the Colorado Supreme Court and are letting banks literally get away with foreclosing without ever having to show that they own the Note and Deed of Trust through actual evidence, and simply presenting the Note at the hearing is sufficient even if there are serious questions as to how the foreclosing party came into the rights under the Note and Deed of Trust.

The article goes on to point out the inherent deficiencies in this type of process. Obviously the message here is that borrowers need to (a) be aware of their Rule 120 hearing and mount any proper challenge if warranted, and (b) make sure the judges know of the Supreme Court’s dictates on what is to be presented at a Rule 120 hearing.

Interestingly, this article comes on the heels of our receiving many inquiries from Colorado borrowers in the past few weeks who did not even know whether a Rule 120 hearing took place in their case or not. If it did and there was no notice of the hearing to the borrower, a due process challenge should be made. However, in view of the article, what appears to need to be done is an overhaul of the Colorado foreclosure system as a whole.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 22, 2010

The November 19, 2010 session of FDN’s live foreclosure defense seminar series brought attorneys to Newport Beach from New Jersey, Illinois, and greater Los Angeles. Participants were provided with a detailed notebook and a full day of instruction in beginning foreclosure defense. The following topics were covered for both judicial and non-judicial foreclosure proceedings:

                    (a)  Identifying Preliminary Defenses

                    (b)  MERS and MERS Assignments

                    (c)  Credit Enhancements and Insurances (Securitized Mortgage Loan Trusts)

                    (d)  Discovery

                    (e)  Injunctive and Declaratory Relief and other remedies

                    (f)  Filing and Defending Dispositive Motions

                    (g)  Forebearance Agreements and Loan Modifications

The notebooks contain exemplar pleadings and responses to Motions to Dismiss and for Summary Judgment; discovery templates; actual disclosures from securitized trust documents; and case law.

Participants also enjoyed the sumptuous, day-long hot and cold buffet which included desserts, fresh fruit, and beverages.

The next seminar is scheduled for Friday, December 17, 2010 in Newport Beach, California and is also for attorneys and paralegals associated with law Firms. We are already receiving requests for registration for this session. The January seminar is scheduled for Friday, January 7, 2010. Future seminars are being scheduled for February and March, 2010 as well.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 

November 17, 2010

The FDN attorney network will now be climbing to 34 law Firms nationwide. Arrangements are being finalized with additional local counsel in Arizona (to handle cases in Maricopa, Pinal, and Yavapai counties); Tennessee (Knoxville and Nashville areas); and New York (the five boroughs of Manhattan, Queens, Brooklyn, Bronx, and Staten Island/Richmond, and the White Plains area). Specific details will be published shortly.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 17, 2010

In a Memorandum dated today from Florida Supreme Court Chief Justice Charles T. Canady to Chief Judges of the Florida Circuit Courts, Justice Canady has attached a letter received from the Florida Press Association and other organizations detailing incidents of denial of access to foreclosure proceedings by court personnel and Judges. The denials were made to pro se litigants, observers, and at least one reporter. 

In one instance, a court observer in Hillsborough County (Tampa) was told that foreclosure proceedings were not open to the public. In another incident in Duval County (Jacksonville), a pro se borrower was told by court security that she could not access foreclosure proceedings because only attorneys were permitted. In another instance in Orange County (Orlando), a court observer was told that foreclosure hearings were held “in private chambers” and not open to the public. The same type of incident was reported to have occurred in Citrus County. In Jacksonville, a separate, distrubing incident occurred which you may have read about in Matt Taibbi’s column in Rolling Stone magazine.

Apparently, a legal aid attorney in Jacksonville attended a foreclosure proceeding accompanied by Mr. Taibbi, who attempted to interview a pro se litigant after the case was heard. Later that day, the Judge sent an e-mail to the attorney “castigating her for bringing the reporter into the proceedings” and stated that “members of the media are only permitted upon proper request to the security officer”, furthering threatening the attorney with contempt if a reporter attempted to interview a homeowner coming out of a foreclosure hearing.

Our threshold questions are:

     What are they trying to hide?

     What are they trying to keep from homeowners from learning about their system?

     What “secrets” about the foreclosure “railroad” system are they trying to prevent the press and borrowers from discovering?

This arrogant, vicious, and threatening conduct is not only unconstitutional, but manifests an outright bias against borrowers attempting to defend their cases and against members of the media attempting to report the truth. When Judges start banning observers from public court proceedings and threatening attorneys for bringing reporters to court, echoes of Nazi Germany come to mind. Fortunately, Chief Justice Canady has now issued the directive that this kind of conduct is to stop at once.

What also needs to be ordered is that foreclosure counsel, particularly certain “local” attorneys who handle hearings for the likes of The Law Offices of David J. Stern, Shapiro & Fishman, The Law Offices of Marshall C. Watson, Florida Default Law Group, and their ilk be likewise admonished and ordered to abide by the Constitution, Court Rules, and case law as well and to stop treating borrowers and their counsel with arrogance and disrespect (which we have observed on numerous occasions). One such attorney has recently gone so far as to represent to the Court that he is appearing for one of these law Firms to argue a Motion, but then refuses to accept a copy of an Order reflecting the Judges’ ruling at the hearing.

Justice Canady’s Memorandum states that he is confident that with the cooperation of all judges and court staff “along with the tools of the revised rules of court procedure [including the Foreclosure Complaint verification requirements of the Florida Supreme Court], implementation of the managed mediation program, and the influx of court resources” that “the Florida courts will be able to meet this challenge in a manner that protects and preserves the rights of all parties as well as interested observers.” Again, “the rights of ALL parties”, which includes pro se litigants and members of the press.

The message from On High is thus clear: cut the crap and comply with the Law and the Rules which have been enacted to protect everyone. If the Circuit Judges want to get mad at someone, they should direct their anger and frustration at the real perpetrators: the Banksters and their RICO Enterprise tool known as MERS, for causing this debacle nationwide; consistently filing fraudulent documents in court; lying about owning mortgage paper and obligations; and perpetrating on this country what is probably the greatest and most massive fraud ever schemed in the history of the United States. Fortunately, more and more members of the Judiciary are recognizing that the borrowers are the victims and not the bad people that the Banksters’ attorneys consistently and wrongfully portray them to be.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 

November 14, 2010

We ordinarily do not go out of our way to repeat news we hear about on other websites, but this latest story needs repeating and also needs more than urgent attention. Apparently, in the upcoming lame duck session of Congress which begins tomorrow, Monday, November 15, 2010, certain members of Congress are drafting and will attempt to push through one or more bills legitimizing all actions of MERS retroactively through provisions buried in rushed legislation which has nothing to do, on its face, with mortgages, lending, or anything related to the foreclosure crisis in the hope that homeowners do not find it. The actions are allegedly being characterized as those under the Commerce Clause, and are, if this is true, nothing short of a conspiracy between the banksters and the government to perpetuate one of the greatest frauds in history on the American homeowner with the goal of providing the banksters with a mechanism to legitimize the countless frauds of MERS over the years.

Such action is unconstitutional on many fronts, including constituting an illegal ex post facto law; a violation of the 10th Amendment to the United States Constitution; and a conspiracy by the Government to legitimize the fraudulent acts of a private company to the detriment of the United States homeowner.

We have been advised that fortunately, there are certain individuals in Washington who are keeping an eye on this attempted cabal, and are going to work overtime to try to prevent its consummation. Those of you who follow the recent escapades of the banksters know that they recently attempted to have the President sign legislation legitimizing illegal notarizations on foreclosure documents, which thankfully did not happen. The same watchdog/preventive action must be taken here. If not, the banksters will have accomplished the perpetration of the largest fraud upon this country since they got into the securitization business.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

November 9, 2010

In what can only be described as one of the most arrogant hypocracies in foreclosure litigation, MERS’ own “Terms and Conditions” with its lenders and servicers, which was recently produced to us in court-ordered discovery, expressly states that the MERS system is not to be used to create or transfer interests in mortgage loans. The MERS contract goes on to state that MERS is never to be identified as the owner of the promissory Note in any foreclosure proceedings, and that MERS will monetarily fine any offenders who do so.

Notwithstanding these self-imposed limitations, MERS has and continues to act as the purported “assignor” to assign mortgages AND PROMISSORY NOTES to foreclosing parties in both judicial and non-judicial foreclosures, affirmatively representing that it is assigning the Mortgage (or Deed of Trust) “together with the Note or other indebtedness”. The overwhelming case law from the state, Federal, and Bankruptcy Courts throughout the United States which have dissected the MERS claim have come to the same universal conclusion, which MERS’ own counsel recently admitted on the record in one of our cases: that MERS does not own promissory notes, thus it cannot transfer them.

How, then, does MERS attempt to assign a Mortgage or Deed of Trust “together with the Note”? It lies, pure and simple, and hopes that the unsuspecting borrower does not catch it. Remember, MERS told the Supreme Court of Nebraska, through its attorney, that MERS does not loan money, does not own mortgage loans, does not extend credit, etc., so that MERS would not have to register as a mortgage lender and could thus avoid paying fees. However and despite these representations to a state supreme court by its own attorney, MERS goes to all of the other 49 states and says the exact opposite in the various “assignments”: by claiming ability to assign the Note, it is both creating an interest in the Note which it never had and is also transferring an interest in a mortgage loan, both of which MERS’ own Terms and Conditions say MERS cannot do.

To add insult to injury, MERS also, as the purported “beneficiary” of the Deed of Trust, also attempts to substitute the Trustee to further a foreclosure in the non-judicial states. As the case law has overwhelmingly stated (including the recent Federal decisions in California and Oregon and the prior decisions from Nevada and other states), MERS is NOT a “beneficiary” despite claiming to be so in Deeds of Trust, as the “beneficiary” is the party for whose benefit the Deed of Trust is given, that being the lender. An Oregon Federal case recently analyzed the statutory definition of “beneficiary” under the Oregon Trust Deed Act and concluded that MERS is not the “beneficiary” despite claiming to be so.

So the MERS hypocracy rolls on. It is up to us who actually read and understand the case law and go around the country teaching this to the Courts to continue to do so, especially with attorneys for “lenders”, “servicers”, and trustee banks continuing to chant their one-themed mantra: “the Deed of Trust says MERS is the beneficiary; therefore it is so”. We applaud those Courts who have analyzed the MERS facade and have said it is not so.

Jeff Barnes, Esq., www/ForeclosureDefenseNationwide.com

November 2, 2010

In an October 25, 2010 letter from Deutsche Bank to “All Holders of Residential Mortgage Backed Securities For Which Deutsche Bank National Trust Company or Deutsche Bank Trust Company Americas Acts As Securitization Trustee”, DB reports on “alleged deficiencies” in certain foreclosure proceedings and advises of the prior issuance, by the DB Trustee, of an “Urgent and Time-Sensitive Memorandum” dated October 8, 2010 to its Securitization Loan Servicers regarding servicing foreclosure procedures, demanding that the servicers “comply with all applicable laws relating to foreclosures”. The thrust of this letter, as we see it, is to shift the blame for any wrongful foreclosure practices to the servicers, saying “we told them to comply with the law”, the inference being that DB was not aware of the fraudulent foreclosure practices being engaged in by their servicers and “agents” (that being the attorneys and trustee sale companies who prosecute judicial and non-judicial foreclosures for DB as “trustee”).

Please. Foreclosures are delivered in file boxes to the servicers and attorneys and DB did not engage in any oversight to make sure their own agents (servicers and attorneys) complied with the law? Do they think the investors just fell off the back of the turnip truck?

The October 8, 2010 “Urgent and Time Sensitive” Memorandum attached to the October 25, 2010 Memo makes things even more interesting. Here are some select quotes:

    “The Governing Documents typically require the Trustee to furnish the Servicer with powers of attorney that allow the Servicer to sign documents and institute legal actions, including foreclosure proceedings, in the name of the Trustee on behalf of the Trusts in connection with these servicing activities…. Recent media reports suggest that the Alleged Foreclosure Deficiencies may include the execution and filing by certain servicers and their agents of potentially defective documents, possibly containing alleged untrue assertions of fact, in connection with certain foreclosure proceedings. The reported scope of such alleged practices raises the possibility that such documents may have been filed in connection with foreclosure proceedings relating to mortgage loans owned by the Trusts and may have been executed under color of one or more powers of attorney granted to Servicers pursuant to the Governing Documents. Any such actions by a servicer or its agents would constitute a breach of that Servicer’s obligations under the Governing Documents and applicable law.”

Read that carefully: “raises the possibility” that deficient documents “may” have been filed under “color of” powers of attorney, and if so, this would constitute a breach of contract and violations of law. Disputed issues of material fact precluding summary judgment, anyone? Telling the servicers that any counterclaim for wrongful or illegal foreclosure is the problem of the servicer and their attorneys? We don’t think so. Agent liability generally flows upstream to the principal, sometimes even in instances where the agent committed illegal acts, and contractual disclaimers are not always a defense.

So what we have here is DB tacitly admitting that its servicers and attorneys “possibly” filed fraudulent foreclosure documents (which we all know did in fact happen, with “robo-signer” assignments, backdated notaries, etc.), which if done “under color of” required powers of attorney, is illegal on more than one front.

As those of us who defend foreclosures in the judicial states know, there is NEVER, EVER, any such power of attorney attached to a foreclosure Complaint showing that the servicer or agent had authority to file the foreclosure, and when we request documentary evidence of such authority in discovery, we get “objections” as “irrelevant”. We have also not seen any such POAs or documented compliance with these or the Governing Documents recorded in non-judicial foreclosures we defend, either.

So here’s what needs to be done: In all “Deutsche Bank as Trustee” instituted foreclosures, discovery needs to be demanded as to these alleged “powers of attorney”, all evidence of compliance therewith, all evidence of oversight/monitering to insure compliance, etc., and without such evidence, motions for summary judgment (and/or, to dismiss in judicial foreclosures) should be filed by the borrower’s attorney. If these documents start magically appearing (like post-filing “assignments” with backdated effective dates and backdated notaries started appearing), well, the attorneys know what to do.

The final thought: if DB issued such a warning to its servicers and agents, we have to believe that Wells Fargo, Bank of America, US Bank, and the other “securitized trustee banks” either have, are, or should be issuing similar warnings. If not, that is just more evidence of lack of authority and compliance with the law, leading to further defenses to foreclosure.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com