March 14, 2012

An Oregon state court Judge has denied a Motion for Summary Judgment filed by Deutsche Bank (as the claimed trustee of a securitized mortgage loan trust) in what is the second round of litigation originally filed by the homeowner challenging whether the foreclosing party has standing, chain of title, and is the real party in interest for purposes of the foreclosure. The homeowner originally filed the case in state court. The Defendants at the time removed the case to Federal court, then caused it to be dismissed by abandoning their claim for nonjudicial foreclosure after the Federal Judge asked counsel to agree to certify the question of MERS’ authority to the Oregon appeallate court. Counsel for the homeowner agreed to the certification, but counsel for the Defendants did not take a position. DB then re-filed the case in state court seeking judicial foreclosure.

The issue of whether MERS is a “beneficiary” under the Oregon Trust Deed Act is currently on appeal with the Oregon Court of Appeals in a separate case where Jeff Barnes, Esq. represents the homeowner.

There are two different versions of the Note in the DB case, and there are many issues surrounding whether the requirements of the PSA were met and whether the loan was ever effectively transferred to the trust. DB’s representative testified in deposition that there was a swap counterparty and swap agreement which provided for insurance on the loans in the trust. The homeowner sought, in discovery, all documents relating to any insurance on the loans and all swap agreements. DB objected, but its objections have been overruled.

In over four (4) years of foreclosure litigation, Mr. Barnes has consistently sought these documents in securitization cases. In each case where they have been compelled, the foreclosing party has steadfastly refused to produce the documents, resulting in a dismissal of the foreclosure or other sanction, including attorneys’ fees against the foreclosing party. It remains to be seen whether DB will comply with the Oregon court’s Order. 

The case is now scheduled for jury trial next week. Jeff Barnes, Esq. represents the homeowner together with local Oregon counsel Elizabeth Lemoine, Esq.

Separately, an article in the New York Times today discusses the resignation of Greg Smith, an Executive Director of Goldman Sachs and head of the firm’s United States equity derivatives business in Europe, the Middle East, and Africa. Mr. Smith is quoted stating the following: ” What are three quick ways to become a leader? a) Execute on the firm’s “axes”, which is Goldman-speak for pursuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants”. In English: get your clients- some of whom are sophistocated, and some of whom aren’t- to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter arconym.”

    “Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not a single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. … It makes me ill how callously people talk about ripping their clients off. … These days, the most common question I get from junior analysts about derivatives is, “How much more money did we make off the client?””

Of course, this implicates how many times a borrower’s mortgage was sold or how many traunches a borrower’s loan was assigned to in order for Goldman to have been able to sell the various derivatives to their clients, and how much money Goldman made by pooling loans which it knew would fail so that it could realize huge profits from insurance claims. This was what the SEC v. Goldman Sachs litigation, which settled VERY quickly after it was filed, was all about: pooling loans, which Goldman knew would fail, into trusts; taking out insurance on the loans; and then collecting checks when the loans failed.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

March 7, 2012

The Florida 5th District Court of Appeal has reversed a summary judgment which was entered in favor of  Novastar Home Mortgage, which was a nonparty to the suit as it had previously withdrawn from the case. The entry of a judgment in favor of a non-party was found by the appeals court to be “fundamental error”. However, this was only the tip of the iceberg.

The Court also held that the judgment would have to be reversed even it had been entered in favor of BONY (as trustee of a securitized mortgage loan trust), as BONY failed to show that it was entitled to enforce the “lost” note when it was lost. BONY offered no proof of who lost the note or when it was lost, and no proof of anyone’s right to enforce the note when it was lost. This is the same set of reasons why an Iowa court has repeatedly denied summary judgment to Wells Fargo in a case where Mr. Barnes represents the homeowner, as we previously reported.

The holding also found that BONY produced no evidence of ownership due to the alleged transfer from Novastar to BONY. The footnote to this part of the opinion is perhaps the most important and significant.

The Court held that “The record contains a copy of an assignment of the note from Novastar to Mellon [BONY], but the document was never offered into “evidence” by being attached to an affidavit for purposes of authentication. As such, it is not competent evidence of the assignment and cannot be considered in ruling on Mellon’s motion.”

This is the first decision we have seen where a court has actually required an assignment to be authenticated in order to be considered on a motion for summary judgment. The recent Florida and North Carolina cases we previously reported highlighted the necessity of authenticating endorsements. The Florida courts will now be applying this same authentication requirement to assignments. As such, all of the requirements of personal knowledge, etc. will have to be met before an Assignment will be permitted to be considered in the context of a motion for summary judgment of foreclosure in Florida.

The case is Beaumont v. Bank of New York Mellon, Case No. 5D10-3471 (Opinion filed February 17, 2012). We thank one of our readers for bringing this very important decision to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 23, 2012

We have confirmed the location for our next seminar, which will be at 9701 Wilshire Boulevard, Suite 1000, Beverly Hills, California 90212. The seminar will be held on Friday, March 16, 2012.

The seminar has been approved by the Florida Bar for 7.0 hours of General CLE, and has also been approved by the Supreme Court of Ohio for CLE credit.

Seminar topics will include, as to both judicial and non-judicial foreclosures: screening and intake of foreclosure cases; identifying preliminary issues and defenses; the state of the law and issues as to MERS; securitization; pleading and motion practice; discovery; filing and defending dispositive motions; mediation (including loan modification issues); and bankruptcy issues (opposing Proofs of Claim and Stay Relief Motions).

Registration forms are available by e-mail request or via the form on the “Contact Us” link above. Seminar is expressly limited to twelve (12) participants, who must be either a licensed attorney or a paralegal associated with a law Firm.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 17, 2012

In response to our prior post as to the proposed dates for the next foreclosure defense seminar, the date which has been most requested is Friday, March 16, 2012. We are thus holding that date for the next seminar, and will confirm it and the location shortly (which will be in the Beverly Hills, CA area). Interested attorneys and paralegals may request a Registration Form through the “Contact Us”  link above or by e-mailing us at [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 17, 2012

Philip A. Lehman, Assistant Attorney General for the Consumer Protection Division of the North Carolina Department of Justice, has issued an “Executive Summary” of the settlement between the state attorneys’ general and the five leading bank mortgage servicers. The last section of the summary, that being Section VII, is the most important, and confirmes the matters in our previous post (below) discussing the limited effect of the settlement:

    ” VII. …Claims based on these areas of past conduct by the banks cannot be brought by state attorneys general or banking regulators. The Release applies only to the named bank parties. It does not extend to third parties who may have provided default or foreclosure services for the banks. Notably claims against MERSCORP, Inc. or Mortgage Electronic Registration Systems, Inc. (MERS) are not released. Securitization claims, including claims of state and local pension funds, and including investor claims relating to the formation, marketing, or offering of securities, are fully preserved. … Of course the Release does not affect the rights of any individuals or entities to pursue their own claims for relief.”

As such, the settlement only precludes actions by state attorneys general for the type of claims which were in their lawsuits which were settled, and has no effect on actions against third-party trustee sale companies (e.g. ReconTrust, Trustee Corps, Regional Trustee Services, Northwest Trustee Services, etc.), MERS, or others who provided “default or foreclosure services”. Claims of individuals are also not affected, which include both affirmative claims and defensive claims in both judicial and non-judicial states.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 13, 2012

We have been receiving literally dozens of e-mails from homeowners inquiring as to what effect the bank settlements with various attorneys general will have on their foreclosure cases. Answer: NONE, for several reasons.

First, the Attorney General claims were just that: claims by attorneys general against the banks. Private litigants were not parties to the litigation, so they are not parties to any settlement. In fact, it has already been reported that the settlements have no effect on and do not preclude an individual pursuing legal relief against a lender.

Second, the settlements are not even finalized yet. They have to be filed in court, and once they are, the states which filed the lawsuits will be free to enact whatever procedures, processes, requirements, etc. they wish as to whether a homeowner “qualifies” for any settlement proceeds. As we all know from the loan mod scam, this process can take months or even years, and there are a million ways that a homeowner can be found to ultimately not “qualify”.

Third, and perhaps most revolting and insidious, is that several of the states have ALREADY announced that portions of the settlements will be diverted to state budgets. Specific instances include Wisconsin’s announcement that it plans to use $25.6 million of the settlement money to “plug holes in the state’s budget”, while Missouri has announced that it plans to put $40 million of the settlement money into the state’s “general fund”.

So, once again, the homeowners get nothing. In fact, it has been separately announced that because the attorney general lawsuits have been resolved that the banks will be ramping up individual foreclosures, obviously now because they will not have state governments and attorneys general examining what they do. Sad, but unfortunately true.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 9, 2012

In view of the number of recent requests we are receiving as to when our next foreclosure defense seminar will be held, we are holding Friday, March 9, 2012 and Friday, March 16, 2012 open for the seminar at this time. As always, the seminar will only be open to attorneys and paralegals associated with law Firms.

The seminar will be held in the Beverly Hills, CA area. The date to be chosen will depend on which date is most requested by interested parties, who may e-mail us at [email protected] or by filling our an inquiry form on the “Contact Us” link above.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 8, 2012

In an opinion released today on JPM’s Motion for Clarification, the Florida 4th District Court of Appeal has reversed a summary judgment which was entered in favor of JPM, which is the claimed “trustee” of a securitized mortgage loan trust. The opinion clarifies the importance and necessity of evidence as to when an endorsement is placed on a note for purposes of standing to sue.

A MERS Assignment of the “lost note” from the (bankrupt) American Brokers’ Conduit was executed three days after the lawsuit was filed. JPM later managed to “find” the original “lost” note, and filed the note with an undated “special endorsement” to JPM by American Brokers’ Conduit.

The important point of this opinion is that the Court focused on the fact that the “special endorsement” to JPM on the note was undated, and that JPM’s Affidavit in support of its motion for summary judgment contained no evidence or information was to when JPM became the owner of the note. As such, this Florida appellate court has finally dug deeper into the “endorsement” argument used by “banks”, and has held that there has to be evidence as to when the endorsement was placed on the note and that this evidence must show that the plaintiff had the right to enforce the note on the date that the suit was filed (citing a 2011 opinion from a Vermont court in support of its conclusion).

The last sentence of the opinion is perhaps the most significant: “An evidentiary hearing may also be required if there is disputed evidence on an issue, such as to the date the note was endorsed to Chase.” All too often, the “endorsements” do not bear a date as to when the endorsement was placed on the note, which this opinion now makes clear is an issue of material fact which precludes summary judgment.

What the opinion did not discuss was the issue of whether MERS, as the alleged “nominee” of the bankrupt American Brokers’ Conduit, even had the authority to execute the Assignment, or under what authority the bankrupt American Brokers Conduit could have placed the undated endorsement on the note to begin with.

We thank one of our dedicated readers for providing a copy of this opinion to us today.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 7, 2012

A Sussex County, Delaware Court has entered an Order finding that Bank of New York Mellon as Trustee of a First Horizon securitized mortgage loan trust failed to comply with the Court’s prior order compelling discovery, and has also assessed sanctions against BNYM for the the homeowner’s having to bring a Motion for Sanctions against BNYM for violation of the Court’s discovery Order. The Order also provides that if BNYM continues to not comply with the prior Order that the case will be dismissed with prejudice.

The homeowneer is represented by Jeff Barnes, Esq. and local Delaware counsel Paul G. Enterline, Esq. We believe this to be the first case in Delaware where securitization-related discovery is being compelled under the threat of a dismissal with prejudice for noncompliance with a prior discovery order. Mr. Barnes has already had several foreclosure cases dismissed in Florida and New Jersey for a foreclosing Plaintiff’s failure to comply with discovery, and he has also obtained court orders assessing attorneys’ fees against “banks” for noncompliance with discovery.

The foreclosing Plaintiff styles itself as the trustee for a series of pass-through certificates by a division of a Tennessee bank “Master Association” in its capacity as trustee under a Pooling and Servicing Agreement and assignee of MERS. As such, all issues as to the securitization including the PSA and MERS’ involvement are implicated by virtue of the Plaintiff’s self-chosen denomination.

It is common knowledge that Joseph Biden III, the Attorney General of Delaware, has sued MERS in a 91-page Verified Complaint sounding in deceptive trade practices which have lead to improper foreclosures. We expect many of the issues in the Biden lawsuit to be raised in the Sussex County litigation.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

February 2, 2012

The Supreme Court of Ohio has officially approved FDN’s Foreclosure Defense Seminar for CLE credits under Rule X of the Supreme Court Rules for the Government of the Bar of Ohio. The approval was issued by letter dated January 20, 2012 which we received today.

We are planning the next seminar to take place some time in March, 2012 in New Jersey, and a second seminar to be scheduled in the Los Angeles, California area in April, 2012.

Separately, Mr. Barnes has caused the third denial of a Plaintiff’s Motion for Summary Judgment in a case pending in Orlando, Florida. At the first hearing on the same motion, the Court told the Plaintiff’s counsel on the record that the Plaintiff did not own the note, and thus the case was going to trial. Mr. Barnes was thereafter retained, and Plaintiff moved for summary judgment again after objecting to and not producing discovery. The Court, on the record, said that “discovery is incomplete, so you win on that issue.” Although Mr. Barnes made numerous attempts to coordinate a hearing on the Plaintiff’s discovery objections with counsel for Plaintiff (which counsel is from Florida Default Law Group in Tampa), no cooperation was ever received.

Undaunted, Plaintiff moved for summary judgment a third time. Mr. Barnes filed an opposition setting forth the two prior denials and reasons therefor. The Court denied the Motion for a third time.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com