Deutsch Bank National Trust Company Was Crushed in Texas in 2015. Why isn’t anyone listening?

When a judge looks carefully at the record, the bank loses. The use of Deutsch’s name in the style of the case still shows that Judges are considering the Plaintiff to be the named “Trustee” instead of the named (or named, which is frequently the case) Trust. In fact the Trustee has nothing to do with foreclosures. In this case the Judge wrote the following:

“Judgment (for the homeowner for declaratory relief) was based on findings and conclusions that Deutsche Bank had failed to prove chain of title back to the original lender, now defunct. The sole proof on which the bank relied — a purported assignment from “MERS as nominee for the lender, its successors and assigns” — was held void, because the assignor did not exist when the document was signed.

“Deutsche Bank’s first argument is based on a misrepresentation of the trial record. [i.e. the lawyers were lying to the court about what was in the trial record].

“The Burkes argued that the stamp block containing the Cathy Powers signature was not a part of the Note as originally executed, and instead offered a copy of the unindorsed Note as one of their own exhibits,

“This absence of documentary proof mirrors the lack of any testimonial evidence of holder status. Given its utter failure of proof, Deutsche Bank’s continuing assertion of a right to foreclose as holder of the Note is not just groundless, it is frivolous. On this trial record the current holder of the Burke Note remains a mystery.

“Deutsche Bank introduced no proof whatever of a prior transaction by which it acquired any rights in the Note. Absent such proof, L’Amoreaux is not controlling. Here MERS was acting on behalf of a defunct entity (IndyMac Bank), and its purported assignment was therefore void and invalid under the Texas common law of assignments, as explained below.

“There is simply no proof of an existing assignor with an existing right in the property capable of being assigned in 2011. It is undisputed that Indy-Mac Bank had been “dead” since 2008, several years prior to the 2011 assignment. (P. Ex. 6, at p. 1). Thus, any post-mortem transaction by that entity would be a nullity under Pool v. Sneed.

“In sum, L’Amoreaux does not undermine this court’s judgment in favor of the Burkes because (1) there is no record evidence of a prior assignment of the lender’s interest in the Note or Deed of Trust, (2) there is no record evidence that any purported assignor existed at the time of the 2011 assignment; and (3) there is no record evidence of a principal/agency relationship between MERS and any “successor or assign” of the lender when the assignment was executed.

“Deutsche Bank’s third argument is a red herring

“a homeowner is allowed “to challenge the chain of assignments by which a party claims a right to foreclose….” Id. at 224. It is true that in Texas an obligor cannot defend against an assignee’s efforts to enforce the obligation on a ground that merely renders the assignment “voidable at the election of the assignor,” such as a fraudulent signature by an unauthorized corporate agent. Id. at 225. The problem here is not a voidable defect that a defrauded assignor might choose to disregard — it is the absence of a valid assignor (i.e. a real entity owning the right to be assigned) in the first place. Cf. L’Amoreaux v. Wells Fargo Bank, N.A., 755 F.3d 748, 750 (5th Cir.2014) (considering homeowner’s challenge to validity of MERS assignment on its merits, implicitly rejecting bank’s “voidable” argument).

“A court’s primary duty in construing a written contract is to ascertain the true intention of the parties as expressed in the language of the document itself. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). In this document, the name of the assignor, “Mortgage Electronic Registration Systems, Inc.” appears three (3) times — in the body of the assignment, above the signature line, and in the corporate acknowledgement. Each time, MERS’s name is immediately followed by the phrase “as nominee for” the lender, IndyMac Bank, its successor and assigns. P. Ex. 2. Nowhere does this document hint that MERS intended to convey its own rights,[8] or that it was acting as principal rather than as agent for other entities.

Words matter, especially in real estate transactions. See Univ. Sav. Ass’n v. Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex.1982) (“the terms set out in a deed of trust must be strictly followed”); see also Mathis v. DCR Mortg. III Sub I, L.L.C., 389 S.W.3d 494, 507 (Tex.App. — El Paso, 2012) (“The rules of interpretation that apply to contracts also apply to notes and deeds of trust.”). Based on the words of the 2011 assignment, MERS was no more acting on its own behalf than was the bank’s own law firm.

“Deutsche Bank asks to reopen the trial record to provide “the wet ink original of the Note or testimony affirming Deutsche Bank’s status as holder of the Note.” (Dkt. 90, at 7). No authority or excuse is offered for this breathtakingly late request. Even assuming such evidence exists, Deutsche Bank does not pretend that it is “newly discovered”, nor that the bank was excusably ignorant about it until after trial despite using due diligence to discover it. See 11 WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE § 2808 (2012). After four years of litigation, including court-ordered mediation and trial on the merits, the time for such a deus ex machina maneuver has long since passed. The Burkes are entitled to the finality of judgment that our judicial process is intended to provide. The bank’s request for a do-over is denied.

Let us help you prepare for trial: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat tip Bill Paatalo

see Deutsche Bank Nat’l Trust Co. v. Burke, 117 F. Supp. 3d 953 – Dist

 

4 Responses

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  2. Rhody–was your loan in a CWALT trust?

    Like

  3. Reblogged this on Deadly Clear and commented:
    Lying lawyers?! How unusual. Judges are beginning to tune-in, maybe they feel they can now. Maybe judges don’t think foreclosure blood money should be used to prop up Obamacare either, or that Fannie & Freddie should be held in unnecessary captivity any longer.

    Like

  4. Our home was foreclosed by the Bank of New York Mellon with a Note endorsed in blank having no date on it. It was not clear whether the Note was transferred by Bank of America to BONY at the assignment of mortgage and that too after the closing date of the trust. The bank never produced certified copy of the Note either.

    Like

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