It’s time to sit up and take notice. Judges are turning the corner and getting pretty angry about what passed before as evidence. In April this order seemed like a shot in the dark. But now, we are seeing more and more judges actually study the chain of alleged transactions relied upon those who seek forced sale of a residence. The motivation of those seeking foreclosure is gradually being revealed this year. Not surprisingly they are not in the least bit interested in the property or the loan. They want a foreclosure judgment because THAT is what has value for them — getting the judge to unwittingly ratify all the preceding illegal acts and frauds perpetrated on the borrower and the courts. Once again our friends at Ocwen are named as the culprits, but this judge goes further when she says
‘This Court finds the AOM [assignment of mortgage] created in 2012 does not document a transaction that occurred in 2005, as Plaintiff suggests. The transaction described in the AOM never legally occurred.There was never a transaction between MERS and/or Freemont Investment and Loan that sold Defendant’s loan directly to the Trust. Not in 2012, not in 2005, not ever.’ (e.s.)
HSBC v Buset, Case # 12-38811 CA 01 Decided 4/26/16 Hon Beatrice Butchko
For about 10 years now I have endured taunts from people representing the banks or themselves citing case after case saying I was wrong in my legal analysis. I persisted because I knew I was right. The reality of a transaction is far more important than the self serving paperwork that parties use to justify their illegal actions — the last decade notwithstanding. If there was no purchase of the loan then the assignee received nothing.
But more important than that is something that Judge Butchko seemed to pick up on. She asks the simple question: why would Ocwen violate a mandatory discovery order that would prove the Plaintiff’s case? Instead they tried to plow through without the reality of a single transaction in which a loan was made, purchased or sold.
If the alleged loan was not sold then why were there any papers showing a transfer of the “loan.” And if each party in the chain was paying nothing to the party before them, why was the assignor signing an assignment without getting paid for it. And if that is true for all the assignments and endorsements then was the originator a lender? If the originator received nothing in a purchase transaction for the alleged loan, the only logical conclusion is that there was no loan by the originator and there might have been no loan at all.
With that conclusion why would a party with no money in the “game” be suing for foreclosure? The answer must be completely separate from the loan because that is obviously of no consequence to those participating parties that were getting fees for executing documents that pretended that there was a purchase and sale of the debt. The answer is that foreclosure is the ONLY way they could cover their tracks in the false sales of mortgage bonds issued by an empty non-operating trust. If you look at decisions like this and thousands of other cases the conclusion is inescapable — a foreclosure judgment is the first and only legal document is the entire chain.
Here are some quotes
The Court takes judicial notice that on July 25, 2008, Freemont Investment and Loan (“Freemont”) entered into a voluntary liquidation and closing which did not result in a new institution. https://www5.fdic.gov/idasp/confirmation_outside.asp?inCert1=25653. As such, the status of MERS as nominee for Freemont ended when Freemont closed on July 25, 2008, which renders the AOM created in 2012 void ab initio.
This endorsement is contrary to the unequivocal terms of the PSA, in evidence over Plaintiff’s objection, which required all intervening endorsements be affixed to the face of the note because there was ample room for endorsements on the face of the note. There is also no evidence the endorsement was affixed before the originator went out of business in 2008.
The Court also finds unclean hands in Plaintiff’s failure to comply with the Court’s Discovery Order of April 27, 2015.
17. In that order, the Court overruled plaintiff’s blanket objections and found no basis for Plaintiff to object to providing any discovery under Fla. Stat. 655.059.
18. The Court then ordered Plaintiff to provide (1) the final executed documents evidencing the chain of title for the subject loan; (2) all records of any custodian related to the chain of custody of the note; and (3) all records showing how and when the specific endorsement on the promissory note was created.
The Court fails to comprehend why Plaintiff would not fully comply with the Court’s Order compelling discovery when the evidence sought by the Defendant would actually assist Plaintiff in establishing the missing link in the chain of ownership in the endorsement and assignment of mortgage.
The Court hereby enters an Order to Show Cause why Plaintiff should not be Sanctioned for violating the Court’s order on April 27, 2015, after representing that it fully complied on or before January 14, 2016.
23. Moreover, the Court hereby enters an Order to Show Cause why Plaintiff should not be sanctioned for the reasons set forth in Defendant’s Motion for Sanctions Under the Court’s Inherent Contempt Powers for Fraud Upon the Court filed on March 16, 2016.
24. Defendant is hereby ordered to conduct further discovery in support of these orders to show cause and set an evidentiary hearing on them at the Court’s earliest convenience.
Ms. Keeley testified the loan boarding process involved two steps. First, Ocwen confirmed that the categories for each column of financial data from the prior servicer matched or corresponded to the same name Ocwen used for that same column of financial data. Second, Ocwen confirmed the figures from the prior servicer transferred over such that the top figure from Litton became the bottom figure for Ocwen. The court notes that when testifying about Ocwen’s boarding process, Ms. Keeley appeared to be merely repeating a mantra or parroting what she learned the so called boarding process is without being able to give specific details regarding the procedure itself. 1 Her demeanor at trial although professional, was hesitant and lacking in confidence in this court’s estimation as the trier of fact.
To support the court’s concern regarding the lack of foundation of the so called boarded records in this case, the Court takes Judicial Notice of the Consent Order entered in the matter of Ocwen Financial Corporation, Ocwen Loan Servicing, LLC by the New York State Department of Financial Services dated December 22, 2014. This Consent Order documents Ocwen’s practice of backdating business records that it failed to fully resolve “more than a year after its initial discovery.”
1 This Court estimates that it has presided over hundreds of foreclosure bench trials since being assigned to the Civil Division in 2011. The court has accordingly heard hundreds of bank witnesses testify regarding their company’s boarding process and has accepted thousands of documents into evidence pursuant to same. The boarding process and training of personnel regarding the boarding of documents varies greatly from one institution to another.
the Court noted that the first two default letters in the inch thick stack which Plaintiff sought to admit into evidence were inexplicably dated a week apart and had a $1,900 difference in the amount required to cure the default.
the admission of the default letters mailed by an outside entity not testifying in court creates a double hearsay problem as there is no evidence of a boarding process of that third party vendor’s mailing practices and procedures. Nor did the Ocwen representative testify that she had received training regarding the procedure used by the third party vendor in mailing the default letters.
Both the endorsement and the assignment omit the Depositor, Freemont Mortgage Securities Corporation, from the transaction which constitutes a fatal break in the chain of title.
The Court gives great weight as the trier of fact to the testimony of Defendant’s
expert witness, Kathleen Cully. Ms. Cully is a Yale Law School graduate that worked her entire career in structured finance transactions since 1985. She was extremely well versed in the Uniform Commercial Code. Among many other tasks and accomplishments, Ms. Cully testified that she led the Citigroup team that created the first pooling and servicing agreement ever. She led Citigroup’s Global Securitization strategy. The Court finds Ms. Cully eminently qualified as an expert witness in the area of securitized transactions and their interplay with the Model Uniform Commercial Code.
The Court applies Ms. Cully’s reasoned analysis as it relates to the note and mortgage for the subject loan and to Article 3 of Florida’s Uniform Commercial Code. However, it is axiomatic that all promissory notes are not automatically negotiable instruments.
This Court finds that the Note is non-negotiable as the amounts payable under the Complaint include amounts not described in the Note and as the Note does not contain an unconditional promise to pay.
66. The promise is not unconditional because the Note is subject to and/or governed by another writing, namely the Mortgage. Moreover, rights or obligations with respect to the Note itself—as opposed to the collateral, prepayment or acceleration—are stated in another writing, namely the Mortgage.
The Court grants Defendants’ Motion for Involuntary Dismissal and enters judgment in favor of the Defendants who shall go forth without day.
83. The Court reserves jurisdiction to award prevailing party attorney’s fees and to impose sanctions against Plaintiff under the inherent contempt powers of the court for fraud on the court, and such other orders necessary to fully adjudicate these issues.
84. Plaintiff is ordered to produce a corporate representative with most knowledge regarding its efforts to comply with the discovery order dated April 27, 2015, for deposition at the offices of Defendant’s counsel within 15 days from the entry of this order.