This morning I have two separate orders, one of which I’ve referenced before but didn’t have in PDF form, and the latter of which is new compliments of http://4closurefraud.org.
The first is a bankruptcy case (Tandala Williams), where we seem to have judges who can read. It’s also short enough to read through and understand.
Wells Fargo Bank, N.A. (“Wells Fargo”) moves the Court for an order lifting the automatic stay with regard to 1167 Grenada Place, Bronx, NY 10466 (the “Property”) pursuant to section 362(d) of the Bankruptcy Code (the “Motion”). Wells Fargo desires to exercise its rights under a mortgage (the “First Mortgage” or “Mortgage”) and promissory note (the “Note”), including, but not limited to, the foreclosure of the Property.
In other words, Wells is coming in trying to foreclose on the property, claiming that the debtor (homeowner) isn’t paying and thus can be evicted.
A totally normal thing, right? Well, it would be, except that Wells is unable to prove it owns the note.
The Note attached to the Motion was originally made payable to Lend America. The last page of the Note, however, contains a stamped endorsement, “Paid to the Order of Washington Mutual Bank, FA, Without Recourse Lend America.” (ECF Doc. # 9, at Ex. 1.) No evidence is offered that Washington Mutual Bank ever assigned or transferred the Note to Wells Fargo or to any other party.
So the note is missing a complete chain of assignments. That is, there’s no “there” there. Wells claims that by mere possession it is entitled to foreclose. However, that’s not what the endorsements say – they claim that Washington Mutual is the creditor – not Wells.
The signature on the Worksheet indicates that it was prepared by Craig C. Zecher, a Wells Fargo legal process specialist. Despite the fact that Wells Fargo did not obtain an assignment of the Mortgage until September 13, 2010, seven days before the lift-stay motion was filed on September 20, 2010, the Worksheet provides information about payment defaults dating back to April 1, 2010. Wells Fargo’s ability to certify the accuracy of the information provided in the Worksheet is questionable given its only recently acquired interest in the First Mortgage.
This is the common dodge. Obtain the “assignment” only in the last minute before foreclosing (and in some cases after the case is filed.) In the latter case the assignment is worthless since you have to have standing on the day you bring the action. In the former case one questions exactly how one came to acquire the interest – and in this case it’s not an open and shut circumstance, as there is plenty of question as to whether the WaMu acquisition by JPM/Chase has actually closed or not!
According to N.Y. REAL PROPERTY LAW § 244, assignments in New York state may be effectuated by the delivery of the relevant note and mortgage. An assignment need not be evidenced by a written assignment. In re Conde-Dedonato, 391 B.R. 247, 251 (Bankr. E.D.N.Y. 2008) (citing Flyer v. Sullivan, 284 A.D. 697, 699 (1st Dept. 1954) (“Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.”)). Delivery requires the physical transfer of the instrument from assignor to assignee. Bank of New York v. Mulligan, No. 29399-07, 2010 WL 3339452, at *6 (N.Y. Sup. Ct., Kings County Aug. 25, 2010).
Wells Fargo has not supplied the Court with any evidence that the Note was physically delivered or assigned pursuant to a written agreement. Here, the Note only indicates a transfer from Lend America to Washington Mutual Bank and not to Wells Fargo. Wells Fargo has not presented any evidence that it is in possession of the original Note, or that it received the Note via a valid written assignment.
Wells apparently filed a copy of the note and failed to establish where the original is and that it holds title to it.
In support of its Motion, Wells Fargo annexed a copy of the Mortgage as Exhibit A to the Motion. While there is nothing that undermines the facial validity of the Mortgage, there are issues surrounding the Assignment from MERS, as nominee for Lend America, to Wells Fargo. The September 13, 2010 Assignment suggests that it may have been executed simply for purposes of enabling Wells Fargo to file a lift-stay motion. An assignment in anticipation of bringing a lift-stay motion does not in and of itself indicate bad faith. However, in the absence of a credible explanation, describing how, when and from whom Wells Fargo derived its rights, relief from the stay will not be granted. Second, MERS, as nominee for Lend America, and presumably its Assistant Vice President, John Kennerly, whose signature is on the assignment, have an address in Ocala, Florida. Kennerly’s signature on the Assignment was, however, notarized in South Carolina, the address shown on the Assignment for Wells Fargo. Did Kennerly personally appear before the notary as represented? If not, is the Assignment valid? When asked about these issues during the October 20, 2010 hearing, Wells Fargo’s counsel was unable to answer any questions about the supporting documents.
In other words, there is a valid question as to whether there is or was any sort of valid transfer of anything. If the documents “establishing” the assignment were forged then they’re worth nothing – they’re a blank sheet of paper. And, of course, with MERS having literally “thousands” of “Vice-Presidents” (none of whom have ever received a nickel of compensation from MERS, and all of whom got their corporate seals simply by paying their $25 and asking for them) it is not only proper to challenge the signatures on the above grounds but it is, in my opinion, proper to force every such “affiant” to establish exactly how he or she came to have their title, how they’re compensated, and to show that said chain of authority – that is, the actual authority to act under direction of the claiming party, is in fact valid and sufficient at-law.
Then, in a refreshing breath of air, we have the following from a Florida foreclosure case, BAC .vs. William Stentz:
This case is important for a number of reasons:
It contains a rejection of the common claim that an endorsement in-blank, standing alone, establishes ownership. The common-law reality is recognized that a thief who steals a check may have possession of it, but he is not the owner of it. Yep. Further the original note was not filed – a copy was, which leaves open the question of whether there are more copies. Again, if you wish to enforce an instrument you must establish that you have the only one of those instruments, which is especially true when one files a copy of an instrument endorsed in blank – an instrument that could be easily duplicated by someone else!
The plaintiff is foreclosing as the servicer, not the owner. No evidence was introduced to show that the owner delegated this authority to the servicer. Without such proof the servicer lacks standing to perform this function.
The court also demanded that BAC amend its complaint and allege ultimate facts, not “conclusions of law”, that document:
That it identify the actual owner of the mortgage and note and document the chain of transfers that took place from inception to that point. In other words, BAC must document the chain of transfers that allegedly took place. As this looks to be a securitized loan this could get interesting, in that BAC now must prove that the transfers to the trust it is servicing for actually took place! (Ed: Betcha they can’t, because I betcha they didn’t.)
Explain why the note was endorsed in-blank in the first place (creating bearer paper) and allege by ultimate facts all entities that hold an interest in the paper. This is an extension of the above point – granting someone a petition to foreclose when there may be other persons with an actual interest is per-se improper. The court is requiring proof of not only ownership but undivided interest, or if interest is divided, that the servicer coming to court has authority from all interested parties to bring the action. BRAVO!
Ultimately these issues turn on whether the so-called “securitized” notes in fact were securitized or whether the notes themselves were simply “endorsed in blank” and then never delivered. Proof of ownership is not simply established by holding the paper – you need to prove that you have the right to the paper, and if you’re filing a copy, that no other copies exist.
We have gone through literally two years of foreclosure courts “rubber stamping” bank claims without one shred of proof that they actually have standing to foreclose. This is not a trivial matter and it is not about “deadbeat borrowers.”
If the paper was never moved from the originator to the trustee there are multiple issues that are immediately raised, with the most-serious being whether “holder in due course” status has been lost. If it has then the borrower has the right to seek monetary redress against the current owner of the note for any violations of law in the origination of the loan (e.g. TILA or RESPA), not just the (probably bankrupt and gone) lender (e.g. “Joe’s Bait and Mortgage.”)
The beginning of an honest inquiry into these matters is welcome and far overdue. From the record in multiple cases it certainly appears that the formalities of transfer of these notes into the trusts involved did not, in many cases, actually happen. If this is the case then the question is not, as many assert, whether anyone can foreclose, it is whether the entity that is bringing the case has any standing at all. Worse, this leaves open the question as to whether the homeowner has been paying the right person all along! If the trusts in fact never got delivery then there is a monstrous mess to unwind, contrary to the repeated assertions from the ASF, which continues to claim that “contractual” transfers (e.g. “intent” by contract) are sufficient despite specific language in the Pooling and Servicing Agreements that say that physical delivery must have taken place, and further, certifications from trustees that it did.
Why do I believe that as soon as we get that sunlight we will see lots of these scurrying around….
Remember that there’s never only one!