Another PennyMac Crash! CA Case for Homeowner

American jurisprudence is clearly still struggling with the fact that in most cases the forecloser either does not exist or does not have any interest in the loans they seek to enforce. In virtually all instances PennyMac is acting in the role of a sham conduit while allowing its name to be used as the front for a nonexistent lender.

Such foreclosers use semantics and legal procedure to create and cover-up the illusion of “ownership” of the debt (the loan) and the illusion of having the rights to enforce the note bestowed by a true creditor. This case opinion is correct in every respect and it conforms with basic black letter law in all 50 states; yet courts still strive to find ways to allow disinterested parties to foreclose.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Hat tip to Bill Paatalo
see GULIEX v. PennyMAC HOLDINGS LLC, Cal: Court of Appeal, 5th Appellate Dist. 2017 https://scholar.google.com/scholar_case?case=9436462246811997539&hl=en&lr=lang_en&as_sdt=2006&as_vis=1&oi=scholaralrt
This case amply demonstrates the following:
  1. The need for a chain of title report
  2. The need for a chain of title analysis
  3. The need for legal research and good memorandums of law
  4. The need to understand “chains of title” or “chains of events” and the laws applicable thereto (e.g. judicial notice, legal presumptions etc.)
  5. The need to formulate a presentation to the judge that is very persuasive.
  6. The need to appeal when trial judges don’t apply the law or don’t apply the law correctly.

The following are significant quotes from the case.

Plaintiff, a homeowner and borrower, sued the defendant financial institution for wrongs allegedly committed in connection with a nonjudicial foreclosure sale of his residence. Plaintiff’s main theory was that the financial institution did not own his note and deed of trust and, therefore, lacked the authority to foreclose under the deed of trust. (e.s.)

The financial institution convinced the trial court that (1) it was, in fact, the beneficiary under the deed of trust, (2) a properly appointed substitute trustee conducted the foreclosure proceedings, and (3) the plaintiff lacked standing to claim the foreclosure was wrongful. The financial institution argued its chain of title to the deed of trust was established by facts stated in recorded assignments of deed of trust and a recorded substitution of trustee. The trial court took judicial notice of the recorded documents. Based on these documents, the court sustained a demurrer to some of the causes of action and granted summary judgment as to the remaining causes of action. On appeal, plaintiff contends he has standing to challenge the foreclosure and, furthermore, the judicially noticed documents do not establish the financial institution actually was the beneficiary under the deed of trust. We agree. (e.s.)

As to standing, the holding in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) clearly establishes plaintiff has standing to challenge the nonjudicial foreclosure on the ground that the foreclosing party lacked the authority to initiate the foreclosure because it held no beneficial interest under the deed of trust. (e.s.)

As to establishing facts by judicial notice, it is well recognized that courts may take notice of the existence and wording of recorded documents, but not the disputed or disputable facts stated therein. (e.s.) (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1; Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (Herrera).) Under this rule, we conclude the facts stated in the recorded assignments of deed of trust and the substitution of trustee were not subject to judicial notice. (e.s.) Therefore, the financial institution did not present evidence sufficient to establish its purported chain of title to the deed of trust. Consequently, the financial institution failed to show it was the owner of the deed of trust and had the authority to foreclose on plaintiff’s residence.

We therefore reverse the judgment and remand for further proceedings.

….

The Links in PennyMac’s Purported Chain of Title

“Links” in a chain of title are created by a transfer of an interest in the underlying property from one person or entity to another. An examination of each link in the purported chain of title relied upon by PennyMac reveals that certain links were not established for purposes of the demurrer. Our analysis begins with a description of each link in the purported chain (and each related document, where known), beginning with the husband and wife who sold the residence to Borrower and ending with the trustee’s sale to PennyMac.

Link One-Sale: Clarence and Betty Dake sold the residence to Borrower pursuant to a grant deed dated April 19, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Two-Loan: Borrower granted a beneficial interest in the residence to Long Beach Mortgage Company pursuant to a deed of trust dated June 21, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Three-Purported Transfer: Long Beach Mortgage Company purportedly transferred its rights to Washington Mutual Bank by means of a document or transaction not identified in the appellate record. Also, the appellate record does not identify when the purported transaction occurred. Borrower disputes the existence of this and subsequent transfers of the deed of trust. (e.s.)

Link Four-Purported Transfer: Washington Mutual Bank purportedly transferred its rights to JPMorgan Chase Bank, National Association in an unidentified transaction at an unstated time. (e.s.)

Link Five-Assignment: JPMorgan Chase Bank, National Association, successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, purportedly transferred the note and all beneficial interest under the deed of trust to “JPMorgan Chase Bank, National Association” pursuant to an assignment of deed of trust dated July 25, 2011, and recorded on July 26, 2011.

Link Six(A)-Assignment: JPMorgan Chase Bank, National Association transferred all beneficial interest in the deed of trust to PennyMac Mortgage Investment Trust Holdings I, LLC pursuant to a “California Assignment of Deed of Trust” dated September 14, 2013, and recorded on November 15, 2013.

Link Seven-Trustee’s Sale: California Reconveyance Company, as trustee under the deed of trust, (1) sold the residence to PennyMac at a public auction conducted on November 20, 2013, and (2) issued a trustee’s deed of sale dated November 21, 2013 and recorded on November 22, 2013. PennyMac, the grantee under the deed upon sale, was described in the deed as the foreclosing beneficiary.

Link Six(B)-Purported Assignment: The day after the trustee’s sale, JPMorgan Chase Bank, National Association executed a “Corporate Assignment of Deed of Trust” dated November 21, 2013, purporting to transfer the deed of trust without recourse to PennyMac Holdings, LLC. The assignment was recorded November 22, 2013. This assignment was signed (1) after JPMorgan Chase Bank, National Association had signed and recorded the “California Assignment of Deed of Trust” described earlier as Link Six(A) and (2) after the trustee’s sale was conducted on November 20, 2013. Consequently, it is unclear whether any interests were transferred by this “corporate” assignment.

3. Links Three and Four Are Missing from the Chain

Postscript from Editor: This Court correctly revealed the fraudulent strategy of the banks, to wit: they created the illusion of multiple transfers giving the appearance of a solid chain of title BUT 2 of the transfers were fake, leaving the remainder of the chain void.

Herrera v Deutsch: CA Appeals Court Deals Death Blow to Deutsch — The House of Cards is Tumbling

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Herrera v Deutsch 5-31-11 Cal 3rd District

SEE HERRERA DECISION GOES PUBLIC MAKING IT BINDING ON OTHER COURTS

The Substitution of Trustee recites that the Bank “is the present beneficiary under” the 2003 deed of trust. As in Poseidon, this fact is hearsay and disputed; the trial court could not take judicial notice of it. Nor does taking judicial notice of the Assignment of Deed of Trust establish that the Bank is the beneficiary under the 2003 deed of trust. The assignment recites that JPMorgan Chase Bank, “successor in interest to WASHINGTON MUTUAL BANK, SUCCESSOR IN INTEREST TO LONG BEACH MORTGAGE COMPANY” assigns all beneficial interest under the 2003 deed of trust to the Bank. The recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Defendants offered no evidence to establish that JPMorgan Chase Bank had the beneficial interest under the 2003 deed of trust to assign to the Bank. The truthfulness of the contents of the Assignment of Deed of Trust remains subject to dispute (StorMedia, supra, 20 Cal.4th at p. 457, fn. 9), and plaintiffs dispute the truthfulness of the contents of all of the recorded documents.

STUNNING APPELLATE DECISION “GETS IT” AND DEALS DEUTSCH A BLOW FROM WHICH IT CANNOT RECOVER

The Rules of Evidence Finally Prevail — NO Presumptions and NO Judicial Notice

Slowly but surely, every point made on this blog, started 3 1/2 years ago, is coming true. Don’t lose hope. I knew that eventually the cards would fall the other way. The reason I knew is that the basic law being applied in this decision is inescapable. The failure of the trial judge to apply basic law was reversible error. The failure of the homeowner to properly plead his case might have had something to do with that, but the Appellate Court got the main points anyway. So here are some of the quotes that highlight the decision: (Special Thank You to Jake Naumer)

Plaintiffs Robert and Gail Herrera lost their house in South Lake Tahoe to a nonjudicial foreclosure sale. They brought suit to set aside that sale. They challenge whether the parties that conducted the sale, defendants Deutsche Bank National Trust Company (the Bank) and California Reconveyance Company (CRC), were in fact the beneficiary and trustee, respectively, under a deed of trust secured by their property, and thus had authority to conduct the sale.

Defendants also provided a declaration by a custodian of records for CRC, in which the custodian did not expressly declare that the Bank was the beneficiary and CRC the trustee. Instead, she merely declared that an Assignment of Deed of Trust and a Substitution of Trustee had been recorded and these recorded documents indicated the Bank had been assigned the deed of trust and that CRC had been substituted as trustee.

The Bank claimed to be the owner of the Property by virtue of a trustee’s deed recorded “by an entity purporting to be the trustee.”

Plaintiffs alleged CRC was not the trustee and had no authority to conduct a trustee’s sale, and believed no such sale had taken place. They further alleged any promissory note supporting the 2003 deed of trust was “time barred by the statute” and the maker, if any, “was lulled into believing that no action would be taken to enforce the 2003 [deed of trust] because no collection actions were taken within a reasonable time and no legally required notices of deficiency were sent or recorded.”

Plaintiffs alleged the original promissory note and deed of trust no longer existed and the Bank’s deed was invalid “as it is based solely upon purported copies which have no force and effect.”

The third cause of action was to quiet title to the Property. Plaintiffs alleged defendants had no original, verifiable promissory note or deed of trust and had no standing to foreclose. They further alleged all rights, title and interest asserted by defendants “were sublimated into a non-functional `security’ instrument that gives no one entity rights in individual notes and deeds of trust.” No defendant had an interest in the Property, but they had placed a cloud upon plaintiffs’ title.

The Bank and CRC moved for summary judgment or summary adjudication on each cause of action, contending there was no triable issue of fact as to any of plaintiffs’ claims. They claimed the undisputed evidence showed that the loan was in default, the Bank was the beneficiary under the deed of trust and CRC was the trustee. The default was not cured and CRC properly noticed the trustee’s sale. Notice of the sale was sent to plaintiffs and California law did not require the original promissory note to foreclose. The Bank and CRC further contended that to quiet title, plaintiffs must allege tender, or an offer of tender, of the amount owed.

defendants [Bank and CRC] requested that the court take judicial notice of certain documents pursuant to Evidence Code sections 451, subdivision (f) and 452, subdivisions (d), (g) and (h). These documents were:
(1) the Trustee’s Deed upon Sale recorded August 13, 2008, under which plaintiffs took title to the Property;
(2) a Grant Deed recorded December 13, 2002, showing the transfer of the Property to Sheryl Kotz;
(3) the Deed of Trust recorded April 30, 2003, with Sheryl Kotz as trustor and Long Beach Mortgage Company as trustee and beneficiary (the 2003 deed of trust);
(4) an Assignment of Deed of Trust recorded February 27, 2009, assigning all interest under the 2003 deed of trust to the Bank by JPMorgan Chase Bank, as successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company;
(5) a Substitution of Trustee recorded February 27, 2009, under which the Bank substituted CRC as trustee under the 2003 deed of trust;
(6) a “Notice of Default and Election to Sell [the Property] Under Deed of Trust” recorded February 27, 2009;
(7) a Notice of Trustee’s Sale under the 2003 deed of trust recorded May 29, 2009; and
(8) a Trustee’s Deed upon Sale recorded July 6, 2009, under which the Bank, as foreclosing beneficiary, was the grantee of the Property.

plaintiffs admitted the description of the Property and that they purchased it on June 24, 2008, at a foreclosure sale; they disputed all of the remaining facts. They asserted that the Brignac declaration was without foundation and contained hearsay and that all of the recorded documents contained hearsay.

They [Plaintiffs-Homeowners] contended defendants failed to meet their burden of proof for summary judgment because their request for judicial notice and Brignac’s declaration were inadmissible hearsay. They further contended the notice of default and the notice of trustee’s sale failed to meet statutory requirements of California law. Finally, they asserted defendants lacked standing to foreclose because they had not produced even a copy of the promissory note.
Plaintiffs moved to strike the declaration of Brignac as lacking foundation and containing hearsay. They also opposed the request for judicial notice. They argued the recorded documents were all hearsay. Citing only the Federal Rules of Evidence and federal case law grounded on the federal rules, plaintiffs argued a court cannot take judicial notice of disputed facts contained in a hearsay document. Plaintiffs disputed “virtually everything” in the recorded documents, arguing one can record anything, regardless of its accuracy or correctness.

Thus, initial issues framed by the pleadings are whether the Bank was the beneficiary under the 2003 deed of trust and whether CRC was the trustee under that deed of trust.

plaintiffs contend the trial court erred in taking judicial notice of the disputed facts contained within the recorded documents. We agree.

“Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. (Love v. Wolf (1964) 226 Cal.App.2d 378, 403.) “When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.” (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 (StorMedia).)

Defendants also relied on Brignac’s declaration, which declared that the 2003 deed of trust permitted the beneficiary to appoint successor trustees. Brignac, however, did not simply declare the identity of the beneficiary and the new trustee under the 2003 deed of trust. Instead, she declared that an Assignment of Deed of Trust and a Substitution of Trustee were recorded on February 27, 2009. These facts add nothing to the judicially noticed documents; they establish only that the documents were recorded.
Brignac further declared that “[t]he Assignment of Deed of Trust indicates that JPMorgan Bank [sic], successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, transfers all beneficial interest in connection with the [deed of trust] to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4.” (Italics added.) This declaration is insufficient to show the Bank is the beneficiary under the 2003 deed of trust. A supporting declaration must be made on personal knowledge and “show affirmatively that the affiant is competent to testify to the matters stated.”

At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. We note that Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation were such as to indicate trustworthiness. (Evid. Code, § 1271, subd. (d).)5 Information concerning this foundational element was conspicuously lacking.6 Yet, this information was critical in light of the evidentiary gap establishing the purported assignments from Long Beach Mortgage Company to Washington Mutual Bank to JPMorgan Chase Bank. The records used to generate the information in the Assignment of Deed of Trust, if they exist, were undoubtedly records not prepared by CRC, but records prepared by Long Beach Mortgage Company, Washington Mutual and JPMorgan Chase. Defendants have not shown how Brignac could have provided information about the source of that information or how those documents were prepared. (See Cooley v. Superior Court (2006) 140 Cal.App.4th 1039

the timing of those purported assignments relative to the recording of those events on the Assignment of Deed of Trust cannot be found in the Brignac declaration or anywhere else in the record.
We also note that Brignac did not identify either the February 27, 2009 Assignment of Deed of Trust, or another key document, the February 27, 2009 Substitution of Trustee, as business records in her declaration. Rather, she referenced both documents in her declaration by stating that “[a] recorded copy” was attached as an exhibit. In light of the request for judicial notice, we take this statement to mean that the exhibits represented copies of records on file at the county recorder’s office.7

had the documents reflecting the assignments and the substitution been offered as business records, there would have been no need to request that the court take judicial notice of them. Accordingly, we reject defendants’ newly advanced theory.
Brignac’s declaration is lacking in yet another way. It is confusing as to the effect of the Substitution of Trustee. She declares, “The Substitution by Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4 substitutes the original trustee, Long Beach Mortgage Company for California Reconveyance Company.” Brignac’s declaration (and defendants’ statement of undisputed facts) can be read to state that the Bank substituted Long Beach Mortgage Company for CRC as trustee, rather than that CRC was substituted for Long Beach Mortgage Company. We must strictly construe this statement against the moving party. (Mann, supra, 38 Cal.3d at p. 35.) Even if we were to construe Brignac’s declaration to state that the Bank substituted CRC as trustee under the 2003 deed of trust, it would be insufficient to establish CRC is the trustee. A declaration that the Substitution of Trustee by the Bank made CRC trustee would require admissible evidence that the Bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. As explained ante, defendants failed to provide admissible evidence that the Bank was the beneficiary under the 2003 deed of trust.

[SUMMARY JUDGMENT FOR DEUTSCH WAS REVERSED AND REMANDED. DEUTSCH, WHO PROBABLY DOESN’T EVEN KNOW THE CASE IS PENDING, IS SCREWED]


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