October 13, 2010

In a national press release, Citibank has announced that it is dropping The Law Offices of David J. Stern as foreclosure counsel due to and pending the investigation of Stern’s office by the Florida Attorney General.

In a separate release, JPMorgan Chase announced that it is withdrawing from MERS in connection with legal challenges to foreclosures. We expect others to follow in an effort to try to circumvent the chain of title and document problems created by interjecting MERS into the mortgage loan process. What this tells us is that there was never, at any time, any authority to have MERS assume any role, title, or function in connection with a mortgage loan other than as an electronic tracking system, and thus the conclusion is that MERS was deliberately used as an instrumentality for the express purpose of ultimately furthering the perpetration of a fraud upon borrowers.

In another headline, depositions of “robo-signers” and other investigations have revealed that financial institutions and their servicing units hired hair stylists, WalMart floor employees, and assembly line workers and installed them as “foreclosure experts” with no formal training to further foreclosures.

The tsunami of fraud which we have been talking about for years is thus finally coming to the fore and is being set forth “on the record”. Again, we believe that this fraud will permit tens of thousands, if not hundreds of thousands, of foreclosure victims to successfully petition the courts to re-examine their foreclosures for fraud, document irregularities, and other legal infirmities, and will probably lead to the filing of significant damage claims as well.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 12, 2010

In a decision rendered October 6, 2010, an Oregon Federal Judge has granted the borrower’s preliminary injunction prohibiting a trustee’s sale and has once again noted that pursuant to decisional law, MERS is not a beneficiary despite claiming to be so and claiming the right to substitute the trustee for purposes of advancing a foreclosure. The case involves Bank of America as a successor trustee to a LaSalle Bank securitization with Mortgage Lenders Network as the originating lender; Litton as the servicer; LSI as the title company; and Quality Loan Service (of San Diego) as Defendants in addition to MERS.

The opinion cites the Landmark v. Kesler, Bellistri v. Ocwen, and Saxon v. Hillery cases in support of its position as to MERS in addition to the recent In Re Allman decision from the Oregon Bankruptcy Court, and rejects the pro-MERS decisions cited by the Defendants in their Motion to Dismiss.

We have also been notified by one of our readers that the State of Washington is also issuing rulings that foreclosing parties are lacking critical documents to foreclose. We will publish more details on this.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 11, 2010

We celebrate Columbus Day today today for his finding a new world. We also today celebrate today the continuing admissions and relevations being made by various banks and servicers (Bank of America, GMAC/Ally Bank, and JPMorgan Chase) that many of the foreclosures which they “processed” may have been legally infirm due to, among other things, “document irregularities”, which is a sugar-coated way of saying that they essentially filed fraudulent documents to foreclose. We here at FDN are going into our third straight year of seeking, in discovery, the alleged authority of the various “lenders”, servicers, “trustee” banks, and “successors by merger” entities to foreclose, and more and more courts are finally starting to seriously question this authority instead of blindly accepting whatever the foreclosing party alleges or files.

The real advantage of these admissions for the borrowers is that they may be construed to constitute “newly discovered evidence” in the context of seeking to set aside or “unwind” a foreclosure which has already taken place. Obviously, the borrower could not have discovered something which the banks, servicers, etc. have just now revealed, especially when these foreclosing parties previously took the position that the foreclosure documents were legitimate. This newly discovered evidence, which has ONLY been recently made available by the foreclosing parties themselves, should be sufficient to mount a challenge against a foreclosure which has already been “processed” so that the borrower can seek to unwind it. Further, as the banks, servicers, etc. are essentially admitting that they engaged in fraud by nondisclosure of the legal infirmities in their documents, a fraud by omission claim could be advanced for the purposes of the borrower’s seeking damages remedies against the offending foreclosing parties.

Since we posted our prior article on this website as to the real upshot of these recent revelations, we have been receiving hundreds of inquiries from borrower victims of foreclosures which went otherwise unchallenged or incompletely defended, which is one of the reasons which our network is expanding at a rapid rate. What will really be interesting is the deposition testimony and other matters which will be revealed in formal discovery so that we may understand the real magnitude of the fraud and continue to seek justice for borrower victims of the illegal foreclosures.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 10, 2010

FDN is pleased to announce the addition of attorney R. Harvey Dye, Esq. as the network’s 30th affiliate law Firm. Mr. Dye is located in Anthem, Arizona and is working with Jeff Barnes, Esq. on cases in Yavapai County, AZ.

FDN will shortly be adding affiliate counsel in Tennessee, Kentucky, and Michigan as well, and we have had inquiries from law Firms in Arkansas and Georgia requesting to become part of our ever-growing network.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 7, 2010

We have recently received a number of requests from law Firms around the United States for assistance with case screening, discovery, case management, and litigating foreclosure defense issues. FDN principal Jeff Barnes, Esq. will thus be forming a private consulting entity to personally assist law Firms in setting up foreclosure defense departments and educating attorneys and their paralegals in order to better serve foreclosure clients. Details are available by e-mailing us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 7, 2010

The recent investigations of Florida foreclosure mills by the Florida Attorney General’s Office; the Attorney General filings in Ohio and other states; and the recent temporary foreclosure stoppages by Bank of America, JPMorgan Chase, and GMAC/Ally Bank because of “document irregularities” are news and are well-discussed on the internet. However, no one is discussing what the real upshot of these matters are in terms of their effect on victims of the fraudulent foreclosure practices perpetrated by the wrongdoers.

Literally millions of foreclosures were railroaded through the system with missing documents, fraudulent documents, and incomplete proofs before the judiciary was made aware of the fraudulent practices of those undertaking these actions. The majority of the victims of these practices originally believed that they had no defense to a foreclosure, and many still do not know that they do. What these AG investigations, etc. have done is to send up a red flag that many of the foreclosures which have already been “processed” are probably open to being challenged and possibly set aside on grounds that the judgments were void or were procured by fraud.

Most states have the equivalent of Federal Rule 60 which provides a legal mechanism to seek to vacate and set aside a judgment for a number of defined reasons. The state versions are usually pursuant to a procedural rule, and provide that a judgment may be challenged on the grounds that it was procured by fraud or is void or suffers from some other infirmity. Although there is generally a one-year time limit on these types of Motions, several states have a “catch-all” provision within their rules which has no such limit to challenge the judgment on “any other grounds”.

As such, the next wave of foreclosure litigation is most probably going to be legal proceedings instituted by borrowers/homeowners/investors who were victimized by the likes of The Law Offices of David J. Stern, The Law Offices of Marshall C. Watson, Shapiro & Fishman, and other foreclosure mills which perpetrated millions of fraudulent foreclosures. With the massive amount of foreclosure judgments which were entered within the past year, the number of challenges is probably going to be significant, but necessary to preserve the integrity of the judicial system and further foreclosure reform.

Foreclosure victims should thus pull their entire court file and scrupulously examine all documents in the file for possible irregularities. A deposition of someone from the Stern law Firm taken by the Florida Attorney General’s office is being posted on the internet where the deponent testifies, under oath, as to signatures of persons on documents not being by the named signatory; “floating” notary stamps used by others than the given notary; and directives given to workers by Stern paralegal Cheryl Samons to undertake actions which were, shall we say, suspect and questionable at best.

Exposing these frauds and illegal actions is necessary. Challenging fraudulent foreclosures is necessary. Educating the judiciary to the extent of these frauds is necessary. Enforcing the rules on vacating judgments procured by fraud is necessary. It is only in this way that true justice will be achieved.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

October 1, 2010

In a detailed, 2-page letter on the letterhead of the Congress of the United States dated September 24, 2010 signed by representatives Alan Grayson, Barney Frank, and Corrine Brown to Michael J. Williams, President and CEO of Fannie Mae, Congress advises that it is “disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers” especially when four of such “mills” are “under investigation by the Attorney General of Florida for fraud”. The letter notes that several of the busiest of these mills show up as members of Fannie Mae’s Retained Attorney Network.

The letter states that “The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note” and that this practice “is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.” Congress requests that Fannie Mae remove the foreclosure mills under investigation for document fraud from the Retained Attorneys Network, and that “Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented”. Congress is thus now thinking along the same lines as the Florida Courts and the Supreme Court of Florida which require that chain of title to a mortgage and note be established by valid, admissible evidence and that foreclosure lawsuits be verified.

The letter goes on to ask: “Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” and “what steps is Fannie Mae taking to avoid the use of foreclosure mills?” and further “What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law?” As to the first question, we have our own suspicions. As to the second and third, the answer is obviously “none”.

It is no secret that the “mills under investigation” are Shapiro & Fishman, The Law Offices of David J. Stern, and The Law Offices of Marshall C. Watson. Shapiro & Fishman has, notably, become very aggressive and arrogant in its tactics as we have personally evidenced in several cases. Stern’s misdeeds are a matter of public record and court documents.

Suspicious? You bet. Insidious? Absolutely. A possible ROCI conspiracy? Maybe. Looks like we are going to have to start doing some intensive discovery here.

Jeff Barnes, Esq., www.ForeclosureDefensenationwide.com

September 30, 2010

FDN attorneys Jeff Barnes, Esq. and Elizabeth Lemoine, Esq. have achieved a significant victory in Federal Court in Oregon. On Tuesday, September 28, Mr. Barnes and Ms. Lemoine defended and argued Motions to Dismiss the borrowers’ lawsuit challenging a nonjudicial foreclosure. The Motions were filed by the Defendants OneWest Bank and MERS. The action was originally filed in state court where a temporary restraining order was entered stopping the sale. On the eve of the scheduled hearing on the borrowers’ Motion for Preliminary Injunction, Defendants OneWest Bank, MERS, and Regional Trustee Services removed the case to Federal Court in an obvious attempt to circumvent the state court injunction hearing. The Federal Court entered an Injunction and scheduled a hearing on the Motions filed by the Defendants.

During the course of the hearing, the Court repeatedly raised the “MERS as nominee” issues to counsel for the Defendants, with said counsel finally admitting, upon repeated inquiry by the Court, that MERS cannot transfer promissory notes. The Court denied the Motions to Dismiss and has, by Order, commanded the injunction against the sale to remain in place through the duration of the borrowers’ lawsuit.

The questions posed to the Defendants’ counsel by the Court on the record demonstrate, again (as with the concerns of the Michigan court highlighted in our other post today), that courts are really starting to examine the inconsistent claims made by MERS (e.g. that it is “solely a nominee” yet purports to have authority to further foreclosures by, among other things, transferring promissory notes and appointing successor trustees). As those of you who follow this website know, what the case law is consistently holding is that MERS cannot do what it has purported to do (and has done in what appears to be over sixty (60) million mortgage transactions nationally).

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

September 30, 2010

A Michigan trial court has denied the Defendants’ Motion to Dismiss a Complaint filed by the borrowers to challenge a nonjudicial foreclosure; denied the Defendants’ request that the borrower make escrow payments; and has requested additional documentation in connection with the Court’s concern as to the alleged authority of MERS to assign the note and mortgage. The borrowers are represented by Jeff Barnes, Esq. together with local Michigan counsel. The case involves a multi-level securitization.

The borrowers sued US Bank as the alleged “successor trustee” to Bank of America as successor by merger to LaSalle Bank as Trustee for a First Franklin securitized mortgage loan trust; MERS; and First Franklin. The supporting legal Memorandum prepared by Mr. Barnes highlights Michigan law which has held that there is no Michigan case law as to the authority of lender nominees or MERS and thus Michigan has looked to decisions from New York and Kansas involving these issues for guidance. The case cites the Landmark decision from Kansas within the opinion.

We view this interim decision as a clear indication that the courts of Michigan, like the courts of Oregon, California, Kansas, Nebraska, Vermont, Arkansas, Nevada, Missouri, and others are not blindly accepting MERS’ purported authority to assign mortgage paper and that MERS “solely as nomnee” cannot do so.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 

September 29, 2010

In an extremely significant decision, the U.S. Bankruptcy Court for the District of Oregon has issued an opinion dated August 24, 2010 in the matter of In Re Allman, 2010 WL 3366405 (Bkrtcy.D.Or.) which has adopted the anti-MERS decisions of the Supreme Courts of Kansas, Nebraska, and and Arkansas in holding that MERS is not “beneficiary” despite claiming to be so in Deeds of Trust. Although the case involved the issue of whether MERS was to entitled to receive, under Oregon statutes, a notice of intention to record a trust deed release which is required to be given to the “beneficiary of record” and “the party to whom the full satisfaction of payment was made”, the Court examined the role of MERS and concluded that it is not a beneficiary, and thus not entitled to such notice.

The Court highlighted the standard MERS language in the trust deed which listed MERS as the beneficiary “solely as nominee for the Lender and assigns” and that “MERS is a separate corporation that is acting as nominee for the Lender and Lender’s assigns”, and further that MERS holds only legal title. The first important conclusion reached by the Court was that under the statutory definition of “beneficiary” of the Oregon Trust Deed Act that the lender (and not MERS) is the “person for whose benefit” the deed of trust was given. This vitiates and should render null the recent arguments made by counsel for foreclosing parties that “because the Deed of Trust says MERS is the beneficiary that MERS is thus the beneficiary”. In other words, just because MERS says so does not mean it is so.

The Court then went on to cite the definition of a “nominee” as cited by the Arkansas Supreme Court in the MERS v. Southwest Homes of Arkansas, Inc. case, and what MERS is and does as found by the Nebraska Supreme Court in the MERS v. Nebraska Dept. of Banking case.

The Court concluded that the relationship of MERS to the lender was “more akin to a straw man than to a party possessing all the rights given to a buyer” , citing the quotation from the Landmark v. Kesler case from the Supreme Court of Kansas, and ultimately concluded that “It is apparent that the listing of MERS as a beneficiary in the deed of trust is merely to facilitate its ownership tracking function. It is not in any real sense of the word, particularly defined in ORS 86.705(1), the beneficiary of the trust deed.” 

As such, the Oregon Federal Court has joined the ever-growing ranks of those courts which have truly examined the inconsistent claims and self-appointed titles of MERS in Deeds of Trust and has concluded, as have the state courts of Kansas, Nebraksa, Arkansas and others and the Bankruptcy Court of Nevada, that MERS is not, never was, and cannot be a “beneficiary”. Thus, as MERS is not a “beneficiary” by statute, every purported assignment of a Deed of Trust or Substitution of Trustee in Oregon by MERS claiming to be the “nominee” or “beneficiary” is now suspect and should be challenged based on the holding of this extremely important and well-reasoned decision.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com