February 20, 2013

Jeff Barnes, Esq. has been retained to prosecute Adversary proceedings in foreclosure-related matters in pending Bankruptcy proceedings in the U.S. Bankruptcy Courts for the District of Mississippi and the Middle District of Florida. He has also been retained to defend a massive foreclosure involving significant property in Tennessee; two new foreclosure filings in New Jersey; and other new foreclosure cases in Florida.

We previously advised that foreclosure activity was going to be on the rise. An article which was provided to us thereafter as to foreclosure activity nationally predicted an increase in foreclosures in Florida, Pennsylvania, New Jersey, and Illinois. As verification thereof, many Florida foreclosures where Mr. Barnes represents the homeowner, which cases have been dormant for periods of from one to 4 years, are now being revived with recent filings by the foreclosing plaintiffs which indicate forthcoming summary judgment motions. Several cases have also been scheduled for trial by the Courts as well.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 12, 2013

In the course of our ongoing investigation into the machinations of the “banks” to devise various forms of “loans” designed to strip the equity from a homeowner, the reverse mortgage is one of the worst. Targeted at elderly borrowers (who have, over the years, paid down or paid off their mortgage), a reverse mortgage depletes the equity in one’s home and evicts the surviving spouse after the death of the “borrower” spouse through a foreclosure.

The case which has been brought to us reveals that the process was accomplished through trickery and fraud. The elderly husband borrower was listed as the only “borrower” on the Note, although both the husband and wife were listed on the Deed of Trust. When the wife asked why she was being told not to sign as a borrower, she was told “Don’t worry, that is just to get the loan approved. There will be a quit claim deed after the loan is approved so you are protected”.

Unbeknownst to the wife, quit-claim deeds have nothing to do with adding a spouse to a promissory note. What happened is that the husband passed away, triggering the acceleration of the “loan” and a foreclosure. The foreclosing party claims that the wife is not protected as she is not listed as a “borrower” although the foreclosing party (Reverse Mortgage Solutions Inc.) claimed a default and sought to void her interest in the property through foreclosure.

The husband was older than the wife. The entity originating the reverse mortgage obviously knew that by failing to make the wife a listed “borrower” that once the husband passed, it could declare a default (as the “borrower” is dead and cannot make any “payments”), and as the wife had no income, she could be readily foreclosed upon and evicted from her home which she and her husband built with no place to go after living in the house for over 35 years.

The former Senator/actor and a second actor who have advertised these reverse mortgages on television should be ashamed for promoting these outright equity-stripping vehicles which take advantage of elderly borrowers who have little or no mortgage debt. The former Senator especially, as he was chief minority counsel of the Senate Watergate Committee in 1973-74. For someone who had previously taken such an active role in seeking to protect citizens of our country from illegal actions to now endorse an outright equity-stripping vehicle which targets elderly homeowners in the midst of a foreclosure crisis defies comprehension.

The battle is shaping up to one which is going to pit contractual language against equity and fairness and contract principles of good faith and fair dealing in addition to fraud by omission. We have had inquiries into other reverse mortgage cases, and the AARP has filed a massive lawsuit involving claims that reverse mortgages violate Federal statutory protections for elderly borrowers as well.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 1, 2013

Today, a Hillsborough County, Florida Circuit Judge has denied a motion for summary judgment filed by JPMorgan Chase Bank, N.A. involving a WaMu origination. The borrower is represented by Jeff Barnes, Esq. who argued the matter in a Tampa courtroom this morning. Mr. Barnes filed the Lawrence Nardi deposition in which Mr. Nardi, as a former employee of WaMu who became employed with JPM after the failure of WaMu, testified that although a schedule of WaMu mortgage loans to be purchased from the FDIC was contemplated, it was never prepared, has never been produced in any case, and does not exist. JPM separately admitted in the Federal litigation that it is not the successor in interest to WaMu in its own motion for summary judgment which it filed in that case, which Mr. Barnes filed as well.

Based on the questions as to JPM’s standing raised by the Nardi deposition and the Federal court admission and the lack of any sworn testimony in JPM’s Affidavit as to when and how it came into possession and ownership of the Note, the Court denied summary judgment.

Mr. Barnes has filed the Nardi deposition and the Federal court admission in several cases, but this was the first time that they were tested for summary judgment purposes, resulting in summary judgment being denied. The Court also ordered that Mr. Barnes may take the deposition of a corporate representative of JPM in light of the issues.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 31, 2013

As most of you know, approximately 52 servicers and lenders, including GMAC Mortgage LLC, filed for Bankruptcy in mid-May of last year. As you may not know, however, GMAC obtained stay relief to pursue foreclosures, and recently, Warren Buffett’s Berkshire Hathaway bought the loans from the BK trustee lock, stock, and barrel “free and clear of liens” from the sellers. What that means is that, for all practical purposes, anyone with a foreclosure involving GMAC or any other the other 51 entities who sold their assets to Berkshire may find that Berkshire is the new foreclosure mill.

Not so fast, however. We have been advised that someone has been offered a significant principal reduction in connection with an unsolicited loan mod offer from MERS “for GMAC”. MERS in fact signed the proffered loan mod. Figure that: MERS, which does not extend credit, loan money, or collect money and is not a lender, is offering a loan mod on behalf of a bankrupt entity.

Separately, we are seeing more and more instances where courts are faced with a situation where there is no law on a given foreclosure issue out of that state’s appellate courts, leaving the trial courts with no guidance from law of that state. As anyone who has studied law knows, the law is dynamic and not static, and has to change and adapt with the times. In the world we live in, that means that there has to be someone willing to take an issue to the state appellate court which has no law on an issue in order to establish it, as we did in Oregon on the MERS issue, which we are also taking to the Montana Supreme Court this spring.

One of the facilitating vehicles in the law, which is common in each state, for making new law is case law which permits a state with no law on an issue to look to what is called the “law of other jurisdictions” for guidance: that is, for example, State A, which has no law on a given issue, can look to case law from States B, C, D, etc. which have case law on the issue to see how it has been analyzed. Ohio did this with New York decisions on foreclosure issues as early as 2008, and the trend has been followed ever since.

Attorneys for the banks like to take the position, when there is no state law on an issue in a state where a case is pending, that “Judge, there is no law on this in our state, so the homeowner’s request must be denied.” In reality, this is the perfect situation for showing the court that other states HAVE dealt with the issue, which can provide the Judge with guidance and so that he or she does not have to “re-invent the wheel.”

The problem, of course, is when the banks misinterpret or misconstrue what a case really says, like they have been doing nationally with the Livonia Properties case out of the U.S. District Court for the Eastern District of Michigan. Banks like to take the postion that the case stands for the proposition that a borrower cannot challenge an assignment. What the case actually says is that a borrower CAN challenge irregularities in the foreclosure process under Michigan’s non-judicial foreclosure statute including irregularities in the assignment process.

Per our prior posts, 2013 looks to be a year of “making law” in the foreclosure arena with the numerous appeals pending, and with more on the way. We will continue to advise of these decisions.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 21, 2013

FDN attorney Jeff Barnes, Esq. has been recently admitted to the United States Court of Appeals for the 6th Circuit, adding to his prior admissions to the United States Courts of Appeals for the Third, Tenth, and Eleventh Circuits. Mr. Barnes has also been recently retained to handle six (6) appeals in six different jurisdictions, which appeals are in both Federal and state courts. The Firm has also been recently retained on new foreclosure filings in various states, including Indiana, Tennessee, Colorado, and Florida.

As those of you who follow this website are aware, the MERS issues were argued by Mr. Barnes in the Supreme Court of Oregon on January 8, 2013, as MERS appealed the decision of the Oregon Court of Appeals which ruled against MERS. Mr. Barnes will also be presenting the MERS issues to the Supreme Court on Montana next month in another case of first impression, as Montana has no state appellate law on the MERS issues (as Oregon did not until the Oregon Court of Appeals issued the Niday decision on July 18, 2012 which was argued by Mr. Barnes as well).

There are many states which have no state appellate law on many of the issues in foreclosure defense litigation, including the MERS issues and securitization related issues (compliance with PSA requirements, etc.). It has been and will continue to be part of the mission of FDN attorneys to make the law on these issues so that states have guidance from their state appellate courts.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 10, 2013

It is now public knowledge that the Law Offices of Marshall C. Watson, P.A., a Florida foreclosure mill, has been ordered to be shut down and closed pursuant to a Consent Judgment with The Florida Bar, which also suspends the lead attorney for 91 days and found that an attorney in the Firm was paid $1.00 for each of the thousands of Affidavits “robo-signed” outside of the presence of a Notary and without that attorney having knowledge of what was being signed, which Affidavits were filed in courts. The Bar has stated that it is “the lowest point” in the foreclosure process.

Like the prior closure of the infamous Law Offices of David J. Stern, P.A. (which was formerly the most active Florida foreclosure mill which left over 100,000 foreclosure cases in limbo when the office shut down), the closing of Marshall Watson will leave tens of thousands of foreclosure cases without counsel and thus “up in the air” to be re-routed to other Firms, assuming they will accept them. With the legal infirmities in these files, no other Firm may want to take on a file from a Firm which has been found (and admitted) to have created fraudulent foreclosure documents. Many of the Stern cases still have not been re-assigned to this day despite that Firm having been out of business for over a year.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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., www.ForeclosureDefenseNationwide.com

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., www.ForeclosureDefenseNationwide.com

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., www.ForeclosureDefenseNationwide.com

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., www.ForeclosureDefenseNationwide.com