May 21, 2016

Jeff Barnes, Esq. of W.J. Barnes, P.A. and securitization/residential mortgage lending expert Richard Kahn have taken the next step toward the initiation of their Foreclosure Defense Seminar series by establishing a website and developing a seminar programs. The seminars are open to attorneys, paralegals, and homeowners, and feature discounts for early registration. The website address will be announced shortly.

The California Court of Appeals for the 4th Appellate District has issued an opinion which permits a homeowner to sue for wrongful foreclosure when the foreclosure is instituted by a non-party and where the assignment is defective. The case is styled Sciarratta v. U.S. Bank National Association, etc., No. D069439 (22 page opinion issued May 18, 2016), which reversed the trial court’s sustaining of the Defendants’ demurrer (CA equivalent to a motion to dismiss) without leave to amend the Complaint. The homeowner is represented by Stephen F. Lopez, Esq. Dan Gyurec, foreclosure litigation paralegal for the Lopez Firm, is a long-time member of FDN and has attended several of Mr. Barnes’ prior foreclosure defense seminars, and brought this opinion to our attention.

The Court found that “the void assignment is the proximate cause of actual injury and that is all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action.” Citing the recent Yvanova decision from the California Supreme Court, the Sciarratta court stated: “Banks are neither private attorneys general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners and take away their homes in satisfaction of some other bank’s deed of trust.” That statement sums up what we have been arguing for years across over 35 states at both the trial and appellate levels and in state and Federal courts. FINALLY, it has been confirmed by two California appellate courts.

The entity claiming to enforce the debt was Deutsche Bank, but the sale was held by Bank of America, which claimed to have inherited the rights to the loan via an assignment from JPMorgan Chase on a Wa-Mu originated loan. There was evidence that Chase had previously assigned the Note and Deed of Trust to Deutsche Bank, yet there were subsequent assignments to BOA by JPM including an alleged “Corrective” assignment.

This case highlights the fraudulent conduct of JPMorgan Chase in attempting to make two assignments of the Note and DOT to two different entities over different periods of time. It also illustrates the fraudulent conduct of BOA in attempting to foreclose on a Note and DOT which BOA should have known had been previously assigned to Deutsche Bank. Incredibly, BOA took the position that the recording of an assignment to Deutsche Bank “does not actually transfer an interest in property; it merely serves as notice that a transfer occurred.” Fortunately, this nonsensical and absurd argument went nowhere but being rejected by the appellate court.

The Defendants also took the position that the later “Corrective Assignment” demonstrated that the beneficial interest had been transferred to BOA, and that Chase had made “procedural errors” on the documents which were later allegedly to have been corrected. These ridiculous arguments were also rejected. The Court held that: “Defendants cannot hijack Sciarratta’s first amended complaint, delete allegations not to their liking, insert other contrary allegations such as this one about a mere “procedural error”, and contend the resulting pleading they have cobbled together fails to state a cause of action.” Thus, the appellate court made it very clear that banks cannot re-write a homeowner’s case and then take the position that no claim is stated. Bravo to the California 4th Appellate District for giving BOA and JPMorgan Chase a good and hard public spanking which is more than deserved and long overdue.

The Court further held that the foreclosure, which is the identified harm, can be traced directly to the foreclosing entity’s exercise of authority purportedly delegated by the assignment. The court stated that there are strong public policy reasons for this approach, as otherwise, anyone could foreclose on a homeowner because someone has the right to foreclose, and since lenders can avoid the court system entirely through the nonjudicial process, there would be no court oversight whatsoever.

Hats off to Mr. Lopez for his efforts in obtaining this decision, and kudos to the California 4th Appellate District for seeing through the mindless and spurious “arguments” of the banksters. A copy of this incredibly rich opinion is available upon e-mail request.

Jeff Barnes, Esq.,