Terms of Art: Assignment or Endorsement?

Lawyers, judges and homeowners are using different terms interchangeably thus muddying up the argument or ruling. An assignment refers to a mortgage whereas an   endorsement (“indorsement” in legalese) refers to a note. The rules regarding enforcement of a mortgage are different than the enforcement of a note.

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I want to point out the difference between assignment and endorsement. Because judges often defer to bank lawyers to explain the law, there is some confusion there. Often the point is that there was no valid purported assignment of the mortgage and there was no valid endorsement of the note. The argument has great significance particularly in view of the use of sham conduints at the initial “closing,” where the disclosed “ledner” is a misrepresentation, thus preventing the doctrine of merger in which the debt is merged with the note.
*
By law, notes are not assigned. They are endorsed if a transfer occurs. Like a check the endorsement must be on the face of the instrument (like the back of the check), or if there is no room because of prior endorsements then an allonge must be permanently affixed to the note containing the endorsement. A separate paper is not an allonge, by definition.
*
Keep in mind that the note is not the debt and the debt is not the note. The note can be (a) evidence of the debt or (b) merged with the debt (to prevent double liability only if the payee on the note is the same as the lender. The only exception to this is if the payee was acting as a disclosed agent for the lender. The debt exists regardless of whether there is paperwork. The note might exist but it might be invalid depending upon whether it memorializes a real transaction between the parties on the note.
*
In practice in the typical “closing” the borrower signs the note and mortgage before he receives the alleged loan. Neither one should be released, much less recorded, by the closing agent unless and until the borrower receives the funds or money is actually paid on the borrower’s behalf by the Payee on the note. When it comes to purported transfer of these residential “loans,” low level employees are not given powers over tens of millions of dollars worth of loans in banking custom and practice.
*
The biggest point I wish to make here is that the assignor and assignee of a mortgage must exist legally and actually. Similarly the endorser and endorsee of a note must exist. An apparently valid assignment or endorsement to a party who did not purchase the debt can result in two things: (a) the assignment of mortgage is not valid because it failed to transfer the debt and/or (b) the failure of the assignment to transfer the debt may be fairly construed as failing to place the subject loan in trust. Without the trust owning the debt (as evidenced by a real transaction in which the debt was purchased from a party who owned the debt), the trust does not exist as to the subject loan nor does it exist at all if that was the practice with respect to all alleged loans for which there was a transfer on paper that did not memorialize real life events.
*
Three endorsements:
Dated special endorsement to a particular party. This will be treated a presumptively valid. But the presumption can be rebutted — if the endorser (“indorser” in legalese) did not own the note or otherwise have the right to act as agent for a party who did own the note. This is the point of our TERA — to expose the fact that the paper is self generated and self serving and fabricated by revealing the one simple fact that the party who executed the endorsement was an actual or fictitious individual who was probably a robo-signor on behalf of an entity that did not own the note nor have the power to assign.
*
Undated special endorsement to a particular party. If it is undated, it is probably fabricated because custom and practice in the industry does not treat mortgage loans the same as they treat checks. When dealing with high ticket items a special endorsement that is dated would (a) ordinarily accompany an assignment of mortgage (often abandoned by the foreclosing party) and (b) MUST be accompanied by acquisition for value — i.e., purchase of the debt. Ordinarily there would also be correspondence and written agreements concerning the sale of the note and mortgage. Those are issues for discovery.
*
Dated or undated blank endorsement — bearer paper. As stated above, big ticket items usually are not generally transferred by blank endorsements, assuming the paper is actually “negotiable.” Hence if it is bearer paper (no person identified as the endorsee) this is likely a fabricated, backdated document, if it is dated, or just a blanket self serving document that consists of a misrepresentation to the court. Note that most provisions in a PSA (Pooling and Servicing Agreement, also referred to as the “trust instrument”) state specifically that (a) the “trust” is organized to be a REMIC vehicle which means there is a 90 day window in which they can acquire loans (the cutoff period) and (b) the assignments must be in recordable form and (c) the endorsements must be valid. Otherwise, the apparent transfer cannot be accepted by the Trust under REMIC rules (see Internal Revenue Code 26 U.S. Code § 860D – REMIC defined), under the powers of the Trustee (virtually nonexistent in most REMIC Trusts), and under New York Law which almost always invoked as the  State in which the Trust is organized. New York Law states that any act that contravenes the powers expressed in the Trust instrument are void, not voidable. So a transfer after the cutoff date is void, as it would ruin the REMIC status under the IRC and violate the specific provisions of the Trust designed to invoke the REMIC rules.

9TH CIRCUIT: MERS and ReconTrust act to usurp Appellant’s property without lawful authority”

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FROM THE BRIEFS:

“MERS Cannot be and in fact is not the beneficiary of the
DOT. There is no named beneficiary in the SOT and ANY and ALL beneficiaries
must be named in the SOT. Therefore the SOT (and consequently the NTS) is
seriously defective and void as an instrument to be implemented to supplant
Appellant from his property.”

“Countrywide was an active conspirator as it allowed BondCorp to utilize its
technological assets, its underwriting resources, account numbering system and
other aids and benefits to entrap Appellant into a loan that was damaging, stated
the wrong parties and took illegal and undisclosed fees.”

EDITOR’S NOTE: The 9th Circuit is inching closer and closer to an outright statement that the foreclosures were fraudulent and illegal. And for the first time it is taking issue with the appointment by Bank of America of ReContrust as “trustee” under the deed of trust. Clearly the replacement of the court system with a qualified trustee was intended to expedite due process, not eliminate it. Every time a substitution of trustee is executed it raises the high probability that the would-be forecloser is appointing itself as the trustee in order to escape the reality that it is not a creditor or proper holder of the loan.

CARNEY vs. BANK OF AMERICA | 9th Circuit Ct. Appeals “It is clear that MERS and ReconTrust act to usurp Appellant’s property without lawful authority”

CARNEY vs. BANK OF AMERICA | 9th Circuit Ct. Appeals “It is clear that MERS and ReconTrust act to usurp Appellant’s property without lawful authority”

MERS, something of a phantom entity and ReconTrust, subsidiary of BAC and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now are trying to come in and clean up the mess made by the fraudulent DOT and Note by BondCorp in a conspiracy with Countrywide, not because they are any real beneficiary and have or will experience any real loss, but rather to gain substantial fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property.

It is truly curious as to why the proper parties in this matter are not named and Appellant posits that other, unrelated legal actions are likely a reason. That said, Appellant has shown good cause why a trustee’s sale should not proceed so that the status quo is maintained while he presses his case in the District Court.”

No. 11-56421

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

________________________________________________________
MICHAEL M. CARNEY
Plaintiff

v.

BANK OF AMERICA CORP., ET AL.
Defendants-Appellees

EXCERPT:

III. Merits Of Case Are Compelling And Clear And Likely to Be Successful.
It is clear that MERS and ReconTrust act to usurp Appellant’s property
without lawful authority. MERS Cannot be and in fact is not the beneficiary of the
DOT. There is no named beneficiary in the SOT and ANY and ALL beneficiaries
must be named in the SOT. Therefore the SOT (and consequently the NTS) is
seriously defective and void as an instrument to be implemented to supplant
Appellant from his property.

Defendants act hurriedly and without authority not because they are
uninformed or have made an excusable mistake, but rather because they wish to
elude the central facts and claims against them, hold the wrongful trustee’s sale
and gain title and possession of Appellant’s property to gain a superior position.

The facts are that BondCorp, who has yet to respond to any complaint or
motion related to this case, was in fact named as “Grantee” when it never proffered
any funds and was used by Countrywide to both gain secret, concealed fees and
allow Countrywide to further gain based on intentional concealments, lies,
misrepresentations and related actions.

As has been stated, the core of this matter is the claims against BondCorp
acting at the behest of Countrywide. If BondCorp was found to have acted
fraudulently, as asserted and supported by facts, every other claim and defense is
affected accordingly.

What this court is presented with is a defendant in BondCorp who has
chosen to remain silent in the face of substantial allegations and facts against it,
and a foreclosing entity defendant (MERS) that is acting without authority and in
clear violation of the law.

Meanwhile, Appellant has had to defend and counter all such actions and to
drag out all the facts, all while in the face of losing his family home and efforts to
understand what options would be available to him to avert such a catastrophic
result.

Up until August/September of 2010, Appellant was resigned to the fact that
his misfortune would likely lead to the loss of his family home. It wasn’t until he
received and further researched the information regarding the assignment/transfer
of his DOT and Note to US BANK (June 2010) that was entirely first time news to
him, that he began to understand and realize the fraud, malfeasance and
misfeasance enacted upon him and then which drove him to seek relief and
damages for.

The facts of the case as pertains to BondCorp are clear and undisputed.
BondCorp was not the “lender”. It only acted as such to attain secret fees.
BondCorp utilized illegal, fraudulent means to sell and convince Appellant that the
loan BondCorp wished to engage him in was in his best interests, when it was not
and that all the facts represented to him regarding the alleged loan were true, when
they were not and the real facts were concealed from him and that he was
defrauded of tens of thousands of dollars in the process.

Countrywide was an active conspirator as it allowed BondCorp to utilize its
technological assets, its underwriting resources, account numbering system and
other aids and benefits to entrap Appellant into a loan that was damaging, stated
the wrong parties and took illegal and undisclosed fees.

MERS, something of a phantom entity and ReconTrust, subsidiary of BAC
and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now
are trying to come in and clean up the mess made by the fraudulent DOT and Note
by BondCorp in a conspiracy with Countrywide, not because they are any real
beneficiary and have or will experience any real loss, but rather to gain substantial
fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property.
It is truly curious as to why the proper parties in this matter are not named
and Appellant posits that other, unrelated legal actions are likely a reason. That
said, Appellant has shown good cause why a trustee’s sale should not proceed so
that the status quo is maintained while he presses his case in the District Court

www.StopForeclosureFraud.com

  1. CARNEY v. BANK OF AMERICA | California Dist. Court “TRO, MERS Interest Discrepancies, ReconTrust may NOT be the Proper Trustee w/ Legal Authority” UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION…
  2. BAKRI v MERS, BONY, TROTT & TROTT PC | Michigan Appeals Court REVERSED “MERS did not have the authority to foreclose by advertisement, No interest in Note” S T A T E  O F  M I C…
  3. CERVANTES RE 9th CIRCUIT OPINION CONTAINS ERROR ON MERS’ LEGAL TITLE Via: LIVING LIES DISTINCTION BETWEEN LENDER AND BENEFICIARY ROOT OF…
  4. BOMBSHELL – JUDGE ORDERS INJUNCTION STOPPING ALL FORECLOSURE PROCEEDINGS BY BANK OF AMERICA; RECONTRUST; HOME LOAN SERVICING; MERS ET AL Via: 4ClosureFraud (St. George, UT) June 5, 2010 – A…
  5. U.S. Bank Natl. Assn. v Mayala | NY Appeals Court 2nd Jud. Dept. Affirms, Consolidated Case “That certain mortgages held by MERS on the subject real property are invalid in their entirety” Decided on August 23, 2011 SUPREME COURT OF THE STATE…

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J Shack: GAME OVER — HSBC FORECLOSURE, EVICTION AND LIS PENDENS DISMISSED WITH PREJUDICE

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SEE ALSO game-over-veal-case-vindicates-every-point-reported-on-livinglies

EDITOR’S ANALYSIS: This case is corroboration of everything we have been saying — the Banks are making us live their lie. They don’t have the mortgages, the investors don’t want them, and the robosigning is euphemism for fraud, forgery and suborning perjury. The road is open to clear title in a suit to quiet title regardless of what stage of foreclosure or contest you are in. If a real creditor wants to make a claim they must present it like any other, without getting around due process, and they must prove it with a FULL accounting for every transaction affecting the loan.

SUMMARY OF IMPORTANT POINTS:

  1. There is no reasonable basis to believe that the investors knew or would accept the transfer of a non-performing loan into a pool in which they supposedly had an interest. The failure of the banks to do the paperwork at the origination of the loan was a fatal defect. They cannot correct the defect by “assigning” the defective and non-performing loan into a pool of assets, contrary to the wishes and agreements with the investors. 
  2. MERS never had the note nor did it ever have an interest in the note. Thus the ability of HSBC to foreclose on a MERS mortgage was eviscerated. The note was split from the mortgage and that defect cannot be cured, although Judge Shack gave HSBC every opportunity to try.
  3. Millions of foreclosures fall into the same category — all of which could be overturned with prejudice, thus disallowing ANYONE to foreclose on property that reveals the same elements as those presented in the Taher case.
  4. Prosecution of notaries, witnesses and signatories, as well as those who put them up to it may well follow at the State level for perjury, criminal fraud, suborning perjury and forgery, based upon Judge Shack’s finding that the statements made in sworn affidavits and confirmed by HSBC were “patently false.”
  5. The pattern of conduct described by Judge Shack also opens the door to civil and criminal RICO actions.
  6. States, sagging under the weight of foreclosures and the dampening effect on each state economy, may well have a way out on a variety of fronts by demonstrating the damage done to the title system, to the economy and to the citizens of each state. 
  7. An “assignment” is no substitute for a properly endorsed note that could be accepted by the assignee. Just like a check, an assignment of the check in a separate instrument conveys nothing. 
  8. A “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity”.
  9.  Self-serving statements claiming agency powers are not sufficient to prove the agency nor the scope of the agent’s powers.
  10. “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel [Emphasis added].”

HSBC v TAHER | Judge SCHACK Grand SLAM!! MERS, Plaintiff’s Counsel, Ocwen Robo-Signers Christina Carter, Scott Anderson, Margery Rotundo Dismissed w/ PREJUDICE

HSBC v TAHER | Judge SCHACK Grand SLAM!! MERS, Plaintiff’s Counsel, Ocwen Robo-Signers Christina Carter, Scott Anderson, Margery Rotundo Dismissed w/ PREJUDICEcoup de grasDecided on July 1, 2011

Supreme Court, Kings County

HSBC Bank USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2

against

Ellen N. Taher, et. al.

EXCERPT:

On plaintiff HSBC’s deadline day, January 7, 2011, the 60th day after issuing my November 8, 2010 decision and order, plaintiff’s counsel, Frank M. Cassara, Esq., of Shapiro, DiCaro & Barak, LLC, submitted to my chambers the required affirmation, pursuant to Chief Administrative Judge Pfau’s Administrative Order 548/10. Mr. Cassara, affirmed “under the penalties of perjury”:

[…]

The assignment of the subject mortgage and note to HSBC, by MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), in the instant foreclosure action is without legal authority. MERS never possessed the TAHER note it allegedly assigned to plaintiff HSBC. Thus, plaintiff HSBC lacked standing to commence the instant foreclosure action. Therefore, the assignment is defective and the instant action is dismissed with prejudice.

Mr. Cassara’s affirmation, affirmed “under the penalties of perjury,” that to the best of Mr. Cassara’s “knowledge, information, and belief, the Summons and Complaint, and other papers filed or submitted to the [*4]Court in this matter contain no false statements of fact or law,” is patently false. Moreover, the Court is troubled that: the alleged representative of plaintiff HSBC, Christina Carter, who according to Mr. Cassara, “confirmed the factual accuracy and allegations set forth in the Complaint and any supporting affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith,” is not an employee of HSBC, but a robosigner employed by OCWEN LOAN SERVICING, LLC [OCWEN], whose signature on legal documents has at least three variations; the MERS to plaintiff HSBC assignment of the subject mortgage and note was executed by Scott W. Anderson, a known robosigner and OCWEN employee, whose signature is reported to have appeared in at least four different variations on mortgage assignments; and, the instant affidavit of merit was executed by Margery Rotundo, another robosigner, OCWEN employee and self-alleged employee of various other banking entities.

Last month, on May 19, 2011, in a case involving a defective MERS to HSBC assignment by a robosigner, Maine’s highest court, the Supreme Judicial Court, found that HSBC’s affidavits and the assignment of the note and mortgage by MERS to HSBC contained serious defects. The Maine Court held “that the affidavits submitted by HSBC contain serious irregularities that make them inherently untrustworthy.” (HSBC Mortg. Services, Inc. v Murphy, 19 A3d 815, 2011 ME 59, * 3). HSBC has a history of foreclosure actions before me with affidavits of merit executed by Margery Rotundo and MERS to HSBC assignments executed by Scott Anderson that “contain serious irregularities that make them inherently untrustworthy.” Moreover, Mr. Cassara was put on notice, in my November 8, 2010 decision and order, that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel.”

[…]

Robosigner Scott W. Anderson

While I have never personally met Mr. Anderson, his signatures have appeared in many foreclosure documents in this Court. His claims of wearing different corporate hats and the variations in the scrawls of initials used for his signature on mortgage documents has earned Mr. Anderson notoriety as a robosigner. Kimberly Miller, in her January 5, 2011-Palm Beach Post article, “State details foreclosure crisis,” wrote:

Sweeping evidence of the case the state attorney general’s office

has built in its pursuit of foreclosure justice for Florida homeowners is

outlined in a 98-page presentation complete with copies of allegedly

forged signatures, false notarizations, bogus witnesses and improper

mortgage assignments.

The presentation, titled “Unfair, Deceptive and Unconscionable

Acts in Foreclosure Cases,” was given during an early December

conference of the Florida Association of Court Clerks and Comptrollers

by the attorney general’s economic crimes division.

It is one of the first examples of what the state has compiled in

its exploration of foreclosure malpractice, condemning banks, mortgage

servicers and law firms for contributing to the crisis by cutting corners . . .

In page after page of copied records, the presentation meticulously

documents cases of questionable signatures, notarizations that could not

have occurred when they are said to have because of when the notary

stamp expires, and foreclosures filed by entities that might not have

had legal ability to foreclose.

It also focuses largely on assignments of mortgage [sic],

documents that transfer ownership of mortgages from one bank to

another. Mortgage assignments became an issue after the real estate

boom, when mortgages were sold and resold, packaged into securities

trusts and otherwise transferred in a labyrinthine fashion that made

tracking difficult.

As foreclosures mounted, the banks appointed people to create

assignments, “thousands and thousands and thousands” of which were signed weekly by people who may not [*6]have known what they were signing . . .

In another example, the signature of Scott Anderson, an employee

of West Palm Beach-based Ocwen Financial Corp., appears in four

styles on mortgage assignments . . .

Paul Koches, executive vice president of Ocwen, acknowledged

Tuesday that the signatures were not all Anderson’s, but that doesn’t mean

they were forged, he said. Certain employees were given authorization

to sign for Anderson on mortgage assignments, which Koches noted

do not need to be notarized.

Still, Ocwen has since stopped allowing other people to sign for

Anderson, Koches said.

Last September, the Ohio Court of Appeals, Second District, Montgomery County

(2010 WL 3451130, 2010-Ohio-4158, lv denied 17 Ohio St.3d 1532 [2011]), affirmed the denial of a foreclosure, sought by plaintiff HSBC, because of numerous irregularities. The Ohio Court, in citing four decisions by this Court [three of the four involved Scott Anderson as assignor] summarized some of this Court’s prior concerns with HSBC and Mr. Anderson, in observing, at * 11:

recent decisions in the State of New York have noted numerous

irregularities in HSBC’s mortgage documentation and corporate

relationships with Ocwen, MERS, and Delta. See, e.g., HSBC Bank

USA, N.A. v Cherry (2007), 18 Misc 3d 1102 (A) [Scott Anderson

assignor] and HSBC Bank USA, N.A. v Yeasmin (2010), 27 Misc 3d

1227 (A) (dismissing HSBC’s requests for orders of reference in

mortgage foreclosure actions, due to HSBC’s failure to provide proper

affidavits). See, also, e.g., HSBC Bank USA, N.A. v Charlevagne (2008),

20 Misc 3d 1128 (A) [Scott Anderson assignor] and HSBC Bank USA,

N.A. v Antrobus (2008), 20 Misc 3d 1127 (A) [Scott Anderson assignor]

(describing “possible incestuous relationship” between HSBC Bank,

Ocwen Loan Servicing, Delta Funding Corporation, and Mortgage

Electronic Registration Systems, Inc., due to the fact that the entities

all share the same office space at 1661 Worthington Road, Suite 100,

West Palm Beach, Florida. HSBC also supplied affidavits in support

of foreclosure from individuals who claimed simultaneously to be

officers of more than one of these corporations.).This Court reviewed Scott Anderson’s signature on the instant MERS to HSBC assignment of the TAHER mortgage and note and using ACRIS compared his signature with that used in assignments in the five prior Scott Anderson assignment foreclosure cases decided by this Court. Similar to the Florida Attorney General’s Economic Crimes Division findings, as reported above in the Kimberly Miller Palm Beach Post article, I also found four variations of Mr. Anderson’s signature in these six assignments. Each signature is actually a variation of Mr. Anderson’s initials, “SA.” The Court concludes that it must be a herculean task for Mr. Anderson to sign “Scott Anderson” or “Scott W. Anderson” in full.

Mr. Anderson’s first signature variation is found in: the January 19, 2007 assignment of the 48 Van Siclen Avenue (Block 3932, Lot 45, County of Kings) mortgage and note from DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE TO MTGLQ INVESTORS LP, by Scott W. Anderson as Senor Vice President of OCWEN, attorney-in-fact for DEUTSCHE BANK (Deutsche Bank Nat Trust Co. v Castellanos, 18 Misc 3d 1115 [A] [Sup Ct, Kings County 2007]), recorded on February 7, 2007 at CRFN 2007000073000; and, the June 13, 2007 assignment of the 3570 Canal Avenue (Block 6978, Lot 20, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Cherry, 18 Misc 3d 1102 (A) [Sup Ct, Kings County 2007]), recorded on August 13, 2007 at CRFN 2007000416732. In this signature variation the letter “S” is a cursive bell-shaped curve overlapping with the cursive letter “A.”

The second signature variation used for Mr. Anderson is in the May 1, 2007 assignment of the 572 Riverdale Avenue (Block 3838, Lot 39, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Valentin, 18 Misc 3d 1123 [A] [Sup [*7]Ct, Kings County 2008]) and HSBC Bank USA, N.A. v Valentin, 21 Misc 3d 1124 [A] [Sup Ct, Kings County 2008], affd as modified 72 AD3d 1027 [2010]), recorded on June 13, 2007 at CRFN 2007000306260. These decisions will be referred to as Valentin I and Valentin II. In this signature variation the letter “S” is a cursive circle around a cursive letter “A” with various loops.

The third signature variation used for Mr. Anderson is in the November 30, 2007 assignment of the 680 Decauter Street (Block 1506, Lot 2, County of Kings) mortgage and note from MERS to HSBC, by Scott Anderson as Vice President of MERS, acting as nominee for DELTA (HSBC Bank USA, N.A. v Antrobus, 20 Misc 3d 1127 [A] [Sup Ct, Kings County [2008]), recorded on January 16, 2008 at CRFN 2008000021186. In this signature variation, the initials are illegible. One cursive letter looks almost like the letter “O.” It is a circle sitting in a valley created by something that looks like the cursive letter “M.”

In the fourth signature variation, used for Mr. Anderson in the February 16, 2009 assignment in the instant case, the cursive letter “S,” which is circular with a loop on the lower left side abuts the cursive letter “A” to its right.

Moreover, in HSBC Bank USA, N.A. v Cherry, Mr. Anderson acted both as assignor of the mortgage and note to HSBC and then as servicing agent for assignee HSBC by executing the “affidavit of merit”for a default judgment. Because of this, in Valentin I, I required him to provide me with an affidavit about his employment history. In Valentin II the Court was provided with an affidavit by Mr. Anderson, sworn on March 14, 2008. Mr. Anderson, in his affidavit, admitted he was conflicted. I noted, at * 2, in Valentin II that:

The Court is troubled that Mr. Anderson acted as both assignor

of the instant mortgage loan, and then as the Vice President of Ocwen,

assignee HSBC’s servicing agent. He admits to this conflict, in ¶ 13,

stating that “[w]hen the loan went into default and then foreclosure in

2007, Ocwen, in it capacity as servicer, elected to remove the loan

from the MERS system and transfer title to HSBC.”

The stockholders of HSBC and the noteholders of the Trust [the

owner of the mortgage] probably are not aware that Mr. Anderson,

on behalf of the servicer, Ocwen, claims to have the right to assign

“toxic” nonperforming mortgage loans to them. It could well be that

Ocwen’s transfer of the instant nonperforming loan, as well as others, is

part of what former Federal Reserve Board Chairman Alan Greenspan

referred to in his October 23, 2008 testimony, before the House

Oversight Committee, as “a once in a century credit tsunami.”

Interestingly, the purported signature of Mr. Anderson in the March 14, 2008-Valentin II affidavit is a fifth signature variation. The Court is perplexed that in response to my order for Mr. Anderson to submit an affidavit with respect to his employment, Mr. Anderson was unable to sign either “Scott Anderson” or “Scott W. Anderson.” Instead, there is a fifth variation of scrawled initials. There is a big loop for the cursive letter “S,” which contains within it something that looks like the cursive letter “M” going into lines that look like the cursive letter “V,” with a wiggly line going to the right of the page.

Robosigner Margery Rotundo

In the instant action, Margery Rotundo executed the April 27, 2009 affidavit of merit and amount due. Ms. Rotundo has, in prior foreclosure cases before me, a history of alleging to be the Senior Vice President of various entities, including plaintiff HSBC, Nomura Credit & Capital, Inc. and an unnamed servicing agent for HSBC. In the instant action she claims to be the Senior Vice President of Residential Loss Mitigation of OCWEN, HSBC’s servicing agent.

In HSBC Bank USA, N.A. v Charlevagne (20 Misc 3d 1128 (A) [Sup Ct, Kings County 2008]), one of the cases in which Scott Anderson as Vice President of MERS assigned the mortgage and note to HSBC, I commented about Ms. Rotundo’s self-allegations of multiple employers, at * 1:

The renewed application of plaintiff, HSBC . . . for an order of

reference and related relief in this foreclosure action, in which all

defendants defaulted, for the premises located at 455 Crescent Street,

Brooklyn, New York (Block 4216, Lot 20, County of Kings) is again [*8]

denied without prejudice, with leave to renew upon providing the

Court with a satisfactory explanation to four concerns.

First, the original application for an order of reference and

related relief was denied with leave to renew, in my unpublished

decision and order of November 15, 2007, because the “affidavit of

merit” was not made by a party but by Margery Rotundo, who swore

that [she] was “Senior Vice President Residential Loss Mitigation of

OCWEN LOAN SERVICING, LLC [OCWEN], Attorney in Fact for

HSBC,”and the “Limited Power of Attorney” from HSBC to OCWEN

was defective. In the renewed application, Ms. Rotundo claims in her

January 9, 2008-”affidavit of merit and amount due,” that she “is the

Senior Vice President of Residential Loss Mitigation of HSBC BANK

USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN

TRUST 2005-3, RENAISSANCE HOME EQUITY LOAN ASSET-

BACKED NOTES, SERIES 2005-3.” In prior decisions, I found that

Ms. Rotundo swore: on October 5, 2007 to be Senior Vice President

of Loss Mitigation for Nomura Credit & Capital, Inc. (Nomura Credit

& Capital, Inc., 19 Misc 3d 1126 (A) [April 30, 2008]); and, on

December 12, 2007 to be Senior Vice President of an unnamed

servicing agent for HSBC (HSBC Bank USA, NA v Antrobus, 20

Misc 3d 1127 (A) [July 31, 2008]).

The late gossip columnist Hedda Hopper and the late United

States Representative Bella Abzug were famous for wearing many

colorful hats. With all the corporate hats Ms. Rotundo has recently

worn, she might become the contemporary millinery rival to both

Ms. Hopper and Ms. Abzug. The Court needs to know the employment

history of the peripatetic Ms. Rotundo. Did she truly switch employers

or did plaintiff have her sign the “affidavit of merit and amount due”

as its Senior Vice President solely to satisfy the Court?

In my Charlevagne decision and order I denied an order of reference without prejudice and granted leave to plaintiff HSBC to renew its application for an order of reference for the premises by providing the Court with several documents, including, at * 4, “an affidavit from Margery Rotundo describing her employment history for the past three years.” Subsequently, plaintiff HSBC’s counsel in Charlevagne, Steven J. Baum, P.C., never provided me with an affidavit from Margery Rotundo, but filed with the Kings County Clerk, on October 27, 2008, a stipulation of discontinuance and cancellation of the notice of pendency.

Robosigner Christina Carter

Mr. Cassara, plaintiff’s counsel affirmed that “On January 4, 2011 and January 5, 2011, I communicated with the following representative . . . of Plaintiff . . . Christina Carter . . . Manager of Account Management.” This is disingenuous. Ms. Carter is not employed by plaintiff, but by OCWEN. She executed documents as an officer of MERS and as an employee of OCWEN. Ms. Carter’s signature on documents is suspect because of the variations of her signature used.

This Court examined eight recent documents that exhibit three different variations of Christina Carter’s signature. The first signature variation is on her May 24, 2010 application with the Florida Department of State for a notary public commission. In this application she lists as her business address that of OCWEN, “1661 Worthington Road, West Palm Beach, FL 33409.” In her full signature the capital letters “C” in her first and last names are signed differently than in other recent documents reviewed by this Court.

In five other documents reviewed by the Court, Ms. Carter signs her initials with the second letter “C” looking like a cursive letter “L,” with a circular loop on the second letter “C.” Three of these documents are deeds of release to acknowledge mortgage satisfactions, filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. In the first document, signed on July 2, 2010, Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 158 Algonquin Trail, Ashland, Massachusetts, with the deed of release [*9]recorded on September 9, 2010, at document number 2010 00156681. In the second document, signed on July 7, 2010, Ms. Carter signed as “Account Management, Manager” for US BANK NATIONAL ASSOCIATION, AS TRUSTEE BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC, for the premises at 30 Kenilworth Street, Malden, Massachusetts, with the deed of release recorded on September 3, 2010, at document number 2010 01542078. In the third Middlesex County, Massachusetts document, signed on July 19, 2010, she signed as “Account Management, Manager” for OCWEN, for the premises at 10 Johnson Farm Road, Lexington, Massachusetts, with the deed of release recorded on September 9, 2010, at document number 2010 00156684. In the fourth document, signed on July 12, 2010, for the assignment of a mortgage for 1201 Pine Sage Circle, West Palm Beach, Florida, Ms. Carter signed as “Account Management, Manager” for NEW CENTURY MORTGAGE CORPORATION BY ITS ATTORNEY-IN-FACT OCWEN LOAN SERVICING, LLC (NEW CENTURY). This mortgage was assigned to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2005-HE3 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-HE3 (DEUTSCHE BANK) and recorded on August 23, 2010 with the Palm Beach County Clerk at CFN 20100314054. Interestingly, both assignor NEW CENTURY and assignee DEUTSCHE BANK have the same address, c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” In the fifth document, Ms. Carter changes corporate hats. She signed, on September 8, 2010, an Oregon assignment of a mortgage deed of trust, for 20673 Honeysuckle Lane, Bend Oregon, as Vice President of MERS “ACTING SOLELY AS NOMINEE FOR CHAPEL MORTGAGE CORPORATION.” The assignment is to DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2006-HE2 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2006-HE2, whose address is c/o OCWEN, “1661 Worthington Road, Suite 100, West Palm Beach, FL 33409.” This was recorded on September 20, 2010 with the Clerk of Deschutes County, Oregon.

Ms. Carter, in the third variation of her signature, again only uses her initials, but the second letter “C” looks like the cursive letter “C,” not the cursive letter “L” with a circular loop. The Court examined two of these documents. The first document is a mortgage satisfaction, signed on June 15, 2010, and filed with the Clerk of Court for Middlesex County, South District, State of Massachusetts. Ms. Carter signed as “Account Management, Manager” for OCWEN, for the premises at 4 Mellon Road, Billerica, Massachusetts. The deed of release was recorded on July 19, 2010, at document number 2010 00031211. In the second document, a mortgage satisfaction for the premises at 13352 Bedford Meadows Court, Wellington, Florida, Ms. Carter signed on July 22, 2010, as “Account Management, Manager” for “HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE BY ITS ATTORNEY-IN FACT OCWEN LOAN SERVICING, LLC.” The document never states for whom HSBC is the Trustee.

This was recorded on September 10, 2010 with the Palm Beach County Clerk at CFN 20100339935.

Plaintiff’s lack of Standing

Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff.” Plaintiff HSBC’s application for an order of reference is a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]).

However, the instant action must be dismissed because plaintiff HSBC lacks standing to bring this action. MERS lacked the authority to assign the subject TAHER mortgage to HSBC and there is no evidence that MERS physically possessed the TAHER notes. Under the terms of the TAHER consolidation, extension and modification agreement, DELTA, not MERS, is the “Note Holder.” As described above, the consolidation, extension and modification agreement defines the “Note Holder” as the “Lender or anyone who succeeds to Lender’s rights under this Agreement and who is entitled to receive the payments.”

“Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor David Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:

[i]t is the law’s policy to allow only an aggrieved person to bring a

lawsuit . . . A want of “standing to sue,” in other words, is just another

way of saying that this particular plaintiff is not involved in a genuine

controversy, and a simple syllogism takes us from there to a “jurisdictional” [*10]

dismissal: (1) the courts have jurisdiction only over controversies; (2) a

plaintiff found to lack “standing”is not involved in a controversy; and

(3) the courts therefore have no jurisdiction of the case when such a

plaintiff purports to bring it.

“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

The Appellate Division, Second Department recently instructed, with respect to standing in a foreclosure action, in Aurora Loan Services, LLC v Weisblum (___ AD3d ___, 2011 NY Slip Op 04184 [May 17, 2011]), at * 6-7, that:

In order to commence a foreclosure action, the plaintiff must

have a legal or equitable interest in the mortgage ( see Wells Fargo

Bank, N.A. v Marchione, 69 AD3d, 204, 207 [2d Dept 2009]). A

plaintiff has standing where it is both (1) the holder or assignee of

the subject mortgage and (2) the holder or assignee of the underlying

note, either by physical delivery or execution of a written assignment

prior to the commencement of the action with the filing of the complaint

(see Wells Fargo Bank, N.A. v Marchione, 69 AD3d at 207-209; U.S.

Bank v Collymore, 68 AD3d 752, 754 [2d Dept 2009].)

Assignments of mortgages and notes are made by either written instrument or the

assignor physically delivering the mortgage and note to the assignee. “Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]).

In the instant action, even if MERS had authority to transfer the mortgage to HSBC, DELTA, not MERS, is the note holder. Therefore, MERS cannot transfer something it never proved it possessed. A “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity [Emphasis added].” (Kluge v Fugazy (145 AD2d 537, 538 [2d Dept 1988]). Moreover, “a mortgage is but an incident to the debt which it is intended to secure . . . the logical conclusion is that a transfer of the mortgage without the debt is a nullity, and no interest is assigned by it. The security cannot be separated from the debt, and exist independently of it. This is the necessary legal conclusion.” (Merritt v Bartholick, 36 NY 44, 45 [1867]. The Appellate Division, First Department, citing Kluge v Fugazy in Katz v East-Ville Realty Co. ( 249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact.” (See U.S. Bank, N.A. v Collymore, 68 AD3d at 754).

MERS had no authority to assign the subject mortgage and note

Scott Anderson for MERS as assignor, did not have specific authority to sign the TAHER mortgage. Under the terms of the consolidation, extension and modification agreement, MERS is “acting solely as nominee for Lender [DELTA].” The alleged power of attorney cited in the Scott Anderson MERS to HSBC assignment, as described [*11]above, is a limited power of attorney from DELTA to OCWEN for the premises located at 14 Harden Street, Brooklyn, New York, not the subject premises. MERS is not mentioned or involved with this limited power of attorney. In both underlying TAHER mortgages MERS was “acting solely as a nominee for Lender,” which is DELTA. The term “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:

The legal status of a nominee, then, depends on the context of

the relationship of the nominee to its principal. Various courts have

interpreted the relationship of MERS and the lender as an agency

relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.

Idaho, March 12, 2009) (MERS “acts not on its own account. Its

capacity is representative.”); Mortgage Elec. Registrations Systems,

Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182

(March 19, 2009) (“MERS, by the terms of the deed of trust, and its

own stated purposes, was the lender’s agent”); La Salle Nat. Bank v

Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .

(“A nominee of the owner of a note and mortgage may not effectively

assign the note and mortgage to another for want of an ownership

interest in said note and mortgage by the nominee.”)

The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:

In 1993, the MERS system was created by several large

participants in the real estate mortgage industry to track ownership

interests in residential mortgages. Mortgage lenders and other entities,

known as MERS members, subscribe to the MERS system and pay

annual fees for the electronic processing and tracking of ownership

and transfers of mortgages. Members contractually agree to appoint

MERS to act as their common agent on all mortgages they register

in the MERS system. [Emphasis added]

Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d [*12]Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).

Thus, in the instant action, MERS, as nominee for DELTA, is DELTA’s agent for limited purposes. It only has those powers given to it and authorized by DELTA, its principal. Plaintiff HSBC failed to submit documents authorizing MERS, as nominee for DELTA, to assign the subject consolidation extension and modification mortgage to plaintiff HSBC. Therefore, MERS lacked authority to assign the TAHER mortgage, making the assignment defective. In Bank of New York v Alderazi (28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010]), Justice Wayne Saitta instructed that:

A party who claims to be the agent of another bears the burden

of proving the agency relationship by a preponderance of the evidence

(Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913])

and “[t]he declarations of an alleged agent may not be shown for

the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v

Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see

also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d

Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept

1978].) “[T]he acts of a person assuming to be the representative of

another are not competent to prove the agency in the absence of evidence

tending to show the principal’s knowledge of such acts or assent to them.”

(Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d

at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26).

Further, several weeks ago, the Appellate Division, Second Department in Bank

of New York v Silverberg, (___ AD3d ___, 2011 NY Slip Op 05002 [June 7, 2011]), confronted the issue of “whether a party has standing to commence a foreclosure action when that party’s assignor—in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS)—was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.” The Court held, “[w]e answer this question in the negative.” Silverberg, similar to the instant TAHER matter, deals with the foreclosure of a mortgage with a consolidation, modification and extension agreement. MERS, in the Silverberg case and the instant TAHER action, never had title or possession of the Note and the definition of “Note Holder” is substantially the same in both consolidation, extension and [*13]modification agreements. The Silverberg Court instructed, at * 4-5:

the assignment of the notes was thus beyond MERS’s authority as

nominee or agent of the lender (see Aurora Loan Servs., LLC v

Weisblum, AD3d, 2011 NY Slip Op 04184, *6-7 [2d Dept 2011];

HSBC Bank USA v Squitteri, 29 Misc 3d 1225 [A] [Sup Ct, Kings

County, F. Rivera, J.]; ; LNV Corp. v Madison Real Estate, LLC,

2010 NY Slip Op 33376 [U] [Sup Ct, New York County 2010,

York, J.]; LPP Mtge. Ltd. v Sabine Props., LLC, 2010 NY Slip Op

32367 [U] [Sup Ct, New York County 2010, Madden, J.]; Bank of

NY v Mulligan, 28 Misc 3d 1226 [A] [Sup Ct, Kings County 2010,

Schack, J.]; One West Bank, F.S.B., v Drayton, 29 Misc 3d 1021

[Sup Ct, Kings County 2010, Schack, J.]; Bank of NY v Alderazi,

28 Misc 3d 376, 379-380 [Sup Ct, Kings County 2010, Saitta, J.]

[the “party who claims to be the agent of another bears the burden

of proving the agency relationship by a preponderance of the evidence”];

HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A] [Sup Ct, Kings

County 2010, Schack, J.]; HSBC Bank USA, N.A. v Vasquez, 24

Misc 3d 1239 [A], [Sup Ct, Kings County 2009, Schack, J.]; Bank of

NY v Trezza, 14 Misc 3d 1201 [A] [Sup Ct, Suffolk County 2006,

Mayer, J.]; La Salle Bank Natl. Assn. v Lamy, 12 Misc 3d 1191 [A]

[Sup Ct, Suffolk County, 2006, Burke, J.]; Matter of Agard, 444 BR

231 [Bankruptcy Court, ED NY 2011, Grossman, J.]; but see U.S.

Bank N.A. v Flynn, 27 Misc 3d 802 [Sup Ct, Suffolk County 2011,

Whelan, J.]).

Moreover, the Silverberg Court concluded, at * 5, that “because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the . . . assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” Further, Silverberg the Court observed, at * 6, “the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property.” [Emphasis added]

Therefore, the instant action is dismissed with prejudice.

Cancellation of subject notice of pendency

The dismissal with prejudice of the instant foreclosure action requires the

cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding [*14]brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court, upon motion of any person aggrieved and upon such

notice as it may require, shall direct any county clerk to cancel

a notice of pendency, if service of a summons has not been completed

within the time limited by section 6512; or if the action has been

settled, discontinued or abated; or if the time to appeal from a final

judgment against the plaintiff has expired; or if enforcement of a

final judgment against the plaintiff has not been stayed pursuant

to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff HSBC’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Possible frivolous conduct by HSBC and its counsel

In this Court’s November 8, 2010 decision and order, Mr. Cassara and his firm, as counsel for plaintiff HSBC, were put on notice about the new affirmation required to be submitted by plaintiff’s counsel in foreclosure actions, pursuant to Administrative Order 548/10. In foreclosure cases pending on October 20, 2010, such as the TAHER case, the affirmation is required to be filed with the Court when moving for either an order of reference or a judgment of foreclosure and sale or five business days before a scheduled auction. Chief Judge Lippman, according to the Office of Court Administrations’s October 20, 2010 press release, stated that, “[t]his new filing requirement will play a vital role in ensuring that the documents judges rely on will be thoroughly examined, accurate, and error-free before any judge is asked to take the drastic step of foreclosure.”

Plaintiff’s counsel was warned that defects in foreclosure filings “include failure of plaintiffs and their counsel to review documents and files to establish standing and other [*15]foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and robosigning’ of documents by parties and counsel.” Mr. Cassara affirmed “under the penalties of perjury,” on January 6, 2011, to the factual accuracy of the complaint, the supporting documents and notarizations contained therein and that the complaint and papers filed with the Court in the TAHER matter “contain no false statements of fact or law.” Further, plaintiff’s counsel was informed that “[t]he wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause

for disciplinary and other sanctions upon participating counsel [Emphasis added].”

However, plaintiff HSBC did not have standing to bring the instant action and its

complaint is replete with false statements. For example, ¶ 1 alleges that HSBC has an office at “1661 Worthington Road, Suite 100, P.O. Box 24737, West Palm Beach, FL 33415.” This is actually OCWEN’s office. OCWEN’s zip code is 33409, not 33415. Also, how big is P.O. Box 24737? Is it big enough to contain an HSBC office? Further, ¶ 6 alleges that HSBC is the owner of the note, which it is not. MERS had no authority to assign the note owned by DELTA to HSBC. MERS was DELTA’s nominee for recording the TAHER-consolidated mortgage but it never possessed the underlying note. (See Bank of New York v Silverberg at * 4-5).

Three robosigners – Scott Anderson, Margery Rotundo and Christina Carter – are involved in this matter. Scott Anderson, who wears many corporate hats and has at least five variations of his initials scrawled on documents filed in this Court, is the alleged assignor of the subject mortgage and note to HSBC, despite lacking authority from DELTA. Both alleged assignor MERS and alleged assignee HSBC have the same address – 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. The milliner’s delight Margery Rotundo executed the affidavit of merit for OCWEN. Then, Mr. Cassara relied upon Christina Carter as the representative of HSBC to confirm the accuracy of HSBC’s documents and their notarizations. However, she is not employed by HSBC. Is Mr. Cassara aware of the robosigning history of Mr. Anderson, Ms. Rotundo and Ms. Carter?

Putting aside HSBC’s lack of standing, MERS allegedly assigned the TAHER- consolidated mortgage and note to HSBC 169 days after defendant TAHER allegedly defaulted in her payments. If HSBC has a duty to make money for its stockholders, why is it purchasing nonperforming loans, and then wasting the Court’s time with defective paperwork and the use of robosigners? The Courts have limited resources, even more so in light of the recent cuts in the budget for fiscal year 2012 and the layoff of several hundred court employees by the Office of Court Administration. The Courts cannot allow itself, as Chief Judge Lippman said in OCA’s October 20, 2010 press release, “to stand by idly and be party to what we know is a deeply flawed process, especially when that process involves basic human needs – such as a family home – during this period of economic crisis.” [*16]

Last year, in HSBC Bank USA v Yeasmin, 24 Misc 3d 1239 [A], for a variety of reasons, I denied plaintiff’s renewed motion for an order of reference and dismissed the foreclosure action with prejudice. Plaintiff’s counsel in YeasminYeasmin, at * 8, that Mr. Westmoreland stated: submitted an affidavit by Thomas Westmoreland, Vice President of Loan Documentation for HSBC, in which he admitted to a lack of due diligence by HSBC. I observed in

in his affidavit, in ¶’s 4 – 7 and part of ¶ 10:

4. The secondary mortgage market is, essentially, the buying and

selling of “pools” of mortgages.

5. A mortgage pools is the packaging of numerous mortgage

loans together so that an investor may purchase a significant

number of loans in one transaction.

6. An investigation of each and every loan included in a particular

mortgage pool, however, is not conducted, nor is it feasible.

7. Rather, the fact that a particular mortgage pool may

include loans that are already in default is an ordinary risk

of participating in the secondary market . . .

10. . . . Indeed, the performance of the mortgage pool is the

measure of success, not any one individual loan contained

therein. [Emphasis added]

The Court can only wonder if . . . the dissemination of this

decision will result in Mr. Westmoreland’s affidavit used as evidence

in future stockholder derivative actions against plaintiff HSBC. It can’t

be comforting to investors to know that an officer of a financial

behemoth such as plaintiff HSBC admits that “[a]n investigation of

each and every loan included in a particular mortgage pool, however,

is not conducted, nor is it feasible” and that “the fact that a particular

mortgage pool may include loans that are already in default is an

ordinary risk of participating in the secondary market.

Therefore, the continuation of this action by plaintiff HSBC, with its false

statements of facts, the use of robosigners, and the disingenuous affirmation of Mr. Cassara, appears to be frivolous. 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1(c) states that:

For purposes of this part, conduct is frivolous if: [*17]

(1) it is completely without merit in law and cannot be supported

by a reasonable argument for an extension, modification or

reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of

the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that the instant motion for an order of reference “is completely without merit in law” and “asserts material factual statements that are false.” Further, Mr. Cassara’s January 6, 2011 affirmation, with its false and defective statements may be a cause for sanctions.

Several years before the drafting and implementation of the Part 130 Rules for

costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the

proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the

courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if

“it is completely without merit . . . and cannot be supported by a

reasonable argument for an extension, modification or reversal of

existing law; or . . . it is undertaken primarily to delay or prolong

the resolution of the litigation, or to harass or maliciously injure

another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR

130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” The instant action, with HSBC lacking standing and using robosigners, is “a waste of judicial resources.” This [*18]conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to

examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).”

In the instant action, plaintiff HSBC’s President and Chief Executive Officer (CEO) bears a measure of responsibility for plaintiff’s actions, as well as plaintiff’s counsel. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.” Irene M. Dorner, President and CEO of HSBC, is HSBC’s “captain of the ship.” She should not only take credit for the fruits of HSBC’s victories but must bear some responsibility for its defeats and mistakes. According to HSBC’s 2010 Form 10-K, dated December 31, 2010, and filed with the U.S. Securities and Exchange Commission on February 28, 2011, at p. 255, “Ms. Dorner’s insight and particular knowledge of HSBC USA’s operations are critical to an effective Board of Directors” and Ms. Dorner “has many years of experience in leadership positions with HSBC and extensive global experience with HSBC, which is highly relevant as we seek to operate our core businesses in support of HSBC’s global strategy.” HSBC needs to have a “global strategy” of filing truthful documents and not wasting the very limited resources of the Courts. For her responsibility she earns a handsome compensation package. According to the 2010 Form 10-k, at pp. 276-277, she earned in 2010 total compensation of $2,306,723. This included, among other things: a base salary of $566,346; a discretionary bonus of $760,417; and, other compensation such as $560 for financial planning and executive tax services; $40,637 for executive travel allowance, $24,195 for housing and furniture allowance, $39,399 for relocation expenses and $3,754 for executive physical and medical expenses.

Therefore, the Court will examine the conduct of plaintiff HSBC and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff HSBC, [*19]by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC, engaged in frivolous conduct, and to allow plaintiff HSBC, by its President and CEO, Irene M. Dorner, and plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC a reasonable opportunity to be heard.

Conclusion

Accordingly, it is

ORDERED, that the motion of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, for an order of reference for the premises located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is denied with prejudice; and it is further

ORDERED, that because plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, lacks standing in this foreclosure action, the instant complaint, Index No. 9320/09 is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on April 16, 2009 by plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, in an action to foreclose a mortgagefor real property located at 931 Gates Avenue, Brooklyn, New York (Block 1632, Lot 57, County of Kings), is cancelled and discharged; and it is further

ORDERED, that it appearing that plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, plaintiff’s counsel Frank M. Cassara, Esq. and his firm Shapiro, DiCaro & Barak, LLC engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: plaintiff HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST 2007-2, by its President and Chief Executive Officer, Irene M. Dorner; plaintiff’s counsel Frank M. Cassara, Esq.; and, his firm Shapiro, DiCaro & Barak, LLC; “a reasonable opportunity to be heard” before me in Part 27, on Friday, July 15, 2011, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Irene M. Dorner, President and Chief Executive Officer of plaintiff, HSBC BANK USA, N.A., AS INDENTURE TRUSTEE FOR THE REGISTERED NOTEHOLDERS OF RENAISSANCE HOME EQUITY LOAN TRUST [*20]2007-2, 452 Fifth Avenue, New York, New York 10018; Frank M. Cassara, Esq., Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624; and, Shapiro DiCaro & Barak, LLC, 250 Mile Crossing Boulevard, Suite One, Rochester, New York 14624.

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACKJ. S. C.

Scott Anderson Signature Variance


www.StopForeclosureFraud.com

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SACCI v. MERS | CA Dist. Court “MYSTIFYING, UTTERLY CONFUSING ASSIGNMENTS, SUBSTITUTIONS, HOST OF ENTITIES

MOST POPULAR ARTICLES

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

USDC CA Central -Sacchi-v-Mers-La-11-Cv11-01658-Ahm-Cwx-w

EDITOR’S NOTE: Every time a Court actually looks at the documents, examines the pleadings and exhibits and asks the most basic questions, they rule in favor of the borrower. It’s not out of bias that they ruled as they did before nor is out of some new bias for borrowers that the latest rulings favor borrowers. It is just application of simple, basic existing law without any need to treat the issues as novel in any way.

The Banks have completed millions of foreclosures side-stepping the issue of whether or not they are in fact the creditor, whether they could submit a credit bid at the auction, whether the money is owed to them, and if they are acting as “agent” whether they will disclose the principal in the transaction. The courts deferred to the banks for too long. Now the Judges are realizing that they have been hoodwinked and that their prior rulings have enabled the worst property title crisis in U.S. history as well as the worst financial scam. The ultimate cost of these errors cannot be calculated in money alone. Ruined lives, divorces and suicides are not just numbers on a page.

SACCI v. MERS | CA Dist. Court “MYSTIFYING, UTTERLY CONFUSING ASSIGNMENTS, SUBSTITUTIONS, HOST OF ENTITES, 2923.5″

SACCI v. MERS | CA Dist. Court “MYSTIFYING, UTTERLY CONFUSING
ASSIGNMENTS, SUBSTITUTIONS, HOST OF ENTITES, 2923.5″

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

ANGELA SACCI, et al

vs

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS , INC,, et al

EXCERPT:

This Court has dealt with numerous mortgage-related cases, and in the process of wading through them it has learned that seemingly straightforward transactions -non – judicial foreclosures- are not at all routine. Indeed, all too often they are mystifying, because of the utterly confusing assignments, substitutions, and other transactions (some recorded, some not) conducted by a host of entities. The number and names of the defendants in Plaintiffs’ FAC only hint at what has now been revealed as the tangled story underlying this loan and the other loans involved in many of these cases.

[…]

Not only is Gomes distinguishable on it’s facts, the Gomes court actually suggested a cause of action for wrongful foreclosure might survive if “the plaintiff complaint identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party.” Id. (emphasis in original). Here, Plaintiffs have alleged just such a specific factual basis – namely, that RCS was not yet the beneficiary under the DOT when it executed the Substitution of Trustee in favor of Fidelity.

[…]

TN CT on STATUS AS CREDITOR: Authentication of Documents Insufficient with Self Serving Affidavits

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

SEE ALSO MASSACHUSEETS SUPREME COURT ORAL ARGUMENT

EDITOR’S NOTE: The walls are closing in on the pretender lenders. The number of Judges that are insisting on applying the substantive, procedural law and rules and evidence is climbing rapidly. The allegation that the loan was transferred is put in factual issue requiring the pretender to plead and prove its case. The burden of proof is shifting back to where it belongs — on the party seeking affirmative relief (i.e., taking the house or collecting force-placed insurance or whatever).

The bottom line is that if a pretender can’t prove they are the real thing in a judicial proceeding, they are not entitled to anything because they lack jurisdictional standing — and that applies whether it is non-judicial or judicial. The use of self-serving affidavits or “representations of counsel” won’t cut it. There must be real evidence of real facts. And documents must be properly authenticated — which means that a witness must forward who is legally COMPETENT to testify.

If you look at the all the affidavits filed in the millions of foreclosures that were initiated, there is an absence of such a witness on the face of the self-serving affidavit or declaration. Without authentication, not even the mortgage can be admitted into evidence, much less transfers of the mortgage. Those witnesses, if they ever existed have long since been downsized (fired) out of organizations that either no longer exist or which have been reorganized and reconstituted.

There are numerous established ways of correcting defects or clouds on the chain of title. The pretenders are not using any of them because the truth is they never loaned the money, they were not at the closing, they never purchased the loan, and the loan documents describe a transaction that never occurred, ignoring the real transaction that occurred between the borrower and the investor-lender which must either be considered undocumented or only partially documented.

THERE IS NO WAY THAT A NON-JUDICIAL FORECLOSURE PROCEEDING SHOULD BE ALLOWED TO PROCEED WHEN THE WOULD-BE FORECLOSER CANNOT EVEN PLEAD A CASE THAT WOULD SURVIVE A MOTION  TO DISMISS IN A JUDICIAL FORECLOSURE. THERE IS NO WAY THAT A WOULD- BE FORECLOSER CAN PREVAIL UNLESS THEY ARE IN FACT THE CREDITOR AND CAN PROVE IT.

TN Court Finds Sufficient, Genuine Issue Regarding Sold Loans, Unrecorded Assignment LEE v. EQUIFIRST

TN Court Finds Sufficient, Genuine Issue Regarding Sold Loans, Unrecorded Assignment LEE v. EQUIFIRST

TERI LEE, Plaintiff,
v.
EQUIFIRST CORP., HOMEQ SERVICING CORP., QUANTUM SERVICING CORP., SUTTON FUNDING, LLC, ROOSEVELT MORTGAGE ACQUISITION CO., and WELLS FARGO, N.A., Defendants.

Case No. 3:10-cv-809.

United States District Court, M.D. Tennessee, Nashville Division.

April 25, 2011.

MEMORANDUM

ALETA A. TRAUGER, District Judge.

Pending before the court is the Motion for Summary Judgment filed by defendant EquiFirst Corp. (Docket No. 64), to which the plaintiff has filed a response (Docket No. 68), and in support of which the defendant has filed a reply (Docket No. 74). For the reasons discussed below, the defendant’s motion will be denied.

BACKGROUND

Plaintiff Teri Lee took out two mortgage loans, the larger of which was for $152,000 (the “Primary Loan”), to purchase her residence in Nashville, Tennessee.[1] Eventually, she missed payments on the Primary Loan. This action arises from the resulting foreclosure.

At the March 2, 2007 closing of the plaintiff’s home purchase, defendant EquiFirst Corp. (“EquiFirst”) held the promissory notes and the servicing rights to both loans. The Amended Complaint alleges that, on May 1, 2007, EquiFirst assigned the servicing rights of the loans to defendant HomEq Servicing Corp. (“HomEq”). (Docket No. 50 ¶ 12.)

The plaintiff’s deed of trust required her to carry an insurance policy on her property, and she allegedly maintained sufficient coverage for the duration of the loans. (Id. ¶ 25.) The plaintiff alleges that on two occasions — May 13, 2008 and October 14, 2008 — HomEq charged her for additional, unnecessary insurance policies, because it failed to discover that she already had insurance. (Id. ¶¶ 27-28.) These charges totaled approximately $4,700, and this expense allegedly caused the plaintiff to fall behind on her loan payments. (Id. ¶¶ 27-28, 34.)

On February 25, 2009, the plaintiff allegedly received a notice of acceleration of the Primary Loan from a law firm, identifying the current creditor as defendant Sutton Funding, LLC (“Sutton”). (Id. ¶ 35.) The next month, Lee received a notice of foreclosure from the same law firm. (Id.)

At that point, the plaintiff called HomEq, which allegedly offered her a forbearance agreement. Under the proposed plan, the plaintiff would immediately pay $3,500 and would then pay increased monthly payments until November 2009, at which point her account would be current. (Id. ¶¶ 36-37.) The plaintiff alleges that she accepted these terms and signed an agreement (the “Forbearance Agreement”) with HomEq on March 27, 2009. (Id.) The agreement provided that it would be binding upon the parties’ “successors and assigns.” (Id. ¶ 39.)

On May 15, 2009, after accepting the plaintiff’s up-front payment and first increased monthly payment, HomEq allegedly transferred the servicing rights for the Primary Loan to defendant Quantum Servicing Corp. (“Quantum”). (Id.Id. ¶ 40.) The letter informed her that she was more than $6,900 in arrears, and it did not reference the Forbearance Agreement. (Id. ¶ 40.) ¶ 38.) Shortly thereafter, the plaintiff received a “Validation of Debt” letter from Quantum, listing defendant Roosevelt Mortgage Acquisition Co. (“Roosevelt”) as the current creditor. (

Quantum allegedly never recognized the Forbearance Agreement. The plaintiff claims that the amounts she paid HomEq under the Forbearance Agreement left her unable to pay the balance that Quantum asserted was due. (Id. ¶¶ 42-43.) Ultimately, on March 24, 2010, after several months of communications with Quantum and its law firm, the plaintiff’s home was sold at a foreclosure sale.

The plaintiff asserts three causes of action: (1) negligence by HomEq for charging her for unnecessary insurance; (2) negligence by HomEq and Quantum for failing to ensure that the Forbearance Agreement was honored when the servicing of her loan was transferred between those companies; and (3) violation of the Real Estate Settlement and Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., by Quantum, for failing to respond to several “qualified written requests” in the months before the foreclosure.[2] (Id. ¶¶ 24-76.) The plaintiff alleges that EquiFirst is vicariously liable, as the creditor of the Primary Loan and as the principal of HomEq and Quantum, for the first two causes of action. (Id. ¶¶ 30, 46, 52.)

The deed of trust for the plaintiff’s property was recorded by Mortgage Electronic Registering Service (“MERS”), of which all of the defendants are members. This allegedly made it difficult for the plaintiff to determine which defendant was the creditor for the Primary Loan at any given time. (Docket No. 50 ¶ 20.) The plaintiff alleges that “[m]embers of MERS do not publicly list this information in the MERS system, which they use to avoid listing the chain of title in the county registry.” (Id. ¶ 19.)

Defendant EquiFirst previously filed a Motion to Dismiss, arguing, in relevant part, that it sold both of the plaintiff’s mortgage loans before any of the servicers’ alleged negligence had occurred. In support of that motion, the defendant filed the declaration of Karen L. Stacy, an EquiFirst Vice President. (Docket No. 18.) In response, the plaintiff requested more time for discovery.

In ruling on the Motion to Dismiss, the court declined to consider the defendant’s extrinsic evidence. (Docket No. 28 at 7 n.2.) The court held that EquiFirst, as mortgagee, could be held vicariously liable for actions taken by HomEq, as servicer. (Id. at 8.) It also found that the plaintiff’s initial Complaint contained sufficient allegations that EquiFirst was the creditor when HomEq charged the plaintiff for insurance. (Id. at 6-7.) There were no allegations, however, suggesting that EquiFirst was the creditor after February 2009; thus, the court dismissed all claims against EquiFirst, except for the negligence claim related to insurance. (Id. at 7.)

The court stated that, “if the evidence ultimately shows that EquiFirst did sell the loans in March 2007, then [EquiFirst] will not be held liable for actions taken by the servicer in 2008.” (Id. at 8.) It further noted that, “[i]f discovery ultimately shows that EquiFirst owned the loan at a later date, the plaintiff may move to amend her Complaint as necessary to re-assert the relevant claims against EquiFirst.” (Id. at 7 n.3.) The plaintiff did subsequently file an Amended Complaint, which, as mentioned above, alleges that EquiFirst is vicariously liable for HomEq’s negligence regarding the insurance and for HomeEq’s and Quantum’s negligence in handling the Forbearance Agreement.

EquiFirst has now filed a Motion for Summary Judgment, pursuant to Federal Rule of Civil Procedure 56. Relying exclusively on the previously filed declaration of Karen L. Stacy, the defendant once again argues that it was not the creditor on the Primary Loan when the servicers’ alleged negligence occurred.

ANALYSIS

I. Summary Judgment Standard

Rule 56 requires the court to grant a motion for summary judgment 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). If a moving defendant shows that there is no genuine issue of material fact as to at least one essential element of the plaintiff’s claim, the burden shifts to the plaintiff to provide evidence beyond the pleadings “set[ting] forth specific facts showing that there is a genuine issue for trial.” Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “In evaluating the evidence, the court must draw all inferences in the light most favorable to the [plaintiff].” Moldowan, 578 F.3d at 374.

At this stage, “`the judge’s function is not . . . to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial.’” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). But “the mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient,” and the plaintiff’s proof must be more than “merely colorable.” Anderson, 477 U.S. at 249, 252. An issue of fact is “genuine” only if a reasonable jury could find for the plaintiff. Moldowan, 578 F.3d at 374 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

II. EquiFirst’s Sale of the Loans

The instant dispute boils down to the factual issue of when, exactly, EquiFirst sold the plaintiff’s loans. The defendant argues that Karen L. Stacy’s declaration shows that it sold the loans on March 30, 2007, so it was not liable for HomEq’s or Quantum’s subsequent negligence. The plaintiff argues that her own evidence shows that EquiFirst still owned the loans on May 14, 2007 and February 20, 2009.

Stacy’s declaration states that, “[o]n March 30, 2007, EquiFirst sold both of the [plaintiff’s mortgage] Loans to Sutton Funding, LLC,” and, “[o]n May 1, 2007, EquiFirst transferred the servicing of both of the Loans to HomEq Servicing Corporation.” (Docket No. 18 ¶¶ 3, 5.) The declaration further states:

EquiFirst was not, at any point in time, the creditor on the Loans during the periods of time in which the Loans were serviced by HomEq Servicing Corporation or by Quantum Servicing Corporation. . . . After EquiFirst transferred the servicing of both Loans to HomEq Servicing Corporation on May 1, 2007, EquiFirst did not have, and EquiFirst continues to not have any ownership interest in the two Loans or the two corresponding liens on the subject property.

(Id. ¶¶ 6-7.) But, “[b]ecause MERS was the beneficiary on the relevant security instruments, no assignment was prepared or recorded in the Register’s Office of Davidson County, Tennessee.” (Id. ¶ 4.)

In opposing the assertions contained in this declaration, the plaintiff relies on several documents. First, the plaintiff has submitted two “Validation of Debt” letters that she received from HomEq, one for each loan, both dated May 14, 2007. These letters, which are dated six weeks after EquiFirst’s claimed sale date, state that HomEq “is responsible for providing monthly remittance processing . . . on behalf of the current owner of the loan EquiFirst.” (Docket No. 68, Exs. 3-4 (emphasis added).) The plaintiff has also submitted five largely identical notice-of-default letters from HomEq, dated February 15, 2008, August 15, 2008, October 16, 2008, January 19, 2009, and February 19, 2009, each of which states that “Barclays Bank PLC” is the Primary Loan’s “current creditor/owner.” (Id., Exs. 6-7.) The plaintiff points out that EquiFirst, which was formally dissolved as of June 2010, was owned, via a string of wholly owned subsidiaries, by Barclays Bank PLC (“Barclays”).[3] (See Docket No. 4 at 1 (EquiFirst’s corporate disclosure statement).) Finally, the plaintiff has submitted a document included in HomEq’s initial disclosures titled “Communication History,” which appears to be an internal log of events and communications related to the plaintiff’s loan file. (Docket No. 68, Ex. 5.) It contains an entry, dated February 20, 2009, labeled “comment log.” In the “description” column, the entry states: “INVESTOR 394 EQUIFIRST BBPLC FORECLOSURE IN THE NAME OF: BARCLAYS CAPITAL.” (Id.)

The court finds that, at least at this stage in the litigation, the plaintiff’s documents are sufficient to create a genuine issue for trial regarding when EquiFirst sold the loans. Significantly, the defendant’s sole piece of evidence is the self-serving declaration of its own employee, which contains the bare assertion that EquiFirst sold the loan to Sutton in March 2007. The defendant has not, for example, attached any supporting documentary evidence of that sale or submitted any relevant testimony from Sutton or HomEq.

In opposition, the plaintiff has produced a letter from HomEq stating that EquiFirst was still the creditor in May 2007.[4] Furthermore, the “Communication History” document states that, as of February 2009, the “investor” for the plaintiff’s loan was “EQUIFIRST BBPLC.” Presumably, “BBPLC” refers to Barclays Bank PLC. The document is ambiguous, but, construed in the light most favorable to the plaintiff (particularly in the absence of countervailing evidence regarding the proper interpretation of the document), it indicates that EquiFirst had some interest in the loan as of February 2009. It also suggests that HomEq might have equated EquiFirst with Barclays Bank PLC in its records. In that event, the five notice-of-default letters naming Barclays as the Primary Loan’s creditor might support the conclusion that EquiFirst owned the loan throughout 2008 and early 2009.

In sum, after reviewing the parties’ evidence, a reasonable juror could conclude that EquiFirst owned the loans during the relevant time periods. On this record, summary judgment is inappropriate.[5] Moreover, although the plaintiff does not argue that she needs time for additional discovery, the court believes that the defendant’s Motion for Summary Judgment is premature. The parties have not had a full and fair opportunity to engage in discovery. In fact, a discovery deadline has not even been set in this case, for various reasons apparent in the case record. Given the apparent lack of transparency regarding which defendant owned the plaintiff’s loans at any given time, the court believes that it would be inappropriate to resolve the instant factual issue before the close of discovery.

Finally, the defendant argues that the court must disregard the plaintiff’s documents because she has not properly authenticated them. (Docket No. 74 at 6-7.) It is true that, at summary judgment, parties must submit evidence that would be admissible at trial. See Fed. R. Civ. P. 56(c), (e). Federal Rule of Evidence 901 requires that, to be admissible, documents must be accompanied “by evidence sufficient to support a finding that the matter in question is what its proponent claims.” Fed. R. Evid. 901(a); see also id. 901(b)(1) (explaining that a matter can be authenticated by “[t]estimony [from a witness with knowledge] that a matter is what it is claimed to be”). Consequently, the Sixth Circuit has repeatedly stated that documents submitted in support of a summary judgment brief must be properly authenticated. Alexander v. CareSource, 576 F.3d 551, 558 (6th Cir. 2009) (noting the Sixth Circuit’s “repeated emphasis that unauthenticated documents do not meet the requirements of Rule 56(e)”); Baugham v. Battered Women, Inc., 211 Fed. Appx. 432, 441 n.5 (6th Cir. 2006) (“[T]he documents Plaintiffs submitted in support of their opposition motion were neither signed nor authenticated and, therefore, are inadmissible evidence for purposes of summary judgment.”); Mich. Paytel Joint Venture v. City of Detroit, 287 F.3d 527, 532 (6th Cir. 2002) (“[The] memo [submitted by the defendant] was not accompanied by an affidavit or document that attested to its validity or authenticity. . . . `[D]ocuments submitted in support of a motion for summary judgment must satisfy the requirements of Rule 56(e); otherwise, they must be disregarded.’”).

But Federal Rule of Civil Procedure 56, as amended effective December 1, 2010, provides that, “[i]f a party fails to properly support an assertion of fact,” the court may “give an opportunity to properly support or address the fact.” Fed. R. Civ. P. 56(e)(1). The Advisory Committee’s notes to the 2010 amendments state that, “[i]n many circumstances[,] this opportunity will be the court’s preferred first step.” Here, nothing suggests that the documents submitted by the plaintiff are actually inauthentic, and the defendant does not dispute that the plaintiff canSee Docket No. 68, Ex. 5.) Accordingly, the court will give the plaintiff an opportunity to submit declarations authenticating the documents.[6] authenticate the documents. Indeed, the Bates label on the “Communication History” document clearly indicates that it was produced by defendant HomEq. (

CONCLUSION

For all of the reasons discussed above, the defendant’s Motion for Summary Judgment will be denied, although EquiFirst is free to file a renewed motion after the close of discovery. The plaintiff will be ordered to file declarations that properly authenticate the documents that she submitted in support of her summary judgment opposition.

An appropriate order will enter.

[1] Unless otherwise noted, the facts are drawn from the parties’ statements of undisputed facts (Docket No. 64, Ex. 1; Docket No. 68, Ex. 1). The court draws all reasonable inferences in favor of the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Brown v. United States, 583 F.3d 916, 919 (6th Cir. 2009).

[2] The Amended Complaint does not explicitly set out a claim for wrongful foreclosure, although it does allege that the defendants’ negligence “helped facilitate the eventual wrongful foreclosure of her home.” (Docket No. 50 ¶ 34; see also id. ¶ 54.)

[3] The plaintiff’s Amended Complaint added Barclays as a defendant. (See Docket No. 50 ¶ 7.) Soon after, however, the plaintiff voluntarily dismissed Barclays without prejudice, because she was unable to serve process on it. (Docket No. 59.)

[4] EquiFirst argues that this letter, which was not created by EquiFirst, was mistaken. (Docket No. 74 at 9.) Although that is certainly possible, at summary judgment, the court must view the evidence in the light most favorable to the plaintiff; thus, the court cannot simply assume that the letter contained mistakes.

[5] The defendant argues that the plaintiff does not oppose entry of summary judgment in favor of EquiFirst on her RESPA and wrongful foreclosure claims. (Docket No. 74 at 2.) But the Amended Complaint does not seek to hold EquiFirst liable for any RESPA violations, and it does not contain a separate wrongful foreclosure claim. (See Docket No. 50 ¶¶ 55-76.) The defendant further argues that, because the plaintiff’s brief does not sufficiently address the issue, she has waived any argument that EquiFirst is vicariously liable for the servicers’ negligence regarding the Forbearance Agreement. (Docket No. 74 at 8.) The court disagrees. First, the defendant’s initial motion papers did not mention the plaintiff’s Forbearance Agreement claim, so the plaintiff could not possibly have waived any arguments by failing to discuss that claim. Second, the plaintiff argues that the “Communication History” document shows that EquiFirst owned the loan in February 2009, the month before she signed the Forbearance Agreement. The clear implication is that EquiFirst owned the loans during the time period relevant to the Forbearance Agreement claim.

[6] It should be enough (1) for the plaintiff to declare that the letters are true copies of letters that she received and (2) for her attorney to declare that the Bates-labeled documents are true copies of documents that HomEq produced in its initial disclosures.

LAWYER ADMITS SIGNING DOCUMENTS AS OFFICER OF HIS CLIENT

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S COMMENT: I’d like to see the expression of someone who sits on a Bar grievance committee that meets out discipline to lawyers, when they read this. In any situation, until the mortgage meltdown, if a lawyer signed documents and then presented them as his client’s “evidence” he would be subject to severe discipline if not disbarment. But as long as we have trillions of dollars at stake, nobody at the Bar associations is saying anything. Here we have, courtesy of stopforeclosurefraud.com, part of the transcript in which the lawyer testifies rather arrogantly, that “sure” he signed the documents, so what? No, he didn’t ever speak to anyone about doing it, no he never obtained permission or instructions,  he just did it. 

The bottom line is that as long as we delay applying the law as it was written and followed for hundreds of years concerning property rights, contract rights, lending and attorney misconduct, the foreclosures will continue, the housing mess will get larger, and the economy will continue to sag under the weight of 80 million mortgage transactions that in any other setting would be called grand theft. And as long as we continue to hear that correction and restoration of the wealth taken from investor-lenders and homeowners would be unfair to those who were not defrauded, we will continue to be subjected to Alice in Wonderland policies.

ROY DIAZ TRANSCRIPT

Full Deposition Transcript of ROY DIAZ Shareholder of Smith, Hiatt & Diaz, P.A. Law Firm

Excerpts:

Q. So through that corporate authority as
Exhibit 4 to this deposition, MERS assented to the terms
Of this assignment of mortgage?

A. Through me.

Q. So it was you that assented to the terms of
This assignment of mortgage.

A. The one in this case, yes.

Q. And no one else.

A. Correct

Q. And you signed as vice president of MERS
acting solely as a nominee for America’s Wholesale
Lender; is that correct?

A. Yes, it is.

Q. How did you know that MERS was nominee for
America’s Wholesale Lender?

A. By reviewing documentation.

Q. What documentation?

A. I don’t specifically recall what I reviewed
In this case to see that, to determine that, but I would
have reviewed either the mortgage or I would have
reviewed other documentation that would have established
that to me.

Q. So in this case you don’t remember a single
Document that you looked at that would establish the
Nominee status of MERS for America’s Wholesale Lenders;
Is that correct?

A. I don’t

Q. Did someone at America’s Wholesale Lender
Tell you that MERS was acting as the nominee?

A. No.

Q. Did someone at MERS tell you they were
Acting as Nominee for America’s Wholesale Lender?

A. NO.

Q. Was America’s Wholesale Lender in existence
On May 19, 2010?

A. don’t now.

Q. Did you check that before signing this
assignment of mortgage?

A. No.

<SNIP>

Q. Now, you’ve said you review the MERS
Website and you’ve seen documents like this, like
Composite Exhibit 6. Any reason why you wouldn’t review
the documents contained in Exhibit 6 before executing the
assignment of mortgage?

A. It’s not necessary.

Q. Why not?

A. Because it’s not. Because I decided it’s
not.

Q. You as vice president of MERS?

A. In every possible capacity as it relates to
This case.

Q. Did you sign this assignment of mortgage
after being retained as counsel for the plaintiff?

A. After my law firm was retained?

Q. (Nods head.)

A. Is that the question?

Q. Sure.

A. Yes.

Q. Okay. So you executed an assignment to be
Used as evidence in your case, correct?

A. Sure.

Q. Is that a yes?

A. It’s a sure.

Q. Is that a yes o a no?

A. You said sure earlier. Was that a yes or a
No?

Q. Okay. So…

A. It’s a yes.

Q. It’s a yes.

WISCONSIN APPEALS CT: AURORA IS NOT OWNER OF NOTE — TRIAL COURT REVERSED

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S NOTE: WISCONSIN COURT GETS IT: HEARSAY, PROOF, HOLDER NOT THE SAME AS CREDITOR, ETC. AFFIDAVIT THROWN OUT FOR LACK OF PERSONAL KNOWLEDGE. In short everything we have been saying here was followed by the Court. Expect more decisions like this coming from other states.

In other words, false papers and representations by counsel are no substitute for good old-fashioned proof. And proof is what the pretenders don’t have which is why they are pretenders — and losers. The parties initiating foreclosures, declaring the defaults, denying modifications, and buying the home at auction with a “credit bid” are and always have been tricksters who have now screwed up at least 10 million real estate transactions and probably closer to 100 million real estate transactions. These are the people who received the bailout, while the buyers of empty bogus mortgage bonds and the owners of homes with undocumented loans looked on in disbelief.

The great securitization scam, the appraisal fraud, the predatory lending and the TILA violations are coming to light in a wave that possibly not even the trillion dollar banking oligarchy can stop. This case is one of dozens of examples.

STOP FORECLOSURE FRAUD

WIS. APPEALS COURT REVERSED “FAILED MERS ASSIGNMENT, FAILED AFFIDAVIT, FAILED STANDING, FAILED CASE” AURORA v. CARLSEN

WIS. APPEALS COURT REVERSED “FAILED MERS ASSIGNMENT, FAILED AFFIDAVIT, FAILED STANDING, FAILED CASE” AURORA v. CARLSEN

AURORA LOAN SERVICES LLC,

PLAINTIFF-RESPONDENT,

V.

DAVID J. CARLSEN AND NANCY L. CARLSEN,

DEFENDANTS-APPELLANTS.

APPEAL from a judgment of the circuit court for Rock County:

JAMES WELKER, Judge. Reversed.

Before Vergeront, P.J., Lundsten and Blanchard, JJ.

¶1 LUNDSTEN, J. This appeal involves a foreclosure action initiated by Aurora Loan Services against David and Nancy Carlsen. Following a court trial, the circuit court granted judgment of foreclosure in favor of Aurora, finding that Aurora is the holder of the note and owner of the mortgage and that the Carlsens were in default. We conclude that the circuit court’s finding that Aurora was the holder of the note, a finding essential to the judgment, is not supported by admissible evidence. We therefore reverse the judgment.

Background

¶2 Aurora Loan Services brought a foreclosure suit against David and
Nancy Carlsen, alleging that Aurora was the holder of a note and owner of a
mortgage signed by the Carlsens encumbering the Carlsens’ property. The
Carlsens denied several allegations in the complaint and, especially pertinent here,
denied that Aurora was the holder of the note. Aurora moved for summary
judgment, but that motion was denied.

¶3 A trial to the court was held on June 9, 2010. Aurora called one of
its employees, Kelly Conner, as its only witness. Aurora attempted to elicit
testimony from Conner establishing a foundation for the admission of several
documents purportedly showing that Aurora was the holder of a note that
obligated the Carlsens to make payments and that the Carlsens were in default. It
is sufficient here to say that the Carlsens’ attorney repeatedly objected to questions
and answers based on a lack of personal knowledge and lack of foundation, and
that the circuit court, for the most part, sustained the objections. Aurora’s counsel
did not move for admission of any of the documents into evidence. After the
evidentiary portion of the trial, and after hearing argument, the circuit court made
findings of fact and entered a foreclosure judgment in favor of Aurora. The
Carlsens appeal. Additional facts will be presented below as necessary.

Discussion

¶4 It is undisputed that, at the foreclosure trial, Aurora had the burden
of proving, among other things, that Aurora was the current “holder” of a note
obligating the Carlsens to make payments to Aurora. Because Aurora was not the
original note holder, Aurora needed to prove that it was the current holder, which
meant proving that it had been assigned the note. There appear to be other failures
of proof, but in this opinion we focus our attention solely on whether Aurora
presented evidence supporting the circuit court’s findings that “the business
records of Aurora Loan Services show … a chain of assignment of that … note”
and that “Aurora is the holder of the note.”

¶5 As to assignment of the note, the Carlsens’ argument is simple: the
circuit court’s findings are clearly erroneous because there was no admissible
evidence supporting a finding that Aurora had been assigned the note. The
Carlsens contend that, during the evidentiary portion of the trial, the circuit court
properly sustained objections to Aurora’s assignment evidence, but the court then
appears to have relied on mere argument of Aurora’s counsel to make factual
findings on that topic. We agree.

¶6 We focus our attention on a document purporting to be an
assignment of the note and mortgage from Mortgage Electronic Registration
Systems to Aurora. At trial, this document was marked as Exhibit D. Although
Aurora’s counsel seemed to suggest at one point that certain documents, perhaps
including Exhibit D, were certified, the circuit court determined that the
documents were not certified. Under WIS. STAT. § 889.17,1 certified copies of
certain documents are admissible in evidence based on the certification alone.
Aurora does not contend that Exhibit D is admissible on this basis.

¶7 Aurora argues that Conner’s testimony is sufficient to support the
circuit court’s finding that Aurora had been assigned the note. Our review of her
testimony, however, reveals that Conner lacked the personal knowledge needed to
authenticate Exhibit D. See WIS. STAT. § 909.01 (documents must be
authenticated to be admissible, and this requirement is satisfied “by evidence
sufficient to support a finding that the matter in question is what its proponent
claims”). Relevant here, Conner made general assertions covering several
documents. Conner either affirmatively testified or agreed to leading questions
with respect to the following:

  • · She works for Aurora.
  • · She “handle[s] legal files” and she “attend[s] trials.”
  • · “Aurora provided those documents that are in [her] possession.”
  • · She “reviewed the subject file” in preparing for the hearing.
  • · She declined to agree that she is the “custodian of records for
  • Aurora.”

  • · She “look[s] at documentation … [does] not physically handle
  • original notes and documents, but [she does] acquire
    documentation.”

  • · “Aurora [is] the custodian of records for this loan.”
  • · She is “familiar with records that are prepared in the ordinary course
    of business.”
  • · She has “authority from Aurora to testify as to the documents, of
    [Aurora’s] records.”

As it specifically pertains to Exhibit D, the document purporting to evidence the
assignment of the note and mortgage from Mortgage Electronic Registration
Systems to Aurora, Conner testified:

  • · Aurora has “possession of Exhibit D.”
  • · Exhibit D is “an assignment of mortgage.”

With respect to possession of Exhibit D, Conner did not assert that Exhibit D was
an original or that Aurora had possession of the original document. For that
matter, Conner did not provide a basis for a finding that any original document she
might have previously viewed was what it purported to be.2

¶8 Thus, Conner did no more than identify herself as an Aurora
employee who was familiar with some unspecified Aurora documents, who had
reviewed some Aurora documents, and who had brought some documents,
including Exhibit D, to court. Although Conner was able to say that Exhibit D, on
its face, was an assignment, she had no apparent personal knowledge giving her a
basis to authenticate that document. See WIS. STAT. § 909.01.

¶9 Aurora points to various provisions in WIS. STAT. chs. 401 and 403,
such as those relating to the definition of a “holder” (WIS. STAT.
§ 401.201(2)(km)), to a person entitled to enforce negotiable instruments (WIS.
STAT. § 403.301), and to the assignment of negotiable instruments (WIS. STAT.
§§ 403.203, 403.204, and 403.205). This part of Aurora’s argument addresses the
underlying substantive law regarding persons entitled to enforce negotiable
instruments, such as the type of note at issue here, but it says nothing about
Aurora’s proof problems. That is, Aurora’s discussion of the underlying law does
not demonstrate why Exhibit D was admissible to prove that Aurora had been
assigned the note and was, under the substantive law Aurora discusses, a party
entitled to enforce the note.

¶10 Similarly, Aurora discusses the relationship between a note and a
mortgage and, in particular, the equitable assignment doctrine. But here again
Aurora’s discussion fails to come to grips with Aurora’s failure to authenticate
Exhibit D, the document purporting to be an assignment of the note to Aurora.
Aurora points to testimony in which Conner asserted that Aurora acquired and
possessed Exhibit D, but possession of Exhibit D is meaningless without
authentication of the exhibit.

¶11 Aurora argues that we may look at the “record as a whole,”
including summary judgment materials, to sustain the circuit court’s factual
findings. Thus, for example, Aurora asks us to consider an affidavit filed with its
summary judgment motion. In that affidavit, an Aurora senior vice-president
avers that the note was assigned to Aurora, that the assignment was recorded with
the Rock County Register of Deeds, and that Aurora is the holder of the note. This
argument is meritless. Aurora was obliged to present its evidence at trial. It could
not rely on the “record as a whole” and, in particular, it could not rely on summary
judgment materials that were not introduced at trial. See Holzinger v. Prudential
Ins. Co., 222 Wis. 456, 461, 269 N.W. 306 (1936). For that matter, even if Aurora
had, at trial, proffered the affidavit of its senior vice-president, the affidavit would
have been inadmissible hearsay. See WIS. STAT. § 908.01(3) (“‘Hearsay’ is a
statement, other than one made by the declarant while testifying at the trial or
hearing, offered in evidence to prove the truth of the matter asserted.”).

¶12 In sum, Aurora failed to authenticate Exhibit D, the document
purporting to be an assignment of the note. Thus, regardless of other alleged proof
problems relating to that note and the Carlsens’ alleged default, the circuit court’s
finding that Aurora was the holder of the note is clearly erroneous—no admissible
evidence supports that finding. Aurora failed to prove its case, and it was not
entitled to a judgment of foreclosure.

By the Court.—Judgment reversed.

_______________________________________

1 All references to the Wisconsin Statutes are to the 2009-10 version unless otherwise noted.

2 Our summary of Conner’s testimony omits several assertions Conner made that were
stricken by the circuit court. Similarly, we have not included examples of the circuit court
repeatedly sustaining hearsay and foundation objections. For example, the court repeatedly
sustained objections to Aurora’s attempts to have Conner testify that Aurora “owns” the note.
Aurora does not and could not reasonably argue that the Carlsens have not preserved their
authentication objections. The Carlsens’ attorney repeatedly and vigorously objected on hearsay,
foundation, and authentication grounds. The record clearly reflects that the Carlsens were
objecting to the admission of all of Aurora’s proffered documents on the ground that Conner
lacked sufficient knowledge to lay a foundation for admission.
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