From: Charles Koppa [mailto:poppakoppa@hotmail.com]
Sent: Friday, December 23, 2011 11:56 AM
To: InfoSam
Subject: 45 Season’s Reasons!

Print out this sheet to make notes. Then open the attached Slide Show and contemplate God’s Winter Glory.
45 LESSONS IN LIFE – (Click 25 Fantastic Scenes – A Gift for YOU)

1.Life isn’t fair, but it’s still good.

2.When in doubt, just take next small step.

3.Life is too short to waste time hating anyone.

4.Your job won’ take care of you when you are sick. Your friends and family will. Stay in Touch.

5.Pay off credit cards every month.

6.You don’t have to win every argument. Agree to disagree..

7.Cry with someone. It’s more healing than crying alone.

8.It’s ok to get angry with God. He can take it.

9.Save for retirement. Starting with your first paycheck.

10.When it comes to chocolate, Resistance is futile.

11.Make peace with your past, so it won’t screw up your present.

12.It’s ok to let your children see you cry.

13.Don’t compare yourself to others; you have no idea what their journey is all about.

14.If a relationship has to be a secret, you shouldn’t be in it.

15.Everything changes in a blink of an eye. But don’t worry God never blinks.

16.Take a deep breath, it calms the mind.

17.Get rid of anything that isn’t useful, beautiful or joyful.

18.Whatever doesn’t kill you, makes you stronger.

19.It’s never too late to have a happy childhood; But the second is up to you.

20.When it comes to going after what you love in life, don’t take no for an answer.

21.Burn the candles, use the nice sheets, wear the fancy lingerie. Don’t wait for a special occasion. Today is special.

22.Over prepare then go with the flow.

23.Be eccentric now. Don’t wait for old age to wear purple.

24.The most important sex organ is the brain.

25.No one is charge of your happiness but you.

26.Frame every so-called disaster with these words "In five years will this matter?"

27.Always choose life.

28.Forgive everyone everything.

29.What others think of you is none of your business.

30.Time heals almost everything. Give time, time.

31.However good or bad a situation is, it will change.

32.Don’t take yourself so seriously no one else does.

33.Believe in Miracles.

34.God Love you because of who God is, not because of anything you did or didn’t do..

35.Don’t audit life. Show up and make the most of it now.

36.Growing old beats the alternative-dying young.

37.Your children get only one childhood.

38.All that truly matters in the end is that you’re loved.

39.Get outside every day. Miracles are waiting everywhere.

40.If we all throw our problems in a pile, and saw everyone else’s, we’d grab ours back.

41.Envy is a waste of time. You already have all you need..

42.The best is yet to come.

43.No matter how you feel, get up, dress up, and show up

44.Yield. Start each day by saying, "I AM Alive!

45.Life isn’t tied with a bow, but it’s still a gift.

46. Please Pass this on to Your 7% family and friends…

Merry Christmas, 2011!

Charles, aka InfoSam © CJKoppa, Julie & Tigre 760-787-9966

Reasons This Season.pps

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, December 16, 2011 9:41 AM
To: Charles Cox
Subject: Homeowner’s challenge of foreclosure fails |

Homeowner’s challenge of foreclosure fails

· Winston & Strawn LLP

· USA

·

· December 5 2011

On December 1st, the Eighth Circuit addressed a "show-me-the-note" challenge to a home foreclosure. Plaintiff challenged the validity of the foreclosure of his home because Chase initiated foreclosure based on the assignment of the mortgage. Affirming the entry of summary judgment dismissing the claim, the Court held that Minnesota law does not require Chase to possess the promissory note at the time it commences foreclosure by advertisement, and even if Minnesota law imposed such a requirement, the undisputed facts establish Chase possessed the note. (Ruling Attached)

Stein.120111.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, December 16, 2011 9:34 AM
To: Charles Cox
Subject: More on the "Independent Foreclosure Review" process – Independent Consultants Cannot Contact Borrowers

OCC Says Independent Consultants Can’t Contact Borrowers

The independent consultants hired by bank servicers to review and assess the claims of millions of borrowers who may have been harmed in the foreclosure process will not be able to contact these borrowers directly or even talk with housing counselors, according to testimony at a Senate Banking subcommittee on Tuesday.

The consultants will be operating in a “vacuum,” and without access to the actual borrowers, said Alys Cohen of the National Consumer Law Review.

Promontory Financial Group managing director Konrad Alt told subcommittee chairman Robert Menendez, D-N.J., that his foreclosure review teams must ask the servicer to contact the borrower if they need additional information about a claim.

Sen. Menendez noted that the claim forms are in narrative form and consumers are unlikely to provide all the necessary information to back up their claims. It would be “very difficult to judge their claims without additional information,” he said.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, December 16, 2011 8:38 AM
To: Charles Cox
Subject: Treat foreclosure as a crime scene

Treat foreclosure as a crime scene

By MATT STOLLER | 12/15/11 1:48 PM EST

Bubbling under the surface of politics is the foreclosure crisis — where the power of big finance is brushing up against the rule of law. The party leaders seem to have decided it is essentially a giant — but unavoidable — tragedy. GOP presidential candidate Mitt Romney said foreclosures have to clear for the housing market to reset. The Obama administration, meanwhile, has spent only about $2 billion of the $75 billion authorized for the Home Affordable Modification Program.

But the foreclosure crisis is not only a few million personal tragedies. It is a few million crime scenes.

Massachusetts Attorney General Martha Coakley recently filed the first broad civil suit against five major banks and the Mortgage Electronic Registration Systems for foreclosure fraud. Her suit alleges that mortgage servicers routinely backdated and falsified documents to expedite foreclosures. In many cases, they foreclosed on loans they did not even own.

This is one of a series of suits that state officials are bringing against leading financial institutions. Nevada Attorney General Catherine Cortez Masto last month indicted two employees of the foreclosure specialist Lender Processing Services, which works with the big banks, on 606 felony and misdemeanor counts of fraud.

Delaware Attorney General Beau Biden is also suing MERS — as I recently wrote in POLITICO — for unfair and deceptive practices. New York Attorney General Eric Schneiderman successfully intervened to stop a whitewash settlement of Countrywide’s ostensible fraud in packaging and selling mortgage-backed securities it knew to be poisoned.

These attorneys general have changed the legal environment around the mortgage and foreclosure mess — refocusing the core issue on justice. They are reframing the problem as a crime scene.

What is behind these suits? Simple: Crime by mortgage servicers and their contractors. And this is more than just the crime of these foreclosures themselves — it’s the residual tail end of a housing bubble based on fraud. The reason these bank servicers must now routinely employ notaries using false documentation is because they never established a clear chain of the property title upfront.

The attitude during the go-go days of the housing bubble was “here today, gone tomorrow,” as Joe Nocera and Bethany McLean make clear in their book “All the Devils Are Here.” This was a refinement of the financial deal makers’ code, “IBG-YBG,” meaning “I’ll be gone, you’ll be gone,” described by Jonathan Knee in “The Accidental Investment Banker.”

In this environment, why bother getting your paperwork in order when the goal is to put someone into a predatory loan, reap fees and disappear tomorrow?

Now that these homes are in foreclosure, however, the lack of paperwork is a serious problem. And, since no one has yet been held accountable for the fraud perpetrated during the housing bubble, the business model of financial institutions is often still predatory.

This fraud is now coming back to haunt our courts — for example, in the falsified foreclosure paperwork required to cover up the corner-cutting of the subprime lenders and the banks that funded them.

The banks themselves have confessed to breaking the law. The Veterans Affairs Committee held a hearing early this year when JPMorgan was found to be illegally foreclosing on 18 U.S. military families — a violation of the Servicemember Civil Relief Act.

This law bans foreclosing on active duty troops. Knowingly violating the ban carries up to one year in prison for each count. JPMorgan apologized for its violations, because for banks, being sorry when caught is what really counts. The families were compensated by JPMorgan financially, but no one at the bank got jail time or had to plead guilty.

Bank regulators have now found that up to 5,000 military families may have been foreclosed on illegally, as The Financial Times reported last month. Yet the Justice Department settled with Bank of America for alleged violations of the service member act. BofA, like JPMorgan, doesn’t have to admit to wrongdoing — but it says it is very sorry anyway.

“The SCRA is not some obscure legal technicality,” said Rep. Brad Miller (D-N.C.), who wrote the law, “that might just have escaped the attention of mortgage servicers. Those servicers are all affiliates of the biggest banks. … Servicing mortgages is all they do, and they really don’t have that many laws to keep up with. They have got to have known what the law required and consciously decided that they could just ignore it, the same way they apparently decided it was OK to file false affidavits in legal proceedings.”

President Barack Obama has argued, as recently as last Sunday on “60 Minutes,” that what happened on Wall Street wasn’t criminal. “Some of the most damaging behavior on Wall Street,” the president told Steve Kroft, “in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal. That’s exactly why we had to change the laws.”

Obama is wrong. Fraud was illegal before the crisis; it’s illegal now. The Servicemember Civil Relief Act was signed in 2003. So it was already on the books. During the savings and loan crisis, the George H.W. Bush administration sent about 3,000 white-collar criminals to jail. This administration has yet to send one.

And it is for lack of trying. Attorney General Eric Holder and his network of U.S. attorneys haven’t brought one criminal suit on illegal military foreclosures or foreclosure fraud. There have been enough books and investigations revealing rampant criminality in the housing bubble and now in foreclosure crisis. Yet Holder’s DOJ is still settling with banks to let them off the hook for illegal foreclosures on active duty troops.

The administration is now attempting to quash state-level officials by fiercely lobbying for a 50-state settlement to paper over the foreclosure fraud scandal. Obama may talk about his fealty to the “99 percent,” but his administration is engaged in an aggressive coverup of bank crimes.

The administration’s response to Coakley’s suit is perhaps the most revealing, for the Massachusetts case against the banks was particularly sweeping.

The banks’ press release response has largely been “we’re disappointed” boilerplate, and only the taxpayer-owned lender Ally Financial (formerly GMAC) pushed back hard. The company declared that it plans to cease all mortgage lending in Massachusetts.

Coakley’s response was simply that this is proof that Ally is not interested in following the laws regarding rules of evidence. In other words: good riddance.

After this dispute, Rep. Barney Frank (D-Mass.) and Coakley called for congressional hearings into Ally’s behavior.

Ally’s action is an attempt at what is known as a capital strike — a threat by financial interests that they will cease financing critical social activities unless their legal demands are met.

Gretchen Morgensen and Josh Rosner detail a similar case in “Reckless Endangerment,” their history of the housing bubble. In 2003, before the bubble, Georgia lawmakers noticed that mortgage lending was riddled with fraud and predation. So the Legislature passed a law clamping down on fraud with a state consumer protection law.

The response was devastating — Standard & Poor’s declared it would no longer rate mortgage-backed securities with loans originated in Georgia. The agency made enormous profits by rating subprime mortgages, so a predatory lending law may well have proved a threat to this profit stream. The state quickly reversed the law for fear that there would be no more housing finance in the state.

Other states and localities took notice — and we saw what happened next.

The housing bubble, in other words, was not just due to tragic herding behavior. It also involved the financial sector’s aggressive responses to democratic attempts to rein in creditor abuses. Now Ally, a bank 74 percent owned by taxpayers and controlled by the administration, is continuing this abusive trend.

Turning our markets into playpens for predatory behavior didn’t happen overnight, and it will not be fixed overnight. But until we have public servants strongly focused on justice for all, we can expect the crime spree to go on. After all, what we’re all learning is that, at least for large banks, crime pays.

Matt Stoller worked on the Dodd-Frank financial reform law and Federal Reserve transparency issues as a staffer for Rep. Alan Grayson (D-Fla.). He is now a fellow at the Roosevelt Institute.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, December 16, 2011 9:48 AM
To: Charles Cox
Subject: DON’T LET THEM DO IT!!!!!

EDITOR’S NOTE: Calculated Risk has the right idea but the wrong calculation. It is relying on published reports of underwater houses and the amount they are underwater. The true figure is at least $1.4 trillion, which would make the settlement around 1.75 cents on the dollar. And it does not include all the foreclosures that went forward even though the homeowner was seeking modification that would present affordable payments and a better return to investors than foreclosure.

This so-called settlement is nothing more than a public relations stunt. It insures that money and politics will continue to be mixed together. It is virtual amnesty. An attorney general is charged with protecting citizens of the state.

by CalculatedRisk SEE ARTICLE

I missed this last week from Adam Belz at the Des Moines Register: Iowa AG says mortgage settlement should be done by Christmas (ht Kevin)

Iowa Attorney General Tom Miller said Thursday a settlement between almost all state attorneys general and the five largest mortgage servicers should be finalized before Christmas, with or without California.

The deal, which Miller has been trying to negotiate since March, would release the five servicers – Ally Financial, Bank of America, Citigroup, J.P. Morgan Chase, and Wells Fargo – from legal claims on past home loan servicing and foreclosures. The deal would not prohibit individuals from suing the banks, or government prosecutors from suing banks over issues related to the packaging of home loans into mortgage-backed securities.

In return the banks will agree to pay for what Miller calls “substantial principal reductions” for homeowners who are underwater, and agree to a set of mortgage servicing standards, interest rate reductions, and cash payments to some homeowners who’ve alrady gone through foreclosure.

>And from Bloomberg today: Ex-Cuomo Aide Said to Be Among 4 Foreclosure-Monitor Candidates

Steven M. Cohen, who was the governor’s secretary, is one potential foreclosure monitor, according to the person, who declined to be identified because the negotiations are secret. That person said North Carolina Commissioner of Banks Joseph A. Smith Jr. is also a candidate, as did a second person who asked not to be identified.

Selection of a monitor is one of the final issues to be worked out between the banks and state and federal officials, said the people. Selection of the monitor is a key issue for the regulators because success of the agreement will largely depend on his or her work, one of the people said.

Other candidates are Nicolas P. Retsinas, a former assistant secretary of the U.S. Department of Housing and Urban Development, and ex-Federal Deposit Insurance Corp. Chairman Sheila Bair, one of the people said.

The discussion of possible principal reductions is too optimistic. They are discussing something like a $25 billion settlement (including California) and only a portion would be for principal reductions. Currently, according to CoreLogic, homeowners with negative equity (including 2nd liens) are an aggregate $699 billion underwater. Even if the entire settlement went to principal reductions, the average underwater homeowner would only see a few percent of their negative equity eliminated.

The major impact from this settlement on the housing market would be to reduce the number of seriously delinquent loans – either by modifications (including principal reductions) or through foreclosures. Currently, according the LPS

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, December 15, 2011 8:33 AM
To: Charles Cox
Subject: Congress Questions Impartiality of Independent Foreclosure Reviews (duh!!!) | STEAL HUNDREDS OF MILLIONS, PAY FINES WITH THE MONEY YOU STOLE. |

Congress Questions Impartiality of Independent Foreclosure Reviews

By: Krista Franks 12/14/2011

At a Senate subcommittee hearing held this week to examine the progress of the foreclosure review process ordered earlier this year by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, lawmakers questioned the impartiality of the “independent reviews.”

The consent orders designed in April call for the independent review of about 4.5 million foreclosure actions by 10 servicers to determine instances in which borrowers were financially harmed and compensate those borrowers.

Julie Williams, first senior deputy comptroller and chief counsel for the OCC, attempted to assure the senators posing questions that the reviews would be unbiased.

Williams explained that the banks proposed the independent consultants, and the OCC and Federal Reserve reviewed the proposals and rejected those in which they found a conflict of interest.

When asked if many of the approved consultants have worked with the servicers previously, Williams admitted that some had. “There are a number of situations where they have done previous work for the servicers in different areas, generally, but they have had previous business engagements with those servicers.”

“This raises questions about the true independence of these organizations,” Sen. Jack Reed (D-Rhode Island) stated.

In her testimony, Williams stated that the OCC is requiring the independent reviewers to “ensure its work under the foreclosure review would not be subject to direction, control, supervision, oversight, or influence by the servicer, its contractors, or agents.”

In its written testimony, the Federal Reserve corroborated Williams’s claim. “In determining the acceptability of consultants, the Federal Reserve closely scrutinized their independence,” stated Scott G. Alvarez, general counsel for the Federal Reserve.

“Everyone involved in this process – the residential mortgage loan servicers, consultants and the regulators – has the desire to get it right,” stated Paul Leonard, vice president of the Housing Policy Council/The Financial Services Roundtable.

Another witness at the hearing expressed an entirely different set of concerns. “My concern is not with the selection of independent consultants, but with the time and costs involved in such a laborious review process relative to the expected economic assessment of harm,” stated Anthony B. Sanders, professor of real estate finance at George Mason University.

Sanders suggests out of the 4.5 million loans, there may be 100 instances of “egregious errors.”

“Once the review is completed and the remediation for financial harm is concluded, I urge everyone to put the foreclosure issue aside and allow the market to heal itself,” Sanders stated.

Meanwhile, servicers will have sent more than 4 million letters by the end of this year and will begin an advertising campaign beginning early 2012 to inform borrowers that they can request an independent review of their foreclosure action.

In addition to a sample set of foreclosure actions, independent reviewers will examine all foreclosure actions on military members covered by the Servicemembers Civil Relief Act, borrowers who previously filed a complaint regarding their foreclosure, and “high risk” cases involving bankruptcy.

©2011 DS News. All Rights Reserved.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, December 15, 2011 2:19 PM
To: Charles Cox
Subject: MERS as a "sham" rebuffed by the Ninth Circuit

MERS as a “sham” rebuffed by the Ninth Circuit

· Morrison & Foerster LLP

· Greg Dresser

· USA

·

· December 6 2011

The Ninth Circuit rejected a putative class action alleging lenders conspired to defraud borrowers through the Mortgage Electronic Registration System (“MERS”)—a private electronic database tracking the transfer of interests in loans. Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011). In affirming dismissal, the Ninth Circuit held plaintiffs failed to state a claim for any underlying fraud. Their allegations missed key elements: that plaintiffs were misinformed about MERS, reliance, and injury. The Ninth Circuit also held that because the standard deeds of trust disclosed MERS’s role and right to foreclose, plaintiffs had agreed to those terms and were on notice. The Ninth Circuit rejected plaintiffs’ core theory that no entity could foreclose because MERS splits the deed from the note. It held that “the notes and deeds are not irreparably split: the split only renders the mortgage unenforceable if MERS or the trustee, as nominal holders of the deeds, are not agents of the lenders.”

STATEMENT OF THE CASE

            Plaintiffs and appellants MARK J. DEMUCHA and CHERYL M. DEMUCHA filed a Verified First Amended Complaint on 15 June 2009 seeking Quiet Title, Removal of Cloud on Title, Damages for Fraud and Misrepresentation, Damages for Intentional Infliction of Emotional Distress, Damages for Slander of Credit, and Punitive Damages (Verified First Amended Complaint in Augmented Record, hereafter “VFAC”). Plaintiffs obtained a preliminary injunction against foreclosure on 7/7/2009 (Court Register of Actions or Docket in Augmented Record, hereafter “CRAD”). However, plaintiffs did not post the required bond of $10,807.40, so the order was dissolved on 7/29/2009 (CRAD). On 15 July 2009, Defendants filed a Demurrer (CT 1) and Motion to Strike Portions of the First Amended Complaint (CT 17). Plaintiff filed his oppositions to the Demurrer and Motion to Strike on 28 August 2009 (CT 26 & Plaintiff’s Brief in Opposition to Defendant’s Motion to Strike Portions of First Amended Complaint; Memorandum of Points of Authorities in Support Thereof in Augmented Record- hereafter “OMS”). Defendants filed their reply briefs on the Demurrer and Motion to Strike on 17 September 2009 (CT 35 and 41). Hearings were held on the Demurrer and Motion to Strike on 14 and 28 September 2009 (RT 2-5). The Court sustained the Demurrer without leave to amend and ruled the Motion to Strike as moot on 28 September 2009 (RT 4, line 22 through 5, line 19). The Court’s Judgment and Order of Dismissal was entered on 7 October 2009 (CT 57).

STATEMENT OF APPEALABILITY

            This appeal is from the judgment of the Kern County Superior Court and is authorized by the Code of Civil Procedure, section 904.1, subsection (a)(1).

STATEMENT OF THE FACTS

            Plaintiffs and appellants MARK J. DEMUCHA and CHERYL M. DEMUCHA filed a Verified First Amended Complaint on 15 June 2009 seeking Quiet Title, Removal of Cloud on Title, Damages for Fraud and Misrepresentation, Damages for Intentional Infliction of Emotional Distress, Damages for Slander of Credit, and Punitive Damages (Verified First Amended Complaint in Augmented Record, hereafter “VFAC”). A key allegation throughout the VFAC was that the defendants “have all failed and refused to produce the original note or otherwise provide proof that any of the defendants is or at any time was the holder of the original note that the defendants, and each of them, are trying to enforce, as required by California Commercial Code § 3301, et seq.” (VFAC 2, line 26 through 3, line 4). It is important to note that this was not an action to stop a foreclosure, but primarily a quiet title action. Plaintiffs did seek a preliminary injunction against foreclosure and obtained the injunction on 7/7/2009 (the court ruled that the defendants failed to comply with Civil Code § 2923.5 and Code of Civil Procedure § 2015.5, requiring that the Notice of Default Declaration be a declaration signed under penalty of perjury, so that the defendants’ entire foreclosure proceedings were invalid) (Court Register of Actions or Docket in Augmented Record, hereafter “CRAD”). However, plaintiffs did not post the required bond of $10,807.40, so the order was dissolved on 7/29/2009. On 15 July 2009, Defendants filed a Demurrer (CT 1) and Motion to Strike Portions of the First Amended Complaint (CT 17). Plaintiff filed his oppositions to the Demurrer and Motion to Strike on 28 August 2009 (CT 26 & Plaintiff’s Brief in Opposition to Defendant’s Motion to Strike Portions of First Amended Complaint; Memorandum of Points of Authorities in Support Thereof hereafter “OMS”). Defendants filed their reply briefs on the Demurrer and Motion to Strike on 17 September 2009 (CT 35 and 41). Throughout their pleadings, the defendants repeatedly mischaracterized the proceedings as being anti-foreclosure proceedings and argued that a lender need not “possess the note” prior to conducting a non-judicial foreclosure (CT 2, lines 9-12), and claimed falsely that there was no allegation of tender in the First Amended Complaint (CT 2, lines 4-8) over the plaintiffs’ objections (CT 26, line 25 through 27, line 4). The defendants further falsely claimed that the first cause of action for quiet title must fail because “plaintiffs cannot state a basis for superior title,” failed to allege all adverse claims, and failed to allege a legal description (CT 2, lines 13-17). In fact, all of the allegedly non-existent allegations are found in paragraphs 9 through 14 of the VFAC (CT 27, lines 5 through 8; VFAC 2, line 17 through 4, line 3). With respect to the second cause of action for “Action to Remove Cloud,” the defendants falsely claimed that it should fail because plaintiffs failed to state a cause of action, failed to plead facts indicating that an instrument was invalid, failed to satisfy the legal requirements for a quiet title action, and cannot demonstrate equity (CT 2, lines 18-22). Again, all of the allegedly missing allegations are contained in paragraphs 9 through 13 of the VFAC (CT 27, lines 9-15; VFAC 2, line 17 through 3, line 24). Regarding the third cause of action for fraud and misrepresentation, defendants falsely claimed that plaintiffs failed to state a cause of action because plaintiffs failed to allege specific facts indicating that any representation was false, cannot allege specific facts indicating that any representation was made with knowledge of its falsity, and plaintiffs could not have actually relied on any alleged representation (CT 2, lines 23-28). In fact, all of the allegedly missing allegations are found in paragraphs 10, 13, 16, and 18 of the VFAC (CT 27, lines 16-25; VFAC page 2 line 26 though page 3 line 10, page 3 lines 20 through 26, page 4 lines 12 through 16, and page 4 line 23 through page 6 line 6). With respect to the fourth cause of action for intentional infliction of emotional distress, defendants falsely claimed that the cause of action must fail because plaintiffs do not contend that they tendered all of their payments under the loan, alleged no facts indicating outrageous conduct, and alleged no facts indicating that defendant intentionally caused any plaintiff emotional distress (CRT 11, line 8 through 12, line 26). In fact, all of the supposedly missing allegations were contained in paragraph 21 (and through incorporation by reference, paragraphs 10, 12, 13, 14, 16, and 18) of the Verified First Amended Complaint (CT 27, line 26 through 28, line 3; VFAC 6 lines 19 through 23; VFAC 2, line 26 through 3, line 10; VFAC 3, line 15 through 4, line 3; VFAC 4, lines 8-14 and 19-24). The demurrer falsely asserted that the fifth cause of action for Slander of Credit must fail because plaintiffs failed to identify the allegedly defamatory statement, cannot allege that any statement about plaintiffs’ credit was false, and cannot allege actual malice (CT 13, line 1 through 14, line 22). In fact, all of the purportedly missing allegations were contained in paragraph 23 (and through incorporation by reference, paragraphs 10, 12, 13, 14, 16, and 18) of the Verified First Amended Complaint (CT 28, lines 4-15; VFAC 7 lines 1 through 3; VFAC 2, line 26 through 3, line 10; VFAC 3, line 15 through 4, line 3; VFAC 4, lines 8-14 and 19-24). The demurrer asserted that the sixth cause of action for Punitive Damages must fail because punitive damages are not a cause of action and a false assertion that plaintiffs failed to plead facts supporting any entitlement to punitive damages (CT 14, line 23 through 15, line 12). Plaintiffs argued that the use of the label “cause of action” did not remove the requirement that the punitive damages allegations be plead, that if it were labeled differently the defendants would have no argument, that the court is to honor substance over form and trifles are to be disregarded, that all of the necessary elements for punitive damages are contained in the sixth cause of action of the Verified First Amended Complaint, and that plaintiff should be given leave to amend (CT 28, line 16 through 29, line 2; VFAC 5, line 19 through 6, line 5). The defendants’ Motion to Strike sought to eliminate the allegations regarding attorney’s fees without any authorities based upon a false claim that the plaintiffs failed to allege a contractual or statutory provision entitling them to such recovery, and the allegations regarding punitive damages based on essentially the same reasoning stated in the Demurrer to the sixth cause of action. CT 18, line 5 through 19, line 4). The plaintiffs fully opposed the Motion to Strike in their “Plaintiff’s Brief in Opposition to Defendant’s Motion to Strike Portions of First Amended Complaint; Memorandum of Points of Authorities in Support Thereof.” Hearings were held on the Demurrer and Motion to Strike on 14 and 28 September 2009 (RT 2-5). The Court sustained the Demurrer without leave to amend and ruled the Motion to Strike as moot, specifically finding that “there’s no tender on the amounts of the loan, and failure to produce the note is not in the foreclosure proceeding as to the deed of trust, a basis upon which to attack the foreclosure” (RT 4, line 22 through 5, line 19). There were numerous other arguments made about the other allegations of the complaint, including a ridiculous assertion by the defendants that the Commercial Code applies only to consumer goods and not to mortgages of real property (CT 6, lines 22-23), but the court apparently hung its hat on these findings alone: the blatantly false claim that no tender was alleged and that failure to produce the note is (according to the defendant and the honorable superior court) not a basis on which to attack a foreclosure (RT 4, line 22 through 5, line 19). The Court’s Judgment and Order of Dismissal was entered on 7 October 2009 (CT 57).

ARGUMENT

Issue 1

THE COURT ABUSED ITS DISCRETION IN DISMISSING THE VERIFIED FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND

            A.        The Standard of Review: “On review of an order sustaining a demurrer without leave to amend, our standard of review is de novo, ‘i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.’ [Citation.]” (Santa Teresa Citizen Action Group v. State Energy Resources Conservation & Development Com. (2003) 105 Cal.App.4th 1441, 1445.) “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.” [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.’” (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126). When analyzing a demurrer, the court is to look “only to the face of the pleadings and to matters judicially noticeable and not to the evidence or other extrinsic matter.” (Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 239, fn. 2.). The appellate court is “not bound by the trial court’s construction of the complaint . . . .” (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.) Rather, the appellate court is to independently evaluate the complaint, construing it liberally, giving it a reasonable interpretation, reading it as a whole, and viewing its parts in context. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The appellate court must determine de novo whether the factual allegations of the complaint are adequate to state a cause of action under any legal theory. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) In the event that the complaint is found to not state a cause of action, but there is a reasonable possibility that amendment can cure the defect, leave to amend must be granted. (Id. at p. 39.)

B.        Causes of action to be discussed independently: Plaintiffs/appellants will discuss each cause of action independently below, demonstrating that each element of each cause of action has been fully plead. Further, plaintiffs/appellants contend that if the court determines that any element was lacking, an amendment could provide the necessary allegation(s), so that leave to amend should be granted.

Issue 2

A PARTY SEEKING TO ENFORCE A NOTE SECURED BY DEED OF TRUST IN CALIFORNIA MUST POSSESS THE ORIGINAL NOTE OR OTHERWISE COMPLY WITH THE CALIFORNIA COMMERCIAL CODE

            A.        Commercial Code § 3301, et seq., applies to Notes Secured by Deed of Trust: With respect to “negotiable instruments,” California’s Commercial Code § 3301 specifies as follows:

“Person entitled to enforce” an instrument means (a) the holder of the instrument, (b) a nonholder in possession of the instrument who has the rights of a holder, or (c) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3309 or subdivision (d) of Section 3418. A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

According to this code section, which applies to “negotiable instruments,” the instrument may only be enforced by someone who possesses the original instrument, unless they meet the exceptions that are set forth in Commercial Code § 3309 or 3418(d). In the case before this court, the defendants do not possess the original Note Secured by Deed of Trust, although they claim to “own” the note, which they allegedly purchased from the original lender. The fact that they claim to have purchased the “Note Secured by Deed of Trust” demonstrates that it was a “negotiable instrument. However, the defendants falsely argued to the trial court that “the Uniform Commercial Code applies to the sale of goods and not transactions involving real property” (CT 6, lines 22-23).

B.        California Law requires security interests in real property to be perfected by obtaining possession of the original note: The United States Court of Appeals for the 9^th Circuit, specifically ruling on a California federal case, in Staff Mortgage v. Wilke (1980) 625 F.2d 281, 6 Bankr.Ct.Dec. 1385, 29 UCC Rep.Serv. 639, citing an earlier case, specifically held that “notes secured by deeds of trust…were ‘instruments’ under the California Commercial Code,” that recording was not adequate to perfect the security interest under the Commercial Code because “such notice was not the type of notice intended or provided by the California Commercial Code,” and that “Perfection of a security interest in an instrument can only occur with the actual possession of the instrument by the secured party.” This case specifically cited Commercial Code § 9304(l). In defendant’s reply brief, they falsely claimed that this case “is no longer good authority because it was superseded by statute” (CT 43, line 28 to CT 44, line 6). However, the defendant blatantly misrepresented the law, because the statute that supposedly superseded this case, California Business & Professions Code § 10233.2, merely created an exception to this rule that permits perfection without possession of the security instrument only in the case of real estate brokers who sell a note and then service the note, in which case the security interest has been perfected even if the broker continues to possess the note. This is not the situation in the case before this court. Here, defendant Wells Fargo, a bank, not a real estate broker, purchased the Note Secured by Deed of Trust from a different lender. The exception that they falsely claim has “superseded” Staff Mortgage does not apply by any stretch of the imagination.

C.        The foreclosure statutes cannot be read in a vacuum and must be read in a manner that complies with other applicable statutes: The defendants cited I.E. Assocs. v. Safeco Title Ins. Co. (1985) 39 Cal.3d 281 in their demurrer (CT 6, line 28 through CT 7 line 4) for the proposition that the non-judicial foreclosure statutes are intended to be exhaustive, so no other laws apply. However, this is a complete misstatement of that case. The actual ruling in I.E. Assocs. was that the principles of common law do not apply because the non-judicial foreclosure statutes are intended to be exhaustive. There is no ruling in I.E. Assocs., nor any other binding authority, that would cause the non-judicial foreclosure statutes to supersede other applicable statutes. There is further nothing in the non-judicial foreclosure statutes that negates the requirements of the Commercial Code that a negotiable instrument must be possessed by the person or entity that seeks to enforce it. The non-judicial foreclosure statutes do require that there must be a “breach” prior to the commencement of foreclosure proceedings (Civil Code § 2924(a)). When read together, Commercial Code § 3301 helps to determine whether or not there has been a “breach” of the Note Secured by Deed of Trust that would trigger the lender’s right to pursue a non-judicial foreclosure. If the lender has perfected its security interest by possessing the original Note or falling within one of the two statutory exceptions, then they have the right to receive the mortgage payments, and if the borrower then fails to make the payments to the entity that has the right to enforce the note, there has been a “breach.” On the other hand, if the entity seeking to enforce the note is not authorized to enforce the note due to lack of compliance with Commercial Code § 3301, that entity cannot properly claim that there has been a “breach” that triggers the right to engage in the non-judicial foreclosure process. If the court were to reach any other result, it would create a conflict of laws and would put borrowers in danger of foreclosure by fraudulent entities who claim to have the right to engage in non-judicial foreclosure proceedings even though they do not have the right to enforce the note, and who subsequently hide behind technical compliance with the non-judicial foreclosure procedures. The borrower could be making or tendering the payment to the entity who holds the statutory right to enforce the note and still be subjected to a non-judicial foreclosure proceeding by a fraudulent “lender” who falsely claims to have the right to enforce the note while not complying with Commercial Code § 3301.

Issue 3

THE ELEMENTS OF A QUIET TITLE ACTION HAVE BEEN PROPERLY PLEAD

            A.        Elements of the Action: Pursuant to Code of Civil Procedure § 761.020, the elements of a Quiet Title Action are as follows:

   (a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall include both its legal description and its street address or common designation, if any.
   (b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.
   (c) The adverse claims to the title of the plaintiff against which a determination is sought.
   (d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.
   (e) A prayer for the determination of the title of the plaintiff against the adverse claims.

B.        The Elements of Quiet Title were fully plead: Plaintiff’s superior title is alleged in Paragraph 9 (page 2 lines 17 through 25) and 14 (page 3 line 27 through page 4 line 1), all adverse claims against the property are specified in Paragraphs 9 through 14 (page 2 line 17 through page 3 line 28), the legal description and property address are specified in Paragraph 9 (page 2 lines 18 through 23), the date as of which the determination is sought is specified in Paragraph 14 (page 3 lines 27-28), and the prayer for title in plaintiff’s favor is found on page 6 line 8 of the VFAC.

Issue 4

TENDER IS NOT AN ELEMENT OF QUIET TITLE, BUT WAS PLEAD ANYWAY

            A.        Defendant’s arguments that tender must be alleged are false: In the defendant’s Demurrer, it was argued that actions attacking trustee sales by foreclosure require tender of the amount due for a secured debt. Defendants cited several cases, including, but not limited to, Nguyen v. Calhoun (2003) 105 Cal.App.4th 428 and Abdallah v. United Sav. Bank (1995) 43 Cal.App.4th 1001. However, all of those cases were attacks on a trustee sale after the sale was completed. In the case before this court, no foreclosure has been completed and no trustee sale has been held. Therefore, no allegation of tender is necessary.

B.        Tender was properly alleged: Even though plaintiffs/appellants contend that tender was not required to be alleged, the VFAC contains the allegations of tender in Paragraph 14 (page 4 lines 2 through 7- VFAC). Because plaintiffs/appellants further contend that the defendants do not possess the original note and are therefore not entitled to enforce the note secured by deed of trust pursuant to Commercial Code § 3301, et seq. (discussed more fully below), the plaintiffs/appellants made their tender “to the individual or entity that is the valid holder of the original note,” as well as to pay all taxes to the appropriate government agency.” (VFAC page 4, lines 2 through 7). Plaintiffs/appellants contend that this allegation of tender is appropriate where it is unclear as to who has proper authority under the law to receive the mortgage payments.

C.        The Court erred by considering extrinsic evidence regarding tender: The defendant argued that statements in a separate ex parte application for preliminary injunction indicated that the plaintiffs/appellants could not tender the amounts due for the mortgage because they were “experiencing ‘difficult financial times’ and do not earn enough to ‘make ends meet” (CT 5, lines 10-14). The trial court was apparently heavily influenced by this argument, because it decided that there was no tender (RT 4, line 22 through 5, line 19) despite the obvious allegations of tender contained in the complaint (VFAC page 4, lines 2 through 7). Pursuant to Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 235, 239, fn. 2, cited above under Issue I, the court should not have considered any extrinsic evidence, but should have only looked at the four corners of the pleadings, plus matters that are properly judicially noticed. Here, the argument is further very weak because there are no details about the exact nature of the plaintiffs/appellants’ financial predicament. The CRAD (in the augmented record) shows that plaintiffs/appellants had an attorney appear for them at one hearing, which is the same attorney acting for the plaintiffs/appellants on this appeal. Further, that same attorney prepared other documents for the defendants that were filed in propria persona, so that they had additional expenses besides just living expenses due to the defendants’ actionable conduct. The point is that it is not safe to assume that the plaintiffs/appellants could not have afforded to tender the amounts due on the mortgage to the proper possessor of the Note just because they were having financial difficulties during the litigation.

Issue 5

THE ELEMENTS OF AN ACTION TO REMOVE CLOUD WERE PROPERLY PLED

            A.        Elements of the Action: The elements of an Action to Remove Cloud are the same as those for an action to Quiet Title, with the distinction that the cloud on title is allegedly “created by a designated instrument. In a suit to remove a cloud the complaint must state facts, not mere conclusions, showing the apparent validity of the instrument designated, and point out the reason for asserting that it is actually invalid.” (Ephraim v. Metropolitan Trust Co. of Ca. (1946) 28 Cal.2nd 824, 835.)

B.        The elements of an Action to Remove Cloud were properly plead: The elements of a quiet title action were fully plead, as shown under Issue 3 above. The defendant further argued that there was no pleading of a specific invalid instrument. However, The allegations that the defendants’ claims through the mortgage (specific instrument) that was granted to CTX MORTGAGE COMPANY, LLC, are invalid may be found in Paragraphs 9 through 13 (page 2 line 17 through page 3 line 26) of the VFAC.

Issue 6

THE ELEMENTS OF FRAUD WERE PROPERLY PLEAD

            A.        Elements of the Action: The elements of an action for fraud are (1) a false representation about a material fact, (2) knowledge of the falsity, (3) intent to defraud, (4) justifiable reliance, and (4) damages. (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109; Gonsalves v. Hodgson (1951) 38 Cal.2d 91, 100-101.)

B.        The Elements of Fraud were fully plead: The allegations of specific facts that representations were false are found in Paragraph 18 (page 4 line 23 through page 6 line 6), as well as in Paragraph 10 (page 2 line 26 though page 3 line 10), Paragraph 13 (page 3 lines 20 through 26), and Paragraph 16 (page 4 lines 12 through 16), of the VFAC. The allegations that the defendants knew of the falsity of the representations are found in Paragraph 18 (page 5 lines 1 through 3, page 5 lines 13 through 16, page 6 lines 2 through 6), as well as portions of Paragraphs 10, 13, and 16, of the VFAC. The allegations of ratification are found in Paragraph 18 (page 5 lines 12 through 13, and page 6 lines 1 and 2) of the VFAC. The allegations of reliance on the misrepresentations/ fraud and damages are contained in Paragraph 18 (page 5 lines 3 and 4, page 6 lines 6 through 9) of the VFAC.

C.        The defendant again improperly offered irrelevant extrinsic evidence to support its arguments on this issue: Defendant again argued in its Demurrer that the court should consider plaintiffs/appellants’ statement in their Ex Parte Application for a Preliminary Injunction that they are having “difficult financial times” to be proof that they were in default on their mortgage (CT 10, lines 10-12). This should not have been argued by the defendant nor considered by the court.

Issue 7

THE ELEMENTS OF INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS WERE PROPERLY PLEAD

            A.        Elements of the action: The elements of a cause of action for intentional infliction of emotional distress are: (1) the defendant engaged in extreme and outrageous conduct with the intention of causing, or reckless disregard of the probability of causing, severe emotional distress to the plaintiff; (2) the plaintiff actually suffered severe or extreme emotional distress; and (3) the outrageous conduct was the actual and proximate cause of the emotional distress. (Cervantez v. J. C. Penney Co. (1979) 24 Cal. 3d 579, 593).

B.        The elements of intentional infliction of emotional distress were properly plead: All of the necessary elements are plead in paragraphs 19 through 21 (pages 4 line 27 through 5 line 8) of the VFAC, with incorporation by reference of paragraphs 1 through 18. The defendant specifically argued that there was no pleading of outrageous conduct, but the outrageous conduct was plead using the phrase “intentional, unreasonable, and so outrageous that they exceed all bounds usually tolerated by a decent society” in Paragraph 21 (page 6 lines 19 through 23) and more fully described in the numerous prior paragraphs that are “incorporated by reference” into the Intentional Infliction of Emotional Distress cause of action (including, but not limited to, paragraphs 10, 12, 13, 14, 16, and 18) of the First Amended Complaint.

C.        Defendant’s assertion of a privilege constitutes a defense, not an element, and does not overcome the allegation of intentionally fraudulent statements and conduct based thereon: The defendant argued that it had a “qualified privilege” as a creditor (CT 11, line 19 through CT 12, line 9). However, this is merely a defense to the cause of action and therefore should not affect the complaint on demurrer (Cervantez v. J. C. Penney Co. (1979) 24 Cal. 3d 579, 593). Further, none of the authorities cited by the defendant allowed fraudulent statements and other misconduct based thereon to fall within the qualified privilege.

D.        The defendant again asserted and the trial court may have considered improper and irrelevant extrinsic evidence: Defendant yet again argued in its Demurrer that the court should consider plaintiffs/appellants’ statement in their Ex Parte Application for a Preliminary Injunction that they are having “difficult financial times” and were having trouble making ends meet to be proof that they were in default on their mortgage (CT 12, lines 12-15). Again, this should not have been argued by the defendant nor considered by the court.

//

//

Issue 8

THE ELEMENTS OF SLANDER OF CREDIT WERE PROPERLY PLEAD

            A.        Elements of the Action: The elements that were contested by the defendant include purported failure to identify the allegedly defamatory statement, a claim that plaintiff cannot (not that they did not) allege that any statement about plaintiff’s credit was false, and that plaintiffs cannot (again, not that they did not) allege actual malice (CT 13, line 1 through CT 14, line 22).

B.        The elements of slander of credit were properly plead: The alleged defamatory statements are referenced in Paragraph 23 (page 7 lines 1 through 3), and more fully described in the paragraphs that are “incorporated by reference” into the Slander of Credit Cause of Action (including, but not limited to, paragraphs 10, 12, 13, 14, 16, and 18-including thorough verbatim quotes in paragraph 18) of the VFAC. The allegation that the statements about plaintiffs’ credit were false is found in Paragraph 23 (page 7 lines 2 and 3), and more fully demonstrated in the paragraphs that are “incorporated by reference” into the Slander of Credit Cause of Action (including, but not limited to, paragraphs 10, 12, 13, 14, 16, and 18) of the VFAC. The allegation of malice is contained in Paragraph 23 (page 6 line 28 through page 7 line 3), and more fully described in the paragraphs that are “incorporated by reference” into the Slander of Credit Cause of Action (including, but not limited to, paragraphs 10, 12, 13, 14, 16, and 18) of the VFAC.

C.        The defendant again asserted and the trial court may have considered improper and irrelevant extrinsic evidence: Defendant once again argued in its Demurrer that the court should consider plaintiffs/appellants’ statement in their Ex Parte Application for a Preliminary Injunction that they are having “difficult financial times” and were having trouble making ends meet to be proof that they failed to remain current on their mortgage (CT 13, lines 22-25). Again, this should not have been argued by the defendant nor considered by the court.

Issue 9

THE PARAGRAPHS REGARDING PUNITIVE DAMAGES, THOUGH MISLABLED AS A “CAUSE OF ACTION,” WERE PROPERLY PLEAD

            A.        Elements of Punitive Damages: Punitive damages require a pleading that the defendant has been guilty of oppression, fraud, or malice with respect to an obligation that did not arise from contract (Civil Code § 3294).

B.        The elements of punitive damages, though properly plead, were mislabeled as a “cause of action,” which should be disregarded as a trifle, with substance being honored over form: The defendant properly argued that punitive damages are not a separate cause of action. However, they still must be plead. Whether it is labeled as a “cause of action” or just a paragraph pleading exemplary damages, the so-called Sixth Cause of Action contains necessary elements to request punitive or exemplary damages as required by Code of Civil Procedure § 425.12 and Civil Code § 3294, and is very similar to Judicial Council Form PLD-PI-001(6). Therefore, if paragraphs 24 and 25 of the VFAC were merely labeled differently, defendant would have no argument whatsoever. Further, pursuant to Civil Code § 3528, the court is to honor substance over form, so defendants’ argument that form should be given a higher priority than substance is contrary to California law. Also, Civil Code § 3535 provides that the Law disregards trifles, so the most that should have happened is that the label “Sixth Cause of Action” should have been stricken and the remaining label and paragraphs should have remained intact.

Issue 10

IF THE DEMURRER IS OVERTURNED, THE MOTION TO STRIKE WILL NO LONGER BE MOOT, SO THAT THE TRIAL COURT SHOULD RECEIVE INSTRUCTIONS REGARDING THE LAW ON THOSE ISSUES

            A.        The Trial Court ruled that the Motion to Strike was Moot due to the sustaining of the Demurrer: The trial court first sustained the demurrer (RT 4, line 22 through 5, line 4). Then the court ruled that the Motion to Strike was moot (RT 5, lines 9 through 11).

B.        If the sustaining of the Demurrer and the order of dismissal are overturned, the Motion to Strike will no longer be moot and the court may need to instruct the trial court: Plaintiffs/appellants are seeking the overturning of the sustaining of the Demurrer and the resulting order of dismissal. If that happens, the Motion to Strike will no longer be moot. Since the Motion to Strike was not granted, plaintiffs/appellants are not briefing those issues. However, plaintiffs/appellants request that this court consider reviewing the portions of the record and augmented record that include the Motion to Strike and the plaintiffs’/appellants’ opposition thereto and further consider making appropriate instructions to the trial court on those issues.

CONCLUSION

            The trial court erred in sustaining the demurrer without leave to amend and entering a judgment of dismissal. The rules of a non-judicial foreclosure proceeding and litigation to set aside a non-judicial foreclosure do not apply to a quiet title action that is filed prior to a foreclosure sale. The Commercial Code’s requirements that the entity enforcing a note must possess the original note (with limited exceptions) applies to a Note Secured by Deed of Trust. The Commercial Code’s requirements that the perfection of a security interest in real property requires possession of the original note applies to a Note Secured by Deed of Trust. Even in the context of a non-judicial foreclosure, there is no “breach” unless the entity that did not receive the mortgage payments had a right to receive the mortgage payments through possession of the original note or compliance with another recognized exception under the Commercial Code. Any other result would cause an unnecessary conflict of laws and allow fraudulent “lenders” to engage in non-judicial foreclosures and sales of property so long as they complied with the technical requirements of a non-judicial foreclosure. All of the causes of action of the Verified First Amended Complaint are properly plead, with the exception that “punitive damages” is not technically a cause of action, but that can be resolved by striking the label “Sixth Cause of Action” and just allowing the heading “Punitive Damages” to stand.

RESPECTFULLY SUBMITTED,

            Dated: 10 June 2010                                                                                                                            

Michael D. Finley, Esq.

Counsel for Plaintiffs/Appellants

Mark J. DeMucha & Cheryl M. DeMucha

CERTIFICATE OF COMPLIANCE

Pursuant to rule 8.204(c) of the California Rules of Court, I hereby certify that this brief contains 5,800 words, including footnotes. In making this certification, I have relied on the word count of the computer program used to prepare the brief.

Dated: 10 June 2010                                                                                                                            

Michael D. Finley, Esq.

Counsel for Plaintiffs/Appellants

Mark J. DeMucha & Cheryl M. DeMucha

AMENDED PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is: 25375 Orchard Village Road, Suite 106, Valencia, CA 91355-3000.

On 10 June 2010 (and on 14 June 2010 as indicated below) I served the foregoing document described as: Appellant’s Opening Brief on the interested parties in this action by placing a true copy thereof in sealed envelopes addressed as follows:

(Attorneys for Wells Fargo Home Mortgage, Inc. & Wells Fargo Bank, N.A.): Kutak Rock LLP, 18201 Von Karman, Suite 1100, Irvine, CA 92612

(Attorneys for First American Loanstar Trustee Services & First American Corporation): Wright, Finlay & Zak, LLP, 4665 MacArthur Court, Suite 280, Newport Beach, CA 92660

(6/14/2010): Judge Sidney P. Chapin, Kern County Superior Court, Metropolitan Division, 1415 Truxtun Ave., Bakersfield, CA 93301

BY MAIL: I deposited such envelopes in the mail at Valencia, California. The envelopes were mailed with first class postage thereon fully prepaid.

ALSO, BY ELECTRONIC FILING WITH THE SUPREME COURT: In addition, I filed an electronic copy of the Appellant’s Opening Brief with the Supreme Court of California on 14 June 2010, through the Supreme Court’s website.

Dated: 14 June 2010                                                                                                                            

Michael D. Finley, Esq.

Counsel for Plaintiffs/Appellants

Mark J. DeMucha & Cheryl M. DeMucha

Jeff Thigpen is the Register of Deeds for Guilford County in Greensboro, North Carolina. The way he explains it, he has two primary responsibilities: 1. To protect the chain of title when property changes hands. 2. A fiduciary duty to collect recording fees. And the fact is that MERS has pretty much blown a hole right through both of those things.

But, you see… Jeff is not your ordinary Register of Deeds. Like his counterpart John O’Brian in Massachusetts, Jeff takes his job pretty seriously, which makes sense since his job has been around for some 300 years. And so he put his foot down… right on top of MERS.

According to Jeff…

“For me, the question is clear. Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?”

For me that’s an easy question to answer because I don’t even want the major banking conglomerates on Wall Street governed by the major banking conglomerates on Wall Street, if you know what I mean.

Well, I caught up with Jeff after receiving a “friend request” from him on Facebook… I recognized the name right away and sent him a note asking him to join me for a podcast… and he said yes, of course. a Mandelman Matters podcast is THE place to hear and be heard, don’t you know.

And on a serious not, I truly believe that EVERY SINGLE ADULT in America should listen to what Jeff says on this podcast… I mean it… it’s not just about foreclosures… this affects everyone in the country… 300 year old property rights laws. From talking to Jeff, I now realize what a big deal this mess is as far as robo-signing and MERS goes… we simply cannot allow the banks to gloss over these issues with statements like “sloppy paperwork.” It’s a whole lot more meaningful that that, as Jeff will very clearly exaplain.

So, please pass it along to other homeowners you know… they need to hear it whether they’re at risk of foreclosure… yet… or not.And her we go… it’s Jeff Thigpen from North Carolina… just click the PLAY button below, turn up your speakers and tell me what you thought when it’s done… I just know you’re going to like it a whole lot.

I have to tell you, I sure did enjoy talking to Jeff… he’s the kind of person we need in government today… and if he ever decides to run for office… I’m volunteering to run his campaign.

Mandelman out.

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From: Charles Cox [mailto:charles@bayliving.com]
Sent: Sunday, December 11, 2011 4:23 PM
To: Charles Cox
Subject: Class of Homebuyers Claims BofA Found a New Dirty Trick

I’m suggesting you be VERY careful if you pay to reinstate or past payments or they could pull the same trick on you and you pay tens of thousands of dollars more and they still show you in “default” and foreclose on you. These guys have no scruples and will do ANYTHING they can to pull more money out of you and still take your house away from you.

BofA.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, December 06, 2011 7:15 AM
To: Charles Cox
Subject: Why Hasn’t the Government Gone After Mortgage Fraud?

http://www.cbsnews.com/video/watch/?id=7390540n

I watched it Sunday night…wanted to reach through the TV and choke the sweating, lying, incompetent and arrogant scumbag!!!! Adverts to wade through…but about 14 minutes of this piece…

Offensive, offensive, offensive…HOW ABOUT ILLEGAL YOU JERK, DOING A GREAT JOB MY ASS!!!!!

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, December 06, 2011 7:15 AM
To: Charles Cox
Subject: Foreclosure Crisis Isn’t Even Halfway Over: Study

Foreclosure Crisis Isn’t Even Halfway Over: Study

By: Carrie Bay 12/05/2011

The foreclosure crisis has had a long and destructive run – five years and counting, with millions put out of their homes. According to the Center for Responsible Lending (CRL), we’re not even halfway through the devastation.

The organization’s analysis of 27 million mortgage loans originated over a five-year period found that 6.4 percent of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3 percent are at immediate, serious risk.

The study also offers up evidence that foreclosure patterns are strongly linked with patterns of risky lending. According to CRL, foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash, such as loans with prepayment penalties, hybrid adjustable-rate mortgages (ARMs), and option ARMs.

Looking at the demographics of foreclosure casualties, CRL found that the majority of people affected by foreclosures

have been white families. However, borrowers of color are more than twice as likely to lose their home, the organization says.

According to CRL, these higher rates reflect the fact that African Americans and Latinos were consistently more likely to receive high-risk loan products, even after accounting for income and credit status.

African Americans and Latinos were much more likely to receive subprime loans with high interest rates and loans with features that are associated with higher foreclosures, CRL explained. The nonprofit group found that these disparities were evident even when comparing borrowers within the same credit score ranges, with the gap especially pronounced for borrowers with higher credit scores.

“Our study provides further support for the key role played by loan products in driving foreclosures,” CRL said. “Specific populations that received higher-risk products-regardless of income and credit status-were more likely to lose their homes.”

While some blame the subprime disaster on policies designed to expand access to mortgage credit, CRL says the facts undercut these claims.

Instead, the group argues that dangerous products, aggressive marketing, and poor loan underwriting were major drivers of foreclosures in the subprime market. CRL credits the Dodd-Frank Act as the first vital step taken to strengthen mortgage protections by restricting the use of risky products and requiring lenders to consider each borrower’s ability to repay a loan.

“These new rules will certainly have a positive effect on the success of future mortgages,” CRL said.

©2011 DS News. All Rights Reserved.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, November 17, 2011 6:48 AM
To: Charles Cox
Subject: NEVADA ATTORNEY GENERAL RELEASES MASSIVE INDICTMENT

BOMBSHELL- NEVADA ATTORNEY GENERAL RELEASES MASSIVE INDICTMENT

November 17th, 2011 | Author: Matthew D. Weidner, Esq.

This really is extraordinary. An Attorney General brings a HUGE indictment against two individuals…but here’s why it is so earth-shattering…..read carefully the crimes that are alleged….then understand that these same acts were probably performed all across this country hundreds of thousands of times.

The conundrum created by an announcement such as this is once it’s done once by one Attorney General, what are all the other Attorney’s General and enforcement agencies to do? Shall they just ignore what their counterpart is alleging? Are they able to just sit on the sidelines and ignore the serious allegations of systemic violations knowing full well that it was/is happening in their states as well?

And what about states like North Carolina and Massachusetts where elected public officials like Jeff Thigpen and John O’Brien have been screaming bloody hell for years, demanding that something be done?

The implications here are mind-blowing…read the indictment carefully and just extrapolate out, all across the country……

Indictment.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, November 17, 2011 7:16 AM
To: Charles Cox
Subject: How do you explain righteous indignation…

If you look up the term “Indignant” in the dictionary, you might find this video:

http://www.youtube.com/watch?feature=player_embedded&v=n0NYBTkE1yQ

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://www.NHCwest.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, November 17, 2011 10:14 AM
To: Charles Cox
Subject: CA AG SUBPOENAS FANNIE AND FREDDIE TO FORCE RELIEF FOR HOMEOWNERS

CA AG SUBPOENAS FANNIE AND FREDDIE TO FORCE RELIEF FOR HOMEOWNERS

Posted on November 17, 2011 by Neil Garfield

EDITOR’S NOTE: The race is on — who is going to be the first attorney general to bring the major banks to their knees begging for amnesty instead of demanding it because they are too big to fail? Any politician with future ambitions had better not be cozy with Banks or even favor leniency. If there is a bailout, it had better be to John Q Public.

California attorney general’s office subpoenas Fannie, Freddie

Information is sought on the mortgage giants’ roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, November 15, 2011 5:44 AM
To: Charles Cox
Subject: NO AUTHORITY FOR MERS SIGNERS – SUPPORT FOR STATEMENT – hultman/lps depo materials

April got quite a few emails asking for the authority for the above statement. The below email and attachments are the response to all these emails.

Please read the depos and the applicable mers membership rules.

Neither MERS nor merscorp ever performed the corporate actions or gave authority or documentation needed to give the mers VP Bill Hultman the corp authority to appoint a single signer; the signers were required to be officers of the mers member corp; the signer had to be appointed in their official capacity, not personal, and mers’ signers would only have the power that the principal had (as mers is only a nominee), the principal being the originating lender who was contractually bound to execute the docs required by the psa only and exclusively within the start up term of the trust. And there is no capacity or authority for any of the signer activity that we are dealing with, surrogate or otherwise, after the closing date of each REMIC trust.

4-7-10 William Hultman Deposition.pdf
09-25-2009 Deposition of RK Arnold, CEO, MERS.doc
corporate rep depo rk arnold 9 25 2006.doc
MERS dep trans of William Hultman.- 11_11_09.pdf

see also 1/3 of all homes underwater — at a minimum

EDITORIAL NOTE: With a few places as an exception, home prices, once predicted as bottoming out LAST YEAR, continue to drop and are expected to take another plunge of 15%-20%. Experts who once predicted the bottom in 2010 are now saying it will be sometime in 2012. Here is what I say: home prices will continue to drop and could even go to near zero because of the rise of title problems caused by exotic Wall Street scenarios in which the title to most properties were affected. As for when they hit “bottom” it will be when the foreclosure nightmare is over. Even the optimistic experts concede that is, on average, another 8 years, with New York topping the list at 57 years.

The reason is simple arithmetic. Start with joblessness, lack of capital for new businesses, and add a healthy amount of fraudulent foreclosures pushing the market downward while the Banks report higher and higher profits through accounting tricks that would baffle the most avid puzzle fanatic. Basic fact pattern: as the prices go lower people “default” on mortgages that have probably long since been paid off. The further prices go down the more people are underwater — either worse than before or for the first time. I spoke with one homeowner who bought his home for $550,000 and only took out a mortgage for $175,000. “Now I see and feel the problem,” he said. “I never thought that I could ever be underwater because the mortgage was so low compared with the purchase price. Yet here I am, the house listed for $175,000, the broker telling me I’ll be lucky to get $140,000 and after all selling expenses I might see $125,000 or less.”

He’ll need to come to the table with money in order to sell and he knows that whoever he pays is probably not entitled to the money. he just wants out of a neighborhood that is a virtual ghost town. What was once a thriving community is  bereft of the family, secure atmosphere on the brochures.

Home Prices Drop in Nearly 3/4 of U.S. Cities

WASHINGTON — Home prices dropped in nearly three quarters of U.S. cities over the summer, dragged down by a decline in buyer interest and a high number of foreclosures.

The National Association of Realtors said Wednesday that the median price for previously occupied homes fell in the July-September quarter in 111 out of 150 metropolitan areas tracked by the group. Prices are compared with the same quarter from the previous year.

Fourteen cities had double-digit declines. The median price in Mobile, Ala. dropped 17.7 percent, the largest of all declines. Phoenix and Allentown, Pa., Atlanta, Las Vegas and Miami also experienced steep declines.

Eight cities saw double-digit price increases. The largest was in Grand Rapids, Mich., where the median price rose 23.7 percent. South Bend, Ind., Palm Bay, Fla., and Youngstown, Ohio, also saw large price increases.

The national median home price was $169,500 in the third quarter, down 4.7 percent from the same period last year.

Most analysts say that prices will sink further because unemployment remains high and millions of foreclosures are expected to come onto the market over the next few years.

Browse through photos of millions of home listings or search foreclosure listings

Sales of previously occupied homes dropped to a seasonally adjusted annual rate of 4.88 million in the third quarter, slightly ahead of last year’s pace for the same period. Sales were lower than usual for the summer season last year because a federal tax credit inspired more buying in the spring.

This year, sales are on pace to finish behind last year’s total, which was the lowest in 13 years.

Sales are low even though the average rate on the 30-year fixed mortgages is hovering near 4 percent.

Regionally, the median home price in the Midwest fell 2.2 percent to $142,300 in the quarter from the year before, even as sales activity jumped 25 percent. In the South, the median price also slid 2.2 percent to $153,200 and home sales increased 15.5 percent.

The Northeast’s median home price dipped 6.5 percent during the period to $236,700, as sales rose from the previous year by 11.6 percent. The median home price in the West dropped by 9 percent to $205,700 in the third quarter from a year ago. Sales there increased 16.7 percent.

Also see:
Where Are the Real Home Bargains? Not Where You Think!
Mortgage Rates Stay Low, But Homebuyers Aren’t Budging
Top 10 Cities For Military Retirement
Gallery: 10 Cheapest Places To Retire

Q1. What is the Independent Foreclosure Review?

As part of a consent order with federal bank regulators, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) (independent bureaus of the U.S. Department of the Treasury), or the Board of Governors of the Federal Reserve System, fourteen mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.

The Independent Foreclosure Review is providing homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury occurred as a result of errors, misrepresentations or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or other remedy.
Q2. What is a foreclosure action? What foreclosure actions are part of the Independent Foreclosure Review?

Foreclosure actions include any of the following occurrences on a primary residence between the dates of January 1, 2009 and December 31, 2010:

* The property was sold due to a foreclosure judgment.
* The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
* The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
* The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.

Q3. How do I know if I am eligible for the Independent Foreclosure Review?

Your loan must first meet the following initial eligibility criteria:

* Your mortgage loan was serviced by one of the participating mortgage servicers in Question 4.
* Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
* The property was your primary residence.

If your mortgage loan does not meet the initial eligibility criteria outlined above, you can still have your mortgage concerns considered by calling or writing your servicer directly.
Q4. Who are the participating servicers? What mortgage servicers and their affiliates are part of the Independent Foreclosure Review process?

The list of participating servicers includes:

* America’s Servicing Co.
* Aurora Loan Services
* Bank of America
* Beneficial
* Chase
* Citibank
* CitiFinancial
* CitiMortgage
* Countrywide
* EMC
* EverBank/EverHome Mortgage Company
* GMAC Mortgage
* HFC
* HSBC
* IndyMac Mortgage Services
* MetLife Bank
* National City Mortgage
* PNC Mortgage
* Sovereign Bank
* SunTrust Mortgage
* U.S. Bank
* Wachovia Mortgage
* Washington Mutual (WaMu)
* Wells Fargo Bank, N.A.

Q5. What are some examples of financial injury due to errors, misrepresentations or other deficiencies in the foreclosure process?

Listed below are examples of situations that may have led to financial injury. This list does not include all situations.

* The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
* You were doing everything the modification agreement required, but the foreclosure sale still happened.
* The foreclosure action occurred while you were protected by bankruptcy.
* You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
* Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
* The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Q6. How does my mortgage loan get reviewed as part of the Independent Foreclosure Review?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011.

If you believe that you may have been financially injured, you must submit a Request for Review Form postmarked no later than April 30, 2012. Forms postmarked after this date will not be eligible for the Independent Foreclosure Review.

If you have more than one mortgage account that meets the initial eligibility criteria for an independent review, you will receive a separate letter for each. You will need to submit a separate Request for Review Form for each account. It is important that you complete the form to the best of your ability. All information you provide may be useful.
Q7. How can I submit the Request for Review Form?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. If you received the notification letter, you can send in your Request for Review Form in the prepaid envelope provided, postmarked no later than April 30, 2012.

If your loan is part of the initial eligible population and you need a new form by mail, have questions, or need help completing the form you have received in the mail, call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.
Q8. Who can submit or sign the Request for Review Form?

Either the borrower or a co-borrower of the mortgage loan can submit and sign the form. The borrower signing the Request for Review Form should be authorized by all borrowers to proceed with the request for review. In the event of a finding of financial injury, any possible compensation or remedy will take into consideration all borrowers listed on the loan, either directly or to their trusts or estates.
Q9. What if one of the borrowers has died or is injured or debilitated?

Any borrower, co-borrower or attorney-in-fact can sign the form. In the event of a finding of financial injury, any possible compensation or other remedy will take into account all borrowers listed on the mortgage loan either directly or to their trusts or estates.
Q10. Do I need an attorney to request or submit the Request for Review Form?

No. However, if your mortgage loan meets the initial eligibility criteria and you are currently represented by an attorney with respect to a foreclosure or bankruptcy case regarding your mortgage; please refer to your attorney.

The Independent Foreclosure Review is free. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.
Q11. If I have already submitted a complaint to my servicer, do I need to submit a separate Request for Review Form to participate in this process?

If your mortgage loan meets the initial eligibility criteria, you should submit a Request for Review Form to ensure your foreclosure action is included in the Independent Foreclosure Review process.
Q12. What happens during the review process?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Your request will be reviewed for inclusion in the Independent Foreclosure Review. If your request meets the eligibility requirements, it will be reviewed by an independent consultant.

Your servicer will provide relevant documents along with any findings and recommendations related to your request for review to the independent consultant for review. Your servicer may be asked to clarify or confirm facts and disclose reasons for events that occurred related to the foreclosure process. You could be asked to provide additional information or documentation. Because the review process will be a thorough and complete examination of many details and documents, the review could take several months.

The Independent Foreclosure Review will determine whether financial injury has occurred as a result of errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy.
Q13. How do I know who my servicer is? How do I find them?

The company you sent your monthly mortgage payments to is your mortgage servicer. It is not necessarily the company whose name is on the actual foreclosure documents (although in most cases, it is). If you don’t remember the name of the servicer for your foreclosed property, we suggest you review cancelled checks, bank statements, online statements or other records for this information.

If you are still unsure of who your mortgage servicer is or do not see their name listed in Q4, please call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.
Q14. If I request an Independent Foreclosure Review, is there a cost or will there be a negative impact to my credit?

The Independent Foreclosure Review is a free program. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

The review will not have an impact on your credit report or any other options you may pursue related to your foreclosure.
Q15. Where can I call if I need help completing the form or have any questions about the review process?

Call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET. If you have already submitted a Request for Review Form, please have your Reference Number available to expedite your call.
Q16. How are military servicemembers affected by the Independent Foreclosure Review?

In the review, servicers are required to include all loans covered by the Servicemembers Civil Relief Act that meet the qualifying criteria. However, servicemembers or co-borrowers may also request a review through this process. Financial injury may have occurred if the foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended.
Q17. How am I affected if I submit a Request for Review Form while in active bankruptcy?

If you submit a Request for Review Form and a review is conducted of your foreclosure process, this will have no impact on your bankruptcy. The letter being sent to you about the Independent Foreclosure Review is not an attempt to collect a debt. If you are in bankruptcy, please refer this letter to your attorney.
Q18. I’m still working with my servicer to prevent a foreclosure sale. Will I still be able to work with them?

Yes, continue to work with your servicer. Participating in the review will not impact any effort to prevent a foreclosure sale. The review is not intended to replace current active efforts with your servicer.
Q19. How long will the review process take and when can I expect a response?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Because the review process will examine many details and documents, the review could take several months. The Independent Foreclosure Review will determine if financial injury occurred as a result of the servicer’s errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy. Not every finding will result in compensation or other remedy.
Q20. What happens if the review finds that I was financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review and information about possible compensation or other remedy. The compensation or other remedy you may receive will be determined by your specific situation. Not every finding will result in compensation or other remedy.
Q21. What happens if the review finds that I was not financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review. Not every finding will result in compensation or other remedy.
Q22. What if I disagree with the eligibility requirements or the result of the Independent Foreclosure Review?

The decision of the review is considered final and there is no further recourse within the Independent Foreclosure Review process. The Independent Foreclosure Review will not have an impact on any other options you may pursue related to the foreclosure process of your mortgage loan.
Q23. Does filing a Request for Review Form prevent me from filing other litigation or action against the servicer?

No. Submitting a request for an Independent Foreclosure Review will not preclude you from any other options you may pursue related to your foreclosure

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, November 10, 2011 6:18 AM
To: Charles Cox
Subject: banksters defense

One of the older play books was sent to me this morning so I thought I’d send this stuff out in case some of you don’t have this info and might find it useful.

Thanks,

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://www.NHCwest.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

arguments-you-can-expect-to-be-used-against-us.pdf
Argument.docx
Removing-Cases-to-Federal-Court.pdf
servicing-guidelines-svc1108.pdf
MY GIFTS TO ALL OF YOU.doc
against-pro-se1.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, November 10, 2011 6:02 AM
To: Charles Cox
Subject: From LivingLies

1. What is the name of the pool
2. What is the EIN of the pool
3. Who actually acts in the capacity of Trustee in that they report and/or distribute funds
4. What IRS Form is used to send an end of year tax statement to investors in the pool?
5. How many parties are identified as trustees or fiduciaries in the formation of the pool.
6. Same question but this time “in the operation of the pool.”
7. Does the pool still exist
8. Does the subject loan exist in the pool? How do you know that?
9. Is the person answering these interrogatories personally familiar with the facts arising from the origination of the loan?
10. Is the person answering these interrogatories personally familiar with the facts rising from the origination of the pool?
11. Is the person answering these interrogatories personally familiar with the facts arising from the operation of the pool?
12. When was the pool created? As what type of legal entity?
13. when is the first time anything was filed with the IRS requesting or declaring REMIC status?
14. What was the date cut-off date applicable under the REMIC statute?
15. What was the cutoff date under the PSA?
16. Was the subject loan transferred into the pool before or after the cut-off date?
17. If after, please describe the circumstances?
18. Under what laws was the pool created
19. What kind of entity is the pool?
20. Is the Pool filing as qualified for REMIC status?
21. When did it file for REMIC status
22. What form was used to report to the IRS for the tax years 2006-present
23. Is FANNIE an active Trustee? What are the duties of FANNIE and did it perform any of those duties.
24. Identify the person at Fannie that is in charge of performing trust duties with respect to this pool, including name, status, address, telephone and email address. If the person has not been the same since inception of the pool, identify each person that was employed by FANNIE acting in support of the duties of FANNIE as a Trustee or fiduciary.
25. Who was the underwriter of the Bonds that were offered to investors?
26. IS FANNIE an owner in the pool
27. Is FANNIE an owner of the pool
28. Is FANNIE the owner of the subject loan
29. IS the pool the owner of the subject loan
30. Was ownership of the pool ever changed?
31. Was ownership of the loans in the pool ever changed
32. Was the ownership of the subject loan ever changed
33. Identify all documents of transfer by which any party other than the originator claims to have acquired an interest in the subject loans with sufficient specify such that it would satisfy the requirements for a request to produce.
34. Where are those documents
35. Who are the people who actually have custody or control.
36. Through what kind of account are payments, proceeds, receipts and distributions processed? Who is the owner of said accounts? What persons are signatories on said accounts? By whom are those persons employed? Do such employees operate according to a contract or manual? Where is that manual. Do they operate according to their employment contract? Who are the parties to said contract? Where is a copy of the employment contract? To whom do they report in FANNIE? Do they report to anyone else?
37. What statements of distributions and receipts does FANNIE prepare?
38. What statements of receipts or distributions does FANNIE send?
39. To whom are statements sent?
40. what is the EIN of Fannie? Does it have more than one EIN? Does it maintain multiple EIN for trusts for which it is the trustee? Does it have subsidiaries or affiliates?
41. Identify the person or persons having possession of facts and reports showing all receipts and disbursements relative to the pool as reported to investors.
42. Did the pool receive any benefits or proceeds from insurance or bailout, TARP, credit enhancements? When? How much?
43. Has any inquiry been made as to whether third parties received such benefits from TARP, bailout, insurance or credit enhancements where such receipts were related to eh status or claimed contents of the pool?
44. If such proceeds were received by third parties relating to assets of the pool or the status of the pool, explain how those proceeds were reported to investors and how they are allocated as to each investor.
45. If such an allocation as made to the pool, and to the investors, explain how those proceeds were allocated toward the obligations of borrowers in loans contained in the pool
46. If no such allocations were made, explain the legal reason why those proceeds were not used as the basis for allocations to the pool, the investors and the borrowers.
47. If no inquiry was made, explain why no such inquiry was made, who made the decision and whether there are any documents that can be identified with specificity that reflect the decision to refrain from such inquiry.
48. Including all receipts and disbursements received by or on behalf of the pool, what is the balance due of the subject loan that is due to the investors and how did you compute it? Who did the computation? Where is this person and what is his/her address telephone number etc.
49. Is the balance due to investors different than the balance claimed as due from the borrower? IF yes, explain why
50. Has any settlement occurred between the pool, the trustees or servicers of the pool and the investors? When? What were the terms? What document reflects such settlement

Against Pro Sepro se litigants and the banksters defense

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, November 08, 2011 7:00 AM
To: Charles Cox
Subject: Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans – Decline in Home Prices – 11 More Commercial Banks Pushed to Insolvency

Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans

By: Krista Franks 11/07/2011

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages over the past six months, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to recent RMBS Performance Metrics from Fitch Ratings.

According to Fitch, foreclosure start rates for severely delinquent RMBS loans have stayed above 10 percent since September — a rate they have not reached since November 2009 — and have been working their way toward their 14 percent average between 2000 and 2010.

“Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year,” states Diane Pendley, managing director of Fitch Ratings.

In fact, the rise in foreclosure starts has occurred most heavily among severely delinquent loans. Foreclosure starts among loans that have been delinquent for six months or more have almost doubled in the past five months.

In contrast, foreclosure starts among loans three months to six months delinquent have increased by 25 percent over the past five months.

The foreclosure process is averaging about eight months in non-judicial states and 15 months in judicial states, according to Fitch.

Despite foreclosure starts being on the rise, foreclosure completions in judicial states hover near their historic lows. Fitch attributes this to “servicers’ continued loss mitigation efforts, a backlog in court foreclosure filings, and weak demand in the housing market.”

About a year after deficiencies in the foreclosure process were brought to light, Pendley says, “Mortgage servicers now generally feel they have implemented the corrective actions that they determined were needed.”

“With corrective actions now in place, servicers now need to process a significant backlog of problem loans as well as implement other process changes in parallel,” she continues.

The effects of rising foreclosure starts as servicers work their way through the backlog of distressed loans may not be evident for more than a year, according to Fitch.

©2011 DS News. All Rights Reserved.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, November 08, 2011 7:11 AM
To: Charles Cox
Subject: Wall Street Journal- Foreclosures Fall When Banks Forced to Tell The Truth – (IMAGINE THAT!)

Wall Street Journal- Foreclosures Fall When Banks Forced to Tell The Truth

November 8th, 2011 | Author: Matthew D. Weidner, Esq.

Florida passed a rule that required banks to verify the accuracy and truthiness of the claims they were making in foreclosure cases. The banksters and fraudclosure mills largely ignored the rule, and continue to play games with it even today. But even if anyone had bothered to force compliance with the rule (GASP!) I’m not aware of a single case of any punishment for lying in pleadings filed with the court.

What might happen if someone tried to enforce truthiness in the midst of Florida Fraudclosure? Well, we should look to Nevada and see that foreclosures ground to a halt when that state started (GASP!) requiring the banks to tell the truth.

Now here in FLORIDA, THE MOST CORRUPT STATE IN THE NATION, we could never stand for such a bold initiative…..in fact, Florida is heading in exactly the opposite direction with Florida’s (un)Fair Foreclosure Act….well, the legislators and “leadership” can wallow in their beds made of lies and fraud….the reality is the whole market is a stinking mess, like driving a school bus full of children over a rickety bridge made of sticks. In the end, it’s all coming crashing down. Go ahead foreclosure mills, get all the foreclosure judgments you want….then you just try to sell all those stinking foreclosed properties…..I DARE YOU!…..

But back to the story….just what happens when the banksters are forced to tell the truth??????

Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.

Slightly more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings. Default notices represent the first step in processing foreclosures.

WALL STREET JOURNAL

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, September 20, 2011 9:59 AM
To: Charles Cox
Subject: Lasalle v. Glarum- Team Ice- The Insider’s Briefs Submitted to The Appellate Court! Tom Ice in Florida doing yeoman’s work!

Lasalle v. Glarum- Team Ice- The Insider’s Briefs Submitted to The Appellate Court!

September 19th, 2011 | Author: Matthew D. Weidner, Esq.

There is a very real and a very profound battle raging across this country. Actually there are many wars and they are not just limited to this country. All around the world in fact, real people are rising up against the overreaching and the abuses of the banks and the power systems that have destroyed our economy, enslaved people and laid waste to our naive notions of due process and justice.

One of the battlefronts in this country are foreclosure courtrooms where dedicated advocates stand up for consumers and fight against the banks and all the power and influence they bring to bear. Every battle is an epic struggle not unlike David taking on several Goliaths all at once. These advocates fight the banks with their armies of lawyers (paid at $600/hour with taxpayer funded bailout money.) and they often fight an entire system predisposed to strike anyone who dares to challenge the awesome power bent on crushing any resistance that dares to stand in the way.

Without a doubt some of the true superheros in this battle are the warriors at Ice Legal in Palm Beach, Florida. The national news has repeated sung their praises, but I daresay not many have actually read the work that lies at the heart of the battle. But today, you can have an insider’s look.

Now, the Glarum case should not have been all that extraordinary. As a good local judge reminded me recently, “That’s always been the law in this state!” But the banks have responded as if the Glarum opinion will mean THE END OF THE WORLD AS WE KNOW IT! The banks have already begun an all out, full stops campaign to attack this decision…and I’m guessing they will bring every single power they can to bear in an effort to attack this plain and clear restatement of the existing law.

I encourage you to read each brief carefully, but before you get there, have a read of a few of my favorite highlights:

In short, appellants argue that it may look like a duck, and quack like a duck, but the court would need a zoologist to testify that it is in fact a duck before it could make that finding.

To adapt the BANK‟s own metaphor: the bare, unsworn statement of its attorney that something looks like a duck and quacks like
a duck is not evidence of a duck.

In Florida, all averments to fraud must be pled with particularity. Rule 1.120(b), Fla.R.Civ.P. (2009). In this case the Appellants amended their answer twice (R.VoI.Three pp.566-567) and never alleged fraud as an affirmative defense. See Supp.R.pp.553-555. They have, however, thrown it around the court room quite a bit.

Section 90.902(8), Florida Statutes (2009), provides that “[ c ]ommercial papers and signatures thereon and documents relating to them, to the extent provided in the Uniform Commercial Code” are self-authenticating. While the Assignment is not commercial paper it is related to the Note and is self authenticating pursuant to 90.902(8). HUH?

The BANK takes the sanctionably irresponsible position that the trial court‟s “factual determinations” in entering summary judgment are to be reviewed for “an abuse of discretion.”1 It is elementary that, if the trial court made factual determinations, it erred in entering summary judgment. Coquina Ridge Properties v. E. W. Co., 255 So. 2d 279, 280 (Fla. 4th DCA 1971) (Summary judgment
reversed because “[t]he trial court may not try or determine factual issues in [summary judgment] proceedings; … substitute itself for the trier of fact and determine controverted issues of fact.”) Not surprisingly, all the cases cited by the BANK for this standard of review
having nothing to do with summary judgment.

Worse than merely misstating the standard of review, the BANK actually employed this incorrect standard throughout its brief. One glaring instance is the BANK‟s contention that summary judgment should be affirmed because “there was not enough evidence to allow Judge Sasser to rule in [“the OWNERS‟] favor at the summary judgment hearing.” Another example is its statement that “[i]t cannot seriously be argued that what the Appellants have identified as evidence…was enough to allow Judge Sasser to make a finding in their favor.” While the BANK‟s stunningly frivolous assertion regarding the summary judgment standard of review would never have misled this Court, it is nevertheless emphasized here because it is indicative of the BANK‟s lack of concern for accuracy and candor when addressing both this Court and the court below.

Correction to the BANK’s Statement of Facts: The BANK tells this Court that the promissory note, mortgage and assignment were “all…duly recorded in the public records.” There is nothing in the record to suggest that the promissory note was ever recorded.

As often occurs when a proffered assignment of mortgage encounters evidentiary snags, the BANK now claims that it “does not need the Assignment to prevail in this case.”

Having failed to adduce evidence to support its allegations of standing, the BANK cannot now change to a different allegation of
standing during the appeal.

The BANK ridicules the OWNERS insistence that the original mortgage be authenticated as “bizarre” because “if it is not the document they executed, they should feel free to say so.” Quoting the trial court judge during an evidentiary hearing, the BANK suggests that the OWNERS should know if the BANK‟s documents are authentic, simply by looking to see if its terms match the copy they received at closing.

Brief, answer, reply and opinion attached.

glarumopinion.pdf
Glarum+Initial+Brief+FINAL.pdf
Glarum+Reply+Brief.pdf
Craig Bell PropertyDetailPrintable.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, September 22, 2011 8:19 AM
To: Charles Cox
Subject: Follow up editor’s comments (Neil Garfield) on Dallas v. MERS/BofA et al and an additional Texas MERS 14th Court of Appeals Case

"So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win, meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to cornered — not being able to foreclose because they did not pay their fees.

The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them. Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down."

DALLAS SEEKS TO PIERCE THE CORPORATE VEIL

IGNORING MERS AND GOING STRAIGHT TO

BANK OF AMERICA, STEWART TITLE ET AL

EDITOR’S NOTE: Real change, real reform, real improvement are going to come from good people doing the right thing instead of standing by and watching their neighbors get clobbered, hoping and wishing that it won’t happen to them. So now protests and rallies are being held and they are growing. Over 2,000 people on Wall Street camped out and their voices are getting louder. Spanish citizens are banding together and forming a wall of bodies that the local,"Sheriff" refuses to penetrate to evict the homeowner. Leaders are rising to the top — people like Dan earl, Martin Andelman, Darrel Blomberg and others are not just actively helping their neighbors and their friends and those who find them pleading for help, they are making a difference.

Politicians are noticing that it is a pretty good bet to run against the banks since nobody likes them anyway and there is a special enmity that the citizens feel toward the banks, who have been draining the lifeblood out of our economy for over 3 decades. This time the banks went far enough for the people, the government and investors to strike back — giving restitution to the victims of the banks feeding frenzy.

Those victims are taxpayers, government agencies whose fees were not paid, regulators whose fees were not paid and who did not receive reports that were essential to orderly commerce, failure to record transactions in real property allowing almost anyone to wake up in the morning deciding to steal a house by asserting they are the beneficiary, filing a substitution of trustee naming someone that is in league with them, and then proceeding with the notice of sale, the auction and submitting a "Credit bid" that is as fake as a three dollar bill.

One by one, local government is getting the message — the banks owe them and they have nothing to fear from the banks. It is an illusion and a myth that the government can call the shots as we let them — because we have long since withdrawn our consent to that. The budgets will be restored by government agencies tracking down the money that is due — not from new taxes — but normal fees and taxes required to perform the services that all of us need government to perform, like recording an interest in real property.

So Dallas has sued MERSCORP and some well-known shareholders seeking to recover its fees and restore its budget. Dallas has now made a statement that they will no longer underwrite the costs of the securitization scam and they want the money that the banks did not pay when they transferred interests in real estate repeatedly without ever recording the interest in the public records of the county in which the property was located.

They have a good case too. Because the trick the banks tried was to use some end user, the final nominee of the securitization process who would claim that they were the holder and owner of the loan so that a foreclosure could occur and another house could be stolen by a party who neither the loaned the money nor purchased the obligation. But now the banks have stepped on a rake because in order to give the "final nominee" the right to foreclose they must claim multiple transfers of the loan, none of which were reported on record. They want to use the county’s facilities to foreclose, but they don’t want to pay for the intervening transactions that they say gives rights to the the party foreclosing on behalf of the his hashed scheme.

So Dallas is suing MERSCORP et al, including big old Bank of America who is already on our death watch. And Dallas is going to win ,meaning that county recorders across the country are going to make their claim for fees that are due, even if the transactions were fraudulent because they tried to use those transactions as a means to foreclose. And ultimately, the banks are going to be cornered — not being able to foreclose because they did not pay their fees. The banks were and are the deadbeats, but they had a lot of money and power which is now fast flowing away from them.

Politicians have figured it out — run against the banks and you can’t go wrong. They’ll get more money and more votes from people and other interest groups running against the banks than doing their bidding. We might let organized crime thrive for a while, but we always take it down.

HERE IS THE BOMBSHELL — the model paragraph that will ultimately be the undoing of of the "Substitute trustees" the auctions, sales, deeds and evictions. When the full import of this paragraph sinks in, the banks will be left naked in the wind, revealed as common thieves who never loaned any money and who never purchased an obligation but managed to create an elaborate scheme to steal the homes in derogation of the rights of both investors and homeowners. In all the foreclosures, assuming the dubious proposition that the liens were perfected, the modification of the loan with a principal correction would have resulted in a better deal for the investor and the crush of evictions would have been reduced to a trickle because the deals would have been workable — something the original loans never aspired to as a goal, since the originators were after fees for closing not payback on the loans.

"PLAINTIFF moves the court pierce the MERSCORP and MERS corporate veils and impose liability upon the Defendants Stewart and BOA as shareholders in MERSCORP for the activities of MERSCORP and MERS alleged herein. Recognizing the corporate existence of MERSCORP and MERS separate from their shareholders, including Stewart and BOA, would cause an inequitable result or injustice, or would be a cloak for fraud or illegality. MERSCORP and MERS were under-capitalized in light of the nature and risk of their business. The corporate fiction is being used to justify wrongs, perpetrating fraud, as a mere tool or business conduit for others, as a means of evading legal obligations, to perpetrate monopoly and unlawfully gain monopolistic control over the real property recording system in the State of Texas, and to circumvent statutory obligations."

MERS.pdf

The Subprime Shakeout: The Government Giveth and It Taketh Away: The Significance of the Game Changing FHFA Lawsuits
[http://fusion.google.com/add?source=atgs&feedurl=http://feeds.feedburner.com/TheSubprimeShakeout]

________________________________

The Government Giveth and It Taketh Away: The Significance of the Game Changing FHFA Lawsuits

Posted: 14 Sep 2011 05:58 PM PDT

It is no stretch to say that Friday, September 2 was the most significant day for mortgage crisis litigation since the onset of the crisis in 2007. That Friday, the Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac, sued almost all of the world’s largest banks in 17 separate lawsuits, covering mortgage backed securities with original principal balances of roughly $200 billion. Unless you’ve been hiking in the Andes over the last two weeks, you have probably heard about these suits in the mainstream media. But here at the Subprime Shakeout, I like to dig a bit deeper. The following is my take on the most interesting aspects of these voluminous complaints (all available here) from a mortgage litigation perspective.

Throwing the Book at U.S. Banks

The first thing that jumps out to me is the tenacity and aggressiveness with which FHFA presents its cases. In my last post (Number 1 development), I noted that FHFA had just sued UBS over $4.5 billion in MBS. While I noted that this signaled a shift in Washington’s “too-big-to-fail” attitude towards banks, my biggest question was whether the agency would show the same tenacity in going after major U.S. banks. Well, it’s safe to say the agency has shown the same tenacity and then some.

FHFA has refrained from sugar coating the banks’ alleged conduct as mere inadvertence, negligence, or recklessness, as many plaintiffs have done thus far. Instead, it has come right out and accused certain banks of out-and-out fraud. In particular, FHFA has levied fraud claims against Countrywide (and BofA as successor-in-interest), Deutsche Bank, J.P. Morgan (including EMC, WaMu and Long Beach), Goldman Sachs, Merrill Lynch (including First Franklin as sponsor), and Morgan Stanley (including Credit Suisse as co-lead underwriter). Besides showing that FHFA means business, these claims demonstrate that the agency has carefully reviewed the evidence before it and only wielded the sword of fraud against those banks that it felt actually were aware of their misrepresentations.

Further, FHFA has essentially used every bit of evidence at its disposal to paint an exhaustive picture of reckless lending and misleading conduct by the banks. To support its claims, FHFA has drawn from such diverse sources as its own loan reviews, investigations by the SEC, congressional testimony, and the evidence presented in other lawsuits (including the bond insurer suits that were also brought by Quinn Emanuel). Finally, where appropriate, FHFA has included successor-in-interest claims against banks such as Bank of America (as successor to Countrywide but, interestingly, not to Merrill Lynch) and J.P. Morgan (as successor to Bear Stearns and WaMu), which acquired potential liability based on its acquisition of other lenders or issuers and which have tried and may in the future try to avoid accepting those liabilities. In short, FHFA has thrown the book at many of the nation’s largest banks.

FHFA has also taken the virtually unprecedented step of issuing a second press release after the filing of its lawsuits, in which it responds to the “media coverage” the suits have garnered. In particular, FHFA seeks to dispel the notion that the sophistication of the investor has any bearing on the outcome of securities law claims – something that spokespersons for defendant banks have frequently argued in public statements about MBS lawsuits. I tend to agree that this factor is not something that courts should or will take into account under the express language of the securities laws.

[http://www.subprimeshakeout.com/wp-content/uploads/2011/09/Freddie-Fannie-Bailout.gif]The agency’s press release also responds to suggestions that these suits will destabilize banks and disrupt economic recovery. To this, FHFA responds, “the long-term stability and resilience of the nation’s financial system depends on investors being able to trust that the securities sold in this country adhere to applicable laws. We cannot overlook compliance with such requirements during periods of economic difficulty as they form the foundation for our nation’s financial system.” Amen.

This response to the destabilization argument mirrors statements made by Rep. Brad Miller (D-N.C.), both in a letter urging these suits before they were filed and in a conference call praising the suits after their filing. In particular, Miller has said that failing to pursue these claims would be “tantamount to another bailout” and akin to an “indirect subsidy” to the banking industry. I agree with these statements – of paramount importance in restarting the U.S. housing market is restoring investor confidence, and this means respecting contract rights and the rule of law. If investors are stuck with a bill for which they did not bargain, they will be reluctant to invest in U.S. housing securities in the future, increasing the costs of homeownership for prospective homeowners and/or taxpayers.

You can find my recent analysis of Rep. Miller’s initial letter to FHFA here under Challenge No. 3. The letter, which was sent in response to the proposed BofA/BoNY settlement of Countrywide put-back claims, appears to have had some influence.

Are Securities Claims the New Put-Backs?

The second thing that jumps out to me about these suits is that FHFA has entirely eschewed put-backs, or contractual claims, in favor of securities law, blue sky law, and tort claims. This continues a trend that began with the FHLB lawsuits and continued through the recent filing by AIG of its $10 billion lawsuit against BofA/Countrywide of plaintiffs focusing on securities law claims when available. Why are plaintiffs such as FHFA increasingly turning to securities law claims when put-backs would seem to benefit from more concrete evidence of liability?

One reason may be the procedural hurdles that investors face when pursuing rep and warranty put-backs or repurchases. In general, they must have 25% of the voting rights for each deal on which they want to take action. If they don’t have those rights on their own, they must band together with other bondholders to reach critical mass. They must then petition the Trustee to take action. If the Trustee refuses to help, the investor may then present repurchase demands on individual loans to the originator or issuer, but must provide that party with sufficient time to cure the defect or repurchase each loan before taking action. Only if the investor overcomes these steps and the breaching party fails to cure or repurchase will the investor finally have standing to sue.

All of those steps notwithstanding, I have long argued that put-back claims are strong and valuable because once you overcome the initial procedural hurdles, it is a fairly straightforward task to prove whether an individual loan met or breached the proper underwriting guidelines and representations. Recent statistical sampling rulings have also provided investors with a shortcut to establishing liability – instead of having to go loan-by-loan to prove that each challenged loan breached reps and warranties, investors may now use a statistically significant sample to establish the breach rate in an entire pool.

So, what led FHFA to abandon the put-back route in favor of filing securities law claims? For one, the agency may not have 25% of the voting rights in all or even a majority of the deals in which it holds an interest. And due to the unique status of the agency as conservator and the complex politics surrounding these lawsuits, it may not have wanted to band together with private investors to pursue its claims.

Another reason may be that the FHFA has had trouble obtaining loan files, as has been the case for many investors. These files are usually necessary before even starting down the procedural path outlined above, and servicers have thus far been reluctant to turn these files over to investors. But this is even less likely to be the limiting factor for FHFA. With subpoena power that extends above and beyond that of the ordinary investor, the government agency may go directly to the servicers and demand these critical documents. This they’ve already done, having sent 64 subpoenas to various market participants over a year ago. While it’s not clear how much cooperation FHFA has received in this regard, the numerous references in its complaints to loan level reviews suggest that the agency has obtained a large number of loan files. In fact, FHFA has stated that these lawsuits were the product of the subpoenas, so they must have uncovered a fair amount of valuable information.

Thus, the most likely reason for this shift in strategy is the advantage offered by the federal securities laws in terms of the available remedies. With the put-back remedy, monetary damages are not available. Instead, most Pooling and Servicing Agreements (PSAs) stipulate that the sole remedy for an incurable breach of reps and warranties is the repurchase or substitution of that defective loan. Thus, any money shelled out by offending banks would flow into the Trust waterfall, to be divided amongst the bondholders based on seniority, rather than directly into the coffers of FHFA (and taxpayers). Further, a plaintiff can only receive this remedy on the portion of loans it proves to be defective. Thus, it cannot recover its losses on defaulted loans for which no defect can be shown.

In contrast, the securities law remedy provides the opportunity for a much broader recovery – and one that goes exclusively to the plaintiff (thus removing any potential freerider problems). Should FHFA be able to prove that there was a material misrepresentation in a particular oral statement, offering document, or registration statement issued in connection with a Trust, it may be able to recover all of its losses on securities from that Trust. Since a misrepresentation as to one Trust was likely repeated as to all of an issuers’ MBS offerings, that one misrepresentation can entitle FHFA to recover all of its losses on all certificates issued by that particular issuer.

The defendant may, however, reduce those damages by the amount of any loss that it can prove was caused by some factor other than its misrepresentation, but the burden of proof for this loss causation defense is on the defendant. It is much more difficult for the defendant to prove that a loss was caused by some factor apart from its misrepresentation than to argue that the plaintiff hasn’t adequately proved causation, as it can with most tort claims.

Finally, any recovery is paid directly to the bondholder and not into the credit waterfall, meaning that it is not shared with other investors and not impacted by the class of certificate held by that bondholder. This aspect alone makes these claims far more attractive for the party funding the litigation. Though FHFA has not said exactly how much of the $200 billion in original principal balance of these notes it is seeking in its suits, one broker-dealer’s analysis has reached a best case scenario for FHFA of $60 billion flowing directly into its pockets.

There are other reasons, of course, that FHFA may have chosen this strategy. Though the remedy appears to be the most important factor, securities law claims are also attractive because they may not require the plaintiff to present an in-depth review of loan-level information. Such evidence would certainly bolster FHFA’s claims of misrepresentations with respect to loan-level representations in the offering materials (for example, as to LTV, owner occupancy or underwriting guidelines), but other claims may not require such proof. For example, FHFA may be able to make out its claim that the ratings provided in the prospectus were misrepresented simply by showing that the issuer provided rating agencies with false data or did not provide rating agencies with its due diligence reports showing problems with the loans. One state law judge has already bought this argument in an early securities law suit by the FHLB of Pittsburgh. Being able to make out these claims without loan-level data reduces the plaintiff’s burden significantly.

Finally, keep in mind that simply because FHFA did not allege put-back claims does not foreclose it from doing so down the road. Much as Ambac amended its complaint to include fraud claims against JP Morgan and EMC, FHFA could amend its claims later to include causes of action for contractual breach. FHFA’s initial complaints were apparently filed at this time to ensure that they fell within the shorter statute of limitations for securities law and tort claims. Contractual claims tend to have a longer statute of limitations and can be brought down the road without fear of them being time-barred (see interesting Subprime Shakeout guest post on statute of limitations concerns.

Predictions

Since everyone is eager to hear how all this will play out, I will leave you with a few predictions. First, as I’ve predicted in the past, the involvement of the U.S. Government in mortgage litigation will certainly embolden other private litigants to file suit, both by providing political cover and by providing plaintiffs with a roadmap to recovery. It also may spark shareholder suits based on the drop in stock prices suffered by many of these banks after statements in the media downplaying their mortgage exposure.

Second, as to these particular suits, many of the defendants likely will seek to escape the harsh glare of the litigation spotlight by settling quickly, especially if they have relatively little at stake (the one exception may be GE, which has stated that it will vigorously oppose the suit, though this may be little more than posturing). The FHFA, in turn, is likely also eager to get some of these suits settled quickly, both so that it can show that the suits have merit with benchmark settlements and also so that it does not have to fight legal battles on 18 fronts simultaneously. It will likely be willing to offer defendants a substantial discount against potential damages if they come to the table in short order.

Meanwhile, the banks with larger liability and a more precarious capital situation will be forced to fight these suits and hope to win some early battles to reduce the cost of settlement. Due to the plaintiff-friendly nature of these claims, I doubt many will succeed in winning motions to dismiss that dispose entirely of any case, but they may obtain favorable evidentiary rulings or dismissals on successor-in-interest claims. Still, they may not be able to settle quickly because the price tag, even with a substantial discount, will be too high.

On the other hand, trial on these cases would be a publicity nightmare for the big banks, not to mention putting them at risk a massive financial wallop from the jury (fraud claims carry with them the potential for punitive damages). Thus, these cases will likely end up settling at some point down the road. Whether that’s one year or four years from now is hard to say, but from what I’ve seen in mortgage litigation, I’d err on the side of assuming a longer time horizon for the largest banks with the most at stake.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Saturday, September 17, 2011 5:34 PM
To: Charles Cox
Subject: The Subprime Shakeout:The Government Giveth and It Taketh Away: The Significance of the FHFA lawsuits

Note…links are active but not highlighted. If you want to follow any, usually you can hold the Ctrl button then left click. Or read it in the Word attachment which might be easier to read.

The Subprime Shakeout.docx

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, September 02, 2011 12:59 PM
To: Charles Cox
Subject: Order Certifying MERS in Washington

CERTIFIED QUESTIONS:

1. Is Mortgage Electronic Registration Systems, Inc., a lawful “beneficiary” within the terms of Washington’s Deed of Trust Act, Revised Code of Washington section 61.24 .005 (2), if it never held the promissory notes secured by the deed of trust?
2. If so, what is the legal effect of Mortgage Electronic Registration Systems, Inc., acting as an unlawful beneficiary under the terms of Washington’s Deed of Trust Act?
3. Does a homeowner possess a cause of action under Washington’s Consumer Protection Act against Mortgage Electronic Registration Systems, Inc., if MERS acts as an unlawful beneficiary under the terms of Washington’s Deed of Trust Act?

This is the second time that a trial court has certified questions to the Supreme Court of a state with respect to the pattern of conduct by those who acted as intermediaries in the process of securitization of debt. In this case, similar to the case being heard by the Supreme Court of the state of Arizona on September 22, 2011, the specific issue can be boiled down to a single point, to wit: if a strawman is being used essentially as merely a placeholder on what would otherwise be a legal document, what is the effect on title, what is the effect on foreclosure, and what right of action exists in favor of the homeowner if the strawman had no interest in the financial transaction?

The very manner in which the questions are phrased makes it clear that the trial court believes that it will require a change in the law for the pretender banks to prevail in the past, present or future foreclosures or mortgage litigation. The impact of the current pattern of conduct in corrupting the title system in all 50 states continues to have a pervasive effect on the housing market, our national economy, and our standing in world opinion. A correction is certainly required. It seems clear that both sides of the issue have proponents who admit that a correction is necessary. If the correction involves changing our notions of certainty in the marketplace wherein a buyer must make further inquiry than what is reflected in public records, the amount of investigation and paperwork involved in virtually any transaction will skyrocket. If the correction involves applying existing law and the rules of evidence, the title to property involved in tens of millions of transactions will be put in doubt, requiring a massive streamlined effort to “quiet title” thus restoring confidence in the marketplace.

Either way, we are in for a prolonged period of time in which title defects and uncertainty in the marketplace will dominate our attention

Order-certifying-mers-questions.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Friday, September 02, 2011 9:55 AM
To: Charles Cox
Subject: AZ AG File Amicus Brief Favoring Homeowners – From LivingLies

CASE IS SCHEDULED FOR ORAL ARGUMENT ON SEPTEMBER 22, 20011 IN TUCSON, AZ. CONTRARY TO RUMOR, DO NOT EXPECT A RULING FROM THE COURT ON THAT DATE. THE SUPREME COURT OF ARIZONA WILL TAKE AS MUCH TIME AS IT NEEDS TO MAKE THE DECISION.

JUDGE HOLLOWELL HAS CERTIFIED TWO QUESTIONS ESSENTIAL TO THE OUT COME OF HUNDRED OF THOUSANDS OF FORECLOSURE CASES. ATTORNEY GENERAL THOMAS C HORNE HAS SUBMITTED AN AMICUS (FRIEND OF THE COURT) BRIEF ADVOCATING A FAVORABLE RESULT FOR THE PROTECTION OF THE TITLE SYSTEM, THE MARKETPLACE AND BORROWERS.

The case is Julia Vasquez v Deutsch Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2005-3; Saxon Mortgage, Inc., and Saxon Mortgage Services, Inc. Supreme Court Case No CV 11-0091-CQ, U.S. Bankruptcy Court Case No: 4:08-bk-15510-EWH. Assisting in the writing of the Amicus Brief were Carolyn R. Matthews, Esq., Dena R. Epstein, Esq., and Donnelly A. Dybus, Esq..

In a very well -written and well-reasoned brief, the Arizona Attorney general takes and stand and makes a very persuasive case contrary to the tricks and shell games of the pretender lenders. It also addresses head-on the contention that that a negative ruling to the banks will cause financial disaster. Just as we have been saying for years here on these pages, the AG makes short shrift of that argument. And the AG takes the bank to task on their “spin” that stopping the foreclosures will have a chilling effect on the housing market and therefore the economy. The absurdity of both positions is exposed for what they are — naked aggression and greed justifying the means to defraud and corrupt the entire housing market, financial industry and the whole of the consumer buying base in this and other countries.

Of particular note is the detailed discussion in the Amicus Brief regarding the recordation of interests in real property. While the brief does not directly attach perfection of liens that violate the provisions of Arizona Statutes, the implications are clear: If the public record does not contain adequate disclosure as to the identity of the interested parties, the document is neither properly recorded, nor is the party seeking to enforce such a document entitled to use that document as though it had been recorded.

The use of a double nominee method of identifying the straw-man beneficiary (usually MERS) and a straw-man “lender” (usually the mortgage originator that was acting only as a conduit or broker) leaves the public without any knowledge as to the identities of the real parties in interest. In the case of a mortgage lien, if it is impossible to know the identity of the party who can satisfy the lien, then the lien is not perfected. The same reasoning holds true with any other document required to be recorded, to wit:

PUBLIC POLICY OF ARIZONA AGAINST FORECLOSURES: The AG also meets head on the obvious bias in the courts in which the assumption is made that that it is somehow better for society to speed along the foreclosures. Not so, says the AG

az-ag-amicus-vasquez-8-2011-1.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Saturday, September 17, 2011 2:17 PM
To: Charles Cox
Subject: COMPETENT EVIDENCE REQUIRED — FOR BOTH SIDES (from LivingLies)

"If you want to save your home, you’ve got to get a good lawyer who knows how to take a deposition—no exceptions."

COMPETENT EVIDENCE REQUIRED — FOR BOTH SIDES

EDITOR’S NOTE: Be careful before you celebrate over this. Yes, it is now more difficult for the banks to lie their way through foreclosure. The word is "difficult" not "impossible."

They can still lie their way through foreclosure if you don’t know how to challenge or object to affidavits, business records, testimony that is not from a COMPETENT (that has a technical definition) witness, etc. And you must also satisfy the same requirements if YOU want to put evidence in the record and have the Judge hear it. Getting it in the record is not usually half as hard as having the Judge actually consider it — that is a matter of ease of presentation and style.

LAWYERS: I RECOMMEND YOU ALWAYS HAVE A COPY OF THE FEDERAL AND STATE RULES OF EVIDENCE IN YOUR POSSESSION — ESPECIALLY THE PARTS ON HEARSAY AND COMPETENCY OF WITNESS. I ALSO STRONGLY RECOMMEND THAT YOU CARRY WITH YOU TRIAL OBJECTIONS 2D BY MARK A DOMBROFF.

Submitted on 2011/09/16 at 12:43 pm

http://floridaforeclosurefraud.com/2011/09/oh-no-we-have-to-actually-prove-our-cases-bank-lawyers-respond-to-the-glarum-case/

Oh, no, we have to actually prove our cases!” Bank lawyers respond to the Glarum case by Mike Wasylik Esq. on September 16, 2011

Glarum has the banks running scared.
The biggest challenge banks face in today’s foreclosure crisis is that they still haven’t come to grips with the need to tell the truth when they testify. The recent case of Glarum v. LaSalle [PDF] http://floridaforeclosurefraud.com/wp-content/uploads/2011/09/4D10-1372.op_.pdf has put even more pressure on the banks to tell the truth in foreclosure court, and now the banks and their lawyers are in a blind panic.

Banks have to provide admissible evidence in foreclosure cases

In the Glarum case, the trial judge had granted a summary judgment in favor of the bank, and ordered the Glarum home to be sold at auction. In support of its motion for that summary judgment, the bank offered the sworn affidavit of Ralph Orsini, who swore that the Glarums had defaulted on their loan and that they owed the bank a particular amount of money. Unfortunately, Orsini didn’t know these things were true, so he relied on the computer database to tell him these things. And according to the appellate court, that’s where the problem began:

Orsini did not know who, how, or when the data entries were made into Home Loan Services’s computer system. He could not state if the records were made in the regular course of business. He relied on data supplied by Litton Loan Servicing, with whose procedures he was even less familiar. Orsini could state that the data in the affidavit was accurate only insofar as it replicated the numbers derived from the company’s computer system. Despite Orsini’s intimate knowledge of how his company’s computer system works, he had no knowledge of how that data was produced, and he was not competent to authenticate that data.

(Emphasis mine.) The appellate court threw out the affidavit, and the resulting judgment, because Orsini’s statements were mere hearsay. They didn’t prove anything.

Applying long-held evidentiary principles to foreclosure cases

Bank lawyers, instead of recognizing this case as reaffirming long-understood principles of basic evidence, have sounded the alarm. Here’s what one “client alert” from Greenberg Traurig had to say:
http://www.gtlaw.com/NewsEvents/Publications/Alerts?find=152634

The Fourth District Court of Appeals has sent a strong statement that more generic affidavits currently utilized in some cases will no longer be sufficient where they do not include specific and detailed factual information regarding the compilation of the loan and payment data into a computer system. In doing so, the appellate court may have achieved the unintended result of dramatically changing the foreclosure landscape in Florida.

Again, emphasis mine. Changing the landscape? Hardly. Here are some of the things that Greenberg Traurig recommends banks will need to do in future foreclosure cases:

· The affiant should be familiar with and have a specific understanding as to how the records are kept by the company and about the company’s recordkeeping practices in general.

· The affidavit may need to include factual information establishing that the records relied upon were kept in the ordinary course of the company’s regularly conducted business activity, with specific reference to each record that is relied upon.

· …the affidavit may need to contain language addressing the procedures that the company takes to ensure that the information input into its computer system is accurate.

· …the information included in the affidavit will need to be sufficient to show that the records were made by or from information transmitted by a person with knowledge.

· The courts may even require the affidavit to provide information regarding the procedures used by the prior loan servicer to ensure that the information is kept within the normal course of its business…

· Particular care should be given to who the company selects as the affiant…

None of this is revolutionary, or even surprising, to anyone who’s ever litigated a commercial case before—it’s “Business Records 101.” Business records are never admissible, because they are hearsay, unless you do all those things. Why? Because business records are hearsay, so you have to lay the groundwork to get them admitted.

Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence may be admitted into evidence as business records if the proponent of the evidence demonstrates the following through a record’s custodian:

(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.

That’s always been the law in every case, and the Glarum court has now ruled that the same law that applies to everyone else now applies to banks, too. And that’s just fair.

If you want to save your home, you’ve got to take depositions.

What lessons can be learned from Glarum? first, that banks are terrified of having their affiants’ depositions taken, and will fight even harder to prevent that from happening. They are terrified of what “borrower’s counsel” like us can do when we have the opportunity to ask them questions under oath. And when we do get the chance to ask those questions, we can blow a foreclosure case right out of the water, just like in Glarum.

Finally, borrowers, homeowners, and other foreclosure defendants should know this: taking depositions in your foreclosure case is a critical step in protecting your home—one that our law firm has long viewed as essential in almost every foreclosure case. And it’s a step that almost no foreclosure defendant is competent to handle on their own. If you want to save your home, you’ve got to get a good lawyer who knows how to take a deposition—no exceptions.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, September 13, 2011 11:20 AM
To: Charles Cox
Subject: LAWYERS TAKE NOTE! COURTS ARE ALLOWING TITLE QUESTIONS IN EVICTIONS

LAWYERS TAKE NOTE! COURTS ARE ALLOWING TITLE QUESTIONS IN EVICTIONS

Posted on September 13, 2011 by Neil Garfield

“The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices. ” — Neil Garfield

OREGON COURT DENIES EVICTION: SHOULD HAVE BEEN A QUIET TITLE LAWSUIT

EDITOR’S NOTE: The eviction laws were mostly designed for landlord tenant situations. Once again, pretender lenders are using questionable practices using laws that don’t apply to the cases they are bringing. But ever since Judge Shack in New York and Judge Boyco in Ohio started questioning whether the homeowners were actually getting their day in court, the courts have been shifting away from the old rules.

The old rules basically prevent a tenant from questioning the title of his landlord as a defense to an eviction. The reason is obvious. You sign a lease with someone, pay them for a while and then stop paying — the issue of who has title is basically irrelevant. You have a contract (lease) either oral or written, you breached it, and so the summary procedure for eviction makes it easier on landlords to get tenants out and begin renting the apartment, condo or house. The only real defense is payment and some issues like retaliatory eviction for reporting health problems, and similar landlord tenant issues. You see these laws in Arizona, Florida and every other state I’ve looked at.

Along comes massive foreclosures and instead of having a contract with the landlord you have a claim by someone you never heard of, with paperwork you’ve never seen, much of it unrecorded, and claiming default without being the creditor or even establishing that they represent the creditor. So in non-judicial states for example, this is the first time you have seen, met or had any day in court and you are told that you are in a court of limited jurisdiction and that if you want to raise issues regarding fraudulent or wrongful foreclosure you need to do it in another court. In the meanwhile, the court is going to evict you no matter how much proof you have that the party doing the evicting obtained title illegally and may never have obtained title.

As I have been saying for 4 years, eviction is not a remedy to anyone claiming to have a right to possession of a foreclosed home unless there has been an opportunity to examine all the claims of the pretender lenders to actual ownership of the obligation and the possession of the proper paperwork. Even in judicial states this is not working right because the foreclosures are considered clerical by judges and many of them don’t believe, or at least didn’t believe until recently, that the banks would be so arrogant and stupid as to make claims on mortgages that were never perfected as liens and never transferred to them or anyone else.

So here we have an Oregon judge that spots the issue and simply states that this is not an eviction, it is a quiet title issue and if you want possession you need to prove title. If you want to prove title, considering the defects that are apparent and alleged by the homeowner then you need to file a quiet title action. This is the same as I have been saying for years. If they really had the goods and they really could prove that US Bank, or BOA was going to lose money because of the alleged default on the obligation, then all they needed to do was go to trial on a few dozen of these cases and the issues raised by homeowners would go away. Instead the issues are growing in volume and sincerity.

The mere fact that the pretenders are avoiding trials at all costs is proof unto itself that they do not have the goods, they do not have title, they are not the creditor and they are merely sneaking into the system to fill the void created by the real creditors (investor/lenders) who want no part of the foreclosure process nor any need to defend against predatory, deceptive or illegal lending practices.

Court rulings complicate evictions for lenders in Oregon

“Those issues give credence to Defendant’s argument that this case is better brought as one to quiet title and then for ejectment.”

OregonLive-

Another Oregon woman successfully halted a post-foreclosure eviction after a judge in Hood River found the bank could not prove it held title to the home.

Sara Michelotti’s victory over Wells Fargo late last week carries no weight in other Oregon courts, attorneys say. But it illustrates a growing problem for banks — if the loans’s ownership history isn’t recorded properly, foreclosed homeowners might be able to fight even an eviction.

“There’s this real uncertainty from county to county about what that eviction process is going to look like for the lender,” said Brian Cox, a real estate attorney in Eugene who represented Wells Fargo.

Michelotti’s case revolved around a subprime mortgage lender, Option One Mortgage Corp., that went out of business during the housing crisis. Circuit Court Judge Paul Crowley ruled that it was not clear when or how Option One transferred Michelotti’s mortgage to American Home Mortgage Servicing Inc., which foreclosed on her home and later sold it to Wells Fargo.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Saturday, September 03, 2011 6:22 PM
To: Charles Cox
Subject: RICO Case Against JPM Chase

Jeff Barnes at it again…could get interesting.

http://market-ticker.org/akcs-www?post=193493

Also see: http://foreclosuredefensenationwide.com/ It would be good to get a copy of the complaint to see how it is drafted.

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://CharlesCox.HersID.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Thursday, August 18, 2011 8:13 AM
To: Charles Cox
Subject: UPDATE: Link to Webcast of Attorney General Kamala Harris’ Announcement of Mortgage-Related Law Enforcement Action

Advisory Only

August 18, 2011

Media Advisory

Contact: (415) 703-5837

Print Version

UPDATE: Link to Webcast of Attorney General Kamala Harris’ Announcement of Mortgage-Related Law Enforcement Action

WHAT: Attorney General Kamala D. Harris will announce a mortgage-related enforcement action.

Press Conference LIVE STREAM VIDEO: http://oag.ca.gov/

WHEN: Thursday, August 18, 2011

Press Conference – 11:30 a.m.

WHERE:

14th Floor Conference Room
State Building
455 Golden Gate Ave.
San Francisco, CA 94102

NOTES:
Please RSVP at agpressoffice or 415.703.5837. Press Credentials are required to attend Press Conference.

# # #

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 17, 2011 5:56 PM
To: Charles Cox
Subject: EVICT THE BANK – I LIKE IT!!!

(Neil Garfield) EDITOR’S COMMENT: I was talking with an expert in landlord tenant law and I received an interesting suggestion. The case involved someone who has just been served with a writ of restitution where the owner had to peaceably leave her home — or it wouldn’t be so peaceful. The suggestion was that the owner file a forcible detainer action of her own against the current party that evicted her and accuse them of trespass as well. If she has proof, and in this case she does, that the documents were forged (even the verified complaint for eviction was forged) then there were many false parties and false documents.

So I squeezed my source a little more and the following is the line of reasoning he was suggesting that we follow from a fact standpoint. The names and details are redacted except for the pretenders. Comments anyone?

1. Petitioner’s primary residence has just been served with a writ of restitution requiring her to vacate the premises.

2. Petitioner is the legal owner of the property.

3. Petitioner cooperated with law enforcement, but states affirmatively that she has proof that the verified complaint filed by US Bank for the forcible detainer from her primary residence was a forged document with a false notary.

4. Further, Petitioner now has in her possession proof that the documents by which US Bank claims to be the creditor were also forged, fabricated and misrepresented to the court intentionally and with willful disregard for the consequences or the truth.

5. Petitioner asserts that US Bank used trickery and falsehood to falsely represent facts to the Court that it knew were untrue.

6. The Substitution of Trustee was a false, forged and fabricated document that was misrepresented by US BANK and their counsel as being authentic.

7. Using the false Substitution of trustee, US BANK caused a false, fabricated notice of default, despite payments being made under contract to the creditors.

8. Using the false Notice of Default, US Bank caused a false Notice of Sale to be issued despite the fact that it was neither the beneficiary nor the lender, nor a successor thereto by any means, nor had US Bank ever parted with anything of value that would constitute consideration or an interest in Petitioner’s obligation to creditors.

9. Using the false Notice of Sale and the false substitute of trustee, a false auction was held by the false substitute trustee, where the false substitute trustee represented US Bank as the false creditor and the false trustee “Accepted” a non-existent bid (US Bank was not present at the false auction) in which the false substitute trustee issued a deed upon “foreclosure” without receiving any consideration of any kind.

10. The false substitute trustee was at all times under the direct control and instructions of US BANK. US Bank had in substance substituted itself as the false trustee using the CalWestern entity.

11. Using the fraudulently created and fraudulently obtained deed from the false substitute trustee US Bank initiated an FED action against the Petitioner.

12. Using the false, forged, fabricated and unauthorized documentation described above, and using the rules of eviction to its advantage, US Bank obtained a Judgment for Eviction and Restitution of the premises against the Petitioner.

13. Using the fraudulently obtained Judgment for Restitution and Eviction, US Bank filed the required documents for a writ of restitution to issue.

14. Petitioner is now legally evicted from a home that she legally owns since the deeds used by US Bank were wild deeds, unauthorized and not in the chain of title.

15. Petitioner demands possession of her home.

16. The actions of US Bank constitute slander of title, trespass, and have caused severe emotional distress to the Petitioner.

To allow US Bank to continue on this march of theft would make this court a co-venturer in a gross miscarriage of justice.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, August 23, 2011 9:11 AM
To: Charles Cox
Subject: AHMSI sues LPS and DocX over robo-signing scandal

http://www.housingwire.com/2011/08/23/ahmsi-sues-lps-and-docx-over-robo-signing-scandal

Thanks April

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://CharlesCox.HersID.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 17, 2011 4:59 PM
To: Charles Cox
Subject: Gomes and Supremes

Petition attached…thanks to Ed Peckham…San Diego attorney…

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://CharlesCox.HersID.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

Petition for Certiorari.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 17, 2011 9:36 AM
To: Charles Cox
Subject: The Post finds problem in 92% of bank foreclosure filings

NY POST: 92% —BANKS STILL FORECLOSING WITHOUT ANY RIGHT

Posted on August 17, 2011 by Neil Garfield

–IF THE BANKS DON’T OWN THE PROPERTY OR THE MORTGAGE, WHO DOES?

EDITOR’S NOTE: My figures tracking thousands of foreclosures indicate the same thing that the New York Post found. There are a scattered few foreclosures that are good old-fashioned foreclosures of valid mortgages. The borrower didn’t pay and there were no third party payments; the mortgage documents were the normal variety without nominees, MERS, substitutions of Trustee, and new parties that are clearly outside the chain of title. It can be expressed as a rule: if there is a substitution of trustee, there is a 99% chance the loan was (a) securitized and (b) invalid, without any valid transfers of authority or ownership. If MERS was involved, the same rule applies.

So the question is not one of probability or theory — the forgery of documents, the origination of the loan, the fabrication of documents, the intentional misrepresentation by counsel (with plausible deniability, but nonetheless knowing) — all contribute to the same conclusion. The substitutions of counsel were in virtually ALL CASES faked, which means that the notice of default, the notice of sale, the auction, the auction sale, the deed upon foreclosure are all void or voidable, depending upon state law. The proof of claim in bankruptcy is faked.

So now what? Those of you who have been following the blog for years know what I am going to say. Unless we change our legal system and throw out hundreds of years of statutory law, common law and standard practices in the real estate transactions, the last owner of the property still owns it. That would be the homeowner. The implications of this are enormous, I know. It means that even people who were foreclosed and evicted (illegally) from their homes have a right to claim ownership, move in, and possess the property — regardless of when it was. It means that there is a 92% probability that out of the 5 million families dispossessed from their homes, at least 4,500,000 of them could return to those properties.

So what would be the status of their ownership, possession and their obligation when their loan was funded? There are many technical issues that present themselves in this scenario, but generally speaking, if you check with any duly licensed attorney in the jurisdiction in which your property is located you will probably find that the following applies:

1. Legally the home is owned in fee simple absolute by the homeowner.

2. Other documents on the title registry will need to be removed through a lawsuit called “Quiet Title.” If there is any legislation required it will be to streamline the Quiet Title procedures.

3. Among the other documents to be removed or ignored, depending upon state law, is the mortgage or deed of trust signed at closing by the homeowner. See my next post on the validity of the original mortgage.

4. All of the foreclosure documents and all of the sale and deed documents from the foreclosure must be removed to have clear title.

5. If the arriving homeowner has purchased the home from another homeowner who was subject to one of these mortgages and/or foreclosures or if there is prior foreclosure the chain of title, all of those must be cleared in order to have clear title.

6. A title company will no longer issue title insurance (unless it is one of the under-capitalized shill title carriers started by the banks) without stating an exception to their commitment with respect to the issue of title in securitized loans and claims arising out of the fact that the foreclosures, transfers or satisfactions were not within the chain of title.

7. The obligation owed to unknown undisclosed creditors is not as was stated in the note on any of those securitized context transactions. There are varying degrees of misstatement in the note but the usual defects are that the actual creditor was never specified and the terms that the actual creditor received included promises from third parties (in the PSA) about payment of the monthly payment, payment of the interest and payment of the principal on each securitized mortgage. Thus the balance can never be known until the parties — all of them — provide an accounting.

8. In each state there is a cause of action for accounting, not necessarily known exactly under that name. You might also want to seek appointment of a receiver to make sure that the payments have been committed properly and not diverted, but that last point probably has the issue of standing attached to it — i.e., it is more properly brought by the investor.

9. If there is a balance due under the obligation it is unsecured, discharged in bankruptcy, and not subject to any security agreement in which any person or entity can make a claim to ownership of anything the homeowner owned, including the house that was the subject of foreclosure or will be subject to foreclosure.

10. Occupied homes by virtue of foreclosure sales that fall under this scope are probably subject to eviction or forcible detainer or unlawful detainer, depending upon the state. Thus the arriving homeowner would need to evict the people who are now living in the home. Again if legislation is to be passed, it should be to smooth the transition in such circumstances and establish a clear right of action for damages for those evicted through no fault of their own.

11. If there is a balance due under the obligation that arose when the loan was funded, then it is subject to offset for any damage claims that are owned by the homeowner for slander of title, trespass, civil theft, fraud, TILA violations, RESPA violations etc.

The Post finds problem in 92% of bank foreclosure filings

August 15, 2011 |

Filed underLenders <http://www.texasforeclosuredefensenetwork.com/blog/category/finance-sector/lenders/http://www.texasforeclosuredefensenetwork.com/blog/category/courts-nationwide/new-york/;
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Since last fall when the whole robo-signing scandal started banks are promising they won’t do it again. But evidences around every corner show the exact opposite: banks are still foreclosing on properties without any right to do it.

A recent probe comes from the New York Post. And the result: In a staggering 92 percent of the claims brought by creditors asserting the right to foreclose against bankrupt families in New York City and the close-in suburbs, banks and mortgage servicers couldn’t prove they had the right to kick the families out on the street, a three-month probe by The Post has shown.

The Post discovered that robosigned documents are still included in the foreclosure paperwork, or – another situation– banks are pressing foreclosures without the proper paperwork and so on.

After reviewing more than 150 Chapter 13 bankruptcy filings from June 2010 in New York’s Eastern and Southern federal court districts the team “put together a random sample of 40 cases where creditors such as banks – but more often loan servicers – filed proofs of claim for first mortgage debt.

The research unearthed claims riddled with robosigners, suspicious documents and outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from the original lender to the company now making claim against a local family for its home and thousands of dollars in questionable fees,” the Post writes.

The paperwork was seen by experienced foreclosure defense lawyers, and these experts agreed that the findings reflect a widespread pattern of malfeasance by banks and loan servicers.

“In-court borrowers are by definition broke and can’t hire document experts, but anybody who knows this terrain knows that stuff that looks this suspicious almost certainly is fraud,” says financial industry expert Yves Smith. “There are too many miraculous copies of documents showing up at the eleventh hour and nonsense like that to think this is clean.”

“The largest financial institutions in the US are doing it every day, and I have not seen it slow down or stop,” says Westchester attorney Linda Tirelli. “The game is always the same: Make up documents and foreclose as fast as you can.”

When the troubled homeowners face the foreclosure lawsuit they don’t have any lawyer to help them see through the paperwork servicers file. However, there are a few judges that have a critical eye, such as Judge Arthur Schack, or New York’s chief judge Jonathan Lippman.

In its investigation, the Post uncovered a pattern of problems centered on mortgage assignments – used when a mortgage is sold to a third party – and endorsements of notes, which is the paperwork that rides with the transfer of the mortgage giving the holder a rightful claim to foreclose.

These included:
* Missing or highly questionable endorsements of notes.
* Questionable timing of documents, including mortgage assignments by companies that were no longer in business on the date of the assignment.
* Signatures by robosigners — individuals who slapped their signature on hundreds of affidavits without attesting to their accuracy — on mortgage assignments.
* Proof-of-claim filings by mortgage servicers without documentation of their legal right to do so on behalf of the owner of the loan.
* Assignments created after the debtor filed for bankruptcy, when the law prevents a creditor from making any new claims.
* Mortgage assignments directly from the originator to the trustee for the securitized trust, bypassing the necessary intervening steps of transfer to the sponsor and depositor.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 17, 2011 3:20 AM
To: Charles Cox
Subject: THE MYTH OF FANNIE OR FREDDIE ACTUALLY "BUYING" MORTGAGES (In other words…check into CONSIDERATION…these are "contracts" afterall)

Neil Garfield – EDITOR’S ANALYSIS: I keep encountering the same myth, which is being overlooked by people on all sides; virtually none of the mortgages were ever sold to Fannie or Freddie. It doesn’t matter if they have it on their website as being owned by them. It doesn’t matter that pretenders are using false representations, fabricated documents and forged documents. The property was not sold pure and simple.

The "seller" in virtually every case was NOT the originator. And the originator never sold or transferred the obligation, note and mortgage to anyone. It doesn’t take a rocket scientist: ergo the property was not sold. Fannie and Freddie are holding zippo. Any money they paid was paid for nothing. Any property interest they are showing on their books is false.

TAXPAYERS are getting the shaft over and over again, while hidden liabilities for slander of title, trespass and a myriad of other claims pile up, for which the GSEs (Fannie and Freddie) could be liable. The money for the purchase of these loans came from taxpayers. What did taxpayers get? ZIPPO.

BY JENNIFER DIXON

DETROIT FREE PRESS STAFF WRITER

Key documents

Last summer, Fannie Mae executives decided the mortgage giant was “suffering delays in the processing of its foreclosures.”

These documents reveal how Fannie Mae addressed those delays, including a letter to GMAC Mortgage spelling out its new policies to assess compensatory fees and require banks to get its written permission to delay foreclosure sales on loans more than 12 months in arrears. The records also include letters to six lenders setting performance goals for the third quarter of 2010.

Tell us your story

Have you been through the nightmare of foreclosure? Have you struggled to get help from the federal government’s Making Home Affordable programs or the Hardest Hit Fund? Do you have a tale to tell? E-mail your story, 300 words or less, along with your e-mail address and phone number, to getpublished or by using the "Submit News" tab on the Free Press smartphone app. We’ll select the best and share them on freep .com .

Related Links

· Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules

· Programs for financially troubled homeowners haven’t helped much to date

· Who are Fannie Mae and Freddie Mac?

· How metro Detroit homeowners can get help

· One family’s story of heartbreak in mortgage scandal

· Homeowners share their frustrations: We got roadblocks, not help

· Persistence pays off after 18 months of faxes and late fees

· The true cost of foreclosure for lenders, homeowners, communities, neighbors all end up paying

· Mortgage principal reductions mired in controversy

· Trying to do the right thing leaves homeowner in shambles

· Disabled vet trades war in Iraq for battle over home

· Not getting it in writing costs Clawson grandma

· Income was too much — and too little

· Know your rights — and how to get help

· Fighting to save their homes

· How metro Detroit homeowners can get help

· Real estate brokers just want to move homes

· Fannie Mae and Freddie Mac’s fire sales dilute metro Detroit home values

· Who are Fannie Mae, Freddie Mac?

· Interactive map: Fannie Mae, Freddie Mac metro Detroit foreclosures sales compared to market value

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Part one of a three-part series.

• Part two: Fannie Mae and Freddie Mac’s fire sales are crippling metro Detroit communities, leaders say

• Part three: Homeowners share their frustrations: We got roadblocks, not help

Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules | How metro Detroit homeowners can get help | Who are Fannie Mae and Freddie Mac? | Programs for financially troubled homeowners haven’t helped much to date | One family’s story of heartbreak in mortgage scandal | How this report was compiled | Accountability, answers are lacking

In early December, a senior executive at Fannie Mae assured members of the Senate Banking Committee in Washington that the mortgage giant was doing everything possible to address the foreclosure crisis.

"Preventing foreclosures is a top priority for Fannie Mae," Terence Edwards, an executive vice president, told the panel. "Foreclosures hurt families and destabilize communities."

But confidential documents obtained by the Free Press show that Fannie Mae has pushed an agenda at odds with those public assurances.

The records cover Fannie Mae’s foreclosure decisions on more than 2,300 properties, a snapshot from among the millions of mortgages Fannie handles nationally. The documents show Fannie Mae has told banks to foreclose on some delinquent homeowners — those more than a year behind — even as the banks were trying to help borrowers save their houses, a violation of Fannie’s own policy.

Fannie Mae has publicly maintained that homeowners would not lose their houses while negotiating changes to mortgages under the federal Home Affordable Modification Program, or HAMP.

The Free Press also obtained internal records revealing that the taxpayer-supported mortgage giant has told banks that it expected them to sell off a fixed percentage of foreclosed homes. In one letter sent to banks around the country last year, a Fannie vice president made clear that Fannie expected 10%-12% of homes in foreclosure to proceed to sale.

Taken together, the documents offer an unprecedented window into how Fannie decides whether to allow borrowers to exhaust all options to keep their homes. "It’s scary, it really is," said Leisa Fenton of Clarkston, who is among an untold number of people whose homes were sold in foreclosure even though they had been assured their homes were safe while they sought mortgage relief from Washington.

Her family’s home was sold at auction in October. "We just keep praying the Lord is going to work it out," she said.

Alan White, a law professor at Valparaiso University and a leading national expert on the foreclosure crisis, reviewed the records for the Free Press and said they show Fannie Mae — which is regulated by the Federal Housing Finance Agency — is sabotaging the nation’s foreclosure prevention efforts and helping drive down home values.

"Fannie just wants to clean up its balance sheet and get these loans off the books while taxpayers are eating these losses," White said, referring to the multibillion-dollar federal bailout of Fannie Mae in 2008 and the rising cost to taxpayers.

"And Treasury and the FHFA are letting them get away with it. It’s a huge waste. Wealth is being destroyed, people are losing houses needlessly, and taxpayers are losing money."

Fannie Mae officials declined to be interviewed and would not address the issues raised in the records obtained by the Free Press, including a lengthy series of questions provided by e-mail.

But a former Fannie Mae executive, Javid Jaberi, whose name is on some of the documents, said the internal records merely reflect an effort by Fannie Mae to get banks to respond more quickly when loans are delinquent, even if that means pushing some foreclosed homes to sale.

In an interview Wednesday, Jaberi said there is plenty of blame to go around. Borrowers often didn’t understand their options. Banks weren’t doing enough to help borrowers to get mortgage relief. And HAMP’s documentation rules, he said, were too complex.

"Everyone is to blame," Jaberi said, including Fannie Mae.

Fannie spokesman Andrew Wilson said in a statement Fannie is "committed to preventing foreclosures whenever possible."

"We encourage homeowners to reach out as early as possible … to pursue modifications and other foreclosure prevention solutions."

Various lenders — Bank of America, GMAC Mortgage, CitiMortgage and Chase — would not discuss Fannie’s policies.

Records reveal foreclosure tactics

Fannie Mae and many of the nation’s top banks have faced considerable criticism for doing little to stem foreclosure sales, which grew by 1.6 million last year. Investigations by other news media outlets showed that Fannie Mae (and the banks that directly service home loans) help only a sliver of people promised relief, and often delay or bungle applications for modifications. Other reports showed Fannie has punished banks that were too slow to foreclose.

The documents obtained by the Free Press indicate, for the first time, that Fannie wasn’t simply indifferent to helping homeowners, but launched a concerted effort to force seriously delinquent borrowers from their homes.

Fannie’s foreclosure policy — what an August 2010 document calls "our new delay initiative" — focused on homeowners more than 12 months late on their mortgages, including people actively negotiating loan modifications. That stance conflicts with the government’s (and Fannie’s) rules, which are meant to insulate people while they seek loan relief under HAMP.

Mortgage companies, of course, can’t wait forever for delinquent borrowers to catch up on their payments. But critics argue that Fannie Mae’s confidential foreclosure policy is not only at odds with its public assurances, but adds to the inventory of vacant homes across the nation and lowers property values for everyone.

According to White, the Valparaiso professor, foreclosing on a home typically costs Fannie Mae far more than a successful loan modification. But, he and others say, Fannie is willing to absorb higher losses because it knows taxpayers — not Fannie Mae — will eventually reimburse the loss.

Since 2008, when the government took over Fannie Mae and its sister company, Freddie Mac, the mortgage giants have cost taxpayers $141 billion, with estimates that the bill could eventually reach as high as $389 billion.

Fannie Mae and Freddie Mac are significant players in the foreclosure crisis; they own or guarantee more than half of all existing single-family mortgages and about two-thirds of all new U.S. home mortgages. Fannie also administers the U.S. Treasury Department’s $29.9-billion foreclosure prevention initiative — Making Home Affordable, which includes HAMP — that was launched by President Barack Obama in 2009.

Everyone loses

Fannie Mae doesn’t lend directly to homeowners. It buys loans from banks, guarantees them, and relies on the banks to service the loans directly. Fannie funds its mortgage investments by issuing debt securities in domestic and international capital markets.

Fannie Mae, according to rules outlined on its Web site, has told banks that service its loans that they "should not proceed with a foreclosure sale" until a borrower has been evaluated for a loan modification under HAMP. That squares with HAMP’s written rules, which forbid banks from completing foreclosures without first weighing a person’s eligibility for a modification.

According to RealtyTrac, which tracks U.S. foreclosures, 1.6 million homes were sold in foreclosure last year, including 78,704 in Michigan. It’s unclear from the records how many could have kept their homes had Fannie not enacted its confidential foreclosure policy.

Metro Detroit leaders say Fannie Mae’s actions are destabilizing neighborhoods and driving down home values. They pleaded with federal regulators to help.

"Local governments are trying to keep people in their homes and keep property values up, and here you have a government bureaucracy ripping (those efforts) to shreds," said Wayne County Executive Robert Ficano.

"It doesn’t make sense."

Adam Taub, a Southfield lawyer who works with people trying to save their homes, said Fannie is "being very, very aggressive, very proactive, in trying to kick people out. … They’re putting a lot of pressure on" the banks.

He said he had several cases in which banks were willing to modify loans but Fannie Mae was unwilling to cooperate. He said he had no way to know whether Fannie’s policy affected those cases.

"They’re making their books look better, and making neighborhoods look worse, and that hurts everybody’s property values," Taub said.

The confidential records reviewed by the Free Press include notations on more than 2,300 homes in which banks asked Fannie to delay foreclosure sales while homeowners sought modifications or other relief, including short sales — in which a lender lets the borrower sell a home for less than what is owed.

In one instance, from August 2010, Bank of America requested a 45-day delay for a Wisconsin homeowner who owed $124,610 and was 32 months delinquent. The bank said the borrower was applying for a loan modification through HAMP and "it appears that all financial documents have been received and we are waiting for an underwriter to be assigned."

Fannie Mae’s response: "Per our new delay initiative, any loan over 12 months deliq must be on an active payment plan with monthly payments coming in. Therefore, this request to postpone is declined. Please proceed to sale."

IndyMac Mortgage Services sought a delay for a Hawaii borrower who provided all records required by HAMP. The homeowner, 22 months behind, owed $412,225. Fannie: "Proceed with foreclosure."

The records do not identify any homeowners by name.

Wilson, the Fannie Mae spokesman, would not address these or other specific documents, saying only that Fannie evaluates delay requests case by case and has approved some delays "if the situation warranted it."

Indeed, Fannie officials approved some brief delays, records show — with conditions.

In October, Bank of America sought a delay for a California borrower who was 24 months behind, owed $230,449 and had filled out a HAMP loan package. Fannie agreed to delay sale until early November, but noted:

"BANK OF AMERICA RESPONSIBLE FOR ALL FEES/COSTS ASSOCIATED WITH THIS POSTPONEMENT DUE TO DELAY IN PROCESSING … DOCS TIMELY."

Meg Burns, chief of policy at FHFA, which oversees Fannie Mae, said foreclosure sales are delayed "all the time. We suspend foreclosure processing all the time. … There are plenty of postponements."

Burns said if anyone is to blame for home losses, it’s the banks for not dealing sooner with homeowners.

FHFA officials also noted that Fannie and Freddie are adopting new rules in October that provide incentives and penalities to encourage servicers to work with delinquent borrowers at an early stage.

Edward DeMarco, FHFA’s acting director, has said the new policies should give homeowners a greater understanding of the process and minimize taxpayer losses by ensuring loans are serviced efficiently and fairly.

FHFA also noted that since Fannie and Freddie were taken into conservatorship, they have completed more than 900,000 loan modifications.

Fannie Mae’s foreclosure policy is also being applied to seriously delinquent borrowers in programs other than HAMP, records show.

In one case last October, Bank of America sought a delay for a Michigan borrower seeking a loan modification who owed $65,542 and was two years behind, but whose finances were improving.

"Borrower is reflecting positive monthly cash flow of $914.77 and may be able to afford a modified payment," the bank wrote. Fannie refused, noting the lengthy delinquency: "Proceed to sale."

Ira Rheingold, executive director of the National Association of Consumer Advocates, said, "It’s rarely in anyone’s best interest to kick out a struggling homeowner who is trying to stay in their home, particularly in cities like Detroit whose housing market is devastated."

He said it’s absurd Fannie is taking actions "devastating to the homeowners and communities they’re supposed to be serving. It really is obscene."

Jamison Brewer, a lawyer with Michigan Legal Services in Detroit, said Fannie’s actions are contrary to what borrowers seeking modifications are being told — that foreclosure sales are put on hold while they apply for HAMP.

"Our tax money went into Fannie," he said. "It’s just ridiculous."

Requests for short sale delays are likewise being denied, the internal records show.

In October, Bank of America sought a delay for a California borrower who owed $416,786, was 13 months behind, and trying to close a short sale. "LOAN IS IN DOCUMENT COLLECTION PHASE," the bank noted. "FILE HAS HAD 0 PREVIOUS POSTPONEMENTS." Fannie Mae declined, noting simply, "Too delinquent."

Sticking taxpayers with the losses

White, the Valparaiso professor, said Fannie’s decision to target homeowners who are more than a year delinquent doesn’t allow for changes in some people’s financial situations, such as a new job or higher pay.

He is among a bipartisan collection of critics who say Fannie is less concerned with helping homeowners than in pushing the cost of troubled mortgages to taxpayers.

For example, White said, if a home with a $200,000 mortgage is foreclosed and Fannie nets $80,000 from its sale, Fannie loses $120,000. But because Congress authorized the Treasury Department to reimburse Fannie as part of the government’s takeover, taxpayers eat the losses.

"Fannie would rather foreclose all the bad and marginal mortgages now, even at very high loss rates, while losses are on the taxpayer, so that when it is once again a private company, these risky mortgages will be gone, and will not result in losses for its shareholders," he said.

"Treasury and Congress have given Fannie a blank check, but Fannie knows the checkbook will be taken away sooner or later."

Fannie Mae has made it difficult in other ways for borrowers to keep their homes.

Take the case of a woman represented by lawyer Lorray Brown of the Michigan Poverty Law Program.

The Eaton County woman lost her home in foreclosure and was facing eviction when she persuaded a bank to lend her $170,000 to buy the property back from Fannie Mae. Brown said Fannie initially rejected her client’s offer, insisting on the full $184,000 the woman owed — $14,000 more than the woman could raise.

Fannie did not accept the woman’s offer until January, after months of wrangling. Had Fannie Mae won the fight, it would certainly have spent more than $14,000 on legal fees and foreclosures costs while displacing a family and leaving another home vacant.

Fannie lawyers referred questions to headquarters, which declined to comment.

Well before Edwards, the Fannie Mae executive, testified before the Senate committee that the mortgage giant was doing all it could to prevent foreclosures, Fannie Mae was making plans to punish banks that were not selling foreclosed homes quickly enough, records show. The records obtained by the Free Press buttress documents reported by the Washington Post earlier this year.

"Fannie Mae is suffering delays in the processing of its foreclosures," according to one unsigned, Aug. 31, 2010, memo. The memo, a "talking points" summary for Fannie Mae management, outlined its plans to fine banks for delaying foreclosure on seriously delinquent homeowners.

As an example, the memo notes, a bank would be fined $5,218 at the time of foreclosure on a house with a mortgage balance of $121,000 and 22 months late.

The memo said Fannie Mae was initially targeting mortgages 18 or more months delinquent to "scrub and clean up servicers’ existing portfolios."

In a June 18, 2010, letter, Jaberi, then Fannie Mae’s vice president, also cited fines in a letter to GMAC.

"Fannie Mae urges you to begin more closely managing delays in the processing of our foreclosure cases as soon as possible," Jaberi wrote, adding: "You must keep the contents of this letter and the requirements confidential."

In the interview Wednesday, Jaberi confirmed that versions of that letter went to all banks that serviced Fannie Mae mortgages.

Fannie Mae also sent letters in June 2010 warning at least six lenders that Fannie projected and expected "approximately 10%-12% of monthly foreclosure inventory will go to sale."

Bert Ely, a banking consultant based in Alexandria, Va., who reviewed the letters for the Free Press, said they show Fannie "wants to force these default situations into a foreclosure sale" and raised questions about whether Fannie is setting arbitrary targets.

"When you have a uniform approach like that, it makes you wonder whether they are just pushing action by the servicers irrespective of local market conditions," he said.

Kurt Eggert, a law professor at Chapman University in Orange, Calif., who has testified before Congress on mortgage issues, said it’s unrealistic to expect banks to hit uniform targets because "they have a different mix of mortgages. … And some are much better at modifying mortgages than others."

Jaberi denied that Fannie took a cookie-cutter approach with banks. Fannie was merely "trying to create a dialogue between Fannie Mae and the servicer. … These are nonperforming assets and need to be resolved. … We were putting more pressure on the servicers to do their jobs."

Alys Cohen, staff attorney for the National Consumer Law Center, noted that Fannie threatened no punishment to banks that denied a loan modification to qualified homeowners, but did threaten to punish banks that didn’t foreclose fast enough.

"That results in many qualified homeowners ending up in foreclosure," she said.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 17, 2011 9:41 AM
To: Charles Cox
Subject: MOST ORIGINAL MORTGAGE LIENS INVALID

MOST ORIGINAL MORTGAGE LIENS INVALID

Posted on August 17, 2011 by Neil Garfield

I held back on writing this post until I was sure beyond a reasonable doubt that I was right. I’ve said it one form or another, but not like this. It is my opinion (to be checked with licensed attorney) that most mortgage liens over the last 10 years+ were never perfected and improperly filed. If you check with cases involving mechanics liens, mortgage liens, bankruptcy etc., the issue is always about priority of liens and perfection of liens. The essential tests I have distilled from many sources are as follows:

1. The most important test of the perfection of a lien is whether the lienholder could issue a satisfaction of that lien.
2. The other statutory steps in establishing the lien and giving it the right place in the priority of the lien must be fulfilled to the letter. Each state differs slightly on such procedures.

Be careful here because this is not one size fits all. There are two classes of such mortgages, and this conclusion regarding the perfection, priority, enforcement and viability of the lien only applies to one class. The first class is the minority by far, but it is a significant minority. There were some actual lenders, apparently like World Savings, that did in fact make loans out of their own cash or credit. That they were later sold into the secondary market does nothing for you if you are challenging the original loan, which presumably was otherwise executed and properly filed. Hence, at the time of origination neither misrepresentation of the creditor nor the PSA were involved.

The other class, including subclasses, accounts for at least 85% of all loans during this period. In most cases the loan originator was either a thinly capitalized mortgage broker who was called “the lender” even though they never gave the borrower one penny and never intended to do so. If there were any borrower claims arising out of the loan transaction itself it would, the strategy goes, be filed against the loan originator (except now we know they were not the lender and were acting as an agent for an undisclosed principal).

The fact that the loan originator was not the lender/creditor means that the real creditor was outside the transaction. Thus a satisfaction of the obligation could only be given by or on behalf of the undisclosed creditor. By definition there is no way of knowing, but for off-record communication, who to go to for a satisfaction. Factually the Promissory Note is a lie. And therefore the “Security instrument” which misstates the terms itself, is based upon a document that does not properly recite the terms of repayment (i.e., including the terms of the PSA).

It does not properly recite the terms of repayment because (1) it provides a nominee instead of the real name of the creditor/lender and (2) it does include all the terms and parties to the deal (see the PSA). If MERS was used, you have a nominee for title, a nominee for creditor, and therefore no real party on the side of the lender, in terms of on-record activity. This results in the lien being imperfect or never perfected. Check the cases and statutes. This conclusion is unavoidable based upon the factual assumptions I have made here.

The focus on forgery, fabrication and misrepresentation (robo-signing) is important. After all this shows fraudulent intent. But it begs the question as to whether the original lien was perfected. And by the way (see previous post) invalidating the lien does not eliminate the obligation or even the possibility of a judgment lien if it is available to the creditor (depends upon the state).

So the narrow issue addressed here ONLY relates to the perfection of the mortgage or deed of trust, which is only one method of enforcement of a debt. These issues are important as to discharge-ability of the obligation in bankruptcy and enforceability of the putative lien in state or Federal Court. There are obvious ramifications as to lawsuits to Quiet Title as well.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, August 16, 2011 5:26 PM
To: Nancie Koerber
Subject: WTF?

The judge is Michael Mosman of the USDC for the District of Oregon, Portland Division. MERS is gloating over these decisions. Check out their newsroom – http://www.mersinc.org/newsroom/press_details.aspx?id=300

Although Judge Mosman cites Hooker, IMHO, his interpretation is way off. Mosman did what Florida’s 5th DCA did in the Taylor v. Deutsche ruling – take an extremely winding path in order to reach the conclusion that MERS has some sort of authority. To this extent, Mosman states that the infamous clause in every mortgage granting MERS certain rights "if necessary to comply with law or custom" grants MERS the right to receive payment of the obligation.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Monday, August 15, 2011 7:59 AM
To: Charles Cox
Subject: TILA Rescission – Maine Supreme Court – Tender Not Necessary When "Bank" Failed to Perform

Although the Pelletiers have not yet tendered to the bank the proceeds of the loan that they received from Ameriquest, the statute specifies that tender is not required until the creditor has performed its obligations under the law.

15 U.S.C.S. § 1635(b). The facts established in this summary judgment record indicate that the creditor—the bank—has not yet performed its obligation to “return to the obligor any money or property given as earnest money,

downpayment, or otherwise.” Id. Thus, the Pelletiers were not yet required to tender the proceeds to the bank, and the court did not err in imposing the remedy of rescission on summary judgment. Further proceedings are necessary, however, to define the scope of that remedy. Because the parties have not followed the process specified by statute with precision and clarity, the court may “otherwise order[]” appropriate procedures to give effect to the remedy of rescission. Id. Accordingly, although we affirm the court’s judgment granting the Pelletiers’ request for

rescission, we remand the matter for the court to determine how this rescission should be effectuated.

The entry is:

Summary judgment for the Pelletiers on the foreclosure complaint affirmed. Remanded for further proceedings to effectuate the rescission of the January 18, 2006, agreements.

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://CharlesCox.HersID.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

62165655-Deutsche-v-Pelletier-ME-Supreme-Rescission.pdf

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Monday, August 15, 2011 7:59 AM
To: Charles Cox
Subject: Bank of America Uses Attack Dog to Smear NY AG Schneiderman

The Roundup for August 15, 2011 »

Bank of America Uses Attack Dog to Smear NY AG Schneiderman
By: David Dayen Sunday August 14, 2011 6:02 pm	Tweet10

I could barely suppress a laugh when reading about Bank of America CEO Brian Moynihan begging Tim Geithner to settle the foreclosure fraud issue so they can get out from under their liability. As Yves Smith points out, if Tim Geithner had the power to get Bank of America out of their mess, he surely would have done it by now, before their stock dipped 36% in the last three weeks. Geithner simply doesn’t have jurisdiction over state courts, where many judges are simply not going to allow foreclosures when standing to foreclose cannot be proven (Moynihan apparently distinguished on a conference call between “states where foreclosure can take place” and “states where foreclosure is going through very slowly,” and he might as well have been distinguishing between states that respect the rule of law and states that don’t). Geithner may try, but he cannot compel Attorneys General in both parties to settle for pennies on the dollar and relinquish all of their liability for consumer protection violations and fraud upon state courts. He cannot influence investors who see a giant meal ticket in the form of forcing big banks to repurchase faulty mortgage backed securities. If there was a magic bullet in this debacle, it would already have been fired.

The problem is enough AGs are proceeding with mortgage lawsuits against banks so as to render that advantage moot. New York’s Eric Schneiderman is moving ahead in a very systematic way, and Delaware’s Beau Biden seems to be moving in concert. Massachusetts’ Martha Coakley is also pushing ahead, albeit on different mortgage issues. Nevada’s Catherine Masto has a major anti-Countrywide suit outstanding that she has no intention of dropping. Kamala Harris in California has nibbled at some foreclosure related issues and may proceed on a broader basis. Colorado’s John Suthers is apparently also likely not to participate in the settlement, which means he may file litigation.

Moreover, any state AG settlement does not restrict private parties’ rights to sue. It won’t stop the $10+ billion AIG action against Countrywide, nor will it bar the various private efforts to derail BofA’s $8.5 billion mortgage settlement. And it will not stop borrowers from using chain of title issues to fight foreclosures.

Best part of this article was learning in the last line that Lawrence DiRita, a former spokesman for Donald Rumsfeld, now flaks for Bank of America. Poetic.

So having figured out that the Feds cannot come riding to the rescue with another back-door bailout, Bank of America has settled on Plan B. They’ve decided to smear the AGs who are doing their job.

And they’re doing it in a very roundabout way. They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

A BNY Mellon spokesman told me the bank didn’t want to comment on the broader implications of the AG’s filing, but directed me to Kathryn Wylde, CEO of the Partnership for New York City, a business development non-profit. She said that the AG’s “careless action” hurts New York’s standing as a financial center.

“It’s disappointing from the standpoint of the business community that the AG would make a fraud accusation against a major financial institution — in the press,” she told me. “And to not have any consultation with the institution? The bank was blindsided by what appears to be an outrageous charge.” (The AG’s press office didn’t respond to my request of comment.)

BNYM DIRECTED the reporter to Wylde, incidentally. Wylde has done this before, back in November 2009, arguing that breaking up big banks would hurt New York City. This would be outrageous enough on its own. But Wylde happens to sit on the board of directors for the New York Federal Reserve (sub. reqd.).

So you have a board member for an federal overseer of banks on Wall Street (Wylde claims that the NY Fed “serves no regulatory function,” which is just absolutely not true) attacking a state regulator for stepping into a settlement where he has found massive fraud in a preliminary investigation. She’s taking up for BNYM, which the NY Fed oversees, against the state Attorney General. This is just a classic case of regulatory capture.

There’s almost no way this is not coordinated. Wylde is pretty powerful in New York circles, I understand, and she’s raising fears of a slowdown to New York City’s main economic engine to stall regulatory oversight. The banks must continue looting, the story goes, or they’ll stop creating jobs in Manhattan. I don’t think Schneiderman is likely to fold under this attempt at pressure, especially because the evidence keeps moving in his favor, rather than the other way. The New York Post, of all papers, has a damning story on this today.

In a staggering 92 percent of the claims brought by creditors asserting the right to foreclose against bankrupt families in New York City and the close-in suburbs, banks and mortgage servicers couldn’t prove they had the right to kick the families out on the street, a three-month probe by The Post has shown […]

The Post dug through more than 150 Chapter 13 bankruptcy filings from June 2010 in New York’s Eastern and Southern federal court districts — covering the five boroughs, Long Island and nearby northern counties including Westchester–in search of local foreclosure or pre-foreclosure cases. We then put together a random sample of 40 cases where creditors such as banks — but more often loan servicers — filed proofs of claim for first mortgage debt.

The research unearthed claims riddled with robosigners, suspiciousdocuments and outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from the original lender to the company now making claim against a local family for its home and thousands of dollars in questionable fees.

This is essentially the same investigation that Abigail Field undertook for Fortune a couple months ago. The New York freakin’ Post now joins Fortune in having done more of an investigation into foreclosure fraud than the 50-state foreclosure fraud task force.

But some of the AGs who believe in their job description are starting to catch up here. And try as the elites and oligarchs might to stop them, a tipping point is being reached where the public may understand just how much the mortgage industry wrecked the system of private property in this country.

UPDATE: Clearing up something from up above – Wylde specifically claimed that the board of directors of the NY Fed serves no regulatory function, not that the NY Fed itself doesn’t. She’s on solid ground with that statement, which I misinterpreted. It hardly negates the position she’s put herself into with this attack. There is such a thing as appearance of impropriety. And Wylde has played this game before, equating any regulatory effort on a bank to destroying New York City. And that’s not in any way above board.

http://news.firedoglake.com/2011/08/14/bank-of-america-uses-attack-dog-to-smear-ny-ag-schneiderman/

Charles
Charles Wayne Cox – Oregon State Director for the National Homeowners Cooperative
Email: mailto:Charles
Websites: http://CharlesCox.HersID.com; www.BayLiving.com; and www.ForensicLoanAnalyst.com
P.O. Box 3065
Central Point, OR 97502
(541) 727-2240 direct
(541) 610-1931 eFax

MERScurseProtect America’s Dream

The LEGAL GroupPRO-NETWORK

JOIN NHC, IT’S FREE

Paralegal; CA Licensed Real Estate Broker; Certified Forensic Loan Analyst. Litigation Support; Mortgage and Real Estate Expert Witness Services.

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 10, 2011 11:43 AM
To: Charles Cox
Subject: WEISBAND APPEAL: IS EVIDENCE REQUIRED OR CAN WE JUST TAKE THE BANKS’ WORD FOR IT?

WEISBAND APPEAL: IS EVIDENCE REQUIRED OR CAN WE JUST TAKE THE BANKS’ WORD FOR IT?

Posted on August 10, 2011 by Neil Garfield

SEE WEISBAND STATEMENT OF ISSUES ON APPEAL 10-1239 – attached…

FILED BY RONALD RYAN, ESQ. IN TUCSON, AZ

Debtor informed the Bankruptcy Court (herein, “Court” as the trial court) that it had expert testimony to support Debtor’s challenge to the Motion, and informed the Court that the evidence in the record contained certain indicators that also supported Debtor’s challenge. Primarily Debtor contends that the Loan, Note and Deed of Trust (“DOT”) were intended for Securitization into a Mortgage Backed Security (“MBS”) Trust, and that Appellee was not, either at the time the bankruptcy case was filed, nor at the time the motion for relief from stay was filed: the real Article 3 Holder of the Note; nor the owner of the Loan; nor the party possessed of the DOT rights, including the security interest in the Property. Debtor alleged that the merger agreement was irrelevant. Debtor alleged that the Loan, Note and DOT rights had been sold or otherwise transferred to a completely separate entity, within weeks after the original loan closed, to a completely separate entity from either FHHLC, FTBNA and FHHL.

The Court did not hold a single evidentiary hearing. It did not require a single piece of evidence or testimony to be admitted in a legal proceeding, subject to cross examination and the right to present controverting evidence. The Court did not require that the evidence and the purport of said evidence met even the standard of summary judgment evidence. Debtor was not afforded an opportunity to perform reasonable discovery, despite the fact that Debtor informed the Court that they intended to immediately serve written discovery requests.

1. Did the Court err in finding that FHHL proved itself to have Constitutional Standing and Real Party in Interest status (“RPI”) (Prudential Standing), without having to present any evidence in an admissible form, over Debtor’s objection?
2. Even if FHHL had established a prima faci case that it had Constitutional Standing and Prudential Standing, was it a denial of due process, or in contravention of statutory law or the applicable rules of procedure to deny Debtor an evidentiary hearing?
3. was it error to deny Debtor the right to a reasonable amount of discovery within a reasonable period of time in this case?
4. What evidence is necessary to prove Constitutional Standing and Prudential Standing in the context of a Motion for Relief from Stay in Bankruptcy Court on residential real estate?

weisband-statement-of-issues-on-appeal-10-1239.pdf