Nardolillo V. Chase – Northern District of California: Motion to Dismiss Denied

By J. Guggenheim/www.lendinglies.com

Note: Our ongoing gratitude to Investigator Bill Paatalo of BP Investigative Agency for keeping us updated with significant developments in nationwide foreclosure defense cases.  Paatalo is the preeminent investigator regarding WaMu/JPMorgan Chase “merger” issues.

See Nordolillo v. JPMorgan Chase Nardolillo v. Chase

Analysis by Neil Garfield:  Although Nardolillo’s case has merit, unfortunately he may lose because he already alleged that the loan was sold to a specific securitized trust.  We already know the loans weren’t transferred to the trusts, so Nardolillo has already compromised his own case by making erroneous presumptions.

Without an amendment to his pleadings, he will be forced to prove the trust bought the loan which is impossible because the trust didn’t buy the loan and therefore there is no evidence to support the allegation.

The flip-side is that if Nordolillo had not identified who the loan was sold to, the court would have likely gone the other way on the motion to dismiss.

If he amends to not be specific on the “sale” of the loan, there is a risk that the court will dismiss the action.  The real problem really is that not only did the trust NOT buy the loan, but NOBODY did.

That is because the only movement of money that actually occurred in the real world was to fund loans originated by WAMU. Thus he is right that WAMU didn’t own it but he is citing the wrong reason. WAMU never owned the loan in the first place. Thus there could be no sale.

Chase relies on the complexity of its scheme to confuse and overwhelm the bench. This is the principal reason that I have been hammering at the idea of using a CPA as an expert witness because the numbers don’t lie. Banks lie, servicers lie, and lawyers lie; but in the end, the numbers on the general ledger as audited by one of the big auditing firms tell the real story. You will likely never find a single one of these loans on the balance sheet of any of the players pretending to foreclose.

___________________________________________________________

Nardolillo v. JPMorgan Chase is scheduled for trial in April in California’s liberal North District Court.  This case includes illegal substitutions of trustees by Chase, if they were not the beneficiary per the Purchase and Assumption Agreement (PAA).  Nardolillo alleges wrongful foreclosure, violations of the California Homeowner’s Bill of Rights, and dual-tracking violations in regards to a pending loan modification.  Nardolillo is not the first to allege that JPMorgan Chase is playing an ownership shell-game (see Fox).

WaMu was taken under receivership by the FDIC in 2008 when it became insolvent.  JPMorgan Chase then entered into a Purchase and Assumption Agreement (PAA) with the FDIC to acquire “certain” WaMu assets.  Plaintiff Gary Nardolillo alleges his Note and Deed of Trust were not among the assets Chase acquired through the PAA and that they were “possibly” sold or securitized years earlier.

This is business as usual for JPMorgan Chase who typically has no note or assignment demonstrating ownership in regards to the WaMu loans it claimed to have acquired.  Therefore, without resorting to manufacturing the documents or having a ‘bank representative’ file a sworn affidavit they have personal knowledge of the loan (when they don’t), JPMorgan Chase simply relies on a substitute trustee to compensate for Chain of Assignment deficiencies.

On March 14, 2011, Chase claimed to be the beneficiary of the DOT and directed the California Reconveyance Corporation (CRC), as trustee, to record a Notice of Default against the subject property.  CRC recorded a Notice of Default, stating the amount due as of March 11, 2011, was $36,304.16.

On October 20, 2014, in a recorded “Corporate Assignment of Deed of Trust,” Chase purported to act as “attorney in fact” for the FDIC and transferred all beneficial interest in Nardolillo’s DOT to itself.   Nardolillo alleges this was a void assignment because: (1) Nardolillo’s DOT was never among the assets received by the FDIC from WaMu and transferred to Chase; and (2) Chase was not authorized to serve as the attorney in fact for the FDIC at the time it executed and recorded the Corporate Assignment.

Chase then began its usual game of what Investigator Paatalo refers to “whack-a-mole” and on April 17, 2015, it recorded a Substitution of Trustee, substituting former-defendant Trustee Corps in place of CRC as trustee under the DOT. Nardolillo alleges that this substitution is also void.

Chase directed Trustee Corps to record a Notice of Trustee’s Sale against the Subject Property on July 7, 2016. Around July 22, 2016, Nardolillo submitted his first loan modification application to Chase, but the defendants have continued to notice trustee’s sale dates on the Property.  He claims that chase violated California Civil Code when it conducted the July 2016 Notice of Trustee’s Sale recorded, as Chase had no right to foreclose because Chase never acquired rights to the DOT and Note from WaMu.

Assuming these allegations are true, the Notice of Trustee’s Sale would not be “accurate and complete and supported by competent and reliable evidence.” Cal. City Code§ 2924.17/a).   Chase argues Nardolillo’s argument isn’t sufficiently supported by facts, but only by insufficient bare conclusions.  Nardolillo is at the mercy of Chase who likely doesn’t have the necessary proof but relies on the complicity of the bank to get away with fraud.  The relevant allegations in the Complaint are:

—Plaintiff alleges on information and belief that WaMu sold Plaintiff’s DOT and Note to a mortgage – backed securitized trust.
—Plaintiff’s securitization audit indicated Plaintiff ‘ s loan was possibly sold to the WaMu Mortgage Pass-Through Certificates Series 2004-AR12 trust – a real estate mortgage investment conduit (“REMIC”) registered with the Securities and Exchange Commission (“SEC”).
—Plaintiff alleges on information and belief that his Note and DOT were not among the assets acquired by Chase through the PAA, having been sold and securitized to a trust pool a few years prior.

Chase relies on the PAA, that claims Chase acquired WaMu’s “assets” from the FDIC in 2008, as well as the recorded “Corporate Assignment,” showing that plaintiff’s DOT and Note were transferred to Chase by Chase (as the attorney in fact for the FDIC as receiver for WaMu).  Relying on JPMorgan Chase’s word is like believing Kevin Hart is a committed family man- despite the Vegas photos.

Chase claims these judicially noticeable documents and the absence of notices recorded by any other entity with respect to the Property establish that Chase “is of record with respect to the Property.”  Plaintiff has correctly objected to any attempt to take judicial notice of the facts contained in these public records as true. He argues that the “truth” of whether Chase was entitled to sign the Corporate Assignment and whether plaintiff’s Note and DOT were included with the scope of the PAA are contested and cannot be established through a request f0r judicial notice.  Neil Garfield writes about the perils of not objecting to judicial notice here.

Chase’s arguments are not well-taken on a motion to dismiss.  The PAA does not expressly cover plaintiff’s Note and DOT.  Chase fails to point to any portion of the PAA that demonstrates that WaMu-funded REMICs (like the one Nardolillo contends owns his Note and DOT) were “WaMu assets” transferred to Chase for servicing or for any other purpose.  The court noted that although Chase has been an entity causing notices to be recorded with respect to the Property, is significant, it does not by itself establish as an incontrovertible fact that Chase is “of interest” or otherwise entitled to enforce rights to the Note and DOT.

Investigator Bill Paatalo has proof that JPMorgan Chase did not purchase $615 billion in WaMu loans.  See article here:

http://bpinvestigativeagency.com/why-jpmorgan-chase-did-not-purchase-ownership-of-615b-worth-of-wamu-loans-in-three-simple-steps/

Paatalo has long discussed the questionable use of using “Substitution of Trustees” in order to create the illusion of ownership and to further complicate the ownership issue in a court of law.  Paatalo discovered that WaMu entities have never been dissolved and still exist.  The loans did not go through the FDIC, therefore Chase executes assignments from the FDIC in order to substitute trustees.  Paatalo demonstrates that JPMorgan Chase did not purchase ownership of $615 billion in Washington Mutal loans in three simple steps.

Paatalo presents a “3-step Analysis” to show that “ownership” of at least $615,000,000,000.00 (over half a TRILLION Dollars!) of WaMu loans were not purchased by JPMorgan Chase from the FDIC.

STEP 1:

The U.S. Senate Sub-Committee (Levin – Coburn Report) reveals in its findings of fact that WaMu sold and securitized at least $615B of residential mortgage loans through its subsidiaries “WaMu Asset Acceptance Corporation” and “Washington Mutual Mortgage Securities Corporation” who acted as “Depositors” in the securitization transactions.

See:

https://www.hsgac.senate.gov/subcommittees/investigations/media/senate-investigations-subcommittee-releases-levin-coburn-report-on-the-financial-crisis

 

Pg. 116 –

From 2000 to 2007, Washington Mutual and Long Beach securitized at least $77 billion in subprime and home equity loans. WaMu also sold or securitized at least $115 billion in Option ARM loans. Between 2000 and 2008, Washington Mutual sold over $500 billion in loans to Fannie Mae and Freddie Mac, accounting for more than a quarter of every dollar in loans WaMu originated.

 

Pg. 119 –

“WaMu Capital Corp. acted as an underwriter of securitization transactions generally involving Washington Mutual Mortgage Securities Corp. or WaMu Asset Acceptance Corp. Generally, one of the two entities would sell loans into a securitization trust in exchange for securities backed by the loans in question, and WaMu Capital Corp. would then underwrite the securities consistent with industry standards.

STEP 2:

See: Page 2. – PAA – (click here: FDIC-Chase – PAA)

“Assets” means all assets of the Failed Bank purchased pursuant to Section 3.1. Assets owned by Subsidiaries of the Failed Bank are not “Assets” within the meaning of this definition.”

STEP 3:

In the case of Fox v. JPMorgan Chase, a specific REMIC Trust is named in the action. To prevail on its argument that the loan was sold and transferred to the Trust, JPMorgan Chase and U.S. Bank, N.A. as Trustee, both admitted / “stipulated” that the loan contained both investor codes “AO1″ and “369” in the loan transfer history, which means the loan was sold by Washington Mutual Bank to the subsidiaries prior to those subsidiaries transferring the loan into the Trust. AND, it was stipulated that the loan was NOT PURCHASED FROM THE FDIC.

(Click here: Chase Stipulated Fact – AO1 – WMAAC)

Stipulated Facts:

“8. Investor Code AO1 in the Loan Transfer History File represents WaMu Asset Acceptance Corporation.”

“9. Investor Code 369 in the Loan Transfer History File represents Washington Mutual Mortgage Securities Corporation.”

“10.  JPMorgan Chase Bank, N.A. did not purchase the loan from the Federal Deposit Insurance Corporation.”

In the Fox case, “JPMorgan Chase” and “U.S. Bank as Trustee,” have taken a position that universally applies to all $615B of these securitized loans.

Each one of these loan transactions will show either the investor code “AO1,” “369,” or both somewhere in the “Loan Transfer History” screenshots within the servicing system, and as such, the loans were not purchased from the FDIC.

To date, Chase has relied upon presumptions in order to maintain its position in thousands of foreclosure proceedings that: (1) it acquired the loans through the PAA, and (2) the assignments of beneficial-ownership interests to the loans unto itself is valid.

Please visit Bill Paatalos’s informative blog at http://www.bpinvestigativeagency.com.  Paatalo has investigated and exposed the fraudulent WaMu/FDIC/JPMorgan Chase fraud and is one of the most talented foreclosure fraud investigators in the country.

 

 

 

 

5 Responses

  1. Livinglies is a blessing and the folks who keep it working are Heros.

  2. Reblogged this on California freelance paralegal and commented:
    That is good news that at least some judges are beginning to see through the smokescreen put out by the big banks and mortgage servicers.

  3. The biggest problem I still see is the FBI warned of the mortgage fraud epidemic in Sept. 2004 and nothing was done.

  4. Excellent read. I’ll have to dissect and ingest and apply to mine. Aurora was NO WHERE on my foreclosure papers.

    ________________________________

  5. There is som very good information and links here to consider. Maybe we should ask for the PAA from Countrywide to BANA.

    Sent from my iPhone

    >

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