New post on Livinglies’s Weblog
New post on Livinglies’s Weblog
Posted by: Matthew D. Weidner, Esq. | on May 8, 2013
Down here in Florida Foreclosure Courts, we are treated to a constant, steady, nearly impenetrable wall of,
“Fraud in Foreclosure Doesn’t Matter at All!”
“Banks Can Ignore All Laws, All Rules, All Foreclosure Processes And Still Take Your Home”
and a recent favorite
“Banks Can Spit In The Face of The Attorneys General And Ignore Their Absurd National Mortgage Settlement”
But up in New York, a court reached a stunning result…..
A COURT ACTUALLY MADE A BANK FOLLOW THE LAW AND ITS OWN RULES!
The assignment of the Defendant’s note and mortgage, having not been assigned fromthe Depositor to the Trust, is therefore void as in being in contravention of the PSA. The evidence submitted by Defendant that the note was acquired after the closing date and that assignment was not made by the Depositor, is sufficient to raise questions [*10]of fact as to Whether the Plaintiff owns the note and mortgage, and precludes granting Plaintiff summary judgment.
The assignment of the note and the mortgage which affected the transfer was dated July
16, 2008, however, pursuant to the terms of the PSA the trust closed on November 14, 2006.
Section 9.02 of the PSA specifically prohibits the acquisition of any asset for a REMIC
part of the fund after the closing date unless the party permitting the acquisition and the
NIMS (net interest margin securities) Insurer have received an Opinion letter from counsel, atthe party’s expense, that the acceptance of the asset will not affect the REMIC’s status. No such letter has been provided to show compliance with the requirements of the PSA.Plaintiff has provided no evidence that the trustee had authority to acquire the note and mortgage herein after the trust had closed.
Since the trustee acquired the subject note and mortgage after the closing date, the
trustee’s act in acquiring them exceeded its authority and violated the terms of the trust.The acquisition of a mortgage after 90 days is not a mere technicality but a material violation of
the trust’s terms, which jeopardizes the trust’s REMIC status.
Section 9.01(f) of the PSA provides that neither the Trustee, the Servicer or Holder of
the Certificates shall cause any REMIC formed under the PSA, by action or omission, to
endanger the status of the REMIC or cause any imposition of tax upon the REMIC.
Since the trust was organized as a REMIC, the investors received certain tax benefits on
the income that passed through the trust to them. Section 26 U.S.C.A. § 860D(a)(4) defines a REMIC as an entity that
as of the close of the 3rd month beginning after the startup day and at all times thereafter,
substantially all of the assets of which consist of qualified mortgages and permitted
NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) must face fraud claims brought by CIFG Assurance North America (CADEGA.UL) over insurance it provided for $275 million in mortgage-backed securities, a New York state appeals court ruled on Tuesday.
CIFG claimed in a 2011 lawsuit that the investment bank fraudulently induced it to provide insurance for a portfolio of more than 6,000 subprime residential mortgages by concealing the shoddy quality of the loans.
A trial judge in Manhattan threw out that claim last year, ruling that CIFG would have uncovered the alleged misrepresentations had it performed proper due diligence.
The New York State Supreme Court’s Appellate Division, First Department, reversed on Tuesday, finding that CIFG had done enough by having an outside consultant analyze the loans.
“There is a question of fact as to whether plaintiff reasonably relied on defendants’ representations,” a five-judge panel wrote in a unanimous decision.
Eric Schneiderman: Banks Have ‘Confidence’ That Law Enforcement Is Not Taking Violations ‘Seriously’
Pro Se Plaintiff Deborah Beaton filed a Complaint against JPMorgan Chase wherein Defendant Northwest Trustee Services, Inc. (“NWTS”) joined in a Motion to Dismiss with Chase. In her Second Amended Complaint (SAC), Beaton alleges three causes of action:
USDC Honorable Richard A. Jones gave Beaton her causes of action (1) and (2) against the defendants’ Motion to Dismiss… and the beat goes on!
In their normal “too big to get slapped down” modus operandi, Northwest Trustee Services filed additional paperwork well beyond the local rule limits…probably thinking the Judge wouldn’t notice. However, Judge Jones noted in his Order (click for order),
“Allowing NWTS to join in Chase’s motion and provide additional briefing would result in a combined brief of 35 pages. This would violate this District’s Local Rules. NWTS did not file a separate motion or request leave to file an over-length brief, and the court will not treat NWTS’s joinder as a separate motion since it did not follow the requisite procedures regarding noting dates. Accordingly, the court has disregarded all argument beyond the 24-page limit of the opening brief (i.e., page 8 through 15 of NWTS’s motion), and beyond the 12-page limit of the reply (i.e., page 7 through 9).”
Per the Order, in August 2008, Beaton executed a promissory note for $271,950.00, payable to the order of Washington Mutual Bank, FA (“WaMu”), which was secured by a deed of trust. The deed of trust lists WaMu as “lender,” the lender as “beneficiary,” and Ticor Title Company as “trustee.” The Court also footnoted its Judicial Notice:
“The Court generally may not consider material beyond the pleadings in ruling on a motion to dismiss. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). However, where documents are referenced extensively in the complaint, form the basis of plaintiffs’ claim, or are subject to judicial notice, the Court may consider those documents in the context of a motion to dismiss. United States v. Ritchie, 342 F.3d 903, 908-09 (9th Cir. 2003). In its prior order, the court took judicial notice of the following exhibits attached to Exhibits 1 (Statutory Warranty Deed), 2 (Note), 3 (Deed of Trust), 5 (Sept. 25, 2008 agreement between FDIC and Chase), 6 (Appointment of Successor Trustee), 7 (Notice of Trustee Sale), 8 & 9 (various publicly recorded instruments/documents by Beaton) because they are publicly recorded documents not reasonably subject to dispute. Chase appears to rely on these same documents in its motion. Additionally, plaintiff incorporates by reference a “Notice of Default” in her SAC. NWTS has attached the Notice of Default as Exhibit 4, and plaintiff does not dispute its authenticity or accuracy. The court takes judicial notice of these documents. The court has disregarded plaintiff’s “Affidavit of Civil Rights Violations Committed” because it is not subject to judicial notice.”
FDCPA – Fair Debt Collection
Excellent work by a Pro Se. Although the Court footnoted that the “plaintiff does not dispute” theauthenticity or accuracy of the Notice of Default, clearly she did as in the Order later stated on page 3 where Judge Jones points out:
“Beaton alleges that WaMu may have transferred or negotiated the note prior to September 25, 2008, and that it remains undetermined if Chase is in fact the actual beneficiary. On November 14, 2010, NWTS, as Chase’s “duly authorized agent,” sent Beaton a “Notice of Default,” in which NWTS advised that if Beaton disputes the debt or any portion of the debt, it will request that the creditor obtain verification of the debt and mail it to her. Beaton alleges that by letter, she disputed the debt and requested validation, and that NWTS failed to comply with the FDCPA.“
The Order continues, “[F]or a complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009).”
The Court then describes in detail the definition of a “debt collector”…
“To the extent that Chase acquired Beaton’s loan in 2008 before she defaulted, it falls within the section 1692a(6)(F) exemption of “debt collector.” NWTS was appointed as successor trustee on November 29, 2010. However, Beaton had been in default since approximately July 1, 2010. Accordingly, NWTS does not fall within the same exemption. Beaton alleges that the identity of the “Note Bearer/Creditor remains unknown[,]” that it remains undetermined if Chase is the actual beneficiary pursuant to RCW 61.24.005(2), and that NWTS violated FDCPA and damaged the Plaintiff by foreclosing her property.
Liberally construed, the court finds that Beaton has plausibly alleged that NWTS attempted to collect on a debt that may not have been owed to Chase, which may have violated the FDCPA. See McDonald II, 2013 WL 858178 at *12 (“At the time [NWTS began the foreclosure process], NWTS had not been appointed successor trustee and was not acting on behalf of the entity that had actual physical possession of the note: it therefore lacked the right to effect dispossession of plaintiff’s property. Plaintiff has established that NWTS violated § 1692f(6)(A) of the FDCPA.”); Michelson v. Chase Home Finance, LLC, Case No. C11-1445MJP, 2012 WL 3240241, *5 (W.D. Wash. Aug. 7, 2012) (“NWTS and RCO may have violated the FDCPA because they did not yet have confirmation of Chase’s right to possess the property, and thus may have violated § 1692f(6)(A)”).
Accordingly, Beaton’s FDCPA claim may proceed against NWTS.“
DTA (Deed of Trust Act)
“The DTA regulates mortgage transactions in which a lender issuing a promissory note or other debt instrument to a borrower can secure the debt via a deed of trust. Bain v. Metro. Mortgage Group, Inc., 285 P.3d 34, 38 (Wash. 2012). The borrower becomes the grantor of the deed of trust and the lender becomes the beneficiary of the deed of trust. Id. A trustee holds title to the property in trust for the lender. Id. If the borrower defaults on the loan, the trustee “may usually foreclose the deed of trust and sell the property without judicial supervision.” Id. Because the DTA “dispenses with many protections commonly enjoyed by borrowers under judicial foreclosures, lenders must strictly comply with the statutes and courts must strictly construe the statutes in the borrower’s favor.” Albice v. Premier Mortgage Servs., Inc., 276 P.3d 1277, 1281 (Wash. 2012).
Among the statutory protections requiring strict compliance are the “requisites to a trustee’s sale” enumerated at RCW § 61.24.030. Albice, 276 P.3d at 1281, 1282 (“Without statutory authority, any action taken is invalid.”); see also Schroeder v. Excelsior Mgmt. Group, LLC, No. 86433-1, 2013 WL 791863, *8 (Wash. Feb. 28, 2013). Trustees must also strictly comply with the sale procedures itemized at RCW § 61.24.040. Albice, 276 P.3d at 1282.
Beaton’s SAC places several DTA requirements at issue. Plaintiff alleges that Chase and NWTS materially violated the DTA by providing a defective beneficiary declaration, a defective notice of default, a defective notice of trustee’s sale, defective appointment of successor trustee, and a defective trustee’s deed. Plaintiff alleges that all of the “defects” are for the same reasons that the beneficiary declaration is defective.
The DTA requires the trustee to “have proof that the beneficiary is the owner of any promissory note or other obligation secured by the deed of trust.” RCW § 61.24.030(7)(a); see also Bain, 285 P.3d at 39 (citing trustee’s statutory obligation to obtain proof of beneficiary’s ownership of the note as element of its duty to the grantor of the deed of trust). Defendants complain that courts across the country, including federal courts in Washington, have rejected “show-me-the-note” arguments like Beaton’s. This court recently suggested that in the wake of Bain, it is time to retire the reductive “show-me-the-note” meme, at least in cases arising under Washington law. Knecht v. Fidelity Nat’l Title Ins. Co., Case No. C12-1575RAJ. In Washington, proof that the beneficiary holds the note secured by a deed of trust is a statutory requisite to a trustee’s sale. RCW § 61.24.030(7)(a).” [DC Ed. “Should be that way in every state.”]
“Defendants direct the court to a beneficiary declaration which provides: “JPMorgan Chase Bank, N.A. successor in interest to Washington Mutual Bank fka Washington Mutual Bank, FA is the actual holder of the promissory note or other obligation evidencing the above-referenced loan or has requisite authority under RCW 62A.3-301 to enforce said obligation.” Even if the declaration is properly subject to judicial notice, the Washington Supreme Court has made a clear pronouncement of strict compliance with statutory provisions of the DTA. According to the declaration, Chase could be a nonholder in possession or a person not in possession who is entitled to enforce the instrument (see RCW § 62A.3-301), neither of which is proof that “the beneficiary is the owner of any promissory note or other obligation secured by the deed of trust.” RCW § 61.24.030(7)(a).”
The Court clearly opines:
“If Chase was not the holder of the note, it did not have the authority to appoint NWTS as a successor trustee, and NWTS did not have authority to initiate foreclosure proceedings without knowledge of the beneficiary as required by RCW 61.24.030(7). This would result in a material violation of the DTA. Accordingly, Beaton has plausibly alleged a violation of the DTA that survives dismissal.“
For all the foregoing reasons, the court GRANTS in part and DENIES in part Chase’s motion. The Clerk is ORDERED to enter an amended case schedule with a trial date of January 6, 2014.” Let’s buy tickets! Thank you Shelley for the heads up.
I recently learned that in Forsyth County Georgia, an investigation has begun on the crooked foreclosure mill attorneys in Georgia. YEA!!!
Wow, there has been continual violations of Georgia’s real property laws ever since Foreclosure Hell began, and should it be proven that these attorneys, signing their names as every bank’s employees, which we know they aren’t maybe the tides will be turning!!!
By Michael Bathon – Mar 18, 2013 3:29 PM E
The company, based in Atlanta, listed debt of more than $50 million and assets of as much as $50 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Ten affiliates also filed for bankruptcy.
Prommis officials determined that it’s “in the best interests of the company, its creditors, and other parties in interest,” to seek court protection under Chapter 11 of the U.S. Bankruptcy Code, according to court documents.
The company said in the filing that it plans to sell virtually all its assets in a court-supervised auction. No terms were disclosed.
Prommis is also seeking to implement retention and incentive plans for key employees, singling out those “who are essential to both the company’s ongoing business operations and their sale and wind-down efforts.”
The company helps mortgage servicers and law firms with foreclosure proceedings in 19 states and provides bankruptcy and loss-mitigation services throughout the U.S., according to its website.
Ares Capital Corp. (ARCC), a New York-based investment firm, owns 17.3 percent of the Prommis’ common stock and 43.2 percent of its Class B units, according to court papers.
Steven K. Kortanek, a lawyer representing Prommis, didn’t immediately return a phone call seeking comment on the bankruptcy filing.
The 30 largest unsecured creditors of the company and its affiliates are owed about $3.3 million, according to court filings.
The case is In re Prommis Holdings LLC, 13-10551, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at email@example.com
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