No Surprise: Ocwen & US Bank Hit by $3.8 Million Verdict in Chicago Federal Trial For Violations in Fake Foreclosure

“The jury, after deliberating for approximately 7 hours, determined that Ocwen breached its contract, violated RESPA for failing to adequately respond to Saccameno’s Qualified Written Request, violated the FDCPA and committed both unfair and deceptive acts in violation of the Illinois Consumer Fraud Act.  Monette Saccameno was awarded $500,000.00 in compensatory damages, $70,000.00 in non-economic damages, $12,000.00 in economic damages and $3,000,000.00 in punitive damages. Nicholas Heath Wooten, Esq.Ross Michael Zambon, Esq., and Mohammed Omar Badwan, Esq. led the litigation team on behalf of Saccameno.”

And I ask again: WHY DO OCWEN DOCUMENTS AND “BOARDING PROCESS” GET ANY LEGAL PRESUMPTION ON SCANT TESTIMONY AND EVIDENCE THAT WOULD NOT BE ACCEPTED AS FOUNDATION IN ANY COURT OTHER THAN ONE IN FORECLOSURE PROCEEDINGS? With this verdict and dozens of other verdicts, settlements, lawsuits and whistleblower  news stories has establishing a crystal clear pattern of conduct of fake foreclosures based upon false documentation, false posting of payments and a clear mission to seek foreclosure whether the homeowner is current in payments or not.

The many cases akin to this one against OCwen and US Bank should be served up to judges hearing foreclosure cases with a single message: the foreclosures you are allowing are wrongful. Your decisions are giving rise to many lawsuits for damages.

GO TO LENDINGLIES to order forms and services

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Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Hat Tip Greg da’ Goose

Case Number: 1:16-cv-05278
Court: Illinois Northern
Nature of Suit: 423(Bankruptcy Withdrawl)
Companies:
Ocwen Financial Corporation
U.S. Bancorp

see OCWEN BANGED WITH $3.8 MILLION VERDICT

This case shows that juries are still angry about the 2008 meltdown and that the entire burden was shifted to homeowners and taxpayers — who “bailed out” financial institutions that had no losses.

And it also shows that lawyers can get rich by charging contingency fees in wrongful foreclosure actions that most lawyers avoid or rush to settlement. It provides ample encouragement for homeowners to sue and for lawyers to take the cases.

So for those of you who are  contemplating filing a wrongful foreclosure action against Ocwen, or U.S. Bank or any of the other players that are acting in concert with Ocwen, here is a case that no doubt will be settled under “seal of confidentiality” (like thousands of others). I think it is high time for borrowers to pool their complaints in either a class action or mass joinder action.

And here are some of the causes of action that could be filed that a federal jury found were reasons enough to award $500,000 in compensatory damages and $3 Million in punitive damages:

  1. Breach of contract
  2. RESPA violation (failure to respond to QWR)
  3. FDCPA violations
  4. Violation of state law — Illinois Consumer Fraud Act: Unfair and deceptive acts.

There are many other causes of action that could be filed. Each case needs to be evaluated as to which causes of action are most appropriate for the subject “loan”, most of which have resulted in substantial verdicts.

And don’t forget the role of US Bank whose name is used as trustee of a trust that  either doesn’t exist, doesn’t own the debt or both. US Bank is paid a fee to pose as trustee not to BE trustee.

See also

https://www.prnewswire.com/news-releases/atlas-consumer-law-secures-3-582-000-jury-verdict-obtained-by-monette-saccameno-a-resident-of-cook-county-illinois-and-against-ocwen-loan-servicing-llc-a-national-mortgage-loan-servicer-300628541.html

https://cookcountyrecord.com/stories/511388869-jury-awards-3-5m-to-woman-who-claimed-loan-servicer-mishandled-mortgage-during-after-chapt-13-bankruptcy

Ocwen (OCN) Receives Daily News Sentiment Rating of 0.15
https://www.thelincolnianonline.com/2018/04/13/ocwen-ocn-receives-daily-news-sentiment-rating-of-0-15.html

https://www.leagle.com/decision/infdco20180410901

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 265 (N.D. Ill. 2018)
DEFENDANTS’ MOTION FOR JUDGMENT AS A MATTER OF LAW Document #: 265 Filed: 04/09/18
https://www.gpo.gov/fdsys/pkg/USCOURTS-ilnd-1_15-cv-01164/pdf/USCOURTS-ilnd-1_15-cv-01164-3.pdf

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 231 (N.D. Ill. 2018)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 3/9/2018
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/231/0.pdf?ts=1520678019

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 152 (N.D. Ill. 2017)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/8/2017
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/152/0.pdf?ts=1517249686

Saccameno v. Ocwen Loan Servicing, LLC et al, No. 1:2015cv01164 – Document 75 (N.D. Ill. 2015)
MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 11/19/2015
https://cases.justia.com/federal/district-courts/illinois/ilndce/1:2015cv01164/306387/75/0.pdf?ts=1448015323

US Government Publishing Office
15-1164 – Saccameno v. Ocwen Loan Servicing, LLC et al
https://www.gpo.gov/fdsys/granule/USCOURTS-ilnd-1_15-cv-01164/USCOURTS-ilnd-1_15-cv-01164-0

Livinglies Recalibrates Forensic and Litigation Support Services

Responding to specific requests from lawyers and homeowners, the livinglies store has changed its offering. Www.livingliesstore.com

You can still get the old Combo of just a title and securitization report, but we have added some levels and services to meet the demand for our services. Of course pricing has been adjusted to reflect the increased workload. Actual litigation support is provided throughout the country to any attorney by Garfield, Gwaltney, Kelley and White (GGKW) with offices now in Broward County and Leon County. We will soon have offices in the Florida Panhandle and Dade County. I’ll be posting separately on each office and the attorneys we have selected to litigate in accordance with our requirements.

GGKW represents homeowners throughout the state of Florida. Do not ask us to provide the full range of litigation support if you are a pro se litigant, even if your case is in Florida. You would be asking us to provide services that might be the unauthorized or unethical practice of law in states where we are not licensed. It would also be a bad idea because you cannot expect an attorney from another state to know the laws of your state, how they are applied in your courts, and the differences between individual judges. Sometimes local rules are dispositive of cases. Florida homeowners can get some additional assistance from GGKW or the livinglies store, but there is no good substitute for an attorney who knows and can argue rules of procedure and laws of evidence as they relate to your case.

The first additional the Combo offering is the Qualified Written Request and Debt Validation Letters. These are rising in importance and an increasing number of lawyers are asking us to prepare these. We can’t send them out but we can prepare them for the signature of the homeowner. We ask more pointed questions about whether the originator actually loaned money to the homeowner — that is, whether there was any transaction between the homeowner and the party stated on the note and mortgage (or deed of trust). This has grown in importance because of the absence of a fundamental allegation by the pretender lenders — that someone in their chain of paper actually entered into an actual transaction (offer, acceptance, consideration and execution) with the alleged borrower. It appears in many cases that the actual funding of the loan was a stranger to the paperwork and that the parties on the paperwork are strangers to the actual transaction.

We also are offering affidavits and declarations from the auditors or experts, including myself, together with a consultation to answer questions on the methods used and the conclusions to be drawn. Where an attorney for the homeowner is available during the consult, the homeowner will hear suggestions on specific strategies and tactics for the battle in court.

We are also just now adding to the package, Freedom of Information requests to the FDIC, OTS, OCC and the Federal Reserve, where applicable. In all likelihood the request you make about the results of their investigations against the banks that led to the Consent Orders and any filings after those orders were entered will be met with some sort of stonewalling. After all, the investigator grilled by Senator Warren admitted to finding thousands of wrongful Foreclosures but refused to tell her or anyone else in Congress which mortgages were effected or the names of homeowners who were illegally thrown out of their homes. It is important to note that these investigations, like the San Francisco study, found serious defects in which the foreclosure should never have happened.

The the response to FOIA requests will undoubtedly require you to push the agency in court to make the disclosures. And interrogatories directed at compliance with the Consent Orders may reveal the actual findings and the names of homeowners who are living outside the homes they still should ow and possess.

We recommend that the other companies providing these services follow our lead. We believe it will lead to better results and a more comprehensible presentation in Court.

Of course I need to remind you that nothing in this article nor the services and products on the store are a substitute for a licensed attorney. You should take no action at all without consulting with a licensed attorney, hopefully one that is familiar with the issues of securitized loans. Most of these cases are being resolved on the basis of the the rules of civil procedure and the laws of evidence. This is above the head of most pro se litigants. Failure to at least consult with an attorney licensed interest state in which your property is located could well result in losing a case you could have otherwise won.

BANK AMNESTY AGAIN: Leaving Consumers to Fend (Litigate) for Themselves

“To someone who lost his house to mortgage servicer incompetence or malfeasance, that’s not restitution. It’s an insult. “The capped pool of cash payments is wholly inadequate in light of the scale of the harm,” says Alys Cohen, staff attorney for the National Consumer Law Center.”   Adam Levin, abcnews.com

Editor’s Analysis: In case after case across the country it is readily apparent that there complete strangers making claims on mortgages, foreclosing, evicting and even collecting “Trial Payments” while they intend to do nothing other than Foreclose — because that is where the money is and because it is only through a foreclosure that they cap the losses and pass them onto investors despite having received large scale payments of insurance and other hedges.

The Banks have it their way despite the obvious unconscionable, illegal, immoral and unethical breach of trust between consumer and bank and between banks.

Whether it is the Chase WAMU deal, or the BOA countrywide deal, or the Indy-mac One West deal, the facts are in — we don’t need to theorize anymore — the banks are NOT the creditors, they cannot shows proof of loss, proof of payment or any financial transaction that would entitle them to enforce an invalid note or foreclose on an invalid, unperfected mortgage lien.

But the institutionalization of hypocrisy and deviant behavior on the part of the Banks has left us with “settlements” that settle nothing, leaving millions of homeowners who lost their homes to entities that received a windfall from the foreclosure process and the windfall from dual tracking “modification” reviews that were a pure sham designed only to get the homeowner in the deepest hole possible so that foreclosure would become inevitable.

At our members conference this Wednesday, we will talk about what is getting traction in the modification of mortgages and what is getting traction in the litigation of mortgage disputes.

The important thing to remember that is that the MONEY never came from ANY of the parties in the sham securitization chain starting with the originator. While there are exceptions — like World Savings — the truth defeats further claims regarding the Wachovia acquisition and then the Wells Fargo acquisition of Wachovia. Either the assignments were missing or they fabricated and forged.

If you ask yourself why they wouldn’t have had the assignments done all nice and proper which is the way the banking world works when BORROWERS must sign documents, you will feel uncomfortable with Wall Street explanations of volume causing the paperwork confusion. It was the exact same volume that produced millions of “originated” mortgages where the i’s were dotted and T’s were crossed —- that is, where the Borrower had to sign. The banks had no trouble then — it was only when the banks had to sign that there was a problem. Where the securitization participants had to sign was neither disclosed nor drafted nor executed.

The simple reason is that there was nothing to sign. There was no financial transaction where money exchanged hands which is why I am pounding on the point that the lawyers should be aiming at the money rather than the documentation. “For value received” means that value was paid or transferred. When you ask for the wire transfer receipt or cancelled check that shows payment and which would establish proof of loss, you are asking to see the transaction upon which the banks place all their reliance.

Their argument that they don’t need to show the actual transaction is a dodge to protect themselves from showing that the transactions in the bogus securitization scheme were all a sham. Your argument should be simple — they say they lost money and that the homeowners owes it. Let’s see the actual proof that they made the loan, lost the money and have not already been paid. The assignments are not accompanies by actual money exchanging hands which means that the assignment lacked consideration and was therefore an executory contract at best, pending payment.

Then you need to ask yourself why there was no consideration when you know that money was funded from somewhere for a loan to the “benefit” of your client (albeit based upon fraud in the execution and fraud in the inducement including appraisal fraud). YOU must tackle the basic issue in the mind of just about every judge — as long as the money was there at the “closing” of the loan, and the borrower signed the papers, and then defaulted on those promises, what difference does it make whether some OTHER papers were fabricated or even forged.

The fact remains, your client, in the eyes of the Judge, got the loan, agreed to the terms and then defaulted. In our world, when you default on a loan, judgment is entered, foreclosure is completed and eviction, if necessary proceeds. The banks have relied upon this perception for years which considerable success. The reason borrowers often lose in litigation is that they arguing about the wrong thing. As soon as they go after the documentation first they are going down a rabbit hole. It is a tacit admission that the loan was valid, the note is evidence of the loan and the mortgage secures the note. DENY and DISCOVER puts that front and center as an issue of fact in dispute.

By going after the money transactions and requiring proof of payment and proof of loss and asking for the accounting data that shows the loan receivable on the books of an entity, you are striking at the heart of the sham transaction.

If you ask me for a loan for $100 and I say “Sure, just sign this note,” and you go ahead and sign the note, what happens when I don’t give you the $100 loan. The answer, which has caused considerable confusion in the foreclosure defense world is that I can nonetheless sue you (on its face the note LOOKS like a negotiable instrument) , but I can’t win. Because if you deny that I ever completed the loan transaction by funding the loan to you, then I have to prove that I gave you the money. I can’t because I didn’t. My argument that you did receive a loan that day and therefore you owe me the money is a lie. You owe the money to whoever actually gave you the money.

At the closing of these loans originated by nominees with no power to touch the money and whose only source of income was fees, not interest on the loan, the borrower was fooled by the fact that the money showed up for the loan. It never occurred to the borrower to ask any questions since the paperwork, and all the disclosures required by law told him a story about the loan. The borrower could not possibly know that the story told by the documents, the documents he or she signed at closing were all a lie.

The Banks will take the position that everyone was authorized to make representations and act for everyone else — except when it comes to paying down the debts with money received from insurance and the proceeds of credit default swaps, federal bailouts etc. In THAT case the bank says it was not the agent of the investors and had no duty to either the investor or the borrower since the banks were the named insureds — made possible only because they purposefully put the name of a nominee on the note, a nominee on the mortgage (or even two nominees on the mortgage) so that the banks could open up a window of time during which they could claim ownership of the loans despite the fact that they had not funded one dime to originate or purchase any loan.

Thus if go for the money first and THEN show the the fabrication, forgery and perjury in documents, the case makes sense and can be presented to the court without giving one inch of admission that the loan, the note or mortgage were real, valid or enforceable. AND by sending a standard QWR and FDCPA letter, the banks have nowhere to hide. In litigation the motion becomes a petition to enforce the RESPA 6 inquiry and the FDCPA inquiry either through direct order or through discovery.

THEN you force the disclosure of the identity of the creditor who actually has a negative account balance on their books for the loan, directly or indirectly, and seek modification or settlement based upon the facts of the case. HAMP modification is impossible, settlement is impossible without first establishing who could submit a credit bid at auction or who could execute a valid satisfaction and release of the debt.

Latest Bank Amnesty Leaves Consumers Adrift

Fraud Is The Biggest Bubble In History
http://www.ritholtz.com/blog/2013/01/fraud-is-the-biggest-bubble-in-history/

CA Trial Court Upholds Claims for Improper Assignment, Accounting, Unfair Practices

Editor’s Note: In an extremely well-written and well reasoned decision Federal District Court Judge M. James Lorenz denied the Motion to dismiss of US Bank on an alleged WAMU securitization that for the first time recognizes that the securitization scheme could be a sham, with no basis in fact.

Although the Plaintiff chose not to make allegations regarding false origination of loan documents, which I think is important, the rest of the decision breaks the illusion created by the banks and servicers through the use of documents that look good but do not meet the standards of proof required in a foreclosure.

  1. I would suggest that lawyers look at the claim and allegations that the origination documents were false and were procured by fraud.
  2. Since no such allegation was made, the court naturally assumed the loan was validly portrayed in the loan documents and that the note was evidence of the loan transaction, presuming that SBMC actually loaned the money to the Plaintiff, which does not appear to be the case.
  3. This Judge actually read everything and obvious questions in his mind led him to conclude that there were irregularities in the assignment process that could lead to a verdict in favor of the Plaintiff for quiet title, accounting, unfair practices and other claims.
  4. The court recites the fact that the loan was sold to “currently unknown entity or entities.” This implicitly raises the question of whether the loan was in fact actually sold more than once, and if so, to whom, for how much, and raises the issues of whom Plaintiff was to direct her payments and whether the actual creditor was receiving the money that Plaintiff paid.  — a point hammered on, among others, at the Garfield Seminars coming up in Emeryville (San Francisco), 8/25 and Anaheim, 8/29-30. If you really want to understand what went on in the mortgage meltdown and the tactics and strategies that are getting traction in the courts, you are invited to attend. Anaheim has a 1/2 day seminar for homeowners. Call customer service 520-405-1688 to attend.
  5. For the first time, this Court uses the words (attempt to securitize” a loan as opposed to assuming it was done just based upon the paperwork and the presence of the the parties claiming rights through the assignments and securitization.
  6. AFTER the Notice of Sale was recorded, the Plaintiff sent a RESPA 6 Qualified Written request. The defendants used the time-honored defense that this was not a real QWR, but eh court disagreed, stating that the Plaintiff not only requested information but gave her reasons in some details for thinking that something might be wrong.
  7. Plaintiff did not specifically mention that the information requested should come from BOTH the subservicer claiming rights to service the loan and the Master Servicer claiming rights to administer the payments from all parties and the disbursements to those investor lenders that had contributed the money that was used to fund the loan. I would suggest that attorneys be aware of this distinction inasmuch as the subservicer only has a small snapshot of transactions solely between the borrower and the subservicer whereas the the information from the Master Servicer would require a complete set of records on all financial transactions and all documents relating to their claims regarding the loan.
  8. The court carefully applied the law on Motions to Dismiss instead of inserting the opinion of the Judge as to whether the Plaintiff would win stating that “material allegations, even if doubtful in fact, are assumed to be true,” which is another point we have been pounding on since 2007. The court went on to say that it was obligated to accept any claim that was “plausible on its face.”
  9. The primary claim of Plaintiffs was that the Defendants were “not her true creditors and as such have no legal, equitable, or pecuniary right in this debt obligation in the loan,’ which we presume to mean that the court was recognizing the distinction, for the first time, between the legal obligation to pay and the loan documents.
  10. Plaintiff contended that there was not a proper assignment to anyone because the assignment took place after the cutoff date in 2006 (assignment in 2010) and that the person executing the documents, was not a duly constituted authorized signor. The Judge’s decision weighed more heavily that allegation that the assignment was not properly made according to the “trust Document,” thus taking Defendants word for it that a trust was created and existing at the time of the assignment, but also saying in effect that they can’t pick up one end of the stick without picking up the other. The assignment, after the Notice of Default, violated the terms of the trust document thus removing the authority of the trustee or the trust to accept it, which as any reasonable person would know, they wouldn’t want to accept — having been sold on the idea that they were buying performing loans. More on this can be read in “whose Lien Is It Anyway?, which I just published and is available on www.livinglies-store.com
  11. The Court states without any caveats that the failure to assign the loan in the manner and timing set forth in the “trust document” (presumably the Pooling and Servicing Agreement) that the note and Deed of trust are not part of the trust and that therefore the trustee had no basis for asserting ownership, much less the right to enforce.
  12. THEN this Judge uses simple logic and applies existing law: if the assignment was void, then the notices of default, sale, substitution of trustee and any foreclosure would have been totally void.
  13. I would add that lawyers should consider the allegation that none of the transfers were supported by any financial transaction or other consideration because consideration passed at origination from the investors directly tot he borrower, due to the defendants ignoring the provisions of the prospectus and PSA shown to the investor-lender. In discovery what you want is the identity of each entity that ever showed this loan is a loan receivable on any regular business or record or set of accounting forms. It might surprise you that NOBODY has the loan posted as loan receivable and as such, the argument can be made that NOBODY can submit a CREDIT BID at auction even if the auction was otherwise a valid auction.
  14. Next, the Court disagrees with the Defendants that they are not debt collectors and upholds the Plaintiff’s claim for violation of FDCPA. Since she explicitly alleges that US bank is a debt collector, and started collection efforts on 2010, the allegation that the one-year statute of limitation should be applied was rejected by the court. Thus Plaintiff’s claims for violations under FDCPA were upheld.
  15. Plaintiff also added a count under California’s Unfair Competition Law (UCL) which prohibits any unlawful, unfair or fraudulent business act or practice. Section 17200 of Cal. Bus. & Prof. Code. The Court rejected defendants’ arguments that FDCPA did not apply since “Plaintiff alleges that Defendants violated the UCL by collecting payments that they lacked the right to collect, and engaging in unlawful business practices by violating the FDCPA and RESPA.” And under the rules regarding motions to dismiss, her allegations must be taken as absolutely true unless the allegations are clearly frivolous or speculative on their face.
  16. Plaintiff alleged that the Defendants had created a cloud upon her title affecting her in numerous ways including her credit score, ability to refinance etc. Defendants countered that the allegation regarding a cloud on title was speculative. The Judge said this is not speculation, it is fact if other allegations are true regarding the false recording of unauthorized documents based upon an illegal or void assignment.
  17. And lastly, but very importantly, the Court recognizes for the first time, the right of a homeowner to demand an accounting if they can establish facts in their allegations that raise questions regarding the status of the loan, whether she was paying the right people and whether the true creditors were being paid. “Plaintiff alleges facts that allows the Court to draw a reasonable inference that Defendants may be liable for various misconduct alleged. See Iqbal, 129 S. Ct. at 1949.

Here are some significant quotes from the case. Naranjo v SBMC TILA- Accounting -Unfair practices- QWR- m/dismiss —

Judge Lorenzo Decision in Naranjo vs. SBMC Mortgage et al 7-24-12

No allegations regarding false origination of loan documents:

SBMC sold her loan to a currently unknown entity or entities. (FAC ¶ 15.) Plaintiff alleges that these unknown entities and Defendants were involved in an attempt to securitize the loan into the WAMU Mortgage Pass-through Certificates WMALT Series 2006-AR4 Trust (“WAMU Trust”). (Id. ¶ 17.) However, these entities involved in the attempted securitization of the loan “failed to adhere to the requirements of the Trust Agreement

In August 2009, Plaintiff was hospitalized, resulting in unforeseen financial hardship. (FAC ¶ 25.) As a result, she defaulted on her loan. (See id. ¶ 26.)
On May 26, 2010, Defendants recorded an Assignment of Deed of Trust, which states that MERS assigned and transferred to U.S. Bank as trustee for the WAMU Trust under the DOT. (RJN Ex. B.) Colleen Irby executed the Assignment as Officer for MERS. (Id.) On the same day, Defendants also recorded a Substitution of Trustee, which states that the U.S. Bank as trustee, by JP Morgan, as attorney-in-fact substituted its rights under the DOT to the California Reconveyance Company (“CRC”). (RJN Ex. C.) Colleen Irby also executed the Substitution as Officer of “U.S. Bank, National Association as trustee for the WAMU Trust.” (Id.) And again, on the same day, CRC, as trustee, recorded a Notice of Default and Election to Sell. (RJN Ex. D.)
A Notice of Trustee’s sale was recorded, stating that the estimated unpaid balance on the note was $989,468.00 on July 1, 2011. (RJN Ex. E.)
On August 8, 2011, Plaintiff sent JPMorgan a Qualified Written Request (“QWR”) letter in an effort to verify and validate her debt. (FAC ¶ 35 & Ex. C.) In the letter, she requested that JPMorgan provide, among other things, a true and correct copy of the original note and a complete life of the loan transactional history. (Id.) Although JPMorgan acknowledged the QWR within five days of receipt, Plaintiff alleges that it “failed to provide a substantive response.” (Id. ¶ 35.) Specifically, even though the QWR contained the borrow’s name, loan number, and property address, Plaintiff alleges that “JPMorgan’s substantive response concerned the same borrower, but instead supplied information regarding an entirely different loan and property.” (Id.)

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat’l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not “necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotation marks omitted). In fact, the court does not need to accept any legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, ___, 129 S. Ct. 1937, 1949 (2009)

the allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Id. Thus, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'” Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a `probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Plaintiff’s primary contention here is that Defendants “are not her true creditors and as such have no legal, equitable, or pecuniary right in this debt obligation” in the loan. (Pl.’s Opp’n 1:5-11.) She contends that her promissory note and DOT were never properly assigned to the WAMU Trust because the entities involved in the attempted transfer failed to adhere to the requirements set forth in the Trust Agreement and thus the note and DOT are not a part of the trust res. (FAC ¶¶ 17, 20.) Defendants moves to dismiss the FAC in its entirety with prejudice.

The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution, and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. (See Defs.’ Mot. 3:16-6:2; Defs.’ Reply 2:13-4:4.) This reason alone is sufficient to deny Defendants’ motion with respect to this issue. [plus the fact that no financial transaction occurred]

Moving on, Defendants’ reliance on Gomes is misguided. In Gomes, the California Court of Appeal held that a plaintiff does not have a right to bring an action to determine a nominee’s authorization to proceed with a nonjudicial foreclosure on behalf of a noteholder. 192 Cal. App. 4th at 1155. The nominee in Gomes was MERS. Id. at 1151. Here, Plaintiff is not seeking such a determination. The role of the nominee is not central to this action as it was in Gomes. Rather, Plaintiff alleges that the transfer of rights to the WAMU Trust is improper, thus Defendants consequently lack the legal right to either collect on the debt or enforce the underlying security interest.

Plaintiff requests that the Court “make a finding and issue appropriate orders stating that none of the named Defendants . . . have any right or interest in Plaintiff’s Note, Deed of Trust, or the Property which authorizes them . . . to collect Plaintiff’s mortgage payments or enforce the terms of the Note or Deed of Trust in any manner whatsoever.” (FAC ¶ 50.) Defendant simplifies this as a request for “a determination of the ownership of [the] Note and Deed of Trust,” which they argue is “addressed in her other causes of action.” (Defs.’ Mot. 6:16-20.) The Court disagrees with Defendants. As discussed above and below, there is an actual controversy that is not superfluous. Therefore, the Court DENIES Defendants’ motion as to Plaintiff’s claim for declaratory relief.

Defendants argue that they are not “debt collectors” within the meaning of the FDCPA. (Defs.’ Mot. 9:13-15.) That argument is predicated on the presumption that all of the legal rights attached to the loan were properly assigned. Plaintiff responds that Defendants are debt collectors because U.S. Bank’s principal purpose is to collect debt and it also attempted to collect payments. (Pl.’s Opp’n 19:23-27.) She explicitly alleges in the FAC that U.S. Bank has attempted to collect her debt obligation and that U.S. Bank is a debt collector. Consequently, Plaintiff sufficiently alleges a claim under the FDCPA.
Defendants also argue that the FDCPA claim is time barred. (Defs.’ Mot. 7:18-27.) A FDCPA claim must be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Defendants contend that the violation occurred when the allegedly false assignment occurred on May 26, 2010. (Defs.’ Mot. 7:22-27.) However, Plaintiff alleges that U.S. Bank violated the FDCPA when it attempted to enforce Plaintiff’s debt obligation and collect mortgage payments when it allegedly had no legal authority to do so. (FAC ¶ 72.) Defendants wholly overlook those allegations in the FAC. Thus, Defendants fail to show that Plaintiff’s FDCPA claim is time barred.
Accordingly, the Court DENIES Defendants’ motion as to Plaintiff’s FDCPA claim.
Defendants argue that Plaintiff’s letter does not constitute a QWR because it requests a list of unsupported demands rather than specific particular errors or omissions in the account along with an explanation from the borrower why she believes an error exists. (Defs.’ Mot. 10:4-13.) However, the letter explains that it “concerns sales and transfers of mortgage servicing rights; deceptive and fraudulent servicing practices to enhance balance sheets; deceptive, abusive, and fraudulent accounting tricks and practices that may have also negatively affected any credit rating, mortgage account and/or the debt or payments that [Plaintiff] may be obligated to.” (FAC Ex. C.) The letter goes on to put JPMorgan on notice of
potential abuses of J.P. Morgan Chase or previous servicing companies or previous servicing companies [that] could have deceptively, wrongfully, unlawfully, and/or illegally: Increased the amounts of monthly payments; Increased the principal balance Ms. Naranjo owes; Increased the escrow payments; Increased the amounts applied and attributed toward interest on this account; Decreased the proper amounts applied and attributed toward the principal on this account; and/or[] Assessed, charged and/or collected fees, expenses and miscellaneous charges Ms. Naranjo is not legally obligated to pay under this mortgage, note and/or deed of trust.
(Id.) Based on the substance of letter, the Court cannot find as a matter of law that the letter is not a QWR.
California’s Unfair Competition Law (“UCL”) prohibits “any unlawful, unfair or fraudulent business act or practice. . . .” Cal. Bus. & Prof. Code § 17200. This cause of action is generally derivative of some other illegal conduct or fraud committed by a defendant. Khoury v. Maly’s of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). Plaintiff alleges that Defendants violated the UCL by collecting payments that they lacked the right to collect, and engaging in unlawful business practices by violating the FDCPA and RESPA.

Defendants argue that Plaintiff’s allegation regarding a cloud on her title does not constitute an allegation of loss of money or property, and even if Plaintiff were to lose her property, she cannot show it was a result of Defendants’ actions. (Defs.’ Mot. 12:22-13:4.) The Court disagrees. As discussed above, Plaintiff alleges damages resulting from Defendants’ collection of payments that they purportedly did not have the legal right to collect. These injuries are monetary, but also may result in the loss of Plaintiff’s property. Furthermore, these injuries are causally connected to Defendants’ conduct. Thus, Plaintiff has standing to pursue a UCL claim against Defendants.

Plaintiff alleges that Defendants owe a fiduciary duty in their capacities as creditor and mortgage servicer. (FAC ¶ 125.) She pursues this claim on the grounds that Defendants collected payments from her that they had no right to do. Defendants argue that various documents recorded in the Official Records of San Diego County from May 2010 show that Plaintiff fails to allege facts sufficient to state a claim for accounting. (Defs.’ Mot. 16:1-3.) Defendants are mistaken. As discussed above, a fundamental issue in this action is whether Defendants’ rights were properly assigned in accordance with the Trust Agreement in 2006. Plaintiff alleges facts that allows the Court to draw a reasonable inference that Defendants may be liable for various misconduct alleged. See Iqbal, 129 S. Ct. at 1949.

Using UDCPA Fair Debt Collection Acts to get Money, Information and Fees

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

RIPE AREA FOR STEADY INCOME FOR LAWYERS REPRESENTING HOMEOWNERS

Editor’s Comment: One small step for a man, one giant leap for mankind. You have both a private right of action against the debt collector and the right to apply to the FTC to set up administrative hearings, where these cases should probably be heard by experienced hearing officers who know what they are looking at.

The practice of playing the numbers on debt collection has been around for a long time. Whether the debt is real or not, there is a statute of limitations, bankruptcies and other obstacles to collection. A lot of times the debt is now owed at all, but byb pestering customers, the collection agency gets some money out of them, which they keep because they have already bought the portfolio at pennies or less on the dollar.

This is where servicers and other intermediaries in the fake securitization chain are going to get into hot water. The debt was created when the investor loaned the borrower the money. The intermediaries are by definition debt collectors under the UDCPA and they are, and have been banged for fines many times on individual cases.

This is an instance where the Obama administration is attacking the practice head-on and taking away their toys. So when the pretender lender comes knocking, it isn’t just a RESPA 6 (Qualified Written Request) that you send out, it is a UDCPA letter you send demanding to know both the identity and contact information for the creditor. As you can see from this article, failure to provide you with that information  plus the balance due and how it was computed, is a violation of that Federal Statute.

It might also be a shortcut way of identifying the pretender not as holder of the note but as agent for an undisclosed principal seeking to collect on a note that was defective in the first place because they did not identify the correct creditor (in violation of TILA) and it did not provide you with a proper accounting showing exactly what this “creditor” received that would reduce your loan balance.

The MAIN point here is that the servicer might well be the one sending you the notice of delinquency swhen they have performed zero due diligence as to the creditor’s accounting. Where the servicer itself or some other party is keeping the account current, as is often the case, the loan is neither delinquent nor susceptible to being declared in default — but they do it anyway.

Now that the FTC has declared war on debt collectors who perform illegally, and banged them with this fine, we can invoke the same administrative procedures and grievances with the FTC as to the collection efforts on mortgages where the “collector” is not the creditor and where the money demanded is not actually shown as due.

There is a presumption that if you didn’t make the payment as set forth in the note, then you must be delinquent and you must be declared (at some point) in default. But that is not true in most cases. There can only be a delinquency or default under the mortgage loan if the borrower has failed to make a payment or cure a payment that is actually due. If the payment has been made already, then no such payment is due, regardless of whether it came from the borrower or not.

This is why you need to know the four legs of the stool in order to object, sue, defend, and present genuine issues of fact before a trial court that will have no choice but to allow you to proceed to discovery. Discovery is where these cases settle because the pretenders know they didn’t fund the loan, they didn’t pay for the loan and the creditor has been paid in whole or in part, with a lower or zero balance remaining.

Just for reminders, the four legs of the stool are:

  1. The loan closing papers with the investors under which he agrees to advance funds into a pool in exchange for a note or bond from a REMIC (which is never properly constituted). Here the investors expects that the money advanced will be used for funding mortgages conforming with the standards set forth in the prospectus and pooling and servicing agreement. Note that there is no nexus or connection between the investor and the borrower because the borrower usually does not even exist at that point in time. If a nexus ever arises, it is when the loan is transferred into the pool, something which we all now know was never done until the loan went into litigation or foreclosure — obviously in violation of the cut-off date required by the IRS REMIC statute, and the concurrent cut-off date in the PSA. But more importantly is the money angle — the investors didn’t advance money for loans that were delinquent or in default. They invested their money for good quality performing loans. Thus there is no way that the loans could be transferred into the pools if they were already declared problematic, delinquent, or non-performing. The failure to provide a nexus between borrower and lender (investor) is fatal to the enforcement of the mortgage lien. The creditor has no interest in the loan and doesn’t want one. Any claim from third parties who also have no nexus with the borrower would be on causes of action that are separate or apart from the mortgage lien. (SEE COMBO TITLE AND SECURITIZATION REPORT ABOVE)
  2. The loan closing papers with the borrower(s), which are subject to roughly the same analysis with identical result. There is no nexus between the borrower and the investor because neither one knows the other, despite requirements in the TILA and RESPA laws that require disclosure of parties and their compensation. (SEE FORENSIC ANALYSIS TILA+ REPORT on Livinglies-store.com) The note does not describe the actual monetary transaction between the investor lender and the borrower. Instead it inserts a straw-man as “lender” and a straw-man as “beneficiary”. This usually takes the form of a new animal in mortgage lending called an “originator” who is a paid fee service provider whose sole duty is to pretend to be the lender, even though they never funded the loan, never bought the loan and never had any interest in the debt, the note or the mortgage. This is deemed by many in the title industry as a corrupted document that breaks the chain of title if any action was taken on such a loan in foreclosure. 
  3. The actual money trail which varies from both the requirements set forth in the paperwork with the investor lender and the paperwork with the homeowner borrower. A full accounting would show that the parties in the middle without any interest in the loan, bought, sold, transferred and used those fabricated, forged documents to initiate foreclosure and eviction proceedings. Under the investor documentation, the pretenders are allowed to use a legal PONZI scheme in which the investors money is used to pay him his interest income, although it is not reported as such. The servicer also has the option of taking money from other revenue and pools and paying certain investors in complete  violation of the explicit requirements of any standard promissory note from a borrower requiring that payments be credited to the account of the borrower. Instead, they make the payment and do not credit the borrower or they receive the money and they pay neither the investors nor the give credit to the borrowers. (see Loan Level Accounting REPORT on Livinglies-store.com). The servicers and intermediaries and attempting, with some success to take over the position of the investor without an assignment from the investor, and enforce a mortgage to which they are not a party.
  4. The Fourth legal of the stool arises from the false representations made in court or foreclosure proceedings. These representations made by people who purport to be authorized to substitute trustees, or file notice of defaults, notice of sales, notice of evictions, or lawsuits for all of those in judicial states, turn out to be at variance with all three of the other legs of the stool — the investor paperwork, the borrower’s paperwork and the actual money trail. 

Using a service like Elite Litigation Management services or others to present the matrix, which we also offer at livinglies-store.com, dial 480-405-1688, and you can present a poster-size board that shows a number of the discrepancy between all four legs of the stool, thus giving rise to the question of fact necessary to get to the next step in litigation. remember, if you go in thinking you have a magic bullet that will end your case, you are dreaming of a better worked than the one we have.

F.T.C. Fines a Collector of Debt $2.5 Million

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The Federal Trade Commission signaled on Monday that it would continue to crack down on debt collectors who harass consumers for money they may not even be legally obligated to pay.

In the second-largest penalty ever levied on a debt collector, the F.T.C. said that Asset Acceptance, one of the nation’s largest debt collection companies, had agreed to pay a $2.5 million civil penalty to settle charges that the company deceived consumers when trying to collect old debts.

The settlement is part of a broader effort to patrol the industry, agency officials said.

“Our attention to debt collection has increased over the past couple of years because the complaints have been on the rise,” said J. Reilly Dolan, assistant director for the F.T.C.’s division of financial practices.

Consumer complaints about debt collection companies consistently rank as the second-highest category among all complaints at the agency, behind identity theft. But in 2010, complaints jumped 17 percent to 140,036, which represented 11 percent of all complaints in the commission’s database, up from 119,540, or about 9 percent of complaints, in 2009.

Asset Acceptance, based in Warren, Mich., was charged with a variety of complaints, including failing to tell consumers that they could no longer be sued for failing to pay some debts because the debts were too old. The company’s collectors also failed to inform consumers that paying even a small portion of the amount owed would revive the debt — in other words, making a payment would extend the amount of time the collector could legally sue.

Debt collectors have only a certain number of years to sue consumers. The statute of limitations varies by state, but typically ranges from two to 15 years, Mr. Dolan said, beginning when a consumer fails to make a payment. But borrowers often do not realize that making a payment on the old debt may restart the clock.

Among other things, the complaint also contended that the company — which buys unpaid debts for pennies on the dollar from credit card companies, health clubs and telecommunications and utility providers and tries to collect them — reported inaccurate information about the consumers to the credit reporting agencies. It also said that Asset Acceptance failed to conduct a reasonable investigation when it was notified by one of the credit agencies that a debt was being disputed. Moreover, the complaint says that the company used illegal collection practices and that it continued to try to collect debts that consumers disputed even though the company failed to verify that the debt was valid.

The proposed settlement with Asset Acceptance requires the company to tell consumers whose debt may be too old to be collected that it will not sue. It also requires the company to investigate disputed debts and to ensure it has a reasonable basis for its claims before going after the consumer. It is also barred from placing debt on credit reports without notifying the consumer.

The penalty “is certainly a slap on the wrist and probably a little bit more, but it really depends on what the F.T.C. does to enforce this in the coming months and years,” said Robert Hobbs, deputy director at the National Consumer Law Center and author of “Fair Debt Collection” (National Consumer Law Center, 1987). But “it is a great step forward. It is not self-enforcing, and it has a mechanism for the F.T.C. to follow up.”

Still, while the settlement requires the company to take more responsibility for checking the statute of limitations before it contacts consumers, he said most states did not require debt collectors to do that. That means it is up to consumers to know the rules on the statute of limitations, which, he said, can be “an enormously complex legal question.”

In a statement, Asset Acceptance said that the settlement ended an F.T.C. investigation that began nearly six years ago, and that the company did not admit to any of the allegations. “We are pleased to have this matter behind us, and to have clarity on the F.T.C.’s policies and expectations of the debt collection industry,” said Rion Needs, president and chief executive of Asset Acceptance.

In March, another leading debt collection company, West Asset Management, agreed to pay $2.8 million, the largest civil penalty ever levied by the F.T.C., to settle charges that its collection techniques violated the law. The commission charged that West Asset’s collectors often called consumers multiple times a day, sometimes using rude and abusive language, about accounts that were not theirs. The Consumer Financial Protection Bureau and the F.T.C. now share enforcement authority for debt collection companies, though the new bureau has a power that the F.T.C. did not: it can write new rules for debt collectors. But F.T.C. officials said that debt collection enforcement would remain a top priority.

 

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