Recording the Notice Of Rescission In California and Elsewhere

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For more information please call 954-495-9867 or 520-405-1688.
This is for general information only. Whether it applies to any particular situation can only be determined by a  knowledgeable attorney who is licensed in the jurisdiction in which the property is located.
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see this link for a treatise on California law: ref05

As you know I am not a California lawyer. So I can’t give you legal advice there. But here in Florida and in most states including California from what I have been told, there are provisions by which one can correct or amend the title chain. Without such a statute defective title could never be fixed without court action, which is something that I don’t think any of the courts want. In Florida it is called a Notice of Interest in Real Property. The statute appears below. I would suggest you talk to a lawyer who does real estate closings.

I cannot believe that California would not have some provision for correcting defective instruments regardless of whether the defect was intentional or scrivener’s error. In addition I don’t think a recording system works without requiring the recorder to accept any statement of interest or change of interest in property as defined by other recorded instruments. Recording of the rescission as an attachment to a Document that announces  the rescission with reference to the other recorded documents seems to comply with that. (See below)

But it may be that the lawyer was looking for a way to directly record the notice of rescission. That might mean you asked him/her the wrong question. Attempting to record a letter of any kind would certainly fail in Florida and from what I have been told it would fail in any state. And THAT is because it is not a recordable instrument, executed with all the formalities of a deed or mortgage. It is simply a letter, with no witnesses, notary etc. Thus the solution is to execute an instrument that CAN be recorded and attach the notice of rescission as an exhibit.

My experience over the last few months is that many lawyers and pro se litigants have concluded that the rescission letter cannot be recorded. But they may have reached this conclusion because they were asking the wrong question. Indeed they may have reached this conclusion because they took the rescission letter to the recorder’s office and asked to record it. The county recorder is not authorized to record an instrument that does not conform to the formalities required by statute, as far as I know, in any state. The refusal by the county recorder is then proper. But the county recorder is required by statute to accept any document that DOES fulfill the requirements of a recordable document.

I googled the issue and came up with the reference book in the above link. These are pages from some treatise or book, although the author is unclear to me. Although it is about California and California statutes, it should be read by a California attorney for interpretation.

Here is the Florida statute that you or your lawyer can use for guidance in finding the authority in California and other states:

Florida Statute 712.05 Effect of Filing Notice—

(1) A person claiming an interest in land or a homeowners’ association desiring to preserve a covenant or restriction may preserve and protect the same from extinguishment by the operation of this act by filing for record, during the 30-year period immediately following the effective date of the root of title, a written notice in accordance with this chapter. Such notice preserves such claim of right or such covenant or restriction or portion of such covenant or restriction for up to 30 years after filing the notice unless the notice is filed again as required in this chapter. A person’s disability or lack of knowledge of any kind may not delay the commencement of or suspend the running of the 30-year period. Such notice may be filed for record by the claimant or by any other person acting on behalf of a claimant who is:

(a) Under a disability;
(b) Unable to assert a claim on his or her behalf; or
(c) One of a class, but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.

Such notice may be filed by a homeowners’ association only if the preservation of such covenant or restriction or portion of such covenant or restriction is approved by at least two-thirds of the members of the board of directors of an incorporated homeowners’ association at a meeting for which a notice, stating the meeting’s time and place and containing the statement of marketable title action described in s. 712.06(1)(b), was mailed or hand delivered to members of the homeowners’ association at least 7 days before such meeting. The homeowners’ association or clerk of the circuit court is not required to provide additional notice pursuant to s. 712.06(3). The preceding sentence is intended to clarify existing law.

(2) It shall not be necessary for the owner of the marketable record title, as herein defined, to file a notice to protect his or her marketable record title.
History.—s. 5, ch. 63-133; s. 798, ch. 97-102; s. 3, ch. 97-202; s. 1, ch. 2003-79; s. 7, ch. 2014-133.

249 Responses

  1. Common law rescission in Kalifornia: Wong v Stoler (2015) 237 CA 4th 1375 (UNPUBLISHED)

    Analysis:
    http://www.rogerbernhardt.com/index.php/ceb-columns/388-rethinking-rescission-wong-v-stoller

  2. Just the link can’t get any more blatant.

  3. Former Clerk at Cook County Recorder of Deeds Indicted for Accepting Cash Bribe in Exchange for Preparing Fraudulent Back-Dated Deed

    Regina Taylor, former clerk for the Cook County Recorder of Deeds accepted a $200 cash bribe in exchange for preparing and agreeing to record a back-dated deed on an Oak Park home, according to a federal indictment announced today.

    Regina Tayor accepted the bribe from an individual who purportedly wanted to add a relative’s name to a back-dated deed of a residence in Oak Park according to the indictment. Unbeknownst to Taylor, the individual she sold the back-dated deed to was actually an undercover law enforcement agent, the indictment states.

    The indictment was returned Thursday in U.S. District Court in Chicago. It charges Taylor, 59, of Chicago, with one count of mail fraud and two counts of wire fraud. Taylor will be arraigned before U.S. District Judge Sara L. Ellis on Sept. 24, 2015, at 10:00 a.m.

    According to the indictment, Taylor offered and agreed to prepare back-dated deeds and false quit claim deed that added the purported relative to the deed of the Oak Park property, which was allegedly owned by three deceased individuals. Taylor told the undercover agent that she usually charges $500 to prepare and record the fraudulent documents and back-dated deeds, but that in this instance she was willing to charge only $200, the indictment states.

    Taylor directed the undercover agent not to tell anyone about the deceased individuals on the back-dated deed, according to the indictment. She then prepared a fraudulent quit claim deed and back-dated it by 18 months, confirming the purported relative as a grantee. After giving the fraudulent quit claim deed to the undercover agent to get stamped at the Village of Oak Park, the undercover agent gave Taylor $200 in cash, according to the indictment. Taylor further directed the undercover agent to bring back the stamped copy of the fraudulent back-dated deed so that Taylor could file it at the Office of the Cook County Recorder of Deeds, according to the indictment.

    The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

    The mail fraud charge carries a maximum sentence of 20 years in prison, a $250,000.00 fine and mandatory restitution. Each count of wire fraud is punishable by a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

    The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

  4. if you recall – i previously brought up the issue of homeowners/citizens/taxpayers borrowers being real third party beneficiaries of the MBS/REMIC Trusts with a real interest…

    The evidence i found in the annual reports of the Illinois State Board of Investments from 2005 to 2014 showed that Illinois is investing citizen/taxpayers’ money in those Trusts and has suffered an ongoing loss since the collapse…

    The beneficiaries of Illinois’ investments are the people/citizens/taxpayers, in the form of supplemental funding, through dividends, of their essential services like water, streets, police, fire, etc… The resulting losses have caused direct out-of-pocket damage to the people/citizens/taxpayers in the form of higher taxes to compensate for said losses…

    Now Illinois cannot even pay its lottery winners because the budget shortfalls created by these investment losses have gone so deep…

    Therefore – get copies of your state, county, city investment reports, show the losses – Then get copies of your taxes and show the increases – Finally get a report from your comptroller or treasurer showing reduction in services…

    Altogether, there is your smoking gun… there is your direct interest… there is your standing to sue.

  5. listen to this

    never give up the land….

  6. It’s called ROSCRUCIANISM & I’m sure you two know that.

    ROSICRUCIANISM is why BANK CEO’S like JAMIE DIMON get paid way too much U.S. TAX PAYER MONEY to send their BOUNTY HUNTER ATTORNEYS out to GANG STALK & DOMESTIC TERRORIZE the victims of their own BANK FRAUD CRIMES.

  7. FOR THE RECORD… i have not ordered anyone to do anything, i ask please and hope it will be attended to…

    ALSO: i am not a mason, freemason, shriner, shiner, scheister… or any other club…

    Rather, from our genealogical research, my family traces to an an orphan boy from an ancient norman-jewish line (Ewering) that was adopted near Westphalen in 1666 by a catholic family… and has been that way since… i have nothing to hide…

    please let’s concentrate on creating working solutions that ordinary people can handle…

  8. Lvent these are equal opportunity criminals. Focus or you’re just adding to the deception.

  9. Furthermore, I can prove what I said in my previous comment is true because one ATTORNEY said to me in the courthouse he is no “BOUNTY HUNTER.”

    The U.S. STATES ATTORNEYS OFFICE should look into thst & SUBPOENA that tape because not only was that unprofessional, that ATTORNEY was behaving like some sort of terrorist.

  10. Of course I meant FALSE BELIEF SYSTEMS like FREEMASONRY in my previous comment.

    The GOVERNORS of the FEDERAL RESERVE BOARD obviously think they can use CATHOLICS like MARTYRS for their crimes.

    Not only do I reject thst notion completely, they belong in the HAGUE for WAR CRIMES.

    We have entire towns, counties, cities, municipalities & STATES in this country of ours being run by FREEMASON NAZI DRUG LORDS AKA the FRB DRUG CARTEL.

  11. Correct typo, FALE BELIEF_SYSTEMS_

    I cannot intercede with God on behalf of the sins of others.

    That’s wby CATHOLICS pray to saints.

  12. Morever Greg, don’t tell me what to do. I don’t take orders from dictators who think they’re God.

    Furthermore, I don’t pray for the sins of others because i don’t worship FALSE GODS for people who have FALSE RELIGIONS FALSE RELIGIOUS BELIEFS & FALSE BELIEF SYSTEMD

  13. I wish it didn’t come to this Greg, you FREEMASONS can go scratch.

    I’m CATHOLIC & I can prove unequivocally FRAUDCLOSURE IS RELIGIOUS PERSECUTION OF CATHOLICS by the FREEMASONS.

  14. Clearly the FRB thinks U.S. COURTROOMS can be used like baseball diamonds to SUICIDE SQUEEZE U.S. CITIZENS born here into funding their CRIME SYNDICATE BLACK BANKING OPERATIONS.

    So i would hand their judges our motions to vacate the FRB JUDGES judgments/rulings due to FRAUD IN THE PROCUREMENT & see how they like us flexing our political muscle.

  15. Ivent

    i was hoping it didn’t come to this….
    as a catholic officer i am asking you to stop talking about your opinion of this whole thing being about catholic persecution… we have an operation ongoing and you are just messing things up –

    we have Cupich’s ears and will ask him a favor…

    in the name of the father, son and holy spirit, please stop… go pray for others instead… they need it

  16. Michael Savage said tonight he does not care what color VESTMENTS the POPE has on he isn’t bowing down to him.

    WOW, who said he should, is my question?

    How idiotic can someone be?

    Clearly MICHAEL SAVAGE bows down to the FEDERAL RESERVE BANK DRUG CARTEL AKA THE MONEY CHANGERS.

    What he said tonight proves the reason for the FUNDAMENTALLY FLAWED & UNLAWFUL FRAUDCLOSURES is written in the book the HIRAM KEY REVISITED by KNIGHT & BUTLER is their FREEMASONIC WAR ON CATHOLICS.

  17. I was listening to MICHAEL SAVAGES radio show tonight & he should get canned for RELIGIOUS PERSECUTION of CATHOLICS & be sued by the VATICAN for DEFAMATION OF CHARACTER of the POPE.

    Even if he doesn’t like the POPES message, MICHAEL SAVAGE is not CATHOLIC.

    Imagine if CATHOLICS were on the radio RELIGIOUS PERSECUTING his jewish religion & defaming the character of the Rabbi in Oslo, Norway?

    SAVAGE sounds like HITLER ready to round up & send CATHOLICS to the (FEMA) NAZI DEATH CAMPS.

    Michael Savage is obviously working for the NAZI SPY RING who have infiltrated the colleges like the one he went to, BERKLEY & they have hijacked the media here in the U.S.

  18. I invoked my NATURAL BORN legal rights & I told the court PLAINTIFFS have violated the 5th AMENDMENT TAKINGS CLAUSE of the U.S. CONSTITUTION for trying to FRAUDCLOSE upon both of my PROPERTIES under the guise of one issue which is NON-DISCLOSURE.

    I requested this honrable court invoke its own particular CRIMINAL SUBJECT MATTER JURISDICTION too.

    I think it was in my RESPONSE to PLAINTIFFS PROCEDURAL HISTORY, which was faulty, fraudulent & criminal because for one, there was no AFFIDAVIT ATTACHED from the onset.

    Then of course, the PROCESS SERVER, JUDGE NIXON, was warantless because I never signed no contract with that crook who had no sworn AFFIDAVIT & therefore, he had no cop badge.

    However, both cases have the 5 badges of fraud & the elements needed to criminally prosecute these crooks.

    .

  19. boys & girls… are you ready to be men and women?

    the 9th amendment in the Bill of Rights reserves anything and everything the people say is theirs, to the people, and government cannot question and judges cannot opine

    it is yours for the taking….
    do you have what it takes?

  20. Furthermore, there is no discovery & there hasn’t been since the U.S. SUPREME COURT blocked it following “the events” of 9/11.

    That is TORTUOUS FRAUDULENT MISREPRESENTATION of the legal fact the SECURITIES do not exist AKA BLACK NOTE SECURITIES FRAUD.

    The FRB is RACKETEERING under FALSE PRETENSES to gain unjust enrichment with their own COUNTERFEIT MOB NOTES.

    That means every U.S. COURTROOM should be closed because they’re being used to violate our NATURAL BORN legal rights & that is HUMAN RIGHTS ABUSE by the FRB.

  21. If the CPA’s from the FRB were subpoened under GRAND JURY INDICTMENTS to testify regarding the whereabouts of the purported “loan files” from every “loan” they say they gave, they would have to plead the 5th or the FRB would unlawfullly seize their wives tiaras, their kids, mistresses, pets, property, cocaine & brothels full of hookers.

    Moreover, when you go into these hijacked U.S. COURTROOMS, the ATTORNEYS, CLERKS, BAILIFFS, SECURITY GUARDS, & even the JUDGES look high on drugs. If they’re not, they sure behave like it by the criminal way they treat us.

  22. Too many issues with regard to “control”. What happened to leaving people to their own devices? The mortgage/foreclosure mess is directly connected to controlling us to HARVEST us. The banks control the government. Break up the banks.

  23. General/President Eisenhower (a republican) warned us, in his retirement speech, to be wary of the US Industrial/Military Complex, as he saw it taking control of more and more divisions of the administration and influencing congress… We did not take him seriously, so since then It has grown to a Global Industrial/Military Complex… He and Tom Jefferson and many others are rolling in their graves…

    They placate the people with welfare programs as pablum and sports and media circuses to keep them distracted (or as the Wizard of Oz tells Dorothy “pay no attention to the man behind the curtain”) Americans are addicted to the government giveaways and they don’t even realize that the government is sucking the life out of them and repackaging THEIR OWN life energy and wealth into the very things that appear to be coming from the government… People have forgotten that government cannot create anything… it can only take and repackage the creations of ITS CREATOR – THE PEOPLE.

    It is not about blaming anymore, it is about the people commanding a return of the government to the prime principal that this and any government of the people is there ONLY to protect the god given rights of EACH AND EVERY of the people and their property, and anything else contrary to that is treason…

    So the question IS NOT “Who are the people behind the scenes controlling the government today?” The question IS “Why am i not the people behind the scenes controlling the government? Take care of the latter and the former vanishes…

    Now back to Mortgage Foreclosure Defense strategies…

  24. No job or can’t pay? The FRB DRUG CARTEL will gladly use false imprisonment to criminally EXTORT your signature so they can CHARGE OFF their BANK FRAUD on the VATICAN BANK in some poor CATHOLICS CORPORATE FICTION NAME.

    Then when they get caught, they want kill every CATHOLIC with their evil drugs like SCOPALMINE they use to destroy the memory of their victims.

  25. Therefore, if the FRB loans don’t “fail” everyday because the color of their money is black, meaning valueless, they’re incriminating themselves for UTTERING. That’s because the juice money they’re charging on they’re own COUNTERFEITS is unlawful & the collection of it is criminal.

  26. This is why we’re being fined eccessively by this CORPORATE DRUG CARTEL who we never signed contracts with.

    When given the choice of feeding your family or pet or handing the FRB penalty money to hide their CRIME SYNDICATE, who BTW, isn’t even American your money what would you pick?

    You have to buy, you have to pay is incessant. We’re told there will be consequences for not letting the FRB EXTORT our money even if you can’t pay these BANKSTERS who do use that to strip you of your legal rights unlawfully just to criminslly EXTORT your signature to fund their DRUG CARTEL & their FASCIST AGENDA 21 NAZISM.

  27. Where do these orders come from to target us? The spy ring of course.

    Who is the head of that? The KGB

    So, since when does the U.S. GOVERNMENT take orders from the kremlin?

    Why haven’t the FRB BOARD OF GOVERNORS been indicted by the FEDERAL BANKING REGULATORS?

    Maybe the U.S. SUPREME COURT can explain that because obviously they’re preventing it.

  28. I think it’s the theory of law vs the law of theory with them Greg.

    If the State AG says there’s fraud in every mortgsge there should not be one fraudclosure.

    So clearly they’re basing factless, lawless claims on theories like “someone is owed this money.” Therefore, they’re corporatists, not elected public officials or public employees but they’re servants of the DRUG CARTELS trying to run this country
    like some corporate controlled Nazi death camp.

    I don’t recall signing up for the military, but it sure seems like defending my legal rights in FRAUDCLOSURE COURT is like one unending CRUCIBLE.

    We have elected public service employees from the STATE OF ILLINOIS forcing ENTRAPMENT to FORCE DRUG to death, & criminally EXTORT the signatures of Catholics under FALSE PRETENSES to fraudulently conceal the crimes of the BOARD OF GOVERNORS of the FEDERAL RESERVE BANK.

  29. Hammer and all…

    as i have said before…. specific questions go to lawman@gmx.us

    i will not field questions in the public for which i am not authorized to answer… everything we discuss is private and you grant me unlimited indemnity in your unlimited capacity to contract as a man to do so…

    there is no presumption of “legal advice” here and no assertion thereof will be assented to by me, my heirs or assigns…

    accept this simple contract and we can talk in detail..

  30. Greg – I’m in an interesting spot if I can stop the eviction attemp or even if I don’t as to city actions and non enforcement of law. I’ve applied sone concepts of administrative approach but tgere hasn’t been a good example as far as I know. Hopefully I’ll be able to get a break and review w you.

  31. Hammer-
    city county state are constantly acting in “QUASI” IN REM actions to avoid the federal prohibition regarding “ACTUAL” IN REM actions which are reserved to the federal government in the constitution (admiralty)…

    much can be had in embarrassment of prosecutors dropping charges when faced with two things…
    1) when pro se against a municipal corporation, demand the plaintiff “appear” for cross examination and don’t settle for their attorneys… “the city” won’t fit in the witness chair… and is a fiction who cannot fit in the witness chair… (BTW if you have a lawyer representing you – you are screwed on this one)
    2) demand a disclosure from the plaintiff & court – if the case is being heard IN REM or QUASI IN REM and the legal exception by which they are avoiding the use of the constitutional federal court for such actions….

  32. City wanted me to comply with property repairs as if a choice and not harm done by “lender” and hardship. What stuck w me was how they felt my credibility needed to be restored! Never accepted their false morality.

  33. Lvent I had a bit of deja vu in ur post about official offering u a position. Same thing w me in LA. Doesn’t matter liberal or conservative the bureaucracies filled w bankster traitors are running thongs and keeping the scam going and do the pretender mender however it needs to work politically and their careers.

  34. Correct typo: I meant to say _properties_ in my previous comment.

    I wonder what Sheriff Dart concluded in his own mortgsge fraud investigation?

    He said on CNN that he had piles of evidence to examine.

    I found that interesting because he said they don’t have the notes.

    Maybe he was hoping to find the connection to PABLO ESCOBAR LOL

  35. I don’t live very far from the proposed quarry & horse farm for the blind the politicians want to throw the residents of ROBBINS out, & replace the town with that.

    The residents were irate of course & I think they filed petitions to try & stop it.

    Maybe someone filed MARITIME LIENS on their properties who knows?

    I remember reading Mayor Daley & AG MADIGAN & others did that with some key properyies downtown.

    Now i know why the way Rahm is selling off the city to his business partners to “pay bills.” Yeah right.

  36. You probably weren’t here Greg, when I said I met with the ILLINOIS STATE AG INVESTIGATOR & the CHIEF OF POLICE from CRESTWOOD where my business property is located. CHIEF WEIGAND is friends with my father who was CHIEF of police in CHICAGO RIDGE & then joined the FBI.

    I had called AG MADIGAN’s office before that meeting to complain there was mortgage fraud on many of the documents. I was told by her ASSISTANT there’s fraud in every mortgage, if you can believe that.

    I went to the meeting with the box of fraud & they both looked surprised to see me walk in with that.

    They said some interesting things & the investigator said he might want to hire me when I’m done fighting my own complicated mess. He said to file my complaint with AG MADIGAN’s OFFICE & they both laughed when I said I could not find one ATTORNEY who was willing to fight the fraud.

    RE GREYLORD, I was in high school I think when that went down & I do remember watching it on the news with my grandparents.

  37. i think we need to start filing verified criminal complaints with Sheriff Tom Dart and AG Lisa Madigan for each and every instance of fraud, forgery, judicial malfeasance, (and a dozen other criminal charges) occurring in our cases….

  38. Ivent

    i was raised in all the same categories as you too… believe it or not…
    i am not picking a fight with you
    your last couple posts were very helpful…
    you need to go back to my posts (about the middle of the comments on this blog) to find my links -then you will even know who and where i am – a big risk to take for me…
    you can see our filings

    BTW – i am glad to finally be chatting with someone in this county – most of the folks are from other states and don’t get how forked up our courts are (remember Operation Greylord?) – the now Cook County Chief Judge Evans was indicted as Greylord Judge #3 and was the only one to escape prison… now he runs the place!

    gg

  39. Seriously Greg, dark tides? I view this entire FC experience to be extremely enlightening & I’m extremely grateful for what I have learned.

    If not for some really honest people blogging the truth, I would never have got it, what the corporatists want is one world satanic government & I being Catholic reject that notion.

  40. Really Greg? What is your contribution here? You whined in one of your comments that you can’t handle TMI so maybe you’re on the wrong website.
    I’m explaining the reasons why loan recission more than likely don’t happen is because the FRB crime syndicate is not going to say they were COUNTERFEITING CREDIT.

    You certainly don’t have to read my comments if you don’t want to.

  41. That ATTORNEY from FISHER & SHAPIRO’s name was BURNSTEIN I beieve. Him & I had some interesting discussions outside of the FC courtroom in the hallway.

    One other time he wanted to know how I found this stuff out that I knew & I said from law websites.

    He was visibly tense & he seemed perturbed with me for questioning him regarding things I knew were important.

    Then of course there was ATTORNEY HERBAS from FISHER & SHAPIRO who sat by the PLAINTIFFS ATTORNEY table & talked to himself
    while he wrote out the Judges orders. Imagine if we did that in open court?

    They’re clearly criminally insane & no doubt on drugs.

  42. Dear Ivent

    i never made a value judgment or criticism of the content of your vents… i believe they belong somewhere else…

    you do have a few useful remarks on the matter of foreclosure defense and offense – but they are so embedded deep in your vents that it is a headache to surgically remove them from the rest…

    it does not matter what faith belief system one operates under – all ships rise or fall together on this dark tide…

    if you ALSO have been doing your best in “CROOK COUNTY” and are ALSO still in your house… then THAT is what i would like to hear about from you… NOT the origin and practice of sin, corruption, murder and mayhem within out culture… WE ALL KNOW IT IS THERE… most folks on this blog are trying to prevail in spite of it!

    i posted links to the majority of my files and access to the cook county recorder of deeds account for my land: to share with others for study, reflection, analysis and use… WHAT HAVE YOU DONE FOR THIS BLOG AND ITS MEMBERS?

    i’m just tired of “Chicken Little” – Alex Jones’ style fear mongering…
    WE KNOW THE DAMN SKY IS FALLING AND WE KNOW WHO DID IT – SO PLEASE STOP IT!

    INSTEAD – please help us hold up the roof or dig a shelter…

    thank you
    greg

  43. There obviously were no deliveries made to trusts because those were never set up. The settlement company set up receiverships of DD money from the U.S. TREASURY & used those to hold escrow money without the LEGAL ATTACHMENT.

    So the entire trust issue is moot. I told one of the ATTORNEYS from FISHER & SHAPIRO right outside of the CHANCERY COURTROOM on the 28th floor of the DALEY CENTER COURTHOUSE, you don’t have the LEGAL ASSIGNMENT, & he said they don’t need it because there is no trust & there is no trustee & they have no docs they can give me in discovery. This was the day JUDGE ATKINS let them enter their robosigned COUNTERFEIT NOTE on the record ignoring my objection because the name rubbed right off the FORGERY. Another one of them said to me one other day outside of the courtroom, they don’t
    have to record those LOL.

    Well yes they do, if they portend they hold the security or have rights of the holder of that security.

    Otherwise, that’s SECURITIES FRAUD.

  44. When I say the DRUG CARTELS use FRAUDCLOSURE courtrooms for HUMAN TRAFFICKING AKA TRADING WITH THE ENEMY I mean they’re TITLE COUNTERFEITING to hide the CORPORATE FICTIONAL name of their targeted victim. They’re using FC to carry out murder hits of CATHOLICS, to hide CORPORATE FRAUD by the DRUG CARTELS.

  45. Moreover, IMHO Greg, posting innumerable laws no one obeys is what I would consider to be venting & serious hate mongering by the far left bar flies who think we don’t get it.

    Why not post rulings like BAYVIEW v NELSON & McCLEAN v J.P. MORGAN CHASE?

    Those the U.S. SUPREME COURT cannot ignore because they’re unrefutable.

    The law is the law for everybody, or there is no law, so take your pick.

    Because these DRUG CARTELS like MERCK & the KGB should be being prosecuted criminally for engaging in ACTS OF RICO in U.S. COURTROOMS they’re using for HUMAN TRAFFICKING U.S. CITIZENS under the guise of FRAUDCLOSURE, & they’re not, so clearly that’s where WALL STREET is hiding their cocaine & hookers.

  46. BTW Greg, I have been defenfing two FRAUDCLOSURES myself, PRO SE, for the past 5 years in procaimed by the local media, “the most corrupt county in the country,” COOK COUNTY ILLINOIS. AKA “CROOK COUNTY ILLINOIS” &, Thank God, I’m still in my house.

    Furthermore, I posted some of my PRO SE legal work here with both CASE NO’s so I have done my part to try to contribute to cause here, thank you very much, & yes, I do my homework & it is my pleasure to do so & to continue to do so.

  47. You know what Greg you obviously don’t get it, it’s called the FIRST AMENDMENT.

    With the mile long tangents on here you decide to try & insult my intelligence & that will never happen because i’ve gone round for round with RELIGIOUS PERSECUTORS much more cunning than you & never back down.

    However, if you want to discuss something intelligent I would not hesitate to repond to that.

    BTW, it’s LVENT short for my name LINDA VENTURELLA & no, I’m no corporation & I never was LOL

  48. Who could have known rule by deception meant rule by COUNTERFEITING? Certainly not me, however, certainly they know, & never wanted us pee-ons to know.

    Of course it’s satanic based deception & that’s the point where they think people stop & never get past the shock of that.

    The top echelon worship the demonic & they don’t just live in posh digs.

    They really did underestimate the determination of we the people of these united states who they thought would never bother to respond to their unlawful solicitations of our TITLES. Of course it was beyond them why some of us even bothered to take it to public forums & speak out on our own behalf.

    That’s why I decided I’m going to take it to the streets & pen & publish my journals & my story to portray the human side to this fiasco WALL STREET created.

    The reason being the pen is mightier than the sword & they blocked my right to free speech for several months because they’re cheaters

  49. Ivent – i get it – “I Vent”

    – please do not “vent” on this important blog…
    – please get your own talkshow, blog and sponsors (since you are so well connected and seem to know just whom to talk to and whom not to talk to) – send us a link when you get it set up…

    at the risk of speaking for others… we are working on a specific issue here and your tangents and vents are not helping us…

    thank you in advance
    greg

  50. FILL IN THE BLANK NOTES can never be cured because the COUNTETFEITER had no less than 30 days to cure their default & secure the lien. The fact the U.S. TREASURY DEPT ATTORNEYS failed in their duty to secure our TITLES is treason & SECURITIES FRAUD.

    FILL IN THE BLANK NOTES is legal evidence of FRAUD IN THE PROCUREMENT by the U.S. TREASURY DEPARTMENT. Proven by the fact their CLOSING ATTORNEYS should be defending our PROPERTY TITLES for free & they’re feigning ignorance by not showing up to court on our behalf to do so.

    Probably because the GSE’s won’t let them take the perp walk because the judges rep the GSE’S.

  51. Therefore, quite literally, FC is DOMESTIC TERRORISM. We’re being forcibly engaged & force coerced by entities like the MUSLIM BROTHERHOOD, the KKK, the PLO & the entire FREEMASONIC CABAL hiding behind banks like the BANK OF LEUMI denying that we have legal rights to defend our titles.

    It is bankster tyranny by investors in their own crime spree & it’s fascism.

    Even if your some FEDERAL AGENT or AGENCY, the ILLINOIS STATES ATTORNEY, ILLINOIS SECRETARY OF STATE, ILLINOIS AG, COP, SHERIFF , LAWYER, ATTORNEY, JUDGE, I.S.C JUSTICE, POLITICIAN or some janitor in some shopping mall, nothing makes COUNTERFEITS legal.

    Furthermore, “FRAUD IN THE PROCUREMENT” voids their fake rulings & false judgments on behalf of themselves & their criminal friends on WALL STREET.

    Because the FILL IN THE BLANK NOTES become our PROPERTY TITLES because that’s physical evidence the banksters were COUNTERFEITING U.S. BANK NOTES behind our backs

  52. FC is SUBJECTIVE REASONING, which is DOMESTIC TERRORISM by the traitors from within.

    We’re being subjected to the spy ring trying to steal our FREE WILL by unlawfully denying us our legal right to DISCOVERY. That is being done to swap out our legal identities by TITLE COUNTERFEITING liens on things that never existed. However, what they’re really doing is hiding they’re fraudclosing on our RELIGION.

    The KGB really hates CATHOLICS.

    What the spy ring is really using those derivatives to hide could very well be nuke devices & other weapons of mass destruction is what i believe because they’re NAZIS.

    Could CDO’s & the like be nukes? I think so because FRAUDCLOSURE is RELIGIOUS PERSECUTION they call JIHAD by INFADELS.

    For example the innumerable M&A’s of no one because everything is COUNTERFEITED.

    Therefore, TBTF is by law, broken up because of FRAUD IN THE PROCUREMENT of everything but conducting business like one vast war criminal CRIME SYNDICATE FRAUDCLOSING on our religions unlawfully because thats what JIHAD by INFADELS is.

  53. Every dime we make & spend is being DRUG MONEY LAUNDERED through CHASE, because of the FRAUD IN THE FACTUM by CHASE who is AIG who is the KGB AKA the U.S.SUPREME COURT.

    We know this because of their failure to secure our liens on 9/11.

  54. Therefore, SUBJECTIVE REASONING is CRIMINAL FRAUD but, moreover, it’s treason.

    While FRAUD IN THE FACTUM, failure to secure the LEGAL LIEN, is the METHOD, SUBJECTIVE REASONING is the METHODOLOGY that is DOMESTIC TERRORISM by the traitors from within.

    CORPORATE AMERICA, run in secret by the KGB DRUG CARTEL, AKA the “investors,” who issue their own COUNTERFEITS to borrow our money from the U.S. TREASURY DEPT, FRAUDULENTLY INDUCE their juice money AKA CREDIT PAYMENTS, & they never pay us back the front money.

    However, the part that makes CREDIT LENDING by DRUG DEALERS terrorism is non-disclosure by them they’re the RPII stealing from you by FORGING your legal signature.

    Therefore, FRAUDCLOSURE, LOAN MODS, HITLERCARE, & everything post the FRAUD IN THE FACTUM, is CRIMINAL EXTORTION by the KGB DRUG CARTEL because CHASE is wholly
    owned subsidiary of the russian mob.

    SUBJECTIVE REASONING is FORCED COERCION because its main objective is CONTROLLING ts victims by terrorizing them.

    I call that RELIGIOUS PERSECUTION by DEVIL WORSHIPPERS.

  55. Hitherto, SUBJECTIVE REASONING is FAILURE TO STATE A CLAIM, because DUALITY, AKA AFFIANT SAYETH NOT, is NO LEGAL JUST CAUSE, thereore, no legal CAUSE OF ACTION was ever entered by AFORESAID VICTIMIZER.

  56. Therefore, we have personages speaking in fictitious terms, regarding everything, because nothing they say is based upon legal fact.

    The reason being is we never signed contracts with crime syndicates.

    What that means in real terms, when OBAMA requests those trillions from CONGRESS, he is saying lets RE-INK some more KGB COUNTERFEITS.

    The same thing goes for every “debt” this global drug racket is trying to coin & issue fraudulently like it’s lawful money.

    Debt is not money, debt is fraud in the issuing of credit AKA MONEY LAUNDERING.

    If it weren’t, we would not have the topic of purported “debt” to discuss.

    Because what “loan” really means is COUNTERFEITING U.S. BANK NOTES & thats why the MOBSTERS never disclose their true identity which is unlawful. Thats what hides their money trail to which I suspect leads right through JAMIE DIMONS PENTHOUSE SUITE.

    Thats why HITLERCARE is unlawful because like electronic discovery, electronic debt has no signed legal contract that would show legal proof theres money DUE & OWING “it.”

    That’s why it’s HITLERCARE because “it” can only be considered to be ” DR DEATH” because our LEGAL RIGHT to FULL DISCLOSURE RE WHO is the RPII FORCING COERCION has been completely ignored by the U.S. SUPREME COURT.

  57. So, by & large, we’re faced with the dilemma of being defaced, unlawfully by personages we cannot see & therefore, cannot be related to & certainly cannot be spoken to.

    I cite the comment made by ERIC HOLDER for example, when he said we need to discuss the issue of race because everyone is racist.

    That was his opinion & he stated it like fact. So clearly he was speaking on his own behalf & not representing the truth. He should have been forced to resign by the sheer irrelevance of his own opinion based upon nothing legally factual.

    I don’t think it’s the proper way for this nations top cop to be misrepresenting the law like that.

    HOLDER would have been better served to try & discuss how in the freeist nation on earth we could possiby have this financial crisis in the first plac

    Because the reason we’re the freeist nation on earth is because we print our own money.

    So maybe HOLDER should have suggested we print some money, instead of RE-INKING COUNTERFEITS for the MAFIA DRUG LORDS who unlawfully INKED them in the first place.

  58. Hey TU

    do you know where this call originated?
    they don’t give the name of the group or website…
    thanks
    g

    Trespass Unwanted, on September 17, 2015 at 6:36 am said:
    http://www.freeconferencing.com/playback_nv.html?n=/storage/sgetFC/OZ4nw/ulPfV
    Last quarter of the audio, allow it to buffer before using slider.

  59. Then of course, that “event” lead the way for obamaramadingdong to let the entire russian mob become maurice greenburg waving 99 year lease contracts like they’re money or something of value to try & hide Maurice/AIG is the russian mob is HITLERCARE

  60. GW got the news right from the head of the beast, the CHIEF JUSTICE of the U.S.S.C. & said hot damn, that’s gotta be why condies had such bad gas lately it’s like nooklear. Who would have ever imagined we would try & recash our own COUNTERFEITS by calling ourselves TBTF AKA MAURICE GREENBURG? We’re just to smart.

  61. It can’t be that complicated because it went down so simply. Paulson called the FED & said the foans lailed & we gotta hide the juice, otherwise they’re gonna find those derivative hidden devices were meant to destroy our own evidence this is FREEMASON war on CATHOLICS by therussian mob

  62. This is a great place to post initial stuff and resources but a lousy place to dig into things because our benevolent mentor leaves us abandoned to our wits and never pitches in… please check out
    Garfield’s Goose and Friends… http://www.talkshoe.com/tc/139335
    or just email me – thanks

  63. i can’t deal with the details in the damn blog anymore
    my eyes and typing are failing…
    my computer is getting so slow i think i’m running DOS
    email and set up a call with me

  64. “The INVESTORS” AKA PUBLIC who hide behind MERS (MUNICIPAL EMPLOYEE RETIREMENT SERVICES) & fake trusts like NORTH STAR TRUST hidden indside of BANKS like M & I who launder drug money for the KGB SPY RING AKA THE BANKSTERS

  65. re-post bump of Greg’s post …

    greg, on September 18, 2015 at 6:46 pm said:

    please pass this along quickly in case it gets deleted….

    Description: Follow up Q&A call to our friend Neil Garfield’s Thursday night call… where fans and those in need of clarification might find friends and sympathetic souls…

    (every Thursday night after Neil)
    EPISODE1 – Garfield’s Goose & Friends
    09/24/2015 06:45 PM EDT 60 min

    First 5 questions posted ON CHAT BOARD get heard – 10 min each – IN ORDER – Call In’s limited to answers or similar situations – The Call Run like a Roman Centurion – at least to start with – lol

    Hosted by: Greg
    Phone Number: (724) 444-7444
    Call ID: 139335

    http://www.talkshoe.com/tc/139335
    “http://www.talkshoe.com/custom/images/icons/TC-139335-MainIcon.jpg”

  66. Good job Greg .. do we need to sig up at the website? or do we treat it just like Neil’s show, where we simply call the phone number and listen in ?? Will we have a place here or there to post messages in regards to the phone calls? Thank you for the effort .

    Bad news for me .. I just found out the District Court of NJ made a decision in the “NJ Free House” case … They REVERSED and gave the house back to the bank.

    I am using this 6 year SOL as one of my arguments in my case.

    In NJ some crooked politicians came along and changed a statute after the 2007 mortgage meltdown .. the SOL was always 6 years , but some filthy dirty rat bastard politician wrote a new statute that says the banks can now have 20 years to foreclose from the time of a default, or six (6 yrs) from the maturity date ..yada yada yada …

    Well the free house came about when a Federal BK Judge Kaplan ruled that once the lender “accelerates” the loan contract, they are infact creating a new maturity date ..because the entire amount is now due.

    I argued the same argument in my case, I used the Federal BK Judges argument and even submitted his decision as an exhibit. The way I argued it was to explain to my Judge that the 30 yr mortgage contract has a clause in it .. a clause that has no effect unless and until the lender chooses to activate and trigger that clause, the clause is the right of the lender to accelerate if you miss a payment. The clause changes the contract ..it changes the terms of the contract once they choose to use it .. I argued that you cannot have two maturity dates, it is either one or the other .. once they accelerate, they trigger the new maturity date ..and that means the 6 year sol begins to run.

    Here is the link to the District Court of NJ Reverses Federal BK Judge
    http://www.njlawblog.com/files/2015/08/District-Opnion.pdf

  67. please pass this along quickly in case it gets deleted….

    Description: Follow up Q&A call to our friend Neil Garfield’s Thursday night call… where fans and those in need of clarification might find friends and sympathetic souls…

    (every Thursday night after Neil)
    EPISODE1 – Garfield’s Goose & Friends
    09/24/2015 06:45 PM EDT 60 min

    First 5 questions posted ON CHAT BOARD get heard – 10 min each – IN ORDER – Call In’s limited to answers or similar situations – The Call Run like a Roman Centurion – at least to start with – lol

    Hosted by: Greg
    Phone Number: (724) 444-7444
    Call ID: 139335

    http://www.talkshoe.com/tc/139335
    “http://www.talkshoe.com/custom/images/icons/TC-139335-MainIcon.jpg”

  68. I’m back, & the KGB EL RUKIN MEDELLIN DRUG CARTEL & their evil FREEMASON TEMPLE OF SET LEADER, KGB OBAMA, the RPPI in Fraudclosure, has not killed me because I’m CATHOLIC, & they never will. The reason is FORCED COERCION to EXTORT signatures to reconstitute the KGB DRUG CARTELS own COUNTERFEITS is ATTEMPTED MURDER by the KGB enemy

  69. I’m on an iPad low battery … But some of the issues the judge ignored when granting Summary Judgment for thbbe servicer Wells Fargo ..

    1) originator pretender lender Commerce Bank table funded the 30 year refinance ..they stamped the Note “pay to the order of Washington Mutual Bank” before the closing .. Commerce upon signing closing docs instantly made Washington Mutual the owner / HIDC.. But the records have always described Commerce as owner…Commerce named MERS as nominee on the mortgage. WAMU went out of business in 2008. …no proper chain of title has ever been shown. The only thing that happened was LPS fabricated a forged fraudulent assignment of mortgage in Oct. of 2008 which said Commerce now assigns the mortgage to Wells Fargo . No mention of WAMU who was the last known HIDC…

    2) Wells Fargo attorneys in their certification and exhibits in 2010 show a true and accurate copy of the note that they say is in their possession. But the note is a blatant and obvious downloaded image of original from the closing .. there is NO Stamped endorsement by WAMU …
    The assignment of mortgage has a forged signature of the Notary.. I submitted a copy of the Notary real signature for comparison. I argued the Note is not in their possession and the copy they certify to has no endorsement from the last owner WAMU who is now out of business.

    3) the judge gave them 3 months adjournment to bring the note to court, they added a fresh stamp and thus fabricated the note in order to overcome my objection. I then argued we have two notes in this case. The one they certified to which had no endorsement, and this newly fabricated note with the fresh stamped endorsement in blank. We need proof of a date as to when this was added to the note I argued. That judge agreed with me and ordered WF to bring in a witness to testify under oath. The Bank brought in their big dogs lawfirm Reed Smith to take over at that point. They requested adjournment for one year, and finally the day before the hearing they asked the judge to sign an order vacating the Judgment and dismissing the complaint. That was 2011

    4) now on May 9 , 2014 they filed a new FC

    5) my answer had 31 affirmative defenses and 4 counterclaims

    6) my answer asserted they had no legal standing ..fabricated note with a stamped endorsement allegedly added by WAMU in 2010 , two years after they were already out of business …with no date or witnesses

    7) I asserted that I had rescinded this contract in 2007 , within the 3 years allowed by TILA..and that they had ignored it all these years. I showed a copy of the letter I mailed them notifying them of my TILA rescission on July 1, 2007 … I submitted proof that I was current on my payments thru June 1, 2007 … And they wrongly accused me of default when I didn’t pay the July 1, 2007 payment …

    8) WF motioned to dismiss my rescission with prejudice, which the judge granted. His reason stated was that a borrower cannot rescind under TILA unless they first tender back the money to the lender.

    9) after the Supreme Court released Jesinoski on Jan 13, 2015 .. I motioned the court to reconsider their decision to dismiss my TILA rescission .. I submitted the Justice Scalia written decision and argued that my court had erred when stating that I needed to tender in order to rescind. The judge argued that Scalia only ruled on whether a borrower needs to file a lawsuit , and that the borrowers need to tender first was not changed by the Scalia descision in the Supreme Court. He denied my timely 2007 rescission based on the fact that I failed to tender back the money at the time I rescinded. He said by failing to tender, it makes the rescission letter ineffective.

    10) he then cut me off from trial on the other issues of material fact that I was still attempting to go to trial over ..he said there were no issues left that needed a trial …he said they have the note, that’s all they need to foreclose … The assignment forgery doesn’t matter …the date of the added endorsement doesn’t matter … Nothing matters !!!!

    He then granted WF the Summary Judgment

  70. I know nothing and if I think I know something, I know nothing.
    I do not give legal advice because I do not know legal things.
    The following is an opinion, not statement of fact and can be perceived as my own truth if you wish.

    Is there no option in a Notice to Vacate to state the the loan was not consummated and that the true creditor has not been revealed, or am I just drawing straws here.

    We all know the parties showing up aren’t the real party in interest.

    I just don’t see how anything a ‘unknowing’ judge writes has any bearing on the facts.

    Just because they signed an order that is defective at best, doesn’t appear to mean defeat and definitely doesn’t appear to be uncontested.

    Is there a CFPB complaint associated with this for the trial judge to take judicial notice of, or are people thinking that they still have to let all these unknown people push papers to rob us of our property for a fee ‘we pay them to do it with’?

    I know I’m missing something because I figured a long time ago the court, business, is not the place to go.

    A phone call to the sec. of the state. of your state and you’ll find out the court house is not a constitutional building of any government for constitutional justice, it’s a business, a corporation with a owner like a JCPenney or an International House of Pancakes, and just like someone comes to work and does work as a cook, someone goes there and does work as a judge, a residing judge, a retired judge, a visiting judge, or some other position they come there to do business as.

    But it’s me. I should not have commented.
    I will make sure the top of the post has my disclaimer for knowing nothing.

    Trespass Unwanted, Creator, Corporeal, Life

  71. i’m thinkin’ 6:45 PM EDT every Thursday night right after Neil’s show – with enough time for a potty break and to process questions based on his call or our other pressing needs? What say you friends?
    gg

  72. if Neil won’t sponsor our call-ins on his shows, maybe we need a fanclub talkshow of our own?

  73. DwightNJ
    email me and lets swap spit
    i could use the company
    g

  74. Greg … Thank you for the links. If possible, can you post a template or sample of some different methods of recording in the land records office. Due to a travesty of justice in my FC case, the Judge granted Wells Fargo’s motion for Summary Judgment, NJ is a judicial state and it now has been kicked back to the foreclosure until to be processed as an uncontested foreclosure , at some point the plaintiff can motion for a. Final Judgment to be entered. My paralegal is preparing my motion to Vacate the Judgment based on lack of standing, defective notice of intent to foreclose which named WF as owner/creditor but he says that Fannie Mae says they own the loan as per their website info and also on the QWR reply from WF that stated on a page that Fannie Mae is owner, the paralegal says that WF messed up and he’ll show me next week when the motion to Vacate is ready.. But since I do not have faith in the trial court judge, I am interested in Clouding my title at some point. My case will most likely end up in the state appellate division but the paralegal is trying to repair the record and make it suitable for appeal. Thank you.

  75. an 86 page manual
    MORTGAGE FORECLOSURE DEFENSE
    FOR CVLS VOLUNTEER PRO BONO ATTORNEYS
    http://www.cvls.org/sites/all/files/seminars/foreclosuredefense_053014/foreclosure_defense.pdf

    INTRODUCTION
    Defending the average foreclosure in court isn’t glamorous, but utterly vital. While policy work is necessary to challenge banking institutions and practices, low-income families lose their homes daily while we wait for politicians to negotiate or for the courts to get it right.

    Attorneys, legal aid and private alike, often rebuff foreclosure defense work as either too complicated or hopeless. It is neither. Hopefully, the following materials will demystify the foreclosure process and you will realize it is a litigation proceeding like any other (with its own twists and turns, of course). Given enough time, most borrowers
    can recover from temporary financial setbacks and save their home.

  76. Greg, the call is like 3 hours and it was after the 2 and a half hour mark.

    I hope you had a chance to hear it.

    Trespass Unwanted

  77. Dwight NJ

    look at your Deed from the seller… it might say “…in Joint Tenancy” or similar…

    very few issue “…in fee simple” anymore

  78. TU

    i’m listening to the link and they just talk about PACER… is that it?

  79. DwightNJ
    recording your bona fide claims in the county land record forewarns any potential 3rd party purchaser of your claims so that they are not an ignorant/innocent party who can get your house under that rule…

    you want to keep the fight between you and the banksters as long as possible…

    tell the world the court issued foreclosure deed is a “wild deed” without operation of law…

    cloud title

  80. Greg .. can you give a brief explanation of how we are “tenants” when we thought we were owners? And how that can work in our favor .. is it a secondary, alternative plan “B” incase of losing our foreclosure case?
    Thank you

    Also … please give brief explanations of the theory of recording things in the county land records .. I understand you can’t spend time giving every detail, but can you give us the brief over-view of the playbook and how it can protect us .. Thank you, DNJ

  81. http://www.freeconferencing.com/playback_nv.html?n=/storage/sgetFC/OZ4nw/ulPfV

    Last quarter of the audio, allow it to buffer before using slider.

    Trespass Unwanted, Creator, Corporeal, Life

  82. Regarding Gregs post …. of First Circuit Court of Appeals … BK Case raising the TILA rescission …

    1) more proof the courts are defiant and will twist and spin anything they can in order to deny the borrower justice.

    2) the court took advantage of the 3 year SOL …the homeowner failed to claim they had notified the lender inside the 3 yrs. The federal statute does not require proof of mailing, it only states that you must notify the lender by mail or some other type of communication. Nowhere in the written statute does it mandate that you need certified return receipt proof of mailing. If your alleged default occurred before the 3 yr window expired, then it makes sense that you should assert that you mailed the rescission notice and stopped paying, as the statute states the rescinding party should do. This loophole applies to persons who stopped making payments before the 3 years had expired. The bank says you defaulted ..you say you rescinded ..same date of default. By the time it gets ignored…and eventually a foreclosure complaint is filed long after the 20 days expired … 1 or 2 years later in court you assert that you had rescinded ..and the bank is attempting to ignore the rescission and claim you defaulted. How is a judge going to demand you prove mailing , when the federal statute doesn’t require proof of mailing? … But when people are walking into court asserting that they missed the 3 year window for rescission, they are giving the judge the opening to rule against you.

    3) the court spins and promotes the lie that homeowners don’t have standing to challenge or question the validity of the PSA and whether it made it into the Trust in time ..the judge continues to promote this BS that homeowners are not allowed to expose illegal activity because they are not a party to the illegal activity…this case the judge flip flops back to blaming the homeowner for not attacking the Assignment ..but the courts have ruled the same way on Assignments, saying we don’t have standing to challenge a fraudulent assignment …so as we see, this is just an on-going game the courts are playing with us. They have no intention of allowing justice to prevail for homeowners caught in the foreclosure Ponzi scheme …it will take an intervention by some higher authorities to bring the judges back in line with upholding the rule of law

    4) again the court simply disregarded the homeowners arguments of fraud and lack of standing of the bank ..and simply played the game of saying “oh my, look ..they have the note stamped in blank, nothing else really matters after all”

  83. Judicial Notice of a document, certified copy of a court of record.

    The Notice of Intent to Preserve Interest,

    is mentioned as an accepted document and has had an effect with their mortgage proceedings.

    Once I get the recorded link I will post it.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  84. for what it is worth – an uncertified opinion of Consummation in Illinois:
    (seems it took 2 months for someone to answer the poor bloke)

    https://www.bankersonline.com/forum/ubbthreads.php/topics/2009818/Consummation_Date

    Q: #2009818 – 04/23/15 01:23 PM
    Screen Name: How to Comply

    I was listening to a webinar yesterday regarding TRID. The presenter recommended that everyone determine what the consummation date is in each of our states. I have looked and cannot find any IL regs that define consummation.

    Anyone aware of what it is? Hate to assume it is the closing date and then later find out it includes rescission period, when applicable.

    Thanks in advance!

    A: #2024221 – 06/30/15 05:28 PM
    Screen Name: cle
    Re: Consummation Date

    Under Illinois case law, a mortgage loan is consummated on the date of the loan closing. A number of Illinois courts have held that consummation occurs on the date of the loan closing for purposes of the TILA.

  85. Will do, we all may need something a little stronger! Interesting thing tenant had been set against me after years of getting along but now sees the manipulation.

  86. Oh… everyone consider that if you have been a tenant and not owner all these years, and you didn’t have a contract that said you would invest in improving the property for free, that all your time and effort and expense can be billed on an invoice, then when dishonored, issue a mechanics lien to the so-called owner/bank

  87. Hammer – email me sometime and maybe we can talk over a sarsaparilla

  88. @ Greg completely agree. That’s what they did to us with non judicial fc especially, the “default” clause in deed was all tgat mattered no matter what forgeries or fraudulent accounting was shown. Although no justification for ignoring crimes.

    The 1 yr time frame should only apply to purported debt that is unsecured by void note. But we need yo keep Dwight ‘s warning in mind until we can cleanse the system of corrupt, traitorous judges.

    I’m caught up with city actions as well. Now over 30 days since I’ve been expecting unlawful detainer. Usually 5 days on normal timeline.

    Today tenant told me robber lender that purportedly took property back on fc sale in July is hiding from city.

    They tried to use property repairs to get tenant to allow them to do inspection but ignored my warnings of big dead oak that was danger to me and neighbors.

    Yesterday we got 2 in of rain in middle of drought and tree came down. Could have killed someone and damaged my unit and neighbors.

    They have NO INTEREST in our properties or human life except for their greed!

    Once I get through this week will look into turning the tables even more as your saying.

  89. DO NOT VOLUNTEER TO LEAVE YOUR LAND….
    if they bitch; tell them to get their damn improvements off your land!

  90. oh… and for those who have already done “the process” an have a UCC1 lien on your “person, etc.”, file a “Notice of Interest” in the Court Case (even if closed) and then add the court case to a new UCC3 on your existing UCC1 at the Sec of State… for those who know what i’m talking about; you’ll see this makes sense… others… sorry, not teachin’ that stuff here…

  91. Hammer

    i am of the mind that one just files their rescission and shuts up!
    if Neil is right and they have a 20 day (from receipt) “hot-potato” which they don’t answer… then fail to sue you for recovery within 1 year… it would seem their negligence, disbelief, or arrogance would be your best friend…

    afterwards, don’t even file a court enforcement action… they might think they have the right to unwind it… just file a “Notice of Wild Deed” and “Notice of Interest” on the county recorder’s record for your home and send copies to all parties… (including your sheriff and AG) and publish in your biggest local paper for 90 days…

    let someone else sue you and bring their proof of claim…

    just an idea which i am about to execute…

  92. Why bk court is another trap! And TILA , consummation are key for non purchase cases or otherwise applies.

  93. and this…
    From Banking and Finance Law Daily, April 17, 2015
    Rollback Dodd-Frank reforms? Senate hears from industry players

    http://www.dailyreportingsuite.com/banking-finance/news/rollback_dodd_frank_reforms_senate_hears_from_industry_players

  94. just found this September 2015 Appeals decision – not good…

    http://media.ca1.uscourts.gov/pdf.opinions/14-1246P-01A.pdf

    United States Court of Appeals For the First Circuit No. 14-1246

    TORRUELLA, Circuit Judge – This case involves an attempt
    by a Chapter 13 debtor to avoid foreclosure on her residential
    mortgage through a lender liability suit in an adversary proceeding
    within her bankruptcy case. Agreeing with the bankruptcy court, we
    find all claims to be either time-barred or without merit, and
    therefore affirm its grant of summary judgment in favor of the
    creditors.

  95. Kalifornia

    sure… would be glad to go off to the kitchen and knead some dough with you to bring back some bread for others…

    greg lawman@gmx.us

  96. @ Greg

    American Jurisprudence, Second Edition
    Database updated May 2014

    Maybe it’s better to correspond off the blog to clarify the relevance of the concealed bailment as a matter of law, then bring the discussion back online for everyone’s benefit.

  97. Kalifornia

    if you don’t show me the higher order reference – i can’t possibly know where these came from…. (fed/state/UN?)

    thanks
    greg

  98. @ Greg

    § 62. Bailment of intangibles

    Leaving intangibles such as mortgages,[1] unendorsed bonds,[2] or stock certificates[3] with another generally will not estop the bailor from asserting his or her title as against innocent third persons claiming under the bailee,[4] if the intangibles are left merely for safekeeping[
    5] or for some special or limited purpose or use.[6] However, if the bailor entrusts written evidence of title or a power of disposition over the property to the bailee, as by executing a blank assignment of bonds or stock certificates, an unauthorized transfer by the bailee normally
    will bind the bailor; in such a case, the bailor will be estopped from asserting title as against an innocent transferee.[7]

  99. @ Greg

    § 58. By bailee; assignable interests—Rights of innocent transferees

    An unauthorized transfer or encumbrance by the bailee of the subject matter of the bailment does not divest the bailor of title to the property.[1] No right, title, or interest may be acquired as the result of an unauthorized sale,[2] mortgage,[3] or gift[4] of the property by the
    bailee, even though the transfer is made to an innocent purchaser in good faith and for value,[5] unless the bailor is estopped from asserting his or her title.[6] However innocent a purchaser to whom an unauthorized sale is made may be, the purchaser acquires no title to the property as against the bailor, who may recover the property from the transferee or hold him or her liable for its value.[7] The fact that the transferee relied on the bailee’s representation that he or she had complete power of disposition of the property, and paid full value in reliance on such a representation, does not protect the purchaser against the bailor’s assertion of rights as the true owner.[8]

    Observation:
    The rule that where one of two innocent persons must suffer, the loss should fall on the person whose act or omission made the loss possible is inapplicable to ordinary bailments,[9] since people are routinely required to entrust the possession of goods to bailees for various purposes. Rather, the doctrine of caveat emptor applies as to any title the purchaser may acquire.[10]

  100. @ Greg

    § 55. As against paramount owner

    The bailee ordinarily acquires, by virtue of the bailment, no greater right in the property than the bailor had. Where the bailor has neither title to, nor the right of possession of, the bailed property, the bailee cannot hold it as against the rights of the holder of a paramount title.[1] A bailee who has sufficient notice of the title or paramount claim of the third person must yield to that claim or title,[2] particularly where the true owner has made demand for the property, or has asserted title thereto and instructed the bailee to retain the property for the true owner’s benefit.[3] In cases where no demand has been made by the true owner, the bailee may safely return the property to the bailor, or deliver it to another, in accordance with the terms of the bailment, even after having received notice of the claims of the owner.[4] Moreover, a bailee who returns the property to the bailor or delivers it to a third person in accordance with the terms of the bailment, before receiving notice of any adverse claim, is not liable to the true owner for conversion.[5]

  101. @ Greg

    § 54. Estoppel to assert title of third person

    A bailee will not be permitted to assert the title of a third person against the bailor in order to avoid returning the property which is the subject of the bailment.[1] Thus, a bailee who retains possession of bailed property cannot assert, as a defense to an action by the bailor to recover the property, that the title is in a third person rather than the bailor.[2]

  102. @ Greg

    V. Title and Right of Property
    B. Estoppel of Bailee to Deny Title of Bailor or Paramount Owner

    A bailee who receives property by virtue of a bailment admits the right of the bailor to make the bailment contract, and cannot set up a lack of title in the bailor as an excuse for a refusal to redeliver the subject matter of the bailment. That is, the bailee is estopped to deny that
    the bailor had title to the bailed property at the time of the bailment and delivery of the property,[1] where the bailee’s apparent purpose is to gain some personal advantage.[2] However, although a bailee is estopped from denying the title of the bailor to the subject property as of
    the time of the bailment, if the bailor’s title to the property is terminated during the bailment, the bailee may thereafter deny any further title in the bailor.[3]

  103. @ Greg

    § 52. Respective interests of parties in subject matter

    In the absence of any contrary provision in the bailment agreement, the bailee has such control and dominion over the property as will allow the bailee to exclude all others from possession, including the bailor.[1] In such a case, so long as the bailee acts consistently with the
    purpose of the bailment, the bailor has no right to retake possession of the property without the bailee’s consent.[2]

  104. @ Greg

    V. Title and Right of Property
    A. In General
    T
    § 51. Generally; right of possession

    Where one with legal title to property transfers possession of it to another pursuant to a contract of bailment, the title to the property remains in the bailor.[1] The bailee acquires only a possessory interest in the property,[2] which carries with it such a legal interest in the subject matter as is consonant with the purposes of the bailment.[3]

  105. @ Greg

    § 45. Sufficiency

    What is a sufficient acceptance to charge a person with the responsibilities of a bailee is probably not capable of ascertainment by any universal rule, but rather depends on the circumstances of each case; one primary requisite is that the one acquiring possession of the
    property must have notice of the possession and knowledge that it is the property of another, for the relation of bailment exists and continues only so long as the party to be charged has notice of the possession and custody.[1] The bailee’s knowledge of possession of the chattel is
    essential to the existence of the bailment.[2]

    Knowingly taking property into possession or control is a sufficient acceptance,[3] provided there is a delivery for the purpose of creating a bailment,[4] particularly where the property is delivered in response to the proposal or invitation of the recipient.[5] However, no formal contract or meeting of the minds is necessary.[6] For example, upon issuance of a dock receipt or trailer exchange report, and its acceptance of custody of a shipper’s cargo, a stevedore becomes a bailee to that cargo.[7]

  106. @ Greg

    IV. Delivery and Acceptance of Subject of Bailment
    B. Acceptance

    § 44. Generally

    A bailment is essentially a consensual transaction.[1] The law generally does not thrust upon one the duties, obligations, and liabilities of a bailee without his and her knowledge or consent;[2] they must be voluntarily assumed by the party or by some authorized agent, as in
    every obligation founded on contract.[3] No legal responsibility as a bailee rests on one who in fact declines to become a bailee.[4]
    As a general rule, there must be an acceptance by the bailee of the goods forming the subject matter of the bailment before there can be any bailment.[5] Thus, to establish a bailment, there generally must be either an express agreement to take the article and later redeliver it, or
    circumstances from which such an agreement can be implied.[6]

  107. @ Greg

    § 42. Sufficiency

    In order to constitute a sufficient delivery of the subject of a bailment, there must be such a full transfer, actual or constructive, to the bailee as to exclude the possession of the owner and all other persons and give to the bailee, for the time being, sole custody and control thereof.[
    1] While there need not be delivery in the technical sense, there must be an actual change of possession from one person to another by an affirmative act of delivery[2] to the bailee,[3] a complete delivery of possession, custody, and control.[4] A bailment therefore does not arise
    unless delivery to the bailee is complete and the bailee has exclusive possession of the bailed property, even as against the property owner.[5] Moreover, the recipient of the property must intend to exercise control over it.[6] Thus, unless the reputed bailee knows of the articles or that they have been delivered to him or her, there cannot be a bailment.[7]

    A written transfer of the muniments of title of the property bailed is sufficient, since it constitutes a delivery of the means of obtaining possession, which is equivalent to actual possession.[8]

  108. @ Greg

    IV. Delivery and Acceptance of Subject of Bailment
    A. Delivery

    § 40. Generally

    Except in constructive bailments,[1] which arise where one has lawful possession of the thing under circumstances that impose on him or her the duty to account for it as the property of another,[2] or in other cases where the bailee is already in possession of the property,[3] it is essential to the creation of the relation of bailor and bailee that possession and control over the subject matter pass from bailor to bailee.[4] Possession requires physical control over the property in question as well as an intention to exercise that control.[5] It is also essential that there be a delivery of the property to the bailee, either real or constructive, or an assumption of control by the bailee.[6] In absence of some form of delivery of chattel to a bailee’s possession, no bailment is created.[7]

  109. § 38. Implied by law

    A bailment contract may arise by operation[1] or implication[2] of law if, through proof of sufficient circumstances, an implied relationship of bailor and bailee is shown to rest upon a substantive foundation.[3] Existence of a bailment depends on the place, the conditions, and
    the nature of the transaction, and a bailment may arise from the bare fact of the thing coming into the actual possession and control of a person fortuitously, or by mistake as to the duty or ability of the recipient to effect the purpose contemplated by the absolute owner.[4] It is the element of lawful possession, and the duty to account for the thing as the property of another, that creates the bailment, whether such possession results from contract or is otherwise lawfully obtained.[5] Thus, where one comes into possession of a chattel and exercises physical control over it,[6] or where possession has been acquired accidentally, or for some purpose other than bailment, the law imposes on the recipient the duties and obligations of a bailee.[7]

  110. @ Greg

    § 37. Implied in fact

    Liability for loss of hat, coat, or other property deposited by customer in place of business, 54 A.L.R.5th 393

    A contract of bailment may be implied from the circumstances of a transaction or from the words and acts of the parties evincing a purpose to enter into that relation toward the property, as well as by an actual agreement.[1] There must, however, be some affirmative act or conduct of the party sought to be charged as bailee;[2] delivery and acceptance must be present for a bailment to arise.[3] That is, absent some form of understanding between the parties, the formation of an implied-in-fact bailment contract cannot take place.[4] There must be a substantive foundation in the acts or conduct of the party sought to be bound on which an implied contract of bailment can rest.[5] The facts surrounding the transaction in question must be analyzed to determine the existence of an implied-in-fact bailment.[6]

  111. @ Greg

    B. Implied Bailments

    § 36. Generally

    A bailment relation with all the attendant legal incidents need not necessarily arise from an express agreement; rather, it may be implied in fact or in law.[1] In an implied bailment, it is not necessary that delivery and acceptance be formal.[2] Thus, while a bailment is ordinarily created by delivery and acceptance and consent or agreement of the parties, it may also result from actions or conduct of people concerning the goods in question,[3] even if the conduct is
    neither foreseen nor contemplated,[4] such as when one comes into lawful possession of personal property of another.[5] However, an implied contract of bailment can arise only when the natural and just interpretation of the acts of the parties warrants such a conclusion.[6]

    To determine whether an implied bailment exists, a court may consider the circumstances surrounding the transaction, such as the benefits to be received by the parties, their intentions, the kind of property involved, and the opportunities of each to exercise control over the property.[7]

  112. § 34. Legality

    A bailment must be predicated on a lawful transaction voluntarily entered into by the parties. Thus, if the contract of bailment is in violation of law or based on an illegal[1] or fraudulent[2] consideration or transaction, it is not enforceable as between bailor and bailee.[3] Illegality of the contract does not, however, work a forfeiture of the property turned over to the bailee in conformity with the agreement, or make the party who received it any less a bailee under obligation to return the thing bailed in good condition.[4] One who bails goods to
    another for illegal purposes may nevertheless be entitled to recover damages for harm caused to the goods by the negligence of the bailee or for their conversion by the bailee. In many cases, however, the illegal nature of the transaction between the parties will prevent liability,
    such as when the return of the chattel would tend to aid in the commission of a crime, for example, when a retail dealer who has received narcotics refuses to return them to the wholesaler who, as the retailer knows, intends to use them for an illegal purpose.[5] Under such circumstances the obligation is one imposed by law, springing out of the fact of possession of another’s property, and its violation sounds in tort, or in quasi contract on a contract implied in law,[6] and not on the illegal bailment transaction The fact that one doing business as a professional bailee has not complied with statutory qualifications for doing business as a public bailee does not preclude the creation of a bailment relation when such person actually receives property for storage, or enable him or her to escape liabilities imposed on bailees,[7] and it is no defense to the bailor’s action against a third person to recover possession of the property or its value from the bailee that the terms of the agreement under which the bailee holds possession are in violation of a federal price regulation.[8]

  113. @ Greg

    § 33. Formal requisites

    Generally, matters of form are of slight significance so far as the validity of a bailment contract is concerned; so long as the lawful possession of the property is in the bailee, under circumstances that impose on him or her the duty to return or account for it.[1] A contract for bailment may be written, oral, express, or implied.[2] The relationship is no less a bailment merely because the agreement is informal in character, oral, or implied in fact or in law.[3] No particular form of words is prescribed.[4]

    Observation:
    However, a contract of bailment or rental of personal property that by its terms is to extend beyond one year is within the inhibition of the statute of frauds governing contracts not to be performed within a year.[5]

  114. @ Greg

    § 32. Consideration

    All contracts of bailment, whether the bailee’s services are rendered gratuitously or for hire, are supported by sufficiently good and legal consideration to the extent that the bailor suffers a detriment by yielding up the present possession or custody of the article bailed on the
    faith of the engagement of the bailee to redeliver or account for it.[1] Monetary consideration is not required for a bailment to be created when the property is delivered and accepted as an incident of business in which the transferee makes a profit; the transferee receives his compensation in the profits of the business in which the bailment is incident.[2] In a gratuitous bailment the bailee typically receives no actual consideration.[3] Moreover, a mere agreement to undertake gratuitously the duties in the future of a bailee is not supported by any consideration and, therefore, is generally not obligatory. On the other hand, once the bailee takes possession of property he or she is bound to act in accordance with the terms of the bailment agreement.[4]

    If a bailment for mutual benefit of the parties is alleged, the plaintiff is required to allege the existence of consideration.[5]

  115. @ Greg

    § 31. Assent

    The general rule that there be mutual assent or a meeting of the minds on all the essential elements or terms to form a binding contract[1] is applicable to a contract of bailment.[2] Except for quasi bailments, a bailment is essentially a consensual transaction.[3] The duties and
    obligations of a bailee cannot, except through operation of law, be thrust on a person against his or her consent.[4] However, where one person has lawfully acquired the possession of the personal property of another and holds it under circumstances whereby he or she ought, upon principles of justice, to keep it safely and restore it or deliver it to the owner, such person, and the owner of the property are, by operation of law, generally treated as bailee and bailor under a contract of bailment, irrespective of whether or not there has been any mutual assent, expressed or implied, to such relationship.[5]

  116. @ Greg

    § 19. Bailment or trust

    Every bailment is a form of trust,[1] since a bailment involves the delivery of personal property by one person to another in trust for a specific purpose.[2] In a commercial or mercantile, as opposed to a technical, sense, bailed property is often regarded as property held “in
    trust.”[3] However, the mere reposing of confidence in a party does not of itself create a trust or make a trustee of one in whom confidence has been reposed; more than this is required to establish a fiduciary relationship of the sort which characterizes the creation of a trust.[4]

    In a more technical sense, the bailment and trust relationships are entirely distinct.[5] It is characteristic of a bailment that the bailee has possession of the property and title or ownership remains in the bailor,[6] while a change of actual physical possession of the trust property is ordinarily not required to create a valid trust[7] and legal title to the property vests in the trustee.[8] Similarly, according to the Restatement Third, Trusts, the owner of a chattel may give another person possession of the chattel without granting that person title to it. In such a case, a bailment and not a trust is created. Whether the bailment is for the benefit of the bailor, the bailee, or a third person, or some combination of these, the bailee is not a trustee.[9] Thus, bailments are not trusts.[10]

  117. …continued from § 17. Bailment or agency

    [FN1] Bogart v. Cohen-Anderson Motor Co., 164 Or. 233, 98 P.2d 720 (1940).

    [FN2] Joseph Mogul, Inc., v. C. Lewis Lavine, Inc., 247 N.Y. 20, 159 N.E. 708, 57 A.L.R. 934 (1928) (holding that a carrier receiving merchandise on a c.o.d. shipment acts as a bailee to transport the goods and as an agent to receive the purchase price).

    [FN3] Johnson v. H. M. Bullard Co., 95 Conn. 251, 111 A. 70, 12 A.L.R. 766 (1920).

    [FN4] Bogart v. Cohen-Anderson Motor Co., 164 Or. 233, 98 P.2d 720 (1940) (involving a gratuitous bailment of an automobile given to a prospective buyer by an automobile dealer to be test-driven). A prospective purchaser of an automobile is an agent, rather than a bailee, of the seller, where the purchaser is accompanied by the seller or the seller’s agent who retains the right to control the operation of the vehicle. Blackburn v. Evergreen Chrysler Plymouth, 53 Wash. App. 146, 765 P.2d 922 (Div. 2 1989).

    [FN5] Nava v. Truly Nolen Exterminating of Houston, Inc, 140 Ariz. 497, 683 P.2d 296 (Ct. App. Div. 2 1984). In the absence of some special provision, the ordinary bailment leaves no residue of control in the bailor as to how the bailed property is to be handled or operated to protect the rights of third persons. One of the distinctive incidents of the status of principal and agent is the power of the agent to subject his or her principal to liability for an act done in furtherance of the agency; a bailee, as such, has no power to subject the bailor to liability. Young v. Lamson, 121 Vt. 474, 160 A.2d 873 (1960). As to control by the principal over the conduct and activities of the agent as a prime
    element of the agency relationship, see Am. Jur. 2d, Agency § 2.

    [FN6] Young v. Lamson, 121 Vt. 474, 160 A.2d 873 (1960).

    [FN7] Bertrand v. Mutual Motor Co., 38 S.W.2d 417 (Tex. Civ. App. Eastland 1931), writ refused, (July 22, 1931).

    [FN8] Am. Jur. 2d, Agency § 223.

  118. So…best to stick to consummation question , No contract, no debt issues?

  119. @ Greg

    § 17. Bailment or agency

    The terms “bailment” and “agency” represent distinct concepts and involve different relationships, even though they may arise in similar circumstances.[1] Although a bailee may also be an agent of the bailor for some purposes with respect to the subject matter of the same
    transaction[2] or for other purposes,[3] a bailee is not necessarily an agent.[4] The primary distinction between an agency and a bailment is the bailee’s freedom from control by the bailor, and the inability of the bailee to subject the bailor to liability in contract or tort.[5] Moreover, the purpose of the bailment may be inconsistent with any relation of principal and agent.[6] In a bailment relationship, the interests of the parties may be completely antagonistic,[7] whereas a person who undertakes to act as an agent for another cannot deal in the agency matter for his or her own benefit without the consent of the principal, freely given with full knowledge of every detail known to the agent which might affect the transaction.[8]

  120. @ Greg

    § 16. Bailor and bailee or debtor and creditor

    In determining whether a relationship is in the nature of a bailment or that of a creditor and debtor, the court must ascertain the parties’ intent.[1] If the purported bailee is not bound to return the same items that were delivered to him or her by the bailor, but may deliver any
    other item or items of equal value, there is no bailment.[2] Thus, an ordinary cash deposit, which becomes commingled with the general funds of a financial institution, creates the relation of debtor and creditor, not bailor and bailee.[3]

  121. @ Greg

    II. Classification of Bailments
    B. Other Relationships Compared and Distinguished
    In determining whether a particular transaction creates a bailment or some other contractual relationship, it is necessary to ascertain the intention of the parties.[1] Usage or custom may be resorted to in order to interpret an otherwise indeterminate intention of the parties, at least
    where it appears that such usage or custom was understood by the parties and the contract made in reference to it.[2]

    By definition, the concepts of abandonment and bailment of property cannot co-exist. “Abandonment” is a relinquishment of an owner’s legal right to a thing, while bailment requires an owner of the object (the bailor) and a possessor (the bailee).[3]

    Absent a special fiduciary relationship between a contractor and a subcontractor, a contractor does not hold funds for subcontractors subject to any form of bailment, pledge, or trust.[4]

  122. @ Greg

    § 11. Bailments for mutual benefit—Bailment incidental to business in which bailee makes profit
    Bailment of an article received by the bailee as an incident to a business in which he or she makes a profit is a bailment for mutual benefit and gives rise to corresponding duties on the part of the bailee, even though nothing is paid directly to the bailee for the care of the property.[1] A bailment is for the mutual benefit of the parties as long as the property of the bailor is delivered to and accepted by the bailee as an incident of a business in which the bailee makes a profit.[2] In such a case, the bailee receives compensation in the form of the profits of
    the business which is incidentally benefited by the bailment.[3] However, business owners are not generally liable for the loss of property deposited in their places of business by customers unless there is such delivery of, or assumption of control over, the property as to create a bailment.[4]

  123. @ Greg

    § 10. Bailments for mutual benefit—Nature or amount of compensation
    A mutual benefit bailment may occur even though the parties did not contemplate compensation for the use or transfer of the property in the ordinary sense,[1] as where the bailment is incidental to some other business transaction between the parties.[2] In determining whether
    a bailment is for mutual benefit of the parties, or for the sole benefit of one of the parties, the law does not inquire into the nature and amount of the consideration or compensation, or into its sufficiency or the certainty of its being realized by the bailee.[3] It is sufficient if the consideration is of some value, even though slight, or is of a nature that may inure to the benefit of the party making the promise.[4] Moreover, the classification of a bailment as one for mutual benefit does not require that actual money or other consideration pass between the parties; rather, a possibility or chance of an expected profit is sufficient to make the relationship one for the mutual benefit of the parties.[5] As a result, a bailment may be for the mutual benefit of the parties even though no fee at all is charged by the bailee, as where the bailment is incidental to a compensation transaction[6] or to a transaction within the scope of the bailee’s principal business.[7] On the other hand, a bailment is not lucrative when there is no compensation, direct or indirect, which flows to the bailee; the bailee is merely a gratuitous bailee if the facts establish that compensation was not contemplated by the parties.[8]

  124. @ Greg

    § 9. Bailments for mutual benefit
    A bailment for the mutual benefit of the parties arises when an
    individual takes the personal property of another into his or her care or custody in exchange for some monetary payment or other benefit.[1] Such a bailment occurs whenever both parties to the bailment contract receive some benefit flowing from the transaction.[2] A “bailment for mutual benefit” is one in which the parties contemplate some price or compensation in return for the benefits flowing from the fact of bailment, and it exists when one person gives to another the temporary use and possession of personal property, other than money, for compensation, and the later agrees to return the property to the former at a future time.[3] However, a mutual benefit bailment does not arise when possession of personal property passes from one person to another by mistake, accident, or through force of circumstances, in which situations the law treats the recipient as a constructive bailee.[4]

    A bailment for the mutual benefit of the parties may also be described as a lucrative bailment,[5] a bailment for compensation,[6] or a bailment for hire.[7]

    A mutual benefit bailment is created when a chattel is delivered by its owner to another for repairs, service, or alteration.[8] A bailment for mutual benefit also may arise when articles are furnished to a person or an association for exhibition or display to the public,[9] or when
    property is delivered to another person or entity for review[10] or approval.[11] Likewise, a bailment for mutual benefit arises where the bailment or loan of an article is motivated by the bailor’s desire to promote a sale of it by the bailee.[12]

  125. @ Greg

    § 8. Gratuitous bailments

    Although the term “gratuitous bailment” sometimes is used to refer exclusively to one which benefits only the bailor,[8] a loan of property for the use of the bailee without charge also can be viewed as a gratuitous bailment.[9] The type of bailment which constitutes a loan
    is a bailment for the sole benefit of the bailee; it is an uncompensated lending in which the bailee is the sole beneficiary[10]

  126. @ Greg

    § 3. Types of property subject to bailment
    Bailment 1, 4
    Any kind of personal property, whether tangible or intangible,[1] may be the subject of bailment.[2] The bailed property therefore may consist of money or a chose in action,[3] as well as chattels.[4] Incorporeal personalty, such as negotiable notes, bonds, corporate stock and insurance policies, may be the subject of bailment, just as corporeal assets, such as horses, watches or furniture, may be.[5]

  127. @ Greg

    The Promissory Note is the property of the Maker who executed it.

    The Maker of the Promissory Note is a Bailor in a bailment relationship with a bailee (a purported mortgagee) who is supposed to hold possession of the Maker/Bailor’s Promissory Note on his or her behalf, to wit:

    § 2. Definitions
    Bailment 1, 2
    A bailor is a person who delivers personal property to another to be held in a bailment.[1] A bailee is one to whom goods are entrusted by a bailor; a bailee is the party to whom personal property is delivered under a contract of bailment.[2] For purposes of a bailment being created by delivery of the possession of goods and acceptance of delivery by a bailee, “delivery” is defined as the bailor’s relinquishing exclusive possession, custody, and control to the bailee.[3] A constructive bailee is a person who acquires possession of another’s property by mistake or accident, or by force of circumstances under which the law imposes upon him or her the duties of a bailee.[4] Where the terms “bailor” and “bailee” are used in a statute, their ordinary legal meaning is presumed to be intended, in the absence of language showing a contrary intention.[5]

    A person who takes possession of personal property solely for the benefit of its owner, without compensation, is a gratuitous bailee.[6] By contrast, a person becomes a bailee for hire by taking property into his or her custody and care for compensation.[7] A professional bailee is one whose principal business is to act as a bailee and who deals with the public on a uniform, rather than an individual, basis.[8]

  128. there is NO Money
    YOU are the Money
    all they do is push debits and credits around on a computer
    YOU loaned them a Note with your signature to Monetize and convert into those digits… then blindly agreed to pay them with your labor for what they already took from you… ‘THE FULL FAITH AND CREDIT OF THE PEOPLE OF THE UNITED STATES OF AMERICA”

  129. now imagine the original lender of record goes bankrupt and is forbidden to execute any new instruments… then you are offered a loan modification tagging the original loan as the source to be altered… “well gee-whiz Beav”… how can the BK lender or their agents offer you a mod when the Fed has chopped off their weenies?

    IT MUST BE A NEW LOAN FROM A MYSTERIOUS NEW LENDER… pretending to be the original lender… dontcha think?

    That would mean tolling starts anew…dontcha think?

    Or – maybe it is the secret real first lender that you never knew about?

    Either way, if the secret lender’s name never appeared… where is the FORKING contract?

  130. My lawyer and bankster teamed up.

  131. Greg I’ve stayed out of court trap since ’08 teamed up to make a false offer WITH bankster. I partly agree on consummation. As Garfield is saying consummation is not the same as purported closing date. But if you are challenged in court you need to be able to make ur case.

    From what we are seeing the script from banks even lawyers is 3 yrs is fixed and starts at closing date..That’s the reality were having to deal with though wrong per supreme court.

  132. DwightNJ –

    one correction…

    it is not whether you mailed in rescission w/i 3 years of the closing…. you leave that alone!!!!!!!!!!!!!!!!!!!!!!!

    It is whether you mailed in a rescission [saying NOTHING about the actual “DATE OF CONSUMMATION” (HOW CAN YOU KNOW) and the alleged creditor did nothing within 20 days of receipt or 1 year from rescission – then they are time barred!

    Remember – not only is the alleged creditor barred…. THE COURT IS BARRED TO HEAR ANY CHALLENGES TO IT….

    yes, this is a loophole which they are going to have congress plug within a year…. act now.

  133. DwightNJ –

    nice comment for Hammertime – [Hammertime – do what he said] that is what we did… we let them “blow it” on their own by ignoring the WELL DOCUMENTED NOTICES GIVEN BY NOTARY RECEIVER AND VIA A NEW TRUSTEE

    [yes-i fired all the previous trustees for being naughty (unclean hands, etc.) and appointed a quality CPA as the new guy…. this should have been recognized all the way to “the trust”… but was not…]

    i’ll work up a “Cliff’s Notes” version for you ASAP…
    greg

  134. Can anyone show me any proof that a man MUST join and be part of a club that was around before he was born just because the people who were here before and are now dead had agreed to be in such club? Would that not mean that if the last guy that lived in my house was a member of Sam’s Club, that I had to be too…? IMHO – same goes for “US Citizen” – a membership status to a club for which i still cannot find any definite, unambiguous description…

  135. Dwight i presumed I was out of the court trap but good advice to stay out of court for year it sounds like. I’m in strange case where I may have to since PMac ignored rescission except for letter and went forward with sale. In CA if they go forward with unlawful detainer I will have to make void sale argument and address damages I understand from AG site documentation. If case not made cannot bring up in future unlawful FC/TILA enforcement lawsuit. Not sure of term used, along lines of double jeopardy?

  136. Hammertime … Enforcement rights are only valid for 1 year after the rescission. But they open up the possibility of “invoking the courts jurisdiction” to adjudicate whether you even had a right to rescind, this is the danger of going after an enforcement for monetary damages, violations, recoupment of payments, etc ..it opens the door for the bias judge to rule against your rescission and vacate it.

    The other way to approach it, is to allow the 1 year to expire, and don’t worry about recovery of monetary damages ..instead look to get beyond the courts reach and jurisdiction …and after the 1 year expires you simply go after obtaining a declaratory judgment or clear title for the property based solely on the effectiveness of the TILA rescission. Now the time has expired for the lender to file (20 days) and for enforcement by the borrower (1 year) ..barring the court from ruling on the merits of the rescission, such as whether the right to cancel notices were given at the closing, etc. .. All you are doing later is saying “Take notice, we did effectively rescind our contract and they waived their 20 day window for the statutory remedies ..so we are hereby looking to declare that the mortgage instrument is void by operation of law. Period.

    The judge has no jurisdiction to decide whether you had a valid reason to rescind because you’re not looking for damages as a plaintiff, which requires you to prove up your case, which in turn allows him the right to deny your enforcement for damages and his chance to vacate your rescission by writing an Order that says you never had a valid reason to rescind. Better to keep the judge out of it if possible.

    Now for those people who have already lost their homes, then this wrongful foreclosure strategy is probably their only way ..

    But the consummation factor still looks large in all of this ..was a valid loan EVER consummated? This is the argument everyone is waiting for.

    Search this web lot site ..for the post “Back to the Future -Rescission” and read the 500 comments where Rod Ciferri does a terrific job arguing why the lenders should lose when they fail to respond within 20 days by filing an action to contest the rescission ..he argues that since TILA rescission is a statutory remedy …the banks have waived the remedy by failing to act in 20 days. And as long as the borrower doesn’t invoke the courts jurisdiction to adjudicate the validity of the rescission the borrower should be the winner by default. The only thing left is to get a court to grant clear title based on the only fact before it, did you mail a rescission letter within 3 years of the closing date. That should be the only question for the court.

    Again..for people looking to fight it out in court and trying to win a large sum of money and the property , then it would require a consummation argument …asserting the,consummation never happened due to fraud

  137. Greg … If you could, please give us a summary of your story. Without going into detail, can you describe in layman’s terms, your strategy and timeline ….
    1) Answering the Foreclosure Complaint – did you deny the default, deny the plaintiff had standing, assert that you had already rescinded? etc.

    2) Briefly ..what happened in court? Motions, discovery, trial, summary judgement? Appeal?

    3) When did you mail the rescission letter? Before the foreclosure complaint was filed? Did you record the papers on the land records before the case went to court, or after?

    4) The UCC-1 , Warranty of Deed, using the Golf Center guy in your documents ..all confusing stuff for lay persons, can you give a brief summary of what the purpose and strategy was?

    5) What is the current status of your case, and what is the next step in your fight to keep your property and to prevail in the courts eyes?

    Thank you

  138. Louise that’s a good example for enforcement that we have a year to file after the notice sent or 20 days? It seems it may bring up issues that bankster needs to bring up though but could be paranoid at this point! Good on damages but could get even deeper.

  139. Exhibit 10.1
    TWENTY FIRST MODIFICATION AGREEMENT
    THIS TWENTY FIRST MODIFICATION AGREEMENT (the “Agreement”) is made as of the 31st day of May, 2005, by
    and among E-LOAN, INC. (the “Borrower”), and GMAC Mortgage Corporation, a Pennsylvania corporation (“GMACM”), as
    successor to all rights, title, interest and obligations under that certain Master Warehouse Loan Purchase and Sale Agreement dated as
    of September 24, 2003 (“Purchase Agreement”), by and among GMACM and GMAC Bank, a federal savings bank (the “Lender”).
    BACKGROUND
    The Borrower and the Lender entered into a Warehouse Credit Agreement, dated as of November 1, 2001, as amended (as so
    amended, the “Warehouse Credit Agreement”) pursuant to which the Lender agreed to make advances (the “Advances”) to the
    Borrower in accordance with the provisions of the Warehouse Credit Agreement. All capitalized terms used herein and not otherwise
    defined shall have the meanings set forth in the Warehouse Credit Agreement.
    The Advances are evidenced by the Borrower’s Fourth Amended and Restated Note, dated as of May 6, 2003 (the “Note”) in
    the stated principal amount of $155,000,000 and secured by, among other things, a Warehouse Security Agreement dated as of
    November 1, 2001, as amended (as so amended, the “Warehouse Security Agreement”) between the Borrower and the Lender
    granting the Lender a security interest in certain of the Borrower’s assets.
    Pursuant to the Purchase Agreement, GMACM is the successor of all rights, title, interest and obligations of Lender under the
    Warehouse Credit Agreement and Collateral Documents.
    The Borrower has requested that GMACM make certain modifications to the terms of the Warehouse Credit Agreement, and
    GMACM has agreed to such modification, subject to the terms and conditions of this Agreement.
    NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
    1. Warehouse Credit Agreement. The Warehouse Credit Agreement is hereby amended as follows:
    (a) The definition of “Commitment” contained in Section 1.01 of the Warehouse Credit Agreement shall be amended to
    read in full as follows:
    “”Commitment” shall mean the obligation of the Lender to make Advances in an aggregate principal amount
    outstanding at any time not to exceed $10,000,000, or such other amount as Lender, in its sole discretion, may determine
    from time to time.”
    (b) The definition of “Expiry Date ” contained in Section 1.01 of the Warehouse Credit Agreement is revised as follows:
    ““Expiry Date” shall mean the earlier of (i) May 31, 2006, as such date may be extended upon mutual agreement
    between the Borrower and the Lender from time to time, and (ii) the date that is 120 days after the date on which the Lender
    shall have given the Borrower the notice referred to in Section 9.13 hereof.”
    (c) Section 2.01 of the Warehouse Credit Agreement is amended to read in full as follows:
    “2.01 Commitment. Subject to and upon the terms and conditions set forth herein, the Lender agrees, at any time
    and from time to time prior to the Expiry Date (or such earlier date as the Commitment shall have been terminated pursuant
    to the terms hereof), to make an advance or advances (each an “Advance” and, collectively, the “Advances”) to the Borrower,
    which Advance: (i) shall be made at any time and from time to time in accordance with the terms hereof on and after the
    Effective Date and prior to the Expiry Date; (ii) shall bear interest as provided in Section 2.07; (iii) may be prepaid and
    reborrowed in accordance with the provisions hereof; and (iv) shall be made against the pledge by the Borrower of Eligible
    Mortgage Loans, Eligible Nonconforming Mortgage Loans, Eligible HELOCs/Second Mortgage Loans or Liquid Assets as
    Collateral for such Advance as provided herein and in the Warehouse Security Agreement; provided, however, that (1) the
    aggregate principal amount of Advances outstanding at any time shall not exceed the lesser of (1) the aggregate principal
    amount of Advances outstanding at any time shall not exceed the lesser of (x) the Commitment and (y) the Borrowing Base,
    at such time, (2) the aggregate principal amount of Advances outstanding at any time secured by Mortgage-backed Securities
    shall not exceed 0% of the Commitment, (3) the aggregate principal amount of Wet Advances outstanding at any time shall
    not exceed 40% of the Commitment, (4) the aggregate principal amount of Advances outstanding at any time secured by
    Jumbo Loans shall not exceed 40% of the Commitment, (5) the aggregate principal amount of Advances outstanding at any
    time secured by Eligible Nonconforming Mortgage Loans shall not exceed $1,000,000 (the “Nonconforming Commitment”),
    (6) the aggregate principal amount of Advances outstanding at any time secured by Credit A– Loans shall not exceed 100%
    of the Nonconforming Commitment, (7) the aggregate principal amount of Advances outstanding at any time secured by
    Credit B Loans shall not exceed 100% of the Nonconforming Commitment, (8) the aggregate principal amount of Advances
    outstanding at any time secured by Credit C Loans shall not exceed 40% of the Nonconforming Commitment, (9) the
    aggregate principal amount of Advances outstanding at any time secured by Credit D Loans shall not exceed 10% of the
    Nonconforming Commitment, and (10) the aggregate principal amount of Advances outstanding at any time secured by
    Eligible HELOCs and Second Mortgage Loans shall not exceed $1,000,000 (the “HELOC Commitment”).”
    (d) The first sentence of Section 3.01(c) of the Warehouse Credit Agreement is amended to read in full as follows:
    “(c) The Borrower shall not pay the Lender a non-use fee (the “Non-Use Fee”) with respect to each calendar
    month during the term of this Agreement.”
    (e) Sections 4.02(a) of the Warehouse Credit Agreement is amended to read in full as follows:
    “(a) if on any date the aggregate principal amount of Advances outstanding (after giving effect to all other
    repayments thereof on such date) exceeds the lesser of (x) the Commitment or (y) the Borrowing Base as then in effect, the
    Borrower shall immediately prepay the principal of Advances in an aggregate amount equal to such excess;”
    (f) Section 4.03(a) of the Warehouse Credit Agreement is amended to read in full as follows:
    “(a) So long as no Default or Event of Default has occurred and is continuing or would result therefrom, upon the
    Borrower’s request therefor accompanied by (1) a prepayment by the Borrower of Advances in an amount sufficient to cause
    the amount of Advances outstanding to be less than or equal to the Borrowing Base (calculated without reference to any
    Collateral which the Borrower requests to be released from the Lien granted pursuant to the Warehouse Security Agreement)
    and (2) a deposit by Borrower of such amount as the Lender shall designate as a reserve for application to any fees, accrued
    interest or breakage costs payable with respect to the calendar month in which such prepayment occurs, the Lender shall,
    within one Business Day after the later of the receipt of such request or such prepayment and deposit, release from the Lien
    granted pursuant to the Warehouse Security Agreement and deliver to the Borrower in accordance with the terms of the
    Warehouse Security Agreement (i) the Collateral corresponding to such Mortgage Loan(s) or Mortgage-backed Security(ies)
    and (ii) the Collateral Documents pertaining thereto.”
    (g) Section 4.04(c) of the Warehouse Credit Agreement is amended to read in full as follows:
    “(c) The Borrower shall make a deposit in immediately available funds into the Warehouse Payment Account
    by 4:00 p.m. (New York City time) on the Business Day on which the release of the Lender’s security interest in such
    Mortgage Loan or Mortgage-backed Securities is scheduled to occur pursuant to the purchase by an Investor under a
    Purchase Commitment, in an amount equal to the amount by which the aggregate amount of Advances outstanding exceeds
    the Borrowing Base (calculated without reference to any such Mortgage Loan or Mortgage-backed Security).”
    (h) Section 8.09 of the Warehouse Credit Agreement is amended to read in full as follows:
    “8.09 Minimum Adjusted Tangible Net Worth. The Borrower will not permit its Adjusted Tangible Net Worth at
    any time during any fiscal year to be less than $60,000,000.”
    2. Warehouse Security Agreement. Section 4(a) of the Warehouse Security Agreement is amended to read in full
    as follows:
    “(a) So long as no Default or Event of Default has occurred and is continuing or would result therefrom, upon
    the Assignor’s request therefor and (1) a prepayment by the Assignor of Advances in an amount sufficient to cause the
    amount of Advances outstanding to be less than or equal to the Borrowing Base (calculated without reference to any
    Collateral which the Assignor requests to be released from the Lien granted pursuant hereto) and (2) a deposit by the
    Assignor of such amount as the Lender shall designate as a reserve for application to any fees, accrued interest or breakage
    costs payable under the Warehouse Credit Agreement with respect to the calendar month in which such repayment occurs,
    the Lender shall, within one Business Day after the later of the receipt of such request or such prepayment and deposit,
    release from the Lien granted pursuant hereto and deliver to the Assignor (i) the Collateral corresponding to such Mortgage
    Loan(s) or Mortgage-backed Security(ies) and (ii) the Collateral Documents pertaining thereto.”
    3. References to Credit Documents. Upon the effectiveness of this Agreement:
    (a) Each reference in the Warehouse Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein”
    or words of like import, and each reference in the Restated Note and the Warehouse Security Agreement to the Warehouse Credit
    Agreement, shall mean and be a reference to the Warehouse Credit Agreement as amended hereby;
    (b) Each reference in the Warehouse Credit Agreement and the Warehouse Security Agreement to the Note
    shall mean and be a reference to the Restated Note; and
    (c) Each reference in the Warehouse Credit Agreement and the Note to the Warehouse Security Agreement
    shall mean and be a reference to the Warehouse Security Agreement as amended hereby.
    4. Ratification of Documents.
    (a) Except as specifically amended herein or amended and restated in the Restated Note, the Warehouse Credit
    Agreement, the Note and the Warehouse Security Agreement shall remain unaltered and in full force and effect and are hereby ratified
    and confirmed.
    (b) The execution, delivery and effectiveness of this Agreement and the Restated Note shall not, except as
    expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under the Warehouse Credit Agreement,
    the Note or the Warehouse Security Agreement nor constitute a waiver of any default or Event of Default under the Warehouse Credit
    Agreement, the Note or the Warehouse Security Agreement.
    5. Representations and Warranties. The Borrower hereby certifies that (i) the representations and warranties which it
    made in the Warehouse Credit Agreement and the Warehouse Security Agreement are true and correct as of the date hereof and (ii) no
    Event of Default and no event which could become an Event of Default with the passage of time or the giving of notice, or both, under
    the Note, the Warehouse Credit Agreement or the Warehouse Security Agreement exists on the date hereof.
    6. Miscellaneous.
    (a) This Agreement shall be governed by and construed according to the laws of the State of Delaware without
    regard to principles of conflicts of laws and shall be binding upon and shall inure to the benefit of the parties hereto, their successors
    and assigns.
    (b) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,
    but all of which together shall constitute one and the same instrument.
    (c) This Agreement is intended to take effect as a document under seal.
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
    E-LOAN, INC. Attorney-In-Fact for GMAC MORTGAGE
    CORPORATION
    By:__/s/_________________________________ By:__/s/_______________________________
    Name: John Doulong
    Title: Vice President of GMAC Bank

  140. Here is a link to a Rescission/WrongfulFC Demand letter from Vondran atty in CA. http://www.foreclosuredefenseresourcecenter.com/2015/02/sample-letter-failure-honor-tila-rescission-letter/

  141. Beazer Homes USA 8-K 2006

    Documents found in this filing:
    8-K
    Ex-10.1
    Ex-99.1
    Ex-99.2
    Ex-99.2

  142. Complicated documents, Greg. I am still researching law here in SC, which is also a judicial state.

  143. 8-K
    HORTON D R INC /DE/ filed this Form 8-K on 07/07/2006
    (h) The Borrower shall not grant a Lien on any of its assets to secure any obligation of any Other Company.
    (i) The Borrower shall not make loans, advances or otherwise extend credit to any of the Other Companies.
    (j) The Borrower shall conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence.
    (k) The Borrower shall have bills of sale or similar instruments of assignment or other written contracts and, if appropriate, UCC-1 financing statements, with respect to all assets purchased from any of the Other Companies.
    (l) The Borrower shall not engage in any transaction with any of the Other Companies, except as permitted by this Agreement or the Charter and as contemplated by the Repurchase Agreement.
    6.23. MERS Designated Mortgage Loans.
    With respect to all MERS Designated Mortgage Loans that are assigned to the Administrative Agent under this Agreement, the Servicer shall cause the MERS Agent, as agent for the Administrative Agent, to be identified on the MERS electronic registration system as the “warehouse lender” with respect to any such MERS Designated Mortgage Loan.
    6.24. Electronic Tracking Agreement.
    In the event that the Electronic Tracking Agreement is terminated, the Servicer shall deliver to the Administrative Agent assignments of all the MERS Designated Mortgage Loans.
    ARTICLE VII
    NEGATIVE COVENANTS
    The Borrower and the Servicer shall each at all times comply with the covenants applicable to it contained in this Article VII, from the date hereof until the later of the Drawdown Termination Date and the date all of the Obligations are paid in full:
    7.1. Limitations on Mergers and Acquisitions.
    (a) The Servicer (so long as the Servicer and the Originator are the same entity) shall not (i) merge or consolidate with or into any corporation unless the Servicer is the surviving entity of any such merger or consolidation or (ii) liquidate or dissolve.
    (b) The Borrower will not merge with or into or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions), all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets or capital stock or other ownership interest of, or enter into any joint venture or partnership agreement with, any Person, other than as contemplated by this Agreement and the Repurchase Agreement.

    82

  144. lawman@gmx.us – please keep questions or comments on point…TY

  145. greg, on September 12, 2015 at 2:47 pm said:

    please notice that our rescission and administrative process was filed 2 years before any judgment or sale and they ignored… the judge, having received notice, should have taken it upon himself “sua sponte” to tell the plaintiff to prove up or shut up, with the NOTE and MORTGAGE CANCELLED…instead, he may have fallen into a misprison of felony or similar? – Regardless, his judgment is VOID and the sale is NULL… Now to come up with a way to keep the dumbed-down hounds away…

    greg, on September 12, 2015 at 2:40 pm said: Your comment is awaiting moderation.

    and here are some of the files we recorded in the county record and court (with a link to go look in real-time at the county record for all files recorded….) they are all in the public record
    https://dl.dropboxusercontent.com/u/4032131/Filed%20in%20County%20Record%20and%20Court.zip

  146. and here is a link to the public court docket synopsis… (which has been fudged with and modified ‘by someone’ since the beginning)
    https://w3.courtlink.lexisnexis.com/cookcounty/FindDock.asp?NCase=2009-CH-49823&SearchType=0&Database=3&case_no=&=&=&=&PLtype=1&sname=&CDate=

  147. FYI – i spoke with Susan and it seems that the WordPress BlogRobot automatically suppresses any posting with more than 2 hyperlinks in it forcing it to wait for approval – at this point she has 1,000s to check..

    SO – i have copied an important old pending post here (which none of you have seen yet) and split it up into pieces…

  148. ELECTRONIC TRACKING AGREEMENT
    WAREHOUSE LENDER
    Lender Org ID _______________
    Borrower Org ID _____________
    THIS ELECTRONIC TRACKING AGREEMENT dated as of ____________, 20__ (this
    “Agreement”) among __________________ (“Lender”), MERSCORP Holdings, Inc.
    (“Electronic Agent”), Mortgage Electronic Registration Systems, Inc. (“MERS”) and
    ________________ (“Borrower”).
    WHEREAS, the Lender has agreed to extend a line of credit to the Borrower for the
    purpose of the Borrower lending money to potential homeowners for mortgage loans (the
    “Mortgage Loans”) pursuant to the terms and conditions of a Mortgage Warehouse Loan and
    Security Agreement dated as of _________ between the Lender and Borrower, as amended from
    time to time (the “________________ Agreement”).
    WHEREAS, the Borrower is obligated to pledge the Mortgage Loans to the Lender and
    also to service the Mortgage Loans pursuant to the terms and conditions of the ____________
    Agreement and to complete all actions necessary to cause the issuance and delivery to the Lender
    of the Mortgage Notes (the “Mortgage Notes”), and
    WHEREAS, the Lender and the Borrower desire to have certain Mortgage Loans
    registered on the MERS® System (defined below) such that the mortgagee of record under each
    Mortgage (defined below) shall be identified as MERS;
    NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

  149. Yeah it really needs more of ur brilliance and bankster arrogance *sarcasm*

  150. What a waste of bandwidth and disk space this blog has turned into.

  151. I did email you Saturday evening.

  152. The Power of Common Law over Admiralty Law

    Karen Hides explains the difference between …
    Common Law
    Maritime Law
    And Admiralty Law

    Many Blessings to All

  153. TU thanks- nice article – let’s see if its more than formal posturing and gets legs….
    “http://www.jdsupra.com/legalnews/doj-issues-memo-directing-prosecutors-12266/”

  154. SC don’t need your identity… you could just email me

  155. @ Neil Garfield

    Having been a frequent unmoderated commenter posting positive content between 2010-2012, and as is evident in this thread, please reinstate the new moniker “Kalifornia” to unmoderated commenting.

  156. OOPS! [@ Trespass Unwanted]

    By the way, the appearance of flooding the blog with pleadings, briefs, etc. is in good faith, so that anyone can process where and how the matters can be corrected.

  157. @ Tresspass Unwanted

    Second Amended Individual and Class Action Complaint

    2014 WL 1711708 (E.D.Ky.) (Trial Pleading)
    United States District Court, E.D. Kentucky.
    Lexington Division
    Larry HIGGINS; W. Glenn Perry; Juanita Buckhalter Clarke; Shelia H. Baker; Rhonda A. Day; David Nadeau; and Martha Megredy, Plaintiffs,
    v.
    BAC HOME LOANS SERVICING, LP fka Countrywide Home Loans Servicing, LP; Bank of America, N.A.; Jpmorgan Chase Bank, N.A.; U.S. Bank, N.A., as Trustee for the Credit Suisse First Boston Mortgage Securities Corp., CSMC Mortgage-backed Pass-through Certificates, Series 2006-6, and, on behalf of the class, as Trustee of other similarly-situated trusts; Wells Fargo Bank, N.A.; Federal National Mortgage Association; Federal Housing Finance Agency as conservator for Federal National Mortgage Association; and John Doe Numbers 1 to 100, Defendants.
    No. 5:12-cv-00183-KKC.
    April 11, 2014.
    Second Amended Individual and Class Action Complaint
    Miller, Griffin & Marks, P.S.C., 600 Security Trust Building, 271 West Short Street, Lexington, Kentucky 40507, Telephone No. (859) 255-6676; Carroll M. Redford, III (cmr@kentuckylaw.com), Thomas W. Miller, David T. Faughn, Elizabeth Woodford, for plaintiffs.
    Atkinson, Simms & Kermode, PLLS, 1608 Harrodsburg Road, Lexington, Kentucky 40504, Telephone No. (859) 225-1745, J.D. Kermode (jdk@ask-law.com), John Simms (jms@ask-law.com), for plaintiffs.
    Come the Plaintiffs, on behalf of themselves and all other similarly-situated owners of real property, and owners of interests in real property located in the Commonwealth of Kentucky, and pursuant to the Court’s Opinions and Orders dated March 31, 2014, by counsel, and for their Second amended individual and class action complaint,1 state as follows:
    PARTIES
    1. Defendant, BAC Home Loans Servicing, LP FKA Countrywide Home Loans Servicing, LP, is a foreign corporate entity, which, according to http://www.mersinc.org is a member in “MERS”. As a national organization, it conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation set up under the laws of Texas with its principal place of business located at 30870 Russell Branch Road, Westlake Village, California 91361 and has listed this address for the Secretary of State to use pursuant to its Certificate of Withdrawal filed July 1, 2011. BAC Home Loans Servicing, LP merged into Bank of America, N.A. on July 2, 2011.
    2. Defendant, Bank of America, N.A., is a foreign corporate entity which, according to http://www.mersinc.org, is a member in “MERS.” As a national organization, it conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation that is set up under the laws of Delaware, with its principal place of business located at 100 North Tryon Street, Charlotte, NC 28202. It provides 400 National Way, CA 919-02-01, Simi Valley, CA 93065 as its mailing address on its Certificate of Assumed Name filing of August 12, 2011.
    3. Defendant, JPMorgan Chase Bank, N.A., is a foreign corporate entity which, according to http://www.mersinc.org, is a member in “MERS.” As a national organization, it conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation set up under the laws of Delaware, with its principal place of business located at 270 Park Avenue, New York, New York 10017. The designated registered agent is CT Corporation System, which is located at 306 W. Main Street, Suite 512, Frankfort, Kentucky 40601.
    4. Defendant, U. S. Bank, N.A., is a foreign corporate entity which, according to http://www.mersinc.org, is a member in “MERS.” In its capacity as Trustee for Credit Suisse First Boston Mortgage Securities Corporation, CSMC Mortgage-backed Pass-through Certificates, Series 2006-6, and in its capacity as trustee for similar trusts, U.S. Bank, N.A., conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation set up under the laws of Delaware, with its principle place of business located at 800 Nicollet Mall, Minneapolis, MN 55402.
    5. Defendant, Wells Fargo Bank, N.A., is a foreign corporate entity which, according to http://www.mersinc.org, is a member or shareholder in “MERS.” As a national organization, it conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation set up under the laws of the United States, with its principal place of business at 464 California Street, San Francisco, California 94104. The designated registered agent is CSC-Lawyers Incorporating Service Company, which is located at 421 W. Main Street, Frankfort, Kentucky 40601.
    6. Defendant, Federal National Mortgage Association, commonly referred to as “Fannie Mae,” is a foreign corporate entity which, according to http://www.mersinc.com, is a member or shareholder in “MERS.” As a national organization, it conducts business in the Commonwealth of Kentucky, and it is therefore appropriate that it be required to defend this suit in this Court. Defendant is a foreign corporation set up under the laws of the United States, with its principal place of business at 3900 Wisconsin Avenue, N.W. Washington, D.C. 20016-2892.
    7. Federal Housing Finance Agency (“FHFA”) was appointed by the Director of FHFA on or about September 6, 2008, as conservator of “Fannie Mae” with its principle place of business being Constitution Center, 400 7th Street, S.W., Washington, DC 20024 (202) 649-3811.
    8. John Doe Numbers 1 to 100 consist of other unnamed members of MERS that have received assignments of any mortgage (including the mortgage interest accompanying the note) without recording the assignment within thirty (30) days as to property owned by any of the named Plaintiffs/class representatives and as to members of the Class. The failure of the Defendants and other members of MERS to properly record assignments makes identification of the John Doe defendants impossible at present.
    JURISDICTION AND VENUE
    9. Jurisdiction is proper in this Court because the amount in controversy exceeds the jurisdictional minimum of this Court.
    10. Venue is proper in this Court under KRS 452.445 because one or more of the Defendants have a principal office or place of business in Fayette County, Kentucky, and, alternatively, pursuant to KRS 452.480, because one or more of the Defendants may be summoned in Fayette County.
    11. Jurisdiction is proper in this Court based on Kentucky’s Long-Arm Statute, KRS 454.210, among other reasons, as a court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from the person’s transacting any business in this Commonwealth or contracting to supply services or goods in this Commonwealth.
    FACTUAL ALLEGATIONS
    12. Under KRS 382.360 and 382.365, all assignments of a mortgage, including the interest in the mortgage which accompanies a note assignment, must be filed and timely recorded by the assignee in the County Clerk’s office within thirty (30) days of the assignment.
    13. According to http://www.mersinc.org, MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS®> products. It is a member-based organization made up of approximately 3,000 lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (“MERS”) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner(s) of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans. MERS represents that its principal place of business is in Reston, Virginia.
    14. Plaintiff Larry Higgins owns real property in the Commonwealth of Kentucky, at 449 Keene Troy Pike, Versailles, Kentucky, in Jessamine County.
    15. The mortgage agreement entered in 2007 between Plaintiff Higgins and his lender, Peoples Exchange Bank, identifies MERS as the “nominee” and “mortgagee.”
    16. Pursuant to MERS website and Fannie Mae’s website, sometime after May 11, 2007, Plaintiff Higgins’s mortgage (including the mortgage interest accompanying the note) was assigned to lender Federal National Mortgage Association.
    17. Federal National Mortgage Association did not timely record the assignment in the Jessamine County Clerk’s Office.
    18. Plaintiff W. Glenn Perry owns real property in the Commonwealth of Kentucky, at 220 Aberdeen Drive, Lexington, Kentucky, in Fayette County.
    19. The mortgage agreement was entered in 2004 between Plaintiff Perry and his lender, Washington Mutual Bank, FA.
    20. Based upon information and belief, on or around September 25, 2008, Plaintiff Perry’s mortgage (including the mortgage interest accompanying the note) was assigned to lender JPMorgan Chase Bank, NA.
    21. JPMorgan Chase Bank, NA did not timely record the assignment in the Fayette County Clerk’s Office.
    22. Plaintiff David Nadeau owns real property in the Commonwealth of Kentucky, at 4421 Georgetown Road, Lexington, Kentucky, in Fayette County.
    23. The mortgage agreement (and note for $154,000) entered on June 24, 2005 between Plaintiff Nadeau and his lender, Century Lending Company, identifies MERS as the “nominee” and “mortgagee.”
    24. Based upon information and belief, in subsequent years, but before December 2011, Plaintiff Nadeau’s mortgage (including the mortgage interest accompanying the note) was assigned to a different lender at least once if not more times. By at least December 2011, lender JPMorgan Chase Bank, NA. had been assigned the Nadeau mortgage (including the mortgage interest accompanying the note).
    25. JPMorgan Chase Bank, NA did not timely record the assignment in the Fayette County Clerk’s Office.
    26. Plaintiffs David Nadeau and Martha Megredy own as joint tenants real property in the Commonwealth of Kentucky, at 4435 Georgetown Road, Lexington, Kentucky, in Fayette County.
    27. The mortgage agreement (and note for $426,000) entered on September 22, 2006 between Plaintiffs Nadeau and Megredy and their lender, Century Lending Company, identifies MERS as the “nominee” and “mortgagee.”
    28. Based upon information and belief, in subsequent years, but before December 2011, Plaintiffs’ Nadeau and Megredy’s mortgage (including the mortgage interest accompanying the note) was assigned to a different lender at least once if not more times. By at least December 2011, lender Wells Fargo Bank, N.A. had been assigned the Nadeau/Megredy mortgage (including the mortgage interest accompanying the note).
    29. Wells Fargo Bank, N.A. did not timely record the assignment in the Fayette County Clerk’s Office.
    30. Plaintiff Juanita Buckhalter Clarke owns real property in the Commonwealth of Kentucky, at 399 South Eagle Creek, Lexington, Kentucky, in Fayette County.
    31. The mortgage agreement entered in 2009 between Plaintiff Clarke and her lender, Central Bank & Trust Bank, N.A., identifies MERS as the “nominee” and “mortgagee.”
    32. Based on information and belief, on or around February 23, 2011, Plaintiff Clarke’s mortgage (including the mortgage interest accompanying the note) was assigned to lender Wells Fargo Bank, N.A.
    33. Wells Fargo Bank, N.A. did not timely record the assignment in the Fayette County Clerk’s Office.
    34. Plaintiff Shelia H. Baker owns real property in the Commonwealth of Kentucky, at 135 Green Rock Lane, f/k/a 920 Shryocks Ferry Road, Versailles, Kentucky, in Woodford County.
    35. The mortgage agreement entered in 2008 between Plaintiff Baker and her lender, American Founders Bank, identifies MERS as the “nominee” and “mortgagee.”
    36. On June 23, 2011, Plaintiff Baker’s mortgage (including the mortgage interest accompanying the note) was assigned to lender U.S. Bank, N.A., in its capacity as Trustee for Credit Suisse First Boston Mortgage Securities Corporation, CSMC Mortgage-backed Pass-through Certificates, Series 2006-6 (the “Trust”).
    37. U.S. Bank, N.A., as trustee for the Trust, did not timely record the assignment in the Woodford County Clerk’s Office. The Assignment of Mortgage was recorded on August 17, 2011, in the Woodford County Clerk’s office in MB 654, Page 74.
    38. Plaintiff Rhonda A. Day owns real property in the Commonwealth of Kentucky, at 413 Hume Drive, Paris, Kentucky, in Bourbon County.
    39. The mortgage agreement entered in 2008 between Plaintiff Day and her lender, Countrywide Bank, FSB, identifies MERS as the “nominee” and “mortgagee.”
    40. On October 3, 2011, Plaintiff Day’s mortgage (including the mortgage interest accompanying the note) was assigned to lender Bank of America, N.A.
    41. Bank of America, N.A. did not timely record the assignment in the Bourbon County Clerk’s Office. The Assignment of Mortgage was recorded on November 28, 2011 in the Bourbon County Clerk’s office in MTG 531, Page 582.
    42. Upon information and belief, a note within the MERS system often is assigned multiple times before it is paid off and the mortgage released, a foreclosure proceeding is initiated, or the note is securitized and thereby comes to rest in an assignee that may become a note holder of record, and through one of these processes, an assignee note holder/mortgage holder becomes identifiable. Because members of MERS do not properly record assignments of the note and mortgage interest that accompanies the note, the identities of the note assignees after the original lender and before the named Defendant note holders have violated the law by not timely recording the assignments, entitling the Plaintiffs and class members to damages as set forth in the statutes, but the specific identities of these Defendants cannot be ascertained from the County land records. These as-yet-unidentifiable note/mortgage assignees are included as Defendants under the designation “John Doe Numbers 1 to 100” and include as-yet-unidentified assignees of notes and mortgage interests of the named Plaintiffs and the Class members.
    43. During the 1990s, lenders began securitizing mortgage loans. Several large participants in the mortgage industry, including the Defendants, established MERS in order to avoid the requisite payment of recording fees to County Clerks for assignments of mortgage loans and for other self-serving purposes.
    44. MERS advertises that, by using its “system,” participants eliminate the frequent need to record assignments of transfers of the note and the interests in mortgages that accompany note assignments.
    45. Defendants, which are MERS members (hereinafter, “members”), subscribe to the MERS “registration system” and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages and notes.
    46. Members contractually agree to name MERS as the “nominee” and mortgagee on all mortgages that they register in the MERS system.
    47. According to MERS, the benefit of naming MERS as the nominal mortgagee of record is that, when a member assigns an interest in a mortgage loan to another member, MERS privately tracks the assignment within its system but remains the mortgagee of record. As long as the sale and assignment of the note is made to another MERS member, MERS remains the mortgagee of record.
    48. Under the MERS registration system, lenders sell and assign loans to investors without recording the transactions with the County Clerks or otherwise in the public record.
    49. Because Kentucky law provides that the assignment of a note secured by a lien also assigns the lien, MERS does not remain the “mortgagee” after the note is assigned and/or each assignee of the note is assigned an interest in the mortgage that must be recorded under Kentucky law, and therefore, each assignment of a lien and/or note must be timely recorded with the County Clerk.
    50. According to MERS’ own website, its system saves money for its members and is specifically designed to avoid recording assignments with the County Clerks. Specifically, MERS has stated:
    MERS acts as nominee in the county land records for the lender and servicer. Any loans registered on the MERS System is inoculated against future assignments because MERS remains the nominal mortgagee no matter how many times servicing is traded.
    * * *
    Assignments eliminated forever ($30 saved per loan).
    * * *
    Lenders may also assign into MERS if the loan has already been closed in the lenders name. Once the loan is assigned to MERS . . . tracking servicing and beneficial rights can occur electronically for all future transfers. The need for any additional assignments after this point will be eliminated unless the servicing rights are sold to a non-MERS member.
    * * *
    Chain of title starts and stops with MERS! With MERS as the Mortgagee of Record, you don’t need additional assignments ever. The unrecorded assignments needed for interim funding and loan sales are costly. With MERS you save an estimated $30 per loan on unrecorded assignments.
    * * *
    MERS saves time associated with processing multiple assignments.
    51. MERS’ “Recommended Investor Policy” provides “ASSIGNMENTS: (Your Company Name) intends to completely eliminate the use of assignments.”
    52. Despite the enactment of the most recent revisions to KRS 382.360 and KRS 382.365 in 2006, the Defendants have not altered their above-described practices and policies, and continue to fail to timely record (or record at all) assignments in the County Clerks’ offices as mandated by KRS 382.360 and KRS 382.365
    53. As members of MERS and otherwise, the Defendants, including the John Doe Defendants, adhere to a policy specifically intended to avoid and frustrate the timely recording requirements imposed by KRS 382.360 and KRS 382.365.
    54. The Defendants’ actions were and are a conspiracy to, at the least, avoid having to pay expenses associated with the recording of assignments as required by KRS 382.360 and KRS 382.365.
    55. As a proximate result of the Defendants’ actions, the Plaintiffs, as well as the proposed Class members whom they seek to represent, have suffered damages in accordance with KRS 382.365.
    DAMAGES ALLEGATIONS
    56. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    57. Pursuant to Kentucky law, “[n]o person who does not, from such record or assignment of record [in the County Clerk’s Offices], appear at the time to be the legal holder of any note secured by lien in any deed or mortgage, shall be permitted to release the lien securing any such note, and any release made in contravention of this section shall be void ….” KRS 382.290(3); see also 382.290 (2) (“the holder of the note, and who appears from the record to be such holder, may release the lien, so far as such note is concerned, by release, over his own hand, attested by the clerk”).
    58. As a result of the above-cited and –quoted statutes, only an entity (or person) that is both the actual holder of the note and that appears in the County Clerk’s records to be the holder of record of that note may release the mortgage, all other releases being void.
    59. Under the system put in place by MERS and its members, including the Defendants, MERS is neither the actual holder of the note, nor the holder of record of the note in the County Clerk’s records. Therefore, though denominated a “mortgagee” in the mortgage and listed as “mortgagee” in the County Clerk’s records, MERS cannot release the mortgage and any attempted release of the mortgage by MERS is void.
    60. Under the system put in place by MERS and its members, including the Defendants, the records in the County Clerk’s Offices fail to track the note and, therefore, there are no records of the beneficial or substantive mortgage interest/mortgagee/note holder after a transfer of a note between MERS members. This breaks the chain of title in the records so that the actual holder of the note is never a holder of record of the note as reflected in the County Clerk’s Office, there being no record of the note holder in the County records for notes within the MERS system, and, thus, no entity (or person) qualifies under Kentucky law to release a mortgage that has ever been within the MERS system as being both the (1) actual note holder and (2) record holder of the note.
    61. Under the system put in place by MERS and its members, including the Defendants, even if the MERS members transfer the nominal interest of MERS as named “mortgagee” in the mortgage to the final beneficial mortgage holder/note holder in order to effectuate a release, a cloud remains on the property since that final note holder is not the holder of record of the note in the County Clerk’s Office and it is impossible to tell from those records if there are unrecorded intervening transfers between the original note holder and the note holder attempting to effectuate the release. The chain of title of the note and beneficial mortgage interest entitled to release the mortgage is broken or clouded for all mortgages and notes in the MERS system. Thus, any release of any mortgage that has been in the MERS system may be void or challenged as void, since no person or entity qualifies as actual note holder and holder of record and the chain of title of the note holder/beneficial mortgagee is clouded, untraceable and/or broken. This places a permanent cloud on the title of all real estate in Kentucky that has ever been part of the MERS system.
    62. In addition, since the actual note holder is never ascertainable from the public records while a note and mortgage are within the MERS system, a real property owner with property encumbered by a “MERS mortgage” is not able to determine from the County land records who to pay to satisfy a note or who to approach to release a mortgage. If the owner pays a person or entity identified by MERS as the note holder, the owner does so at his or her peril, since the actual note holder retains a legally-binding right to payment, but has an identity that cannot be discerned from County land records.
    63. Because only a note holder may modify the terms of a note, the MERS system prevents a property owner from knowing who to approach for loan modifications if the need arises, which has occurred often in the mortgage crises plaguing the economy in recent years.
    64. Because only a note holder may foreclose or receive money in a foreclosure, the MERS system prevents a property owner from ascertaining the standing of any plaintiff in a foreclosure proceeding to foreclose on the property or who is entitled to receive money from the sale of the property to satisfy the mortgage lien and note.
    65. A given real property owner may incur out-of-pocket monetary expenses in an attempt to quiet title to his or her property, secure a proper release, to determine the actual note holder to pay, whether in full, in part, to determine the entity to approach to request or obtain a loan modification, or to determine who has standing to foreclose.
    66. In addition to the above, all real property owners who own properties that have ever been part of the MERS system suffer actual damages in the form of a perpetual cloud on title to their property, since the record chain of title to the note is broken and no person or entity appears in the County property record as empowered to release the mortgage, and the law provides that all releases (or eventual releases) that are not given by the record holder of the note as reflected in the County property records are void (there being no such record holder for mortgages and notes in the MERS system) or at least of permanent questionable validity.
    67. The damages set forth in the preceding paragraph constitute actual damages, even when a given property owner has not incurred other liquidated out-of-pocket monetary damages.
    68. KRS 382.365(5) allows a property owner to recover actual damages (plus attorneys fees and costs), and provides for a minimum damage award of $500 each time a mortgage (including the mortgage interest accompanying a note assignment) is assigned but the assignee fails to record the assignment within thirty (30) days. The minimum amount provided for by statute reflects actual damages incurred by a property owner from the lack of or an untimely assignment, just damages that are non-monetary or are difficult to quantify monetarily, analogous to damages quantified in contractual liquidated damages clauses.
    69. For themselves and for the proposed Class Members, the Plaintiffs seek damages measured by the $500 award (plus costs and attorneys fees) recognized by KRS 382.365(5) as appropriate each time a transfer was made to a Defendant (including other as yet unknown defendants) without the proper and timely recording, but do not seek individualized monetary damages, such as out-of-pocket expenses paid.
    INDIVIDUAL AND CLASS ALLEGATIONS
    70. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    71. The Representative Plaintiffs bring this action pursuant to Federal Rule of Civil Procedure 23 on behalf of themselves individually, and on behalf of a proposed Class consisting of all owners of real property and owners with an interest in real property located in the Commonwealth of Kentucky from the effective date of KRS 382.360 and 382.365 on July 12, 2006, through the present whose mortgages (including the mortgage interest accompanying the note) secured by that real property have been assigned to one or more of the Defendants (or other as yet unknown defendants) but not timely recorded as assigned in the appropriate County Clerk’s office within thirty (30) days from the date of the assignment.
    72. On information and belief, there are tens of thousands of real property owners and owners of interests in real property in Kentucky whose mortgages (including the mortgage interest accompanying the note) have been assigned to one or more of the Defendants (or as yet unknown defendants) but not timely recorded as assigned pursuant to KRS 382.360 and KRS 382.365.
    73. The size of the Class is therefore so numerous that joinder of all members is impracticable.
    74. The Representative Plaintiffs are adequate class representatives because they are similarly situated to the Members of the Class. The representative Plaintiffs and the Class are directly impacted by the Defendants’ failure to timely record assignments as required by KRS 382.360 and KRS 382.365. The interests of the Representative Plaintiffs are not antagonistic to, or in conflict with, the interests of the other proposed Class members or with the proposed Class as a whole.
    75. Plaintiff Baker seeks to represent a Class comprised not only of other Kentucky real property owners who have mortgages (including the mortgage interest accompanying the note) transferred to U.S. Bank, N.A., as Trustee for the “Credit Suisse First Boston Mortgage Securities Corporation, CSMC Mortgage-backed Pass-Through Certificates, Series 2006-6” Trust, but also in its capacity as trustee for similarly-situated trusts that have been assigned mortgages (including the mortgage interest accompanying the note) secured by real property in Kentucky where U.S. Bank, as trustee, has failed to record the assignment in the County Clerk’s Offices within thirty (30) days of the assignment. The conduct of U.S. Bank as a trustee for each of these trusts is part of a common plan or scheme and is a general practice affecting all of the trusts for which it is trustee, being the same plan, scheme and practice that comprises the entire MERS system. Baker’s damages are identical to those suffered by each Class member Baker seeks to represent.
    76. The attorneys representing the Representative Plaintiffs have experience in handling complex litigation and class actions, and in suits involving unfair business practices and consumer credit law.
    77. The Representative Plaintiffs will fairly and adequately protect the interests of all Class members in the prosecution of this action and in the administration of all matters relating to the Class members’ claims. Neither the Representative Plaintiffs nor the Plaintiffs’ counsel has any interest which might cause them not to vigorously pursue this action.
    78. Common questions of law and fact predominate among the proposed Class members. These common questions include (1) whether the Defendants violated and conspired to violate KRS 382.360 and/or KRS 382.365 through their participation in the MERS system and, more specifically, their failure to timely record assignments of mortgages (including the mortgage interest accompanying the note) secured by the proposed Class members’ real property in the appropriate County Clerks’ offices within thirty (30) days of the date of the assignment, and (2) the appropriate relief to be granted to the proposed Class members.
    79. The only individual questions present in this proposed Class action concern the computation of relief to be afforded to each Class member. That computation is dependent upon the number of times that an individual Class member’s lien and mortgage have been assigned but not timely recorded, and may be determined by a ministerial examination of the Defendants’ files.
    80. The Representative Plaintiffs’ claims are typical of the claims of the proposed Class members because all Class members, like the Representative Plaintiffs, are current owners or owners who have an interest in real property located in the Commonwealth of Kentucky whose mortgages (including the mortgage interest accompanying the note) secured by that real property have been assigned to one or more of the Defendants (or other as yet unknown defendants) but not timely recorded as assigned in the appropriate County Clerk’s offices within thirty (30) days from the date of the assignment, from July 12, 2006, through the present, and because the Representative Plaintiffs’ claims are based upon the same legal and remedial theories as the proposed Class members’ claims.
    81. Certification of a class is appropriate pursuant to Federal Rule of Civil Procedure 23 because the prosecution of separate actions by the proposed Class members would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for the Defendants.
    82. Certification of a class is appropriate pursuant to Federal Rule of Civil Procedure 23 because the Defendants have acted in a uniform manner toward the Representative Plaintiffs and the Class members by failing to timely record assignments in the appropriate County Clerk’s offices as required by KRS 382.360 and/or KRS 382.365.
    83. Certification of a class is appropriate pursuant to Federal Rule of Civil Procedure 23 because the questions of law and fact common to the members of the proposed Class (whether the Defendants violated KRS 382.360 and/or KRS 382.365 by failing to timely record the assignments) predominate over any questions affecting only individual members, and because a class action is superior to other available methods for the fair and efficient adjudication of this controversy in that:
    a. In light of the relatively minimal statutory amount payable to a property owner as a result of a failure to timely record an assignment (three (3) times actual damages, but no less than $500, plus attorney’s fees and costs), the members of the Class are not likely to have a significant interest in individually controlling the prosecution of separate actions against the Defendants;
    b. The Representative Plaintiffs and Class counsel are not aware of any other litigation concerning this controversy commenced by members of the Class prior to institution of this litigation;
    c. Litigation of the proposed Class members’ claims against the Defendants for violations of KRS 382.360 and/or 382.365 in a single forum is desirable, in order to avoid the risk of inconsistent verdicts as to the Defendants’ obligations under those statutes; and
    d. The management of the proposed Class is not likely to create significant or insurmountable difficulties, since the Defendants’ liability to each Class member (and the amount of that liability) may be easily determined by reviewing files maintained by the Defendants and/or MERS as to the number of times a particular Class member’s note and mortgage has been assigned to one or more of the Defendants but not recorded.
    COUNT I – VIOLATION OF KRS 382.360 AND 382.365
    84. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    85. By failing to timely record assignments of the Representative Plaintiffs and the proposed Class members’ liens and mortgages, including mortgage interests accompanying the notes, in the appropriate County Clerk’s offices, the Defendants have violated KRS 382.360 and/or KRS 382.365.
    86. Additionally, and in the alternative, the Defendants’ above-described conduct has substantially frustrated the goals of KRS 382.360 and/or KRS 382.365.
    87. As a proximate result of the Defendants’ negligent, willful, and wanton violations of KRS 382.360 and KRS 382.365, the Representative Plaintiffs and the proposed Class members have been damaged, including by the cloud placed on their title to real property.
    88. The Representative Plaintiffs and the proposed Class members are permitted to recover various sums and damages for the Defendants’ violations of KRS 382.360 and KRS 382.365 pursuant to KRS 382.365(5) and, in the alternative, KRS 446.070. However, the Plaintiffs and proposed Class members seek damages measured by the minimum amount provided for in KRS 382.365(5), being $500 for each assignment that was not recorded within thirty (30) days of the assignment.
    COUNT II — CONSPIRACY TO VIOLATE KRS 382.360 AND KRS 382.365
    89. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    90. KRS 382.360 and KRS 382.365 impose a duty upon the Defendants to timely record the assignment of liens and mortgages in the appropriate County Clerk’s offices.
    91. As members of MERS, each of the Defendants acted pursuant to a common design, and/or rendered substantial assistance to one another, to violate the statutory duty to timely record the assignments of liens and mortgages (including the mortgage interest accompanying the note) in the appropriate County Clerk’s offices. Each of the Defendants was an active and knowing participant in that misconduct.
    92. As a proximate result of the Defendants’ conspiracy to violate KRS 382.360 and KRS 382.365, the Representative Plaintiffs and the proposed Class members have been damaged. These actual damages include a cloud being placed on the title to the subject real property as is set forth above. The measure of actual damages sought by the Class Members and the named representatives is the minimum amount quantified by KRS 382.365(5), being $500 for each assignment that was not recorded in the County Clerk’s Office within thirty (30) days.
    COUNT III — CERTIFICATION OF THE CLASS
    93. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    94. The Representative Plaintiffs respectfully request that the Court certify a Class of current and former owners of real property and owners of an interest in real property located in the Commonwealth of Kentucky whose mortgages (including the mortgage interest accompanying the note) secured by that real property have been assigned by one or more of the Defendants (or other as yet unknown defendants) but not timely recorded as assignments in the appropriate County Clerk’s offices within thirty (30) days from the date of the assignment, from July 12, 2006, through the present.
    95. The Representative Plaintiffs further request the appointment of the undersigned attorneys as Class counsel.
    COUNT IV — TEMPORARY AND PERMANENT INJUNCTION2
    96. Each of the foregoing allegations is hereby incorporated, as if fully set forth herein.
    97. As a result of Defendants’ actions and the controversy between the parties, the Representative Plaintiff and Class members have suffered, and will continue to suffer, irreparable harm due to the violations of law by Defendants in the absence of injunctive relief.
    98. The harm Representative Plaintiff and Class members have suffered, and will continue to suffer, cannot be adequately remedied by monetary damages.
    99. The Representative Plaintiff and Class members have a substantial likelihood of success on the merits.
    100. The equities weigh in favor of enforcing the Kentucky statutes as requested by the Representative Plaintiffs and Class members.
    101. The Representative Plaintiff and Class members respectfully requests this Court enter temporary and permanent restraining Orders: 1.) requiring and directing Defendants to immediately prepare and file legally proper assignments in the appropriate county clerk’s offices for all assignments past and present; and 2.) prohibiting Defendants from refusing to comply with the statutes now and in the future.
    PRAYER FOR RELIEF
    WHEREFORE, the Representative Plaintiffs, on behalf of themselves and on behalf of all similarly-situated current and former owners of real property located in Kentucky, respectfully request:
    1. The certification of a Class pursuant to Federal Rule of Civil Procedure 23 to be described as and to include: all current and former owners of real property, and owners of interests in real property, located in the Commonwealth of Kentucky whose mortgages (including the mortgage interest accompanying the note) secured by that real property have been assigned to one or more of the Defendants but not timely recorded as assignments in the appropriate County Clerk’s offices within thirty (30) days from the date of the assignment, from July 12, 2006, through the present; and
    2. Damages and an award of attorneys’ fees and court costs by statute and/or in equity; and
    3. Temporary and permanent injunctive relief mandating that Defendants and each of them immediately comply with the statutory requirements and record all past and current assignments; and
    4. An award of prejudgment and post judgment interest as allowed by law; and
    5. A trial by jury on all counts so triable; and
    6. Any and all other relief to which they appear entitled.
    RESPECTFULLY SUBMITTED,
    MILLER, GRIFFIN & MARKS, P.S.C.
    600 Security Trust Building
    271 West Short Street
    Lexington, Kentucky 40507
    Telephone No. (859) 255-6676
    BY /s/ Carroll M. Redford, III
    CARROLL M. REDFORD, III (cmr@kentuckylaw.com)
    THOMAS W. MILLER
    DAVID T. FAUGHN
    ELIZABETH WOODFORD
    ATTORNEYS FOR PLAINTIFFS
    AND
    ATKINSON, SIMMS & KERMODE, PLLS
    1608 Harrodsburg Road
    Lexington, Kentucky 40504
    Telephone No. (859) 225-1745
    BY: /s/ J.D. Kermode
    J.D. KERMODE (jdk@ask-law.com)
    JOHN SIMMS (jms@ask-law.com)
    ATTORNEYS FOR PLAINTIFFS
    Footnotes
    1
    The Court’s Orders directed the Plaintiffs to amend certain aspects of their First Amended Complaint. This Second Amended Complaint does as directed, but should not be construed as a waiver of the Plaintiffs’ right to challenge the requirement that they do so or the underlying reasoning of those aspects of the Orders that required amendment, including, but not limited to, any finding that U.S Bank, individually, is not a proper party to this matter, that the Plaintiffs must suffer liquidated out-of-pocket monetary damages in order to have “actual damages” necessary to support a conspiracy claim, or any implicit finding that Plaintiff Baker lacks standing to bring a class action against U.S. Bank in its capacity as trustee for other similarly-situated trusts.
    2
    The Plaintiffs acknowledge that this claim for relief was dismissed by the Court. Reassertion of this claim is intended to preserve the Plaintiffs’ right to appeal or to seek reconsideration of the Court’s finding that injunctive relief is not allowed, and is not intended to ignore the Order previously entered or to require the Defendants to move again for this claim to be dismissed.

  158. Why?
    http://dsnews.com/news/09-11-2015/sixth-circuit-court-denies-petition-for-rehearing-in-promissory-note-transfer-case

    It’s [law]suits like this that gives ……………. a bad name.

    Why did anyone bring a suit that “alleging that “transfer of the notes was an assignment”. Huh?

    #1 There is a note.
    #2 There is a mortgage or deed of trust.

    One is recorded and when there is an assignment, You record the assignment,

    Does that go for #1 or #2.

    Why would anyone bring a suit trying to control what happens to #1?
    They must have had a lot of money to throw away.

    Trespass Unwanted, Creator, Corporeal

  159. http://www.justice.gov/dag/file/769036/download

    Trespass Unwanted, Creator, Corporeal

  160. The greed cancer was spread through every system TU. It was a crime from day one. Any genius legal argument or wannabe guru for the “right way” can only be seen as part of the Great Scam.

  161. I’ll post the jdsupra link
    THIS IS SERIOUS,
    http://www.jdsupra.com
    /legalnews/doj-issues-memo-directing-prosecutors-12266/
    The meek shall inherit the earth and the world is full of meek victims, where more than 99% are witnesses, and some of the meek will join the 1% because they sold their conscience and their soul in the act of doing their job.
    If you work/worked in an industry where you profit from deceptive practices, or you helped the company you work for, profit from deceptive practices so you could get that bonus, you will do good to enjoy every moment of your life as you have it right now, because it is time.
    The ones who knew we are the ones we are waiting on, have filed our complaints, we are first pure witnesses and some of your names are on our complaints and the evidence is not hearsay if it’s your signature indicating an act is to be done against someone else.
    I know the judge that signed the docs to have me removed by the hands of another from my property had better have had a proper authority, contract, or oath on file prior to signing that document to remove property.
    No one can give their selves the authority over another’s life.
    I can’t give my self authority to take your car. That’s why contracts and power of attorney are important, and oaths of people who claim to represent the interest of the public trust are important, because there is a moral obligation to act for the public not against.
    People have revealed insurrection and sedition by the legislatures, and all kinds of evidence.
    Whoo Hoo!
    I don’t bask in the joy of someone going down or being convicted or jailed, but I do bask in having that burden created by them lifted off my back because I didn’t ask for it.
    Too big to fail no longer exists if you are already insolvent, it’s just a matter of bringing them down to size and liquidating your assets.

    Trespass Unwanted, Creator, Corporeal

  162. They only open for me if I am on Karen Hudes’, Karen Hudes Whistleblower facebook page, and click them.
    Someone linked to PRnews or something like that, and as official as it looks, it’s a members only press release site and Karen writes press releases, she is her own authority of her own press releases.
    I love the way she thinks, her authority lies with the authority she gives herself to do what she does.
    If all of us could come into our power, and be our own authority; others could not steal so easily from us.
    Authority is not equal to violence.
    So the Fed has shifted the paradigm of prosecution, and if there are FeedMa camps around, when they start going after the low hanging fruit who are someones mom, dad, brother, sister, cousin, aunt, uncle, neighbor, fiance/fiance’, etc; do not get all huffy because a criminal act has caused harm to another, and we have reached the Nuremburg trials paradigm where people can no longer say ‘ I was just doing my job. ‘
    There was plenty of time to stop and people did not because the people around them were doing it.
    I have always said, there is enough evidence of what is done publicly recorded, and even if they destroy their own records, the complaints made public that give ‘the real name’ of the ones we know who did an act, will not be destroyed, and with court documents loaded into Pacer, the better proof of every signature without authority.
    See the wheels of justice move slow but they move, and one thing about the DOJ, it makes no sense to tilt anyone to know the ‘all seeing eye’ is looking at them.
    There are videos of people wearing costumes beating other people, and as much as we are led to believe the video doesn’t show everyone who has done a thing, that’s not true.
    Just take a look at at image like these.
    http://www.pcmag.com/slideshow/story/310489/10-jaw-dropping-gigapixel-photos
    They can darn near show the penny, nickel, or dime on the ground.
    People are going to get picked up and say, ‘I didn’t do nothing’, and come trial, they are going to be shown documents they certified as true that caused harm, or judges signing to have property taken from people when the paperwork clearly shows the property belongs to them not the one suing who has a ton of digital money, and for sheriffs who’s employees troll the streets and snatch and grab folks with those metal restrictive devices that require keys to be free, and move people without warrant to other places where they can’t leave until held long enough for a case to be ‘created’ to offer them ‘life in prison’ or ‘a guilty plea to accept 10 years’ for a crime not committed.
    These acts not only rob the people of property, rights, or their life, it also robs the country of its land and its free and makes its brave appear to be enemies.
    Individual accountability is the way to go, and even as it is being revealed the process is slow but ‘all prosecutors’ are put on notice to ‘start’ doing a thing, and then when this is over, ‘some prosecutors’ may be implicated by the very people they help catch who may say, ‘he or she was part of it too!’
    Tangled web.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  163. They only open for me if I am on Karen Hudes’, Karen Hudes Whistleblower facebook page, and click them.
    Someone linked to PRnews or something like that, and as official as it looks, it’s a members only press release site and Karen writes press releases, she is her own authority of her own press releases.
    I love the way she thinks, her authority lies with the authority she gives herself to do what she does.
    If all of us could come into our power, and be our own authority; others could not steal so easily from us.
    Authority is not equal to violence.

    So the Fed has shifted the paradigm of prosecution, and if there are FeedMa camps around, when they start going after the low hanging fruit who are someones mom, dad, brother, sister, cousin, aunt, uncle, neighbor, fiance/fiance’, etc; do not get all huffy because a criminal act has caused harm to another, and we have reached the Nuremburg trials paradigm where people can no longer say ‘ I was just doing my job. ‘

    There was plenty of time to stop and people did not because the people around them were doing it.

    I have always said, there is enough evidence of what is done publicly recorded, and even if they destroy their own records, the complaints made public that give ‘the real name’ of the ones we know who did an act, will not be destroyed, and with court documents loaded into Pacer, the better proof of every signature without authority.

    See the wheels of justice move slow but they move, and one thing about the DOJ, it makes no sense to tilt anyone to know the ‘all seeing eye’ is looking at them.

    There are videos of people wearing costumes beating other people, and as much as we are led to believe the video doesn’t show everyone who has done a thing, that’s not true.

    Just take a look at at image like these.
    http://www.pcmag.com/slideshow/story/310489/10-jaw-dropping-gigapixel-photos

    They can darn near show the penny, nickel, or dime on the ground.
    People are going to get picked up and say, ‘I didn’t do nothing’, and come trial, they are going to be shown documents they certified as true that caused harm, or judges signing to have property taken from people when the paperwork clearly shows the property belongs to them not the one suing who has a ton of digital money, and for sheriffs who’s employees troll the streets and snatch and grab folks with those metal restrictive devices that require keys to be free, and move people without warrant to other places where they can’t leave until held long enough for a case to be ‘created’ to offer them ‘life in prison’ or ‘a guilty plea to accept 10 years’ for a crime not committed.

    These acts not only rob the people of property, rights, or their life, it also robs the country of its land and its free and makes its brave appear to be enemies.

    Individual accountability is the way to go, and even as it is being revealed the process is slow but ‘all prosecutors’ are put on notice to ‘start’ doing a thing, and then when this is over, ‘some prosecutors’ may be implicated by the very people they help catch who may say, ‘he or she was part of it too!’

    Tangled web.

    I’ll post the jdsupra link

    THIS IS SERIOUS,

    http://www.jdsupra.com
    /legalnews/doj-issues-memo-directing-prosecutors-12266/

    The meek shall inherit the earth and the world is full of meek victims, where more than 99% are witnesses, and some of the meek will join the 1% because they sold their conscience and their soul in the act of doing their job.

    If you work/worked in an industry where you profit from deceptive practices, or you helped the company you work for, profit from deceptive practices so you could get that bonus, you will do good to enjoy every moment of your life as you have it right now, because it is time.

    The ones who knew we are the ones we are waiting on, have filed our complaints, we are first pure witnesses and some of your names are on our complaints and the evidence is not hearsay if it’s your signature indicating an act is to be done against someone else.

    I know the judge that signed the docs to have me removed by the hands of another from my property had better have had a proper authority, contract, or oath on file prior to signing that document to remove property.

    No one can give their selves the authority over another’s life.
    I can’t give my self authority to take your car. That’s why contracts and power of attorney are important, and oaths of people who claim to represent the interest of the public trust are important, because there is a moral obligation to act for the public not against.

    People have revealed insurrection and sedition by the legislatures, and all kinds of evidence.

    Whoo Hoo!
    I don’t bask in the joy of someone going down or being convicted or jailed, but I do bask in having that burden created by them lifted off my back because I didn’t ask for it.

    Too big to fail no longer exists if you are already insolvent, it’s just a matter of bringing you down to size and liquidating your assets,

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  164. these maybe?
    “https://s3.amazonaws.com/khudes/Twitter9.12.15.1.pdf”
    “https://s3.amazonaws.com/khudes/Twitter9.13.15.pdf”

  165. How many people here have a won a case?

  166. The link is not opening from here…sorry.
    Go to Karen Hudes Whistleblower on FB.
    She reposted it this morning after it had been blocked by the internet.
    Its finally up…house of cards.

  167. Do not click the link
    Type in Both lines to complete the link in your browser.

  168. http://s3.amazonaws.com
    /khudes/twitter9.13pdf

    Ohhhh….Biting Hard.
    Must Read….lots of Goodies.

  169. Oh, it was a
    ……. a state-federal settlement with Chase Bank, USA N.A. and Chase Bankcard Services, Inc.,

    (state-federal settlement)

    joint state-federal agreement, through an Assurance of Voluntary Compliance (AVC), with Texas, 47 other states, plus the District of Columbia, and the Consumer Financial Protection Bureau, follows a lengthy investigation into Chase’s past debt collection practices.

    Good ole CFPB (Thank you!)
    Disclosure: I don’t use credit, not affected by the settlement, just glad CFPB is an agency that takes complaints and do something with them, and glad the people use the agency (as their public servant to right a wrong)

    Trespass Unwanted, Creator, Corporeal, Life

  170. thanks JG, I will.

    Texas got a settlement out of
    https://www.texasattorneygeneral.gov/news/releases/texas-attorney-general-ken-paxton-announces-settlement-with-chase

    and in that agreement is this portion
    Chase has agreed to cease all collection efforts on more than 528,000 consumers, including an estimated 9,066 in Texas.

    Texas is a big state, and only 9,000 of 528,000 are in Texas…where are the rest of the people that should be happy with that settlement?

    Trespass Unwanted, Creator, Corporeal

  171. @ johngault

    (the unfortunate 2015 ruling granting MTD for failure to produce expert witnesses)

    2015 WL 1237193

    United States District Court,
    D. Maryland.
    Kevin WILLES
    v.
    WELLS FARGO BANK, N.A.
    Civil No. CCB–12–137.
    Signed March 16, 2015.
    Attorneys and Law Firms
    A. Donald C. Discepolo, Andrew J. Toland, III, Discepolo LLP, Baltimore, MD, for Kevin Willes.
    David Andrew Wilson, Thompson Hine LLP, Washington, DC, Jennifer Mingus Mountcastle, Stephanie Marie Chmiel, Thompson Hine LLP, Columbus, OH, Brian A. Troyer, James L. Defeo, Thompson Hine LLP, Cleveland, OH, for Wells Fargo Bank, N.A..
    MEMORANDUM
    CATHERINE C. BLAKE, District Judge.
    *1 KH Funding (“KH”), a subprime mortgage lender, issued “Series 3 Notes” and subordinated “Series 4 Notes” under an indenture with Wells Fargo Bank (“Wells Fargo”). Kevin Willes held Series 4 Notes from that issuance. In this suit, he sues Wells Fargo, alleging it breached its duties to him as a third-party beneficiary of the indenture. Wells Fargo now moves to dismiss for Willes’ failure to prosecute his suit or, alternatively, for summary judgment. A week after the completion of briefing on that motion, Willes moved to modify this court’s prior scheduling order by extending the deadline for discovery. Willes’ motion to modify will be denied, and Wells Fargo’s motion for summary judgment will be granted.
    BACKGROUND
    The court described the basis of Willes’ suit in the memorandum accompanying its order denying Wells Fargo’s motion to dismiss Willes’ amended complaint, and it will not repeat those allegations here. (See Mem. 1–3, ECF No. 40.) After receiving Wells Fargo’s answer, the court proposed a scheduling order that would have closed discovery on April 18, 2013. (See ECF No. 43.) At the parties’ joint request, (see ECF No. 44), the court modified that proposal and instead issued a scheduling order that coordinated discovery with Gresser, et al. v. Wells Fargo Bank, N.A., Civil No. CCB–12–987, a putative class action of Series 3 noteholders that raised overlapping questions of fact and law, (see ECF No. 45). Over half a year later, the court again approved the parties’ joint proposal to modify the schedule, again to match the discovery deadlines in Gresser, which had been extended. (See ECF Nos. 46, 47.) That scheduling order, which remains in effect, closed fact discovery on November 22, 2013, and expert discovery on March 21, 2014. (Id.) In the meantime, however, the pace of proceedings in Gresser slowed. On November 13, 2013, the court stayed discovery pending the resolution of a previously filed motion for class certification. (See Gresser, ECF No. 143.) The court later denied the motion for class certification. (See Gresser, ECF No. 164). Discovery, however, never resumed. Instead, in late 2014, Gresser was dismissed pursuant to a settlement. (See Gresser, ECF No. 188.)
    On November 22, 2013—the day fact discovery in this case concluded and just nine days after discovery was stayed in Gresser—the parties filed a court-mandated status report. (See Joint Status Report, ECF No. 48.) In it, Willes explained that the Gresser discovery had overlapped with his case only to the extent of deposing one individual, Robert Harris. That limited overlap, he suggested, largely derived from the focus of the parties in Gresser on the discovery of facts relevant to certification of the proposed class. (See id. at 1.) Notwithstanding the anticipated relevance of Harris’ testimony to Willes’ case, Willes did not participate in Harris’ deposition, explaining that he had “direct contact” with Harris, which would raise “Willes specific issues that have nothing to do with the class action issues in Gresser, and I don’t want to seem as if we are wasting the Gresser’s [sic] plaintiffs’ time.” (Id. at 1–2.) Willes’ status report suggested continued coordination with the scheduling order in Gresser, “request[ing] that the discovery deadlines in this case be modified and extended by three months to account for the anticipated resolution of the class certification motion pending” in that case. (Id. at 2.) Willes did not move for such an extension until late May 2014, long after the conclusion of the three month period contemplated in his status report.
    *2 Wells Fargo took a different position in the joint status report, opposing any extension of time for further discovery. It explained that Willes had failed to timely respond to its interrogatories and requests for production, which it served on January 9, 2013. (Id. at 1.) According to Wells Fargo, Willes did not respond to the production requests until May 13, 2013, and the interrogatories some two weeks later—that is, months after the deadline for such responses. (See id. at 3.) Wells Fargo added that Willes sought no discovery himself, a representation Willes has never denied. (Id.)
    ANALYSIS
    I. Motion to Modify Scheduling Order
    In late May 2014, Willes formally moved to modify the scheduling order to coordinate with discovery in Gresser. Despite the termination of that litigation, he has not withdrawn his motion.
    “A schedule may be modified only for good cause and with the judge’s consent.” Fed.R.Civ.P. 16(b)(4). “ ‘Good cause’ is shown when the moving party demonstrates that the scheduling order deadlines cannot be met despite its diligent efforts. Lack of diligence and carelessness are the ‘hallmarks of failure to meet the good cause standard.’ “ Innovative Therapies, Inc. v. Meents, 302 F.R.D. 364, 382 (D.Md.2014) (internal citations omitted) (quoting W. Va. Hous. Dev. Fund v. Ocwen Tech. Xchange, Inc., 200 F.R.D. 564, 567 (S.D.W.Va.2001)). Where, as here, a party moves to extend discovery, the question
    is not whether the discovery sought is relevant and would aid resolution of the factual issues at trial. The question before the court is whether Plaintiff has shown that despite her counsel’s diligence and good faith efforts the discovery deadlines could not be met and that there is a good cause to permit additional discovery at this late stage in the litigation.
    Id. at 384 (quoting Dent v. Montgomery Cnty. Police Dep’t, Civil No. DKC–08–886, 2011 WL 232034, at *2 (D.Md. Jan.24, 2011)).
    Willes has not satisfied that diligence standard. In the first place, he does not explain why he filed this motion to modify so late—six months after the scheduled conclusion of fact discovery, two months after the conclusion of expert discovery, and nearly seven weeks after Wells Fargo moved to dismiss for failure to prosecute. See id. at 384 (requiring justification for filing a motion to extend discovery “one day prior to the … discovery deadline”). That unexplained tardiness is reason enough to justify denying his motion.
    Even if Willes did explain his tardy motion, it would not help him, for he has made no effort whatsoever to discover facts relevant to his case in the substantial period for discovery the court has already permitted. Although the court twice extended its initial proposed discovery deadline, Willes has not even initiated that process. And although he supposedly wishes to coordinate with the Gresser plaintiffs, he has not once participated in discovery in that case nor attempted to uncover facts peculiar to his own cause of action. He acknowledges, for example, that he would have had to ask Harris substantially different questions than the Gresser plaintiffs, but appears never to have deposed Harris separately. Nor could he have relied on Gresser in good faith; the court stayed discovery in that case only days before the scheduled conclusion of fact discovery in his own lawsuit, before the Gresser parties had turned up any overlapping facts. In any case, discovery in that case never resumed and now never will.
    *3 Willes’ utter disregard for the discovery deadlines is the very opposite of diligence and does not constitute good cause for modification. His motion to modify the schedule will be denied.
    II. Motion for Summary Judgment
    Wells Fargo moves to dismiss for failure to prosecute or, alternatively, for summary judgment. Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) (emphases added). Summary judgment is proper “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial .” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
    Wells Fargo argues that Willes cannot prove breach or damages without expert testimony, which he failed to prepare or disclose during discovery. (See Mot. Dismiss 10–15.) Willes does not object to that argument; his opposition does not mention it at all. He has thus abandoned his claim, which is reason enough to grant summary judgment in favor of Wells Fargo. See, e.g., Ross v. Cecil Cnty. Dep’t of Soc. Servs., 878 F.Supp.2d 606, 626 (D.Md.2012).1
    Even were it otherwise, Wells Fargo is correct that Willes cannot prove that Wells Fargo breached the standard of care required by the indenture or the magnitude of the ensuing damages. “Where the plaintiff alleges negligence by a professional, expert testimony is generally necessary to establish the requisite standard of care owed by the professional.” Schultz v. Bank of Am., N.A., 413 Md. 15, 990 A.2d 1078, 1086 (Md.2010). That rule applies unless “the alleged negligence, if proven, would be so obviously shown that the trier of fact could recognize it without expert testimony.” Id. In the complicated context of a bank’s duty to its customers, paying a check “indorsed with only part of the payee’s name” or releasing collateral with inadequate security constitute such “obvious” breaches that no expert testimony is required. Id. at 1087. By contrast, adding a second person’s name to the plaintiff’s account on the basis of an alleged forgery does require expert testimony. Id. at 1090.
    Expert testimony is almost certainly necessary in the far more complicated context presented here, in which Willes’ case turns on the appropriate standard of care for an indenture trustee on notes backed by subprime mortgages. Cf. LNC Invs., Inc. v. First Fid. Bank, No. 92CIV7584–CSH, 2000 WL 1024717, at *3 (S.D.N.Y. July 25, 2000) (highlighting, under New York law, “[t]he need for expert opinion” where a banking malpractice case arose “within the complex and specialized setting of trust indentures, high corporate finance, and bankruptcy law”).2 Similarly, estimating the magnitude of Willes’ damages would seem to require expert testimony as to the value of his notes had Wells Fargo issued a Notice of Default at a prudent time. See Jones v. Koons Auto., Inc., Civil No. DKC–09–3362, 2013 WL 3713845, at *7 (D.Md. July 15, 2013) (granting summary judgment, under Maryland tort law, where a plaintiff failed to designate an expert whose testimony was necessary to demonstrate the magnitude of devaluation of a car); cf. LNC Invs., 2000 WL 1024717, at *3. Certainly Willes does not argue otherwise. Nor does he offer any proof of the expert testimony he would seemingly require at trial. Because he “ ‘may not rest upon the mere allegations or denials of [his] pleadings,’ but rather must ‘set forth specific facts showing that there is a genuine issue for trial,’ “ summary judgment is proper. Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.2003) (alteration in original) (quoting Fed.R.Civ.P. 56(e)).
    *4 Accordingly, the court will grant summary judgment in favor of Wells Fargo.
    CONCLUSION
    For the reasons stated above, Willes’ motion to modify the scheduling order will be denied and Wells Fargo’s motion for summary judgment will be granted.
    A separate order follows.
    ORDER
    For the reasons stated in the accompanying Memorandum, it is hereby ORDERED that:
    1. Kevin Willes’ motion to modify the scheduling order, (ECF No. 57), is DENIED;
    2. Wells Fargo Bank’s motion to dismiss for failure to prosecute or, alternatively, for summary judgment, (ECF No. 49), is GRANTED to the extent it seeks summary judgment;
    3. JUDGMENT is granted in favor of Wells Fargo Bank, N.A.;
    4. The Clerk shall CLOSE this case; and
    5. The Clerk shall send copies of this Order and the accompanying Memorandum to counsel of record.
    All Citations
    Not Reported in F.Supp.3d, 2015 WL 1237193
    Footnotes
    1
    Wells Fargo charitably interprets Willes’ silence as an implied argument that discovery should be reopened to permit him to acquire facts necessary to oppose Wells Fargo’s motion for summary judgment. (Reply Mot. Dismiss 6, ECF No. 56.) But nowhere does Willes expressly articulate such an argument. Certainly he does not support any such tacit argument with an affidavit stating that he “cannot present facts essential to justify [his] opposition,” as Federal Rule of Civil Procedure 56(d) requires. Nor does he so much as mention Rule 56(d). Where, as here, a plaintiff “never filed any discovery requests, [timely] moved for a continuance so she could conduct discovery, or filed an affidavit as required by Rule 56( [d] ),” summary judgment is proper without permitting any additional time for discovery. Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 961 (4th Cir.1996). In any case, the court has denied Willes’ belated motion to extend discovery, see supra Part I, so whatever facts he might need to justify his opposition now lie beyond his reach.
    2
    Unpublished opinions are cited for the soundness of their reasoning, not for any precedential value.

  172. @ johngault

    Plaintiff’s Opposition to Wells Fargo Bank, N.A.’s Motion to Dismiss Plaintiff’s Amended Complaint

    2012 WL 6655657 (D.Md.) (Trial Motion, Memorandum and Affidavit)
    United States District Court, D. Maryland.
    Kevin WILLES, Plaintiff,
    v.
    WELLS FARGO BANK, N.A., Defendant.
    No. 12CV00137.
    July 3, 2012.
    Plaintiff’s Opposition to Wells Fargo Bank, N.A.’s Motion to Dismiss Plaintiff’s Amended Complaint
    A. Donald C. Discepolo, Esquire, Federal Bar No.: 25525, don @discepolollp.com, Andrew J. Toland III, MD. Federal Bar No. 05057, andy @discepolollp.com, Discepolo LLP, 111 S. Calvert Street, Suite 1950, Baltimore, Maryland 21202, Telephone: 410-296-0780, Facsimile: 410-296-2263.
    Plaintiff, Kevin Willes, by and through his attorneys, hereby submits this Opposition to the Motion to Dismiss Plaintiff’s Amended Complaint [Docket No. 30] filed by Wells Fargo Bank, N.A. (“Wells Fargo” or the “Defendant”) and states:
    I. INTRODUCTION
    The Plaintiff owns Series 4 Subordinated Unsecured Investment Debt Securities (“Series 4 Notes”) issued by KH Funding. Amended Complaint (“AC”) at ¶ 3. As of December 31, 2009, Plaintiffs Series 4 Notes had a face value of over $630,249.26, including interest. Id. As a result of the conduct alleged herein, Plaintiffs Series 4 Notes have lost substantially all of their value. Id.
    Defendant Wells Fargo was the Indenture Trustee for the Series 3 Senior Secured Investment Debt Securities and Series 4 Unsecured Debt Securities issued by KH Funding, pursuant to an August 2, 2004 Indenture. AC at ¶3. KH Funding acquired, originated and serviced mortgage loans. AC at ¶ 5.
    The Indenture was executed between KH Funding and Wells Fargo for the benefit of KH Funding and Wells Fargo “and for the equal and ratable benefit” of Holders of the Notes. AC at ¶11.
    Section 11.10 of the Indenture provides that the Indenture is governed by the law of the State of Maryland
    Section 6.1 of the Indenture defines “Event of Default” to include, inter alia, the failure of KH Funding to pay interest and/or principal due on the Notes for a period of 30 days-
    An “Event of Default” occurs if:
    (1) the Company [i.e., KH Funding] defaults, in the payment of interest on a Security [defined to include the Notes] when the same becomes due and payable and the Default continues for a period of 30 days, whether or not such payment is prohibited by the provisions of Article 10 hereof;
    (2) the Company defaults in the payment of the principal of any Security when the same becomes due and payable at maturity, upon a required redemption or otherwise, and the Default continues for a period of 30 days, whether or not prohibited by the provisions of Article 10 hereof…
    AC at ¶ 13
    Section 6.2 of the Indenture provides Wells Fargo the power to accelerate payment of unpaid principal and accrued interest on all of the Notes upon the occurrence of a continuing event of default, even if the default related to only some of the Notes: “If an Event of Default… occurs and is continuing, the [Indenture] Trustee by notice to the Company… may declare the unpaid principal of and any accrued interest on all the [Notes] to be due and payable. Upon such declaration the principal and interest shall be due and payable immediately….” AC at ¶ 14.
    Section 7.5 of the Indenture required Wells Fargo to notify Holders of the Series 3 and Series 4 Notes, including the Plaintiff, of “notice of the Default or Event of Default within 90 days after it occurs.” AC at ¶ 15.
    Under Section 7.1(a) of the Indenture, the occurrence and continuation of an Event of Default triggered a fiduciary obligation on the part of the Indenture Trustee:
    If an Event of Default has occurred and is continuing, the [Indenture] Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
    AC at ¶ 16.
    Section 7.1(c) of the Indenture provides, in part, that the Indenture Trustee “may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that…(2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in asserting the pertinent facts.” AC at ¶ 17.
    Beginning in April 2009, KH Funding was in default by having failed to satisfy requests to redeem some of the Notes. AC at ¶ 23. KH Funding’s defaults continued throughout 2009. AC at ¶¶ 24-27. KH Funding told Wells Fargo about each of these defaults. See AC ¶¶ 23-27. Despite knowing about these defaults, Wells Fargo failed to notify the Holders as required by 7.5 of the Indenture. AC ¶¶ 15, 24-26, 49. Had Wells Fargo provided such notice, the Plaintiff would have sought to redeem his Notes and would not have lost all of his investment. AC at ¶ 49-50.
    Under the Indenture, Wells Fargo also had the ability to accelerate all of the obligations under the Note if an Event of Default occurred. AC at ¶ 14 (Section 6.2 of the Indenture). The Indenture also required Wells Fargo, as the Trustee, to operate under a “prudent man” standard. AC at 16 (Section 7.1(a)). A “prudent man,” faced with knowledge of KH Funding’s default, would have investigated KH Funding’s financial situation, and, having determined that KH Funding was in a serious financial downfall, would have accelerated the Notes and attempted to
    protect the Holder’s investments. AC at ¶ 44-48.1 Wells Fargo’s timely actions would have decreased the amount of loss suffered by the Plaintiff and allowed him to recover some of his investment. AC at ¶ 48.
    II. APPLICABLE LEGAL STANDARD
    “The purpose of a motion to dismiss pursuant to Fed.R.Civ.P. 12(b) (6) is to test the sufficiency of the plaintiffs complaint. U.S. v. Rawlings, 2010 WL 2292508 1 (D.Md. 2010)(citing Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999)). “In considering the motion, the court accepts all well-pleaded allegations of the complaint as true, and construes the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff as the non-moving party.” Schwentner v. Maryland Div. of Corrections, 2012 WL 908956 *1 (D.Md. 2012).
    “Rule 8(a) (2) of the Federal Rules of Civil Procedure requires only a ‘short and plain statement of the claim showing that the pleader is entitled to relief.”’ Id. at *2. “The purpose of the Rule is to provide the defendant with ‘fair notice; of the claim and the ‘grounds’ for entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted).” Schwentner at *2. See also Skinner v. Switzer, 131 S.Ct. 1289, 1296 (U.S. 2011) (“Rule 8(a)(2) of the Federal Rules of Civil Procedure generally requires only a plausible “short and plain” statement of the plaintiffs claim, not an exposition of his legal argument.”):
    The Supreme Court of the United States has explained that a “plaintiffs obligation to provide the ‘grounds’ of his ‘entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). Both Twombly and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), make clear that, in order to survive a motion to dismiss under Rule 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Iqbal, 129 S.Ct. at 1953 (“Our decision in Twombly expounded the pleading standard for ‘all civil actions’…” (citation omitted)); see also Simmons v. United Mortgage and Loan Inv., 634 F.3d 754, 768 (4th Cir.2011); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir.2009); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.2008).
    “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949. “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the” complaint has alleged—but it has not ‘show [n]’—‘that the pleader is entitled to relief.’ “Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).
    Schwentner, 2012 WL 908956 at *2. Still, in evaluating a motion to dismiss for failure to state a claim, the court does not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Schwentner at *2 (quoting Edwards, 178 F.3d at 243).
    III. THE PLAINTIFF HAS PROPERLY ALLEGED A BREACH OF CONTRACT ON THE PART OF THE DEFENDANT, WELLS FARGO BANK, N.A.
    A. Wells Fargo Had Notice of Continuing Events of Default
    Wells Fargo contends that the complaint “fails to allege facts demonstrating that Wells Fargo had notice of a continuing Event of Default.” Wells Fargo Memorandum at 15-16 (emphasis in original).
    Section 6.1 of the Indenture defines “Event of Default” to include, inter alia, the failure of KH Funding to pay interest and/or principal due, or redeem, on the Notes for a period of 30 days. AC at -13.2 The Amended Complaint alleges that continuing Event of Defaults occurred as early as April 15, 2009. AC at ¶23. The Amended Complaint further alleges that KH Funding directly informed Wells Fargo of various Events of Default beginning in April 2009. AC at ¶¶ 23-26.3 (detailing that KH funding informed Wells Fargo of Events of Default that were detailed in KH Funding’s April 15, 2009, May 20, 2009, August 13, 2009 and November 16, 2009 SEC filings). In Paragraph 49 if the Amended Complaint, the Plaintiff alleges that “beginning no later than April 15, 2009, Wells Fargo, which had actual knowledge of continuing Events of Default, should have provided notice the Holders, including the Plaintiff.” AC at ¶ 49 (emphasis added).4
    The Amended Complaint therefore alleges that there were continuing Events of Default, beginning at least in April of 2009, which required Wells Fargo to provide notice to the Holders.
    Wells Fargo nonetheless claims that the Amended Complaint does not state a claim because these Events of Default theoretically could have been cured or waived. See Wells Fargo Memorandum at 8. The Amended Complaint, however, alleges that the Events of Default were continuing and, therefore, implicitly that the default were not cured or waived. Even the SEC filings relied upon by Wells Fargo indicate that defaults were continuing:
    As of December 31, 2008, we were subject to redemption requests with respect to (i) approximately $4.61 million of outstanding investor notes that are past the date set for redemption but within the 30-day grace period for repayment and (ii) approximately $1.75 million of outstanding investor notes that are past the 30-day grace period for repayment. This fact, along with updates, are regularly reported to the Indenture Trustee. For so long as a default is continuing, the Indenture Trustee or the holders of 25% of our outstanding investor notes could accelerate all of our outstanding notes, in which case we would be required to immediately pay the outstanding principal and accrued interest due on such notes.
    We have not received notice from either the Trustee or the holders of 25% in principal amount of our outstanding investor notes that they intended to assert a default or accelerate all outstanding investor notes because of the situations described above and we have no indication that such a default or an acceleration will be asserted, but there can be no guarantee that the Trustee or the holders will not do so.
    2008 10-K (filed in April 2009)(emphasis added).5 Thus, even the SEC filing confirms that KH Funding kept Wells Fargo informed of the status of ongoing defaults. Moreover, by the time of the filing of the 10-K in April of 2009, more than 90 days had passed since the Events of Default has occurred (which had happened no later than December 31, 2008). Other SEC filings also confirm that, while some waivers had been obtained, waivers had not been obtained from all of the Holders. See Wells Fargo Memorandum at 8 (quoting the August 13, 2009 10-Q that “we have either obtained waivers from each of the note holder or are working to obtain waivers.”) (emphasis added).6
    Although the SEC filings show that Wells Fargo should have given notice prior to April 2009, the allegations of the Amended Complaint establish that by July of 2009, at the latest, Wells Fargo should have given notice to the Holders of known and continuing Events of Default.
    B. “Prudent Man” and “Good Faith” Provisions
    The failure to give notice to the Holders is a direct contractual obligation and does not trigger the “prudent man” standard of Section 7.1(a) since Section 7.1(a) only relates to Wells Fargo’s “rights and powers” under the Indenture and not its contractual duties and obligations. Similarly, the failure to provide the required notice does not involve any “error of judgment made in good faith”; therefore, the “good faith” provisions of Section 7.1(c)(2) do not apply.
    The notice provision of Section 7.5 is mandatory under the facts involved in this case:
    If a Default or Event of Default occurs and is continuing, and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders a notice of the Default or Event of Default within 90 days after it occurs. At least 5 Business Days prior to the mailing of any notice to Holders under this Section 7.5, the Trustee shall provide the Company with notice of its intent to mail such notice. Except in the case of a Default or Event of Default in payment on any Security, the Trustee may withhold the notice if and so long as the Responsible Officers of the Trustee in good faith determines that withholding the notice would have no material adverse effect on the Holders.
    Section 7.5 (emphasis added).7 Section 7.5 does allow Wells Fargo to withhold notice if Wells Fargo “in good faith” determines that the withholding of the Notice would have no “material adverse effect on the Holders.” However, withholding of the Notice is prohibited, when as happened here, there is a default by KH Funding in the payment of a security. Because, Wells Fargo was prohibited from withholding notice of an Event of Default, the notice was mandatory and not subject to any discretion on the part of Wells Fargo.
    Since Section 7.5 provides a specific “good faith” exception to Wells Fargo’s duty to provide notice of Events of Default, that specific provision also controls the more generalized statements in Sections 7.1(a) and 7.1(c)(2). The good faith standard in Section 7.5 would be rendered meaningless if the question of whether Wells Fargo acted in “good faith” when failing to provide notice is controlled by other provisions.
    Even if the “prudent man” and “good faith” provision of the Indenture were applicable to the Wells Fargo’s failure to provide notice, those provisions relate to possible defenses by Wells Fargo.
    The words of the Indenture thus provide for shifting in the burden of proof: the plaintiff must first allege that the trustee’s actions amounted to a breach; and the trustee can thereafter affirmatively defend the charge with proof that it made a “good faith” judgment error. If the latter affirmative defense can be proven, the trustee may be relieved of liability notwithstanding a breach.8 The plaintiff, however, may still defeat the trustee’s affirmative defense if it is shown that the trustee was negligent in “ascertaining pertinent facts.” Id. See Sallie v. Tax Sale Investors, Inc., 998 F. Supp. 612, 621-22 (D. Md. 1998) (stating that “good faith is an affirmative defense for Section 1983 claims, and that “Plaintiffs are entitled, at the least, to discovery on that issue.”); Dellastatious v. Williams, 242 F.3d 191, 194 (4th Cir. 2001) (holding that “good faith” is an affirmative defense for control person liability under the Securities Act); Equitable Life Assur. Soc. Of U.S. v. Okey, 812 F.2d 906, 910 (4th Cir. 1987) (recognizing a “good faith” affirmative defense under the Uniform Commercial Code); Rea v. Wichita Mortg. Corp., 747 F.2d 567, 576 (10th Cir. 1984) (noting that “good faith error” is an affirmative defense). These issues ultimately are shifting factual questions that cannot be decided on a motion to dismiss.
    Additionally, the concept of “good faith” is distinct from the concept of “bad faith.” Cecilia Schwaber Trust Two v. Hartford Acc. and Indem. Co., 636 F. Supp.2d 481, 486 (D. MD. 2009) (“Maryland Courts have indicated that the two [good faith and bad faith] are not the same….). Wells Fargo confuses the two concepts in attempting to extract a pleading requirement from the cases of Bond v. Messerman, 162 Md. App. 119-120, 873 A.2d 417, 432 (2005), aff’d 391 Md. 706, 895 A.2d 990 (2006), Rite Aid Corp. v. Hagley, 374 Md. 665, 680-81, 824 A.2d 107, 116-17 (2003), for definitions of what constitutes “good faith” and “bad faith.” Wells Fargo Memorandum at 18. Even if the court were to hold that “a lack of good faith” is not an affirmative defense, Wells Fargo’s argument that Plaintiff must “plead facts plausibly establishing that Wells Fargo acted dishonestly, with malice or ill will, or with a design to defraud or seek unconscionable advantage” has no support in the Indenture or case law. Id.
    Even under this standard, the Amended Complaint sufficiently alleges that “on information and belief and based on the allegations herein, Wells Fargo’s conduct complained of herein was not the result of a good faith error of judgment by Wells Fargo, its responsible officers or others acting on its behalf.” AC at ¶ 56.
    Wells Fargo’s case law does not hold otherwise. Gruss Global Investors Master Fund, Ltd. v. Deutsche Bank Trust Co. Americas, Case No. 09-civ-9723 (AKH) (S.D.N.Y. Nov. 24 2010), is a one paragraph opinion that states that “[p]laintiff has failed to allege facts supporting a plausible claim that Defendant acted in bad faith.” There is very little rationale in the opinion from which one can discern what the court believed was lacking, and the case dealt with “bad faith” not whether the defendant exhibited “good faith.” Id. Similarly, Barry v. EMG Mortgage, 2011 WL 2669436, at *7, held that a bare-boned allegation of “bad faith” without more was not sufficient for a breach of contract (when the plaintiffs were pursuing a breach of good faith and fair dealing claim). The Plaintiff has alleged far more, including that Wells Fargo failed to provide notice to Plaintiff despite the passage of more than a year since the first Event of Default and Wells Fargo’s actual knowledge of KH Funding’s financial distress, and the events of default. ¶¶ 22-27, 48.9
    Decohen, 2011 WL 3438625, at *5 n. 10 is irrelevant to the present action, because the allegations of “bad faith” in that case concerned an unjust enrichment claim. Plaintiff does not assert an unjust enrichment claim and, in any event, the Indenture does not refer to “bad faith.”
    Likewise, Painter’s Mill Grille, LLC v. Brown, No. RDB-11-1607, 2012 WL 576640, at *4 (D. Md. Feb. 21, 2012), does not require a plaintiff to prove a “lack of good faith” as an element of her breach of contract cause of action. The result in Painter’s Mill Grille is different because the claim at issue there was one for tortious interference with contract, a cause of action that requires plaintiffs to allege, as an element of the claim, that the conduct at issue was “unlawful.”
    Moreover, “[w]hether a party to a contract acted in good faith, however, generally presents a question of fact for a jury.” Capital, S.A. v. Lexington Capital Funding III, Ltd., 2011 WL 3251554 11 (S.D.N.Y. 2011) (rejecting argument that the trustee “is entitled to dismissal, because ‘[u]nder the express terms of the Indenture, the Trustee is not liable for any errors of judgment made in good faith.”’) (citation omitted).
    C. Damages For Breach Of Contract
    The Plaintiff alleges that ‘[h]ad Wells Fargo provided notice to the Plaintiff and other Holders as required by its obligations under the Indenture, the Plaintiff would have sought the immediate redemption of the Notes issued to him and would have recovered more of the amounts owed to him under the Notes.” AC at ¶ 62. Wells Fargo nonetheless argues that the Plaintiff’s damages claim is factually unsupported.
    First, Wells Fargo contends that the Plaintiff must expressly state that he was unaware of Events of Default. Wells Fargo’s Memorandum at 23. There is no such obligation under Twombly, et al., that a plaintiff must affirmatively allege lack of knowledge, especially when such lack of knowledge is not a necessary element to the plaintiff’s claim. The Plaintiff’s lack of knowledge also is a reasonable inference derived from the Plaintiff’s allegations.
    Second, Wells Fargo contends that the Plaintiff is required to allege that he sought redemption of his notes after Wells Fargo finally declared an Event of Default. Again, nothing legally or factually requires the Plaintiff to make such an allegation. Wells Fargo nonetheless protests that the Plaintiffs “assertion that he would have acted immediately upon an earlier notice” is “self-serving.”’ Wells Fargo’s Memorandum at 23. Wells Fargo’s position is fundamentally an argument about the strength of the Plaintiff’s assertion in Wells Fargo’s eyes, but does not justify the court to ignore the Plaintiff’s well-pleaded allegation.10
    Finally, Wells Fargo contends that “Plaintiff fails to allege any facts showing that the would have been paid if he had requested redemption.” Wells Fargo Memorandum at 23. Relying on portions of statements from KH Funding SEC’s filings, Wells Fargo argues that the Plaintiff’s investment was lost years ago. Aside from the fact that the court cannot, and should not, rely on the vague, hearsay statements contained the these filings, those filings themselves are not proof of anything since they only relate warnings made by KH Funding. See Wells Fargo’s Memorandum at 20-21 (“The 2008 10-K explicitly and repeatedly warned that, if the Notes were declared due and payable due to an Event of Default, KH Funding would have to liquidate its assets—during the depths of the market crisis—and that investors could lose ‘all’ of their money.”). Furthermore, as of December 31, 2008, those filing reflect that KH Funding’s assets were approximately the same as its liabilities. AC at ¶ 51.
    Finally, the Amended Complaint states that the Plaintiff would have attempted to redeem his obligations if Wells Fargo had provided the required notice to Holders, and would have suffered a smaller loss of his investment. AC at ¶¶ 49-50. An earlier acceleration of the Notes by Wells Fargo also would have allowed there to be more assets available to be distributed to the Holders, including the Plaintiff, given that KH Holdings financial situation only continued to deteriorate while Wells Fargo ignored the Events of Default. AC at ¶ 48.11
    The Plaintiff has alleged that his losses would have been lessened, in part, if he had received earlier notice from Wells Fargo. This allegation is sufficient because “[u]nder Maryland law, a plaintiff suing for breach of contract must show simply “that the defendant had a contractual obligation and that the obligation was breached.” International Fidelity Ins. Co. v. Mahogany, Inc., 2011 WL 3055251 *2 (D.Md. 2011) (quoting Mathis v. Hargrove, 166 Md.App. 286, 888 A.2d 377, 396 (2005). “It is not necessary that the plaintiff prove damages resulting from the breach, for it is well settled that where a breach of contract occurs, he may recover nominal damages even though he has failed to prove actual damages.” Mahogany, at *2 (quoting Taylor v. NationsBank, N.A., 365 Md. 166, 776 A.2d 645, 651 (2001).
    D. Wells Fargo’s Failure To Accelerate
    The Plaintiff previously demonstrated that he fully pled allegations that Wells Fargo was aware of continuing Events of Default and that such knowledge required Wells Fargo to provide notice to the Holders.
    Wells Fargo’s knowledge of the Events of Default also allowed Wells Fargo to accelerate all of the indebtedness owed to Series 3 and Series 4 holders. See Section 6.2 (“If an Event of Default…occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least twenty-five percent (25%) in principal amount of the then outstanding Securities by written notice to the Company and the Trustee, may declare the unpaid principal of and any accrued interest on all the Securities to be due and payable.”).
    Relative to Wells Fargo’s failure to accelerate the obligations prior to February 5, 2010, the Amended Complaint provides sufficient factual allegations (notice of default and the continuing decline in KH Funding’s financial condition) to establish that Wells Fargo violated the “prudent man” standard in failing to accelerate the obligations prior to February 2010. AC at ¶¶ 23-26, 48. Indeed, Wells Fargo was on notice of Events of Default by April 15, 2009, if not earlier, and could have accelerated the obligations at any time thereafter. The Plaintiff’s allegations that earlier acceleration would have allowed “more assets [to] be available to distribute[] to the Holder, including the Plaintiff,” is, as was discussed before in the context of the Plaintiff’s damages for Wells Fargo’s failure to provide notice of Events of Default, a sufficient description of damages for a motion to dismiss.
    Wells Fargo’s failure to ascertain other “pertinent facts” also precludes Wells Fargo from relying on a “good faith” defense. See AC at ¶ 17 (Section 7.1(c) of the Indenture). In any event, and as discussed previously, Wells Fargo’s attempted “error of judgment made in good faith” defense does not establish that the Plaintiff’s complaint does not state a claim.
    Wells Fargo also argues that it must have acted prudently, because “Holders of a mere 25% of the Notes had the same power as Wells Fargo under the Indenture to accelerate [but] never did so.” Wells Fargo’s Memorandum at 17. This argument is just that: argument. Whether the actions of the other Holders are relevant to the question of whether Wells Fargo acted prudently fundamentally is a factual determination that must be decided by a jury.
    Wells Fargo also fails to account for the effect of its failure to provide notice to all of the Holders of the continuing Events of Default. While some Holders may know that their own obligations were not being paid, that information cannot be imputed to all Holders—or even a collection of Holders with 25% of the Notes. Even if an individual Holder might agree to a waiver, that person may be acting based on their own individual knowledge and perspective. The Trustee, seeing the full picture, is able to a broader, fully-informed decision.
    Wells Fargo’s argument also attempts to relieve Wells Fargo of any responsibility because the Holders could have independently acted. This argument ignores the unique position of the Trustee. “Subsequent to default, it is usually only the trustee who is able to act swiftly and effectively to assure, insofar as assurance can be had, that the rights of bondholders to recover what they are owed will ultimately be vindicated. It simply does not accord with sound public policy or the ostensible purposes for which an indenture is made and relied upon by its beneficiaries, to allow indenture trustees the benefit of broad exculpatory provisions to excuse their failure to exercise those powers they possess pursuant to the indenture prudently in order to mitigate or obviate the consequences of default. The fundamental and highly salutary purpose of a bond indenture is to secure payment of the underlying obligation. If, however, an indenture trustee is under no enforceable obligation to act prudently to preserve and manage the trust assets in the event of default, and so to provide some reasonable assurance that the bondholders eventually receive their due, it may be asked whether the indenture does in fact secure the payment of anything.” Beck v Manufacturers Hanover Trust Co., 218 A.D.2d 1, 12 (N.Y.A.D.,1995).
    CONCLUSION
    The Amended Complaint adequately pleads a cause of action against Wells Fargo both for failing to provide the Plaintiff with notice of events of default and for failing to accelerate the obligations after learning of continuing events of default. For the reasons, set forth above Wells Fargo’s motion to dismiss must be denied.
    Footnotes
    1
    Wells Fargo cannot rely on Section 7.1(c)(2) of the Indenture which provides that the “Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in asserting the pertinent facts.” Wells Fargo’s failure to investigate FH Funding’s financial condition after learning of the Events of Default constitutes “negligen[ce] in asserting the pertinent facts” which vitiates any “good faith” defense.
    2
    An ‘Event of Default’ occurs if: “(1) the Company [i.e., KH Funding] defaults, in the payment of interest on a Security [defined to include the Notes] when the same becomes due and payable and the Default continues for a
    period of 30 days, whether or not such payment is prohibited by the provisions of Article 10 hereof; (2) the Company defaults in the payment of the principal of any Security when the same becomes due and payable at maturity, upon a required redemption or otherwise, and the Default continues for a period of 30 days, whether or not prohibited by the provisions of Article 10 hereof….” Amended Complaint at ¶13.
    3
    The Amended Complaint clarifies that Wells Fargo received knowledge of the Events of Default directly from KH Funding and that Wells Fargo’s knowledge was not knowledge that could only be imputed from Wells Fargo’s receipt of KH Funding’s SEC filings.
    4
    Without any legal support, Wells Fargo argues that the Plaintiff must “allege the date when Wells Fargo received notice of an Event of Default, the manner of the notice, or who received it.” Wells Fargo Memorandum at 16. There is no support in the law requiring that such detailed underlying factual information be included in a complaint, especially when the complaint does not include any counts for fraud.
    5
    Wells Fargo cites to the 2008 10-K and argues that the filing “states that, of 48 redemption request more than 30 days past due as of October 10, 2008, all but three were paid on that date, and the remaining three Holders agreed to extend the dates set forth the redemption of their notes.” Wells Fargo Memorandum at 8. While that is true concerning the status as of October 10, 2008, Wells Fargo conveniently ignores the updated information contained in the remainder of the filing concerning the status as of December 31, 2008. The 10-K’s statement that the debts could be accelerated also demonstrates that the defaults were continuing because the threat of acceleration would not exist if there no longer were any continuing default.
    6
    Wells Fargo attached numerous exhibits to its motion to dismiss, including copies of the Indenture, prospectus, KH Funding’s bankruptcy petition and various SEC filings. Wells Fargo contends that the court can consider and rely on those attachments. The cases cited by Wells Fargo allow attachments to be considered under limited circumstances, primarily when the documents are core loan or contract documents. While the Indenture is a core contractual document, the other documents, including the SEC filing, are only referenced in the Amended Complaint for the purpose of detailing factual background and Wells Fargo’s knowledge of events and are not “integral” to the Plaintiff’s claims. See Wells Fargo Memorandum at 4 n. 1. These references do not justifying wholesale use of those documents in evaluating the motion to dismiss, especially when the SEC documents contain hearsay statements upon which Wells Fargo is attempting to rely. The Plaintiff objects to the use and reliance on any documents attached to Wells Fargo’s motion except for the core contractual document, the Indenture.
    7
    Wells Fargo contends that the Plaintiff was required to allege that the defaults were known to a “Responsible Officer” of Wells Fargo. Nothing in the case law requires the identification of a specific person or persons who were informed. The Plaintiff alleges that Wells Fargo was aware of continuing Events of Default and that the failure to provide notice to the Holders violated the terms of the Indenture. A reasonable inference from these allegations is that the appropriate person or persons, who were “Responsible Officers,” had the knowledge required under Section 7.5.
    8
    Under Maryland law “[a]n affirmative defense is one which directly or implicitly concedes the basic position of the opposing party, but which asserts that notwithstanding that concession the opponent is not entitled to prevail because he is precluded for some other reason.” Armstrong v. Johnson Motor Lines, Inc., 12 Md. App. 492, 501, 280 A.2d 24, 29 (1971).
    9
    Wells Fargo relies on Section 4.3(a) of the Indenture which provides that “the Trustee shall have no duty to review such documents [SEC filings] for the purposes of determining compliance with any provisions of this Indenture.” A lack of duty to review such documents, however, does not mean that Wells Fargo cannot obtain actual knowledge of Events of Default or of KH Funding’s financial condition if it reviews those filings—in addition to obtaining direct knowledge from KH Funding. The information in the SEC filings also would have required Wells Fargo, as a “prudent” trustee, to further investigate KH Funding’s’ financial situation.
    10
    The Plaintiff also noted in the Amended Complaint that the ultimately acceleration by Wells Fargo in February 2010 precluded holders from seeking redemption. See AC at ¶ 49 n. 1.
    11
    Wells Fargo’s attempts at forensic accounting of KH Holding’s financial condition (See Memorandum at 20-21) are insufficient to overcome the allegations of the Amended Complaint. In any event, this accounting argument cannot be resolved in a motion to dismiss

  173. @ johngault

    Memorandum in Support of Motion of Wells Fargo Bank, N.A., to Dismiss Plaintiff’s Amended Complaint

    2012 WL 6655654 (D.Md.) (Trial Motion, Memorandum and Affidavit)
    United States District Court, D. Maryland.
    (Baltimore Division)
    Kevin WILLES, Plaintiff,
    v.
    Wells Fargo BANK, N.A., et al., Defendants.
    No. 12CV00137.
    June 4, 2012.
    Memorandum in Support of Motion of Wells Fargo Bank, N.A., to Dismiss Plaintiff’s Amended Complaint
    C. Dennis Southard IV (D. MD. Bar No. 15010), Thompson Hine LLP, 1919 M Street N.W., Suite 700, Washington, D.C. 20036-1600, Tel: (202) 263-4169, Fax: (202) 331-8330, dennis.southard@thompsonhine.com.
    Jennifer M. Mountcastle (admitted pro hac vice), Stephanie M. Chmiel (admitted pro hac vice), Thompson Hine LLP, 41 South High Street, Suite 1700, Columbus, OH 43215-6101, Tel: (614) 469-3200, Fax: (614) 469-3361, jennifer. Mountcastle@ThompsonHine.com, stephanie.chmiel@thompsonhine.com, Attorneys for Defendant Wells Fargo Bank, N.A.
    Brian Troyer (admitted pro hac vice), James Defeo (admitted pro hac vice), Thompson Hine LLP, 3900 Key Center, 127 Public Square, Cleveland, OH 44114-1291, Tel: (216) 566-5500, Fax: (216) 566-5800, Brian.Troyer @ThompsonHine.com, Jim.Defeo@ThompsonHine.com.
    Table Of Contents
    PRELIMINARY STATEMENT 1
    BACKGROUND 3
    A. Plaintiff invests in KH Funding Series 4 Notes. 3
    B. KH Funding suffers losses during the economic collapse and enters bankruptcy. 5
    C. Wells Fargo’s rights and duties are defined by the Indenture and federal law 7
    1. Defaults and Events of Default are curable and waivable 7
    2. During a continuing Event of Default, Wells Fargo’s duty was limited to the prudent exercise of the specific rights and powers granted to it by the Indenture. 9
    3. The Indenture strictly defines what constitutes notice to Wells Fargo 9
    4. The Indenture limits and qualifies Wells Fargo’s obligations to provide notice of Defaults or Events of Default to Holders. 10
    5. Holders shared remedial powers during an Event of Default. 11
    6. Wells Fargo is not liable for good-faith acts or omissions. 12
    ARGUMENT 13
    A. Plaintiff fails to state a claim for delayed acceleration. 14
    1. Plaintiff fails to plead facts showing that Wells Fargo had of notice of a continuing Event of Default. 15
    2. Plaintiff pleads no facts plausibly showing that Wells Fargo failed to act as a prudent man would have. 16
    3. Plaintiff does not plead facts demonstrating that Wells Fargo failed to act in good faith. 8 1
    4. Plaintiff does not plausibly allege damages from delayed acceleration. 20
    B. Plaintiff fails to state a claim for failure to give timely notice of a continuing Default or Event of Default. 21
    1. The Amended Complaint lacks facts showing that Wells Fargo failed to comply with Section 7.5’s notice requirement. 21
    2. Plaintiff pleads no facts plausibly showing that Wells Fargo failed to act in good faith. 22
    3. Plaintiffs theory of notice damages is factually unsupported. 22
    CONCLUSION 24
    PRELIMINARY STATEMENT
    Plaintiff Kevin Willes (“Plaintiff”) invested over $600,000 in debt securities (“Notes”) issued by KH Funding Company (“KH Funding”), a small mortgage company that failed and ultimately entered bankruptcy as a result of the collapse of the real estate and financial markets, causing his Notes to lose “substantially all their value.” He did not seek to redeem his Notes to try to avoid his loss when he could have but now instead seeks to recover from Wells Fargo Bank, N.A. (“Wells Fargo”) in its capacity as an indenture trustee. He purports to sue for breach of contract, but in reality his theories would amount to holding Wells Fargo liable as if it were an insurer or guarantor of his bad investment in KH Funding. Because his original Complaint failed to state a claim, he has filed an Amended Complaint. Like the original, however, it recites many facts about KH Funding’s demise but fails to state a claim against Wells Fargo.
    Plaintiff’s first theory of liability is that Wells Fargo should have exercised its discretionary power to accelerate the principal and interest on the Notes at some unspecified time before it did so on February 5, 2010, and that it failed, in not accelerating sooner, to meet the standard of excercising its indenture powers as a “prudent man” would have. To state a claim under this theory, however, he was required to plead facts showing that an Event of Default, as defined in the Indenture, had occurred and was “continuing” at some earlier point in time, and that a prudent man could only have accelerated the debt then rather than on February 5, 2010. The Amended Complaint pleads no such facts but instead mere conclusions. It identifies no continuing Event of Default, and pleads no facts showing that a “prudent man” necesssarily would have accelerated more quickly, when, or why.
    Plaintiff’s second theory is that Wells Fargo failed to give him and other Holders notice of a Default or Event of Default immediately upon its occurrence. If it had, he asserts, he would have sought redemption of his notes and avoided his loss. This theory fails because (1) Plaintiff does not allege that he was unaware of KH Funding’s financial difficulties or its Defaults; (2) he in fact did not seek redemption when Wells Fargo did accelerate; and (3) the Indenture did not require Wells Fargo to give notice upon the occurrence of an Event of Default but only within ninety days when a Default or Event of Default had occurred and was continuing, and Plaintiff does not allege that Wells Fargo failed to give such notice.
    Both Plaintiff’s acceleration theory and his notice theory also fail because the Amended Complaint pleads no facts showing that Wells Fargo failed to act in good faith. This failure is critical because, as a matter of federal law, and under the express terms of the Indenture, Wells Fargo cannot be held liable absent proof that it did more than make a good-faith error. The Amended Complaint contains only a bare conclusion that Wells Fargo did not act in good faith.
    Furthermore, both theories fail to state a claim because the Amended Complaint pleads no facts plausibly showing that Plaintiff was damaged. To the contrary, the facts alleged contradict his conclusion that he was damaged. The very KH Funding SEC filings on which Plaintiff relies in his Amended Complaint show that acceleration in 2009 would have resulted in liquidation of KH Funding’s assets and the loss of Plaintiff’s investment, which were part of the tiny sliver of KH Funding’s most junior debt—its Series 4 Notes. Nor is it plausible that a redemption demand by Plaintiff in response to an earlier notice of an Event of Default would have resulted in payment of his Notes. KH Funding’s inability to meet its payment obligations is the very premise of Plaintiff’s claims. In 2009, KH Funding was already millions behind in satisfying its payment obligations and warned in its 2008 Form 10-K that it did not have sufficient liquidity to meet ongoing requests for payment. There is no plausible factual basis in the Amended Complaint for a belief that Plaintiff was any more likely to have been paid in those circumstances in 2009 than he was at the beginning of 2010. That is particularly true given that a notice of an Event of Default would (according to Plaintiff’s own theory) have led to redemption requests from other Holders as well and, as the company warned, to the liquidation of its assets.
    Because Plaintiff has failed to state a claim upon which relief can be granted, the Court should dismiss his claims with prejudice.
    BACKGROUND
    Wells Fargo moved to dismiss Plaintiffs original Complaint (“Original Complaint”) on March 23, 2012. (Dkt. No. 12.) Plaintiff requested, and Wells Fargo consented to, extensions of time until April 26, 2012, to respond. On that date, however, and without requesting consent or leave of the Court, Plaintiff instead filed his Amended Complaint, despite its being beyond the time to do so under Fed. R. Civ. P. 15(a)(1). (Dkt. No. 23.) He simultaneously filed a memorandum styled as an opposition to Wells Fargo’s motion to dismiss but in reality commenting on the Amended Complaint. (Dkt. No. 20.)
    A. Plaintiff invests in KH Funding Series 4 Notes.
    According to the Amended Complaint, “KH Funding is a small Maryland corporation that issues interest-bearing debt securities, such as Series 3 and Series 4 Notes…, and acquires, originates and services mortgage loans.” (Compl. ¶ 5.) KH Funding issued Series 3 Senior Secured Investment Debt Securities (“Series 3 Notes”) and Series 4 Subordinated Unsecured Investment Debt Securities (“Series 4 Notes”). (Compl. ¶¶5-6.) “KH Funding issued the Notes pursuant to a prospectus (“Prospectus”), as well as an indenture between KH Funding and Wells Fargo dated August 2, 2004 and later supplemented and amended” (“Indenture”). (Compl. ¶ 6.)1
    Plaintiff is a Holder of Series 4 Notes that have face value of $630,249.26 but that “have lost substantially all of their value.” (Compl. ¶¶3, 7.) His Amended Complaint does not say when they lost their value, nor does it explain the basis for his valuation.
    As their names suggest, the Series 3 Notes were senior, secured debt, and Series 4 Notes held by Plaintiff were unsecured and subordinate in payment to Series 3 and other debt. (Compl. ¶¶4, 7.) This placed Series 4 Holders at special risk of nonpayment in the event of insolvency, as KH Funding’s 2008 Form 10-K explained:
    Our Series 4 investor Notes are unsecured obligations of KH Funding and are subordinated to our Series 3 investor notes and any other senior debt we may incur. Senior debt includes any indebtedness incurred in connection with our borrowings from a bank, trust company, insurance company, or from any other institutional lender…. If we were to become insolvent, the Series 3 investor notes and any other outstanding senior debt would have to be paid in full prior to payment of Series 4 investor notes in our liquidation. As a result, there may not be adequate funds remaining to pay the principal and interest on the Series 4 investor notes.
    (2008 10-K at 18 (emphasis added).) In exchange for this greater risk, Series 4 Notes received higher rates of interest than Series 3 Notes. (Prospectus at 1.)
    The total amount of outstanding principal and accrued interest on the Series 3 Notes was also much larger than Series 4. As of the end of 2008, KH Funding’s balance sheet showed outstanding Series 3 Notes totaling $35,995,322 and Series 4 Notes totaling only $2,859,502. (2008 10-K at 28.) “As of October 31, 2010, KH Funding was indebted to the holders of the Series 3 Notes and Series 4 Notes in aggregate amounts of more than $38,150,000 and $1,321,000, respectively.” (Compl. ¶ 10.)
    Holders were entitled to demand that KH Funding redeem their Notes. Upon receipt of a demand, KH Funding was to set a redemption date within ninety business days after receipt of the demand. (Prospectus at 35.)
    B. KH Funding suffers losses during the economic collapse and enters bankruptcy.
    Beginning in 2007, KH Funding suffered a series of annual and quarterly financial losses, which were disclosed in regular filings with the SEC. (Compl. ¶¶ 38-47.) By the end of 2008, KH Funding’s balance sheet showed total assets of $44,847,358 and total liabilities of $45,229,118, for negative equity of $382,130, and virtually all of those assets were mortgage loans and real estate, the values of which were reported on book rather than market basis. (2008 10-K at 23.) As the 2008 10-K explained, the value and marketability of KH Funding’s assets had substantially declined because of the collapse of the real estate market and the global financial crisis. Even KH Funding’s ability to meet ongoing redemption requests from Holders of its Notes was impaired by the market collapse and the resulting impaired marketability of loans and real estate.
    At December 31, 2008, we held more than $16.04 million in residential and commercial mortgage loans that we believe could be sold within a short period of time for the purpose of satisfying investor note redemption requests. Further, we held $5.71 million in business line-of-credit loans and second lien loans at December 31, 2008, which earn higher yields than the first trust loans and that we believe could also be sold, although generally they take longer to sell and are sold at a discount. It should be noted, however, that the national and local real estate economies have weakened during the past two years in part due to the widely-reported problems in the sub-prime mortgage loan market. These problems have had the effect of decreasing the amount of credit that is available to borrowers. As a result, sellers of real estate and loans secured by real estate have found it more difficult in recent years to sell their assets at the times and at the prices they desire.
    (2008 10-K at 27 (emphasis added).)
    KH Funding’s liabilities of $45,229,488 included $38,828,923 in investor notes (the Series 3 and 4 Notes) and another $6,133,480 in Collateralized Notes and Loans Sold with Recourse. (2008 10-K at 23.) Given the huge size of KH Funding’s debt obligations to Holders, its 2008 10-K explicitly warned that acceleration of the interest and principal likely would lead to liquidation of its devalued assets and leave it unable to satisfy its obligations to Holders.
    Because the sum of principal and accrued interest due on our outstanding investor notes exceeds our cash balances and other sources of immediate liquidity, we would likely have to liquidate our assets if we were to default under the Indenture and the Indenture Trustee or our holders were to accelerate our outstanding notes. If we were forced to liquidate, our assets would be used first to satisfy the Series 3 investor (sic) and any other senior debt, and then to satisfy the Series 4 investor notes, our short-term borrowings, and the obligations owed to our other creditors. Any assets remaining after such distributions would be distributed pro rata to the holders of our common stock.
    It should be noted that a majority of our assets are loans, many of which are secured by real estate. The national and local real estate markets have experienced a significant downturn in recent months. Accordingly, if we are forced to liquidate, there can be no guarantee that we would be able to sell our assets at the times or the prices that we desire. In addition, we had no available-for-sale investment securities at December 31, 2008 or December 31, 2007, compared to available-for-sale securities of $581,149 at December 31, 2006. Because of the foregoing, holders of our securities could lose all or a part of their investments if we were to become insolvent or forced to liquidate and our assets at that time were not sufficient to satisfy our obligations to those holders.
    (2008 10-K at 10 (emphasis added).) That same 2008 10-K warned that KH Funding’s auditors’ opinion contained a “going concern” qualification, meaning that its auditors expressed “substantial doubt” that KH Funding could continue in business. (2008 10-K at 9; see also id. at 31, 38-39.)
    On December 21, 2009, Wells Fargo notified KH Funding of its intent to give notice to Holders of an Event of Default; it gave notice to Holders on January 7, 2010. (Compl. ¶ 27.) On February 5, 2010, Wells Fargo gave written notice of acceleration of the Notes pursuant to Section 6.2 of the Indenture. (Id. ¶ 30.) Eleven months later, on December 3, 2010, KH Funding filed a Chapter 11 bankruptcy petition. (Compl. ¶52.) KH Funding’s bankruptcy proceedings are ongoing. In re KH Funding Company, Case No. 10-37371 (U.S. Brtcy. Ct. D. Md.).
    C. Wells Fargo’s rights and duties are defined by the Indenture and federal law.
    As Indenture Trustee, Wells Fargo had certain rights and duties defined by the Indenture, subject to conditions and limitations discussed below. It was not a guarantor or insurer of KH Funding’s obligations. Nothing in the Indenture or the governing law imposes upon Wells Fargo responsibility for Plaintiff’s investment decisions or his own negligence.
    1. Defaults and Events of Default are curable and waivable.
    A Default is “any event that is or with the passage of time or the giving of notice or both would be an Event of Default.” (Indenture § 1.1.) For purposes of the allegations of the Amended Complaint, an Event of Default is a failure by KH Funding to pay principal, interest, or a required redemption, when due and payable, that “continues for a period of 30 days.” (Indenture § 6.1(1), (2).) A continuing Event of Default, therefore, is a Default that remains continuing beyond thirty days.
    By definition, Defaults and Events of Default that have been cured or waived are not “continuing.” Both the Amended Complaint and the documents from which it draws its allegations indicate that Defaults and Events of Default routinely were being cured and waived by Holders. (See Compl. ¶¶ 27-28.) The 2008 10-K filed in April 2009, for example, states that, of 48 redemption requests more than 30 days past due as of October 10, 2008, all but three were paid on that date, and the remaining three Holders agreed to extend the dates set for the redemption of their notes. (2008 10-K at 10.) The second quarter 10-Q filed by KH Funding on August 13, 2009, similarly stated (at p. 21):
    As of June 30, 2009, we were subject to redemption requests with respect to approximately $0.35 million of outstanding investor notes that are within the 30-day grace period for payment. Further, we were subject to redemption requests with respect to approximately $3.87 million of outstanding investor notes that are beyond the 30-day grace period for payment. For those notes that are beyond the grace period, we have either obtained waivers from each of the note holders or are working to obtain waivers.
    According to the January 7, 2010 8-K (at 2), between December 23, 2009 and January 7, 2010, KH Funding obtained waivers that reduced the payment obligations for which it was in Default from $4.53 million (11.04% of the total) to $1.18 million (2.86% of the total).
    Although the Amended Complaint alleges that Defaults and Events of Default occurred and continued, it fails to identify any specific Default or Events of Default and, critically, when they occurred and the periods of time during which they were continuing.
    2. During a continuing Event of Default, Wells Fargo’s duty was limited to the prudent exercise of the specific rights and powers granted to it by the Indenture.
    Wells Fargo’s duties after an Event of Default had occurred and was continuing were governed by Section 7.1(a) of the Indenture:
    If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
    (Indenture § 7.1(a).) Thus, by the Indenture’s express terms, any claim that Wells Fargo breached its contractual duty requires Plaintiff to (1) identify an Event of Default that was continuing, i.e., had not been waived or cured; (2) identify a right or power vested in Wells Fargo as Indenture Trustee; and (3) plead facts plausibly showing that Wells Fargo failed to use the same degree of care and skill that a prudent man would have used in exercising that right or power during the continuation of the Event of Default.
    3. The Indenture strictly defines what constitutes notice to Wells Fargo.
    The Amended Complaint alleges that Wells Fargo had actual notice of unspecified Defaults and Events of Default because KH Funding gave it notice, and also because they were disclosed in KH Funding’s SEC filings, which the Indenture required KH Funding to submit to Wells Fargo. (Compl. ¶¶ 22-26, 38.)
    The Indenture strictly defines notice to Wells Fargo: “The Trustee shall not be deemed to have notice of an Event of Default for any purpose under this Indenture unless notified of such Event of Default by the Company [i.e., KH Funding], the Paying Agent (if other than the Company) or a Holder of the Securities.” (Indenture § 7.2(f).)
    It similarly confines “knowledge” of the Indenture Trustee and limits any duty to investigate:
    The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented to it by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall have no duty to inquire as to the performance of the Issuers’ (sic) covenants in Article 4 [including payment]. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except any Default or Event of Default of which a Responsible Officer of the Trustee shall have received written notification or obtained actual knowledge.
    (Indenture § 7.2(a) (emphasis added).)
    The Indenture also expressly provides that Wells Fargo has no duty to review KH Funding’s SEC filings to determine its compliance with the Indenture: “Notwithstanding anything contrary (sic) herein the Trustee shall have no duty to review such documents [KH Funding’s SEC filings] for purposes of determining compliance with any provisions of this Indenture.” (Indenture ¶ 4.3.)
    4. The Indenture limits and qualifies Wells Fargo’s obligations to provide notice of Defaults or Events of Default to Holders.
    Plaintiff incorrectly alleges that “Section 7.5 of the Indenture required Wells Fargo to provide Holders of the Series 3 and Series 4 Notes ‘notice of the Default or Event of Default within 90 days after it occurs.”’ (Compl. ¶ 15 (purporting to quote § 7.5 of the Indenture).) In its entirety, Section 7.5 of the Indenture actually states:
    If a Default or Event of Default occurs and is continuing, and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to holders a notice of the Default or Event of Default within 90 days after it occurs. At least 5 Business Days prior to mailing of any notice to Holders under this Section 7.5, the Trustee shall provide the Company with notice of its intent to mail such notice.
    (Emphasis added.) Wells Fargo thus had no duty to give notice of a Default or Event of Default that was waived or cured within ninety days of its occurrence. To plead a breach of this duty, rather, Plaintiff must plead facts showing that (1) a Default or Event of Default occurred, (2) it was known to a Responsible Officer of Wells Fargo, and (3) it continued for ninety days before Wells Fargo gave notice.
    5. Holders shared remedial powers during an Event of Default.
    Paragraph 14 of the Amended Complaint cites the Trustee’s power after an Event of Default (but not a mere Default) to accelerate unpaid principal and interest, but omits other key language, which provides that both the Trustee and the Holders have the power to accelerate interest and principal:
    If an Event of Default… occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least twenty-five percent (25%) in principal amount of the then outstanding Securities by written notice to the Company and the Trustee, may declare the unpaid principal of and any accrued interest on all the Securities to be due and payable.
    (Indenture § 6.2 (emphasis added).)2 Moreover, this section conferred a discretionary power, not a mandatory one, by providing that the Indenture Trustee (or Holders) “may” accelerate. The Indenture did not require either Wells Fargo or Holders to accelerate.
    6. Wells Fargo is not liable for good-faith acts or omissions.
    Section 7.1(c)(2) of the Indenture shields Wells Fargo from liability for errors made in good faith:
    The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining pertinent facts.
    (Indenture § 7.1(c) (emphasis added).) This provision incorporates Section 315(d)(2) of the Trust Indenture Act, which provides, as to every trust indenture:
    such indenture shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to contain provisions protecting the indenture trustee from liability for any error of judgment made in good faith by a responsible officer or officers of such trustee, unless it shall be proved that such trustee was negligent in ascertaining the pertinent facts.
    15 U.S.C. § 77ooo(d)(2). Section 7.1(d) of the Indenture provides that “every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.” Section 7.2(d) of the Indenture reinforces this protection of the Trustee from liability, providing: “The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within the rights or powers conferred upon it by this Indenture.”
    By the express terms of the Indenture and as a matter of federal law, therefore, Wells Fargo can be held liable only if Plaintiff pleads and proves that it failed to act in good faith. Under the heading “Wells Fargo’s Conduct Was Not the Result of Good Faith Errors of Judgment,” Plaintiff recites that Wells Fargo did not act in good faith but pleads no facts remotely supporting the conclusory allegation. (Compl. ¶ 61.)
    ARGUMENT
    A Complaint will be dismissed if it does not contain facts sufficient to state a plausible claim for relief. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Twombly plausibility standard requires that a Complaint contain “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Id. at 555; Iqbal, 129 S. Ct. at 1949 (“Nor does a Complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement” (internal quotations omitted)); Painter’s Mill Grille, LLC v. Brown, No. RDB-11-1607, 2012 WL 576640, *4 (D. Md. Feb. 21, 2012) (“To survive a Rule 12(b)(6) motion, the legal framework of the Amended Complaint must be supported by factual allegations that ‘raise a right to relief above the speculative level,’ which requires more than conclusory allegations and recital of the claims’ elements). Moreover, the facts must be more than “merely consistent with” liability. Iqbal, 129 S. Ct. at 1950.
    The Court should disregard conclusory allegations, including legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555; see also Iqbal, 129 S. Ct. at 1950 (noting that “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.”); Ramos v. Wells Fargo Home Mtg., No. 11-cv-03130, 2012 WL 261308, *2 (D. Md. Jan. 26, 2012) (“The Court should not, however, accept unsupported legal allegations, legal conclusion[s] couched as…factual allegation[s], or conclusory factual allegations devoid of any reference to actual events.” (internal citations and quotations omitted)).
    To state a claim for breach of contract, Plaintiff must allege facts supporting each claim element, including a breach and resulting damage. Decohen v. Abbasi, LLC, No. WDQ-10-3157, 2011 WL 3438625, *5 (D. Md. July 26, 2011) (applying Twombly, finding that plaintiff failed sufficiently to allege facts showing a contractual obligation and breach thereof); Barry v. EMC Mtg., No. DKC 10-3120, 2011 WL 2669436, *7 (D. Md. July 6, 2011) (“To plead a breach of contract, a Complaint must plead the existence of a contractual obligation owed by the defendant to the plaintiff and a material breach of that obligation.”). Here, because Plaintiff seeks to hold Wells Fargo liable for breach of the Indenture’s notice and acceleration provisions, Plaintiff must first establish that there was an Event of Default, which continued for ninety days, of which Wells Fargo had notice. (Indenture §§7.1, 7.2(a), (f.) Then, for each of two claimed breaches, Plaintiff must establish that an actual breach occurred, that Wells Fargo did not act in good faith, and Plaintiff was damaged as a result. (Id. §§ 7.1(c), 7.1 (d), 7.1(d).)
    Plaintiff’s Amended Complaint does not cure the deficiencies of the Original Complaint in pleading these elements.
    A. Plaintiff fails to state a claim for delayed acceleration.
    The Original Complaint failed to identify the rights or powers that Wells Fargo allegedly failed prudently to exercise; the Amended Complaint resolves that mystery by alleging that Wells Fargo did not exercise its power to accelerate quickly enough. (Compl.¶ 61.) But it still fails to plead facts plausibly supporting a claim on that theory.3 First, he fails to allege facts demonstrating that Wells Fargo had notice of a continuing Event of Default. Second, he pleads no facts supporting his conlusion that Wells Fargo failed to act prudently. Third, he pleads no facts supporting his conclusion that it acted other than in good faith. And, fourth, he pleads no plausible basis for a belief that he was damaged.
    1. Plaintiff fails to plead facts showing that Wells Fargo had of notice of a continuing Event of Default.
    A predicate to Plaintiffs acceleration theory is not only that an Event of Default (not a mere Default) had occurred but that it was continuing at the time Plaintiff claims Wells Fargo should have accelerated, because only a continuing Event of Default implicates the “prudent man” standard in Section 7.1(a). Plaintiffs Amended Complaint does not say when this occurred or even clearly state that it did occur. In fact, it does not even say when Wells Fargo should have accelerated in the first place. It instead generalizes that a series of Defaults and Events of Default occurred, as disclosed in KH Funding’s SEC filings, which periodically reported that KH Funding was in default in meeting certain unidentified payment obligations to Holders. (Compl. ¶¶ 23-26.)
    Those generalizations cannot substitute for factual allegations identifying the Event of Default and its continuation that Plaintiff alleges triggered Wells Fargo’s duty under Section 7.1(a). While the Amended Complaint broadly alleges that Events of Default occurred, the very SEC filings upon which Plaintiff relies state that all of the reported Defaults were being waived or cured, or that KH Funding was seeking waivers. (2008 10-K at 10; May 20, 2009 10-Q at 29; August 13, 2009 10-Q at 18, November 16, 2009 10-Q at 20.) It is Plaintiffs obligation to plead the specific facts that would establish, despite these facts, an Event of Default that went unwaived and uncured, and the time period during which it thus continued. The Amended Complaint simply does not satisfy that obligation.
    Given Plaintiffs failure to identify a continuing Event of Default, it is no surprise that his Amended Complaint also lacks fact allegations showing that Wells Fargo had notice of one, as notice to Wells Fargo is defined in the Indenture. Plaintiff broadly alleges that Wells Fargo had actual notice of Defaults and Events of Default because KH Funding reported Defaults to it, and because Wells Fargo received copies of SEC filings. (Compl. ¶¶23-26.) But Plaintiff does not allege the date when Wells Fargo received notice of an Event of Default, the manner of the notice, or who received it. He relies instead on insufficient, broad-brush generalizations.
    2. Plaintiff pleads no facts plausibly showing that Wells Fargo failed to act as a prudent man would have.
    The Amended Complaint pleads the conclusion that Wells Fargo failed to exercise its acceleration power with the skill and care of a prudent man by not accelerating sooner, but it pleads no facts plausibly supporting that conclusion. It does not even say when Wells Fargo should have accelerated, much less why prudence required it to act at that time. Plaintiffs claim as pleaded is no more than hindsight second-guessing, without a shred of factual support or substance.
    Such vague allegations do not state a claim for breach of contract. See Alexis v. Albertini & Darby, No. WDQ-11-0113, 2011 WL 4914965, *2 (D. Md. Oct. 13, 2011) (plaintiff failed to state a claim for breach of contract where allegations were merely legal conclusions, which, though helpful for the Amended Complaint’s framework, are insufficient to survive a motion to dismiss); Decohen, 2011 WL 3438625 at *5 (conduct alleged in Amended Complaint did not qualify as a material breach of contract); Barry, 2011 WL 2669436 at *7 (finding plaintiffs allegations regarding breach did not meet the Twombly standard, reasoning that the plaintiff failed to identify how any obligations under the trust at issue were breached).
    If anything, the facts alleged in the Amended Complaint indicate that Wells Fargo acted prudently in the timing of accelerating the debt. The Amended Complaint alleges Defaults in payments to the Holders. Moreover, the same facts that Plaintiff alleges were available to Wells Fargo in KH Funding’s SEC filings were equally available to the Holders and were undoubtedly known to many of them. Although the Holders of a mere 25% of the Notes had the same power as Wells Fargo under the Indenture to accelerate, they never did so. To the contrary, according to the very filings on which the Amended Complaint relies for its facts, large percentages of Holders waived KH Funding’s defaults. Because the facts alleged show that a large percentage of Holders thought it prudent to waive Defaults and not press KH Funding for payment or accelerate the principal and interest on their Notes, Plaintiffs claim that Wells Fargo failed to act prudently by not accelerating more quickly simply is not plausible.
    The allegations in the Amended Complaint, in short, provide no basis for a plausible inference that Wells Fargo acted imprudently in not accelerating the debt at some unspecified point in time earlier than when it did so. The Amended Complaint at best alleges hindsight speculation that faster acceleration might have produced a better result for him, with no factual basis for believing that Wells Fargo acted imprudently at the time.
    3. Plaintiff does not plead facts demonstrating that Wells Fargo failed to act in good faith.
    Section 315(d)(2) of the Trust Indenture Act, 15 U.S.C. § 77000(d)(2), protects Wells Fargo from liability if it acted in good faith, absent an express exclusion of that protection. The Indenture did not exclude this protection but in fact incorporated it. (Indenture ¶ 7.1(c).)
    Courts have not hesitated to dismiss actions by security holders against indenture trustees when they failed to allege facts demonstrating a lack of good faith. See, e.g., Gruss Global Investors Master Fund, Ltd. v. Deutsche Bank Trust Co. Americas, Case No. 09-civ-9723 (AKH) (S.D.N.Y. Nov. 24, 2010) (unpublished) (granting dismissal of action for failure “to allege facts supporting a plausible claim that Defendant acted in bad faith”); see also Barry, 2011 WL 2669436 at *7 (finding plaintiffs allegations regarding breach of trust agreement did not meet the Twombly standard, reasoning that “[t]he vague assertion that EMC’s conduct ‘was in bad faith’ is not sufficient” to establish breach of the agreement); cf. Decohen, 2011 WL 3438625 at *5 n.10 (D. Md. July 26, 2011) (plaintiff did not sufficiently allege bad faith such that contract could be ignored in favor of unjust enrichment and restitution claims); Painter’s Mill Grille, 2012 WL 576640 at *4 (finding plaintiff failed to sufficiently plead that conduct was unlawful, instead merely alleging the conclusion that it was).
    To plead lack of good faith, Plaintiff must plead facts showing that Wells Fargo acted dishonestly, with malice or ill will, or with a design to defraud or seek unconscionable advantage. See Bond v. Messerman, 873 A.2d 417, 432 (Md. Ct. Sp. App. 2005) (“‘Good faith’ is an intangible and abstract quality that encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage.”); cf. Rite Aid Corp. v. Hagley, 824 A.2d 107, 116 (Md. 2003) (“‘Bad faith’ is the opposite of good faith; it is not simply bad judgment or negligence, but it implies a dishonest purpose or some moral obliquity and a conscious doing of wrong.” (internal quotation omitted)).
    Nothing in the Amended Complaint even remotely supports such an inference. Instead, Plaintiff merely concludes, “[o]n information and belief…, Wells Fargo’s conduct complained of herein was not the result of a good faith error of judgment….” (Compl. ¶ 56.) That bare legal conclusion does not satisfy the Twombly standard and is to be ignored. Gruss Global Investors Master Fund, Ltd., Case No. 09-civ-9723; Barry, 2011 WL 2669436 at *7.
    Plaintiff attempts to invoke the exception to the good-faith protection by alleging that Wells Fargo was negligent “in ascertaining or understanding pertinent facts related to the repeated and continuing events of default, KH Funding’s deteriorating financing condition and KH Funding’s longstanding failure to maintain adequate internal controls….” (Compl. ¶ 56.) This allegation fails for two reasons.
    First, plaintiff appears mistakenly to assume that the exception for a trustee that is “negligent in ascertaining pertinent facts” itself creates an affirmative duty to ascertain facts. It does not. That language in Section 315(d)(2) of the TIA and Section 7.1(c)(2) of the Indenture is only an exception to the good-faith immunity clause that would apply if the plaintiff had a negligence claim for failure to investigate. It does not create a duty to investigate or ascertain facts; indeed, Section7.2(a) of the Indenture expressly provides that Wells Fargo had no duty to investigate KH Funding’s compliance with its covenants or any fact or matter stated in a document that it believed to be genuine and signed or presented by a proper person.
    Second, the allegations are conclusory and unsupported by any factual allegations. If Plaintiff seeks to invoke this exception to the good-faith protection, he must identify the “pertinent facts” that Wells Fargo negligently failed to ascertain. The Amended Complaint identifies no such facts. It merely refers to “pertinent facts related to” KH Funding’s defaults and financial condition. (Compl. ¶ 56.) The Amended Complaint in fact alleges that Wells Fargo knew the facts regarding KH Funding’s defaults and financial condition, because Wells Fargo received copies of KH Funding’s SEC filings and had knowledge of their contents. Those filings describe KH Funding’s precarious financial condition, its defaults, and issues with its internal controls in great detail.
    4. Plaintiff does not plausibly allege damages from delayed acceleration.
    The Amended Complaint also fails to plead facts plausibly establishing damages. It alleges that, “[h]ad Wells Fargo acted timely as required by its obligations under the Indenture, less of KH Funding’s assets would have been lost and the Plaintiff would have recovered more of the amounts owed under the Notes issued to him.” (Compl. ¶ 62.) The facts do not just fail to support that conclusion but make it entirely implausible.
    A significant flaw in Plaintiff’s theory is that the Series 4 Notes he holds are junior debt, subordinate to the Series 3 Notes and other Senior Debt. Moreover, Series 4 was much smaller than Series 3; as of KH Funding’s bankruptcy filing, Series 3 principal and interest totaled $38,150,000, and Series 4 only $1,321,00. (Compl. ¶ 10.) Not until all of that senior debt was paid would Plaintiff have received anything at all upon acceleration.
    There was no prospect of that happening in 2009. By the end of 2008, even the book value of KH Funding’s assets had fallen below its liabilities. That book value, however, vastly overstated the true value of the assets, because nearly all of the assets were mortgage loans and real estate that had been devalued by the market collapse. (2008 10-K at 23.) The 2008 10-K explicitly and repeatedly warned that, if the Notes were declared due and payable due to an Event of Default, KH Funding would have to liquidate its assets—during the depths of the market crisis—and that investors could as a result lose “all” of their money. (See 2008 10-K at 8, 9.) In fact, it warned that the impaired marketability of its assets might not even allow it to cover individual Holders’ requests for redemption by selling the assets it normally held to meet that demand. (2008 10-K at 27.) And it warned that Series 4 Holders in particular were at risk of losing their investment in the event of insolvency, which would force liquidation. (2008 10-K at 18.)
    Those are the financial facts outlined in the Amended Complaint and its source documents. They do not support a plausible inference that acceleration in April 2009 or at any other point before February 2010 would have resulted in Plaintiffs recovery of any principal or interest at all. All that the facts alleged in the Amended Complaint show is that Plaintiff lost his investment in the market collapse of 2008, and that acceleration in 2009 would have made no difference.
    B. Plaintiff fails to state a claim for failure to give timely notice of a continuing Default or Event of Default.
    Plaintiffs notice allegations fail to state a claim for three reasons. First, he simply does not allege that Wells Fargo failed to give him notice as required by Section 7.5 of the Indenture. Second, he fails to plead facts showing that Wells Fargo did not act in good faith, even if it did err by giving untimely notice. Third, he pleads no plausible factual basis for damages.
    1. The Amended Complaint lacks facts showing that Wells Fargo failed to comply with Section 7.5’s notice requirement.
    The Original Complaint erroneously cited Section 10.13(b) of the Indenture and alleged that Wells Fargo failed to comply with it by giving Plaintiff immediate notice of an Event of Default. As Wells Fargo pointed out in its first motion to dismiss, however, that section applies only to holders of Senior Debt and not to Series 4 Holders like Plaintiff.
    In response, Plaintiff has stricken the references to Section 10.13(b) and instead alleges that Wells Fargo breached Section 7.5’s notice requirement, which does apply to Series 4 Holders. (Compl. ¶15.) But Plaintiffs notice allegations otherwise remain unchanged, even though Section 7.5’s terms are different from those of Section 10.13(b). Count I thus alleges that Wells Fargo breached the Section 7.5’s notice requirement “by failing to provide Holders with notice of the Events of Defaults upon Wells Fargo’s obtaining knowledge of those Events of Default.” (Compl. ¶ 62.) That allegation does not state a claim, because Section 7.5 of the Indenture required Wells Fargo to give notice of an Event of Default not “upon receiving knowledge” but “within 90 days after it occurs,” if it is known to a Responsible Officer, and if it is continuing. Count I does not allege that Wells Fargo failed to give notice of an Event of Default that was continuing and within 90 days of its occurrence. It merely faults Wells Fargo for not giving notice “upon” an Event of Default at some unspecified time before January 7, 2010, and concludes that this was a breach of Section 7.5. (Id. ¶¶ 29, 62.) Because Section 7.5 does not require such notice, Plaintiff fails to state a claim.
    2. Plaintiff pleads no facts plausibly showing that Wells Fargo failed to act in good faith.
    As with his claim that Wells Fargo did not accelerate quickly enough, Plaintiff pleads no facts indicating that Wells Fargo acted other than in good faith in discharging its notice duty. He therefore pleads no factual basis to hold Wells Fargo liable for failure to give timely notice.
    3. Plaintiff’s theory of notice damages is factually unsupported.
    Plaintiff alleges that, if Wells Fargo had given notice of an Event of Default earlier than January 7, 2010, he “would have sought the immediate redemption of the Notes issued to him and would have recovered more of the amounts owed to him under the Notes.” (Compl. ¶ 62.) But the facts alleged in the Amended Complaint again tell a very different story. His theory of damage is highly implausible if not impossible.
    First, he does not allege that he was unaware of Defaults or Events of Default by KH Funding. The Amended Complaint alleges at length that these facts were regularly disclosed in the KH Funding SEC filings on which it is based. Plaintiff had access to that information, and, as a substantial investor, he presumably did know that KH Funding had reported defaults and financial difficulties. In any event, he fails to allege that he was unaware of them.
    Second, he fails to allege that he sought redemption after Wells Fargo gave notice of an Event of Default on January 7, 2010. In a footnote, the Amended Complaint attempts to excuse this failure on the ground that he could not seek redemption after Wells Fargo gave notice of acceleration a month later, on February 5, 2010 (Compl. ¶ 49 n. 1), but nothing stopped him from doing so before acceleration was declared. The reasonable inference from the fact that Plaintiff did not seek redemption during the month after he received notice of an Event of Default is that he also would not have done so if he had received it a day, a week, or a month earlier. His self-serving assertion that he would have acted immediately upon an earlier notice is not a reasonable inference from the facts that are alleged.
    Third, Plaintiff fails to allege any facts showing that he would have been paid if he had requested redemption. In this, his theory of damage suffers a flaw similar to his acceleration theory: the premise of the Amended Complaint is that KH Funding was unable to meet its payment obligations. According to the Complaint itself ( 23) and KH Funding’s 2008 10-K (at 10), KH Funding was already $4.61 million past due in redemptions, of which $1.75 million were 30 days past due, as of the end of 2008. In May 2010, after obtaining waivers from some Holders, KH Funding was thirty days past due on $1.5 million in redemption requests, had another $.9 million in requests pending (within thirty days), and was in default on $1.79 million owed on matured Notes. (May 20, 2009 10-Q at p. 29.) And, according to the Amended Complaint itself, KH Funding remained delinquent in its payment obligations until default was declared, the debt was accelerated, and it ultimately declared bankruptcy. Not surprisingly, then, Plaintiff does not identify any point in time when KH Funding could have honored his theoretical redemption request, nor does he allege any facts plausibly supporting that theory. The only plausible inference is that he would only have joined the queue of the unpaid and been asked to waive the default.
    CONCLUSION
    For the foregoing reasons, the Court should dismiss Plaintiff’s action against Wells Fargo for failure to state a claim upon which relief can be granted.
    C. Dennis Southard IV (Bar No. 15010)
    THOMPSON HINE LLP
    1919 M Street, N.W., Suite 700
    Washington, D.C. 20036-1600
    Tel: (202) 331-8800
    Fax: (202) 331-8330
    Dennis.Southard@ThompsonHine.com
    Brian Troyer (admitted pro hac vice)
    James DeFeo (admitted pro hac vice)
    THOMPSON HINE LLP
    3900 Key Center
    127 Public Square
    Cleveland, OH 44114-1291
    Tel: (216) 566-5500
    Fax: (216) 566-5800
    Brian.Troyer@ThompsonHine.com
    Jim.Defeo@ThompsonHine.com
    Jennifer M. Mountcastle (admitted pro hac vice)
    Stephanie M. Chmiel (admitted pro hac vice)
    THOMPSON HINE LLP
    41 South High Street, Suite 1700
    Columbus, OH 43215-6101
    Tel: (614) 469-3200
    Fax: (614) 469-3361
    Jennifer.Mountcastle@ThompsonHine.com
    Stephanie.Chmiel@ThompsonHine.com
    Attorneys for Defendant Wells Fargo Bank, N.A.
    Footnotes
    1
    For the Court’s reference, complete and accurate copies of the Indenture, the Prospectus, KH Funding’s bankruptcy petition, and KH Funding’s SEC filings referenced in the Amended Complaint are annexed as Exhibits 1-19. The Court may properly consider and rely upon them in ruling on Wells Fargo’s Motion, because Plaintiffs claim is premised on alleged breach of the Indenture, and he references and quotes from the attached documents throughout the Amended Complaint. See, e.g., Beasley v. Arcapita Inc., No. 09-1125, 2011 WL 2489950, *1 (4th Cir. June 23, 2011) (reasoning that documents attached to a motion to dismiss may be considered where “integral to and explicitly relied on in the Amended Complaint” and if the documents’ authenticity is not challenged by the plaintiff (internal quotation omitted)); Porter v. Greenpoint Mtg. Funding, Inc., No. 11-1251, 2011 WL 6837703, *1 n.1 (D. Md. Dec. 28, 2011) (determining that mortgage documents relied upon in framing the Amended Complaint, but not attached thereto, could be considered in ruling on motion to dismiss); Horlick v. Capital Women’s Care, LLC, F. Supp. 2d -, 2011 WL 7144125, *4 (D. Md. Nov. 14, 2011) (district court may consider documents incorporated into the Amended Complaint if integral and authentic).
    2
    The Amended Complaint consistently omits references to Holders’ acceleration rights. It alleges, for example, that KH Funding’s 2008 Form 10-K stated that KH Funding had “informed Wells Fargo of such nonpayment and that KH Funding had received no indication that Wells Fargo would assert acceleration of the outstanding Notes” (Compl. ¶ 23), omitting the fact that the 10-K in reality stated that KH Funding had “not received notice from either the Trustee or the holders of 25% in principal amount of the outstanding investor notes that they intended to assert a default or accelerate….” (2008 Form 10-K at 10 (emphasis added).)
    3
    To the extent that Plaintiff indicates that Wells Fargo had a duty to investigate KH Funding’s financial affairs (Compl. ¶ 48), he is attempting to impose on Wells Fargo duties not imposed on it by either the Indenture or the law because, even after an Event of Default, an indenture trustee’s duties are limited to those set forth in the subject indenture. See Beck v. Manufacturers Hanover Trust Co., 632 N.Y.S.2d 520, 528 (1st Dep’t 1995) (“The trustee is not required to act beyond his contractually conferred rights and powers, but must, as prudence dictates, exercise those singularly conferred prerogatives in order to secure the basic purpose of any trust indenture, the repayment of the underlying obligation.”); see also Trafalgar Power, Inc. v. U.S. Bank Nat‘l Ass‘n, No. 5:05-cv-1533, 2012 U.S. Dist. Lexis 21275, *22-24 (N.D.N.Y. Feb. 21, 2012) (finding that the trustee’s
    duties were limited to those within the indenture, including the post-default prudent man standard). Moreover, Plaintiff has not identified any facts that Wells Fargo failed to investigate or determine. His allegation that Wells Fargo failed to investigate is conlusory. Indeed, the Amended Complaint affirmatively alleges that Wells Fargo was aware of KH Funding’s Defaults and its precarious financial condition.

  174. @ johngault

    Motion of Wells Fargo Bank, N.A., to Dismiss for Failure to State a Claim

    2012 WL 6655591 (D.Md.) (Trial Motion, Memorandum and Affidavit)
    United States District Court, D. Maryland.
    (Baltimore Division)
    Kevin WILLES, Plaintiff,
    v.
    WELLS FARGO BANK, N.A., et al., Defendants.
    No. 12CV00137.
    March 23, 2012.
    Motion of Wells Fargo Bank, N.A., to Dismiss for Failure to State a Claim
    C. Dennis Southard IV (D. Md. Bar No. 15010), dennis.southard @thompsonhine.com, Thompson Hine LLP, 1919 M Street NW, Suite 700, Washington, D.C. 20036-1600, Tel: (202) 263-4169, Fax: (202) 331-8330, Attorneys for Defendant, Wells Fargo Bank, N.A.
    Brian A. Troyer (Ohio Bar No. 0059671), brian. troyer@thompsonhine.com, James L. Defeo (Ohio Bar No. 0079222), james.defeo@thompsonhine.com, 127 Public Square, 3900 Key Center, Cleveland, OH 44114-1291, Tel: (216) 566-5500, Fax: (216) 566-5800, Of Counsel for Defendant, Wells Fargo Bank, N.A.
    TABLE OF CONTENTS
    PRELIMINARY STATEMENT 1
    WHAT THE COMPLAINT ALLEGES AND FAILS TO ALLEGE 2
    1. KH Funding suffers losses during the economic collapse and enters bankrupty 2
    2. The Indenture contains key terms omitted from or misstated in Plaintiffs Complaint 7
    a. During a continuing Event of Default Wells Fargo’s duty was limited to prudent exercise of the rights and powers granted by the Indenture 7
    b. Defaults and Events of Default waivable and currable 7
    c. Wells Fargo’s notice obligations were limited and qualified 8
    d. The Indenture strictly defines when the Indenture Trustees has notice of defaults 9
    e. Holders had redemption rights and shared remedial powers in the Event of Default 10
    f. Wells Fargo is not liable for good-faith acts or omissions 11
    3. Plaintiffs allegations of liability and damages are vague and unsupported by facts 12
    ARGUMENT 16
    1. Plaintiff fails to plead facts plausibly demonstrating a continuing Event of Default 17
    2. Plaintiff fails to plead facts plausibly demonstrating that Wells Fargo had notice of a continuing Event of Default 17
    3. Plaintiff fails to plead facts plausibly demonstrating a breach of the Indenture. 19
    a. The Complaint fails to plead an actionable failure to exercise rights and powers 19
    b. The Complaint fails to plead a breach of Wells Fargo’s notice duties 20
    4. Plaintiff fails to plead facts plausibly demonstrating that Wells Fargo did not act in good faith 20
    5. Plaintiff fails to plead facts plausibly demonstrating damages 23
    CONCLUSION 24
    Pursuant to Rule 12(b)(6) of the Federal Rule of Civil Procedure, Wells Fargo Bank, N.A., (“Wells Fargo”) moves to dismiss this action for failure to state a claim upon which relief can be granted. As demonstrated in the accompanying memorandum in support of this motion, Plaintiffs Complaint pleads several pages of facts but fails to plead facts supporting his sole claim for breach of contract against Wells Fargo, or even to identify a specific theory of liability for breach of contract. The Complaint in particular fails to allege facts plausibly showing that Wells Fargo breached the trust indenture on which Plaintiffs claim is based, fails to allege facts demonstrating that Wells Fargo failed to act in good faith, and fails to allege facts showing that he was damaged as a result. This action should accordingly be dismissed.
    CERTIFICATE OF SERVICE
    The undersigned hereby certifies that a copy of the foregoing Motion to Dismiss was served upon the following persons, via electronic Court filing, this day of March, 2012:
    A. Donald C. Discepolo, Esq.
    Discepolo LLP
    111 S. Calvert Street, Ste. 1950
    Baltimore, MD 21202
    Attorney for Plaintiff
    C. Dennis Southard IV
    Attorney for Defendant
    Wells Fargo Bank, N.A.
    MEMORANDUM IN SUPPORT OF MOTION OF WELLS FARGO BANK, N.A., TO DISMISS FOR FAILURE TO STATE A CLAIM
    C. Dennis Southard IV (D. Md. Bar No. 15010 )
    dennis.southard@thompsonhine.com
    THOMPSON HINE LLP
    1919 M Street NW
    Suite 700
    Washington, D.C. 20036-1600
    Tel: (202) 263-4169
    FAX: (202) 331-8330
    Brian A. Troyer (Ohio Bar No. 0059671)
    Brian. Troyer@thompsonhine.com
    James L. DeFeo (Ohio Bar No. 0079222)
    lames.DeFeo@thompsonhine.com
    127 Public Square
    3900 Key Center
    Cleveland, OH 44114-1291
    Tel: (216) 566-5500
    Fax: (216) 566-5800
    PRELIMINARY STATEMENT
    Plaintiff Kevin Willes is a holder of unsecured, subordinated debt securities issued by KH Funding Company (“KH Funding”), a small mortgage company that failed and ultimately entered bankruptcy in 2010 as a result of the collapse of the real estate and financial markets. He now seeks to hold Wells Fargo Bank, N.A., (“Wells Fargo”) responsible for his bad investment in KH Funding, purportedly for breaching unspecified duties as an indenture trustee but in reality as if Wells Fargo were an insurer or guarantor of KH Funding’s obligations. His Complaint recites many facts about KH Funding and its financial and business demise, but it fails to state a claim for breach of contract against Wells Fargo.
    The Complaint is a study in opacity and evasion that fails in at least three significant ways.
    It first fails to identify any actual breach of a contractual duty by Wells Fargo, let alone facts that plausibly substantiate the charge. Instead, the Complaint makes only equivocal criticisms that Wells Fargo did not give timely notice of defaults by KH Funding and failed to exercise unspecified “rights and powers” as a “prudent man” would have. The Complaint neither claims that the alleged failure to give timely notice was a breach nor pleads the predicate facts supporting such a claim. The Complaint also neither identifies the rights and powers that Wells Fargo allegedly failed to exercise nor pleads the facts showing how Wells Fargo failed prudently to exercise them.
    The Complaint fails even more profoundly to plead any facts showing that Wells Fargo failed to act in good faith. This failure is critical because, under the express terms of the subject indenture, and as a matter of federal law, Wells Fargo cannot be held liable absent proof that it did more than make a mistake in good faith. The Complaint contains only a bare conclusion that Wells Fargo did not act in good faith.
    And the Complaint pleads no plausible factual basis for Plaintiffs claim that he was damaged by Wells Fargo’s unspecified misconduct. Instead, the facts alleged show that KH Funding never had assets sufficient to cover its debts to holders of its investment notes. In fact, KH Funding’s Form 10-K for 2008 explicitly warned that holders of its investment notes—particularly the series held by Plaintiff—could lose all of their investment if the debt were accelerated because of defaults. Rather than demonstrate that he was damaged by Wells Fargo, Plaintiffs allegations show only that he lost his investment because he purchased unsecured debt from a mortgage company that collapsed with the market as a whole.
    Plaintiff has accordingly failed to state a claim upon which relief can be granted, and his action should be dismissed.
    WHAT THE COMPLAINT ALLEGES AND FAILS TO ALLEGE
    Plaintiffs Complaint describes the financial decline and fall of KH Funding, a small mortgage company, during the world economic and financial crisis beginning in 2008. It is a story of obvious misfortune for bondholders like Plaintiff and other creditors and equity holders of KH Funding, which ultimately entered bankruptcy in December 2010. But the facts alleged provide no basis to hold Wells Fargo liable for Plainitiff s bad investment.
    1. KH Funding suffers losses during the economic collapse and enters bankruptcy.
    According to the Complaint, “KH Funding is a small Maryland corporation that issues interest-bearing debt securities, such as Series 3 and Series 4 Notes…, and acquires, originates and services mortgage loans.” (Compl. ¶ 6.) KH Funding issued Series 3 Senior Secured Investment Debt Securities (“Series 3 Notes”) and Series 4 Subordinated Unsecured Investment Debt Securities (“Series 4 Notes”) (Compl. ¶¶ 3, 4) “pursuant to a prospectus, as well as an indenture between KH Funding and Wells Fargo dated August 2, 2004 and later supplemented and amended….” (Compl. ¶ 7).1
    Plaintiff is a Holder of Series 4 Notes with face value of $630,249.26 that he alleges “have lost substantially all of their value.” (Compl. ¶ 3) As their names suggest, the Series 3 Notes were senior, secured debt, and Series 4 Notes held by Plaintiff were unsecured and subordinated to Series 3 and other debt. (Compl. ¶ 8.) As explained in KH Funding’s 2008 Form 10-K (at 18 (emphasis added)):
    Our Series 4 investor Notes are unsecured obligations of KH Funding and are subordinated to our Series 3 investor notes and any other senior debt we may incur. Senior debt includes any indebtedness incurred in connection with our borrowings from a bank, trust company, insurance company, or from any other institutional lender…. If we were to become insolvent, the Series 3 investor notes and any other outstanding senior debt would have to be paid in full prior to payment of Series 4 investor notes in our liquidation. As a result, there may not be adequate funds remaining to pay the principal and interest on the Series 4 investor notes.
    The total principal and interest amount of the Series 3 Notes also was much larger than Series 4. As of the end of 2008, KH Funding’s balance sheet showed outstanding Series 3 Notes totaling $35,995,322 and Series 4 Notes totaling only $2,859,502. (2008 10-K at 28.) “As of October 31, 2010, KH Funding was indebted to the holders of the Series 3 Notes and Series 4 Notes in aggregate amounts of more than $38,150,000 and 1,321,000.” (Compl. ¶ 11.)
    Beginning several years before 2007, KH Funding suffered a series of annual and quarterly financial losses, all of which were disclosed in regular filings with the SEC. (Compl. ¶¶ 41-50; 2008 10-K at 9.) The Complaint further alleges that KH Funding’s SEC filings reported “repeated and continuing events of default… related to KH Funding’s failure to pay interest and principal due on the Notes.” (Compl. ¶ 25.) The Complaint recites a series of these disclosures of payment defaults in SEC filings from April 2009 through February 2010 (Compl. ¶¶ 25-34) and alleges upon information and belief that “Wells Fargo had notice of such events of default because Wells Fargo received copies of KH Funding’s SEC filings described herein” (Compl. ¶¶ 25, 41).
    At the end of 2008, KH Funding’ss balance sheet liabilities exceeded its assets. According to the 2008 Form 10-K filed on April 15, 2009, KH Funding had total assets of $44,847,358 and total liabilities of $45,229,488, for negative equity of $382,130. (2008 10-K at 23.) Of that asset total, however, $36,860,118 consisted of mortgage loans, and $4,731,443 consisted of real estate. Thus, more than $41 million of KH Funding’s reported assets were mortgage loans and real estate.
    The value and marketability of those assets had declined due to the collapse of the real estate market and the financial crisis in 2008. Indeed, the 2008 10-K noted that even KH Funding’s ability to meet ongoing redemption requests from Holders of its notes was compromised by the market collapse and the resulting impaired marketability of loans and real estate:
    At December 31, 2008, we held more than $16.04 million in residential and commercial mortgage loans that we believe could be sold within a short period of time for the purpose of satisfying investor note redemption requests. Further, we held $5.71 million in business line-of-credit loans and second lien loans at December 31, 2008, which earn higher yields than the first trust loans and that we believe could also be sold, although generally they take longer to sell and are sold at a discount. It should be noted, however, that the national and local real estate economies have weakened during the past two years in part due to the widely-reported problems in the sub-prime mortgage loan market. These problems have had the effect of decreasing the amount of credit that is available to borrowers. As a result, sellers of real estate and loans secured by real estate have found it more difficult in recent years to sell their assets at the times and at the prices they desire.
    (2008 10-K at 27 (emphasis added).)
    At that same time, KH Funding’s liabilities of $45,229,488 included $38,828,923 in investor notes (the Series 3 and 4 Notes) and another $6,133,480 in Collateralized Notes and Loans Sold with Recourse. (2008 10-K at 23.) Given the huge size of KH Funding’s debt to Holders compared to its devalued assets, the 2008 10-K explicitly warned of the potentially dire consequences of acceleration. If KH Funding’s payment obligations on its investor notes were accelerated due to an Event of Default, it would have to liquidate its assets and still might not be able to pay back Holders, because most of its assets were loans secured by real estate, which had lost value in the real estate market collapse and economic crisis:
    Because the sum of principal and accrued interest due on our outstanding investor notes exceeds our cash balances and other sources of immediate liquidity, we would likely have to liquidate our assets if we were to default under the Indenture and the Indenture Trustee or our holders were to accelerate our outstanding notes. If we were forced to liquidate, our assets would be used first to satisfy the Series 3 investor and any other senior debt, and then to satisfy the Series 4 investor notes, our short-term borrowings, and the obligations owed to our other creditors. Any assets remaining after such distributions would be distributed pro rata to the holders of our common stock.
    It should be noted that a majority of our assets are loans, many of which are secured by real estate. The national and local real estate markets have experienced a significant downturn in recent months.
    Accordingly, if we are forced to liquidate, there can be no guarantee that we would be able to sell our assets at the times or the prices that we desire. In addition, we had no available-for-sale investment securities at December 31, 2008 or December 31, 2007, compared to available-for-sale securities of $581,149 at December 31, 2006. Because of the foregoing, holders of our securities could lose all or a part of their investments if we were to become insolvent or forced to liquidate and our assets at that time were not sufficient to satisfy our obligations to those holders.
    (2008 10-K at 10 (emphasis added).)
    That same 2008 Form 10-K warned that the opinion given by KH Funding’s auditors with respect to its financial statements contained a “going concern” qualification, which warned investors that there was “substantial doubt” that KH Funding could continue in business:
    Because of our recurring losses and stockholders’ deficit and because future income from loans, cash needed for operations (including investor note redemptions) and the success of our securities offerings and sales are uncertain, there is substantial doubt about our ability to continue as a going concern.
    (2008 10-K at 9; see also id. at 31, 38-39.)
    KH Funding’s woes continued, and Wells Fargo declared an Event of Default on December 21, 2009, and gave notice to Holders of an Event of Default on January 7, 2010. (Compl. ¶¶ 30-31.) On February 5, 2010, Wells Fargo gave written notice of acceleration to Holders pursuant to Section 6.2 of the Indenture. (Compl.¶¶ 31-32.)
    Eleven months later, on December 3, 2010, KH Funding filed a Chapter 11 bankruptcy petition. According to the petition, “KH Funding had $30,601,886 and $43,371,721 in total assets and total debts.” (Compl. ¶ 53.) KH Funding thus reported nearly $13 million in liabilities in excess of its assets at that time.
    2. The Indenture contains key terms omitted from or misstated in Plaintiff’s Complaint.
    The Complaint recites a number of provisions of the Indenture, but in many cases it does so inaccurately or incompletely, and it omits other key terms. Wells Fargo was Indenture Trustee under the Indenture for the Series 3 and Series 4 Notes until August 23, 2010. (Compl. ¶¶ 54-55.) As Indenture Trustee, Wells Fargo had certain rights and duties defined by the Indenture, subject to conditions and limitations discussed below. It was not a guarantor or insurer of KH Funding’s obligations. Moreover, Holders including Plaintiff had their own rights and powers as to which his Complaint is notably silent.
    a. During a continuing Event of Default, Wells Fargo’s duty was limited to prudent exercise of the rights and powers granted by the Indenture.
    Wells Fargo’s duties after an Event of Default had occurred and was continuing were governed by Section 7.1(a):
    If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
    (Indenture § 7.1(a).) The Indenture Trustee’s duty during a continuing Event of Default therefore is limited to (1) using the same degree of care and skill that a “prudent man” would use (2) in exercising “the rights and powers vested in it by this Indenture.”
    b. Defaults and Events of Default are waivable and curable.
    A Default is “any event that is or with the passage of time or the giving of notice or both would be an Event of Default.” (Indenture § 1.1.) An Event of Default is, in essence, a failure by KH Funding to pay principal, interest, or a required redemption, when due and payable, that continues uncured and unwaived for 30 days. (Indenture § 6.1.) Defaults can be waived by Holders, and, upon waiver, “such Default shall cease to exist, and every Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.” (Indenture § 6.4.)
    c. Wells Fargo’s notice obligations were limited and qualified.
    Plaintiff incorrectly alleges in his Complaint that “Section 10.13(b) of the Indenture required Wells Fargo to notify Series 4 Holders of the existence of any Default or Event of Default.” (Compl. ¶ 17.) Section 10.13(b) applies only to holders of Senior Debt. (Indenture §10.13(b) (“The Trustee shall notify all holders of Senior Debt….”).) That Section does not apply to Holders of Series 4 Notes, because those notes are not Senior Debt, which is defined in the Indenture as follows:
    “Senior Debt” means any Indebtedness (whether outstanding on the date hereof or thereafter created) incurred by the Company in connection with borrowings by the Company (including its subsidiaries) from a bank, trust company, insurance company, any other institutional lender or other entity which lends funds in connection with its primary business activities whether such Indebtedness is or is not specifically designated as being “Senior Debt” in its defining instruments.
    (Indenture § 1.1.) The Series 4 Notes held by Plaintiff are not indebtedness incurred in connection with borrowings from institutional lenders; moreover, Series 4 notes explicitly are not “senior” but are officially titled “Series 4 Subordinated Unsecured Securities.” (Id.) Thus, Series 4 Notes are not Senior Debt. (See Prospectus at 8, 34; 2008 10-K at 7, 18.)
    The notice requirement for Series 4 Holders is qualified as provided by Section 7.5:
    If a Default or Event of Default occurs and is continuing, and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to holders a notice of the Default or Event of Default within 90 days after it occurs.
    Thus, the Indenture requires notice to be given to Holders of Series 4 Notes only within 90 days after, and during the continuation of, a Default that is known to a Responsible Officer of the Indenture Trustee. This means that, once a Default or Event of Default has occurred, notice must be given within 90 days if it has not first been cured or waived during that time.
    d. The Indenture strictly defines when the Indenture Trustee has notice of defaults.
    The Complaint alleges “on information and belief” that Wells Fargo had notice of unspecified Defaults and Events of Default because KH Funding disclosed them in its SEC filings and because the Indenture required KH Funding to submit its SEC reports to Wells Fargo. (Compl. ¶¶ 25, 41.) These allegations, however, do not comport with the terms of the Indenture.
    First, the Indenture strictly defines notice to Wells Fargo: “The Trustee shall not be deemed to have notice of an Event of Default for any purpose under this Indenture unless notified of such Event of Default by the Company [i.e., KH Funding], the Paying Agent (if other than the Company) or a Holder of the Securities.” (Indenture § 7.2(f).)
    It similarly confines “knowledge” of the Indenture Trustee and limits any duty to investigate (Indenture § 7.2(a) (emphasis added)):
    The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented to it by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall have no duty to inquire as to the performance of the Issuers’ (sic) covenants in Article 4 [including payment]. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except any Default or Event of Default of which a Responsible Officer of the Trustee shall have received written notification or obtained actual knowledge.
    Finally, the Indenture expressly provides that Wells Fargo has no duty to review KH Funding’s SEC filings to determine compliance with the Indenture: “Notwithstanding anything contrary herein (sic) the Trustee shall have no duty to review such documents [KH Funding’s SEC filings] for purposes of determining compliance with any provisions of this Indenture.” (Indenture ¶ 4.3.)
    The Complaint, meanwhile, alleges no facts showing when or how Wells Fargo received notice of a Default or Event of Default before December 21, 2009, when Wells Fargo declared an Event of Default
    e. Holders had redemption rights and shared remedial powers in an Event of Default.
    The Indenture provides that, after an Event of Default has occurred and is continuing, both the Trustee and the Holders have the power to accelerate unpaid principal and accrued interest:
    If an Event of Default… occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least twenty-five percent (25%) in principal amount of the then outstanding Securities by written notice to the Company and the Trustee, may declare the unpaid principal of and any accrued interest on all the Securities to be due and payable.
    (Indenture § 6.2 (emphasis added).) This power to accelerate payment was discretionary, not mandatory. Thus, the Indenture did not require Wells Fargo (or Holders) to accelerate upon an Event of Default.
    Plaintiff also had the individual right under the Indenture to demand redemption of his Series 4 Notes:
    Any Holder of an (sic) Fixed Term Note, as described in Section 2.1 hereof [including the Series 4 Notes], may require the Company to redeem, in whole or in part subject to penalty, the Fixed Term Note held by such Holder by delivering to the Company an irrevocable election (a “Redemption Election”) requiring the Company to make such redemption or by executing a draft in a form provided by or approved by the Company.
    (Indenture § 3.2.) Plaintiff could have involved this right at any time but, based on the allegations of the Complaint, did not do so, even after Wells Fargo gave notice of an Event of Default.
    f. Wells Fargo is not liable for good-faith acts or omissions.
    Finally, the Indenture contains provisions precluding liability unless the Indenture Trustee failed to act in good faith. Section 7.1(c) provides (emphasis added) :
    (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
    (2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining pertinent facts.2
    This provision incorporates Section 315(d)(2) of the Trust Indenture Act, which provides, as to every trust indenture:
    such indenture shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to contain provisions protecting the indenture trustee from liability for any error of judgment made in good faith by a responsible officer or officers of such trustee, unless it shall be proved that such trustee was negligent in ascertaining the pertinent facts.
    15 U.S.C. § 77ooo(d)(2). Section 7.1(d) of the Indenture also provides that “every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.” Section 7.2(d) of the Indenture reinforces this heightened standard of fault that Plaintiff must satisfy, providing: “The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within the rights or powers conferred upon it by this Indenture.”
    Although the Complaint contains a paragraph reciting this standard, Plaintiff alleges no facts demonstrating any lack of good faith.3 (See Compl. ¶ 57.)
    3. Plaintiff’s allegations of liability and damages are vague and unsupported by facts.
    Against this backdrop of KH Funding’s inexorable collapse and Wells Fargo’s limited role as Indenture Trustee, the Complaint recites a single count for breach of contract against Wells Fargo.4 The entire substance of Count I is a bare conclusion:
    [B]y its recurrent failure to exercise its rights and powers under the Indenture despite its knowledge of repeated and continuing events of default, KH Funding’s deteriorating financial condition and KH Funding’s longstanding failure to maintain adequate internal controls, for which KH Funding was penalized by Maryland state regulators.
    (Compl. ¶ 62.) Count I does not identify the “rights and powers” that Wells Fargo failed to exercise and refers to no facts substantiating the alleged failure.
    The Complaint similarly makes the conclusory and broad-brush assertion that “[a]s a result of Wells Fargo’s conduct alleged herein, the Plaintiff, a holder of Series 4 notes (sic) will receive less in interest and principal on the Notes than they (sic) otherwise would have received.” (Compl. ¶ 51.) In support of this sweeping conclusion, Plaintiff cites nothing more than the reported decline in KH Funding’s balance sheet from December 2008 to December 2010. He explains neither what “conduct” of Well Fargo conceivably caused this decline nor how it caused his alleged loss.
    The body of the Complaint is little help in supplying the missing substance. While it contains a litany of facts about the terms of the Indenture, the contents of various SEC filings, and non-party KH Funding’s conduct, it alleges only two things about Wells Fargo. One is that Wells Fargo did not exercise its authority to accelerate the notes until February 5, 2010. (Compl. ¶¶ 26-30, 33) The other is that, “[o]n information and belief, Wells Fargo failed to notify holders of the Notes of the events of default described herein prior to January 7, 2010.” (Compl. ¶ 32.)
    More notable are all the things the Complaint does not allege:
    ● It does not plead facts showing when Wells Fargo first had notice of an Event of Default or a duty to give notice of an Event of Default to Holders.
    ● It does not allege that Plaintiff or other Holders were unaware of KH Funding’s financial straits or the Defaults and Events of Default. Since it was Holders who were not being paid, Holders by definition knew that KH Funding was defaulting on payments and redemption requests.
    ● It does not allege that Plaintiff (or other Holders) would have done anything differently if Wells Fargo had given earlier notice of KH Funding’s Defaults. Given that Holders by definition already knew that KH Funding was in default on their payments, that Wells Fargo also gave them notice of an Event of Default on January 7, 2010, and that the Complaint fails to allege that they acted on that information, no plausible claim exists that they would have acted on earlier notice from Wells Fargo.
    ● It does not say when, if at all, Wells Fargo should have exercised its power to declare the outstanding debt due and payable, let alone allege any facts showing that a prudent man would have done so at that time. Indeed, the Complaint does not even allege that Wells Fargo in fact should have accelerated more quickly.
    ● It pleads no facts showing how accelerating the debt prior to February 5, 2010, would have avoided Plaintiffs damages. To the contrary, the allegations show that earlier acceleration would have changed nothing, because KH Funding’s only means of paying its debts was liquidation of its assets, which had been devalued by the market crash and were questionably even marketable. The Complaint pleads no facts plausibly suggesting that Series 4 Notes would have been paid under this admitted set of facts.
    ● It does not say whether Plaintiff requested redemption of his Notes, or, if he did not, why he did not. Since he does not allege that he requested redemption after Wells Fargo gave notice of an Event of Default on January 7, 2010, the reasonable inference is that he did not request redemption then and would not have had notice been delivered earlier. The Complaint does not explain why he took no action after notice of the Event of Default, or how Wells Fargo caused his loss when he left his own rights unexercised.
    ● It does not explain why Holders did not exercise their own right to accelerate the debt owed to them, or plead any facts showing how Plaintiffs loss was caused by Wells Fargo’s judgment to accelerate on February 5, 2010, rather than by Holders’ own failure to declare the debt due and payable at all.
    ● It fails to allege a single fact of any kind plausibly substantiating the claim that Wells Fargo did not act in good faith. There are no allegations demonstrating that Wells Fargo acted dishonestly, with malice, or to benefit itself at Holders’ expense. There simply is not a shred of factual information in the Complaint consistent with the claim that Wells Fargo acted out of motives other than good faith.
    The real focus of the allegations in the Complaint is not Wells Fargo but KH Funding itself. The Complaint details not only KH Funding’s financial decline and payment defaults but the misappropriation of funds by a former Senior Vice President of KH Funding, poor record keeping by KH Funding, and a failure by KH Funding to disclose defaults in redemption payments, resulting in a consent order with the Maryland Division of Securities in 2008. (Compl. ¶¶ 6-11, 25-31, 35-50, 60.) The Complaint is as detailed in linking Plaintiffs claimed loss to KH Funding’s actions as it is short on allegations tying them to conduct by Wells Fargo. In short, it is a Complaint about KH Funding that improperly seeks recovery from Wells Fargo.
    ARGUMENT
    A complaint will be dismissed if it does not contain facts sufficient to state a plausible claim for relief. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility standard of Twombly requires that a complaint contain “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 129 S. Ct. at 1949 (“Nor does a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement” (internal quotations omitted)); Painter’s Mill Grille, LLC v. Brown, No. RDB-11-1607, 2012 WL 576640, at *4 (D. Md. Feb. 21, 2012) (“To survive a Rule 12(b)(6) motion, the legal framework of the complaint must be supported by factual allegations that ‘raise a right to relief above the speculative level,”’ which requires more than conclusory allegations and recital of the claims’ elements) (quoting Twombly, 550 U.S. at 555)). Moreover, the facts must be more than “merely consistent with” liability. lqbal, 129 S. Ct. at 1950.
    The Court should disregard conclusory allegations, including legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555; see also Iqbal, 129 S. Ct. at 1950 (noting that “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.”); Ramos v. Wells Fargo Home Mortg., No. 11-cv-03130, 2012 WL 261308, at *2 (D. Md. Jan. 26, 2012).
    To state a claim for breach of contract, Plaintiff must allege facts supporting each claim element, including a breach and resulting damage. Decohen v. Abbasi, LLC, No. WDQ-10-3157, 2011 WL 3438625, at *5 (D. Md. July 26, 2011) (applying Twombly, finding that plaintiff failed sufficiently to allege facts showing a contractual obligation and breach thereof); Barry v. EMC Mortg., No. DKC 10-3120, 2011 WL 2669436, at *7 (D. Md. July 6, 2011).
    Plaintiff seeks to hold Wells Fargo liable for breach of the Indenture as a contract benefiting Holders. Based upon the Indenture’s terms, therefore, Plaintiff must plead and prove that:
    (1) An Event of Default occurred and was continuing (§ 7.1);
    (2) Wells Fargo had notice of the Event of Default (§§ 7.2(a), (f));
    (3) Wells Fargo failed to use the same degree of care and skill that a prudent man would have used in exercising its rights and powers under the Indenture (§ 7.2);
    (4) Wells Fargo’s failure was not an error made in good faith (§§ 7.1(c), 7.1(d), 7.2(d)); and
    (5) Plaintiff was damaged as a result of that breach.
    Despite its plethora of allegations about KH Funding’s Defaults and financial decline, the Complaint does not plead facts substantiating these elements. The Complaint is, rather, almost studiously vague and evasive in pleading concrete facts substantiating its conclusions.
    1. Plaintiff fails to plead facts plausibly demonstrating a continuing Event of Default.
    The duty in Section 7.1(a) of the Indenture arises only when an Event of Default—not a mere Default—has occurred and is continuing. Again, an Event of Default is essentially a Default that has gone uncured and unwaived for 30 days, and an Event of Default that has been waived is deemed never to have occurred.
    The Complaint alleges that KH Funding’s SEC filings reported the occurrence of Events of Default, but careful reading shows that it does not identify an Event of Default that had occurred and was continuing at a point in time when Plaintiff contends that Wells Fargo acted or failed to act, in breach of its duty in Section 7.1(a). Because, as discussed below, the Complaint does not say how or when Wells Fargo failed prudently to exercise its rights and powers, the Complaint’s failure to pin down a pertinent Event of Default that was continuing at the time is not surprising. But that related failure only compounds the deficiency of the allegations; it does not excuse the deficiency.
    2. Plaintiff fails to plead facts plausibly demonstrating that Wells Fargo had notice of a continuing Event of Default.
    By the terms of the Indenture, Wells Fargo is only deemed to have had notice of an Event of Default upon receiving notice from KH Funding or a Holder. (Indenture § 7.) The Complaint pleads no facts showing that Wells Fargo had notice of a continuing Event of Default before declaring that one had occurred, or, if so, when. The Complaint merely presumes that Wells Fargo must have known of continuing Events of Default because KH Funding was required to provide it with copies of its SEC filings. (Compl. ¶¶ 25, 41.)
    These allegations fail for at least two separate reasons. First, Plaintiff fails to identify in any of the SEC filings any Event of Default that was continuing at a time when Plaintiff claims that Wells Fargo should have acted differently. Second, the Indenture expressly provides that Wells Fargo had no duty to review KH Funding’s SEC filings to determine whether Defaults or Events of Default had occurred. (Indenture § 4.3.) Even assuming that Wells Fargo did receive the SEC filings, that does not constitute notice to Wells Fargo of their contents.
    3. Plaintiff fails to plead facts plausibly demonstrating a breach of the Indenture.
    Count I of the Complaint completely fails to identify the conduct of Wells Fargo that allegedly breached the Indenture. It merely recites the “prudent man” obligation and states the conclusion that “Wells Fargo breached its obligation under the Indenture by its recurrent failure to exercise its rights and powers under the Indenture….” (Compl. ¶ 62.) It fails to identify even in the most rudimentary or conclusory way the rights or powers that Wells Fargo failed to exercise with care and skill, let alone to plead or reference any supporting facts. Nor can these blanks be filled in by searching the body of the Complaint.
    a. The Complaint fails to plead an actionable failure to exercise rights and powers.
    The Complaint mentions only one right or power of Wells Fargo as Indenture Trustee, and it is the one shared by Holders: the power to accelerate the debt. But the Complaint does not allege that Wells Fargo failed to use due care and skill in exercising that power. It merely alleges that Wells Fargo declared acceleration on February 5, 2010 (Compl. ¶ 32) after not doing so in December 2009 (Compl. ¶ 30). Assuming that Plaintiff intends to fault Wells Fargo for not accelerating at an earlier point in time, however, the Complaint does not say when Wells Fargo should have accelerated, or why a “prudent man” would have done so then instead of when Wells Fargo did. In fact, the Complaint does not even allege that Wells Fargo should have exercised its power before it actually did so. And, critically, the Complaint pleads no facts supporting a conclusion that prudent man would have accelerated earlier.
    Such pleading is not sufficient to establish a breach of contract claim. See Alexis v. Albertini & Darby, No. WDQ-11-0113, 2011 WL 4914965, at *2 (D. Md. Oct. 13, 2011) (plaintiff failed to state a claim for breach of contract where allegations were merely legal conclusions, which though helpful for the complaint’s framework, are insufficient to survive a motion to dismiss); Decohen, 2011 WL 3438625, at *5 (conduct alleged in Complaint did not qualify as a material breach of contract); Barry, 2011 WL 2669436, at *7 (finding plaintiff’s allegations regarding breach did not meet the Twombly standard, reasoning that the plaintiff failed to identify how any obligations under the trust at issue were breached).
    b. The Complaint fails to plead a breach of Wells Fargo’s notice duty.
    The Complaint alleges “on information and belief” that Well Fargo “failed to notify holders of the Notes of events of default described herein prior to January 7, 2010.” (Compl. ¶ 32.) But Count I does not allege that Wells Fargo breached the terms of the Indenture by failing to give notice. Count I is, rather, limited to the conclusory allegation that Wells Fargo failed to “exercise its rights and powers” in unspecified ways. (Compl. ¶62.) The duty to give notice of Events of Default, however, is not a “right” or “power” of the indenture trustee and therefore would not fall within this allegation.
    Regardless, even if Plaintiff intended to fault Wells Fargo for failing to give timely notice, he does not and cannot plead facts to support such a claim. First, he cites Section 10.13(b) of the Indenture, but that section did not require notice to Series 4 Holders. Section 7.5, on the other hand, only required notice to Holders within 90 days after a Default or an Event of Default had occurred and was “continuing.” The Complaint does not say when this allegedly occurred or when Wells Fargo was required to give notice and fails to plead any facts to substantiate such a claim.
    In addition, after Twombly and lqbal, allegations made “on information and belief” are deemed appropriate “where the facts required to be pled are uniquely in the control of the defendant,” and cannot be used to transform a legal conclusion into a fact allegation. Wright v. Lehigh Valley Hosp. & Health Network, No. 10-431, 2011 WL 2550361, at *3 (E.D. Pa. June 23, 2011); see also Mills v. Bristol-Myers Squibb Co., No. CV-11-00968, 2011 WL 4708850, at *2 (D. Ariz Oct. 7, 2011) (finding plaintiff improperly alleged facts “on information and belief” that were exclusively within her knowledge). Whether Plaintiff or other Holders received notice is not a fact uniquely within Wells Fargo’s control. His allegations therefore should be ignored.
    4. Plaintiff fails to plead facts plausibly demonstrating that Wells Fargo did not act in good faith.
    Even if the Complaint alleged a breach of the Indenture by Wells Fargo, it would still fail to state a claim because it pleads no facts plausibly showing that any error was other than an error made in good faith—if it was an error at all. Courts have not hesitated to dismiss actions by security holders against indenture trustees when they failed to allege facts demonstrating a lack of good faith. See, e.g., Gruss Global Investors Master Fund, Ltd. v. Deutsche Bank Trust Co. Americas, No. 09-civ-9723 (AKH) (S.D.N.Y Nov. 24, 2010) (unpublished) (granting dismissal of action for failure “to allege facts supporting a plausible claim that Defendant acted in bad faith”); see also Barry, 2011 WL 2669436, at *7 (finding plaintiffs allegations regarding breach of trust agreement did not meet the Twombly standard, reasoning that “[t]he vague assertion that EMC’s conduct ‘was in bad faith’ is not sufficient” to establish breach of the agreement); cf. Decohen, 2011 WL 3438625, at *5 n.10 (plaintiff did not sufficiently allege bad faith such that contract could be ignored in favor of unjust enrichment and restitution claims); Painter’s Mill Grille, 2012 WL 576640, at *4 (finding plaintiff failed to sufficiently plead that conduct was unlawful, instead merely alleging the conclusion that it was).
    In the face of this standard, Plaintiffs Complaint is devoid of allegations that Wells Fargo acted other than in good faith. It alleges no facts plausibly showing that Wells Fargo acted dishonestly, or with malice or ill will, or any other indicia of an absence of good faith. See Bond v. Messerman, 873 A.2d 417, 432 (Md. Ct. Spec. App. 2005) (“‘Good faith’ is an intangible and abstract quality that encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage.” (quoting Catterton v. Coale, 579 A.2d 781, 783 (Md. Ct. Spec. App. 1990)); cf. Rite Aid Corp. v. Hagley, 824 A.2d 107, 116 (Md. 2003) (“‘Bad faith’ is the opposite of good faith; it is not simply bad judgment or negligence, but it implies a dishonest purpose or some moral obliquity and a conscious doing of wrong.”).
    The allegations that are in the Complaint in fact would compel the conclusion that Wells Fargo acted in good faith. The Holders themselves had the power to accelerate, if merely those holding a 25% interest agreed, but they did not do so, even though they, if anyone, plainly knew that KH Funding was in default in making payments due to them. It is implausible to suggest that Wells Fargo lacked good faith in “failing” to accelerate before February 5, 2010, when the Holders themselves had the same power but did not use it.
    5. Plaintiff fails to plead facts plausibly demonstrating damages.
    The Complaint also pleads no plausible factual account of how Plaintiff was damaged. Its manifold financial allegations are in this respect more camouflage than substance.
    While the Complaint seems, however sketchily, to fault Wells Fargo for not giving earlier notice of an Event of Default, it alleges no facts plausibly showing that any speculative delay in giving notice would have prevented Plaintiffs alleged loss. First, Plaintiff does not allege that he or other Holders lacked knowledge of Defaults or Events of Defaults; to the contrary, because the Defaults were in payment to Holders of the notes, the Holders by definition knew. In addition, the Complaint admits that Defaults and Events of Default were regularly reported in its SEC filings, which Plaintiff, as a substantial investor, could have read. Second, Plaintiff does not allege that he would have done anything differently if Wells Fargo had given earlier notice. Indeed, by Plaintiffs own account, Wells Fargo gave notice of an Event of Default on January 7, 2010. But the Complaint does not allege that he acted based on that notice. Nor does Plaintiff allege that he would have taken any action had Wells Fargo given notice at an earlier date. In short, the Complaint does not allege that earlier notice would have changed anything, much less plead any facts showing how it would have prevented Plaintiffs alleged loss.
    The Complaint also fails to allege facts plausibly showing that Plaintiff incurred damages as a result of Wells Fargo’s “failure” to accelerate earlier—again, assuming that this is Plaintiffs theory. Plaintiff relies entirely upon the decline in KH Funding’s balance sheet between December 31, 2008, as reported in KH Funding’s 2008 Form 10-K, and December 2010, when KH Funding went into bankruptcy, apparently grasping for an inference that quicker acceleration in the midst of this collapse would have avoided the loss to a junior creditor like Plaintiff. (Compl. ¶52-53.) But the Complaint offers no factual basis for this speculation or even any theory of how it could have happened. Indeed, it does not even clearly articulate that this is Plaintiffs theory. It leaves the reader to guess at how Plaintiff is claiming Wells Fargo caused his loss.
    This claim of damages is contradicted by all of the financial allegations in the Complaint, which admit that Plaintiff was a junior creditor of a company that already had negative equity, devalued assets, and a likely inability to cover its debt obligations if its investor notes were accelerated. The whole premise of Plaintiffs Complaint is that KH Funding began to default on note payments and redemptions as early as 2007, and that it suffered a steadily increasing and ultimately catastrophic series of financial losses from that point on. By the end of 2008, its liabilities already exceeded its total assets, the vast majority of which were mortgage loans and real estate the true market value of which had collapsed with the markets. (2008 10-K at 23, 28.) The company actually warned investors that, if the notes were declared due and payable due to an Event of Default, it would have to liquidate its assets—during the depths of the market crisis—and that investors could as a result lose “all” of their money. (See 2008 10-K at 8, 9.) In fact, it warned that the impaired marketability of its assets might not even allow it to cover individual Holders’ requests for redemption by selling the assets it normally held to meet that demand. (2008 10-K at 27.)
    Against this admitted reality, Plaintiff has failed to plead facts that plausibly demonstrate how and why he would have been paid if Wells Fargo had acted sooner. In fact, he does not even allege that there was any point in time when KH Funding’s assets were sufficient to cover its debts so that acceleration would have resulted in his receiving payment as a junior creditor. The allegations in the Complaint show just the opposite: he lost money owed to him by KH Funding, because its business collapsed, along with the rest of the real estate and financial markets, leaving it with assets consisting of devalued mortgage loans and real estate that could not cover its debts.
    Wells Fargo was an indenture trustee, not an insurer or guarantor, and was not responsible for managing KH Funding’s business. Declaring a debt due and payable only makes it due and payable; it does not solve the debtor’s inability to pay it. The Complaint does not and could not plead any facts plausibly showing that Wells Fargo should have or even could have solved that fundamental problem and averted of Plaintiffs loss. All that the Complaint shows is that Plaintiff lost his money because KH Funding could not pay him back.
    CONCLUSION
    For the foregoing reasons, the Court should dismiss Plaintiff’s action against Wells Fargo for failure to state a claim upon which relief can be granted.
    C. Dennis Southard IV
    (D. Md. Bar No. 15010)
    dennis.southard@thompsonhine.com
    THOMPSON HINE LLP
    1919 M Street NW
    Suite 700
    Washington, D.C. 20036-1600
    Tel: (202) 263-4169
    Fax: (202) 331-8330
    Attorneys for Defendant
    Wells Fargo Bank, N.A.
    Brian A. Troyer (Ohio Bar No. 0059671)
    Brian. Troyer@thompsonhine.com
    James L. DeFeo (Ohio Bar No. 0079222)
    lames.DeFeo@thompsonhine.com
    127 Public Square
    3900 Key Center
    Cleveland, OH 44114-1291
    Tel: (216) 566-5500
    Fax: (216) 566-5800
    Of Counsel for Defendant
    Wells Fargo Bank, N.A.
    Footnotes
    1
    For the Court’s reference, complete and accurate copies of the Indenture, the Prospectus, and KH Funding’s 2008 Form 10-K are annexed as Exhibits 1-3. The Court may properly consider and rely upon them in ruling on Wells Fargo’s Motion, because Plaintiffs claim is premised on alleged breach of the Indenture, and he references and quotes from these documents throughout the Complaint. See, e.g., Beasley v. Arcapita Inc., No. 09-1125, 2011 WL 2489950, at *1 (4th Cir. June 23, 2011) (reasoning that documents attached to a motion to dismiss may be considered where “integral to and explicitly relied on in the complaint” and if the documents’ authenticity is not challenged by the plaintiff (internal quotation omitted)); Porter v. Greenpoint Mtg. Funding, Inc., No. 11-1251, 2011 WL 6837703, at *1 n.1 (D. Md. Dec. 28, 2011) (determining that mortgage documents relied upon in framing the complaint, but not attached thereto, could be considered in ruling on motion to dismiss); Horlick v. Capital Women’s Care, LLC, – F. Supp.2d -, 2011 WL 7144125, at *4 (D. Md. Nov. 14, 2011) (district court may consider documents incorporated into the complaint if integral and authentic).
    2
    The Complaint quotes the first part of Section 7.1(c) but omits “except that” and everything that follows it.
    3
    Nor are there any factual allegations that Wells Fargo negligently failed to ascertain any pertinent facts. To the contrary, the Complaint repeatedly alleges that Wells Fargo knew the pertinent facts regarding KH Funding’s financial losses and the alleged Defaults and Events of Default.
    4
    Count II of the Complaint is against defendant Law Debenture Trust Company of New York and was voluntarily dismissed.

  175. TU – I think that was a maryland case (so adj by maryland law). You might google it to see.

  176. WILLES v. WELLS FARGO BANK (D.Md. 1152012)
    KEVIN WILLES v. WELLS FARGO BANK, N.A.
    Civil No. CCB12137
    United States District Court, D. Maryland
    November 5, 2012

    Here’s a new one for us.

    This guy, app as a deriv holder, sued wells fargo as trustee for breaching its duties as indenture trustee. WF of course moved to dismiss and the court said ‘not’. I haven’t followed up to see what happened thereafter, but it’s either a road map of what to do or
    what to get right as an investor to nail the trustee. imo.

  177. JG,

    Thanks for that.
    “defective notice of default is grounds to void and nullify a foreclosure sale — even after the property was purchased at auction by a third party without knowledge of the problem.”

    My case, the AG put a halt to all foreclosure and sent cease and desist letters to specific lenders but the law firms they hired, ignored the AG and kept going, and the realtors licensed in the state, ignored the AG and the title company, licensed in the state, ignored the AG.

    What is the AG there for? To be ignored.
    Oh wait, to be elected Governor for letting them ignore him as Attorney General, what a great political future that is!

    https://www.texasattorneygeneral.gov/oagnews/release.php?id=3500

    Trespass Unwanted, Creator, Corporeal

  178. No NOD, notice of default, recorded
    (I guess they forgot),

    the NOA, notice of acceleration, was only ‘filed’ with the county
    – so it was destroyed by the county after two years.

    Trespass Unwanted, Creator, Corporeal, Life, People, Independent, State, In Jure Proprio, Jure Divino

  179. well, sc, you do raise any interesting question (which I think I posed also). Where is the agreement by and between1) the party named originally in a dot as the trustee and 2) the latest, the greatest, yahoo blankhead currently named bankster-ben and the substituted trustee? The statute of frauds applies imo.

    In other news, or old news or whatever, did we miss this?

    PINTI V EMIGRANT MORTGAGE CO, INC.

    “In a decision which could affect how title examiners and title insurance companies underwrite title to foreclosed properties, the Supreme Judicial Court has ruled that a lender’s defective notice of default is grounds to void and nullify a foreclosure sale — even after the property was purchased at auction by a third party without knowledge of the problem. The decision is Pinti v. Emigrant Mortgage Co. Inc. (SJC-July 17, 2015).

    The defective aspect of the default notice was relatively minor. The notice was required to say that the borrower had the right to bring “a court action” to challenge the default or foreclosure. The actual notice instead referenced a “lawsuit for foreclosure and sale.” The problem is that in Massachusetts there is really no such thing as a lawsuit for foreclosure, because we are a non-judicial foreclosure state. In order to challenge a foreclosure, a borrower must bring an injunction proceeding in Superior Court. Over this minor discrepancy, the Court throw out a 3 year old foreclosure, leaving the subsequent buyer with defective title…….

    The SJC’s reasoning for requiring strict compliance with the default notice provisions in the mortgage was based on the fact that Massachusetts uses a non-judicial foreclosure process. That is, lenders do not need a judge’s approval to start foreclosure (with the except that they need Land Court approval that the borrower is not in the armed services). Accordingly, even the most hyper-technical defect in a default notice by the lender could render a foreclosure void.

    Following a long series of pro-borrower rulings starting with the historic U.S. v. Ibanez decision, the SJC’s decision in this case is yet another cautionary tale to lenders that they must dot their “i’s” and cross their “t’s” before conducting a valid foreclosure sale.”

    For those of you who got shafted by America’s Wholesale Lender, INC or was it Corporation (?!), try some research on laws against holding oneself out as a corporation (“Inc” or “Corporation” or “Corp.”) and its impact on contracts / agreements. Just a thought.

  180. A POA executed agreement…or anything else……has no effect when it follows.

    Nothing equals Nothing.
    Zero equals Zero
    If I convey or gift you nothing….what do you have?
    Nothing!

  181. A trust deed has no effect without a trustee agreement.

    Agreed!

  182. Who prepared and signed your Notice of Default? Who is swearing you’re in default? Clues if not answers to who should imo:

    “Where a trust is created by a trust deed, the powers of a trustee are derived primarily from that trust deed. In that circumstance, the general law and statute have a residual function (ie they ‘fill in’ any gaps in the trust deed); they are not a source of power in themselves.

    A trustee does not have the power to appoint a delegate under general law and cannot do so UNLESS the trust deed expressly allows.”

    and

    “Delegates and agents

    Under the general law it is recognized that it is often impracticable and undesirable for trustees to perform every act in the conduct of the trust themselves. It is more important that the trust be operated properly than that the trustee perform every action related to the trust.

    However, under the general law, there is a distinction between:

    mere ‘ministerial’ (eg, administrative) acts for which the trustee may engage an agent (subject to exercising the requisite standard of care), and
    acts relating to the execution of the trust or exercise of the trustee’s powers and discretions which cannot be given to another (ie, delegated) without some express power UNDER A TRUST DEED or statute.”

  183. Greg…. Because of a previous incident , my over protective friends highly insists I protect my identity and location. I have no problems with giving referrals but that is where I stop.

    Quite frankly it is rather refreshing to talk to another Illinoision with a level head …. and not a trigger finger …who is looking to lay blame.
    If you spoke with attorney friends…then I highly recommend you hire an attorney.

  184. so funny that so may are eager to post anonymously and when given the opportunity to converse directly with another man – “the training wheels fall off their bicycles” – i’ve given all i can to the blog…

    at this point- if you don’t write me directly i will not answer anymore… (this is not a setup to charge you anything – i CANNOT accept debt instruments – which is all you have to offer… ALL i can share is my time and love… BUT keep in mind i am no sucker or mark and you will get no more from me than you are willing to give…)
    greg lawman@gmx.us

  185. SC – yes – home sweet home… 3 lawyers i have known for years talked to me this week and asked “how the F are you still in your home?” i said… i guess we keep them busy….

  186. IN REM jurisdiction (A.K.A. Law Merchant/Admiralty) can only be heard in federal court according to the constitution… if your county or state court has done an IN REM or QUASI IN REM action on you or your property – you have the RIGHT TO DEMAND a federal question to be heard in federal court! a Declaratory action.. to ask “WHERE THE FORK DID THE GET THAT?” and… “IF THEY HAD THAT, WHY WAS IT KEPT FROM ME?” and “WHERE IS MY STATE?”…. think about it….

  187. Greg…are you still in the home?

  188. for those just tuning in – i included tons of downloads to look at consider – all on the public record – filed – stamped – not make-believe hyperbole… go see all my previous posts… thank you… (maybe Neil will even notice?)

  189. elexquisitor – please forgive me for momentarily stealing the blog…
    i would like this out front because it is helpful for everyone coast to coast…

  190. problem is it generates +54 million/year in property taxes claimed by the county… thinking of announcing a new town/county at 1/3 the cost?

  191. PennyMac sent broker to harass tenants and I after informed sent rescission notice but they went ahead w illegal sale. After sending cease and desist letters and complaint w CFPB haven’t heard a peep. Have heard of at least 5-10 cases throughout the country personally with these types of break ins. Couldn’t believe it myself but definitely a pattern.

  192. SC i would rather talk with you – you seem like a firebrand… let’s see how it goes… lawman@gmx.us

  193. Greg…plant an 80 acre garden.
    Or lease it and head for the mountains.

  194. Time for real law. What the CA Suckpremes don’t want to acknowledge is Civil Code 1203 (the Glaski Blaster). It allows anyone with an interest in the property to require proof of a document recorded with the county related to title by filing a case in state court. You need to read the sections that follow because there is a caveat of a 1-year provision regarding notice. It may be possible to challenge the NOD as a title-affecting document, although I have already had a CA judge rule against me on that point. And while it’s true a notice of default may not be title affection, the notice of intent to exercise the beneficial right to accelerate the loan and election to invoke non-judicial foreclosure seems pretty title affecting to me.

    IANAL, and I have yet to see a single case reference this statute.

  195. Greg…post yoour email address again and I will pass the information forward. I see that you are in Crook County….it shouldn’t be to hard to find someone to put you in touch with. They will contact you…not me.
    It sounds as though you are doing all the right things…except having an attorney and a lawsuit for damages. You don’t have to prove their act was criminal…just that it caused you harm…and damages.

  196. over 5 years ago i filed a claim to the ownership (by heir/assign) to the original land grant issued to Eber Chapin by President Polk… i established a lienhold claim on a UCC-1 at that time… so it has been in the public record since then… if the beancounters and lawyers for the plaintiff were doing their duty, they would have discovered this claim and lien… if there were a genuine priority claim by the plaintiff – one must believe they would have brought me a challenge… but i’m certain that their dereliction of duty and federal and state limitations of time have precluded them from rebuff… forever (now what do i do with 80 acres of the northwest side of Chicago?)

  197. SC that’s why I said before Dwight posted. Since it’s not “just us” on here and it may have been a while could benefit to see what you’ve done.

  198. It sneaked up on my husband and tapped him on the shoulder while he was weed whacking. Almost had ourselves a 450lb slaughter.

  199. on the break-in TORT – i think i will use a lawyer… on the claim to ownership of my land – i know that i have established the highest court – me/ man and they must sue me (i will not be baited into being the plaintiff in a case forcing me to prove my claims in court – rather – force them to prosecute and prove everything!)

  200. louise – i copy our sheriff and attorney general on everything we do…

  201. SC – if you would not mind email me a number…

  202. Greg… I pray you have yourself A good attorney.
    Those who trespassed were prosecuted.

    I put the Trespasser on Notice.

  203. after police investigation, the FBI crime lab discovered from DNA evidence found that one of the people in my house during the break-in was a convicted felon….

  204. Greg, fabulous. I see the notice indicates International law. We have a law here that No Trespassing has to be recorded with the County Sheriffs Department.

  205. i really hope you guys take the time to dig through my stuff – it can help you… i haven’t even gotten to the break-in paid for by OCWEN to some property preservation outfit doing wrongful trespass, destruction and theft of property which occurred before any judgment…
    i could have been killed or harmed had i not been working on my mom’s kitchen….

  206. want a good laugh… here is the first and only assignment recorded in the county in 2006 – 2 years after the so-called mortgage in in 2004 – it was not recorded in the land record attached to the property and ended up in an orphaned recording that nobody could find until the foreclosure attorneys dug it up – and look at it in detail – the fields are empty… but people swore to it anyway! Then – 1 month before the foreclosure judgment the foreclosure attorneys moved to have a “correction of assignment” accepted into the court (correcting from zero?) IT IS ALL FRAUD… there was never standing…

    https://dl.dropboxusercontent.com/u/4032131/Assignments.zip

  207. Or perhaps he does not see the relevance.
    But do not dismiss what he says.

    JG…EXCELLENT!!!

  208. Hammettime..he was being sarcastic …
    Apparently he lacks the knowledge that the case was heard and ruled upon by ISC.

  209. American Bankruptcy Institute
    The Warehouse and Secured Lender Battle
    Common Law

    Keep Up the Good Fight for them.

  210. re: ‘mers’ assignments (for instance). Those interested might start researching these terms:

    disclosed principal

    undisclosed principal

    partially disclosed principal

    Restatement (third) of Agency (I don’t know when this was implemented v Restatement (second) of Agency but it matters. Also see one’s own state laws on Agency.

    I’m posting this here because I just read (and lost where I read) that with the partially disclosed principal, think it was, third parties are charged with ascertaining the id of the principal and the agent’s authority. Don’t take my word for it – I think that’s what I read.

    If interested, keep hacking until you find something helpful.

  211. Very sorry for your loss, Greg. Too many tragedies in this mess.

  212. Illinois Common Law innocent insured doctrine .

  213. lawman@gmx.us – please keep questions or comments on point…TY

  214. please notice that our rescission and administrative process was filed 2 years before any judgment or sale and they ignored… the judge, having received notice, should have taken it upon himself “sua sponte” to tell the plaintiff to prove up or shut up, with the NOTE and MORTGAGE CANCELLED…instead, he may have fallen into a misprison of felony or similar? – Regardless, his judgment is VOID and the sale is NULL… Now to come up with a way to keep the dumbed-down hounds away…

  215. Greg… A reasonable person could assume the abandonment of the overpayment Could be at issue with the payoff.

    Everybody has a want of knowledge.

  216. Greg…. Who gave them permission to put my name on that undisclosed account and make me a creditor and or a borrower?
    Where did my money go?

    non borrower
    That’s my story and I am sticking to it.

  217. Want proof that this is real? Ask yourself the following questions:

    1. Were you told that the Federal Reserve Bank Policies and Procedures as well as the Generally Accepted Accounting Principles (GAAP) requirements imposed upon all Federally-insured (FDIC) banks in Title 12 of the United States Code, Section 1831(a), prohibit banks from lending their own money from their own assets or from other depositors? Did the bank tell you where the funds for the loan were to come from?

    2. Were you told that the contract you signed, the promissory note, was going to be converted into a ‘negotiable instrument’ by the bank and become an asset on the bank’s accounting books? Did the bank tell you that your signature on that note, makes it ‘money’, according to the Uniform Commercial Code (UCC), sections 1-201(24) and 3-104?

    3. Were you told that your promissory note would be taken, recorded as an asset of the bank, and then sold by the bank for cash, without “valuable consideration” given to obtain your note? Did the bank give you a deposit slip as a receipt for the promissory note you gave them, just as the bank would normally have to provide when you make a deposit to the bank?

    4. Were you told that the bank would create a new account at the bank that would contain this money that you gave them?

    5. Were you told that a check from this new account would be issued with your signature, without your knowledge, and that this new account would be the source of the funds behind the check that was given to you as a “loan”?

    If you answered “No” to any of these questions, YOU HAVE BEEN CHEATED! How does that make you feel? It is now up to you to demand your deposit back and to challenge the validity of this bank loan Agreement. Since the banks and other lending institutions cannot allow “full disclosure” of your loan Agreement and cannot answer your challenges about it, their silence is the key, along with other necessary steps that can be learned by you, to get your deposit back and/or “payoff” their alleged loan to you

  218. Unclaimed property escheats to the State.

  219. Greg…they have a tax form for foreign entities.
    Like the one they sent along with a W-9 for my husband (the borrower under the note) to fill out so they could review his file.

    Hahahaha….I have a Tax Attorney too.

  220. Do not forget… I was one of many who tried to pay off the unrecorded liens. And they refused.

    PPMs strucure consisted of 2 trusts.
    Why would the Estate be released from claims in the settlement if something had not been done in the name of the Estate?

    No Trusts!

  221. read very careful,

    Section 3.02. Trust Account. On or before the Issue Date, the Paying Agent shall either (i) open with a depository institution one or more trust accounts in the name of the Trustee on behalf of the Trust Fund that shall collectively be the “Trust Account,” (ii) in lieu of maintaining any such account or accounts, maintain the Trust Account by means of appropriate entries on its books and records designating all amounts credited thereto in respect of the Uncertificated REMIC Interests and all investments of any such amounts as being held by it in its capacity as Paying Agent for the benefit of the Holders of the Certificates or (iii) maintain the Trust Account in the form of any combination of accounts or book entries described in clauses (i) and (ii) above. Any manner or manners in which the Trust Account is maintained may at any time be changed without notice to, or the approval of, Holders of the Certificates so long as funds held in the Trust Fund by, or for the account of, the Paying Agent shall at all times be identified. To the extent that the Trust Account is maintained by the Paying Agent in the manner provided for in clause (ii) above, all references herein to deposits and withdrawals from the Trust Account shall be deemed to refer to credits and debits to the related books of the Paying Agent.
    The Paying Agent shall deposit in the Trust Account all distributions in respect of the Uncertificated REMIC Interests received by it as Paying Agent hereunder. All such distributions deposited from time to time in the Trust Account and all investments made with such moneys, including all income or other gain from such investments, shall be held by the Paying Agent in the Trust Account as part of the Trust Fund as herein provided, subject to withdrawal by the Paying Agent for distributions on the Certificates.

  222. IRS. … Yes.

    They are foreclosing Estates…not houses.

  223. Think Land Trust.
    Security Interests…is Not land!

    Do not disregard Greg’s post….. Look at it if….different.
    Like….the titles already being clouded.

  224. A. Mortgage is a commercial lien that does not transfer the estate or title to property.

    Fraud on the Face of the Document

  225. John gault- this is the first image, rathef than a llink, that you have ever posted. How about more images? Thanks

  226. Sorry about that, NG. I forgot that scribd now pastes the doc when it’s linked and not just identified.

  227. Is this for real?! It looks like a generic how to / road map to retroactively obtain REMIC status for those who failed to perform – out of the IRS!

  228. Wait a minute. FNMA gets their stinking undisclosed g-fee at .25% built into the rate on loans sold to them. But then, they have rights of subrogation, so…..what?! They get their advances back plus they’re also getting the ‘guarantee’ premium?

  229. Well, I’m fired. I thought FNMA’s payments were voluntary with no right of recovery. They’re not, acc to this, which is at scribd. It contains a recitation of subrogation rights, which I don’t believe was in the Prospectus or maybe I missed it. This says the subrogation right is against the certificate holders, which only shows to go you one needs a complete picture. Yeah, right. That takes a village. Why make a payment if one only intends to be repaid? What’s the point, other than to artificially impact the value of derivatives? Anyone?

    FNMA REMIC Master Trust Agreement_080107 (scribd)

  230. shadowcat, WHAT are you talking about? You’ve said this 20 times which is why I’m finally asking. The estate exists, loan or no loan. If you own one thing, you have an estate, whether it’s comprised of real or personal property or a comb of the two. A trust is created in the dot and one’s home is put into it for the duration of the loan mol. So please do end the mystery – WHAT do you mean?

  231. I’m with NG. AS LONG as one is the owner of real property he may record any document he wants on his property related to that property which contains nothing one believes is false.If one says she rescinded because she did, then that’s a statement made in good faith. Whether or not the law will uphold it, is another matter, but doesn’t imo make the document a false one. I don’t personally believe anyone is prohibited from giving Notice about anything proper relating to her property, and imo rescission notice is proper. County recorders have certain requirements like margins, parcel no. id, adequate identification of the property (or if you don’t adequately identify the property, an alleg may be made that your document doesn’t impart Notice), notarized, and so on which they’re imo entitled to have. All that may be addressed in a cover sheet entitled Notice.
    strictly lay opinion

  232. greg@6:09 – yes, forget it. It’s bunk. Some of it’s true, but most of it’s propaganda.

  233. No contract, no transaction -》Truth In Lending

  234. My thought?
    The trust is created in the instrument that creates the estate.

    Attack the Contract!

  235. Greg…you seem like a very smart person.
    Why in tarnations do you not have an attorney?

  236. any thoughts on this???
    Allodial Titles and Land Patents
    http://webmavin.com/Allodial%20Info.html

  237. Interesting case here on recording rescission in LA County. From 30s when title companies did their jobs!
    http://law.justia.com/cases/california/court-of-appeal/2d/40/461.html

  238. Some of the laws I have looked at say that you must swear to what you are putting in the Reg. of Deeds records and that you could be liable in the amount of $25,000 for false or fraudulent documents. This is addressed to lenders who have filed satisfactions and want to change it.

  239. As Trump called them Sharks the banksters are Sharks Look at what they did to a law firm in California that hired an IP internet company to track down who was making allegedly false claims against them.

    http://www.ripoffreport.com/r/SCAM-Brookstone-Law-Vito-Torchia-Jr-Damian-Kutzner-United-Law-Group-Sean-Rutledge-Robert-Buscho-are-a-SCAM/Newport-Beach-California-92660/Brookstone-Law-Vito-Torchia-Jr-Damian-Kutzner-United-Law-Group-Sean-Rutledge-Robert-B-700272#comment_1

    NEVER AGAIN

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