HOAs CAN STOP FORECLOSURES

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The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available TO PROVIDE ACTIVE LITIGATION SUPPORT to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S NOTE: One good thing about House Bill 87 recently passed in the Florida legislature is that homeowner associations, condominium associations, and cooperative associations can force a bank to proceed with foreclosure. The problem they have is that once a homeowner knows that foreclosure is “inevitable” they stopped paying the Association dues as well as not making any payments on mortgage debt.

But I think the lead story is that these associations could stop the foreclosures altogether. As I have previously stated on these pages arguments that are frequently rejected by both the trial and appellate courts when they are proposed by homeowners are accepted and even augmented when the same argument is made by an institutional opponent to the foreclosure.

The associations may be included in the institutional category. In my opinion they should take advantage of the new portion of House Bill 87 when appropriate, but their focus should be on filing foreclosures on the homeowners who have not paid their dues. In that same foreclosure it is my opinion that the alleged mortgage that was recorded should be attacked as to both validity and priority.

When I was practicing law in South Florida in the 1970’s and 1980’s I represented hundreds of associations as general counsel and of course as trial counsel for the foreclosure of liens. generally foreclosures were not as pandemic as they are now but there were still plenty of them. The procedure is the same as the mortgage foreclosure.

  1. You plead that the association has the right to a lien as per the the Declaration of Condominium or other enabling document for the association.
  2. You plead that you gave adequate notice in accordance with the statutes.
  3. You plead the amount of monthly dies and special assessments due from this homeowner and you plead that no payments were made (not merely that the homeowner failed to pay). You might want to phrase it as “neither the homeowner nor any other stakeholder has made any payment to the association or its agents on this debt.” (This is to require the Bank to plead the same words).
  4. You plead that you filed the lien to secure past dues and future dues until the foreclosure judgment is entered and the property is sold.
  5. You plead that the dues were so much for monthly maintenance, so much for special assessments, and that the expenses of filing the lien and enforcing it with an attorney should also be awarded.
  6. You plead that all other lienholders are junior to the lien of the association unless you know otherwise. You plead that the mortgage lien recorded at page XX Book XX in the Public Records of the County is junior to the lien of the association.
  7. When the trial or Motion for Summary Judgment comes along you have a witness that verifies that they are the records keeper for the condominium as set forth under the Condominium Statutes, they have personal knowledge regarding the receipts and disbursements with respect to the account of this homeowner, they verify or testify what was received from all sources on this account, and that the balance due to the association, as a receivable, is a specific total amount arrived at through simple addition and subtraction.

When the HOA files such an action it is setting the standard for a foreclosure proceeding and it has the full authority of Florida Statutes behind it. Since in most cases the alleged owner of the mortgage lien is no longer the party named on the instrument, the Association can plead truthfully that this party has no interest in the debt and therefore is not entitled to enforce it nor argue for its validity or priority relative to the Association’s lien and foreclosure.

Any OTHER party would be required to intervene and prove that they can make and prove the SAME ALLEGATIONS AS THE ASSOCIATION — something they clearly cannot do. And if they try, depositions of the leading witnesses for the new guest to the party would occur revealing that they have no money trail to show that they funded either the origination or acquisition of the loan and that if they have any claim, it is unsecured and subject to a separate right of action against the borrower. Instead they have a bunch of fabricated paper that refers to financial transactions that never occurred in reality.

The usual end result, if the HOA is successful, and my firm is prepared to demonstrate this to any association that wants to hire us (or who wants to instruct their association attorneys to do it) is that the Association wins, the homeowner redeems the Association lien because it is a small fraction of the presumed lien of the mortgage and everyone is happy except the bank that tried to foreclose who finds itself foreclosed out of the mortgage.

Or the Association becomes the owner of the property at a foreclosure sale or some other person outbids the association WITH CASH and the association lien is satisfied, along with a new owner who pays the monthly and special assessments.

This is going to cause all the players in the false securitization scheme that masked a massive PONZI scheme a lot of trouble because the investors, insurers, government agencies, counterparties to credit default swaps and others who paid on this debt are going to find out through a Court Order that the whole thing was a sham and that the real lenders, the investors never had the bond secured nor was the mortgage debt ever subject to a valid claim through the bond, nor was it properly perfected and secured, so the mortgage filed in the county records was a sham.

HOAs have good reason to follow this strategy for themselves, their distressed homeowners who can be restored to ownership of the property without the illegal encumbrance filed by the the Wall Street players, and for the other homeowners whose property value decreases each time another foreclosure is filed.

John C. Goede: Can HOAs file for a court order requiring lenders to complete stalled foreclosures?
http://www.naplesnews.com/news/2013/jun/30/john-c-goede-can-hoas-file-for-a-court-order-to/

The Sneaky Game Banking Giants Are Playing to Suck More Money From the Foreclosure Crisis
http://www.alternet.org/economy/banks-and-foreclosure

WHY WOULD A BANK OF ALL THINGS PAY 6 TIMES WHAT THE PROPERTY IS WORTH UNLESS THEY WERE COVERING SOMETHING UP? Big banks sometimes pay 600% above value to retain Sarasota foreclosures
http://www.housingwire.com/fastnews/2013/07/08/big-banks-sometimes-pay-600-above-value-retain-sarasota-foreclosures

WHERE ARE THE CONVICTIONS OF THE BANK OFFICERS WHO TURNED THIEVERY INTO POLICY? More than 40 convictions in mortgage fraud scheme involving Florida properties, Ohio straw buyers
http://www.inman.com/wire/more-than-40-convictions-in-mortgage-fraud-scheme-involving-florida-properties-ohio-straw-buyers/

WHY DO BANKS WANT US HOMELESS? Our bank wants us homeless
http://www.salon.com/2013/07/08/our_bank_wants_us_homeless/

Does Your Mortgage Receive Your Full Attention?
http://realtytimes.com/rtpages/20130709_mortgageattention.htm

 

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9 Responses

  1. STOP PAYING THESE FOREIGN CONTROLLED KORPORATE AMERIKA CROOKS…..! ALL THEY CARE ABOUT IS ROBBING US TO COLLECT THE USURY ON EVERYTHING WE PAY FOR. WAKE UP AMERICA AND STOP REPAYING THESE FOREIGN KORPORATE FELONS TO ROB US…! TELL THEM ALL BAFANGUL…AND SEND THEM THEIR BILLS THEY SEND US AND TELL THEM TO PAY US BACK FIRST.

  2. This is an opportune time to ask again:
    Does anyone have any case law or info on “banks” foreclosing but not taking title to the property so as to claim they are not liable for dues, assesments, re taxes etc. ” I’m sorry but we don’t own that property and have no idea who does “. Anyone?

  3. The more exposure of the Ponzi scheme, the better. I hope there are other HOA type actions in other states that will also expose the Ponzi Scheme.

  4. The HOAs are whores for KORPORATE America. The whore of Babylon.

  5. Neil ,

    My HOA foreclosed on a property 2 homes away from mine about 8 months ago, numerous liens existed and are being fought out now ,, HOA lawyer is saying she’s going to let the bank win via default. Obviously I want the HOA to kick bankster butt , sell the property and use the proceeds to pay for everyones dues and some needed improvements ..

    HOA also owns a second property they foreclosed upon in 2009 , bank apparently doesn’t want that one (no action from bank).

    How should I proceed .. obviously I first have to let the HOA know that if they let the property default to the pretender I will sue… On what grounds? CAN YOU HELP? This is in Florida.

    You know how to reach me …

  6. Take #2

    evidence submitted by the plaintiff demonstrated that Greenpoint Mortgage was the
    original holder of the note. There was no evidence to establish that Greenpoint Mortgage
    assigned, or physically delivered, the note to MERS prior to the commencement of the
    action, such that there were any triable issues of fact as to whether MERS had standing to
    foreclose, or as to whether MERS could confer such standing to the plaintiff

  7. Decided on July 3, 2013
    SUPREME COURT OF THE STATE OF NEW YORK
    APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT
    WILLIAM F. MASTRO, J.P.
    L. PRISCILLA HALL
    PLUMMER E. LOTT
    SANDRA L. SGROI, JJ.
    2012-01874
    2012-08325
    (Index No. 12220/05)
    [*1]Homecomings Financial, LLC, formerly known as Homecomings Financial
    Network, Inc., respondent,
    v
    George O. Guldi, as administrator of the estate of Walter E. Guldi, appellant, et al.,
    defendants.
    George O.O. Guldi, Woodbourne, N.Y., appellant pro se.
    Zeichner Ellman & Krause, LLP, New York, N.Y. (Jantra
    Van Roy and Robert Guttmann of
    counsel), for respondent.
    Homecomings Fin., LLC v Guldi (2013 NY Slip Op 05048) Page 1 of 5
    http://www.courts.state.ny.us/reporter/3dseries/2013/2013_05048.htm 7/8/2013
    DECISION & ORDER
    In an action to foreclose a mortgage, the defendant George O. Guldi, as administrator
    of the estate of Walter E. Guldi, appeals from (1) an order of the Supreme Court, Suffolk
    County (Cohalan, J.), dated December 28, 2011, which denied his motion, denominated as
    one for leave to renew and reargue, but which was, in actuality, one for leave to reargue
    his opposition to the plaintiff’s motion for summary judgment on the amended complaint,
    and (2) a judgment of foreclosure and sale of the same court entered June 20, 2012, which,
    upon an order of the same court dated May 19, 2010, granting the plaintiff’s motion for
    summary judgment on the amended complaint, confirmed a referee’s report and directed
    the sale of the subject property.
    ORDERED that the appeal from the order dated December 28, 2011, is dismissed, as
    no appeal lies from an order denying reargument; and it is further,
    ORDERED that the judgment is reversed, on the law, the plaintiff’s motion for
    summary judgment on the amended complaint is denied, and, upon searching the record,
    the defendant George O. Guldi, as administrator of the estate of Walter E. Guildi, is
    awarded summary judgment dismissing the amended complaint insofar as asserted against
    him, without prejudice, and the order dated May 19, 2010, is modified accordingly; and it
    is further,
    ORDERED that one bill of costs is awarded to the defendant George O. Guldi, as
    administrator of the estate of Walter E. Guldi.
    In August 2004, Walter E. Guldi executed an adjustable rate note and mortgage in
    favor of nonparty Greenpoint Mortgage Funding, Inc. (hereinafter Greenpoint Mortgage).
    The mortgage instrument identified Greenpoint Mortgage as the lender, and Mortgage
    Electronic Registration Systems, Inc. (hereinafter MERS), as “nominee” for the lender. In
    May 2005, MERS, as nominee for Greenpoint Mortgage, commenced this action to
    foreclose on the mortgage. In an [*2]answer, Walter E. Guldi raised the defense of lack of
    standing.
    On February 8, 2006, MERS purportedly assigned the mortgage instrument to
    Homecomings Financial Network, Inc. On February 28, 2006, Walter E. Guldi died. In
    Homecomings Fin., LLC v Guldi (2013 NY Slip Op 05048) Page 2 of 5
    November 2007, Walter’s son, the defendant George O. Guldi (hereinafter the appellant),
    was appointed as the administrator of Walter’s estate. In a decision and order dated April
    30, 2008, the Supreme Court, inter alia, substituted the appellant for his deceased father,
    and amended the caption by removing MERS as the plaintiff and substituting therefor the
    plaintiff Homecomings Financial, LLC, formerly known as Homecomings Financial
    Network, Inc. (hereinafter the plaintiff).
    In May 2008, the plaintiff filed a supplemental summons and amended complaint,
    among other things, to include additional defendants in the foreclosure action. In an
    answer to the amended complaint, the appellant raised the defense of lack of standing.
    Thereafter, the plaintiff moved for summary judgment on the amended complaint. In an
    order dated May 19, 2010, the Supreme Court granted the plaintiff’s motion, concluding,
    among other things, that the defense of lack of standing constituted a “mere conclusory
    allegation[], expression[] of hope or unsubstantiated claim[].” In an order dated December
    28, 2011, the Supreme Court denied the appellant’s motion, which was denominated as
    one for leave to renew and reargue, but which was, in actuality, one for leave to reargue
    his opposition to the motion for summary judgment. Thereafter, upon the order dated May
    19, 2010, the Supreme Court entered a judgment of foreclosure and sale.
    The appeal from the order dated December 28, 2011, must be dismissed, as no appeal. lies from an order denying reargument (see generally Tyson v Tower Ins. Co. of N.Y., 68
    AD3d 977; JP Morgan Chase Bank, N.A. v Mark Elliot Korn & Assoc., LLC, 66 AD3d
    844). However, the appeal from the judgment of foreclosure and sale entered June 20,
    2012, brings up for review the order dated May 19, 2010, wherein the Supreme Court
    granted the plaintiff’s motion for summary judgment on the amended complaint (see
    CPLR 5501[a][1]; Brown Bark II, L.P. v Weiss & Mahoney, Inc., 90 AD3d 963, 964;
    Lancer Ins. Co. v Marine Motor Sales, Inc., 84 AD3d 1318, 1320).
    The Supreme Court erred in granting the plaintiff’s motion for summary judgment on
    the amended complaint. “In a mortgage foreclosure action, a plaintiff has standing where
    it is both the holder or assignee of the subject mortgage and the holder or assignee of the
    underlying note at the time the action is commenced” (Bank of N.Y. v Silverberg, 86 AD3d
    274, 279; see US Bank N.A. v Cange, 96 AD3d 825, 826; U.S. Bank, N.A. v Collymore, 68
    AD3d 752, 753-754; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709). “Either a
    written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the
    mortgage passes with the debt as an inseparable incident” (U.S. Bank, N.A. v Collymore,
    68 AD3d at 754; see HSBC Bank USA v Hernandez, 92 AD3d 843). However, “a transfer
    or assignment of only the mortgage without the debt is a nullity and no interest is acquired
    by it,” since a mortgage is merely security for a debt and cannot exist independently of it
    (U.S. Bank N.A. v Dellarmo, 94 AD3d 746, 748; see Deutsche Bank Natl. Trust Co. v
    Barnett, 88 AD3d 636). “Where, as here, the issue of standing is raised by a defendant, a
    plaintiff must prove its standing in order to be entitled to relief” (Bank of N.Y. v
    Silverberg, 86 AD3d at 279; see Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d
    239, 242).
    In this case, the plaintiff failed to make a prima facie showing that MERS was a
    lawful holder of the mortgage and note at the time of the commencement of the action.
    Although the mortgage instrument identified MERS as the nominee, and purported to
    grant MERS the authority to foreclose on the subject property, the mere presence of such
    language in the mortgage instrument itself “cannot overcome the requirement that the
    foreclosing party be both the holder or assignee of the subject mortgage, and the holder of
    the underlying note, at the time the action is commenced” (Bank of N.Y. v Silverberg, 86
    AD3d at 282-283; cf. Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674).
    The adjustable rate note specifically identified Greenpoint Mortgage as the “Lender” and
    “Note Holder,” and the plaintiff failed to submit any evidence demonstrating that the note
    was physically delivered to MERS prior to the commencement of the action, or that
    Greenpoint Mortgage assigned the note to MERS prior to the commencement of the action
    (see [*3]Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909; Deutsche Bank Natl.
    Trust Co. v Haller, 100 AD3d 680; U.S. Bank N.A. v Dellarmo, 94 AD3d 746, 749; HSBC
    Bank USA v Hernandez, 92 AD3d 843). Moreover, although there was evidence that
    MERS assigned the mortgage instrument to the plaintiff during the course of the action,
    such an assignment would not render the plaintiff the holder of the note, since MERS
    could not transfer that which it did not hold (see UCC 3-201; Matter of International
    Ribbon Mills [Arjan Ribbons], 36 NY2d 121, 126; Bank of N.Y. v Silverberg, 86 AD3d at
    282). Furthermore, the affidavit from the plaintiff’s servicing agent, which stated that the
    note was delivered to the custodian of records for the plaintiff during the course of the
    action on November 15, 2005, was insufficient to demonstrate that the party commencing
    the action, i.e., MERS, had standing to do so at the time of the filing of the summons and
    Homecomings Fin., LLC v Guldi (2013 NY Slip Op 05048) Page 4 of 5
    complaint (see Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210). In any event,
    the affidavit did not give factual details as to the physical delivery of the note and, thus,
    was insufficient to establish that the plaintiff had physical possession of the note at any
    time (see Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680; HSBC Bank USA v
    Hernandez, 92 AD3d 843; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 109).
    Accordingly, the Supreme Court should have denied the plaintiff’s motion for summary
    judgment on the amended complaint.
    Upon our authority to search the record and award summary judgment to the
    nonmoving party with respect to an issue that was the subject of the motion before the
    Supreme Court (see CPLR 3212[b]), we award summary judgment to the appellant,
    dismissing the amended complaint insofar as asserted against him, without prejudice. The
    evidence submitted by the plaintiff demonstrated that Greenpoint Mortgage was the
    original holder of the note. There was no evidence to establish that Greenpoint Mortgage
    assigned, or physically delivered, the note to MERS prior to the commencement of the
    action, such that there were any triable issues of fact as to whether MERS had standing to
    foreclose, or as to whether MERS could confer such standing to the plaintiff (cf. Deutsche
    Bank Natl. Trust Co. v Haller, 100 AD3d 680; HSBC Bank USA v Hernandez, 92 AD3d
    843).
    Accordingly, we reverse the judgment, deny the plaintiff’s motion for summary judgment on the amended complaint, upon searching the record, award summary
    judgment to the appellant dismissing the complaint insofar as asserted against him,
    without prejudice, and modify the order dated May 19, 2010, accordingly.
    MASTRO, J.P., HALL, LOTT and SGROI, JJ., concur.
    ENTER:
    Aprilanne Agostino
    Clerk of the Court

  8. HOA’s in Nevada have been hard to deal with and have been taking people’s homes to pay attorney fees and big dollar amounts. The NRS 116 states they can only go back 9 months of fees and no attorney fees but most people don’t know the laws so HOA’s take advantage.

  9. Yes. I agree with this 100% !!!! It’s the way to expose the ponzi fraud.

    My only question is. After HOA forecloses , the homeowner pays the HOA and stays in the houses. Are they still not back where they started ??? As I thought if the homeowner buys same at foreclosure the mortgage/note remains.

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