August 11, 2010

Those of you who follow this website know that the Law Offices of David J. Stern, P.A., which was sued in a Federal Court class action for RICO violations recently and was announced to be the target of an Economic Crimes Division investigation by the Florida Attorney General yesterday, was previously found by a Pasco County, Florida Judge to have manufactured a fraudulent, backdated Assignment of Mortgage notarized by a notary whose commission and stamp were not even in existence until five months after the date of the notarized Assignment, and where the Court which had jurisdiction over that case dismissed it with prejudice and assessed the borrower’s attorney’s fees against Stern’s client. Well, all we have to say is “he gone and done it agin”.

In a case we are defending, Stern did the EXACT SAME THING: filed and recorded an Assignment of Mortgage “notarized” by a Notary whose commission did not even exist until several months after the date of the alleged Assignment, which was, as usual, signed by a Stern paralegal posing as a “Secretary” of MERS. We have filed a Motion on behalf of the homeowner seeking dismissal of the action with prejudice, sanctions, attorneys’ fees and costs, and referral of the matter to the Florida Attorney General, which is investigating the same type of conduct engaged in by Stern in other cases.

If Stern did it twice, he probably did it hundreds of times. That is why, again, we believe that the State of Florida or the Supreme Court of Florida or the Florida legislature, or a combination therof, should immediately appoint a Special Commission or Task Force or other body to review ALL foreclosure cases filed by Stern since the day his Firm first started doing so to examine each and every case for misconduct, false documentation, or other legal infirmities, and to cause each such case to be re-opened for full defense by the borrower/homeowner. It is only in this way that true justice will be done as to the man whose 130 foot yacht is named “Your House is My House” in Spanish.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

August 10, 2010

The Economic Crimes Division of the office of the Florida Attorney General has announced today the launching of a criminal investigation of the Law Offices of David J. Stern, P.A., the Law Offices of Marshall Watson, P.A., and Shapiro & Fishman, P.A. regarding improper documentation created and filed in Florida foreclosure cases by these Firms to speed up the foreclosure process, oftentimes without knowledge of the homeowner. Interested readers may follow up on www.myfloridalegal.com/picture.html.

As those of you who follow this website already know, the Law Offices of David J. Stern has already been found by a Pasco County, Florida Court to have manuafactured false documentation and perpetrated a fraud upon the court in a written opinion in a foreclosure case where the borrower’s attorneys’ fees were assessed against Stern’s client. Our experience with the Stern and Shapiro & Fishman Firms has also demonstrated that these Firms consistently violate due process and the ethics rules in their relentless pursuit of pushing foreclosures through the courts with arrogance and contempt not only for the law but for opposing counsel as well, with an attitude of “how dare you defend these cases!”

What should happen, and what FDN attorneys and associates have already discussed more than once, is that the Florida courts should appoint a special commission to examine each and every foreclosure action filed by these Firms (and Florida Default Law Group as well, who we also know, from personal experience and reported court proceedings, also routinely engages in misconduct in “prosecuting” foreclosure cases) from their first foreclosure filing in their history, and for any case which appears to have any indication of improper procedure, that each such case be reopened and the borrower be permitted to defend it. We were recently retained on a case filed by the Stern Firm in 2003 which has indications of improper procedure and false allegations.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

August 9, 2010

An Arizona Superior Court Judge has issued an Order, on Motion of FDN’s Jeff Barnes, Esq. (admitted pro hac vice) and local counsel Richard Duffield, Esq. granting a preliminary injunction against a trustee’s sale. The Defendant bank had originally counterclaimed for judicial foreclosure, then attempted to dismiss that counterclaim after the borrower served a response to the counterclaim. The Court held that the attempted dismissal was improper and that a trustee’s sale cannot occur in the presence of a pending action for judicial foreclosure.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

August 9, 2010

We have received an overwhelming response as to our upcoming live seminar series. The seminars will be held in the Newport Office Center (where Mr. Barnes’ maintains his Newport Beach, California office), which is located at 2901 West Coast Highway, Newport Beach, California 92663. 

Mr. Barnes’ Newport Beach, California office will permanently replace the Las Vegas, Nevada office as of Friday, August 27, 2010. The Las Vegas office will be closing on Thursday, August 26, 2010.

The one-day live seminars will be held on Fridays and will consist of seven (7) hours of instruction from segments of Mr. Barnes’ 12-CLE hour course which has been previously approved by The Florida Bar. Each participant will receive a binder with power points, outlines, sample pleadings, motions, discovery, proposed court orders, and case law. Breakfast, lunch, snacks, and beverages will be served and are included in the seminar fee.

The present tentative dates for the first round of one-day live seminars are October 1, 2010; October 29, 2010; November 19, 2010; December 17, 2010; and January 7, 2011. Content and materials will be similar for each session, but may differ as to updates on court rulings, case law, and litigation techniques. There may also be certain segments from the 12-CLE hour series which are included in one specific session but not another. Course schedules for each specific seminar will be posted on this website as of the date that registration materials are made available.

Enrollment for each one-day seminar will be limited to twenty (20) participants. Seminars will begin promptly at 9:00 a.m. Pacific time and will conclude at approximately 5:00 p.m. The lunch hour from noon to 1:00 p.m. is reserved for Q&A.

Reservation forms will be made available by e-mail and fax beginning the week of September 6, 2010. A posting on this website will be made when a given seminar is closed at the point where enrollment for that specific seminar reaches 20 participants. There will be no on-site registration, and the seminars are limited to licensed attorneys only. Future seminars are being planned for paralegals and legal assistants employed by active law Firms.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 27, 2010

An Oakland Park (Ft. Lauderdale area) Florida attorney has sued MERS and the Law Offices of David J. Stern in a Federal RICO action in Florida. The lawsuit, filed yesterday, July 26, 2010 and comprising some 24 pages, is available by googling Law Offices of David J. Stern, and alleges violations of the Federal Racketeering and Corrupt Organizations Act.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 25, 2010

As those of you who follow this website are aware, the “nonjudicial” foreclosure states require the borrower to institute litigation in court to challenge a Trustee’s (foreclosure) sale and request both a temporary restraining order cancelling a pending sale, and for a preliminary injunction prohibiting any further attempts at foreclosure pending the duration of the borrower’s litigation challenging the foreclosure attempt. One of the elements which must be proven in order to obtain a preliminary injunction is something called “likelihood of success on the merits”. This element has consistently been mischaracterized by attorneys representing the “lenders”, servicers, and trustees of securitized mortgage loan trusts as the likelihood of success on the merits of the entire case.

Not so under Arizona law, which has explained the distinction in print. Arizona case law provides that a showing of irreparable harm if an injunction is not granted satisfies the “likelihood of success on the merits” prong of the claim for injunctive relief. As such, if a borrower can show that absent a court order to preclude the sale of the unique real property during the pendency of the borrower’s litigation that the unique property will be lost, the borrower has satisfied the “likelihood of success on the merits” prong of the claim for injunctive relief. The case stems from an insurance dispute where the particular type of insurance was unique and absent an injunction, the protections of the insurance would be lost.

What we consistently run into in the non-judicial states is this argument from counsel for the “lenders”, servicers, and trustee banks of securitized mortgage loan trusts that “the plaintiff (borrower) cannot satisfy the likelihood of success on the merits of their case because the plaintiff is in default and they are living in the house for free”. This argument is not only incorrect, but is a deliberate misrepresentation of the state of the law, at least in Arizona, as the “likelihood of success on the merits” claim relates SOLELY to the claim for injunctive relief, not the whole case, and has nothing to do with the claimed default.

Of course, the counter-argument takes its first steps at the legal right to declare a default (standing, chain of title, etc.), and follows, in securitization cases, that what the “lender”, servicer, or securitized trustee is really doing is trying to get paid twice, three times, four times, or more with the foreclosure. In fact, when the Arizona state court Judge in the case recently argued by Mr. Barnes was presented with the question of why a Wall Street securitized trustee Bank would buy a loan which is already in default (a/k/a a “toxic” loan) for purposes of placing it into a securitized mortgage loan trust, the Judge stated “because they knew they were going to get paid by insurance”. This is the question which was implicitly posed by Judge Schack in the Deutsche Bank v. Rolando Campbell case in New York back in 2008, which the Arizona Judge answered on the record last week.

BINGO!!! SHAZAM!!! This is what the Goldman Sachs litigation was all about, and why they settled so quickly with the SEC. As those of you who read the lawsuit know, Goldman pooled a series of loans which they knew would fail and took out multiple insurances on the risk of failure, and cashed in when the loans did fail. We call this “rigged gambling contracts”. For a paltry $0.55 billion, Goldman walked away with what must have been many times that. The settlement was nothing more than a “cost of doing business”.

It is up to us who defend foreclosure cases to keep bringing this to the attention of the judiciary. We are more than happy that at least one jurist has finally stated on the record what we have been arguing all along.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 20, 2010

In connection with the opening of the Newport Beach, California office last week, FDN’s Jeff Barnes, Esq. will shortly be scheduling a series of one-day seminars in foreclosure defense to take place once to twice a month at the Newport office. Seminars will be all day on Fridays from approximately 9 a.m. to 5 p.m. and will encompass 7 CLE segments from Mr. Barnes’ 12 hour foreclosure defense series which has previously been approved by The Florida Bar (CLE credits may be used by attorneys in other states. Check with your local state Bar for details).

Each seminar will be a live presentation and will be accompanied by a booklet with sample pleadings, motions, discovery, and settlement agreements, and will include a lunchtime “Q&A” session as well.

Dates and costs for the seminars will be made available by the second week of August, 2010. Please contact  [email protected] for these details. The seminars are slated to be held beginning in September, 2010. Although the seminars are designed primarily for attorneys in any jurisdiction, non-attorneys such as paralegals are welcome to register and attend, but will not receive CLE credit unless any particular licensing authority recognizes Florida Bar approved CLE for credit toward any other certification or license.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

July 16, 2010

FDN attorneys Jeff Barnes, Esq. and Monica Brennan, Esq. have today stopped a foreclosure sale in southern Idaho literally 30 minutes before the scheduled sale. The case came to Mr. Barnes and Ms. Brennan just days before the sale date and at a time when Mr. Barnes and Ms. Brennan were already booked with several other court matters. Mr. Barnes worked overtime late at night and early in the morning to research and prepare the papers which were filed and prosecuted by Ms. Brennan, resulting in the sale being stopped 1/2 hour before the borrower’s home was to be sold at a trustee’s sale.

The case is one of the most complicated seen in some time, involving at least three purported assignments of the mortgage loan from the (now defunct) original “lender” to the first trustee of the securitized mortgage loan trust, then to another trustee, then to another. There is also involvement of an alleged servicer.

Our thanks to Ms. Brennan for her diligent efforts.

Jeff Barnes, Esq., ForeclosureDefenseNationwide.com

July 14, 2010

FDN attorney Bill Sloan, Esq. has defeated a plaintiff’s Motion for Summary Judgment in a foreclosure case in South Carolina. The case thus continues to progress into discovery. This is Mr. Sloan’s second recent victory in a span of just weeks. Mr. Sloan is being assisted by FDN’s Jeff Barnes, Esq., who may seek admission PHV to the South Carolina court in the case. Mr. Sloan and Mr. Barnes have also just been retained on yet another case in South Carolina as well.

FDN’s Alan Geraci, Esq. has scored his second recent victory in California on papers drafted and prepared by Mr. Barnes. The Court entered a Temporary Restraining Order cancelling a trustee’s sale the day before the sale was to take place. The Order provides that the Defendants must produce certain discovery documents at this time, even before formal discovery has been instituted. The form of the Order is very similar to a prior Order entered by another California court which commanded the production of discovery documents relating to securitization, chain of title, and standing at the TRO stage, which Order was obtained by Mr. Geraci on papers prepared by Mr. Barnes. We previously published this significant result on this website.

As Mr. Barnes has literally been deluged with cases from California, Oregon, and Arizona recently and is receiving more and more inquiries as to cases in Hawaii, he has opened an office in Newport Beach, California which will ultimately replace the Las Vegas, Nevada office and will provide Mr. Barnes with five (5) different airports to better serve clients in numerous states. The transition is scheduled to be completed by the end of the first week of August, 2010. Mr. Barnes will continue to use the Nevada office for the remainder of the month of July. The Boca Raton, Florida office will continue to operate after the Nevada/California transition.

The California office is located at 2901 West Coast Highway, Newport Beach, California 92663. All mail to that office should be directed to Suite 350.

Jeff Barnes, Esq.

July 9, 2010

The United States Bankruptcy Court for the Eastern District of California has issued a ruling dated May 20, 2010 in the matter of In Re: Walker, Case No. 10-21656-E-11 which found that MERS could not, as a matter of law, have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp. The Court’s opinion is headlined stating that MERS and Citibank are not the real parties in interest.

The court found that MERS acted “only as a nominee” for Bayrock under the Deed of Trust and there was no evidence that the note was transferred. The opinion also provides that “several courts have acknowledged that MERS is not the owner of the underlying note and therefore could not transfer the note, the beneficial interest in the deed of trust, or foreclose on the property secured by the deed”, citing the well-known cases of In Re Vargas (California Bankruptcy Court), Landmark v. Kesler (Kansas decision as to lack of authority of MERS), LaSalle Bank v. Lamy (New York), and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court).

The opinion states: “Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.”

Read that again: “Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note IS VOID UNDER CALIFORNIA LAW.” This conclusion was based upon California law cited in the opinion that the note and the mortgage are inseparable, with the former being essential while the latter is “an incident”, and that an assignment of the note carries the mortgage with it, “while an assignment of the latter [the mortgage] alone is a nullity.” As MERS must own the note in order to assign the incident deed of trust, MERS is legally precluded from assigning the deed of trust for want of ownership of the note, and cannot assign the note in any event as it never owned it. MERS’ lack of ownership interest in promissory note is a matter of decided case law based on a record stipulation of MERS’ own lawyers in the MERS v. Nebraska Dept. of Finance decision.

This opinion thus serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

The Court concluded by stating: “Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.” Thus, any foreclosing party which is not the original lender which purports to claim payment due under the note and the right to foreclose in California on the basis of a MERS assignment does not have the right to do so under the principles of this opinion.

This ruling is more than significant not only for California borrowers, but for borrowers nationwide, as this California court made it a point to cite non-bankruptcy cases as to the lack of authority of MERS in its opinion. Further, this opinion is consistent with the prior rulings of the Idaho and Nevada Bankruptcy courts on the same issue, that being the lack of authority for MERS to transfer the note as it never owned it (and cannot, per MERS’ own contract which provides that MERS agrees not to assert any rights to mortgage loans or properties mortgaged thereby).

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

Jeff Barnes, Esq.;, www.ForeclosureDefenseNationwide.com