June 27, 2012

A New Mexico District Judge yesterday denied BAC Home Loan Servicing’s Motion for Protective Order which it filed in an attempt to avoid producing documentary discovery to a homeowner who BAC has sued for foreclosure. The loan was originated by New Mexico Bank and Trust, was sold to Countrywide, and thereafter allegedly “assigned” first to MERS and then by MERS to BAC.

As is known to anyone who is involved in foreclosure issues, Countrywide sold off its loans for securitization purposes between 2000 and the first quarter of 2008, and what was “sold” to BOA in 2009 consisted essentially of servicing contracts from the old Countrywide Home Loans Servicing LP, which became the property of BAC Home Loans Serving LP. As we also know, the MERS Terms and Conditions preclude the use of the MERS system to either create or transfer beneficial interests in mortgage loans, and counsel for MERS in the MERS v. Nebraska Dept. of Banking and Finance decision admitted (which admission is in the published decision) that MERS does not acquire mortgage loans or have any right to collect payments thereon.

The borrower thus requested 53 categories of documents from BAC, including securitization documents. BAC filed a Motion for Protective Order which claimed that public information on the SEC website was “confidential”; that the securitization-related discovery was “irrelevant”; and that it was essentially entitled to withhold discovery because it “has the original note” and has moved for summary judgment on the “relevant” issues.

The Court disagreed, denying BAC’s Motion in its entirety and commanding full responses to the borrower’s discovery request (including production of all responsive documents) within 30 days. The Court found BAC’s Motion to be “sparse”; not in compliance with New Mexico court rules as to discovery; and against New Mexico’s case law which provides for liberal discovery in foreclosure actions so that all of the issues are fully developed and a fair trial is had.

Jeff Barnes, Esq. represents the homeowner together with local New Mexico counsel John Fox, Esq. Mr. Barnes, who was admitted pro hac vice in the case, prepared the written response to BAC’s Motion and personally argued the matter in court in New Mexico yesterday. Mr. Barnes has now obtained orders compelling securitization discovery in Oregon, New Mexico, New Jersey, Delaware, Hawai’i, Tennessee, and Florida, and has had foreclosures dismissed and attorneys’ fees assessed against foreclosing “banks” for nomcompliance with court discovery orders in several of those states.

Jeff Barnes, Esq.,