December 31, 2012

2012 saw the advancement of many homeowner-related issues in foreclosure defense litigation around the United States. FDN was at the forefront of many of these matters, which are pressing into 2013. Some of the highlights from 2012 include the following:

In Delaware, we forced the issue of securitization discovery and caused MERS to dismiss a case where it attempted to foreclose in its own name. The issues surrounding what MERS can and cannot do are still unresolved in Delaware, as are the issues related to securitization.

In Florida, we caused several cases to be dismissed and attorneys’ fees to be assessed against the foreclosing “banks”, which attorneys’ fee awards were paid. We are also advancing multiple appeals on the issue of the validity of alleged “blank endorsements” under the McLean line of cases.

In Tennessee, we forced the issue of securitization discovery and compelled that discovery to be provided with a Motion to Dismiss pending.

In Oregon, we prevailed in the Oregon Court of Appeals on the issue of wherther MERS is a “beneficiary” for purposes of the Oregon Trust Deed Act, with the COA holding that it is not. The issue is being argued in the Oregon Supreme Court on January 8, 2013 as MERS appealed the COA decision.

In Hawaii, we defeated summary judgment and caused a court ruling which has permitted an attack on a nonjudicial foreclosure which took place 3 years ago, in accordance with the homeowner’s claim that there was no strict compliance with HRS 667-5 (Hawaii’s nonjudicial foreclosure statute).

In New Jersey, we forced the issue of securitization discovery and caused the dismissal of additional cases due to the foreclosing “bank’s” noncompliance with Management Orders.

In Michigan, we are actively litigating the issue of the alleged preclusion of attacks on assignments under the Livonia Properties case, which actually does not prohibit such attacks. The “banks” continue to misrepresent the alleged limitations of the case, with the distinctions being clarified by later decisions of the same Court which rendered the Livonia Properties opinion.

We brought securitization issues into Indiana, where there is still no appellate case law relating to these issues.

In Colorado, we caused a foreclosure to be dismissed at the Rule 120 stage with a written opinion, which ruling is being used in other cases across the state.

In Montana, we are bringing the MERS issues to the Montana Supreme Court as there is no appellate law on MERS in Montana.

There are a multitude of issues being brought in pending foreclosure actions both in these states and others, as many states still, to this day, do not have any appellate-level case law on many of the issues surrounding foreclosures, including the validity of alleged “blank endorsements”; the validity of alleged “assignments” (including alleged “Allonges”); and all of the securitization issues related to credit default swaps, insurances, and third-party payments on loans, which issues have been vigorously fought by the “banks”. We anticipate that 2013 will see the further development and refinement of a multitude of legal issues which will be pressed by our national network of law Firms, which network began with Mr. Barnes and one Firm in Maryland in early 2008 and now has 41 member Firms with more Firms requesting to join the network in 2013.

Jeff Barnes, Esq.,


December 28, 2012

In a decision rendered on December 21, 2012, the Supreme Court of Michigan held that JPMorgan Chase did not acquire any WaMu loans from the FDIC by operation of law, as when a subsequent mortgagee acquires an interest in a mortgage through a voluntary purchase agreement with the FDIC, the mortgage has not been acquired by “operation of law” and that subsequent mortgagee must comply with the provisions of MCL 600.3204 and record the assignment of the mortgage before foreclosing by advertisement. The decision affirmed the prior decision of the Michigan Court of Appeals on this issue.

The case is Kim v. JPMorgan Chase Bank, NA, Docket No. 144690, 2012 Mich LEXIS 2220, which affirmed the Court of Appeals’ reversal of the trial court’s summary judgment in favor of JPM. The Court of Appeals found that JPM’s failure to record the assignment rendered the Sheriff’s sale void ab initio, but the Supreme Court held that it is voidable.

The problem for JPM, in a Michigan non-judicial foreclosure, is that it will have to prove that it acquired a specific mortgage loan from WaMu, which is going to be difficult in light of the sworn deposition testimony of Lawrence Nardi (previously posted on this website) that there was never a schedule of WaMu mortgage loans purchased from the FDIC and that such a schedule does not exist, and JPM’s admission, in the D.C. Federal litigation, that it is not the “successor in interest” to WaMu. Given this record evidence and judicial admission, any purported “assignment” of a WaMu loan to JPM out of the FDIC would be suspect at best.

The opinion does not discuss these issues, which were apparently not raised and as the opinion strictly limited its holding to whether JPM acquired the homeowner’s WaMu loan “by operation of law”. Thus, all of the evidentiary issues as to whether there was any effective transfer of the homeowner’s loan to JPM remain to be raised.

This is a step in the right direction on a major point, as JPM has made the assertion, in litigation in several states, that it became the owner of a homeowner’s WaMu mortgage loan “by operation of law”, which assertion has now been proven by the Supreme Court of Michigan to be false.

Thanks to one of our dedicated followers for bringing this important decision to us.

Jeff Barnes, Esq.,


December 10, 2012

Today, a Special Master appointed by a Tennessee state court Judge ordered discovery, including securitization discovery, to proceed, denying a Motion which had been filed by Bank of New York (as “trustee” of a CWALT securutized mortgage loan trust) to stay discovery pending a ruling on BONY’s Motion to Dismiss. The discovery was ordered to proceed before any ruling on the Motion to Dismiss, in accordance with a prior pronouncement of the Judge at a prior hearing. The Special Master also denied BONY’s Motion to Dissolve a restraining order which had been entered by the Judge staying all foreclosure activity, which order was entered without the necessity of the posting of a bond. The Special Master found that “the Judge thinks that this is serious enough to warrant injunctive relief.”

The securitization issues presented to the Special Master are believed to be the first of their kind raised in Tennessee, which has no appellate law on MERS or securitization. The case is fraught with issues including a toxic, post-trust closing assignment by MERS over 5 years after the trust closed; conflicting documents filed by MERS and ReconTrust as to who the alleged assigning party is; and whether BONY has any interest in either the Note or the DOT whatsoever.

Jeff Barnes, Esq. represents the homeowners together with local counsel Andrew Farmer, Esq. Mr. Barnes prepared the briefs and personally argued the matters in court in Sevierville, Tennessee today.

Jeff Barnes, Esq.,


December 6, 2012

Yesterday, an Oakland County, Michigan Judge overruled numerous objections of foreclosing Plaintiff Citimortgage, Inc. (CMI) in a judicial foreclosure action where CMI relies for its alleged standing on a pahntom assignment (which CMI admits was “lost” before it was recorded with present whereabouts unknown), and an alleged “endorsement” from the original lender which went out of business in 2009 and was found by the State of Michigan Department of Labor and Economic Growth Office of Financial and Insurances Services (OFIS) to have engaged in fraudulent mortgage activities in connection with the origination and sale of mortgage loans to third parties, including WaMu. The Cease and Desist Order, with detailed findings, is 38 pages in length, and readily available by googling World Wide Financial Services.

CMI’s counsel took the position, unsupported by any Affidavit or other evidence, the now all too familiar “we have the Note, it has an endorsement in blank, thus we win and everything the homeowner asks for is irrelevant” tack. The Court disagreed, ordering CMI to serve discovery responses to the homeowner’s request for the production of all documents which purport to assign any interest in the mortgage or Note to any party; all documents evidencing the recording of any such assignment of either the Note or the mortgage; all documents setting forth the entire chain of title to the Note and mortgage from the original lender to the true and present holder; all documents setting forth payments and credits on the loan and the disposition of all payments made; all documents setting forth the treatment of taxes including the establishment of escrows and payments from escrows; and all appraisals as to both the property and the mortgage loan as well as other documents relating to charges in connection with the mortgage loan.

Jeff Barnes, Esq. represents the homeowner together with local Michigan counsel Priya Kumar, Esq. Mr. Barnes filed the formal response to CMI’s “Motion to Quash” the homeowner’s discovery and argued the motion yesterday.

Jeff Barnes, Esq.,