Tag: Foreclosure

penalty of purjury litigation CCP 2015.5

I have attached an article written by Robert Finlay of Wright, Finlay & Zak LLP. They have written an amicus curae brief which I have been intending to post for sometime, and will be doing it within the next day or two. This article basically outlines the banks’ arguments regarding the declaration at the end of every NOD. Just wanted to give everyone a heads up if they didn’t already know.

-Catarina

Taken from http://www.mortgageorb.com

A California-Brewed Recipe For Litigation
in From The Orb
By T. Robert Finlay on Friday 19 March 2010

comments: 0

REQUIRED READING: As many readers may recall, the California Legislature enacted Civil Code Section (§) 2923.5 in July 2008, requiring that the foreclosing party contact the borrower in an attempt to work out a loan modification prior to initiating foreclosure.

The purpose of the legislation was to avoid any unnecessary foreclosure sales in an attempt to stabilize California’s hard-hit housing market. A year and a half later, borrowers who are either unable or unwilling to modify their loans are filing lawsuits at an alarming rate over perceived technical violations of §2923.5 in an effort to delay foreclosures.

Legal challenges
Civil Code §2923.5 was designed to slow down the foreclosure process and ensure that borrowers have an opportunity to discuss foreclosure alternatives with servicers. In substance, §2923.5 did not require servicers to do anything that they were not already doing; instead, it required that the borrower contact take place in a specific manner. The methods of complying with §2923.5 have been discussed ad naseum in prior articles and internal servicing meetings. The purpose of this article is not to rehash the compliance issues, but to discuss the litigation that §2923.5 has spawned.

Many borrowers are trying to take advantage of this opportunity not by seeking a loan modification, but rather by challenging the form of the declaration attached to or included in the notice of default. Specifically, borrowers are claiming that the §2923.5 declaration must be signed under the penalty of perjury and that it must specifically identify the method of compliance with §2923.5 (i.e., whether the borrower was contacted, a due-diligence attempt was made to contact the borrower, or that one of the exceptions applied).

This has resulted in further delay in the foreclosure process for the individual borrowers that have filed lawsuits and unnecessary legal fees for the beneficiaries, servicers and trustees concerned with the individual properties. Because efforts by the United Trustees Association to amend §2923.5 have not gotten off the ground, the industry’s only chance to clear up the confusion created by §2923.5 and to put a stop to the onslaught of litigation is a published decision from the Court of Appeals. The good news is that we may be close to an appellant decision.

Penalty of perjury
The original version of §2923.5 required a declaration “from” the servicer that it has either contacted the borrower, tried to contact the borrower or that the borrower has surrendered the property. The language in §2923.5 has since been “cleaned up” to require a declaration “that” the servicer has contacted the borrower, tried to contact the borrower or that one of the exceptions applied. Neither §2923.5 nor its legislative history make any mention that the declaration must be signed under penalty of perjury.

Borrowers argue that because a different statute, Code of Civil Procedure §2015.5, allows a statement made under penalty of perjury to be substituted for a statement that must otherwise be sworn, all declarations must be made under penalty of perjury. While this argument misreads sections 2015.5 and 2923.5, it is often sufficient to confuse judges if the matter is not properly briefed, which is often the case.

The plain language of §2923.5 does not require that the declaration be made under penalty of perjury. Any court that so holds will be inserting this requirement into the statute. Finding that a notice of default is invalid because the declaration was not made under penalty of perjury would also put form over substance in the cases where the servicer has contacted the borrower or made a diligent effort to contact the borrower but where the trustee failed to execute the declaration under the penalty of perjury.

Finally, as a practical matter, a trustee (the party that normally executes the notice of default) would not have personal knowledge of the servicer’s contact, or lack thereof, with the borrower. It is illogical to conclude that the Legislature intended for the trustee to make the declaration under penalty of perjury concerning the conduct of another party.

Borrower contact
Many §2923.5 declarations quote directly from the code section in stating that “the mortgagee, beneficiary or authorized agent has contacted the borrower, has tried with due diligence to contact the borrower as required by [§2923.5] or that no contact was required pursuant to subdivision (h).”

Borrowers filing suit claim that the §2923.5 declaration is deficient if it does not specifically state whether the servicer (a) contacted the borrower, (b) made a diligent effort to contact the borrower or (c) one of the exceptions applied. Again, borrowers are asking the courts to put form over substance in focusing on the technical execution, rather than asking whether the servicer complied with the intent of the statute.

The plain language of the statute does not require this level of specificity in §2923.5(b), but it is important to note that the Legislature did require this level of specificity in §2923.5(c). Courts must assume that the “Legislature knew what it was saying and meant what it said” and, therefore, should not impose requirements that the Legislature intentionally left out.

As previously described, the reason for enacting §2923.5 was to stabilize the California housing market and state and local economies, which the Legislature felt were being threatened by the “skyrocketing residential property foreclosure rate in California.” If California courts are swayed by borrowers’ arguments and hold that the notices of default recorded since July 2008 are void, the California housing market may be paralyzed by uncertainty.

According to RealtyTrac, more than 250,000 trustee sales took place in the state of California in 2009. Title to each of these properties, regardless of whether the property is still held by the foreclosing beneficiary or has since been sold to a third party, could be in question, resulting in the exact opposite of what the Legislature intended when it created 2923.5.

For this reason, and in order to stop the daily filing of new cases challenging the form of the §2923.5 declaration, the industry needs some guidance from the California Court of Appeals.

Help may be on its way. In the case of Mabry v. Superior Court of Orange County, the Court of Appeal, Fourth District, recently accepted a borrower’s Writ of Mandate on the exact issues discussed in this article. The Court of Appeals has set a briefing schedule and is accepting Amicus Curiae Briefs from interested parties. An amicus brief has been filed on behalf of the United Trustees Association and the California Mortgage Association.
Hopefully, additional briefs will be filed before the matter is heard on the court’s May calendar. Until then, the industry will have to continue to face the rising tide.

No Default The Servicer is making the payments !!!

In the sercuritization game there are many co-obligors and you may not be in default after all. In the pooling agreement the servicer must agree to advance payment in the event of a missed payment by debtor.

Who is the obligor? Is there a default? Remember – this is financial engineering at its best. This is the American way to be creative and inventful. These guys are so good that homeowners can stop paying their loan and the creditors get paid anyway. They just forgot to tell the homeowners – and the courts. Some people call this forgetfulness fraud upon the court.

When they added the loans into the pool they attached numerous conditions to them. What might some of those conditions be? One of them is a condition for the servicer (making them an obligor). If the servicer doesn’t receive the homeowners payment, they MUST advance the payment (principal and interest) to keep the flow of revenue to the creditors (read this in the SEC filings). Don’t believe me? Think it can’t be proven? Read on …

The following is in regards to the IndyMac INDX 2005-AR7 trust …

Let’s look at the April 2010 loan level files. Look at the these specific fields (for loan #120600243):

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
523275.38 939.51 0 0 522335.87 939.51 2956.3 0.04625 2016.79 0.00375 163.52 0.0425 1853.27 0.000055 2.4 0 0 165.92 0.0424451 1850.87

Now look at the March 2010 loan level files. Look at these same specific fields (again for loan #120600243).

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
524211.28 935.9 0 0 523275.38 935.9 2956.3 0.04625 2020.4 0.00375 163.82 0.0425 1856.58 0.000055 2.4 0 0 166.22 0.042445 1854.18

(Note the ending balance for March 2010 is 523275.38 – how come the balance is going DOWN?). On the March 2010 loan level files the servicer is also reporting the account is 90+ days delinquent. The homeowner is not and has not been making payments.

Beginning balance is 523,275.38 and ending balance is 522,335.87!!!

Scheduled Principal is 939.51 and the total principal is 939.51

523,275.38 – 939.51 = 522,335.87 (they show the principle has been reduced!)

Scheduled payment is 2956.30

Scheduled Interest is 2016.79 and net interest is 1853.27

939.51 + 2016.79 = 2956.30 (the scheduled payment)

Servicing fee = 163.52

2016.79 – 163.52 = 1853.27 (net interest)

Total PTR Interest is 1850.87 (Trustee fee is 2.40 so 1850.87 + 2.40 = 1853.27 which is the net interest)

The reason they have to ADVANCE the fees is because the fees are still paid and (apparently) come out of the interest portion of the payment.

This homeowner “might” owe the money to somebody, but not the creditor as the creditor has received the payment in full. Remember – this is a STATEMENT to the investors describing what they were PAID. The party foreclosing is not entitled to power of sale as they are not the creditor. The creditor has received all payments and the homeowner has not defaulted.

The method used seems to be inconsistent between deals. I checked for another homeowner in another IndyMac Trust (IndyMac RAST 2007-A5) and the homeowner had interest only payments (so the principal didn’t go down) however, the interest looks like it is being paid. For other homeowners in this deal they are using the “curtailment” field and the ending principal balance is RISING.

This is just the statement to the certifiateholders. You can BET the sub-servicer and the master servicer are keeping full accounting records that they are NOT reporting to the homeowner, the investors or the courts.

Double dipping They foreclose, Get Insurance, Get Tarp, Get yeild prem, Bailout our tax money then they evict…

See this motion for discovery it shows all the sources of recovery for the lenders it also shows the trustees take the money and don’t even allocate to the investors but keep it

remic-brief-with-exhibits-and-bkr-decision-champerty-distribution-report-appraisal-reduction-event

Latest on MERS and “possession of the Note”

There is a great case re MERS’ authority to operate in CA since it is NOT registered to do business. The case is Champlaie. It
states that MERS is not a foreign lending institution, nor is it creating evidences.

The case is also interesting since it discusses why those who foreclose do not have to be in possession of the promissory note.Here are three paragraphs below from the court, although they are taken from different pages.
It is not helpful for us but the court does question why those who foreclose do not have to be in possession of the note.

“Several courts have held that this language demonstrates that possession of the note is not required, apparently concluding that the statute authorizes initiation of foreclosure by parties who would not be expected to possess the
note. See, e.g., Spencer v. DHI Mortg. Co., No. 09-0925, 2009 U.S. Dist. LEXIS 55191, *23-*24, 2009 WL 1930161 (E.D. Cal. June 30, 2009) (O’Neill, J.).
However, the precise reasoning of these cases is unclear.FN14”

“To say that a trustee’s duties are strictly limited does not appear to this court to preclude possession of the note as a prerequisite to foreclosure. On the other hand, perhaps it is not unreasonable to suggest that such a prerequisite imposes a nonstatutory duty.”

“At some point, however, the opinion of a large number of decisions, while not in a sense binding, are by virtue of the sheer number, determinative. I cannot conclude that the result reached by the district courts is unreasonable or does not accord with the law. I further note that this conclusion is not obviously at odds with the policies underlying the California statutes. The apparent purpose
of requiring possession of a negotiable instrument is to avoid fraud. In the context of non-judicial foreclosures, however, the danger of fraud is minimized by the requirement that the deed of trust be recorded, as must be any assignment or substitution of the parties thereto. While it may be that requiring production of the note would have done something to limit the mischief that led to the economic pain the nation has suffered, the great weight of authority has reasonably concluded that California law does not impose this requirement.”

Ortiz v. Accredited Home Lenders

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
Docket Number available at www.versuslaw.com
Citation Number available at www.versuslaw.com
July 13, 2009

ERNESTO ORTIZ; ARACELI ORTIZ, PLAINTIFFS,
v.
ACCREDITED HOME LENDERS, INC.; LINCE HOME LOANS; CHASE HOME FINANCE, LLC; U.S. BANK NATIONAL ASSOCIATION, TRUSTEE FOR JP MORGAN ACQUISITION TRUST-2006 ACC; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.

The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER GRANTING MOTION TO DISMISS Doc. No. 7

On February 6, 2009, Plaintiffs Ernesto and Araceli Ortiz (“Plaintiffs”) filed a complaint in the Superior Court of the State of California, County of San Diego, raising claims arising out of a mortgage loan transaction. (Doc. No. 1, Exh. 1.) On March 9, 2009, Defendants Chase Home Finance, LLC (“Chase”) and U.S. Bank National Association (“U.S. Bank”) removed the action to federal court on the basis of federal question jurisdiction, 28 U.S.C. § 1331. (Doc. No. 1.) Plaintiffs filed a First Amended Complaint on April 21, 2009, naming only U.S. Bank as a defendant and dropping Chase, Accredited Home Lenders, Inc., and Lince Home Loans from the pleadings. (Doc. No. 4, “FAC.”) Pending before the court is a motion by Chase and U.S Bank to dismiss the FAC for failure to state a claim pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6). (Doc. No. 7, “Mot.”) Because Chase is no longer a party in this matter, the court construes the motion as having been brought only by U.S. Bank. Plaintiffs oppose the motion. (Doc. No. 12, “Opp’n.”) U.S. Bank submitted a responsive reply. (Doc. No. 14, “Reply.”) Pursuant to Civ.L.R. 7.1(d), the matter was taken under submission by the court on June 22, 2009. (Doc. No. 12.)

For the reasons set forth below, the court GRANTS the motion to dismiss.

I. BACKGROUND

Plaintiffs purchased their home at 4442 Via La Jolla, Oceanside, California (the “Property”) in January 2006. (FAC ¶ 3; Doc. No. 7-2, Exh. 1 (“DOT”) at 1.) The loan was secured by a Deed of Trust on the Property, which was recorded around January 10, 2006. (DOT at 1.) Plaintiffs obtained the loan through a broker “who received kickbacks from the originating lender.” (FAC ¶ 4.) U.S. Bank avers that it is the assignee of the original creditor, Accredited Home Lenders, Inc. (FAC ¶ 5; Mot. at 2, 4.) Chase is the loan servicer. (Mot. at 4.) A Notice of Default was recorded on the Property on June 30, 2008, showing the loan in arrears by $14,293,08. (Doc. No. 7-2, Exh. 2.) On October 3, 2008, a Notice of Trustee’s Sale was recorded on the Property. (Doc. No. 7-2, Exh. 4.) From the parties’ submissions, it appears no foreclosure sale has yet taken place.

Plaintiffs assert causes of action under Truth in Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”), the Perata Mortgage Relief Act, Cal. Civil Code § 2923.5, the Foreign Language Contract Act, Cal. Civ. Code § 1632, the California Unfair Business Practices Act, Cal. Bus. Prof. Code § 17200 et seq., and to quiet title in the Property. Plaintiffs seek rescission, restitution, statutory and actual damages, injunctive relief, attorneys’ fees and costs, and judgments to void the security interest in the Property and to quiet title.

II. DISCUSSION

A. Legal Standards

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the pleadings. De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). In evaluating the motion, the court must construe the pleadings in the light most favorable to the plaintiff, accepting as true all material allegations in the complaint and any reasonable inferences drawn therefrom. See, e.g., Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). While Rule 12(b)(6) dismissal is proper only in “extraordinary” cases, the complaint’s “factual allegations must be enough to raise a right to relief above the speculative level….” U.S. v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981); Bell Atlantic Corp. v. Twombly, 550 US 544, 555 (2007). The court should grant 12(b)(6) relief only if the complaint lacks either a “cognizable legal theory” or facts sufficient to support a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

In testing the complaint’s legal adequacy, the court may consider material properly submitted as part of the complaint or subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Furthermore, under the “incorporation by reference” doctrine, the court may consider documents “whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff’s] pleading.” Janas v. McCracken (In re Silicon Graphics Inc. Sec. Litig.), 183 F.3d 970, 986 (9th Cir. 1999) (internal quotation marks omitted). A court may consider matters of public record on a motion to dismiss, and doing so “does not convert a Rule 12(b)(6) motion to one for summary judgment.” Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by Astoria Fed. Sav. and Loan Ass’n v. Solimino, 501 U.S. 104, 111 (1991). To this end, the court may consider the Deed of Trust, Notice of Default, Substitution of Trustee, and Notice of Trustee’s Sale, as sought by U.S. Bank in their Request for Judicial Notice. (Doc. No. 7-2, Exhs. 1-4.)

B. Analysis

A. Truth in Lending Act

Plaintiffs allege U.S. Bank failed to properly disclose material loan terms, including applicable finance charges, interest rate, and total payments as required by 15 U.S.C. § 1632. (FAC ¶¶ 7, 14.) In particular, Plaintiffs offer that the loan documents contained an “inaccurate calculation of the amount financed,” “misleading disclosures regarding the…variable rate nature of the loan” and “the application of a prepayment penalty,” and also failed “to disclose the index rate from which the payment was calculated and selection of historical index values.” (FAC ¶ 13.) In addition, Plaintiffs contend these violations are “obvious on the face of the loans [sic] documents.” (FAC ¶ 13.) Plaintiffs argue that since “Defendant has initiated foreclosure proceedings in an attempt to collect the debt,” they may seek remedies for the TILA violations through “recoupment or setoff.” (FAC ¶ 14.) Notably, Plaintiffs’ FAC does not specify whether they are requesting damages, rescission, or both under TILA, although their general request for statutory damages does cite TILA’s § 1640(a). (FAC at 7.)

U.S. Bank first asks the court to dismiss Plaintiffs’ TILA claim by arguing it is “so summarily pled that it does not ‘raise a right to relief above the speculative level …'” (Mot. at 3.) The court disagrees. Plaintiffs have set out several ways in which the disclosure documents were deficient. In addition, by stating the violations were apparent on the face of the loan documents, they have alleged assignee liability for U.S. Bank. See 15 U.S.C. § 1641(a)(assignee liability lies “only if the violation…is apparent on the face of the disclosure statement….”). The court concludes Plaintiffs have adequately pled the substance of their TILA claim.

However, as U.S. Bank argues, Plaintiffs’ TILA claim is procedurally barred. To the extent Plaintiffs recite a claim for rescission, such is precluded by the applicable three-year statute of limitations. 15 U.S.C. § 1635(f) (“Any claim for rescission must be brought within three years of consummation of the transaction or upon the sale of the property, whichever occurs first…”). According to the loan documents, the loan closed in December 2005 or January 2006. (DOT at 1.) The instant suit was not filed until February 6, 2009, outside the allowable three-year period. (Doc. No. 1, Exh. 1.) In addition, “residential mortgage transactions” are excluded from the right of rescission. 15 U.S.C. § 1635(e). A “residential mortgage transaction” is defined by 15 U.S.C. § 1602(w) to include “a mortgage, deed of trust, … or equivalent consensual security interest…created…against the consumer’s dwelling to finance the acquisition…of such dwelling.” Thus, Plaintiffs fail to state a claim for rescission under TILA.

As for Plaintiffs’ request for damages, they acknowledge such claims are normally subject to a one-year statute of limitations, typically running from the date of loan execution. See 15 U.S.C. §1640(e) (any claim under this provision must be made “within one year from the date of the occurrence of the violation.”). However, as mentioned above, Plaintiffs attempt to circumvent the limitations period by characterizing their claim as one for “recoupment or setoff.” Plaintiffs rely on 15 U.S.C. § 1640(e), which provides:

This subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided by State law.

Generally, “a defendant’s right to plead ‘recoupment,’ a ‘defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded,’ … survives the expiration” of the limitations period. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 415 (1998) (quoting Rothensies v. Elec. Storage Battery Co., 329 U.S. 296, 299 (1946) (internal citation omitted)). Plaintiffs also correctly observe the Supreme Court has confirmed recoupment claims survive TILA’s statute of limitations. Id. at 418. To avoid dismissal at this stage, Plaintiffs must show that “(1) the TILA violation and the debt are products of the same transaction, (2) the debtor asserts the claim as a defense, and (3) the main action is timely.” Moor v. Travelers Ins. Co., 784 F.2d 632, 634 (5th Cir. 1986) (citing In re Smith, 737 F.2d 1549, 1553 (11th Cir. 1984)) (emphasis added).

U.S. Bank suggests Plaintiffs’ TILA claim is not sufficiently related to the underlying mortgage debt so as to qualify as a recoupment. (Mot. at 6-7.) The court disagrees with this argument, and other courts have reached the same conclusion. See Moor, 784 F.2d at 634 (plaintiff’s use of recoupment claims under TILA failed on the second and third prongs only); Williams v. Countrywide Home Loans, Inc., 504 F.Supp.2d 176, 188 (S.D. Tex. 2007) (where plaintiff “received a loan secured by a deed of trust on his property and later defaulted on the mortgage payments to the lender,” he “satisfie[d] the first element of the In re Smith test….”). Plaintiffs’ default and U.S. Bank’s attempts to foreclose on the Property representing the security interest for the underlying loan each flow from the same contractual transaction. The authority relied on by U.S. Bank, Aetna Fin. Co. v. Pasquali, 128 Ariz. 471 (Ariz. App. 1981), is unpersuasive. Not only does Aetna Finance recognize the split among courts on this issue, the decision is not binding on this court, and was reached before the Supreme Court’s ruling in Beach, supra. Aetna Fin., 128 Ariz. at 473,

Nevertheless, the deficiencies in Plaintiffs’ claim become apparent upon examination under the second and third prongs of the In re Smith test. Section 1640(e) of TILA makes recoupment available only as a “defense” in an “action to collect a debt.” Plaintiffs essentially argue that U.S. Bank’s initiation of non-judicial foreclosure proceedings paves the path for their recoupment claim. (FAC ¶ 14; Opp’n at 3.) Plaintiffs cite to In re Botelho, 195 B.R. 558, 563 (Bkrtcy. D. Mass. 1996), suggesting the court there allowed TILA recoupment claims to counter a non-judicial foreclosure. In Botelho, lender Citicorp apparently initiated non-judicial foreclosure proceedings, Id. at 561 fn. 1, and thereafter entered the plaintiff’s Chapter 13 proceedings by filing a Proof of Claim. Id. at 561. The plaintiff then filed an adversary complaint before the same bankruptcy court in which she advanced her TILA-recoupment theory. Id. at 561-62. The Botelho court evaluated the validity of the recoupment claim, taking both of Citicorp’s actions into account — the foreclosure as well as the filing of a proof of claim. Id. at 563. The court did not determine whether the non-judicial foreclosure, on its own, would have allowed the plaintiff to satisfy the three prongs of the In re Smith test.

On the other hand, the court finds U.S. Bank’s argument on this point persuasive: non-judicial foreclosures are not “actions” as contemplated by TILA. First, § 1640(e) itself defines an “action” as a court proceeding. 15 U.S.C. § 1640(e) (“Any action…may be brought in any United States district court, or in any other court of competent jurisdiction…”). Turning to California law, Cal. Code Civ. Proc. § 726 indicates an “action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property” results in a judgment from the court directing the sale of the property and distributing the resulting funds. Further, Code § 22 defines an “action” as “an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.” Neither of these state law provisions addresses the extra-judicial exercise of a right of sale under a deed of trust, which is governed by Cal. Civ. Code § 2924, et seq. Unlike the situation in Botelho, U.S. Bank has done nothing to bring a review its efforts to foreclose before this court. As Plaintiffs concede, “U.S. Bank has not filed a civil lawsuit and nothing has been placed before the court” which would require the court to “examine the nature and extent of the lender’s claims….” (Opp’n at 4.) “When the debtor hales [sic] the creditor into court…, the claim by the debtor is affirmative rather than defensive.” Moor, 784 F.2d at 634; see also, Amaro v. Option One Mortgage Corp., 2009 WL 103302, at *3 (C.D. Cal., Jan. 14, 2009) (rejecting plaintiff’s argument that recoupment is a defense to a non-judicial foreclosure and holding “Plaintiff’s affirmative use of the claim is improper and exceeds the scope of the TILA exception….”).

The court recognizes that U.S. Bank’s choice of remedy under California law effectively denies Plaintiffs the opportunity to assert a recoupment defense. This result does not run afoul of TILA. As other courts have noted, TILA contemplates such restrictions by allowing recoupment only to the extent allowed under state law. 15 U.S.C. § 1640(e); Joseph v. Newport Shores Mortgage, Inc., 2006 WL 418293, at *2 fn. 1 (N.D. Ga., Feb. 21, 2006). The court concludes TILA’s one-year statute of limitations under § 1635(f) bars Plaintiffs’ TILA claim.

In sum, U.S. Bank’s motion to dismiss the TILA claim is granted, and Plaintiffs’ TILA claims are dismissed with prejudice.

B. Perata Mortgage Relief Act, Cal. Civ. Code § 2923.5

Plaintiffs’ second cause of action arises under the Perata Mortgage Relief Act, Cal. Civ. Code § 2923.5. Plaintiffs argue U.S. Bank is liable for monetary damages under this provision because it “failed and refused to explore” “alternatives to the drastic remedy of foreclosure, such as loan modifications” before initiating foreclosure proceedings. (FAC ¶¶ 17-18.) Furthermore, Plaintiffs allege U.S. Bank violated Cal. Civ. Code § 2923.5(c) by failing to include with the notice of sale a declaration that it contacted the borrower to explore such options. (Opp’n at 6.)

Section 2923.5(a)(2) requires a “mortgagee, beneficiary or authorized agent” to “contact the borrower in person or by telephone in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure.” For a lender which had recorded a notice of default prior to the effective date of the statute, as is the case here, § 2923.5(c) imposes a duty to attempt to negotiate with a borrower before recording a notice of sale. These provisions cover loans initiated between January 1, 2003 and December 31, 2007. Cal. Civ. Code § 2923.5(h)(3)(i).

U.S. Bank’s primary argument is that Plaintiffs’ claim should be dismissed because neither § 2923.5 nor its legislative history clearly indicate an intent to create a private right of action. (Mot. at 8.) Plaintiffs counter that such a conclusion is unsupported by the legislative history; the California legislature would not have enacted this “urgency” legislation, intended to curb high foreclosure rates in the state, without any accompanying enforcement mechanism. (Opp’n at 5.) The court agrees with Plaintiffs. While the Ninth Circuit has yet to address this issue, the court found no decision from this circuit where a § 2923.5 claim had been dismissed on the basis advanced by U.S. Bank. See, e.g. Gentsch v. Ownit Mortgage Solutions Inc., 2009 WL 1390843, at *6 (E.D. Cal., May 14, 2009)(addressing merits of claim); Lee v. First Franklin Fin. Corp., 2009 WL 1371740, at *1 (E.D. Cal., May 15, 2009) (addressing evidentiary support for claim).

On the other hand, the statute does not require a lender to actually modify a defaulting borrower’s loan but rather requires only contacts or attempted contacts in a good faith effort to prevent foreclosure. Cal. Civ. Code § 2923.5(a)(2). Plaintiffs allege only that U.S. Bank “failed and refused to explore such alternatives” but do not allege whether they were contacted or not. (FAC ¶ 18.) Plaintiffs’ use of the phrase “refused to explore,” combined with the “Declaration of Compliance” accompanying the Notice of Trustee’s Sale, imply Plaintiffs were contacted as required by the statute. (Doc. No. 7-2, Exh. 4 at 3.) Because Plaintiffs have failed to state a claim under Cal. Civ. Code § 2923.5, U.S. Bank’s motion to dismiss is granted. Plaintiffs’ claim is dismissed without prejudice.

C. Foreign Language Contract Act, Cal. Civ. Code § 1632 et seq.

Plaintiffs assert “the contract and loan obligation was [sic] negotiated in Spanish,” and thus, they were entitled, under Cal. Civ. Code § 1632, to receive loan documents in Spanish rather than in English. (FAC ¶ 21-24.) Cal. Civ. Code § 1632 provides, in relevant part:

Any person engaged in a trade or business who negotiates primarily in Spanish, Chines, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, which includes a translation of every term and condition in that contract or agreement.

Cal. Civ. Code § 1632(b).

U.S. Bank argues this claim must be dismissed because Cal. Civ. Code § 1632(b)(2) specifically excludes loans secured by real property. (Mot. at 8.) Plaintiffs allege their loan falls within the exception outlined in § 1632(b)(4), which effectively recaptures any “loan or extension of credit for use primarily for personal, family or household purposes where the loan or extension of credit is subject to the provision of Article 7 (commencing with Section 10240) of Chapter 3 of Part I of Division 4 of the Business and Professions Code ….” (FAC ¶ 21; Opp’n at 7.) The Article 7 loans referenced here are those secured by real property which were negotiated by a real estate broker.*fn1 See Cal. Bus. & Prof. Code § 10240. For the purposes of § 1632(b)(4), a “real estate broker” is one who “solicits borrowers, or causes borrowers to be solicited, through express or implied representations that the broker will act as an agent in arranging a loan, but in fact makes the loan to the borrower from funds belonging to the broker.” Cal. Bus. & Prof. Code § 10240(b). To take advantage of this exception with respect to U.S. Bank, Plaintiffs must allege U.S. Bank either acted as the real estate broker or had a principal-agent relationship with the broker who negotiated their loan. See Alvara v. Aurora Loan Serv., Inc., 2009 WL 1689640, at *3 (N.D. Cal. Jun. 16, 2009), and references cited therein (noting “several courts have rejected the proposition that defendants are immune from this statute simply because they are not themselves brokers, so long as the defendant has an agency relationship with a broker or was acting as a broker.”). Although Plaintiffs mention in passing a “broker” was involved in the transaction (FAC ¶ 4), they fail to allege U.S. Bank acted in either capacity described above.

Nevertheless, Plaintiffs argue they are not limited to remedies against the original broker, but may seek rescission of the contract through the assignee of the loan. Cal. Civ. Code § 1632(k). Section 1632(k) allows for rescission for violations of the statute and also provides, “When the contract for a consumer credit sale or consumer lease which has been sold and assigned to a financial institution is rescinded pursuant to this subdivision, the consumer shall make restitution to and have restitution made by the person with whom he or she made the contract, and shall give notice of rescission to the assignee.” Cal. Civ. Code § 1632(k) (emphasis added). There are two problems with Plaintiffs’ theory. First, it is not clear to this court that Plaintiffs’ loan qualifies as a “consumer credit sale or consumer lease.” Second, the court interprets this provision not as a mechanism to impose liability for a violation of § 1632 on U.S. Bank as an assignee, but simply as a mechanism to provide notice to that assignee after recovering restitution from the broker.

The mechanics of contract rescission are governed by Cal. Civ. Code § 1691, which requires a plaintiff to give notice of rescission to the other party and to return, or offer to return, all proceeds he received from the transaction. Plaintiffs’ complaint does satisfy these two requirements. Cal. Civ. Code § 1691 (“When notice of rescission has not otherwise been given or an offer to restore the benefits received under the contract has not otherwise been made, the service of a pleading…that seeks relief based on rescission shall be deemed to be such notice or offer or both.”). However, the court notes that if Plaintiffs were successful in their bid to rescind the contract, they would have to return the proceeds of the loan which they used to purchase their Property.

For these reasons discussed above, Plaintiffs have failed to state a claim under Cal. Civ. Code § 1632. U.S. Bank’s motion to dismiss is granted and Plaintiffs’ claim for violation of Cal. Civ. Code § 1632 is dismissed without prejudice.

D. Unfair Business Practices, Cal. Bus. & Prof. Code § 17200

California’s unfair competition statute “prohibits any unfair competition, which means ‘any unlawful, unfair or fraudulent business act or practice.'” In re Pomona Valley Med. Group, 476 F.3d 665, 674 (9th Cir. 2007) (citing Cal. Bus. & Prof. Code § 17200, et seq.). “This tripartite test is disjunctive and the plaintiff need only allege one of the three theories to properly plead a claim under § 17200.” Med. Instrument Dev. Labs. v. Alcon Labs., 2005 WL 1926673, at *5 (N.D. Cal. Aug. 10, 2005). “Virtually any law–state, federal or local–can serve as a predicate for a § 17200 claim.” State Farm Fire & Casualty Co. v. Superior Court, 45 Cal.App.4th 1093, 1102-3 (1996). Plaintiffs assert their § 17200 “claim is entirely predicated upon their previous causes of action” under TILA and Cal. Civ. Code §§ 2923.5 and § 1632. (FAC ¶¶ 25-29; Opp’n at 9.)

U.S. Bank first contend Plaintiffs lack standing to pursue a § 17200 claim because they “do not allege what money or property they allegedly lost as a result of any purported violation.” (Mot. at 9.) The court finds Plaintiffs have satisfied the pleading standards on this issue by alleging they “relied, to their detriment,” on incomplete and inaccurate disclosures which led them to pay higher interest rates than they would have otherwise. (FAC ¶ 9.) Such “losses” have been found sufficient to confer standing. See Aron v. U-Haul Co. of California, 143 Cal.App.4th 796, 802-3 (2006).

U.S. Bank next offers that Plaintiffs’ mere recitation of the statutory bases for this cause of action, without specific allegations of fact, fails to state a claim. (Mot. at 10.) Plaintiffs point out all the factual allegations in their complaint are incorporated by reference into their § 17200 claim. (FAC ¶ 25; Opp’n at 9.) The court agrees there was no need for Plaintiffs to copy all the preceding paragraphs into this section when their claim expressly incorporates the allegations presented elsewhere in the complaint. Any argument by U.S. Bank that the pleadings failed to put them on notice of the premise behind Plaintiffs’ § 17200 claim would be somewhat disingenuous.

Nevertheless, all three of Plaintiffs’ predicate statutory claims have been dismissed for failure to state a claim. Without any surviving basis for the § 17200 claim, it too must be dismissed. U.S. Bank’s motion is therefore granted and Plaintiffs’ § 17200 claim is dismissed without prejudice.

E. Quiet Title

In their final cause of action, Plaintiffs seek to quiet title in the Property. (FAC ¶¶ 30-36.) In order to adequately allege a cause of action to quiet title, a plaintiff’s pleadings must include a description of “[t]he title of the plaintiff as to which a determination…is sought and the basis of the title…” and “[t]he adverse claims to the title of the plaintiff against which a determination is sought.” Cal. Code Civ. Proc. § 761.020. A plaintiff is required to name the “specific adverse claims” that form the basis of the property dispute. See Cal. Code Civ. Proc. § 761.020, cmt. at ¶ 3. Here, Plaintiffs allege the “Defendant claims an adverse interest in the Property owned by Plaintiffs,” but do not specify what that interest might be. (Mot. at 6-7.) Plaintiffs are still the owners of the Property. The recorded foreclosure Notices do not affect Plaintiffs’ title, ownership, or possession in the Property. U.S. Bank’s motion to dismiss is therefore granted, and Plaintiffs’ cause of action to quiet title is dismissed without prejudice.

III. CONCLUSION

For the reasons set forth above, U.S. Bank’s motion to dismiss (Doc. No. 7) is GRANTED. Accordingly, Plaintiffs’ claim under TILA is DISMISSED with prejudice and Plaintiffs’ claims under Cal. Civ. Code § 2923.5, Cal. Civ. Code § 1632, and Cal. Bus. & Prof. Code § 17200, and their claim to quiet title are DISMISSED without prejudice.

The court grants Plaintiffs 30 days’ leave from the date of entry of this order to file a Second Amended Complaint which cures all the deficiencies noted above. Plaintiffs’ Second Amended Complaint must be complete in itself without reference to the superseded pleading. Civil Local Rule 15.1.

IT IS SO ORDERED.

Opinion Footnotes

*fn1 Although U.S. Bank correctly notes the authorities cited by Plaintiffs are all unreported cases, the court agrees with the conclusions set forth in those cases. See Munoz v. International Home Capital Corp., 2004 WL 3086907, at *9 (N.D. Cal. 2004); Ruiz v. Decision One Mortgage Co., LLC, 2006 WL 2067072, at *5 (N.D. Cal. 2006).

Latest ruling on Civil Code 2923.5

B. Perata Mortgage Relief Act, Cal. Civ. Code § 2923.5

Plaintiffs’ second cause of action arises under the Perata Mortgage Relief Act, Cal. Civ. Code § 2923.5. Plaintiffs argue U.S. Bank is liable for monetary damages under this provision because it “failed and refused to explore” “alternatives to the drastic remedy of foreclosure, such as loan modifications” before initiating foreclosure proceedings. (FAC PP 17-18.) Furthermore, Plaintiffs allege U.S. Bank violated Cal. Civ. Code § 2923.5(c) by failing to include with the notice of sale a declaration that it contacted the borrower to explore such options. (Opp’n at 6.)

Section 2923.5(a)(2) requires a “mortgagee, beneficiary or authorized agent” to “contact the borrower in person or by telephone in order to assess the borrower’s [*1166] financial situation and explore options for the borrower to avoid foreclosure.” For a lender which had recorded a notice of default prior to the effective date of the statute, as is the case here, § 2923.5(c) imposes a duty to attempt to negotiate with a borrower before recording a notice of sale. These provisions cover loans initiated between January 1, 2003 and December 31, 2007. Cal. Civ. Code § 2923.5(h)(3), (i).

U.S. Bank’s primary argument is that Plaintiffs’ claim should be dismissed because neither § 2923.5 nor its legislative history clearly indicate an intent to create a private right of action. (Mot. at 8.) Plaintiffs counter that such a conclusion is unsupported by the legislative history; the California legislature would not have enacted this “urgency” legislation, intended to curb high foreclosure rates in the state, without any accompanying enforcement mechanism. (Opp’n at 5.) The court agrees with Plaintiffs. While the Ninth Circuit has yet to address this issue, the court found no decision from this circuit [**15] where a § 2923.5 claim had been dismissed on the basis advanced by U.S. Bank. See, e.g. Gentsch v. Ownit Mortgage Solutions Inc., 2009 U.S. Dist. LEXIS 45163, 2009 WL 1390843, at *6 (E.D. Cal., May 14, 2009)(addressing merits of claim); Lee v. First Franklin Fin. Corp., 2009 U.S. Dist. LEXIS 44461, 2009 WL 1371740, at *1 (E.D. Cal., May 15, 2009) (addressing evidentiary support for claim).

On the other hand, the statute does not require a lender to actually modify a defaulting borrower’s loan but rather requires only contacts or attempted contacts in a good faith effort to prevent foreclosure. Cal. Civ. Code § 2923.5(a)(2). Plaintiffs allege only that U.S. Bank “failed and refused to explore such alternatives” but do not allege whether they were contacted or not. (FAC P 18.) Plaintiffs’ use of the phrase “refused to explore,” combined with the “Declaration of Compliance” accompanying the Notice of Trustee’s Sale, imply Plaintiffs were contacted as required by the statute. (Doc. No. 7-2, Exh. 4 at 3.) Because Plaintiffs have failed to state a claim under Cal. Civ. Code § 2923.5, U.S. Bank’s motion to dismiss is granted. Plaintiffs’ claim is dismissed without prejudice.

Fixing the Administration’s Home Affordable Modification Program (HAMP)

Posted: December 28, 2009.

By Professor Jean Braucher

Jean Braucher is the Roger C. Henderson Professor of Law at the University of Arizona James E. Rogers College of Law. This article is based on a longer paper, available for free at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1518098).

The Obama Administration originally envisioned bankruptcy modification as a companion to HAMP. The House passed a bill to achieve that goal, only to see it stall in the Senate. An attempt to get the legislation moving again in the House failed on December 11, but the more problems with HAMP become apparent, the greater the chances that bankruptcy modification might ultimately be enacted.

Low quantity. Only 31,382 modifications were made permanent in the first eight months of HAMP, which became operational last April and committed $75 billion to help three to four million borrowers avoid foreclosure. In response to these poor results, Treasury launched a “Conversion Campaign” to get as many as possible of another 697,026 pending trial plans converted into permanent ones.

Comparing the permanent modifications at the end of November to the 386,865 trial plans at the end of August (giving them three months to become final), the conversion rate has been about eight percent, equivalent to chances of a college applicant getting into Harvard or Yale.

A Treasury official used police and military rhetoric to describe its campaign: “SWAT teams” of Treasury staff are now “imbedded” at servicers in an “escalation process.” So if you have clients who could benefit from HAMP modifications, now is a good time to contact the program’s “Hope Hotline”: 1-888-995-HOPE (4673).

Treasury also acknowledged persistent accounts of servicers “losing” documents and asks borrowers and their counselors to report program violations. That’s another action item for you if you have clients who have been given the runaround. Other servicer violations should also be reported, such as conducting foreclosure sales while reviews or trial plans are in progress, charging for evaluation, or offering noncomplying plans that are more expensive than HAMP calls for. Gross monthly mortgage payments are supposed to be reduced to 31 percent of gross monthly income. Any of these practices could make a good basis for state Unfair and Deceptive Practices (UDAP) actions, typically carrying statutory damages and attorneys’ fees.

Low quality. Principal reduction is not required under HAMP and is rarely given. Three-quarters of borrowers are left underwater, often seriously so, with the principal obligation on average at 137 percent of the home’s current value, according to the Congressional Oversight Panel report last October. Borrowers who later lose income are stuck, unable to sell and pay off the loan or refinance. Temporary interest rate breaks are the way affordability is achieved, without principal reduction, and that creates high risk of redefault, especially given high unemployment.

The Obama Administration originally envisioned bankruptcy modification as a companion to HAMP. The House twice passed bills to achieve that goal, only to see them stall in the Senate. An attempt to get the legislation moving again in the House failed on December 11, but the more problems with HAMP become apparent, the greater the chances that bankruptcy modification might ultimately be enacted.

Alternatively, HAMP’s guidelines could include principal reduction as a standard tool when needed to keep borrowers in their homes, something Treasury could implement itself. As is, many HAMP modifications are not going to be sustainable.

Wrongful Foreclosure Class Action

Attached hereto is a class action pending in Massachusetts the same action could be filed here in California in that our foreclosure laws are not being followed Civil Code 2924 and 2923.5 and 2923.6 and we have the unfair business practices act under b and p 17200 MAClassActionforeclosure

2009-2010 livinglies recap

1. No governmental relief is in sight for homeowners except in isolated instances of community action together with publicity from the media.
2. State and federal governments continue to sink deeper into debt, cutting social and necessary services while avoiding the elephant in the living room: the trillions of dollars owed and collectible in taxes, recording fees, filing fees, late fees, penalties, financial damages, punitive damages and interest due from the intermediary players on Wall Street who created trading “instruments” based upon conveyance of interests in real property located within state borders. The death grip of the lobby for the financial service industry is likely to continue thus making it impossible to resolve the housing crisis, the state budget crisis or the federal budget deficit.
3. Using taxpayer funds borrowed from foreign governments or created through quantitative easing, trillions of dollars have been paid, or provided in “credit lines” to intermediaries on the false premise that they own or control the mortgage backed securities that have defaulted. Foreclosures continue to hit new highs. Total money injected into the system exceeds 8 trillion dollars. Record profits announced by the financial services industry in which power is now more concentrated than before, making them the strongest influence in Federal and State capitals around the world.
4. Toxic Titles reveal unmarketable properties in and out of foreclosures with no relief in sight because nearly everyone is ignoring this basic problem that is a deal-breaker on every transfer of an interest in real property.
5. Evictions continue to hit new highs as Judges continue to be bombarded with ill-conceived motions that do not address the jurisdiction or authority of the court. The illegal evictions are based upon fraudulent conveyances procured through abuse of the foreclosure process and direct misrepresentations and fraud upon the court and recording system in each county as to the documents fabricated for purposes of foreclosure — creating the illusion of a proper paper trail.
6. 1.7 million new foreclosed properties are due to hit the market according to published statistics. Livinglies estimate the number to be at least 4 million.
7. Downward pressure on both price and marketability continues with no end in sight.
8. Unemployment continues to rise, albeit far more slowly than at the beginning of 2009. Unemployment, underemployment, employment drop-outs, absence of entry-level jobs, low statistics on new business starts, and former members of workforce (particularly men) are harbingers for continued decline in median income combined with higher expenses for key components, particularly health care. The ability to pay anything other than rent is continuing its decline.
9. Concurrent with the increase in foreclosures and the decrease in housing prices, official figures put the number of homes underwater at 25%. Livinglies estimates that when you look at three components not included in official statistics, the figure rises to more than 45%. The components are selling discounts, selling expenses, and continued delusional asking prices that will soon crash when sellers realize that past high prices were an illusion, not a market fluctuation.
10. The number of people walking from their homes is increasing daily, including people who are not behind in their mortgages. This is increasing the inventory of homes that are not officially included in the pipeline because they are not sufficiently advanced in the delinquency or foreclosure process. This is a hidden second wave of pressure on housing prices and marketability.
11. With the entire economy on government life-support that is not completely effective in preventing rises in homelessness and people requiring public assistance, the likelihood of severe social unrest and political upheaval increases month by month. Increasing risks of unrest prompted at least one Wall Street Bank to order enough firearms and ammunition to start an armory.
12. Modification of mortgages has been largely a sham.
13. Short-sales have been largely a sham.
14. Quiet titles in favor of homeowners are increasing at a slow pace as the sophistication of defenses improves on the side of financial services companies seeking free homes through foreclosures.
15. Legislative Intervention has been ineffective and indeed, misleading
16. Executive intervention has been virtually non-existent. The people who perpetrated this fraud not only have evaded prosecution, they maintain close relationships with the Obama administration.
17. Judicial intervention has been spotty and could be much better once people accept the complexity of securitization and the simplicity of STRATEGIES THAT WORK.
18. Legal profession , slow to start went from zero to 15 mph during 2009. Let’s hope they get to 60 mph during 2010.
19. Accounting profession, which has thus far stayed out of the process is expected to jump in on several fronts, including closer scrutiny of the published financial statements of public companies and financial institutions and the cottage industry of examining loan documents for compliance issues and violations of Federal and State lending laws.
20. Prospects for actual economic recovery affecting the average citizen are dim. While there has been considerable improvement from the point of risk we had reached at the end of 2008, the new President and Congress have yet to address essential reforms on joblessness, regulation of financial services (including insurance businesses permitted to write commitments without sufficient assets in reserve to assure the payment of the risk. The economic indicators have been undermined by the intentional fraud perpetrated upon the world economic and financial system. Thus the official figures are further than ever from revealing the truth about about our current status. Without key acceptance of these anomalies it is inconceivable that the economy will, in reality, improve during 2010.
21. Real inflation affecting everyday Americans has already started to rise as credit markets become increasingly remote from the prospective borrowers. Hyperinflation remains a risk although most of us were off on the timing because we underestimated the tenacious grip the dollar had on world commerce. While this assisted us in moving toward a softer landing, the probability that the dollar will continue to fall is still very high, thus making certain non-dollar denominated commodities more valuable. This phenomenon could affect housing prices in an upward direction if the trend continues. However the higher dollar prices will be offset by the fact that the cheaper dollars are required in greater quantities to buy anything. Thus the home prices might rise from $125,000 to $150,000 but the price of a loaf of bread will also be higher by 20%.
22. GDP has been skewed away from including econometrics for actual work performed in the home unless money changes hands. Societal values have thus depreciated the value of child-rearing and stable homes. The results have been catastrophic in education, crime, technological innovation and policy making. While GDP figures are officially announced as moving higher, the country continues to move further into a depression. No actual increase in GDP has occurred for many years, unless the declining areas of the society are excluded from what is counted.
23. The stock market is vastly overvalued again based upon vaporous forward earnings estimates and completely arbitrary price earnings ratios used by analysts. The vapor created by a 1000% increase in money supply caused by deregulation of the private financial institutions together with the illusion of profits created by these institutions trading between themselves has resulted in an increase from 16% to 45% of GDP activity. This figure is impossible to be real. As long as it is accepted as real or even possible, public figures, appointed and elected will base policy decisions on the desires of what is currently seen as the main driver of the U.S. economy. The balance of wealth will continue to move toward the levels of revolutionary France or the American colonies.
24. Perceptible increases in savings and consumer resistance to retail impulse buying bodes well for the long-term prospects of the country. As the savings class becomes more savvy and more wealthy, they will, like their counterparts in the upper echelons of government commence exercising their power in the marketplace and in the voting booth.

90% Forclosures Wrongful

A wrongful foreclosure action typically occurs when the lender starts a non judicial foreclosure action when it simply has no legal cause. This is even more evident now since California passed the Foreclosure prevention act of 2008 SB 1194 codified in Civil code 2923.5 and 2923.6. In 2009 it is this attorneys opinion that 90% of all foreclosures are wrongful in that the lender does not comply (just look at the declaration page on the notice of default). The lenders most notably Indymac, Countrywide, and Wells Fargo have taken a calculated risk. To comply would cost hundreds of millions in staff, paperwork, and workouts that they don’t deem to be in their best interest. The workout is not in there best interest because our tax dollars are guaranteeing the Banks that are To Big to Fail’s debt. If they don’t foreclose and if they work it out the loss is on them. There is no incentive to modify loan for the benefit of the consumer.

Sooooo they proceed to foreclosure without the mandated contacts with the borrower. Oh and yes contact is made by a computer or some outsourcing contact agent based in India. But compliance with 2923.5 is not done. The Borrower is never told that he or she have the right to a meeting within 14 days of the contact. They do not get offers to avoid foreclosure there are typically two offers short sale or a probationary mod that will be declined upon the 90th day.

Wrongful foreclosure actions are also brought when the service providers accept partial payments after initiation of the wrongful foreclosure process, and then continue on with the foreclosure process. These predatory lending strategies, as well as other forms of misleading homeowners, are illegal.

The borrower is the one that files a wrongful disclosure action with the court against the service provider, the holder of the note and if it is a non-judicial foreclosure, against the trustee complaining that there was an illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed or court judicial proceeding. The borrower can also allege emotional distress and ask for punitive damages in a wrongful foreclosure action.

Causes of Action

Wrongful foreclosure actions may allege that the amount stated in the notice of default as due and owing is incorrect because of the following reasons:

* Incorrect interest rate adjustment
* Incorrect tax impound accounts
* Misapplied payments
* Forbearance agreement which was not adhered to by the servicer
* Unnecessary forced place insurance,
* Improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
* Breach of contract
* Intentional infliction of emotional distress
* Negligent infliction of emotional distress
* Unfair Business Practices
* Quiet title
* Wrongful foreclosure
* Tortuous violation of 2924 2923.5 and 2923.5 and 2932.5
Injunction

Any time prior to the foreclosure sale, a borrower can apply for an injunction with the intent of stopping the foreclosure sale until issues in the lawsuit are resolved. The wrongful foreclosure lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued by the court if the court determines that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm.

Damages Available to Borrower

Damages available to a borrower in a wrongful foreclosure action include: compensation for the detriment caused, which are measured by the value of the property, emotional distress and punitive damages if there is evidence that the servicer or trustee committed fraud, oppression or malice in its wrongful conduct. If the borrower’s allegations are true and correct and the borrower wins the lawsuit, the servicer will have to undue or cancel the foreclosure sale, and pay the borrower’s legal bills.

Why Do Wrongful Foreclosures Occur?

Wrongful foreclosure cases occur usually because of a miscommunication between the lender and the borrower. Most borrower don’t know who the real lender is. Servicing has changed on average three times. And with the advent of MERS Mortgage Electronic Registration Systems the “investor lender” hundreds of times since the origination. And now they then have to contact the borrower. The don’t even know who the lender truly is. The laws that are now in place never contemplated the virtualization of the lending market. The present laws are inadequate to the challenge.

This is even more evident now since California passed the Foreclosure prevention act of 2008 SB 1194 codified in Civil code 2923.5 and 2923.6. In 2009 it is this attorneys opinion that 90% of all foreclosures are wrongful in that the lender does not comply (just look at the declaration page on the notice of default). The lenders most notably Indymac, Countrywide, and Wells Fargo have taken a calculated risk. To comply would cost hundreds of millions in staff, paperwork, and workouts that they don’t deem to be in their best interest. The workout is not in there best interest because our tax dollars are guaranteeing the Banks that are To Big to Fail’s debt. If they don’t foreclose and if they work it out the loss is on them. There is no incentive to modify loan for the benefit of the consumer.This could be as a result of an incorrectly applied payment, an error in interest charges and completely inaccurate information communicated between the lender and borrower. Some borrowers make the situation worse by ignoring their monthly statements and not promptly responding in writing to the lender’s communications. Many borrowers just assume that the lender will correct any inaccuracies or errors. Any one of these actions can quickly turn into a foreclosure action. Once an action is instituted, then the borrower will have to prove that it is wrongful or unwarranted. This is done by the borrower filing a wrongful foreclosure action. Costs are expensive and the action can take time to litigate.
Impact

The wrongful foreclosure will appear on the borrower’s credit report as a foreclosure, thereby ruining the borrower’s credit rating. Inaccurate delinquencies may also accompany the foreclosure on the credit report. After the foreclosure is found to be wrongful, the borrower must then petition to get the delinquencies and foreclosure off the credit report. This can take a long time and is emotionally distressing.

Wrongful foreclosure may also lead to the borrower losing their home and other assets if the borrower does not act quickly. This can have a devastating affect on a family that has been displaced out of their home. However, once the borrower’s wrongful foreclosure action is successful in court, the borrower may be entitled to compensation for their attorney fees, court costs, pain, suffering and emotional distress caused by the action.

no recoded asignment no power of sale (foreclosure)2932.5

Mortgages with a power of sale as a form of security, although such powers of sale are strictly construed (Savings & Loan Soc. v. Burnett, 106 Cal. 514 [39 P. 922]), are not looked upon with disfavor in California. (Godfrey v. Monroe, 101 Cal. 224 [35 P. 761].) Indeed, such powers of sale are expressly permitted by section 2932 of the Civil Code, and since July 27, 1917, the exercise of such powers has been carefully regulated. (Civ. Code, sec. 2924.) In this connection we should also bear in mind section 858 of the Civil Code, which reads as follows: “Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is to be deemed a part of the security, and vests in any person who, by assignment, becomes entitled to the money so secured to be paid, and may be executed by him whenever the assignment is duly acknowledged and recorded.” This indicates to some extent that California intended that such a power of sale survives until the debt is paid or barred by the statute of limitations. [13 Cal.App.2d 239]

Fabrication of Documents: MERS GAP Illuminated

Posted on July 30, 2009 by livinglies

Another example of why a TILA audit is grossly inadequate. A forensic audit is required covering all bases. Although dated, this article picks up on a continuing theme that demonstrates the title defect, the questionable conduct of pretender lenders and the defects in the foreclosure process when you let companies with big brand names bluff the system. The MERS GAP arises whether MERS is actually the nominee on the deed of trust (or mortgage deed) or not. It is an announcement that there will be off record transactions between parties who have no interest in the loan but who will assert such an interest once they have successfullly fabricated documents, had someone without authority sign them, on behalf of an entity with no real beneficial interest or other economic interest in the loan, and then frequently notarized by someone in another state. we have even seen documents notarized in blank and forged signatures of borrowers on loan closing papers.

NYTimes.com
Lender Tells Judge It ‘Recreated’ Letters
Tuesday January 8, 2008 11:38 pm ET
By GRETCHEN MORGENSON
The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess.The documents — three letters from Countrywide addressed to the homeowner — claimed that the borrower owed the company $4,700 because of discrepancies in escrow deductions. Countrywide’s local counsel described the letters to the court as “recreated,” raising concern from the federal bankruptcy judge overseeing the case, Thomas P. Agresti.

“These letters are a smoking gun that something is not right in Denmark,” Judge Agresti said in a Dec. 20 hearing in Pittsburgh.

The emergence of the fabricated documents comes as Countrywide confronts a rising tide of complaints from borrowers who claim that the company pushed them into risky loans. The matter in Pittsburgh is one of 300 bankruptcy cases in which Countrywide’s practices have come under scrutiny in western Pennsylvania.

Judge Agresti said that discovery should proceed so that those involved in the case, including the Chapter 13 trustee for the western district of Pennsylvania and the United States trustee, could determine how Countrywide’s systems might generate such documents.

A spokesman for the lender, Rick Simon, said: “It is not Countrywide’s policy to create or ‘fabricate’ any documents as evidence that they were sent if they had not been. We believe it will be shown in further discovery that the Countrywide bankruptcy technician who generated the documents at issue did so as an efficient way to convey the dates the escrow analyses were done and the calculations of the payments as a result of the analyses.”

The documents were generated in a case involving Sharon Diane Hill, a homeowner in Monroeville, Pa. Ms. Hill filed for Chapter 13 bankruptcy protection in March 2001 to try to save her home from foreclosure.

After meeting her mortgage obligations under the 60-month bankruptcy plan, Ms. Hill’s case was discharged and officially closed on March 9, 2007. Countrywide, the servicer on her loan, did not object to the discharge; court records from that date show she was current on her mortgage.

But one month later, Ms. Hill received a notice of intention to foreclose from Countrywide, stating that she was in default and owed the company $4,166.

Court records show that the amount claimed by Countrywide was from the period during which Ms. Hill was making regular payments under the auspices of the bankruptcy court. They included “monthly charges” totaling $3,840 from November 2006 to April 2007, late charges of $128 and other charges of almost $200.

A lawyer representing Ms. Hill in her bankruptcy case, Kenneth Steidl, of Steidl and Steinberg in Pittsburgh, wrote Countrywide a few weeks later stating that Ms. Hill had been deemed current on her mortgage during the period in question. But in May, Countrywide sent Ms. Hill another notice stating that her loan was delinquent and demanding that she pay $4,715.58. Neither Mr. Steidl nor Julia Steidl, who has also represented Ms. Hill, returned phone calls seeking comment.

Justifying Ms. Hill’s arrears, Countrywide sent her lawyer copies of three letters on company letterhead addressed to the homeowner, as well as to Mr. Steidl and Ronda J. Winnecour, the Chapter 13 trustee for the western district of Pennsylvania.

The Countrywide letters were dated September 2003, October 2004 and March 2007 and showed changes in escrow requirements on Ms. Hill’s loan. “This letter is to advise you that the escrow requirement has changed per the escrow analysis completed today,” each letter began.

But Mr. Steidl told the court he had never received the letters. Furthermore, he noticed that his address on the first Countrywide letter was not the location of his office at the time, but an address he moved to later. Neither did the Chapter 13 trustee’s office have any record of receiving the letters, court records show.

When Mr. Steidl discussed this with Leslie E. Puida, Countrywide’s outside counsel on the case, he said Ms. Puida told him that the letters had been “recreated” by Countrywide to reflect the escrow discrepancies, the court transcript shows. During these discussions, Ms. Puida reduced the amount that Countrywide claimed Ms. Hill owed to $1,500 from $4,700.

Under questioning by the judge, Ms. Puida said that “a processor” at Countrywide had generated the letters to show how the escrow discrepancies arose. “They were not offered to prove that they had been sent,” Ms. Puida said. But she also said, under questioning from the court, that the letters did not carry a disclaimer indicating that they were not actual correspondence or that they had never been sent.

A Countrywide spokesman said that in bankruptcy cases, Countrywide’s automated systems are sometimes overridden, with technicians making manual adjustments “to comply with bankruptcy laws and the requirements in the jurisdiction in which a bankruptcy is pending.” Asked by Judge Agresti why Countrywide would go to the trouble of “creating a letter that was never sent,” Ms. Puida, its lawyer, said she did not know.

“I just, I can’t get over what I’m being told here about these recreations,” Judge Agresti said, “and what the purpose is or was and what was intended by them.”

Ms. Hill’s matter is one of 300 bankruptcy cases involving Countrywide that have come under scrutiny by Ms. Winnecour, the Chapter 13 trustee in Pittsburgh. On Oct. 9, she asked the court to sanction Countrywide, contending that the company had lost or destroyed more than $500,000 in checks paid by homeowners in bankruptcy from December 2005 to April 2007.

Ms. Winnecour said in court filings that she was concerned that even as Countrywide had misplaced or destroyed the checks, it levied charges on the borrowers, including late fees and legal costs. A spokesman in her office said she would not comment on the Hill case.

O. Max Gardner III, a lawyer in North Carolina who represents troubled borrowers, says that he routinely sees lenders pursue borrowers for additional money after their bankruptcies have been discharged and the courts have determined that the default has been cured and borrowers are current. Regarding the Hill matter, Mr. Gardner said: “The real problem in my mind when reading the transcript is that Countrywide’s lawyer could not explain how this happened.”

Filed under: CDO, CORRUPTION, Eviction, GTC | Honor, Investor, Mortgage, bubble, currency, foreclosure, securities fraud | Tagged: borrower, countrywide, disclosure, foreclosure defense, foreclosure offense, fraud, rescission, RESPA, TILA audit, trustee
« Lucrative Fees May Deter Efforts to Alter Loans

unperfected mortgage goes away in Bankruptcy and here is how it was done

Yes in San Jose an unperfected Mortgage was don away with the perfect storm.
1. COMPLAINT2. MEMOR. IN SUPPORT OF APPLICATION FOR RESTRAINING ORDER3. APPLICATION FOR A TEMPORARY RESTRAINING ORDER4. REQUEST FOR JUDICIAL NOTICE5. OPPOSITION TO MOTION FOR RELIEF FROM THE AUTOMATIC STAY6. DECLARATION OF ISABEL7. NOTICE OF HEARING

Mortgage Chaos? Add a Bankruptcy and its a Recipe for Disaster! Part II

My last article laid out the framework for the bankruptcy real estate cocktail. This article will attempt to predict how that cocktail will be served and its ramifications. Remember, this recipe for disaster requires two things: a “Non-Perfected” Mortgage and a Bankruptcy.

So far, about 70 to 80% of the mortgages I see in local Bankruptcy cases here in the Southern District of California Bankruptcy Court appear to be non-perfected. Despite my continued requests to the mortgage companies to produce either proof they possess the underlying note or proof of a recorded assignment, I have received neither. Instead I get the run around, “Yes we have the original note. Really, can I see? Actually no, I thought we had the original, but we have a copy…………Yes we have the assignment. Really, can I see? Sure, here you go. But that was not recorded. Oh…….” Its the same song and dance. So what becomes of this?

Chapter 7: The trustee will most likely put on his “544 hat” and now “strip the lien off the house.”

When he does this, he creates an unencumbered piece of real estate in most cases, with the exception of a small amount of past taxes and HOA fees remaining as liens on the property. The property is then sold and net profits held in trust. A notice is then sent to the creditors of the bankruptcy to submit a claim if they want to get paid.

The claims are then reviewed, and paid pro-rata or objected to with the Bankruptcy Court issuing the final ruling. The Claims process is a complex area too lengthy to discuss for this Blog, but suffice to say, many claims will be objected to as well, since most credit card debt and collection agents have similar problems in proving they too own their debts. Moreover, you might ask what happens to the mortgage lien which has now become a large unsecured debt? It might be paid, provided they can prove they own the note. However, it also may not. There is a Bankruptcy Code section, 11 USC 502(d) which states that a creditor may not be able to share in the distribution if they did not give up there lien when requested by the trustee under 544. So, it could be that any remaining monies may even go back to the debtor if the new unsecured mortgage claim is disallowed! But this remains a grey area, and time will tell.

But what if the debtor wants to keep the house? No problem. Time to make a deal with the trustee. Suppose that the House was bought for $650,000 in 2006 with 100% financing and now is worth $500,000. The debtor is negative $150,000 in equity. Upside Down! Now lets say a bankruptcy is filed. The Mortgage Note was not perfected so Bankruptcy Trustee avoids the lien. Now he has this $500,000 piece of real estate that he wants to sell, but the debtor wants to keep it. So the debtor makes an offer of $430,000 to keep the house and the Trustee agrees. Trustee agrees since he would only net $430,000 anyways after costs of sale, attorney fees, marketing, etc. Debtor gets the $430,000 from a new loan he might qualify for, have cosigned, or have a family member engage their credit. Trustee then takes the $430,000 and distributes to creditors, which include the debtor’

s non-dischargeable taxes, non-dischargeable child support obligations, and non-dischargeable student loans.

Wow! Lets get this straight: Mortgage reduced from $650,000 to $430,000, and over $100,000 in non-dischargeable bankruptcy debt consisting of student loans, taxes, and support obligations also paid, and all other debt wiped out? Sounds like the lemon just turned into lemonade! Also, time to also read the blog on why the credit score is much better after bankruptcy than before now.

Chapter 13: In Chapter 13, the Trustee does not liquidate assets. Instead, he administers a three to five year plan by distributing the monthly payments from the debtor to the creditors, and the avoidance powers of the Chapter 7 Trustee are given to the Debtor(at least here in the Ninth Circuit….western states in the US). This includes the power to remove unperfected liens such as unperfected mortgages.

So now the debtor can remove the mortgage just like a Chapter 7 Trustee.

But that might be a problem. The Chapter 13 Trustee may object now to the bankruptcy since the debtor has too many assets. Well, as discussed above, time to get another smaller mortgage, pay that money into the Chapter 13 plan, and again pay off the non-dischargeable debt. Even better, if not all the creditors filed claims, the money then reverts to the debtor!

In the alternative, the simple threat of litigating the issues to remove the mortgage sure makes for a great negotiating tool to deal with the lender and rewrite the mortgage…..knocking off possibly hundreds of thousands of dollars and also lowering the interest rate substantially.

Involuntary Bankruptcies? Is there such a thing? Unfortunately, YES. And this could be very problematic. If several creditors are owed substantial sums of money, say a SBA Loan, large Medical Bill, or even large credit cards, they could petition the court for an involuntary bankruptcy. The debtor has no control to stop it. Next thing the debtor knows, he is in a bankruptcy and all the property is being liquidated, less the property allowed by exemption law. Then steps up the Chapter 7 Trustee and discovers that the Mortgage is not perfected. Well, there goes the house now! Or does it?

Once again, a smart debtor would argue to the trustee that he will get a loan to pay the trustee as discussed above. Problem solved, and what appears to be disaster at first, may be a blessing in disguise. The debtor keeps his home with a much smaller mortgage and removes non-dischargeable debts. He is better off now than before, even though he did not want this!

So the Recipe for Disaster appears to only affect the Mortgage Companies. They are the losing parties here, and rightly so for getting sloppy…..attempting to save $14 per loan times thousands of loans. Why didn’t they compute losing hundreds of thousands of dollars per loan times thousands of loans? Couldn’

t they connect the dots? No…..like I said, lots of smart Real Estate Attorneys and lots of smart Bankruptcy Attorneys, but not too many Bankruptcy Real Estate Attorneys and none of them worked for the Mortgage industry.

But everyone else now seems to win. The debtor reduces his mortgage, gets a better interest rate, and eliminates the rest of his debts. The trustee makes a healthy profit on distributing such a large dividend to creditors. And the creditors who obey the law now share in a large dividend.

Of course, all the forgoing is Brand New. It has not been done yet in any cases I am aware of. But since talking with other Bankruptcy Attorneys across the Nation for the past couple weeks, its starting to catch on. I’

m told a few trustees back east have started this procedure now. And just today, I get an announcement from our local Chapter 7 Trustee that he is making new requirements concerning producing documents in all cases before him so that he can start avoiding these liens. Coincidentally, this also comes after three of our Local Bankruptcy Judges started denying relief to Mortgage Creditors when coming before the Bankruptcy Court during the past week! Its brand new…but catching on like wildfire.

Housing Bubble? Mortgage Bubble? Well now it’

s a Housing Mortgage Bubble disaster about to happen in Bankruptcy Court. Congress was not able to reform the predatory lending abuses. The Lenders certainly do not seem interested in workout programs. I guess its time for a Bankruptcy Cocktail!

Written by Attorney Michael G. Doan

discovery to mers

PROPOUND TO MORTGAGE ELECTRONIC (2)

mers-explained-by-aurora-lawyers.pdf

mers-explained-by-aurora-lawyers

How to Use MERS on Deed of Trust or Mortgage

It is time to use the presence of MERS on the originating loan paperwork as an OFFENSIVE TACTIC. Most states have some version of the statute below. It is simply common sense. A creditor is not a creditor unless they are owed something. A beneficiary is not a beneficiary unless they are a creditor. In the case of a mortgage note, a beneficiary is not a creditor unless it is the obligee on the note (i.e., the one to whom the note directs payment). There is no escaping this logic.

The point is that designating MERS as beneficiary or mortgagee is the same as designating nobody at all. The range of options for the Judge include several possibilities. But the one I think we should concentrate on is that an ambiguity has been raised on the face of every Deed of Trust or Mortgage Deed naming MERS as the beneficiary or mortgagee. That being the case, it MUST BE JUDICIALLY DETERMINED by a trier of fact (Judge or Jury)in judicial foreclosure states.

In California there is legislation being proposed that would require mandatory mediation before a foreclosure can be initiated. The provisions the California Foreclosure prevention act of 2008 are just not working. Judges don’t uphold what the law says civil code 2023.6 and 2923.6 when the attorneys for the publicly funded Banks (our tax dollars 17.1 Trillion before it all over) oppose individual debtors and claim federal preemption. Our legal system is a rigged game favoring the capital of a capitalist system. In California a nonjudicial state a foreclosure can occur on the mere word of a lender without the original note or assignment of the original deed of trust. A then former homeowner can then be evicted by giving notice to vacate constructively (without notice) have a summons “Posted and Mailed” (again no actual notice) a default judgment taken (no trial) and a writ issued and the Sheriff’s instruction to evict issued and enforced.

In Non Judicial an action should be filed for declaratory relief that the foreclosure is invalid and void this is the problem in the non Judicial states. See state bar president article No Lawyer No Law Without having a beneficiary or mortgagee identified, there obviously can be no enforcement. The power off sale is contained in Civil 2932 and in California there must be a valid assignment civil code 2932.5 to have the power to foreclose.

So the strategy here would be to force the would-be forecloser (pretender lender) to file a lawsuit establishing the note and mortgage (or deed of trust) by identifying the beneficiary or mortgagee. It would also enable you, in the face of a reluctant judge, to press for expedited discovery for information that the would-be foreclosing trustee or attorney should have had before they started. And this leads to a request for an evidentiary hearing — the kiss of death for pretender lenders unless you don’t know your rules of evidence

California Mortgage and Deed of Trust Practice § 1.39 (3d ed Cal CEB 2008)

§ 1.39 (1) Must Be Obligee

The beneficiary must be an obligee of the secured obligation (usually the payee of a note), because otherwise the deed of trust in its favor is meaningless. Watkins v Bryant (1891) 91 C 492, 27 P 775; Nagle v Macy (1858) 9 C 426. See §§ 1.8-1.19 on the need for an obligation. The deed of trust is merely an incident of the obligation and has no existence apart from it. Goodfellow v Goodfellow (1933) 219 C 548, 27 P2d 898; Adler v Sargent (1895) 109 C 42, 41
P 799; Turner v Gosden (1932) 121 CA 20, 8 P2d 505. The holder of the note, however, can enforce the deed of trust
whether or not named as beneficiary or mortgagee. CC § 2936;

No lawyer, no law

Pro bono publico
Redeeming the touch of justice that brought each of us to the Bar

By Howard B. Miller
President, State Bar of California

Miller
Unfortunately the colloquial meaning of pro bono has become legal services for free, at no cost. But the proper meaning and importance of the words is in the full Latin quote: for the public good.

Several almost simultaneous developments have brought us to a tipping point in the commitment of the legal profession to pro bono work, and in our understanding that it is for the public good.

No lawyer, no law

We were all caught unawares in the past year not only by the scope of the loan foreclosure crisis, but by the cracks and failures that it showed in our legal system. We know of too many cases where homeowners would have had legal defenses to foreclosure, but without lawyers in our California system of non-judicial foreclosure the result was a loss of homes. For over a century our legislature and courts have constructed an elaborate series of technicalities and protections for homeowners faced with foreclosure. But the existence of those protections made no difference to those who had no legal representation. It is as though all those laws did not exist, as though because there was no representation all the work and thought that went into those laws and protections had never been done.

And so we learned again, with a vengeance: No lawyer, no law.

How to Stop Foreclosure

This is general information and assumes that you have access to the rest of the material on the blog. Foreclosures come in various flavors.

First of all you have non-judicial and judicial foreclosure states. Non-judicial basically means that instead of signing a conventional mortgage and note, you signed a document that says you give up your right to a judicial proceeding. So the pretender lender or lender simply instructs the Trustee to sell the property, giving you some notice. Of course the question of who is the lender, what is a beneficiary under a deed of trust, what is a creditor and who owns the loan NOW (if anyone) are all issues that come into play in litigation.

In a non-judicial state you generally are required to bring the matter to court by filing a lawsuit. In states like California, the foreclosers usually do an end run around you by filing an unlawful detainer as soon as they can in a court of lower jurisdiction which by law cannot hear your claims regarding the illegality of the mortgage or foreclosure.

In a judicial state the forecloser must be the one who files suit and you have considerably more power to resist the attempt to foreclose.

Then you have stages:

STAGE 1: No notice of default has been sent.

In this case you want to get a forensic analysis that is as complete as humanly possible — TILA, RESPA, securitization, title, chain of custody, predatory loan practices, fraud, fabricated documents, forged documents etc. I call this the FOUR WALL ANALYSIS, meaning they have no way to get out of the mess they created. Then you want a QWR (Qualified Written Request) and DVL (Debt Validation Letter along with complaints to various Federal and State agencies. If they fail to respond or fail to answer your questions you file a suit against the party who received the QWR, the party who originated the loan (even if they are out of business), and John Does 1-1000 being the owners of mortgage backed bonds that are evidence of the investors ownership in the pool of mortgages, of which yours is one. The suit is simple — it seeks to stop the servicer from receiving any payments, install a receiver over the servicer’s accounts, order them to answer the simple question “Who is my creditor and how do I get a full accounting FROM THE CREDITOR? Alternative counts would be quiet title and damages under TILA, RESPA, SEC, etc.

Tactically you want to present the forensic declaration and simply say that you have retained an expert witness who states in his declaration that the creditor does not include any of the parties disclosed to you thus far. This [prevents you from satisfying the Federal mandate to attempt modification or settlement of the loan. You’ve asked (QWR and DVL) and they won’t tell. DON’T GET INTO INTRICATE ARGUMENTS CONCERNING SECURITIZATION UNTIL IT IS NECESSARY TO DO SO WHICH SHOULD BE AFTER A FEW HEARINGS ON MOTIONS TO COMPEL THEM TO ANSWER.

IN OTHER WORDS YOU ARE SIMPLY TELLING THE JUDGE THAT YOUR EXPERT HAS PRESENTED FACTS AND OPINION THAT CONTRADICT AND VARY FROM THE REPRESENTATIONS OF COUNSEL AND THE PARTIES WHO HAVE BEEN DISCLOSED TO YOU THUS FAR.

YOU WANT TO KNOW WHO THE OTHER PARTIES ARE, IF ANY, AND WHAT MONEY EXCHANGED HANDS WITH RESPECT TO YOUR LOAN. YOU WANT EVIDENCE, NOT REPRESENTATIONS OF COUNSEL. YOU WANT DISCOVERY OR AN ORDER TO ANSWER THE QWR OR DVL. YOU WANT AN EVIDENTIARY HEARING IF IT IS NECESSARY.

Avoid legal argument and go straight for discovery saying that you want to be able to approach the creditor, whoever it is, and in order to do that you have a Federal Statutory right (RESPA) to the name of a person, a telephone number and an address of the creditor — i.e., the one who is now minus money as a result of the funding of the loan. You’ve asked, they won’t answer.

Contemporaneously you want to get a temporary restraining order preventing them from taking any further action with respect to transferring, executing documents, transferring money, or collecting money until they have satisfied your demand for information and you have certified compliance with the court. Depending upon your circumstances you can offer to tender the monthly payment into the court registry or simply leave that out.

You can also file a bankruptcy petition especially if you are delinquent in payments or are about to become delinquent.

STAGE 2: Notice of Default Received

Believe it or not this is where the errors begin by the pretender lenders. You want to challenge authority, authenticity, the amount claimed due, the signatory, the notary, the loan number and anything else that is appropriate. Then go back to stage 1 and follow that track. In order to effectively do this you need to have that forensic analysis and I don’t mean the TILA Audit that is offered by so many companies using off the shelf software. You could probably buy the software yourself for less money than you pay those companies. I emphasize again that you need a FOUR WALL ANALYSIS.

Stage 3 Non-Judicial State, Notice of Sale received:

State statutes usually give you a tiny window of opportunity to contest the sale and the statute usually contains exact provisions on how you can do that or else your objection doesn’t count. At this point you need to secure the services of competent, knowledgeable, experienced legal counsel — professionals who have been fighting with these pretender lenders for a while. Anything less and you are likely to be sorely disappointed unless you landed, by luck of the draw, one of the increasing number of judges you are demonstrating their understanding and anger at this fraud.

Stage 4: Judicial State: Served with Process:

You must answer usually within 20 days. Failure to do so, along with your affirmative defenses and counterclaims, could result in a default followed by a default judgment followed by a Final Judgment of Foreclosure. See above steps.

Stage 5: Sale already occurred

You obviously need to reverse that situation. Usually the allegation is that the sale should be vacated because of fraud on the court (judicial) or fraudulent abuse of non-judicial process. This is a motion or Petitioner but it must be accompanied by a lawsuit, properly served and noticed to the other side. You probably need to name the purchaser at sale, and ask for a TRO (Temporary Restraining Order) that stops them from moving the property or the money around any further until your questions are answered (see above). At the risk of sounding like a broken record, you need a good forensic analyst and a good lawyer.

Stage 6: Eviction (Unlawful Detainer Filed or Judgment entered:

Same as Stage 5.

The Long-Term Cost of the Mortgage Fraud Meltdown — The Real Legacy of Wall Street

This is a re-post by Niel Garfield

Posted 21 hours ago by livinglies on Livinglies’s Weblog

Editor’s Note: Why do I do this? Because we are delivering a message to future generations about how the world works contrary to our constitution and contrary to American values and ideals. Conservatives conserve nothing except the wealth of the fantastic few while the liberals liberate nobody from the yoke of economic slavery. Maybe it’s all a game. I won’t play and if you care about this country and wish to avoid a societal collapse, you should stop playing too.

History has shown us with grim clarity what happens to any country or empire when the power and the wealth gets so concentrated in just a few people while the rest of the population can’t keep a roof over their head and can’t eat food and can’t get medical care, all hell breaks loose. Galbraith, IMF economists, World Bank economists, all know what is going to happen do to our failure to police our own, our failure to make it right and our failure to make amends to our allies or would-be allies.

Children are learning an important lesson: in their world, Mom and Dad are powerless to prevent the worst things from happening and there is nobody else they can depend upon. A whole generation is growing up with the notion that the American Dream is an unknown, unknowable fantasy. Every time the far right asserts personal responsibility in the face of a wretched fraud committed on most of the country, they close the gate a little more, waiting for the final slaughter. Every time the far left wimps out on their own paltform, the one the people elected them on for CHANGE NOW, they deceive and abandon our citizens.

And so we are a Prozac nation because everyone is depressed. We are a Xanax nation because everyone is so stressed out we can’t think straight. And those of us who are entering our twilight years see a future where our children and grandchildren and their children will lead bleak lives of quiet desperation in a country which proclaims free speech and assembly but has surrendered that basic right to about 100 institutions that control the lobbyists who control the flow of money in Washington and state houses.

In April, 2007 stocks were up, confidence was high and everyone had been convinced that all was well without questioning anything. Meanwhile in the inner recesses of the Federal Reserve and halls of power of the executive branch and the U.S. Department of Treasury in particular, they knew the collapse was coming and the only reason they did nothing was political — they didn’t want to admit that the free market was not working, that it wasn’t free, that it was controlled by monopoly and oligopoly, and that the government wasn’t working either because we the people had allowed people to get re-elected despite their sell-out of our countries and our lives.

In I did some very simple calculations and determined that the DJIA was not actually worth 14,000, it was worth 8,000. As it came down, more stumps revealed themselves as the high water receded. The equities market is overpriced by about 25%-30%. Housing is still inflated by 15%-20%. Nobody wants to hear this. The dollar is in a swan dive because everyone in the world knows the reality except the citizens of the United States of America where we have a “free press” that would rather entertain us than actually tell us the news.

I’m doing my part. What are you doing to end this catastrophe?

Job Woes Exacting a Toll on Family Life
By MICHAEL LUO

THE WOODLANDS, Tex. — Paul Bachmuth’s 9-year-old daughter, Rebecca, began pulling out strands of her hair over the summer. His older child, Hannah, 12, has become noticeably angrier, more prone to throwing tantrums.

Initially, Mr. Bachmuth, 45, did not think his children were terribly affected when he lost his job nearly a year ago. But now he cannot ignore the mounting evidence.

“I’m starting to think it’s all my fault,” Mr. Bachmuth said.

As the months have worn on, his job search travails have consumed the family, even though the Bachmuths were outwardly holding up on unemployment benefits, their savings and the income from the part-time job held by Mr. Bachmuth’s wife, Amanda. But beneath the surface, they have been a family on the brink. They have watched their children struggle with behavioral issues and a stress-induced disorder. He finally got a job offer last week, but not before the couple began seeing a therapist to save their marriage.

For many families across the country, the greatest damage inflicted by this recession has not necessarily been financial, but emotional and psychological. Children, especially, have become hidden casualties, often absorbing more than their parents are fully aware of. Several academic studies have linked parental job loss — especially that of fathers — to adverse impacts in areas like school performance and self-esteem.

“I’ve heard a lot of people who are out of work say it’s kind of been a blessing, that you have more time to spend with your family,” Mr. Bachmuth said. “I love my family and my family comes first, and my family means more than anything to me, but it hasn’t been that way for me.”

A recent study at the University of California, Davis, found that children in families where the head of the household had lost a job were 15 percent more likely to repeat a grade. Ariel Kalil, a University of Chicago professor of public policy, and Kathleen M. Ziol-Guest, of the Institute for Children and Poverty in New York, found in an earlier study that adolescent children of low-income single mothers who endured unemployment had an increased chance of dropping out of school and showed declines in emotional well-being.

In the long term, children whose parents were laid off have been found to have lower annual earnings as adults than those whose parents remained employed, a phenomenon Peter R. Orszag, director of the White House Office of Management and Budget, mentioned in a speech last week at New York University.

A variety of studies have tied drops in family income to negative effects on children’s development. But Dr. Kalil, a developmental psychologist and director of the university’s Center for Human Potential and Public Policy, said the more important factor, especially in middle-class households, appeared to be changes in family dynamics from job loss.

“The extent that job losers are stressed and emotionally disengaged or withdrawn, this really matters for kids,” she said. “The other thing that matters is parental conflict. That has been shown repeatedly in psychological studies to be a bad family dynamic.”

Dr. Kalil said her research indicated that the repercussions were more pronounced in children when fathers experience unemployment, rather than mothers.

She theorized that the reasons have to do with the importance of working to the male self-image, or the extra time that unemployed female breadwinners seem to spend with their children, mitigating the impact on them.

Certainly, some of the more than a dozen families interviewed that were dealing with long-term unemployment said the period had been helpful in certain ways for their families.

Denise Stoll, 39, and her husband, Larry, 47, both lost their positions at a bank in San Antonio in October 2008 when it changed hands. Mrs. Stoll, a vice president who managed a technology group, earned significantly more than her husband, who worked as a district loan origination manager.

Nevertheless, Mr. Stoll took unemployment much harder than she did and struggled to keep his spirits up, before he landed a new job within several months in the Kansas City area, where the family had moved to be closer to relatives. He had to take a sizable pay cut but was grateful to be working again.

Mrs. Stoll is still looking but has also tried to make the most of the additional time with the couple’s 5-year-old triplets, seeking to instill new lessons on the importance of thrift.

“Being a corporate mom, you work a lot of hours, you feed them dinner — maybe,” she said. “This morning, we baked cookies together. I have time to help them with homework. I’m attending church. The house is managed by me. Just a lot more homemaker-type stuff, which I think is more nurturing to them.”

Other families, however, reported unmistakable ill effects.

Robert Syck, 42, of Fishers, Ind., lost his job as a call-center manager in March. He has been around his 11-year-old stepson, Kody, more than ever before. Lately, however, their relationship has become increasingly strained, Mr. Syck said, with even little incidents setting off blowups. His stepson’s grades have slipped and the boy has been talking back to his parents more.

“It’s only been particularly in the last few months that it’s gotten really bad, to where we’re verbally chewing each other out,” said Mr. Syck, who admitted he had been more irritable around the house. “A lot of that is due to the pressures of unemployment.”

When Mr. Bachmuth was first laid off in December from his $120,000 job at an energy consulting firm, he could not even bring himself to tell his family. For several days, he got dressed in the morning and left the house as usual at 6 a.m., but spent the day in coffee shops, the library or just walking around.

Mr. Bachmuth had started the job, working on finance and business development for electric utilities, eight months earlier, moving his family from Austin. They bought something of a dream home, complete with a backyard pool and spa.

Although she knew the economy was ultimately to blame, Mrs. Bachmuth could not help feeling angry at her husband, both said later in interviews.

“She kind of had something in the back of her mind that it was partly my fault I was laid off,” Mr. Bachmuth said. “Maybe you’re not a good enough worker.”

Counseling improved matters significantly, but Mrs. Bachmuth still occasionally dissolved into tears at home.

Besides quarrels over money, the reversal in the couple’s roles also produced friction. Mrs. Bachmuth took on a part-time job at a preschool to earn extra money. But she still did most, if not all, of the cooking, cleaning and laundry.

Dr. Kalil, of the University of Chicago, said a recent study of how people spend their time showed unemployed fathers devote significantly less time to household chores than even mothers who are employed full-time, and do not work as hard in caring for children.

Mr. Bachmuth’s time with his girls, however, did increase. He was the one dropping off Rebecca at school and usually the one who picked her up. He began helping her more with homework. He and Hannah played soccer and chatted more.

But the additional time brought more opportunities for squabbling. The rest of the family had to get used to Mr. Bachmuth being around, sometimes focused on his search for a job, but other times lounging around depressed, watching television or surfing soccer sites on the Internet.

“My dad’s around a lot more, so it’s a little strange because he gets frustrated he’s not at work, and he’s not being challenged,” Hannah said. “So I think me and my dad are a lot closer now because we can spend a lot more time together, but we fight a lot more maybe because he’s around 24-7.”

When Rebecca began pulling her hair out in late summer in what was diagnosed as a stress-induced disorder, she insisted it was because she was bored. But her parents and her therapist — the same one seeing her parents — believed it was clearly related to the job situation.

The hair pulling has since stopped, but she continues to fidget with her brown locks.

The other day, she suddenly asked her mother whether she thought she would be able to find a “good job” when she grew up.

Hannah said her father’s unemployment had made it harder for her to focus on schoolwork. She also conceded she had been more easily annoyed with her parents and her sister.

At night, she said, she has taken to stowing her worries away in an imaginary box.

“I take all the stress and bad things that happen over the day, and I lock them in a box,” she said.

Then, she tries to sleep.

Your tags: Eviction, foreclosure

Other Tags: conservatives, DJIA, IMF, Prozac, U.S Department of Treasury, World Bank, Xanax, bubble, CDO, CORRUPTION, currency, GTC | Honor, Investor, Mortgage, securities fraud

Published: November 12, 2009 6:04 pm
Livinglies’s Weblog, Eviction, foreclosure

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“Officials” Who Sign for MERS: False, Fraudulent, Fabricated, Forged and Void Documents in the Chain

Posted 3 days ago by livinglies on Livinglies’s Weblog

all we have left is the obligation, unsecured and subject to counterclaims etc. MOST IMPORTANT procedurally, it requires a lawsuit by the would-be forecloser in order to establish the terms of the obligation and the security, if any. This means they must make allegations as to ownership of the receivable and prove it — the kiss of death for all would be lenders except investors who funded these transactions.

sirrowan
sirrowan@peoplepc.com

“I just thought of something. I was reading what was posted a few above me regarding MERS own rules. They claim that their “officers” tend to act without authority from MERS and they do not use any records held by MERS etc.

How can this be? How can they be officers then? They aren’t if you ask me. Now wonder all these judges are telling them they are nothing but agents if even that, lol.

But if they were officers, wouldn’t MERS be liable for the actions of their “officers” on behalf of MERS?”

ANSWER from Neil

Sirrowan: GREAT POINT! The answer is that if they have a user ID and password ANYONE can become a “limited signing officer” for MERS.

Sometimes they say they are vice-president, sometimes they use some other official title. But the fact remains that they have no connection with MERS, no employment with MERS, no access to MERS records, and definitely no direct grant of a POA (Power of attorney). It’s a game.

This is why I have repeatedly say that in every securitized chain, particularly in the case of a MERS chain, there are one or more documents that are fabricated, forged or voidable. Whether this rises the level of criminality is up to future courts to determine.

One thing is sure — a party who signs a document that has no authority to sign it in the capacity they are representing has just committed violations of federal and state statute and common law. And the Notary who knew the party was not authorized as represented has committed a violation as well. Most states have statutes that say a bad notarization renders the document void, even if it was recorded. This breaks the chain of title and reverts back to the originating lender (at best) or voids the documents in the originating transaction (at worst).

In either event, the distinction I draw between the obligation (the substance of the transaction caused by the funding of a “loan product”) and the note (which by law is ONLY EVIDENCE of the obligation and the mortgage which is ONLY incident to the note, becomes very important. If the documents (note and mortgage) are void then all we have left is the obligation, unsecured and subject to counterclaims etc. MOST IMPORTANT procedurally, it requires a lawsuit by the would-be forecloser in order to establish the terms of the obligation and the security, if any. This means they must make allegations as to ownership of the receivable and prove it — the kiss of death for all would be lenders except investors who funded these transactions.

Your tags: Eviction, foreclosure

Other Tags: chain of title, disclosure, evidence, foreclosure defense, foreclosure offense, fraud, investors, lenders, MERS, Obligation, securitization, Signatures, trustee, bubble, CDO, CORRUPTION, currency, GTC | Honor, Investor, Mortgage, securities fraud

Published: November 10, 2009 3:10 pm
Livinglies’s Weblog, Eviction, foreclosure

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What to Look For and Demand Through QWR or Discovery Part II

Posted 4 days ago by livinglies on Livinglies’s Weblog

Dan Edstrom, you are great!

OK I found the loan level details for my deal. It shows my loan in foreclosure and my last payment in 6/2008 (which is accurate). What it doesn’t say (among other things) is what advances were made on the account. Very interesting. This report is generated monthly but they are only reporting the current month. It also shows which pool my loan is in (originally their were approx. 4 pools, now there are 2). This means I can use all of this information to possibly calculate the advances reported – except that two months before I missed my first payment they stopped reporting SUB-servicer advances. [Editor’s Note: Those who are computer savvy will recognize that these are field names, which is something that should be included in your demand and in your QWR. You will also wanat the record data and metadata that is attached to each record. ]

DIST_DATE
SERIES_NAME
LOAN_NUM
POOL_NUM
DEAL_NUM LTV_DISCLOSED_PCT CLTV_PCT CREDIT_SCORE_NBR BACK_END_DTI_PCT
JUNIOR_RATIO LOAN_DOC_TYPE_DSCR LOAN_PURPOSE_TYPE_DSCR OCCUPANCY_TYPE PROPERTY_TYPE_DSCR LIEN_PRIORITY_DSCR STANDALONE_IND SILENT_SECOND_IND PROPERTY_STATE CONFORMING_BAL_IND INT_RATE_TYPE_DSCR MARGIN_GROSS_PCT
PMT_1ST_DATE INT_CHG_FREQ_MTH_QTY INT_CHG_PRD_INCR_CEIL_RATE INT_LIFE_CEIL_RATE INT_LIFE_FLOOR_RATE INT_ONLY_TERM_MTH_QTY INT_CHG_1ST_MTH INT_CHG_FREQ_DSCR INT_CHG_MTH_DIFF_QTY MORTAGE_INSURANCE_PROVIDER MORTAGE_INSURANCE_TYPE_DSCR MATURITY_DATE
NOTE_DATE
PRIN_ORIG_BAL
SOLD_BAL
TERM_ORIG_MTH_QTY PREPMT_PENALTY_TERM_MTH_QTY BORROWER_RESIDUAL_INCOME_AMT RFC_GRADE_CODE PRODUCT_GROUP_FALLOUT_DSCR MI_TYPE_DSCR INDEX_TYPE_CODE INDEX_TYPE_DSCR MLY_CURTAILMENT_AMT MLY_DRAW_GROSS_AMT MLY_COUPON_NET_RATE MLY_COUPON_GROSS_RATE MLY_PRIN_UNPAID_BAL MLY_PRIN_SCHED_BAL LOAN_AGE MLY_TERM_REMAIN_MTH_QTY MLY_UTILIZATION_PCT MLY_DELQ_REPORT_METHOD MLY_LOAN_STATUS_CODE MLY_LOAN_STATUS_DSCR MLY_PREPMT_TYPE_DSCR MLY_PAID_TO_DATE

If anyone wants this file or any of the servicing reports so they can see the actual data shoot me an email.

Thanks,
Dan Edstrom
dmedstrom@hotmail.com

Your tags: Eviction, foreclosure

Other Tags: accounting, disclosure, discovery, Edstrom, foreclosure defense, foreclosure offense, fraud, lost note, Mortgage, quiet title, QWR, TILA audit, trustee, bubble, CDO, CORRUPTION, currency, GTC | Honor, Investor, securities fraud

Published: November 9, 2009 6:24 pm
Livinglies’s Weblog, Eviction, foreclosure

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TENT CITY, California While Vacant Houses Deteriorate

Posted 4 days ago by livinglies on Livinglies’s Weblog

TENT CITY, California While Vacant Houses Deteriorate

From watergatesummer.blogspot.com we have this post on the moronic ideology that misuses our natural and creative resources. It can be said that conservatives do not conserve and liberals do not liberate. I coined that because it is obvious that politics in this country is degrading even while some try to revive it.

Out of pure ideology and ignorance, people are being ejected from homes they own on the pretense that they don’t own the home. This sleight of hand is accomplished by “bridge to nowhere” logic — the pretender lender merely pretends to be authorized to initiate foreclosure proceedings. They come into court with a pile of inconsistent documents with little or no REAL connection with the originating papers and zero connection with the REAL lender.

So we end up with hundreds of thousands of homes that are empty, subject to vandalism and decay from lack of mainteance and lack of anyone living in them, combined with nobody paying utility bills etc that would help take the edge off the crisis. Instead, we choose to allow TENT CITY where there are no decent facilities, where people are living in tents literally, resulting in a greater drain on social services, police, fire, health, schools etc.

Why because some ideologue and people who mindlessly subscribe to such ideology has already played Judge and Jury and convicted these victims of Wall Street fraud. They are certain that these are deadbeats that don’t pay thier bills and won’t listen when someone points out that many of these people had nearly perfect credit scores before tragedy hit. That means the victims were generally considered to have been better credit risks based upon an excellent record of paying their bills, than their ideological detractors.

Someone of this ideology will tell us or anyone who will listen that the victims should have read what they were signing. The is fact that NOBODY reads those closing documents, not even lawyers, not even the ideological (don’t confuse me with the facts) conservatives. So the same people who say you should have read those documents, didn’t read their own.

And now everyone who is NOT in foreclosure or who has already lost possession of their home and who signed a securitized loan package is “underwater” an average of 25% , which means that they are, on average around $70,000 in debt that will never be covered by equity in their lifetime — so they can’t move without coming to the table with the shortfall.

Such ideologues fall short of helping their fellow citizens to be sure. What is astonishing is that they fall short of helping themselves, which means they subject their life partners, spouses, children and other dependents to the same mindless mind-numbing shoot myself in the foot political theology. And somehow it is THESE people who are controlling the pace of the recovery, controlling the correction in housing and social services who are claiming to be angry about their country being taken away from them!

Your tags: Eviction, foreclosure

Other Tags: bailout, housing, lender, POLICY, securitization, tent city, CDO, CORRUPTION, GTC | Honor, Mortgage, securities fraud

Published: November 9, 2009 6:15 pm
Livinglies’s Weblog, Eviction, foreclosure

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U.S. STANDS FIRM IN SUPPORT OF WALL STREET WHILE THE REST OF THE WORLD TAKES THE ECONOMIC CRISIS SERIOUSLY

Posted 5 days ago by livinglies on Livinglies’s Weblog

MR. GEITNER, MR. SUMMERS AND OTHERS WHO ARE ON THE ECONOMIC TEAM DESERVE some CREDIT FOR BRINGING US BACK FROM AN ECONOMIC PRECIPICE THAT WOULD HAVE RESULTED IN A DEPRESSION FAR DEEPER AND LONGER THAN THE GREAT DEPRESSION. AND THEY SHOULD BE CUT SOME SLACK BECAUSE THEY WERE HANDED A PLATE ON WHICH THE ECONOMY WAS BASED LARGELY ON VAPOR — THE CONTRACTION OF WHICH WILL SPELL DISASTER IN MORE WAYS THAN ONE.
THAT SAID, THEY ARE GOING TOO FAR IN PROTECTING INVESTMENT BANKS AND DEPOSITORY BANKS FROM THEIR OWN STUPIDITY AND ENCOURAGING BEHAVIOR THAT THE TAXPAYERS WILL ABSORB — AT LEAST THEY THINK THE TAXPAYERS WILL DO IT.
As the following article demonstrates, the model currently used in this country and dozens of other countries is “pay to play” — and if there is a crash it is the fees the banks paid over the years that bails them out instead of the taxpayers.
For reasons that I don’t think are very good, the economic team is marginalizing Volcker and headed down the same brainless path we were on when Bush was in office, which was only an expansion of what happened when Clinton was in office, which was a “me too” based upon Bush #1 and Reagan. The end result is no longer subject to conjecture — endless crashes, each worse than the one before.
The intransigence of Wall Street and the economic team toward any meaningful financial reform adds salt to the wound we created in the first palce. We were fortunate that the rest of the world did not view the economic meltdown as an act of war by the United States. They are inviting us to be part of the solution and we insist on being part of the problem.
Sooner or later, the world’s patience is going to wear thin. Has anyone actually digested the fact that there is buyer’s run on gold now? Does anyone care that the value of the dollar is going down which means that those countries, companies and individuals who keep their wealth in dollars are dumping those dollars in favor of diversifying into other units of storage?
The short-term “advantage” will be more than offset by the continuing joblessness and homelessness unless we take these things seriously. Culturally, we are looking increasingly barbaric to dozens of countries that take their role of protecting the common welfare seriously.
Bottom Line on these pages is that it shouldn’t be so hard to get a judge to realize that just because the would-be forecloser has a big expensive brand name doesn’t mean they are anything better than common thieves. But like all theft in this country, the bigger you are the more wiggle room you get when you rob the homeless or a bank or the government or the taxpayers. Marcy Kaptur is right. She calls for a change of “generals” (likening Obama’s situation to Lincoln), since their skills were perhaps valuable when Obama first tackled the economic crisis — but now are counterproductive. We need new generals on the economic team that will steer us clear from the NEXT crisis not the LAST crisis.

November 8, 2009
Britain and U.S. Clash at G-20 on Tax to Insure Against Crises
By JULIA WERDIGIER

ST. ANDREWS, Scotland — The United States and Britain voiced disagreement Saturday over a proposal that would impose a new tax on financial transactions to support future bank rescues.

Prime Minister Gordon Brown of Britain, leading a meeting here of finance ministers from the Group of 20 rich and developing countries, said such a tax on banks should be considered as a way to take the burden off taxpayers during periods of financial crisis. His comments pre-empted the International Monetary Fund, which is set to present a range of options next spring to ensure financial stability.

But the proposal was met with little enthusiasm by the United States Treasury secretary, Timothy F. Geithner, who told Sky News in an interview that he would not support a tax on everyday financial transactions. Later he seemed to soften his position, saying it would be up to the I.M.F. to present a range of possible measures.

“We want to make sure that we don’t put the taxpayer in a position of having to absorb the costs of a crisis in the future,” Mr. Geithner said after the Sky News interview. “I’m sure the I.M.F. will come up with some proposals.”

The Russian finance minister, Alexei Kudrin, also said he was skeptical of such a tax. Similar fees had been proposed by Germany and France but rejected by Mr. Brown’s government in the past as too difficult to manage. But Mr. Brown is now suggesting “an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global financial transaction levy.”

Supporters of a tax had argued that it would reduce the volatility of markets; opponents said it would be too complex to enact across borders and could create huge imbalances. Mr. Brown said any such tax would have to be applied universally.

“It cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us,” Mr. Brown said at the summit. “There must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards.”

At the meeting at the Scottish golf resort, the last to be hosted by Britain during its turn leading the group, the ministers agreed on a detailed timetable to achieve balanced economic growth and reiterated a pledge not to withdraw any economic stimulus until a recovery was certain.

They also committed to enact limits on bonuses and force banks to hold more cash reserves. But they failed to reach an agreement on how to finance a new climate change deal ahead of a crucial meeting in Copenhagen next month.

The finance ministers agreed that economic and financial conditions had improved but that the recovery was “uneven and remains dependent on policy support,” according to a statement released by the group. The weak condition of the economy was illustrated Friday by new data showing the unemployment rate in the United States rising to 10.2 percent in October, the highest level in 26 years.

The finance ministers also acknowledged that withdrawing stimulus packages required a balancing act to avoid stifling the economic recovery that has just begun.

“If we put the brakes on too quickly, we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Mr. Geithner said. “It is too early to start to lean against recovery.”

As part of the group’s global recovery plan, the United States would aim to increase its savings rate and reduce its trade deficit while countries like China and Germany would reduce their dependence on exports. Economic imbalances were widely faulted as helping to bring about the global economic downturn.

Mr. Geithner acknowledged on Saturday that the changes would take time but that “what we are seeing so far has been encouraging.”

Your tags: Eviction, foreclosure

Other Tags: bailout, credit, economic team, financial reform, foreclosures, Geitner, Summers, Volker, bubble, CDO, CORRUPTION, currency, GTC | Honor, Investor, Mortgage, securities fraud

Published: November 8, 2009 6:55 pm
Livinglies’s Weblog, Eviction, foreclosure

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I’m OK. Thanks for asking

Posted 6 days ago by livinglies on Livinglies’s Weblog
Livinglies’s Weblog, foreclosure

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FOLLOWING THE MONEY — WHAT TO ASK FOR AND LOOK FOR

Posted 6 days ago by livinglies on Livinglies’s Weblog
Livinglies’s Weblog, Eviction, foreclosure

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Why “too big to fail” has to be dealt with this time

Posted 6 days ago by livinglies on Livinglies’s Weblog
Livinglies’s Weblog, foreclosure

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AIG Reports Profits Increase — More Smoke and Mirrors

Posted 7 days ago by livinglies on Livinglies’s Weblog
Livinglies’s Weblog, Eviction, foreclosure

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Foreclosure Defense: New York Judge Gets It HSBC v Valentin N.Y. Sup., 2008

Posted 7 days ago by livinglies on Livinglies’s Weblog
Livinglies’s Weblog, Eviction, foreclosure

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Bankruptcy Court Wipes Out Mortgage Debt When Servicer Fails to Document Claim

10/26/2009 By: Darrell Delamaide

A federal bankruptcy judge in New York created new uncertainties for mortgage servicers when he expunged a mortgage debt after the servicer could not provide sufficient documentation that it had a claim on the home.

The ruling came earlier this month in bankruptcy court in the Southern District of New York in a case involving Mount Laurel, New Jersey-based PHH Mortgage and a property in White Plains, the New York Times reported.

Judge Robert Drain wiped out a $461,263 mortgage debt on the property, in another case of how things can go wrong when documentation does not keep up with transfers of mortgages in a world of securitized loans.

A recent ruling by the Kansas Supreme Court similarly denied the Mortgage Electronic Registration Service (MERS) rights to recovery in a foreclosure case, even though MERS often stands in for banks that actually hold the mortgage. As a consequence, the bank holding the mortgage lost out in the foreclosure.

In the PHH case, the homeowner, who was not identified, filed for bankruptcy and PHH claimed its mortgage debt.

When attempts by the homeowner’s lawyer to get PHH to modify the debt met with no success, he asked for proof of PHH’s standing and received a letter stating that PHH was the servicer of the loan but that the holder of the note was U.S. Bank, as trustee of a securitization pool.

When he then asked for proof that U.S. Bank was indeed the holder of the note, he received only an affidavit from an executive at PHH Mortgage, the Times reported.

Among the documents supplied to the court to support PHH’s assertion was a copy of the assignment of the mortgage, but this was signed by the same PHH executive identified this time as an official of MERS, and was dated March 26 of this year, well after the bankruptcy had been filed.

In the hearing, the PHH lawyer argued that in the secondary market, there are many cases where assignment of mortgages or assignment of notes don’t happen at the time they should – that this was standard operating procedure for many years.

Judge Drain rejected that argument, the Times reported. “I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person,” the newspaper quoted him as saying. “That’s the problem. And that’s because the claimant has not shown an assignment of a mortgage.”

PHH is appealing Judge Drain’s decision.

The ruling also puts the homeowner in uncharted territory. “Right now I am in bankruptcy court with a house that has no discernible debt on it,” her lawyer told the Times, “yet I have a client with a signed mortgage. We cannot in theory just go out and sell this house because the title company won’t give a clear title on it.”

The lawyer’s options are to file an amended plan or sue to try to get clear title to the property.

The lawyer is not competend to testify

If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

So you sent a QWR and you know the loan is securitized. The orignating lender says talk to the servicer and the servicer declines to answer all the questions because they didn’t originate the loan. Or you are in court and the lawyer is trying to finesse his way past basic rules of evidence and due process by making representations to the Judge as an officer of the court.

He’s lying of course and if you let it go unchallenged, you will lose the case. Basically opposing counsel is saying “trust me Judge I wouldn’t say it if it wasn’t so.” And your answer is that the lawyer is not a witness, that you don’t trust the lawyer or what he has to say, that if he is a witness he should be sworn in and subject to cross examaintion and if he is not a witness you are entitled to be confronted with a real witness with real testimony based upon real knowledge.

First Questions: When did you first learn of this case? What personal knowledge do you have concerning the payments received from the homeowner or third parties? What personal knowledge do you have as to who providing the actual cash from which the subject loan was funded?

Only when pressed relentlessly by the homeowner, the servicer comes up with a more and more restrictive answer as to what role they play. But they always start with don’t worry about a thing we control everything. Not true. Then later after you thought you worked out a modification they tell the deal is off because the investor declined. The investor is and always was the lender. That is the bottom line and any representation to the contrary is a lie and a fraud upon the court.

So whoever you sent the QWR to, always disclaims your right to ask, or tells you the name of the investor (i.e., your lender) is confidential, or that they have authority (but they won’t show it to you). That doesn’t seem to be a lender, does it? In fact they disclaim even knowing enough to answer your questions.

So AFTER THEY SERVE YOU with something file a motion to compel an immediate full answer to your QWR since under TILA service on the servicer is the same as service on the lender. You argue that everyone seems to be claiming rights to be paid under the original obligation, everyone seems to be claiming the right to enforce the note and mortgage, but nobody is willing to state unequivocally that they are the lender.

You are stuck in the position of being unable to seek modification under federal and State rules, unable to sell the property because you don’t know who can sign a satisfaction of mortgage or a release and reconveyance, unable to do a short-sale, and unable to refinance — all because they won’t give a simple answer to a simple question: who is the lender and what is the balance claimed by the real lender on the obligation? At this point you don’t even know that any of the real lenders wish to make a claim.

This is probably because they received TARP funds and insurance proceeds on defaults of pools that they had purchased multiple insurance policies (credit default swaps). But whether they are paid by someone who acquired rights of subrogation or they were not paid, you have a right to a FULL accounting and to know who they are and whether they received any third party money. If they were paid in part or otherwise sold their interest, then you have multiple additional unknown parties.

The reason is simple. They are not the lender and they know it. The lender is a group of investors who funded the transaction with Petitioner/Homeowner and others who purchased similar financial products from the same group of participants in the securitization chain relating to the subject loan.

The people currently in court do not include all the real parties in interest for you to make claims against the lender. Cite to the Massachusetts case where Wells Fargo and its lawyer were subject to an $850,000 sanction for misrepresenting its status to the court.

It is not enough for them to bluff their way by saying that they have already answered the interrogatories. When they lost and it came time to allocate damages and attorneys fees, Wells suddenly said they were NOT the lender, beneficiary or current holder and that therefore the damages and attorneys fees should be assessed against the real lender — who was not a party to the pending litigation and whom they refused to disclose along with their misrepresentation that they were the true lender.

It is not enough that the lawyer makes a representation to the court as an officer of the court. That is not how evidence works. If the lawyer wants to represent facts, then he/she should be sworn in and be subject to (1) voir dire to establish that he/she is opposing counsel that it came from some company.

The witness must be a competent witness who takes an oath, has personal knowledge regarding the content of the document, states that personal knowledge and whose testimony conforms to what is on the document.

There is no such thing as foundation without a witness. There is no such thing as foundation without a competent witness. So if the lawyer tries to finesse the subject by making blanket representations to the court(e.g. the property is “underwater” by $xxx,xxx and we need a lift of stay…yet, there is no certified appraisal entered into evidence with a certified appraiser that can be cross examined…just a statement from opposing counsel) point to Wells, or even point to other inconsistencies between what counsel has represented and what now appears to be the truth, and demand an evidentiary hearing. If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

File a motion to extend time to file adversary proceeding(in BK situation), answer, affirmative defenses and counterclaim UNTIL YOU GET A FULL AND COMPLETE ANSWER TO YOUR QWR so you can determine the real parties in interest and serve them with process. Otherwise, we will have a partial result wherein the real owner of the loan can and will claim damages and injunctive relief probably against all the current parties to this action including the Homeowner.

In short, the opposing counsel cannot just make statements of “fact” and have them accepted by the court as “fact” if they don’t pass the sniff test of real evidence corroborated by a competent witness. …and with every pleading ask for an evidentiary hearing and attorneys fees. Follow rule 11 procedure in Federal Court or the state law counterpart so you can get them later.

The case is lost when you stip to the commissioner

remember this if you forget everything else you don’t have to agree to take a commissioner in your eviction case he has thirty or so cases per day and therefore does not have time to listen to your defenses to the foreclosure or that the sale was not dully perfected . He will politely say I do not have  jurisdiction to hear these defenses. if they present the Trustees deed,

Trustees Fleming and Huff
Trustees Fleming and Huff (Photo credit: dave.cournoyer)

its over.
See Cal. Const. Article 6, §§21; 22
CCP § 259(e)

SB 94 and its interferance with the practice

CA SB 94 on Lawyers & Loan Modifications Passes Assembly… 62-10

The California Assembly has passed Senate Bill 94, a bill that seeks to protect homeowners from loan modification scammers, but could end up having the unintended consequence of eliminating a homeowner’s ability to retain an attorney to help them save their home from foreclosure.

The bill, which has an “urgency clause” attached to it, now must pass the State Senate, and if passed, could be signed by the Governor on October 11th, and go into effect immediately thereafter.

SB 94’s author is California State Senator Ron Calderon, the Chair of the Senate Banking Committee, which shouldn’t come as much of a surprise to anyone familiar with the bigger picture. Sen. Calderon, while acknowledging that fee-for-service providers can provide valuable services to homeowners at risk of foreclosure, authored SB 94 to ensure that providers of these services are not compensated until the contracted services have been performed.

SB 94 prevents companies, individuals… and even attorneys… from receiving fees or any other form of compensation until after the contracted services have been rendered. The bill will now go to the Democratic controlled Senate where it is expected to pass.

Supporters of the bill say that the state is literally teeming with con artists who take advantage of homeowners desperate to save their homes from foreclosure by charging hefty fees up front and then failing to deliver anything of value in return. They say that by making it illegal to charge up front fees, they will be protecting consumers from being scammed.

While there’s no question that there have been some unscrupulous people that have taken advantage of homeowners in distress, the number of these scammers is unclear. Now that we’ve learned that lenders and servicers have only modified an average of 9% of qualified mortgages under the Obama plan, it’s hard to tell which companies were scamming and which were made to look like scams by the servicers and lenders who failed to live up to their agreement with the federal government.

In fact, ever since it’s come to light that mortgage servicers have been sued hundreds of times, that they continue to violate the HAMP provisions, that they foreclose when they’re not supposed to, charge up front fees for modifications, require homeowners to sign waivers, and so much more, who can be sure who the scammers really are. Bank of America, for example, got the worst grade of any bank on the President’s report card listing, modifying only 4% of the eligible mortgages since the plan began. We’ve given B of A something like $200 billion and they still claim that they’re having a hard time answering the phones over there, so who’s scamming who?

To make matters worse, and in the spirit of Y2K, the media has fanned the flames of irrationality with stories of people losing their homes as a result of someone failing to get their loan modified. The stories go something like this:

We gave them 1,000. They told us to stop making our mortgage payment. They promised us a principal reduction. We didn’t hear from them for months. And then we lost our house.

I am so sure. Can that even happen? I own a house or two. Walk me through how that happened again, because I absolutely guarantee you… no way could those things happen to me and I end up losing my house over it. Not a chance in the world. I’m not saying I couldn’t lose a house, but it sure as heck would take a damn sight more than that to make it happen.

Depending on how you read the language in the bill, it may prevent licensed California attorneys from requiring a retainer in advance of services being rendered, and this could essentially eliminate a homeowner’s ability to hire a lawyer to help save their home.

Supporters, on the other hand, respond that homeowners will still be able to hire attorneys, but that the attorneys will now have to wait until after services have been rendered before being paid for their services. They say that attorneys, just like real estate agents and mortgage brokers, will now only be able to receive compensation after services have been rendered.

But, assuming they’re talking about at the end of the transaction, there are key differences. Real estate agents and mortgage brokers are paid OUT OF ESCROW at the end of a transaction. They don’t send clients a bill for their services after the property is sold.

Homeowners at risk of foreclosure are having trouble paying their bills and for the most part, their credit ratings have suffered as a result. If an attorney were to represent a homeowner seeking a loan modification, and then bill for his or her services after the loan was modified, the attorney would be nothing more than an unsecured creditor of a homeowner who’s only marginally credit worthy at best. If the homeowner didn’t pay the bill, the attorney would have no recourse other than to sue the homeowner in Small Claims Court where they would likely receive small payments over time if lucky.

Extending unsecured credit to homeowners that are already struggling to pay their bills, and then having to sue them in order to collect simply isn’t a business model that attorneys, or anyone else for that matter, are likely to embrace. In fact, the more than 50 California attorneys involved in loan modifications that I contacted to ask about this issue all confirmed that they would not represent homeowners on that basis.

One attorney, who asked not to be identified, said: “Getting a lender or servicer to agree to a loan modification takes months, sometimes six or nine months. If I worked on behalf of homeowners for six or nine months and then didn’t get paid by a number of them, it wouldn’t be very long before I’d have to close my doors. No lawyer is going to do that kind of work without any security and anyone who thinks they will, simply isn’t familiar with what’s involved.”

“I don’t think there’s any question that SB 94 will make it almost impossible for a homeowner to obtain legal representation related to loan modifications,” explained another attorney who also asked not to be identified. ”The banks have fought lawyers helping clients through the loan modification process every step of the way, so I’m not surprised they’ve pushed for this legislation to pass.”

Proponents of the legislation recite the all too familiar mantra about there being so many scammers out there that the state has no choice but to move to shut down any one offering to help homeowners secure loan modifications that charges a fee for the services. They point out that consumers can just call their banks directly, or that there are nonprofit organizations throughout the state that can help homeowners with loan modifications.

While the latter is certainly true, it’s only further evidence that there exists a group of people in positions of influence that are unfamiliar , or at the very least not adequately familiar with obtaining a loan modification through a nonprofit organization, and they’ve certainly never tried calling a bank directly.

The fact that there are nonprofit housing counselors available, and the degree to which they may or may not be able to assist a given homeowner, is irrelevant. Homeowners are well aware of the nonprofit options available. They are also aware that they can call their banks directly. From the President of the United States and and U.S. Attorney General to the community newspapers found in every small town in America, homeowners have heard the fairy tales about about these options, and they’ve tried them… over and over again, often times for many months. When they didn’t get the desired results, they hired a firm to help them.

Yet, even the State Bar of California is supporting SB 94, and even AB 764, a California Assembly variation on the theme, and one even more draconian because of its requirement that attorneys only be allowed to bill a client after a successful loan modification has been obtained. That means that an attorney would have to guarantee a homeowner that he or she would obtain a modification agreement from a lender or servicer or not get paid for trying. Absurd on so many levels. Frankly, if AB 764 passes, would the last one out of California please turn off the lights and bring the flag.

As of late July, the California State Bar said it was investigating 391 complaints against 141 attorneys, as opposed to nine investigations related to loan modifications in 2008. The Bar hasn’t read anywhere all of the complaints its received, but you don’t have to be a statistician to figure out that there’s more to the complaints that meets the eye. So far the State Bar has taken action against three attorneys and the Attorney General another four… so, let’s see… carry the 3… that’s 7 lawyers. Two or three more and they could have a softball team.

At the federal level they’re still reporting the same numbers they were last spring. Closed 11… sent 71 letters… blah, blah, blah… we’ve got a country of 300 million and at least 5 million are in trouble on their mortgage. The simple fact is, they’re going to have to come up with some serious numbers before I’m going to be scared of bumping into a scammer on every corner.

Looking Ahead…

California’s ALT-A and Option ARM mortgages are just beginning to re-set, causing payments to rise, and with almost half of the mortgages in California already underwater, these homeowners will be unable to refinance and foreclosures will increase as a result. Prime jumbo foreclosure rates are already up a mind blowing 634% as compared with January 2008 levels, according to LPS Applied Analytics.

Clearly, if SB 94 ends up reducing the number of legitimate firms available for homeowners to turn to, everyone involved in its passage is going to be retiring. While many sub-prime borrowers have suffered silently through this horror show of a housing crisis, the ALT-A and Option ARM borrowers are highly unlikely to slip quietly into the night.

There are a couple of things about the latest version of SB 94 that I found interesting:

1. It says that a lawyer can’t collect a fee or any other compensation before serivces have been delivered, but it doesn’t make clear whether attorneys can ask the client to deposit funds in the law firm’s trust account and then bill against thsoe funds as amounts are earned. Funds deposited in a law firm trust account remain the client’s funds, so they’re not a lawyer’s “fees or other compensation”. Those funds are there so that when the fees have been earned, the lawyer doesn’t have to hope his or her bill gets paid. Of course, it also says that an attorney can’t hold any security interest, but money in a trust account a client’s money, the attorney has no lien against it. All of this is a matter of interpretation, of course, so who knows.

2. While there used to be language in both the real estate and lawyer sections that prohibited breaking up services related to a loan modification, in the latest version all of the language related to breaking up services as applied to attorneys has been eliminated. It still applies to real estate licensed firms, but not to attorneys. This may be a good thing, as at least a lawyer could complete sections of the work involved as opposed to having to wait until the very end, which the way the banks have been handling things, could be nine months away.

3. The bill says nothing about the amounts that may be charged for services in connection with a loan modification. So, in the case of an attorney, that would seem to mean that… well, you can put one, two and three together from there.

4. Lawyers are not included in definition of foreclosure consultant. And there is a requirement that new language be inserted in contracts, along the lines of “You don’t have to pay anyone to get a loan modification… blah, blah, blah.” Like that will be news to any homeowner in America. I’ve spoken with hundreds and never ran across one who didn’t try it themselves before calling a lawyer. I realize the Attorney General doesn’t seem to know that, but look… he’s been busy.

Conclusion…

Will SB 94 actually stop con artists from taking advantage of homeowners in distress? Or will it end up only stopping reputable lawyers from helping homeowners, while foreclosures increase and our economy continues its deflationary free fall? Will the California State Bar ever finishing reading the complaints being received, and if they ever do, will they understand what they’ve read. Or is our destiny that the masses won’t understand what’s happening around them until it sucks them under as well.

I surely hope not. But for now, I’m just hoping people can still a hire an attorney next week to help save their homes, because if they can’t… the Bar is going to get a lot more letters from unhappy homeowners.

Countrywide San Diego district attorney v. Countrywide

san deigovscountrywide

Brown Sues 21 Individuals and 14 Companies Who Ripped Off Homeowners Desperate for Mortgage Relief

News Release
July 15, 2009
For Immediate Release
Contact: (916) 324-5500
Print Version
Attachments

Los Angeles – As part of a massive federal-state crackdown on loan modification scams, Attorney General Edmund G. Brown Jr. at a press conference today announced the filing of legal action against 21 individuals and 14 companies who ripped off thousands of homeowners desperately seeking mortgage relief.

Brown is demanding millions in civil penalties, restitution for victims and permanent injunctions to keep the companies and defendants from offering mortgage-relief services.

“The loan modification industry is teeming with confidence men and charlatans, who rip off desperate homeowners facing foreclosure,” Brown said. “Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn’t provide an ounce of relief.”

Brown filed five lawsuits as part of “Operation Loan Lies,” a nationwide sweep of sham loan modification consultants, which he conducted with the Federal Trade Commission, the U.S. Attorney’s office and 22 other federal and state agencies. In total, 189 suits and orders to stop doing business were filed across the country.

Following the housing collapse, hundreds of loan modification and foreclosure-prevention companies have cropped up, charging thousands of dollars in upfront fees and claiming that they can reduce mortgage payments. Yet, loan modifications are rarely, if ever, obtained. Less than 1 percent of homeowners nationwide have received principal reductions of any kind.

Brown has been leading the fight against fraudulent loan modification companies. He has sought court orders to shut down several companies including First Gov and Foreclosure Freedom and has brought criminal charges and obtained lengthy prison sentences for deceptive loan modification consultants.

Brown’s office filed the following lawsuits in Orange County and U.S. District Court for the Central District (Los Angeles):

– U.S. Homeowners Assistance, based in Irvine;
– U.S. Foreclosure Relief Corp and its legal affiliate Adrian Pomery, based in the City of Orange;
– Home Relief Services, LLC, with offices in Irvine, Newport Beach and Anaheim, and its legal affiliate, the Diener Law Firm;
– RMR Group Loss Mitigation, LLC and its legal affiliates Shippey & Associates and Arthur Aldridge. RMR Group has offices in Newport Beach, City of Orange, Huntington Beach, Corona, and Fresno;
– and
– United First, Inc, and its lawyer affiliate Mitchell Roth, based in Los Angeles.

U.S. Homeowners Assistance
Brown on Monday sued U.S. Homeowners Assistance, and its executives — Hakimullah “Sean” Sarpas and Zulmai Nazarzai — for bilking dozens of homeowners out of thousands of dollars each.

U.S. Homeowners Assistance claimed to be a government agency with a 98 percent success rate in aiding homeowners. In reality, the company was not a government agency and was never certified as an approved housing counselor by the U.S. Department of Housing and Urban Development. None of U.S. Homeowners Assistance’s known victims received loan modifications despite paying upfront fees ranging from $1,200 to $3,500.

For example, in January 2008, one victim received a letter from her lender indicating that her monthly mortgage payment would increase from $2,300 to $3,500. Days later, she received an unsolicited phone call from U.S. Homeowners Assistance promising a 40 percent reduction in principal and a $2,000 reduction in her monthly payment. She paid $3500 upfront for U.S. Homeowners Assistance’s services.

At the end of April 2008, her lender informed her that her loan modification request had been denied and sent her the documents that U.S. Homeowners Assistance had filed on her behalf. After reviewing those documents, she discovered that U.S. Homeowners Assistance had forged her signature and falsified her financial information – including fabricating a lease agreement with a fictitious tenant.

When she confronted U.S. Homeowners Assistance, she was immediately disconnected and has not been able to reach the company.

Brown’s suit contends that U.S. Homeowners Assistance violated:
– California Business and Professions Code section 17500 by falsely stating they were a government agency and misleading homeowners by claiming a 98 percent success rate in obtaining loan modifications;

– California Business and Professions Code section 17200 by failing to perform services made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Civil Code section 2945.45 for failing to register with the California Attorney General’s Office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

US Homeowners Assistance also did business as Statewide Financial Group, Inc., We Beat All Rates, and US Homeowners Preservation Center.

US Foreclosure Relief Corporation
Brown last week sued US Foreclosure Relief Corporation, H.E. Service Company, their executives — George Escalante and Cesar Lopez — as well as their legal affiliate Adrian Pomery for running a scam promising homeowners reductions in their principal and interest rates as low as 4 percent. Brown was joined in this suit by the Federal Trade Commission and the State of Missouri.

Using aggressive telemarketing tactics, the defendants solicited desperate homeowners and charged an upfront fee ranging from $1,800 to $2,800 for loan modification services. During one nine-month period alone, consumers paid defendants in excess of $4.4 million. Yet, in most instances, defendants failed to provide the mortgage-relief services. Once consumers paid the fee, the defendants avoided responding to consumers’ inquiries.

In response to a large number of consumer complaints, several government agencies directed the defendants to stop their illegal practices. Instead, they changed their business name and continued their operations – using six different business aliases in the past eight months alone.

Brown’s lawsuit alleges the companies and individuals violated:
– The National Do Not Call Registry, 16 C.F.R. section 310.4 and California Business and Professions Code section 17200 by telemarketing their services to persons on the registry;

– The National Do Not Call Registry, 16 C.F.R. section 310.8 and California Business and Professions Code section 17200 by telemarketing their services without paying the mandatory annual fee for access to telephone numbers within the area codes included in the registry;

– California Civil Code section 2945 et seq. and California Business and Professions Code section 17200 by demanding and collecting up-front fees prior to performing any services, failing to include statutory notices in their contracts, and failing to comply with other requirements imposed on mortgage foreclosure consultants;

– California Business and Professions Code sections 17200 and 17500 by representing that they would obtain home loan modifications for consumers but failing to do so in most instances; by representing that consumers must make further payments even though they had not performed any of the promised services; by representing that they have a high success rate and that they can obtain loan modification within no more than 60 days when in fact these representations were false; and by directing consumers to avoid contact with their lenders and to stop making loan payments causing some lenders to initiate foreclosure proceedings and causing damage to consumers’ credit records.

Victims of this scam include a father of four battling cancer, a small business owner, an elderly disabled couple, a sheriff whose income dropped due to city budget cuts and an Iraq-war veteran. None of these victims received the loan modification promised.

Brown is seeking unspecified civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

The defendants also did business under other names including Lighthouse Services and California Foreclosure Specialists.

Home Relief Services, LLC
Brown Monday sued Home Relief Services, LLC., its executives Terence Green Sr. and Stefano Marrero, the Diener Law Firm and its principal attorney Christopher L. Diener for bilking thousands of homeowners out of thousands of dollars each.

Home Relief Services charged homeowners over $4,000 in upfront fees, promised to lower interest rates to 4 percent, convert adjustable-rate mortgages to low fixed-rate loans and reduce principal up to 50 percent within 30 to 60 days. None of the known victims received a modification with the assistance of the defendants.

In some cases, these companies also sought to be the lenders’ agent in the short-sale of their clients’ homes. In doing so, the defendants attempted to use their customers’ personal financial information for their own benefit.

Home Relief Services and the Diener Law Firm directed homeowners to stop contacting their lender because the defendants would act as their sole agent and negotiator.

Brown’s lawsuit contends that the defendants violated:
– California Business and Professions Code section 17500 by claiming a 95 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

– California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

– California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $10 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Two other companies with the same management were also involved in the effort to deceive homeowners: Payment Relief Services, Inc. and Golden State Funding, Inc.

RMR Group Loss Mitigation Group
Brown Monday sued RMR Group Loss Mitigation and its executives Michael Scott Armendariz of Huntington Beach, Ruben Curiel of Lancaster, and Ricardo Haag of Corona; Living Water Lending, Inc.; and attorney Arthur Steven Aldridge of Westlake Village as well as the law firm of Shippey & Associates and its principal attorney Karla C. Shippey of Yorba Linda – for bilking over 500 victims out of nearly $1 million.

The company solicited homeowners through telephone calls and in-person home visits. Employees claimed a 98 percent success rate and a money-back guarantee. None of the known victims received any refunds or modifications with the assistance of defendants.

For example, in July 2008, a 71-year old victim learned his monthly mortgage payments would increase from $2,470 to $3,295. He paid $2,995, yet received no loan modification and no refund.

Additionally, RMR insisted that homeowners refrain from contacting their lenders because the defendants would act as their agents.

Brown’s suit contends that the defendants violated:

– California Business and Professions Code section 17500 by claiming a 98 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

– California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

– California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

United First, Inc.
On July 6, 2009, Brown sued a foreclosure consultant and an attorney — Paul Noe Jr. and Mitchell Roth – who conned 2,000 desperate homeowners into paying exorbitant fees for “phony lawsuits” to forestall foreclosure proceedings.

These lawsuits were filed and abandoned, even though homeowners were charged $1,800 in upfront fees, at least $1,200 per month and contingency fees of up to 80 percent of their home’s value.

Noe convinced more than 2,000 homeowners to sign “joint venture” agreements with his company, United First, and hire Roth to file suits claiming that the borrower’s loan was invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. Similar suits in other states have never resulted in the elimination of the borrower’s mortgage debt.

After filing the lawsuits, Roth did virtually nothing to advance the cases. He often failed to make required court filings, respond to legal motions, comply with court deadlines, or appear at court hearings. Instead, Roth’s firm simply tried to extend the lawsuits as long as possible in order to collect additional monthly fees.

United First charged homeowners approximately $1,800 in upfront fees, plus at least $1,200 per month. If the case was settled, homeowners were required to pay 50 percent of the cash value of the settlement. For example, if United First won a $100,000 reduction of the mortgage debt, the homeowner would have to pay United First a fee of $50,000. If United First completely eliminated the homeowner’s debt, the homeowner would be required to pay the company 80 percent of the value of the home.

Brown’s lawsuit contends that Noe, Roth and United First:

– Violated California’s credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945

– Inserted unconscionable terms in contracts;

– Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and Noe, who were not lawyers, to generate business for his law firm violating California Business and Professions Code 6150; and

– Violated 17500 of the California Business and Professions Code.

Brown’s office is seeking $2 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Tips for Homeowners
Brown’s office issued these tips for homeowners to avoid becoming a victim:

DON’T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.

DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.

DON’T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.

DON’T transfer title or sell your house to a “foreclosure rescuer.” Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called “rescuers” use to evict homeowners and steal all or most of the home’s equity.

DON’T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.

DON’T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the “rescuer.”

DO contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or http://www.hud.gov.

If you believe you have been the victim of a mortgage-relief scam in California, please contact the Attorney General’s Public Inquiry Unit at http://ag.ca.gov/consumers/general.php.
# # #

Ex-parte aplication for TRO and injunction

EX PARTE APPLICATION FOR OSC TRO

Pretender Lenders

— read and weep. Game Over. Over the next 6-12 months the entire foreclosure mess is going to be turned on its head as it becomes apparent to even the most skeptical that the mortgage mess is just that — a mess. From the time the deed was recorded to the time the assignments, powers of attorneys, notarization and other documents were fabricated and executed there is an 18 minute Nixonian gap in the record that cannot be cured. Just because you produce documents, however real they appear, does not mean you can shift the burden of proof onto the borrower. In California our legislator have attempted to slow this train wreck but the pretender lenders just go on with the foreclosure by declaring to the foreclosure trustee the borrower is in default and they have all the documents the trustee then records a false document. A notice of default filed pursuant to Section 2924 shall include a declaration from the mortgagee, beneficiary, or authorized agent that it has contacted the borrower, tried with due diligence to contact the borrower as required by this section, or the borrower has surrendered the property to the mortgagee, trustee, beneficiary, or authorized agent.
Invalid Declaration on Notice of Default and/or Notice of Trustee’s Sale.

The purpose of permitting a declaration under penalty of perjury, in lieu of a sworn statement, is to help ensure that declarations contain a truthful factual representation and are made in good faith. (In re Marriage of Reese & Guy, 73 Cal. App. 4th 1214, 87 Cal. Rptr. 2d 339 (4th Dist. 1999).
In addition to California Civil Code §2923.5, California Code of Civil Procedure §2015.5 states:
Whenever, under any law of this state or under any rule, regulation, order or requirement made pursuant to the law of this state, any matter is required or permitted to be supported, evidenced, established, or proved by the sworn statement, declaration, verification, certificate, oath, or affidavit, in writing of the person making the same, such matter may with like force and effect be supported, evidenced, established or proved by the unsworn statement, declaration, verification, or certificate, in writing of such person which recites that is certified or declared by him or her to be true under penalty of perjury, is subscribed by him or her, and (1), if executed within this state, states the date and place of execution; (2) if executed at any place, within or without this state, states the date of execution and that is so certified or declared under the laws of the State of California. The certification or declaration must be in substantially the following form:
(a) If executed within this state:
“I certify (or declare) under penalty of perjury that the foregoing is true and correct”:
_____________________ _______________________
(Date and Place) (Signature)

For our purposes we need not look any farther than the Notice of Default to find the declaration is not signed under penalty of perjury; as mandated by new Civil Code §2923.5(c). (Blum v. Superior Court (Copley Press Inc.) (2006) 141 Cal App 4th 418, 45 Cal. Reptr. 3d 902 ). The Declaration is merely a form declaration with a check box.

No Personal Knowledge of Declarant
According to Giles v. Friendly Finance Co. of Biloxi, Inc., 199 So. 2nd 265 (Miss. 1967), “an affidavit on behalf of a corporation must show that it was made by an authorized officer or agent, and the officer him or herself must swear to the facts.” Furthermore, in Giles v. County Dep’t of Public Welfare of Marion County (Ind.App. 1 Dist.1991) 579 N.E.2d 653, 654-655 states in pertinent part, “a person who verified a pleading to have personal knowledge or reasonable cause to believe the existence of the facts stated therein.” Here, the Declaration for the Notice of Default by the agent does not state if the agent has personal knowledge and how he obtained this knowledge.
The proper function of an affidavit is to state facts, not conclusions, ¹ and affidavits that merely state conclusions rather than facts are insufficient. ² An affidavit must set forth facts and show affirmatively how the affiant obtained personal knowledge of those facts. ³
Here, The Notice of Default does not have the required agent’s personal knowledge of facts and if the Plaintiff borrower was affirmatively contacted in person or by telephone
to assess the Plaintiff’s financial situation and explore options for the Plaintiff to avoid foreclosure. A simple check box next to the “facts” does not suffice.
Furthermore, “it has been said that personal knowledge of facts asserted in an affidavit is not presumed from the mere positive averment of facts, but rather, a court should be shown how the affiant knew or could have known such facts, and, if there is no evidence from which the inference of personal knowledge can be drawn, then it is
¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬____________________________________________________________________________
¹ Lindley v. Midwest Pulmonary Consultants, P.C., 55 S.W.3d 906 (Mo. Ct. App. W.D. 2001).
² Jaime v. St. Joseph Hosp. Foundation, 853 S.W.2d 604 (Tex. App. Houston 1st Dist. 1993).
³ M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403 (Tex. App. Corpus Chrisit 1999).

presumed that from which the inference of personal knowledge can be drawn, then it is presumed that such does not exist.” ¹ The declaration signed by agent does not state anywhere how he knew or could have known if Plaintiff was contacted in person or by telephone to explore different financial options. It is vague and ambiguous if he himself called plaintiff.
This defendant did not adhere to the mandates laid out by congress before a foreclosure can be considered duly perfected. The Notice of Default states,

“That by reason thereof, the present beneficiary under such deed of trust, has executed and delivered to said agent, a written Declaration of Default and Demand for same, and has deposited with said agent such Deed of Trust and all documents evidencing obligations secured thereby, and has declared and does hereby declare all sums secured thereby immediately due and payable and has elected and does hereby elect to cause the trust property to be sold to satisfy the obligations secured thereby.”

However, Defendants do not have and assignment of the deed of trust nor have they complied with 2923.5 or 2923.6 or 2924 the Deed of Trust, nor do they provide any documents evidencing obligations secured thereby. For the aforementioned reasons, the Notice of Default will be void as a matter of law. The pretender lenders a banking on the “tender defense” to save them ie. yes we did not follow the law so sue us and when you do we will claim “tender” Check Mate but that’s not the law.

Recording a False Document
Furthermore, according to California Penal Code § 115 in pertinent part:
(a) Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.

If you say you have a claim, you must prove it. If you say you are the lender, you must prove it. Legislators take notice: Just because bankers give you money doesn’t mean they can change 1000 years of common law, statutory law and constitutional law. It just won’t fly. And if you are a legislator looking to get elected or re-elected, your failure to act on what is now an obvious need to clear title and restore the wealth of your citizens who were cheated and defrauded, will be punished by the votes of your constituents.

The doan deal 3

California Civil Code 2923.6: California Courts’ Negative Rulings to Homeowners.

By Michael Doan on Apr 26, 2009 in Foreclosure Defense, Foreclosure News, Mortgage Servicer Abuses

In September, 2008, I wrote about the new effects of California Civil Code 2923.6 and how it would appear that home loans in California would require modifications to fair market value in certain situations.

Since then, many decisions have come down from local judges attempting to decipher exactly what it means. Unfortunately, most judges are of the opinion that newly enacted California Civil Code 2923.6 has no teeth, and is a meaningless statute.

Time and time again, California Courts are ruling that the new statute does not create any new duty for servicers of mortgages or that such duties do not apply to borrowers. These Courts then immediately dismiss the case, and usually do not even require the Defendant to file an Answer in Court, eliminating the Plaintiff’s right to any trial.

Notwithstanding some of these decisions, the statute was in fact specifically created to address the foreclosure crisis and help borrowers, as Noted in Section 1 of the Legislative Intent behind the Statute:

SECTION 1. The Legislature finds and declares all of the following:

(a) California is facing an unprecedented threat to its state economy and local economies because of skyrocketing residential property foreclosure rates in California. Residential property foreclosures increased sevenfold from 2006 to 2007. In 2007, more than 84,375 properties were lost to foreclosure in California, and 254,824 loans went into default, the first step in the foreclosure process.

(b) High foreclosure rates have adversely affected property values in California, and will have even greater adverse consequences as foreclosure rates continue to rise. According to statistics released by the HOPE NOW Alliance, the number of completed California foreclosure sales in 2007 increased almost threefold from 1,902 in the first quarter to 5,574 in the fourth quarter of that year. Those same statistics report that 10,556 foreclosure sales, almost double the number for the prior quarter, were completed just in the month of January 2008. More foreclosures means less money for schools, public safety, and other key services.

(c) Under specified circumstances, mortgage lenders and servicers are authorized under their pooling and servicing agreements to modify mortgage loans when the modification is in the best interest of investors. Generally, that modification may be deemed to be in the best interest of investors when the net present value of the income stream of the modified loan is greater than the amount that would be recovered through the disposition of the real property security through a foreclosure sale.

(d) It is essential to the economic health of California for the state to ameliorate the deleterious effects on the state economy and local economies and the California housing market that will result from the continued foreclosures of residential properties in unprecedented numbers by modifying the foreclosure process to require mortgagees, beneficiaries, or authorized agents to contact borrowers and explore options that could avoid foreclosure. These changes in accessing the state’s foreclosure process are essential to ensure that the process does not exacerbate the current crisis by adding more foreclosures to the glut of foreclosed properties already on the market when a foreclosure could have been avoided. Those additional foreclosures will further destabilize the housing market with significant, corresponding deleterious effects on the local and state economy.

(e) According to a survey released by the Federal Home Loan Mortgage Corporation (Freddie Mac) on January 31, 2008, 57 percent of the nation’s late-paying borrowers do not know their lenders may offer alternatives to help them avoid foreclosure.

(f) As reflected in recent government and industry-led efforts to help troubled borrowers, the mortgage foreclosure crisis impacts borrowers not only in nontraditional loans, but also many borrowers in conventional loans.

(g) This act is necessary to avoid unnecessary foreclosures of residential properties and thereby provide stability to California’s statewide and regional economies and housing market by requiring early contact and communications between mortgagees, beneficiaries, or authorized agents and specified borrowers to explore options that could avoid foreclosure and by facilitating the modification or restructuring of loans in appropriate circumstances.

SEC. 7. Nothing in this act is intended to affect any local just-cause eviction ordinance. This act does not, and shall not be construed to, affect the authority of a public entity that otherwise exists to regulate or monitor the basis for eviction.

SEC. 8. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

The forgoing clearly illustrates that the California Legislature was specifically looking to curb foreclosures and provide modifications to homeowners in their statement of intent. Moreover, Section (a) of 2923.6 specifically references a new DUTY OWED TO ALL PARTIES in the loan pool:

(a) The Legislature finds and declares that any duty servicers may have to maximize net present value under their pooling and servicing agreements is owed to all parties in a loan pool, not to any particular parties,…..

California Civil Code 2923.6(a) specifically creates to a NEW DUTY not previously addressed in pooling and servicing agreements. It then states that such a DUTY not only applies to the particular parties of the loan pool, but ALL PARTIES. So here we have the clear black and white text of the law stating that if a duty exists in the pooling and servicing agreement to maximize net present value between particular parties of that pool(and by the way, every pooling and servicing agreement I have ever read have such duties), then those same duties extend to all parties in the pool.

So how do these Courts still decide that NO DUTY EXISTS??? How do these Courts dismiss cases by finding that the thousands of borrowers of the loan pool that FUND the entire loan pool are not parties to that pool?

Hmm, if they are really not parties to the loan pool, then why are they even required to make payments on the loans to the loan pools? As you can see, the logic from these courts that there is no duty or that such a duty does not extend to the borrower is nothing short of absurd.

To date, there are no appellate decision on point, but many are in the works. Perhaps these courts skip the DUTY provisions in clause (a) and focus on the fact that no remedy section exists in the statute (notwithstanding the violation of any statute is “Tort in Se”). Perhaps their dockets are too full to fully read the legislative history of the statute (yes, when printed out is about 6 inches thick!) Whatever the reason, it seems a great injustice is occurring to defaulting homeowners, and the housing crisis is only worsening by these decisions.

Yet the reality is that much of the current housing crisis has a solution in 2923.6, and is precisely why the legislature created this EMERGENCY LEGISLATION. Its very simple: Modify mortgages, keep people in their homes, foreclosures and housing supplies goes down, and prices stabilize. More importantly, to the Servicers and Lenders, is the fact that they are now better off since THEY GENERALLY SAVE $50,000 OR MORE in foreclosure costs when modifying a loan(yes, go ahead and google the general costs of foreclosure and you will see that a minimum of $50,000.00 in losses is the average). Thus it is strange why most Courts are ruling that the California Legislature spent a lot of time and money writing a MEANINGLESS STATUTE with no application or remedy to those in need of loan modification.

Well, at least one Judge recently got it right. On April 6, 2009, in Ventura, California, in Superior Court case number 56-2008-00333790-CU-OR-VTA, Judge Fred Bysshe denied Metrocities Mortgage’ motion to dismiss a lawsuit brought under 2923.6. Judge Bysshe ruled that 2923.6 is not a matter of law that can be decided in the beginning of a lawsuit to dismiss it, but is instead a matter of fact that needs to be decided later:

THE COURT: Well, at this juncture in this case the Court holds that section 2923.6 was the legislature’s attempt to deal with a collapsing mortgage industry, and also to stabilize the market. And the Court’s ruling is to overrule the demurrer. Require the defendant to file an answer on or before April 27, 2009. And at this juncture with regard to the defendant’s request to set aside the Lis Pendens, that request is denied without prejudice.

Hopefully, more judges will now follow suit and appeals courts will have the same rulings. To read the actual transcript of the forgoing case, please click to my other blog here.

Written by Michael Doan

Countrywide complaint

countrywide_fin_class_action_defense_mdl

Homecomings TILA complaint GMAC

homecomingstila

Leman Tila complaint

Lemantilacomp

Lender class action

Mortgageinvestorgroupclass

Option One Complaint Pick a payment lawsuit

optionone

Win the eviction by Summary judgement

When title to the property is still in dispute ie. the foreclosure was bad. They (the lender)did not comply with California civil code 2923.5 or 2923.6 or 2924. Or the didn’t possess the documents to foreclose ie. the original note. Or they did not possess a proper assignment 2932.5. at trial you will be ignored by the learned judge but if you file a Motion for Summary Judgmentevans sum ud
template notice of Motion for SJ
TEMPLATE Points and A for SJ Motion
templateDeclaration for SJ
TEMPLATEProposed Order on Motion for SJ
TEMPLATEStatement of Undisputed Facts
you can force the issue and if there is a case filed in the Unlimited jurisdiction Court the judge may be forced to consider title and or consolidate the case with the Unlimited Jurisdiction Case2nd amended complaint (e) manuel
BAKER original complaint (b)
Countrywide Complaint Form
FRAUDULENT OMISSIONS FORM FINAL
sample-bank-final-complaint1-2.docx

CALIFORNIA CODES
CODE OF CIVIL PROCEDURE
SECTION 437c-438

437c. (a) Any party may move for summary judgment in any action or
proceeding if it is contended that the action has no merit or that
there is no defense to the action or proceeding. The motion may be
made at any time after 60 days have elapsed since the general
appearance in the action or proceeding of each party against whom the
motion is directed or at any earlier time after the general
appearance that the court, with or without notice and upon good cause
shown, may direct. Notice of the motion and supporting papers shall
be served on all other parties to the action at least 75 days before
the time appointed for hearing. However, if the notice is served by
mail, the required 75-day period of notice shall be increased by five
days if the place of address is within the State of California, 10
days if the place of address is outside the State of California but
within the United States, and 20 days if the place of address is
outside the United States, and if the notice is served by facsimile
transmission, Express Mail, or another method of delivery providing
for overnight delivery, the required 75-day period of notice shall be
increased by two court days. The motion shall be heard no later than
30 days before the date of trial, unless the court for good cause
orders otherwise. The filing of the motion shall not extend the time
within which a party must otherwise file a responsive pleading.
(b) (1) The motion shall be supported by affidavits, declarations,
admissions, answers to interrogatories, depositions, and matters of
which judicial notice shall or may be taken. The supporting papers
shall include a separate statement setting forth plainly and
concisely all material facts which the moving party contends are
undisputed. Each of the material facts stated shall be followed by a
reference to the supporting evidence. The failure to comply with this
requirement of a separate statement may in the court’s discretion
constitute a sufficient ground for denial of the motion.
(2) Any opposition to the motion shall be served and filed not
less than 14 days preceding the noticed or continued date of hearing,
unless the court for good cause orders otherwise. The opposition,
where appropriate, shall consist of affidavits, declarations,
admissions, answers to interrogatories, depositions, and matters of
which judicial notice shall or may be taken.
(3) The opposition papers shall include a separate statement that
responds to each of the material facts contended by the moving party
to be undisputed, indicating whether the opposing party agrees or
disagrees that those facts are undisputed. The statement also shall
set forth plainly and concisely any other material facts that the
opposing party contends are disputed. Each material fact contended by
the opposing party to be disputed shall be followed by a reference
to the supporting evidence. Failure to comply with this requirement
of a separate statement may constitute a sufficient ground, in the
court’s discretion, for granting the motion.
(4) Any reply to the opposition shall be served and filed by the
moving party not less than five days preceding the noticed or
continued date of hearing, unless the court for good cause orders
otherwise.
(5) Evidentiary objections not made at the hearing shall be deemed
waived.
(6) Except for subdivision (c) of Section 1005 relating to the
method of service of opposition and reply papers, Sections 1005 and
1013, extending the time within which a right may be exercised or an
act may be done, do not apply to this section.
(7) Any incorporation by reference of matter in the court’s file
shall set forth with specificity the exact matter to which reference
is being made and shall not incorporate the entire file.
(c) The motion for summary judgment shall be granted if all the
papers submitted show that there is no triable issue as to any
material fact and that the moving party is entitled to a judgment as
a matter of law. In determining whether the papers show that there is
no triable issue as to any material fact the court shall consider
all of the evidence set forth in the papers, except that to which
objections have been made and sustained by the court, and all
inferences reasonably deducible from the evidence, except summary
judgment may not be granted by the court based on inferences
reasonably deducible from the evidence, if contradicted by other
inferences or evidence, which raise a triable issue as to any
material fact.
(d) Supporting and opposing affidavits or declarations shall be
made by any person on personal knowledge, shall set forth admissible
evidence, and shall show affirmatively that the affiant is competent
to testify to the matters stated in the affidavits or declarations.
Any objections based on the failure to comply with the requirements
of this subdivision shall be made at the hearing or shall be deemed
waived.
(e) If a party is otherwise entitled to a summary judgment
pursuant to this section, summary judgment may not be denied on
grounds of credibility or for want of cross-examination of witnesses
furnishing affidavits or declarations in support of the summary
judgment, except that summary judgment may be denied in the
discretion of the court, where the only proof of a material fact
offered in support of the summary judgment is an affidavit or
declaration made by an individual who was the sole witness to that
fact; or where a material fact is an individual’s state of mind, or
lack thereof, and that fact is sought to be established solely by the
individual’s affirmation thereof.
(f) (1) A party may move for summary adjudication as to one or
more causes of action within an action, one or more affirmative
defenses, one or more claims for damages, or one or more issues of
duty, if that party contends that the cause of action has no merit or
that there is no affirmative defense thereto, or that there is no
merit to an affirmative defense as to any cause of action, or both,
or that there is no merit to a claim for damages, as specified in
Section 3294 of the Civil Code, or that one or more defendants either
owed or did not owe a duty to the plaintiff or plaintiffs. A motion
for summary adjudication shall be granted only if it completely
disposes of a cause of action, an affirmative defense, a claim for
damages, or an issue of duty.
(2) A motion for summary adjudication may be made by itself or as
an alternative to a motion for summary judgment and shall proceed in
all procedural respects as a motion for summary judgment. However, a
party may not move for summary judgment based on issues asserted in a
prior motion for summary adjudication and denied by the court,
unless that party establishes to the satisfaction of the court, newly
discovered facts or circumstances or a change of law supporting the
issues reasserted in the summary judgment motion.
(g) Upon the denial of a motion for summary judgment, on the
ground that there is a triable issue as to one or more material
facts, the court shall, by written or oral order, specify one or more
material facts raised by the motion as to which the court has
determined there exists a triable controversy. This determination
shall specifically refer to the evidence proffered in support of and
in opposition to the motion which indicates that a triable
controversy exists. Upon the grant of a motion for summary judgment,
on the ground that there is no triable issue of material fact, the
court shall, by written or oral order, specify the reasons for its
determination. The order shall specifically refer to the evidence
proffered in support of, and if applicable in opposition to, the
motion which indicates that no triable issue exists. The court shall
also state its reasons for any other determination. The court shall
record its determination by court reporter or written order.
(h) If it appears from the affidavits submitted in opposition to a
motion for summary judgment or summary adjudication or both that
facts essential to justify opposition may exist but cannot, for
reasons stated, then be presented, the court shall deny the motion,
or order a continuance to permit affidavits to be obtained or
discovery to be had or may make any other order as may be just. The
application to continue the motion to obtain necessary discovery may
also be made by ex parte motion at any time on or before the date the
opposition response to the motion is due.
(i) If, after granting a continuance to allow specified additional
discovery, the court determines that the party seeking summary
judgment has unreasonably failed to allow the discovery to be
conducted, the court shall grant a continuance to permit the
discovery to go forward or deny the motion for summary judgment or
summary adjudication. This section does not affect or limit the
ability of any party to compel discovery under the Civil Discovery
Act (Title 4 (commencing with Section 2016.010) of Part 4).
(j) If the court determines at any time that any of the affidavits
are presented in bad faith or solely for purposes of delay, the
court shall order the party presenting the affidavits to pay the
other party the amount of the reasonable expenses which the filing of
the affidavits caused the other party to incur. Sanctions may not be
imposed pursuant to this subdivision, except on notice contained in
a party’s papers, or on the court’s own noticed motion, and after an
opportunity to be heard.
(k) Except when a separate judgment may properly be awarded in the
action, no final judgment may be entered on a motion for summary
judgment prior to the termination of the action, but the final
judgment shall, in addition to any matters determined in the action,
award judgment as established by the summary proceeding herein
provided for.
(l) In actions which arise out of an injury to the person or to
property, if a motion for summary judgment was granted on the basis
that the defendant was without fault, no other defendant during
trial, over plaintiff’s objection, may attempt to attribute fault to
or comment on the absence or involvement of the defendant who was
granted the motion.
(m) (1) A summary judgment entered under this section is an
appealable judgment as in other cases. Upon entry of any order
pursuant to this section, except the entry of summary judgment, a
party may, within 20 days after service upon him or her of a written
notice of entry of the order, petition an appropriate reviewing court
for a peremptory writ. If the notice is served by mail, the initial
period within which to file the petition shall be increased by five
days if the place of address is within the State of California, 10
days if the place of address is outside the State of California but
within the United States, and 20 days if the place of address is
outside the United States. If the notice is served by facsimile
transmission, Express Mail, or another method of delivery providing
for overnight delivery, the initial period within which to file the
petition shall be increased by two court days. The superior court
may, for good cause, and prior to the expiration of the initial
period, extend the time for one additional period not to exceed 10
days.
(2) Before a reviewing court affirms an order granting summary
judgment or summary adjudication on a ground not relied upon by the
trial court, the reviewing court shall afford the parties an
opportunity to present their views on the issue by submitting
supplemental briefs. The supplemental briefing may include an
argument that additional evidence relating to that ground exists, but
that the party has not had an adequate opportunity to present the
evidence or to conduct discovery on the issue. The court may reverse
or remand based upon the supplemental briefing to allow the parties
to present additional evidence or to conduct discovery on the issue.
If the court fails to allow supplemental briefing, a rehearing shall
be ordered upon timely petition of any party.
(n) (1) If a motion for summary adjudication is granted, at the
trial of the action, the cause or causes of action within the action,
affirmative defense or defenses, claim for damages, or issue or
issues of duty as to the motion which has been granted shall be
deemed to be established and the action shall proceed as to the cause
or causes of action, affirmative defense or defenses, claim for
damages, or issue or issues of duty remaining.
(2) In the trial of the action, the fact that a motion for summary
adjudication is granted as to one or more causes of action,
affirmative defenses, claims for damages, or issues of duty within
the action shall not operate to bar any cause of action, affirmative
defense, claim for damages, or issue of duty as to which summary
adjudication was either not sought or denied.
(3) In the trial of an action, neither a party, nor a witness, nor
the court shall comment upon the grant or denial of a motion for
summary adjudication to a jury.
(o) A cause of action has no merit if either of the following
exists:
(1) One or more of the elements of the cause of action cannot be
separately established, even if that element is separately pleaded.
(2) A defendant establishes an affirmative defense to that cause
of action.
(p) For purposes of motions for summary judgment and summary
adjudication:
(1) A plaintiff or cross-complainant has met his or her burden of
showing that there is no defense to a cause of action if that party
has proved each element of the cause of action entitling the party to
judgment on that cause of action. Once the plaintiff or
cross-complainant has met that burden, the burden shifts to the
defendant or cross-defendant to show that a triable issue of one or
more material facts exists as to that cause of action or a defense
thereto. The defendant or cross-defendant may not rely upon the mere
allegations or denials of its pleadings to show that a triable issue
of material fact exists but, instead, shall set forth the specific
facts showing that a triable issue of material fact exists as to that
cause of action or a defense thereto.
(2) A defendant or cross-defendant has met his or her burden of
showing that a cause of action has no merit if that party has shown
that one or more elements of the cause of action, even if not
separately pleaded, cannot be established, or that there is a
complete defense to that cause of action. Once the defendant or
cross-defendant has met that burden, the burden shifts to the
plaintiff or cross-complainant to show that a triable issue of one or
more material facts exists as to that cause of action or a defense
thereto. The plaintiff or cross-complainant may not rely upon the
mere allegations or denials of its pleadings to show that a triable
issue of material fact exists but, instead, shall set forth the
specific facts showing that a triable issue of material fact exists
as to that cause of action or a defense thereto.
(q) This section does not extend the period for trial provided by
Section 1170.5.
(r) Subdivisions (a) and (b) do not apply to actions brought
pursuant to Chapter 4 (commencing with Section 1159) of Title 3 of
Part 3.
(s) For the purposes of this section, a change in law does not
include a later enacted statute without retroactive application.

438. (a) As used in this section:
(1) “Complaint” includes a cross-complaint.
(2) “Plaintiff” includes a cross-complainant.
(3) “Defendant” includes a cross-defendant.
(b) (1) A party may move for judgment on the pleadings.
(2) The court may upon its own motion grant a motion for judgment
on the pleadings.
(c) (1) The motion provided for in this section may only be made
on one of the following grounds:
(A) If the moving party is a plaintiff, that the complaint states
facts sufficient to constitute a cause or causes of action against
the defendant and the answer does not state facts sufficient to
constitute a defense to the complaint.
(B) If the moving party is a defendant, that either of the
following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of
action alleged in the complaint.
(ii) The complaint does not state facts sufficient to constitute a
cause of action against that defendant.
(2) The motion provided for in this section may be made as to
either of the following:
(A) The entire complaint or cross-complaint or as to any of the
causes of action stated therein.
(B) The entire answer or one or more of the affirmative defenses
set forth in the answer.
(3) If the court on its own motion grants the motion for judgment
on the pleadings, it shall be on one of the following bases:
(A) If the motion is granted in favor of the plaintiff, it shall
be based on the grounds that the complaint states facts sufficient to
constitute a cause or causes of action against the defendant and the
answer does not state facts sufficient to constitute a defense to
the complaint.
(B) If the motion is granted in favor of the defendant, that
either of the following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of
action alleged in the complaint.
(ii) The complaint does not state facts sufficient to constitute a
cause of action against that defendant.
(d) The grounds for motion provided for in this section shall
appear on the face of the challenged pleading or from any matter of
which the court is required to take judicial notice. Where the motion
is based on a matter of which the court may take judicial notice
pursuant to Section 452 or 453 of the Evidence Code, the matter shall
be specified in the notice of motion, or in the supporting points
and authorities, except as the court may otherwise permit.
(e) No motion may be made pursuant to this section if a pretrial
conference order has been entered pursuant to Section 575, or within
30 days of the date the action is initially set for trial, whichever
is later, unless the court otherwise permits.
(f) The motion provided for in this section may be made only after
one of the following conditions has occurred:
(1) If the moving party is a plaintiff, and the defendant has
already filed his or her answer to the complaint and the time for the
plaintiff to demur to the answer has expired.
(2) If the moving party is a defendant, and the defendant has
already filed his or her answer to the complaint and the time for the
defendant to demur to the complaint has expired.
(g) The motion provided for in this section may be made even
though either of the following conditions exist:
(1) The moving party has already demurred to the complaint or
answer, as the case may be, on the same grounds as is the basis for
the motion provided for in this section and the demurrer has been
overruled, provided that there has been a material change in
applicable case law or statute since the ruling on the demurrer.
(2) The moving party did not demur to the complaint or answer, as
the case may be, on the same grounds as is the basis for the motion
provided for in this section.
(h) (1) The motion provided for in this section may be granted
with or without leave to file an amended complaint or answer, as the
case may be.
(2) Where a motion is granted pursuant to this section with leave
to file an amended complaint or answer, as the case may be, then the
court shall grant 30 days to the party against whom the motion was
granted to file an amended complaint or answer, as the case may be.
(3) If the motion is granted with respect to the entire complaint
or answer without leave to file an amended complaint or answer, as
the case may be, then judgment shall be entered forthwith in
accordance with the motion granting judgment to the moving party.
(4) If the motion is granted with leave to file an amended
complaint or answer, as the case may be, then the following
procedures shall be followed:
(A) If an amended complaint is filed after the time to file an
amended complaint has expired, then the court may strike the
complaint pursuant to Section 436 and enter judgment in favor of that
defendant against that plaintiff or a plaintiff.
(B) If an amended answer is filed after the time to file an
amended answer has expired, then the court may strike the answer
pursuant to Section 436 and proceed to enter judgment in favor of
that plaintiff and against that defendant or a defendant.
(C) Except where subparagraphs (A) and (B) apply, if the motion is
granted with respect to the entire complaint or answer with leave to
file an amended complaint or answer, as the case may be, but an
amended complaint or answer is not filed, then after the time to file
an amended complaint or answer, as the case may be, has expired,
judgment shall be entered forthwith in favor of the moving party.
(i) (1) Where a motion for judgment on the pleadings is granted
with leave to amend, the court shall not enter a judgment in favor of
a party until the following proceedings are had:
(A) If an amended pleading is filed and the moving party contends
that pleading is filed after the time to file an amended pleading has
expired or that the pleading is in violation of the court’s prior
ruling on the motion, then that party shall move to strike the
pleading and enter judgment in its favor.
(B) If no amended pleading is filed, then the party shall move for
entry of judgment in its favor.
(2) All motions made pursuant to this subdivision shall be made
pursuant to Section 1010.
(3) At the hearing on the motion provided for in this subdivision,
the court shall determine whether to enter judgment in favor of a
particular party.

What is worse bankruptcy or foreclosure?

So what is worse, bankruptcy or foreclosure? Which will have the biggest impact on my credit score? Both bankruptcy and foreclosure will have serious negative affects on your personal credit report and your credit score as well. With re-established credit after a bankruptcy and/or foreclosure you can possibly qualify for a good mortgage once again in as little as 24 months. Therefore, it is very difficult to say one is worse than the other, but the bottom line is that they are both very bad for you and should be avoided if all possible.

Foreclosure is worse then bankruptcy because you are actually losing something of value, your home. Once you are in foreclosure you will lose any and all equity in your home. If there is no equity in the home you will be responsible for the remaining balance after the property auction. With chapter 7 bankruptcy all of your unsecured debts are erased and you start over and in most cases you will not lose anything other then your credit rating.

Many times qualifying for a mortgage after a foreclosure is more difficult than applying for a home after a bankruptcy. With that said, that could possibly lead you to believe that foreclosure is worse than bankruptcy. Most people who have a home foreclosed upon end up filing bankruptcy as well.

Bankruptcy and Foreclosure filings are public records, however no one would know about your proceedings under normal circumstances. The Credit Bureaus will record your bankruptcy and a foreclosure. Bankruptcies will remain on your credit record for 10 years while foreclosures can stay on your report for up to 7 years.

In some cases, one can refinance out of a Chapter 13 Bankruptcy with a 12 month trustee payment history and a timely mortgage history. It is much more difficult to obtain financing with a foreclosure on your record.

Foreclosure is worse because of the loss of value. You will not receive any compensation for the equity in your home if it proceeds to foreclosure.

Standing argument

judge-youngs-decision-on-nosek

Ameriquest’s final argument, that the sanctions are a
criminal penalty, is bereft of authority. Ameriquest cites F.J.
Hanshaw Enterprises, Inc. v. Emerald River Development, Inc., 244
F.3d 1128 (9th Cir. 2001), a case about inherent powers – not
Rule 11 –

This is an excerpt from the decision just this bloggers note the Hanshaw Case was my case. I argued this case at the 9th circuit court of appeals

http://openjurist.org/244/f3d/1128/fj-v-emeraldfj-v-emerald

If you will grasp the implications of this judge-youngs-decision-on-nosekdecision all or most all the evictions and  foreclosures are being litigated by the wrong parties that is to say parties who have no real stake in the outcome. they are merely servicers not the real investors. They do not have the right to foreclose or evict. No assignment No note No security interest No standing They do not want to be listed anywhere. They (the lenders) have caused the greatest damage to the American Citizen since the great depression and they do not want to be exposed or named in countless lawsuits. Time and time again I get from the judges in demurer hearings ” I see what you are saying counsel but your claim does not appear to be against this defendant” the unnamed investment pool of the Lehman Brothers shared High yield equity Fund trustee does not exist and so far can’t be sued.

Exponential Usury On Wall Street

By Edward W. Miller, MD

Thou hast taken usury and increase, and thou hast greedily gained of thy neighbors by extortion, and thou hast forgotten me saith the Lord.” – Ezekiel 22:12 (King James Version)

And Jesus entered the temple of God and drove out all who sold and bought in the temple and turned the tables of the money changers and the seats of those who sold pigeons. He said to them, ‘It is written, ‘My house show be called a house of prayer’; but you make it a den of robbers.'” -Matthew 21: 12

AS for our economy, the ongoing failure of millions of “sub-prime” mortgages with 9 million threatened foreclosures across the country, the increasing reported lack of “affordable housing”, along with a consumer debt of $2.52 trillion, and a major economic recession stretching across the industrial world comes as no surprise to those who have watched Congress, again and again surrender to Wall Street lobbying over the past half century. The first major slide downhill took place on June 23rd, 1947, when a newly elected Republican Congress passed the Taft-Hartley Act over president Truman’s veto. The results of this assault on American labor appeared gradually over the years. Beginning in 1972, statistics show that wages were already falling below the costs of living for the American middle class.

The present huge pyramid of debt, both public and private was made possible by the weakening of labor’s political input plus thirty years of Congress’ relentless deregulation of our financial markets, culminating, during the Clinton Administration, in the 1999 repeal of the Glass-Steagall Act, which Act had prohibited banks from dealing in high-risk securities. In effect, Washington supposed regulators had become passive enablers to Wall Street’s financial binge drinkers.

As columnist Robert Scheer pointed out (March 12th SF Chronicle): “The Clinton-backed Gramm-Leach-Baily Act of 1999 called the “Financial Services Modernization Act,” permitted banks, stock brokers, and insurance companies to merge and was exacerbated by Bush’s appointment of rapacious corporate foxes to watch the corporate hen house.” They will take care of their own…Their action was made possible only by the federal government’s using our tax dollars to pick up the bad debt of the banks.”

President Signs Mortgage Bills

Carrie Bay | 05.20.09

President Barack Obama signed two housing bills into law on Wednesday afternoon – one that provides additional foreclosure relief and a second that targets mortgage fraud and other criminal activity related to federal assistance programs. The Helping Families Save Their Home Act will make vital changes to the Hope for Homeowners (H4H) program to encourage servicers to employ the plan as a means to help underwater homeowners under the administration’s Making Home Affordable program.

The bill also includes a servicer safe haven to provide lenders with liability protections from investors for the mortgage modifications they make. It provides for an additional $130 million to fund foreclosure prevention efforts, such as counseling and education, and establishes foreclosure protections for renters. In addition, the new law more than triples the FDIC’s line of credit with the Treasury to $100 billion – a measure intended to rebuild the agency’s depleted insurance fund while keeping lenders’ depository insurance fees at a minimum.

The act also permanently raises the insurance cap on individual bank accounts from $100,000 to $250,000.

The Fraud Enforcement and Recovery Act (FERA) grants new resources to help fight financial fraud and address the rapid rise in mortgage and foreclosure rescue scams. The legislation provides nearly $500 million for the investigation and prosecution of such criminal activity – a move that John A. Courson, president and CEO of the Mortgage Bankers Association (MBA) called “imperative in protecting vulnerable consumers as well as protecting the integrity of our housing finance system.” Of the funds provided under FERA, the majority will be allocated to the hiring of fraud prosecutors and investigators at the Justice Department and to increasing the number of Federal Bureau of Investigation (FBI) agents devoted to mortgage fraud.

The money will also be used to expand the staff of the U.S. Attorney’s office and the Justice Department’s criminal, civil, and tax divisions. In addition, the legislation, for the first time, expands federal fraud statutes to also apply to independent mortgage companies and mortgage brokers that are not regulated or insured by the government.

Using the countrywide complaint in your own case

Using the countrywide complaint in your own casecounrtrywidelanderscomplaintand countrywidelanders and word versionsCountrywide attorney general Complaint Form and templetsCountrywide Complaint Form

Coalition sues lenders

Coalition Sues lenders

They are to give options to foreclosure 2923.5

(a) (1) A mortgagee, trustee, beneficiary, or authorized
agent may not file a notice of default pursuant to Section 2924 until
30 days after contact is made as required by paragraph (2) or 30
days after satisfying the due diligence requirements as described in
subdivision (g).
   (2) A mortgagee, beneficiary, or authorized agent shall contact
the borrower in person (and this does not mean agent for the foreclosure company) or by telephone in order to assess the
borrower's financial situation and explore options for the borrower
to avoid foreclosure. During the initial contact, the mortgagee,
beneficiary, or authorized agent shall advise the borrower that he or
she has the right to request a subsequent meeting and, if requested,
the mortgagee, beneficiary, or authorized agent shall schedule the
meeting to occur within 14 days. The assessment of the borrower's
financial situation and discussion of options may occur during the
first contact, or at the subsequent meeting scheduled for that
purpose. In either case, the borrower shall be provided the toll-free
telephone number made available by the United States Department of
Housing and Urban Development (HUD) to find a HUD-certified housing
counseling agency. Any meeting may occur telephonically.
   (b) A notice of default filed pursuant to Section 2924 shall
include a declaration from the mortgagee, beneficiary, or authorized
agent that it has contacted the borrower, tried with due diligence to
contact the borrower as required by this section, or the borrower
has surrendered the property to the mortgagee, trustee, beneficiary,
or authorized agent.
   (c) If a mortgagee, trustee, beneficiary, or authorized agent had
already filed the notice of default prior to the enactment of this
section and did not subsequently file a notice of rescission, then
the mortgagee, trustee, beneficiary, or authorized agent shall, as
part of the notice of sale filed pursuant to Section 2924f, include a
declaration that either:
   (1) States that the borrower was contacted to assess the borrower'
s financial situation and to explore options for the borrower to
avoid foreclosure.
   (2) Lists the efforts made, if any, to contact the borrower in the
event no contact was made.
   (d) A mortgagee's, beneficiary's, or authorized agent's loss
mitigation personnel may participate by telephone during any contact
required by this section.
   (e) For purposes of this section, a "borrower" shall include a
mortgagor or trustor.
   (f) A borrower may designate a HUD-certified housing counseling
agency, attorney, or other advisor to discuss with the mortgagee,
beneficiary, or authorized agent, on the borrower's behalf, options
for the borrower to avoid foreclosure. That contact made at the
direction of the borrower shall satisfy the contact requirements of
paragraph (2) of subdivision (a). Any loan modification or workout
plan offered at the meeting by the mortgagee, beneficiary, or
authorized agent is subject to approval by the borrower.
   (g) A notice of default may be filed pursuant to Section 2924 when
a mortgagee, beneficiary, or authorized agent has not contacted a
borrower as required by paragraph (2) of subdivision (a) provided
that the failure to contact the borrower occurred despite the due
diligence of the mortgagee, beneficiary, or authorized agent. For
purposes of this section, "due diligence" shall require and mean all
of the following:
   (1) A mortgagee, beneficiary, or authorized agent shall first
attempt to contact a borrower by sending a first-class letter that
includes the toll-free telephone number made available by HUD to find
a HUD-certified housing counseling agency.
   (2) (A) After the letter has been sent, the mortgagee,
beneficiary, or authorized agent shall attempt to contact the
borrower by telephone at least three times at different hours and on
different days.  Telephone calls shall be made to the primary
telephone number on file.
   (B) A mortgagee, beneficiary, or authorized agent may attempt to
contact a borrower using an automated system to dial borrowers,
provided that, if the telephone call is answered, the call is
connected to a live representative of the mortgagee, beneficiary, or
authorized agent.
   (C) A mortgagee, beneficiary, or authorized agent satisfies the
telephone contact requirements of this paragraph if it determines,
after attempting contact pursuant to this paragraph, that the
borrower's primary telephone number and secondary telephone number or
numbers on file, if any, have been disconnected.
   (3) If the borrower does not respond within two weeks after the
telephone call requirements of paragraph (2) have been satisfied, the
mortgagee, beneficiary, or authorized agent shall then send a
certified letter, with return receipt requested.
   (4) The mortgagee, beneficiary, or authorized agent shall provide
a means for the borrower to contact it in a timely manner, including
a toll-free telephone number that will provide access to a live
representative during business hours.
   (5) The mortgagee, beneficiary, or authorized agent has posted a
prominent link on the homepage of its Internet Web site, if any, to
the following information:
   (A) Options that may be available to borrowers who are unable to
afford their mortgage payments and who wish to avoid foreclosure, and
instructions to borrowers advising them on steps to take to explore
those options.
   (B) A list of financial documents borrowers should collect and be
prepared to present to the mortgagee, beneficiary, or authorized
agent when discussing options for avoiding foreclosure.
   (C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgagee, beneficiary,
or authorized agent.
   (D) The toll-free telephone number made available by HUD to find a
HUD-certified housing counseling agency.
   (h) Subdivisions (a), (c), and (g) shall not apply if any of the
following occurs:
   (1) The borrower has surrendered the property as evidenced by
either a letter confirming the surrender or delivery of the keys to
the property to the mortgagee, trustee, beneficiary, or authorized
agent.
   (2) The borrower has contracted with an organization, person, or
entity whose primary business is advising people who have decided to
leave their homes on how to extend the foreclosure process and avoid
their contractual obligations to mortgagees or beneficiaries.
   (3) The borrower has filed for bankruptcy, and the proceedings
have not been finalized.
   (i) This section shall apply only to loans made from January 1,
2003, to December 31, 2007, inclusive, that are secured by
residential real property and are for owner-occupied residences. For
purposes of this subdivision, "owner-occupied" means that the
residence is the principal residence of the borrower.
  (j) This section shall remain in effect only until January 1, 2013,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2013, deletes or extends that da

Toxic Corpus no note no corpus

In a trust (all trusts) there is a grantor/trustor, Trustee and a Beneficiary/investor. Right? Well, there is one more vital element you need for every trust that most people do not look at. You always need a “corpus” or a body of the trust. Right?

Well, sit down! Take a deep breath and keep reading: A transaction that uses a ‘deed of trust’ involves a trust. There is a ‘grantor/trustor’, a ‘trustee’, a ‘beneficiary/investor’ . Please tell me what the ‘corpus’ IS for this type of a trust? Most people think it is the property—but hold on—it isn’t–the property has a deed to it and the deed to the property is ONLY used as security for the real corpus–the Promissory Note! And–that is why they call these notes “Toxic Assets”. Without the Promissory Note (asset and corpus) there CANNOT be a valid trust. Without a valid trust–there is no longer need for any security called the ‘deed of trust’. RIGHT?

This is soooo simple that it is overlooked by EVERYONE—but it IS the law!!! They NEVER talked about trust law in a fight with a deed of trust and foreclosure–but that is because the TRUSTOR/GRANTOR does not bring it up. It is the job of the Trustor/Grantor to bring this up, that the Trust does NOT exist any longer because the corpus of the trust IS NOT THERE!

Let me know your thoughts on this.

Doan on “produce the Note”

Are Courts in California Truly Limited by Non-Judicial Foreclosure Statutes?

By Michael Doan on May 2, 2009 in Foreclosure Defense, Foreclosure News

Recently, many California Courts have been dismissing lawsuits filed to stop non-judicial foreclosures, ruling that the non-judicial foreclosure statutes occupy the field and are exclusive as long as they are complied with. Thus, in the case where a notice of default is recorded and a lawsuit then filed in response to stop the foreclosure since the foreclosing party does not possess the underlying note, all too often the Court will simply dismiss the case and claim “2924 has no requirement to produce the note.”

Thus, these Courts view the statutes that regulate non-judicial foreclosures as all inclusive of all the requirements and remedies in foreclosure proceedings. Indeed, California Civil Code sections 2924 through 2924k provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust. This comprehensive statutory scheme has three purposes: ‘“(1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the debtor/trustor from wrongful loss of the property; and (3) to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser.” [Citations.]’ [Citation.]” (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1249–1250 [26 Cal. Rptr. 3d 413].)

Notwithstanding, the foreclosure statutes are not exclusive. If someone commits murder during an auction taking place under Civil Code 2924, that does not automatically mean they are immune from criminal and civil liability. Perhaps this is where some of these courts are “missing the boat.”

For example, in Alliance Mortgage Co. v. Rothwell (1995) 10 Cal. 4th 1226, 1231 [44 Cal. Rptr. 2d 352, 900 P.2d 601], the California Supreme Court concluded that a lender who obtained the property with a full credit bid at a foreclosure sale was not precluded from suing a third party who had fraudulently induced it to make the loan. The court concluded that “ ‘the antideficiency laws were not intended to immunize wrongdoers from the consequences of their fraudulent acts’ ” and that, if the court applies a proper measure of damages, “ ‘fraud suits do not frustrate the antideficiency policies because there should be no double recovery for the beneficiary.’ ” (Id. at p. 1238.)

Likewise, in South Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc. [*1071] (1999) 72 Cal.App.4th 1111, 1121 [85 Cal. Rptr. 2d 647], the court held that a junior lienor retains the right to recover damages from the trustee and the beneficiary of the foreclosing lien if there have been material irregularities in the conduct of the foreclosure sale. (See also Melendrez v. D & I Investment, Inc., supra, 127 Cal.App.4th at pp. 1257–1258; Lo v. Jensen (2001) 88 Cal.App.4th 1093, 1095 [106 Cal. Rptr. 2d 443] [a trustee’s sale tainted by fraud may be set aside].)

In looking past the comprehensive statutory framework, these other Courts also considered the policies advanced by the statutory scheme, and whether those policies would be frustrated by other laws. Recently, in the case of California Golf, L.L.C. v. Cooper, 163 Cal. App. 4th 1053, 78 Cal. Rptr. 3d 153, 2008 Cal. App. LEXIS 850 (Cal. App. 2d Dist. 2008), the Appellate Court held that the remedies of 2924h were not exclusive. Of greater importance is that the Appellate Court reversed the lower court and specifically held that provisions in UCC Article 3 were allowed in the foreclosure context:

Considering the policy interests advanced by the statutory scheme governing nonjudicial foreclosure sales, and the policy interests advanced by Commercial Code section 3312, it is clear that allowing a remedy under the latter does not undermine the former. Indeed, the two remedies are complementary and advance the same goals. The first two goals of the nonjudicial foreclosure statutes: (1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor and (2) to protect the debtor/trustor from a wrongful loss of the property, are not impacted by the decision that we reach. This case most certainly, however, involves the third policy interest: to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser.

This is very significant since it provides further support to lawsuits brought against foreclosing parties lacking the ability to enforce the underlying note, since those laws also arise under Article 3. Under California Commercial Code 3301, a note may only be enforced if one has actual possession of the note as a holder, or has possession of the note not as a non-holder but with holder rights.

Just like in California Golf, enforcing 3301 operates to protect the debtor/trustor from a wrongful loss of the property. To the extent that a foreclosing party might argue that such lawsuits disrupt a quick, inexpensive, and efficient remedy against a defaulting debtor/trustor, the response is that “since there is no enforceable obligation, the foreclosing entity is not a party/creditor/beneficiary entitled to a quick, inexpensive, and efficient remedy,” but simply a declarant that recorded false documents.

This is primarily because being entitled to foreclose non-judicially under 2924 can only take place “after a breach of the obligation for which that mortgage or transfer is a security.” Thus, 2924 by its own terms, looks outside of the statute to the actual obligation to see if there was a breach, and if the note is unenforceable under Article 3, there can simply be no breach. End of story.

Accordingly, if there is no possession of the note or possession was not obtained until after the notice of sale was recorded, it is impossible to trigger 2924, and simple compliance with the notice requirements in 2924 does not suddenly bless the felony of grand theft of the unknown foreclosing entity. To hold otherwise would create absurd results since it would allow any person or company the right to take another persons’ home by simply recording a false notice of default and notice of sale.

Indeed, such absurdity would allow you to foreclose on your own home again to get it back should you simply record the same false documents. Thus it is obvious that these courts improperly assume the allegations contained in the notice of default and notice of sale are truthful. Perhaps these courts simply can not or choose not to believe such frauds are taking place due to the magnitude and volume of foreclosures in this Country at this time. One can only image the chaos that would ensue in America if the truth is known that millions of foreclosures took place unlawfully and millions more are now on hold as a result of not having the ability to enforce the underlying obligation pursuant to Article 3.

So if you are in litigation to stop a foreclosure, you can probably expect the Court will want to immediately dismiss your case. These Courts just can not understand how the law would allow someone to stay in a home without paying. Notwithstanding, laws can not be broken, and Courts are not allowed to join with the foreclosing parties in breaking laws simply because “not paying doesn’t seem right.”

Accordingly, at least for appeal purposes, be sure to argue that 2924 was never triggered since there was never any “breach of the obligation” and that Appellate Courts throughout California have routinely held that other laws do in fact apply in the non-judicial foreclosure process since the policies advanced by the statutory non-judicial foreclosure scheme are not frustrated by these other laws.

FORECLOSURE DEFENSE: CALIFORNIA SOMETIMES IT’S THE LITTLE THINGS THAT COUNT

As I continue through this journey through the maze created by lenders, investment bankers, title agents and closing/escrow agents I keep discovering things that end up being quite interesting.

For example: In California the requirements for posting Notice of sale are very clear and yet, I am told that they are routinely ignored. This would invalidate the notice of sale on the most basic of concepts “notice,” by definition and therefore could be attacked at any time as a defect of service and jurisdiction while at the same time bring your claims under TILA, usury, identity theft, fraud, etc. California requires public and private posting as do most other states. The public part is what they ordinarily ignore. see notice-of-the-sale-thereof-shall-be-given-by-posting-a-written-notice

With the new law changes Civil code 2923.5  that became effective Sept 6, 2008 it adds more procedures that are routinely not followed ie. a Declaration must be attached and recorded that recites that the lender has met and assessed the borrowers financial condition and made alternatives to forclosure ie. modification. First they don’t do it and second the declaration is not even under penalty of pujury. So on its face the sale could be set aside.

After the notice of default the lender routinely switches trustee’s and records a Substitution of trustee with an affidavit that is not under penalty of perjury. Again the sale could be set aside for this.

For example. MERS, whose legal status is dubious at best anyway inasmuch as it plainly violates the recording requirements of every state and which supposedly has not one but multiple corporate entities, one of which has been suspended from operation in California, is subject to specific instructions as to what to do with the “master Deed of Trust and what to do with the individual deed of trust, the procedures, language to be inserted etc. These too I am told are routinely ignored especially when it comes to (a) showing that you have provided a copy of the Master Deed of Trust and (b) having the proof as specifically required in the FNMA/Freddie instruction sheet.

As stated in my other posts, the entire MERS concept causes, in my opinion, a separation between the alleged security instrument and provisions, the Trustee’s authority and the note, all of which end up being different people who were all “real parties in interest” receiving fees and value not disclosed in the GFE or settlement statement. In all these closings the borrower is subjected to a series of documents that hide the true nature of the transaction, the true source of funds, the true lender, and the application of funds contrary to the terms of the note.

All of these new requirements create questions of fact, that if not correct, create a method to set aside the sale by way of court action. I guess that’s the point the lenders trustees and servicers are banking on the victims not fighting it.

Borrowers’ Defenses to Forclosure

A great source of information you can use, and since the Guy is in Washington I can give him all the credit
defensestoforeclosure

Doan deal 2

Mortgage Chaos? Add a Bankruptcy and its a Recipe for Disaster! Part II

My last article laid out the framework for the bankruptcy real estate cocktail. This article will attempt to predict how that cocktail will be served and its ramifications. Remember, this recipe for disaster requires two things: a “Non-Perfected” Mortgage and a Bankruptcy.

So far, about 70 to 80% of the mortgages I see in local Bankruptcy cases here in the Southern District of California Bankruptcy Court appear to be non-perfected. Despite my continued requests to the mortgage companies to produce either proof they possess the underlying note or proof of a recorded assignment, I have received neither. Instead I get the run around, “Yes we have the original note. Really, can I see? Actually no, I thought we had the original, but we have a copy…………Yes we have the assignment. Really, can I see? Sure, here you go. But that was not recorded. Oh…….” Its the same song and dance. So what becomes of this?

Chapter 7: The trustee will most likely put on his “544 hat” and now “strip the lien off the house.”

When he does this, he creates an unencumbered piece of real estate in most cases, with the exception of a small amount of past taxes and HOA fees remaining as liens on the property. The property is then sold and net profits held in trust. A notice is then sent to the creditors of the bankruptcy to submit a claim if they want to get paid.

The claims are then reviewed, and paid pro-rata or objected to with the Bankruptcy Court issuing the final ruling. The Claims process is a complex area too lengthy to discuss for this Blog, but suffice to say, many claims will be objected to as well, since most credit card debt and collection agents have similar problems in proving they too own their debts. Moreover, you might ask what happens to the mortgage lien which has now become a large unsecured debt? It might be paid, provided they can prove they own the note. However, it also may not. There is a Bankruptcy Code section, 11 USC 502(d) which states that a creditor may not be able to share in the distribution if they did not give up there lien when requested by the trustee under 544. So, it could be that any remaining monies may even go back to the debtor if the new unsecured mortgage claim is disallowed! But this remains a grey area, and time will tell.

But what if the debtor wants to keep the house? No problem. Time to make a deal with the trustee. Suppose that the House was bought for $650,000 in 2006 with 100% financing and now is worth $500,000. The debtor is negative $150,000 in equity. Upside Down! Now lets say a bankruptcy is filed. The Mortgage Note was not perfected so Bankruptcy Trustee avoids the lien. Now he has this $500,000 piece of real estate that he wants to sell, but the debtor wants to keep it. So the debtor makes an offer of $430,000 to keep the house and the Trustee agrees. Trustee agrees since he would only net $430,000 anyways after costs of sale, attorney fees, marketing, etc. Debtor gets the $430,000 from a new loan he might qualify for, have cosigned, or have a family member engage their credit. Trustee then takes the $430,000 and distributes to creditors, which include the debtor’

s non-dischargeable taxes, non-dischargeable child support obligations, and non-dischargeable student loans.

Wow! Lets get this straight: Mortgage reduced from $650,000 to $430,000, and over $100,000 in non-dischargeable bankruptcy debt consisting of student loans, taxes, and support obligations also paid, and all other debt wiped out? Sounds like the lemon just turned into lemonade! Also, time to also read the blog on why the credit score is much better after bankruptcy than before now.

Chapter 13: In Chapter 13, the Trustee does not liquidate assets. Instead, he administers a three to five year plan by distributing the monthly payments from the debtor to the creditors, and the avoidance powers of the Chapter 7 Trustee are given to the Debtor(at least here in the Ninth Circuit….western states in the US). This includes the power to remove unperfected liens such as unperfected mortgages.

So now the debtor can remove the mortgage just like a Chapter 7 Trustee.

But that might be a problem. The Chapter 13 Trustee may object now to the bankruptcy since the debtor has too many assets. Well, as discussed above, time to get another smaller mortgage, pay that money into the Chapter 13 plan, and again pay off the non-dischargeable debt. Even better, if not all the creditors filed claims, the money then reverts to the debtor!

In the alternative, the simple threat of litigating the issues to remove the mortgage sure makes for a great negotiating tool to deal with the lender and rewrite the mortgage…..knocking off possibly hundreds of thousands of dollars and also lowering the interest rate substantially.

Involuntary Bankruptcies? Is there such a thing? Unfortunately, YES. And this could be very problematic. If several creditors are owed substantial sums of money, say a SBA Loan, large Medical Bill, or even large credit cards, they could petition the court for an involuntary bankruptcy. The debtor has no control to stop it. Next thing the debtor knows, he is in a bankruptcy and all the property is being liquidated, less the property allowed by exemption law. Then steps up the Chapter 7 Trustee and discovers that the Mortgage is not perfected. Well, there goes the house now! Or does it?

Once again, a smart debtor would argue to the trustee that he will get a loan to pay the trustee as discussed above. Problem solved, and what appears to be disaster at first, may be a blessing in disguise. The debtor keeps his home with a much smaller mortgage and removes non-dischargeable debts. He is better off now than before, even though he did not want this!

So the Recipe for Disaster appears to only affect the Mortgage Companies. They are the losing parties here, and rightly so for getting sloppy…..attempting to save $14 per loan times thousands of loans. Why didn’t they compute losing hundreds of thousands of dollars per loan times thousands of loans? Couldn’

t they connect the dots? No…..like I said, lots of smart Real Estate Attorneys and lots of smart Bankruptcy Attorneys, but not too many Bankruptcy Real Estate Attorneys and none of them worked for the Mortgage industry.

But everyone else now seems to win. The debtor reduces his mortgage, gets a better interest rate, and eliminates the rest of his debts. The trustee makes a healthy profit on distributing such a large dividend to creditors. And the creditors who obey the law now share in a large dividend.

Of course, all the forgoing is Brand New. It has not been done yet in any cases I am aware of. But since talking with other Bankruptcy Attorneys across the Nation for the past couple weeks, its starting to catch on. I’

m told a few trustees back east have started this procedure now. And just today, I get an announcement from our local Chapter 7 Trustee that he is making new requirements concerning producing documents in all cases before him so that he can start avoiding these liens. Coincidentally, this also comes after three of our Local Bankruptcy Judges started denying relief to Mortgage Creditors when coming before the Bankruptcy Court during the past week! Its brand new…but catching on like wildfire.

Housing Bubble? Mortgage Bubble? Well now it’

s a Housing Mortgage Bubble disaster about to happen in Bankruptcy Court. Congress was not able to reform the predatory lending abuses. The Lenders certainly do not seem interested in workout programs. I guess its time for a Bankruptcy Cocktail!

Written by Attorney Michael G. Doan

they-must-call-and-offer-to-work-it-out-2923.5

they-must-call-and-offer-to-work-it-out-29235

Eviction defense no declaration no valid sale no eviction

trial-brief-you-can-use-to-win-the-eviction-under-the-new-29235-we-beat-b-of-a-with-it

Plaintiff claims they have complied with civil code 2924 in paragraphs 4 thru 7 of their complaint that they have met the burden of proof in that a sale had occurred and the trustees Deed establishes this presumption that the sale was “duly Perfected” and Civil Code 2924 has been complied with.
Defendant would claim that they have not defendant will submit to the court a certified copy of the Notice of Trustees Sale and ask the court to take judicial notice of said document.
If the Trustees sale had occurred prior to Sept 6,2008 plaintiff would prevail but for other procedural defects in the assignment of the Deed of Trust in Civil code 2932.5 prior to sale.
For our purposes we need not look any farther than the Notice of Trustees Sale to find the declaration is not signed under penalty of perjury; as mandated by new Civil code 2923.5. (c) . (Blum v. Superior Court (Copley Press Inc.) (2006) 141 Cal App 4th 418, 45 Cal. Reptr. 3d 902 ) This lender did not adhere to the mandates laid out by congress before a foreclosure can be considered duly perfected.
As a general rule, the purpose of the unlawful detainer proceeding is solely to obtain possession, and the right to possession is the only issue in the trial. The title of the landlord is usually not an issue, and the tenant cannot frustrate the summary nature of the proceedings by cross-complaints or affirmative defenses.
A different rule applies in an unlawful detainer action that is brought by the purchaser after a foreclosure sale. His or her right to obtain possession is based upon the fact that the property has been “duly sold” by foreclosure proceedings, CC1161a (b) (3) and therefore it is necessary that the plaintiff prove each of the statutory procedures has been complied with as a condition for seeking possession of the property.
When the eviction is by a bona fide bidder at the sale the defendant has no defenses to eviction. However as in this case a beneficiary that is the plaintiff in the unlawful detainer action must prove that it has duly complied with each of the statutory requirements for foreclosure, and the trustor can put these questions in issue in the unlawful detainer proceeding. Miller and Star 3rd 10:220.

United First Class Action

On Saturday March 7,2009 a meeting was held for 200 plus victims of the United First equity save your house scam. At that meeting it was determined that a class action should be filed to recover the funds lost by the victims of the unconscionable contract.

As a first step an involuntary Bankruptcy is being filed today March 9, 2009. To be considered as a creditor of said Bankruptcy please Fax the Joint Venture agreement and retainer agreement to 909-494-4214.
Additionally it is this attorneys opinion that said Bankruptcy will act as a “stay” for all averse actions being taken by lenders as against said victims. This opinion is based upon the fact that United First maintained an interest in the real property as a joint venture to 80% of the properties value(no matter how unconscionable this may be) this is an interest that can be protected by the Bankruptcy Stay 11 USC 362.