- WAMU Appraisal Fraud – The People of the State of New York by Andrew Cuomo, Attorney General of the State of New York, Plaintiff-Respondent, v First American Corporation, et al., Defendants
- Why New York Foreclosures Are Grinding to a Halt
- GMAC v Visicaro – Judge Rondolino – I really honestly don’t have any confidence that any of the documents the Courts are receiving on these mass foreclosures are valid…
Dec
05
New York Legal | Foreclosures – (In)validity and (in)admissibility of out-of-state documents and affidavits: the CPLR 3212/2309(c) – RPL 299-a
(In)validity and (in)admissibility of out-of-state documents and affidavits: the CPLR 3212/2309(c) – RPL 299-a You represent the plaintiff-assignee on motion for summary judgment under Civil Practice Law and Rule 3212 in a commercial mortgage foreclosure action. Your “affirmation of regularity” is supported by a complaint verified in New Jersey. The assignment was effected and acknowledged, … Read more
Related posts:
Nov
12
Deposition of Expert Witness (Yours Truly) in a Securitized Trust/Trustee Foreclosure Case
By Lane Houk
November 11, 2010
It took an Act of Congress to finally get a copy of my own deposition. Go figure… I was retained by an attorney and client in a New Jersey case to conduct a securitization analysis and investigation on this case and then quantify my opinion in an Affidavit. The Affidavit was filed in the instant case and the judge relied on my Affidavit in his ruling on the Plaintiff’s Motion for Summary Judgment – which he denied after carefully considering my opinion in the Affidavit.
The case was set for trial and the Plaintiff, Deutsche Bank National Trust Company (DBNTC) as Trustee For Argent Securities Inc. Series 2004-PW1, wanted to depose me, presumably, to get an idea of what they were going to have to deal with at trial in my testimony.
Here is the 62-Page Deposition taken by DBNTC and their attorney on September 17, 2010 in New York.
Here is the Affidavit filed in the instant case.
Mind you, this work was done by me back in early 2010. I have advanced considerably in my analyses and how I structure my Affidavits now versus how I used to structure them – with the gracious help of some of the attorneys I work with on a regular basis.
Here is a much more recent live sample of an Affidavit of Expert Opinion with all Exhibits recently filed in a Duval County, Jacksonville, FL case. One thing for sure… this work and the affidavit filed in a foreclosure case is successful almost 100% of the time in defeating summary judgment and getting to trial and advanced discovery phases. It also sets up a deposition(s) of corporate reps very nicely. There are so many issues of fact presented in my affidavits that a judge is going to have go rogue in a major way to still grant summary judgment.
If you would like more information on this, please feel free to contact me at 800-985-4685.
Aug
16
Maine Supreme Court Invalidates MERS Standing
MAINE SUPREME JUDICIAL COURT Reporter of Decisions
MERS v Saunders Law Court decision[1]
Decision: Docket: Argued: Decided:
Panel:
2010 ME 79 Cum-09-640 June 15, 2010 August 12, 2010
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. v. JON E. SAUNDERS et al.
The good news is that we have yet another state Supreme Court invalidating the legal standing of MERS. But there are many other lessons to be learned from this decision. The main lesson for litigants without legal representation is that the sophistication of legal and procedural arguments has reached a point beyond the capabilities of virtually any layman.
In this case MERS filed a foreclosure action against Saunders. In a late attempt to avoid a decision that would clearly undermine MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, Deutsche Bank National Trust Company attempted to correct the record by substituting itself in the motion for summary judgment after the trial court had already granted the motion for summary judgment in favor of MERS. It is the intricacies of legal procedure that must be observed here.
The court agreed that MERS did not have a stake in the proceedings and therefore had no standing. The court also agreed that a substitution of parties could not be used to cure a jurisdictional defect of lack of standing and was therefore an improper. (The importance of this part of the decision can only be apparent to seasoned litigators. Nearly all foreclosure cases involve late filings of papers intended to cure a jurisdictional defect or other defect).
Finally, and equally as important, the court concluded that “there are genuine issues of material fact.”
This Court made the assumption that the real party in interest was the bank but that the bank was not entitled to summary judgment as a matter of law because they were genuine issues of material fact. The assumption that the bank was a real party in interest is troublesome. It does not appear that there was any evidence in the record to support that assumption.
Before the bank had become a party to the action, it filed a motion to reconsider or amend the order denying the previous motion for summary judgment. The court noted that the bank filed an undated two-page allonge indicating that the originating lender transferred the note to the bank and also filed an assignment indicating that MERS had transferred any rights it had in the note or mortgage to the Bank.
The court also noted that the transfers occurred during the course of litigation. Of course we all know by now that MERS doesn’t have any interest or right in any note or mortgage.
The court stated “a party’s personal stake in the litigation is evidenced by a particularized injury to the party’s property, pecuniary or personal rights.” This wording is congruent with the wording of many other decisions in state and federal courts
The court specifically rejected the argument that a nominee could for any purposes be considered the mortgagee of record and therefore the party with a right to initiate foreclosure proceedings. MERS only right was the right to record the mortgage. The fact that the security instrument identified it as “the mortgagee of record does not change or expand that right.”
An interesting discussion on page 11 of the decision makes a distinction between judicial and nonjudicial states. “These cases are inapposite because nonjudicial foreclosures do not invoke the jurisdiction of the courts. Nonjudicial foreclosures proceed wholly outside of the judiciary, typically utilizing local law enforcement to affect a mortgage or and gain possession of the mortgaged property.”
The interesting procedural point was a finding by the court that Deutschbank, as a non-party had no standing to file any motion in the current proceeding. The implications of this reasoning are very interesting. Because the nominee had no jurisdictional standing, it had no right to bring the foreclosure in the first instance. Because the bank was not a party to the action filed by the nominee, it had no right to bring any motions in the foreclosure initiated by the nominee.
I think this last point is very important from both a tactical and legal perspective. The pretender lenders are using any pretense available in order to initiate a foreclosure and a judicial or nonjudicial state. Only after they are challenged do they attempt to correct obvious deficiencies and defects in the title chain relating to the original obligation between the borrower and the originating lender. Their strategy is clearly to finesse the basic requirements of due process, substantive law and the Rules of Civil Procedure. Arguing this position successfully obviously will take considerable knowledge, memorandums of law, and the ability to argue the point succinctly.
The court obviously recognized this strategy. “After substitution, the bank should have filed its own independent motion for summary judgment with a statement of material facts and supporting affidavits. The Saunders would then have had the opportunity to respond to the new motion and appropriately defend the foreclosure action against the real party in interest.”
On page 19 the court corroborates our arguments regarding evidence citing other cases in Maine. At a minimum a party attempting to foreclose a mortgage must provide proof of the existence of a mortgage and its claim on the real estate supported by evidence of a quality that could be admissible at trial. These facts must be included in the mortgage holder’s statement of facts.
In my opinion this position supports both arguments made on these pages regarding judicial and nonjudicial foreclosures, sales and evictions. None of them are valid and all of them are void unless supported by evidence of the truth of the chain of title. And non-judicial states that require minimal proffers by counsel instead of proof are committing legal error and applying nonjudicial statutes in a manner that is inconsistent with the due process requirements of the United States Constitution.
Filed under: bubble, CASES, CORRUPTION, Eviction, evidence, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, Investor, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, STATUTES, trustee Tagged: 2010 ME 79, Maine Supreme Judicial Court
Aug
16
Maine Supreme Court Invalidates MERS Standing
MAINE SUPREME JUDICIAL COURT Reporter of Decisions
MERS v Saunders Law Court decision[1]
Decision: Docket: Argued: Decided:
Panel:
2010 ME 79 Cum-09-640 June 15, 2010 August 12, 2010
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. v. JON E. SAUNDERS et al.
The good news is that we have yet another state Supreme Court invalidating the legal standing of MERS. But there are many other lessons to be learned from this decision. The main lesson for litigants without legal representation is that the sophistication of legal and procedural arguments has reached a point beyond the capabilities of virtually any layman.
In this case MERS filed a foreclosure action against Saunders. In a late attempt to avoid a decision that would clearly undermine MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, Deutsche Bank National Trust Company attempted to correct the record by substituting itself in the motion for summary judgment after the trial court had already granted the motion for summary judgment in favor of MERS. It is the intricacies of legal procedure that must be observed here.
The court agreed that MERS did not have a stake in the proceedings and therefore had no standing. The court also agreed that a substitution of parties could not be used to cure a jurisdictional defect of lack of standing and was therefore an improper. (The importance of this part of the decision can only be apparent to seasoned litigators. Nearly all foreclosure cases involve late filings of papers intended to cure a jurisdictional defect or other defect).
Finally, and equally as important, the court concluded that “there are genuine issues of material fact.”
This Court made the assumption that the real party in interest was the bank but that the bank was not entitled to summary judgment as a matter of law because they were genuine issues of material fact. The assumption that the bank was a real party in interest is troublesome. It does not appear that there was any evidence in the record to support that assumption.
Before the bank had become a party to the action, it filed a motion to reconsider or amend the order denying the previous motion for summary judgment. The court noted that the bank filed an undated two-page allonge indicating that the originating lender transferred the note to the bank and also filed an assignment indicating that MERS had transferred any rights it had in the note or mortgage to the Bank.
The court also noted that the transfers occurred during the course of litigation. Of course we all know by now that MERS doesn’t have any interest or right in any note or mortgage.
The court stated “a party’s personal stake in the litigation is evidenced by a particularized injury to the party’s property, pecuniary or personal rights.” This wording is congruent with the wording of many other decisions in state and federal courts
The court specifically rejected the argument that a nominee could for any purposes be considered the mortgagee of record and therefore the party with a right to initiate foreclosure proceedings. MERS only right was the right to record the mortgage. The fact that the security instrument identified it as “the mortgagee of record does not change or expand that right.”
An interesting discussion on page 11 of the decision makes a distinction between judicial and nonjudicial states. “These cases are inapposite because nonjudicial foreclosures do not invoke the jurisdiction of the courts. Nonjudicial foreclosures proceed wholly outside of the judiciary, typically utilizing local law enforcement to affect a mortgage or and gain possession of the mortgaged property.”
The interesting procedural point was a finding by the court that Deutschbank, as a non-party had no standing to file any motion in the current proceeding. The implications of this reasoning are very interesting. Because the nominee had no jurisdictional standing, it had no right to bring the foreclosure in the first instance. Because the bank was not a party to the action filed by the nominee, it had no right to bring any motions in the foreclosure initiated by the nominee.
I think this last point is very important from both a tactical and legal perspective. The pretender lenders are using any pretense available in order to initiate a foreclosure and a judicial or nonjudicial state. Only after they are challenged do they attempt to correct obvious deficiencies and defects in the title chain relating to the original obligation between the borrower and the originating lender. Their strategy is clearly to finesse the basic requirements of due process, substantive law and the Rules of Civil Procedure. Arguing this position successfully obviously will take considerable knowledge, memorandums of law, and the ability to argue the point succinctly.
The court obviously recognized this strategy. “After substitution, the bank should have filed its own independent motion for summary judgment with a statement of material facts and supporting affidavits. The Saunders would then have had the opportunity to respond to the new motion and appropriately defend the foreclosure action against the real party in interest.”
On page 19 the court corroborates our arguments regarding evidence citing other cases in Maine. At a minimum a party attempting to foreclose a mortgage must provide proof of the existence of a mortgage and its claim on the real estate supported by evidence of a quality that could be admissible at trial. These facts must be included in the mortgage holder’s statement of facts.
In my opinion this position supports both arguments made on these pages regarding judicial and nonjudicial foreclosures, sales and evictions. None of them are valid and all of them are void unless supported by evidence of the truth of the chain of title. And non-judicial states that require minimal proffers by counsel instead of proof are committing legal error and applying nonjudicial statutes in a manner that is inconsistent with the due process requirements of the United States Constitution.
Filed under: bubble, CASES, CORRUPTION, Eviction, evidence, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, Investor, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, STATUTES, trustee Tagged: 2010 ME 79, Maine Supreme Judicial Court
Jul
02
GMAC v Visicaro Case No 07013084CI: florida judge reverses himself: applies basic rules of evidence and overturns his own order granting motion for summary judgment
Having just received the transcript on this case, I find that what the Judge said could be very persuasive to other Judges. I am renewing the post because there are several quotes you should be using from the transcript. Note the intimidation tactic that Plaintiff’s Counsel tried on the Judge. A word to the wise, if you are going to use that tactic you better have the goods hands down and you better have a good reason for doing it that way.
Fla Judge rehearing of summary judgement 4 04 10
5035SCAN4838_000 vesicaro Briefs
Posted originally in April, 2010
RIGHT ON POINT ABOUT WHAT WE WERE JUST TALKING ABOUT
I appeared as expert witness in a case yesterday where the Judge had trouble getting off the idea that it was an accepted fact that the note was in default and that ANY of the participants in the securitization chain should be considered collectively “creditors” or a creditor. Despite the fact that the only witness was a person who admitted she had no knowledge except what was on the documents given to her, the Judge let them in as evidence.
The witness was and is incompetent because she lacked personal knowledge and could not provide any foundation for any records or document. This is the predominant error of Judges today in most cases. Thus the prima facie case is considered “assumed” and the burden to prove a negative falls unfairly on the homeowner.
The Judge, in a familiar refrain, had trouble with the idea of giving the homeowner a free house when the only issue before him was whether the motion to lift stay should be granted. Besides the fact that the effect of granting the motion to lift stay was the gift of a free house to ASC who admits in their promotional website that they have in interest nor involvement in the origination of the loans, and despite the obviously fabricated assignment a few days before the hearing which violated the terms of the securitization document cutoff date, the Judge seems to completely missed the point of the issue before him: whether there was a reason to believe that the movant lacked standing or that the foreclosure would prejudice the debtor or other creditors (since the house would become an important asset of the bankruptcy estate if it was unencumbered).
If you carry over the arguments here, the motion for lift stay is the equivalent motion for summary judgment.
This transcript, citing cases, shows that the prima facie burden of the Movant is even higher than beyond a reasonable doubt. It also shows that the way the movants are using business records violates all standards of hearsay evidence and due process. Read the transcript carefully. You might want to use it for a motion for rehearing or motion for reconsideration to get your arguments on record, clear up the issue of whether you objected on the basis of competence of the witness, and then take it up on appeal with a cleaned up record.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, Investor, Mortgage, securities fraud, Servicer Tagged: 07013084CI, assumptions, beyond a reasonable doubt, burden of prrof, business records, competency, due process, evidence, expert witness, florida judge, foreclosure defense, FOUNDATION, fraud, GMAC, hearsay, HERS, incompetent witness, motion for summary judgment, rules of evidence, securitization, Visicaro, witness
Apr
18
Allocating Bailout to YOUR LOAN
Editor’s Note: Here is the problem. As I explained to a Judge last week, if Aunt Alice pays off my obligation then the fact that someone still has the note is irrelevant. The note is unenforceable and should be returned as paid. That is because the note is EVIDENCE of the obligation, it isn’t THE obligation. And by the way the note is only one portion of the evidence of the obligation in a securitized loan. Using the note as the only evidence in a securitized loan is like paying for groceries with sea shells. They were once currency in some places, but they don’t go very far anymore.
The obligation rises when the money is funded to the borrower and extinguished when the creditor receives payment — regardless of who they receive the payment from (pardon the grammar).
The Judge agreed. (He had no choice, it is basic black letter law that is irrefutable). But his answer was that Aunt Alice wasn’t in the room saying she had paid the obligation. Yes, I said, that is right. And the reason is that we don’t know the name of Aunt Alice, but only that she exists and that she paid. And the reason that we don’t know is that the opposing side who DOES know Aunt Alice, won’t give us the information, even though the attorney for the borrower has been asking for it formally and informally through discovery for 9 months.
I should mention here that it was a motion for lift stay which is the equivalent of a motion for summary judgment. While Judges have discretion about evidence, they can’t make it up. And while legal presumptions apply the burden on the moving party in a motion to lift stay is to remove any conceivable doubt that they are the creditor, that the obligation is correctly stated and to do so through competent witnesses and authenticated business records, documents, recorded and otherwise. All motions for lift stay should be denied frankly because of thee existence of multiple stakeholders and the existence of multiple claims. Unless the motion for lift stay is predicated on proceeding with a judicial foreclosure, the motion for lift stay is the equivalent of circumventing due process and the right to be heard on the merits.
But I was able to say that the the PSA called for credit default swaps to be completed by the cutoff date and that obviously they have been paid in whole or in part. And I was able to say that AMBAC definitely made payments on this pool, but that the opposing side refused to allocate them to this loan. Now we have the FED hiding the payments it made on these pools enabling the opposing side (pretender lenders) to claim that they would like to give us the information but the Federal reserve won’t let them because there is an agreement not to disclose for 10 years notwithstanding the freedom of information act.
So we have Aunt Alice, Uncle Fred, Mom and Dad all paying the creditor thus reducing the obligation to nothing but the servicer, who has no knowledge of those payments, won’t credit them against the obligation because the servicer is only counting the payments from the debtor. And so the pretender lenders come in and foreclose on properties where they know third party payments have been made but not allocated and claim the loan is in default when some or all of the loan has been repaid.
Thus the loan is not in default, but borrowers and their lawyers are conceding the default. DON’T CONCEDE ANYTHING. ALLEGE PAYMENT EVEN THOUGH IT DIDN’T COME FROM THE DEBTOR.
This is why you need to demand an accounting and perhaps the appointment of a receiver. Because if the servicer says they can’t get the information then the servicer is admitting they can’t do the job. So appoint an accountant or some other receiver to do the job with subpoena power from the court.
Practice Hint: If you let them take control of the narrative and talk about the note, you have already lost. The note is not the obligation. Your position is that part or all of the obligation has been paid, that you have an expert declaration computing those payments as close as possible using what information has been released, published or otherwise available, and that the pretender lenders either refuse or failed to credit the debtor with payments from third party sources —- credit default swaps, insurance and other guarantees paid for out of the proceeds of the loan transaction, PLUS the federal bailout from TARP, TALF, Maiden Lane deals, and the Federal reserve.
The Judge may get stuck on the idea of giving a free house, but how many times is he going to require the obligation to be paid off before the homeowner gets credit for the issuance that was was paid for out of the proceeds of the borrowers transaction with the creditor?
Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court
By Bob Ivry
April 14 (Bloomberg) — The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.
Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.
The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.
“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”
Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.
Joined Lawsuit
The 157-year-old, New York-based Clearing House Payments Co., which processes transactions among banks, is owned by its 20 members. They include Citigroup Inc., Bank of New York Mellon Corp., Deutsche Bank AG, HSBC Holdings Plc, PNC Financial Services Group Inc., UBS AG, U.S. Bancorp and Wells Fargo & Co.
The Clearing House Association, a lobbying group with the same members, joined the lawsuit in September 2009, after an initial ruling against the central bank in federal court in Manhattan.
The Fed is “reviewing the decision and considering our options,” said Fed spokesman David Skidmore in Washington. He had no comment on Saltzman’s plans.
Attorneys face a May 3 deadline to file their appeals.
“We’ll wait to see the motion papers,” said Thomas Golden, attorney for Bloomberg who is a partner at New York- based Willkie Farr & Gallagher LLP. “The judges’ decision was well-reasoned, and we doubt further appeals will yield a different result.”
Bloomberg sued in November 2008 under the U.S. Freedom of Information Act, after the Fed denied access to records of four Fed lending programs and a loan the central bank made in connection with New York-based JPMorgan Chase’s acquisition of Bear Stearns Cos. in March 2008.
231 Pages
The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA. The statute obliges federal agencies to make government documents available to the press and the public. The suit doesn’t seek money damages.
The Fed released lists on March 31 of assets it acquired in the 2008 bailout of Bear Stearns.
The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.
The Fed Board of Governors’ “refusal to disclose the names of borrowers renders public oversight of its actions impossible — it prevents any assessment of the effectiveness of the Board’s actions and conceals any collusion, corruption, fraud or abuse that might have occurred,” the news organizations said in a letter to the appeals panel.
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).
To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net.
Last Updated: April 14, 2010 00:01 EDT
Filed under: foreclosure Tagged: 09-04083, accounting, AMbac, appointment of a receiver, Aunt Alice, authenticated business records, Bank of America Corp, Bank of New York Mellon Corp, banks, Bloomberg LP v. Board of Governors of the Federal Reserve System, bloomberg.net., Bob Ivry, Citigroup Inc, Clearing House Association, Clearing House Payments Co, competent witnesses, conceivable doubt, credit default swaps, crisis, Deutsche Bank AG, evidence of the obligation, Fed, Freedom of Information Act, HERS, High Court, HSBC Holdings Plc, JPMorgan Chase & Co, Maiden Lane, MERS, motion for lift stay, Obligation, Paul Saltzman, PNC Financial Services Group Inc, proceeds of the borrowers transaction, PSA, receiver, Saltzman, servicers, summary judgment, TALF, TARP, The Clearing House Association LLC, The New York Times, third party sources, Thomas Golden, U.S. Bancorp, U.S. Court of Appeals in Manhattan, UBS AG, Wells Fargo & Co, Willkie Farr & Gallagher LL
Nov
09
Finally, a Judge Willing to Hold Lenders/Servicers Accountable!
I have to say that reading the below order from Judge Arthur Schack is refreshing. It’s also disappointing because there are so few judges out there today willing to do what he is doing. The majority of Florida judges are cowboys who don’t really care about legal standards and rules of civil procedure. They routinely grant motions for Summary Judgment even when there are clear issues of material fact in the case or even when there is still outstanding disovery that the Plaintiff servicer/trustee hasn’t complied with. They routinely hear a Motion to Dismiss AND a Motion for Summary Judgment on the same day/time! It’s ridiculous and despicable all at the same time.
The bottom line is that most judges in Florida and other states trample on the civil rights of homeowners and deny them due process because of their “personal views” on the issues of foreclosure. I highly encourage homeowners to organize in their communities and march on the steps of their local courthouse and protest what their elected judges are doing and not doing to uphold the law as Judge Schack is doing in this case.
Judge Schack also provides some great points that attorneys and pro se litigants should focus on in their case(s). Read carefully and learn the elements that he is stipulating because there are fine points of law that he his holding the plaintiff in this case to. Enjoy…
HSBC Bank USA, N.A. v. Valentin N.Y.Sup.,2008. NOTE: THIS OPINION WILL NOT BE PUBLISHED IN A PRINTED VOLUME. THE DISPOSITION WILL APPEAR IN A REPORTER TABLE. Supreme Court, Kings County, New York.
HSBC BANK USA, N.A., as Indenture Trustee for the Registered Noteholders of Renaissance Home Equity Loan Trust 2005-3, Renaissance Home Equity Loan Asset-Backed Notes, Series 2005-3,, Plaintiff, v. Candida VALENTIN, Candide Ruiz, et. al., Defendants. No. 15968/07. Jan. 30, 2008. Vincent P. Surico, Esq., De Rose & Surico, Bayside, for Plaintiff. No Opposition submitted by defendants to plaintiff’s Judgment of Foreclosure and Sale. ARTHUR M. SCHACK, J. *
1 Plaintiff’s application, upon the default of all defendants, for an order of reference, for the premises located at 572 Riverdale Avenue, Brooklyn, New York (Block 3838, Lot 39, County of Kings) is denied without prejudice. The “affidavit of merit” submitted in support of this application for a default judgment is not by an officer of the plaintiff or someone with a power of attorney from the plaintiff.
Leave is granted to plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-3 (HSBC), to renew its application for an order of reference upon presentation to the Court of compliance with the statutory requirements of CPLR § 3215(f), with “an affidavit of facts” executed by someone who is an officer of HSBC or has a valid power of attorney from HSBC.
Further, the Court, upon renewal of the application for an order of reference requires a satisfactory explanation to questions with respect to: the assignment of the instant nonperforming mortgage loan from the original lender, Delta Funding Corporation to HSBC Bank; the employment history of one Scott Anderson, who assigned the instant mortgage to HSBC, yet in a case I decided last month, HSBC Bank, N .A. v. Cherry, 18 Misc.3d 1102(A), swore in an affidavit to be HSBC’s servicing agent; and the relationship between HSBC, Ocwen Federal Bank, FSB (OCWEN), Deutsche Bank and Goldman Sachs, who all seem to share office space at 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409 (Suite 100). Background Defendants, Candida Valentin and Candide Ruiz, borrowed $340,000 from Delta Funding Corporation, on June 23, 2005.
The note and mortgage were recorded in the Office of the City Register, New York City Department of Finance on July 14, 2005, at City Register File Number (CRFN) 2005000395517. Delta Funding Corporation, by Mortgage Electronic Registration Systems, Inc. (MERS), its nominee for the purpose of recording the mortgage, assigned the note and mortgage to plaintiff HSBC, on May 1, 2007, with the assignment recorded on June 13, 2007 at CRFN 2007000306260.
Plaintiff’s moving papers for an order of reference fails to present an “affidavit made by the party,” pursuant to CPLR § 3215(f). The application contains an April 23, 2007-affidavit by Jessica Dybas, who states that she is “a Foreclosure Facilitator of OCWEN LOAN SERVICING, LLC, servicing agent and attorney in fact to the holder of the bond and mortgage sought to be foreclosed herein.”On that date, the note and mortgage were still held by MERS, as nominee of Delta Funding Corporation. For reasons unknown to the Court, MERS, as nominee of Delta Funding Corporation, or plaintiff HSBC failed to provide any power of attorney authorizing OCWEN to go forward with the instant foreclosure action.
Further, even if HSBC authorized OCWEN to be its attorney in fact, Ms. Dybas is not an officer of OCWEN. She is a “Foreclosure Facilitator,” a job title unknown to this Court. Therefore, the proposed order of reference must be denied without prejudice. Leave is granted to plaintiff HSBC to comply with CPLR § 3215(f) by providing an “affidavit made by the party,” whether by an officer of HSBC or someone with a valid power of attorney from HSBC. *2 Further, according to plaintiff’s application, the default of defendants Valentin and Ruiz began with the nonpayment of principal and interest due on January 1, 2007. Yet, four months later, plaintiff HSBC was willing to take an assignment of the instant nonperforming loan. The Court wonders why HSBC would purchase a nonperforming loan, four months in arrears?
Additionally, plaintiff HSBC must address a third matter if it renews its application for an order of reference. In the instant action, as noted above, Scott Anderson, as Vice President of MERS, assigned the instant mortgage to HSBC on May 1, 2007. Doris Chapman, the Notary Public, stated that on May 1, 2007, “personally appeared Scott Anderson, of 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409.”In HSBC Bank, N.A. v. Cherry, at 3, I observed that: Scott Anderson, in his affidavit, executed on June 15, 2007, states he is Vice President of OCWEN. Yet, the June 13, 2007 assignment from MERS to HSBC is signed by the same Scott Anderson as Vice President of MERS. Did Mr. Anderson change his employer between June 13, 2007 and June 15, 2007. The Court is concerned that there may be fraud on the part of HSBC, or at least malfeasance. Before granting an application for an order of reference, the Court requires an affidavit from Mr. Anderson describing his employment history for the past three years. Lastly, the court notes that Scott Anderson, in the MERS to HSBC assignment gave his address as Suite 100. This is also the address listed for HSBC in the assignment. In a foreclosure action that I decided on May 11, 2007 (Deutsche Bank Nat. Trust Company v. Castellanos, 15 Misc.3d 1134[A] ), Deutsche Bank assigned the mortgage to MTGLQ Investors, L.P. I noted, at 4-5, that MTGLQ Investors, L.P.: According to Exhibit 21.1 of the November 25, 2006 Goldman Sachs 10-K filing with the Securities and Exchange Commission … is a “significant subsidiary” of Goldman Sachs…. [T]he January 19, 2007 assignment has the same address for both the assignor Deutsche Bank and the assignee MTGLQ Investors, L.P., at 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409.
The Court will not speculate about why two major financial behemoths, Deutsche Bank and Goldman Sachs share space in a West Palm Beach, Florida office suite In the instant action, with HSBC, OCWEN and MERS, joining with Deutsche Bank and Goldman Sachs at Suite 100, the Court is now concerned as to why so many financial goliaths are in the same space. The Court ponders if Suite 100 is the size of Madison Square Garden to house all of these financial behemoths or if there is a more nefarious reason for this corporate togetherness.
If HSBC seeks to renew its application for an order to reference, the Court needs to know, in the form of an affidavit, why Suite 100 is such a popular venue for these corporations. Discussion Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of the defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” In the instant action, plaintiff’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v. Gkanios, 230 A.D.2d 770 [2d Dept 1996] ). *3 Plaintiff has failed to meet the requirements of CPLR § 3215(f) for a default judgment. On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party… Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party’s attorney. [Emphasis added]. Plaintiff has failed to submit “proof of the facts” in “an affidavit made by the party.”The affidavit is submitted by Jessica Dybas, “a Foreclosure Facilitator of OCWEN LOAN SERVICING, LLC, servicing agent and attorney in fact to the holder of the bond and mortgage sought to be foreclosed herein.” There must be an affidavit by an officer of HSBC or a servicing agent, possessing a valid power of attorney from HSBC for that express purpose. Additionally, if a power of attorney is presented to this Court and it refers to pooling and servicing agreements, the Court needs a properly offered copy of the pooling and servicing agreements, to determine if the servicing agent may proceed on behalf of plaintiff. (EMC Mortg. Corp. v. Batista, 15 Misc.3d 1143(A) [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v. Lewis, 14 Misc.3d 1201(A) [Sup Ct, Suffolk County 2006] ).
Also, the instant application upon defendants’ default must be denied because even though it contains a verified complaint, the attorney’s verification is insufficient to meet the requirements of CPLR § 3215(f). The Court, in Mullins v. Di Lorenzo, 199 A.D.2d 218 [1st Dept 1993], instructed that “a complaint verified by counsel amounts to no more than an attorney’s affidavit and is therefore insufficient to support entry of judgment pursuant to CPLR 3215.”Citing Mullins v. Di Lorenzo, the Court, in Feffer v. Malpeso, 210 A.D.2d 60, 61 [1st Dept 1994], held that a complaint with not more than an attorney’s affidavit, for purposes of entering a default judgment “was erroneous and must be deemed a nullity.” Professor David Siegel, in his Practice Commentaries (McKinney’s Cons Laws of NY, Book 7B, CPLR C3215: 16) explains that Mullins v. Di Lorenzo is in point here. Perhaps the verified complaint can do service as an affidavit for various purposes within the litigation while the contest is on … but it will not suffice to put an end to the contest with as drastic a step as a default at the outset. It must be kept in mind that even an outright “affidavit” by the plaintiff’s attorney on the merits of the case-except in the relatively rare circumstances in which the attorney happens to have first-hand knowledge of the facts – lacks probative force and is usually deemed inadequate by the courts to establish the merits. A fortiori, a verified pleading tendered as proof of the merits would also lack probative force when the verification is the attorney’s. [Emphasis added ] *4 In Blam v. Netcher, 17 AD3d 495, 496 [2d Dept 2005], the Court reversed a default judgment granted in Supreme Court, Nassau County, holding that: In support of her motion for leave to enter judgment against the defendant upon her default in answering, the plaintiff failed to proffer either an affidavit of the facts or a complaint verified by a party with personal knowledge of the facts (seeCPLR 3215(f): Goodman v. New York City Health & Hosps. Corp. 2 AD3d 581 [2d Dept 2003]; Drake v. Drake, 296 A.D.2d 566 [2d Dept 2002]; Parratta v. McAllister, 283 A.D.2d 625 [2d Dept 2001] ). Accordingly, the plaintiff’s motion should have been denied, with leave to renew on proper papers (see Henriquez v. Purins, 245 A.D.2d 337, 338 [2d Dept 1997] ). (See Hazim v. Winter, 234 A.D.2d 422 [2d Dept 1996]; Finnegan v. Sheahan, 269 A.D.2d 491 [2d Dept 2000]; De Vivo v. Spargo, 287 A.D.2d 535 [2d Dept 2001]; Peniston v. Epstein, 10 AD3d 450 [2d Dept 2004]; Taebong Choi v. JKS Dry Cleaning Eqip. Corp., 15 AD3d 566 [2d Dept 2005]; Matone v. Sycamore Realty Corp., 31 AD3d 721 [2d Dept 2006]; Crimmins v. Sagona Landscaping, Ltd., 33 AD3d 580 [2d Dept 2006] ). Therefore, the instant application for an order of reference is denied without prejudice, with leave to renew.
The Court will grant plaintiff HSBC an order of reference when it presents: an affidavit by either an officer of HSBC or someone with a valid power of attorney from HSBC, possessing personal knowledge of the facts; an affidavit from Scott Anderson clarifying his employment history for the past three years and what corporation he serves as an officer; and, an affidavit by an officer of HSBC explaining why HSBC would purchase a nonperforming loan from Delta Funding Corporation, and why HSBC, OCWEN, MERS, Deutsche Bank and Goldman Sachs all share office space in Suite 100.
Conclusion Accordingly, it is ORDERED, that the application of plaintiff, HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-3, for an order of reference for the premises located at 572 Riverdale Avenue, Brooklyn, New York (Block 3838, Lot 29, County of Kings), is denied without prejudice; and it is further ORDERED, that leave is granted to plaintiff, HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-3, to renew its application for an order of reference for the premises located at 572 Riverdale Avenue, Brooklyn, New York (Block 3838, Lot 39, County of Kings), upon presentation to the Court, within forty-five (45) days of this decision and order, of: an affidavit of facts either by an officer of HSBC or someone with a valid power of attorney from HSBC, possessing personal knowledge of the facts; an affidavit from Scott Anderson, describing his employment history for the past three years; an affidavit from an officer of plaintiff HSBC BANK N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-BACKED NOTES, SERIES 2005-3, explaining why plaintiff would purchase a nonperforming loan from Delta Funding Corporation and why plaintiff *5 HSBC BANK N.A., shares office space at Suite 100, 1661 Worthington Road, West Palm Beach, Florida 33409, with Ocwen Federal Bank FSB, MortgageElectronicRegistrationSystems, Inc., Deutsche Bank and Goldman Sachs. This constitutes the Decision and Order of the Court. N.Y.Sup.,2008. HSBC Bank USA, N.A. v. Valentin Slip Copy, 18 Misc.3d 1123(A), 2008 WL 239932 (N.Y.Sup.), 2008 N.Y. Slip Op. 50164(U) END OF DOCUMENT
