March 21, 2012

In view of recent requests, FDN is planning its next foreclosure defense seminar for April, 2012. The proposed dates are Friday, April 13 or Friday, April 20, 2012. Interested attorneys or paralegals may e-mail us with their preferred date. The seminar has been accredited for 7.0 General CLE credits by the Florida Bar, and has also been approved for CLE by the Supreme Court of Ohio.

The seminar will be held locally in Beverly Hills, California. Breakfast and lunch of international cuisine will be catered.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 21, 2012

During the time that the rash of Attorney General lawsuits against the banks were in litigation over the past several months, foreclosures slowed. However, now that many of these AG lawsuits have been settled, the attitude of the banks appears to be “off to the races” now that the AG’s are not watching over their shoulders. Since these settlements of late, we have been receiving significantly more inquiries concerning foreclosures which have been recently filed, and also as to cases previously filed which were dormant during the AG litigations but which have now “ramped up”. However, court backlogs remain.

Florida is a case in point. State funding for the “rocket dockets” ran out June 30, 2011, resulting in foreclosures which had been assigned to the “rocket docket” being sent back to the presiding Judges. As such, we are now having to wait up to three (3) months to get a hearing on motion calendar in some jurisdictions. This is not a criticism of the system; just a reality. The reality has also been compounded by the over 100,000 foreclosure cases left “up in the air” when the Law Offices of David J. Stern, P.A. ceased operations. 

Another problem is that certain law Firms which are taking over some of the cases filed by the Stern Firm are not examining the court file to ascertain whether the homeowner is represented by counsel, and instead using the service list from the original Complaint for purposes of sending papers filed by the “new” law Firm. This has resulted in homeowners who are and have been represented by counsel being served with court papers, including motions for summary judgment, directly and without their counsel being copied on the papers. This practice of contacting the homeowner directly instead of contacting the homeowner’s attorney of record is a sanctionable offense in Florida with case law to support the imposition of sanctions against the offender.

Another issue concerns the substitution of counsel for the foreclosing Plaintiff. Many of the “foreclosure mills” are being replaced by other Firms, with the files being, in many instances, incomplete. We had instances lately where a “new” law Firm apparently entered an appearance for the Plaintiff, but with that law Firm only copying one Defendant (such as the HOA) and not all counsel of record. In another instance, there was no copy of the Notice of Appearance in the court file, and the “Appearance” was only brought to the attention of the Court by one Defendant’s counsel who received a copy of the Appearance.

A third problem is that certain of the “new” law Firms taking over cases from the mills are sending copies of papers to us in cases where our Firm is not even and has never been counsel of record for anyone in the case. The obvious result is that the proper attorneys for the parties named as Defendants are probably not being copied with filings by the “new” Firms.

Given the amount of pending foreclosures in Florida, we do not expect these problems to be resolved any time soon.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 15, 2012

The Guilford County, North Carolina Register of Deeds has filed a 47 page lawsuit against MERS and numerous banks arising out of what has been alleged to be a systematic creation of “falsified, forged and/or fraudulently executed mortgage documents filed with the Register of Deeds by what infamously has become known as ‘robo-signing'”, and that the Defendants’ scheme “was manifested in a private electronic registry many of the Defendants created called the ‘Mortgage Electronic Registration System’ (MERS).

“Through MERS, Defendants effectively privatized the public property recording system and disrupted Guilford County’s responsibility to maintain a reliable public registry of land records, as well as citizens’ fundamental right to determine through public searches who holds interests in property.” The suit goes on to state that the scheme “confused, misled, and deceived the Register of Deeds, as well as borrowers, homeowners, and other citizens who rely on the validity of publicly filed property records.” Note the use of the term “fundamental right” of a citizen to determine who owns their property.

The suit states that “Defendants’ misdeeds in connection with their securitization of billions of dollars of mortgages have been the subject of numerous investigations, state Attorneys General lawsuits, court findings of facts, and consent orders”, and that the actions of the Defendants were “criminal”. The suit takes the reader through the entire securitization process, the creation and operation of MERS, the state attorney and regulatory actions against MERS, fraudulent robo-signing, and sets forth documented examples of admissions of bank officers to signing false affidavits under oath. Examples of misconduct by JPMorgan Chase, Bank of America, Wells Fargo, and others are set forth in detail.

This is a “must-read” for any attorney who practices foreclosure defense. The style is Guilford County ex rel. Jeff L. Thigpen, Guilford County Register of Deeds v. Lender Processing Services et al., General Court of Justice, Superior Court Division, County of Guilford, State of North Carolina. The case is online.

We thank one of our North Carolina network attorneys for bringing this most important filing to our attention.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 14, 2012

An Oregon state court Judge has denied a Motion for Summary Judgment filed by Deutsche Bank (as the claimed trustee of a securitized mortgage loan trust) in what is the second round of litigation originally filed by the homeowner challenging whether the foreclosing party has standing, chain of title, and is the real party in interest for purposes of the foreclosure. The homeowner originally filed the case in state court. The Defendants at the time removed the case to Federal court, then caused it to be dismissed by abandoning their claim for nonjudicial foreclosure after the Federal Judge asked counsel to agree to certify the question of MERS’ authority to the Oregon appeallate court. Counsel for the homeowner agreed to the certification, but counsel for the Defendants did not take a position. DB then re-filed the case in state court seeking judicial foreclosure.

The issue of whether MERS is a “beneficiary” under the Oregon Trust Deed Act is currently on appeal with the Oregon Court of Appeals in a separate case where Jeff Barnes, Esq. represents the homeowner.

There are two different versions of the Note in the DB case, and there are many issues surrounding whether the requirements of the PSA were met and whether the loan was ever effectively transferred to the trust. DB’s representative testified in deposition that there was a swap counterparty and swap agreement which provided for insurance on the loans in the trust. The homeowner sought, in discovery, all documents relating to any insurance on the loans and all swap agreements. DB objected, but its objections have been overruled.

In over four (4) years of foreclosure litigation, Mr. Barnes has consistently sought these documents in securitization cases. In each case where they have been compelled, the foreclosing party has steadfastly refused to produce the documents, resulting in a dismissal of the foreclosure or other sanction, including attorneys’ fees against the foreclosing party. It remains to be seen whether DB will comply with the Oregon court’s Order. 

The case is now scheduled for jury trial next week. Jeff Barnes, Esq. represents the homeowner together with local Oregon counsel Elizabeth Lemoine, Esq.

Separately, an article in the New York Times today discusses the resignation of Greg Smith, an Executive Director of Goldman Sachs and head of the firm’s United States equity derivatives business in Europe, the Middle East, and Africa. Mr. Smith is quoted stating the following: ” What are three quick ways to become a leader? a) Execute on the firm’s “axes”, which is Goldman-speak for pursuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants”. In English: get your clients- some of whom are sophistocated, and some of whom aren’t- to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter arconym.”

    “Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not a single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. … It makes me ill how callously people talk about ripping their clients off. … These days, the most common question I get from junior analysts about derivatives is, “How much more money did we make off the client?””

Of course, this implicates how many times a borrower’s mortgage was sold or how many traunches a borrower’s loan was assigned to in order for Goldman to have been able to sell the various derivatives to their clients, and how much money Goldman made by pooling loans which it knew would fail so that it could realize huge profits from insurance claims. This was what the SEC v. Goldman Sachs litigation, which settled VERY quickly after it was filed, was all about: pooling loans, which Goldman knew would fail, into trusts; taking out insurance on the loans; and then collecting checks when the loans failed.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 7, 2012

The Florida 5th District Court of Appeal has reversed a summary judgment which was entered in favor of  Novastar Home Mortgage, which was a nonparty to the suit as it had previously withdrawn from the case. The entry of a judgment in favor of a non-party was found by the appeals court to be “fundamental error”. However, this was only the tip of the iceberg.

The Court also held that the judgment would have to be reversed even it had been entered in favor of BONY (as trustee of a securitized mortgage loan trust), as BONY failed to show that it was entitled to enforce the “lost” note when it was lost. BONY offered no proof of who lost the note or when it was lost, and no proof of anyone’s right to enforce the note when it was lost. This is the same set of reasons why an Iowa court has repeatedly denied summary judgment to Wells Fargo in a case where Mr. Barnes represents the homeowner, as we previously reported.

The holding also found that BONY produced no evidence of ownership due to the alleged transfer from Novastar to BONY. The footnote to this part of the opinion is perhaps the most important and significant.

The Court held that “The record contains a copy of an assignment of the note from Novastar to Mellon [BONY], but the document was never offered into “evidence” by being attached to an affidavit for purposes of authentication. As such, it is not competent evidence of the assignment and cannot be considered in ruling on Mellon’s motion.”

This is the first decision we have seen where a court has actually required an assignment to be authenticated in order to be considered on a motion for summary judgment. The recent Florida and North Carolina cases we previously reported highlighted the necessity of authenticating endorsements. The Florida courts will now be applying this same authentication requirement to assignments. As such, all of the requirements of personal knowledge, etc. will have to be met before an Assignment will be permitted to be considered in the context of a motion for summary judgment of foreclosure in Florida.

The case is Beaumont v. Bank of New York Mellon, Case No. 5D10-3471 (Opinion filed February 17, 2012). We thank one of our readers for bringing this very important decision to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com