March 28, 2013

In an earlier post, we advised that a Honolulu, Hawai’i Circuit Court Judge had denied a Motion for Summary Judgment filed by U.S. Bank, N.A. as the claimed trustee of a GMAC securitization which was the foreclosing Plaintiff. The Court has now entered the final Order which states that the Court denied the Motion as “there are genuine issues of material fact (whether the transfer) of the note was proper when Homecomings Financial, LLC filed for bankruptcy.”

This decision is in line with prior decisions of both the State and Federal courts in Hawai’i which have questioned MERS assignments made by MERS “as nominee” of a bankrupt lender and in the absence of any proof that the transfer was authorized by the bankruptcy court having jurisdiction over the estate of the bankrupt lender. Hawai’i has been in the forefront of the decisions on this issue.

As previously mentioned, the homeowner is represented by Hawai’i counsel Damon Senaha, Esq. of Honolulu, and by Jeff Barnes, Esq. who wrote the legal memorandum opposing USB’s Motion for Summary Judgment. Mr. Barnes also represents another Hawai’i homeowner who successfully opposed a Motion for Summary Judgment filed by a securitization trustee which was Motion was denied on the same basis and facts by the same court as the recent decision the subject of this post: that is, the genuine issues of material fact surrounding the alleged assignment of the loan by MERS as nominee of a lender who had filed bankruptcy.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 20, 2013

The foreclosure world has been the subject of some genuinely strange events lately.

We were advised that a judge granted summary judgment in a case where the homeowner never had a mortgage loan with the foreclosing bank and the prior mortgage was never assigned or transferred to the foreclosing bank. Another case has come to us where the homeowner simply asked the bank to change the payment due date on the mortgage, having never been late or requested any type of modification to the loan. The bank told the homeowner that they had to be 3 months behind to change the payment date, and then declared a “default” and foreclosed.

In another case, a Judge denied a temporary restraining Order although admitting the the homeowner showed irreparable harm without the sale being stopped and that the Defendants had been put on notice of the request, yet denied the Motion for a lack of explanation as to why notice to the Defendants was not needed (so notice was provided and admitted but the alleged problem was the lack of a reason why notice was not needed). In yet another case, a Judge granted summary judgment by “rejecting” conflicting material fact information as to an assignment, thereby acting as factfinder on summary judgment (which a court cannot do).

The result is that the appellate courts are going to become busier, as the trial courts which engage in these actions are causing otherwise unnecessary appeals to be filed. (Generally, if a summary judgment is denied, there is no appeal of such a denial and the matter proceeds to trial, where the grant of a summary judgment is appealable). The silver lining in this is that there will be appellate law clarifying the issues which will be binding on the trial courts in future cases. At least that is the presumption, which is not necessarily guaranteed.

We had a previous case in Arizona where the Supreme Court of Arizona had issued an opinion dead-on in the homeowner’s favor on a specific issue. The trial Judge’s response was “that is not the law in my court.” In another case in Oregon, the trial Judge asked where the Oregon law was supporting the homeowner’s position on certain issues. When the judge was provided with the Oregon law and statutes, the Judge said “not in my book it’s not”. We appealed this case and won, reversing the summary judgment.

Thankfully, most Judges in the cases we have are patient and listen to all of the arguments and follow the law, and when there is no law on an issue, defer to the side of not granting summary judgment. Time will tell is this continues, but meanwhile the appeals are being filed.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 6, 2013

FDN attorney Douglas E. Klein, Esq. has scored a major victory in the course of an appeal in the California Second Appellate District (Los Angeles) for his clients, who are tenants. The landlord signed a California Board of Realtors lease in which he warranted that there were no loans encumbering the property which were delinquent. In truth and in fact, a second mortgage on the house was and had been delinquent prior to the time that the landlord signed the lease, which second mortgage was in favor of the landlord’s broker.

The landlord had told the second mortgage holder that he (the landlord) would pay the delinquent second mortgage when the property was rented, which he told the second mortgage holder before the lease was signed. Despite the property being rented and the tenants paying significant deposits and rent to the landlord, the landlord did not pay the second mortgage holder, who filed a Notice of Default on August 12, 2012 to foreclose on the house. The landlord waited until after Labor Day (September) and after he received the September rent from the tenants to tell the tenants that the house was in foreclosure.

The landlord also lied about the condition the house would be in upon his leaving it, which was left in a detestable condition when he and his wife left the United States to live in Canada after taking the tenants’ money (the landlord had 13 people living in the house). The landlord had promised to clean the property in order to induce the tenants to sign the lease, but did not do so, leaving garbage and trash throughout the property and failing to clean the grease, grime, and dirt from the property, leaving the property with a foul odor, all of which required the tenants to expend significant sums to clean the property.

The tenants sued the landlord for fraud, breach of contract, unjust enrichment, and violations of CA Civil Code 17200 (unfair business practices). As a protest, the tenants withheld payment of the rent pursuant to California’s anti-SLAPP law. The landlord then sued for unlawful detainer. The tenants’ anti-SLAPP Motion was denied. Appellants appealed the denial, and the landlord filed a motion to have the appeal dismissed or given calendar preference (accelerated disposition).

Today, the California appellate court denied the landlord’s Motion. Pursuant to California law, the tenants’ lawsuit and the landlord’s claim for unlawful detainer (which were consolidated by prior court order) are stayed pending the full disposition of the appeal. We believe that this is the first decision by a California appellate court to uphold the appealability of the denial of an anti-SLAPP Motion filed in protest to paying rent pending an unlawful detainer action where the landlord has breached the lease prior to filing the unlawful detainer.

Mr. Klein represents the tenants in both the trial court actions and the appeal. He may be contacted directly at [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 4, 2013

A Honolulu, Hawai’i state court Judge has denied a Motion for Summary Judgment filed by US Bank as the claimed trustee for a GMAC securitization. There is no date or other source of verification or authority on either of the alleged “endorsements” to the Note; there was no Affidavit filed in support of the Motion; there is no mention of Residential Funding (which appears on one of the endorsements) in the Assignment; and the MERS Assignment was executed on behalf of a bankrupt lender. The Court did not accept USB’s argument that a homeowner cannot challenge an assignment, and on the authority of Deutsche Bank v. Williams, U.S. Dist. Ct. for Hawai’i Case No. 11-00632 JMS/RLP (also known as the “Seabright decision”), permitted a homeowner to challenge the MERS assignment in view of it being made allegedly by a “nominee” of a bankrupt lender. (Homecomings and GMAC both filed for BK in May of 2012).

Jeff Barnes, Esq. prepared the briefing, with the matter being argued by local Hawai’i counsel Damon Senaha, Esq. This is the second ruling from the Honolulu state court denying a trustee bank’s Motion for Summary Judgment in a case where Mr. Barnes was retained by the homeowner and prepared the briefing opposing the summary judgment.

Separately, another Hawai’i homeowner was just presented with what appears to be the latest scam from Bank of America, which is apparently looking for a way to short-circuit having to pay for foreclosures and attorneys to prosecute them and reduce its apparent debt to the government. Like the loan mod offers of the past, this is a non-offer. It is solely a mechanism designed by BOA to take someone’s home without even having to institute a foreclosure and obviously without having to deal with a foreclosure challenge, and in a further obvious effort to reduce what must be a tremendous debt owed by BOA to Fannie Mae.

The vehicle has been termed a “mortgage release” (followed by the trademark “TM” letters). BOA claims that it is “working with REDC Default Solutions, a third party servicing company” on this, whereby the homeowner just voluntarily transfers ownership of their home and all property secured by the mortgage to Fannie Mae. This is so that the homeowner is “spared having to go through a foreclosure”. The only thing being “spared” is BOA having to spend money on a foreclosure and providing its obvious creditor Fannie Mae with a quick and painless inventory of tangible assets.

The “deal” (a) does not allow the homeowner to keep their home; (b) creates a deficiency and a situation where the homeowner may have to pay Bank of America or Fannie Mae monies while the alleged “process” is being reviewed; (c) does not stop foreclosure or a sale; and (d) repeatedly refers to otherwise unidentified “terms and conditions” that the homeowner has to satisfy to remain in the home until the voluntary transfer is completed, after which a move-out date is allegedly set.

BOA must think that the American public is dumb enought to fall for this scam, and is brazen enough to even offer it. Wow! You can VOLUNTARILY surrender your home to the government and pay them for the privilege of doing so, and the alleged “bank” will not have to pay for a foreclosure or deal with a foreclosure challenge! And this is for the alleged “benefit” of the homeowner!

Does it get any more ridiculous than this? It probably will. We thought the loan mod scams, where homeowers were told that they had to be 2 or 3 months behind in their payments in order to “qualify” for a loan mod and were then told that they could not get a loan mod because they were in default and were being foreclosed upon, were bad. This new scam just adds insult to injury.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com