UNITED STATES DIS’ COURT CENTRAL DISTRICT OF CALIFORNIA ~ WESTE! DIVISION LE A. HOWARD MATZ, U.S. DISTRICT < PLAINTIFF, DIANE W GUERRE CV11-1038-AHM(JCx) NANCIAL SERVIC! AEM (CWx) REPORTER'S TRANSCRIPT ¢ PROCEEDIN LOS ANGELES, CALIFO NIA MONDAY, } 2011 10:15 AM 12 North Spring Street, #438 Angeles, California 90012 nb. wuw.eindyni com UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 APPEARANCES OF COUNSEL: CVL1-1038-ABM(JCX), DIANE WELLS GUERRERO VERSUS FIRST NLC FINANCIAL SERVICES, ET AL FOR THE PLAINTIFF DIANE WELLS GUERRERO (NOT PRESENT DIANE WELLS GUERRERO, PRO SE 6459 BIXBY TERRACE DRIVE LONG BEACH, CA 90815 562-431-0980 FOR THE DEFENDANT THE BANK OF NEW YORK MELLON KUTAK ROCK BY: CYRUS CHEN, ATTORNEY AT LAW 18201 VON KARMAN AVENUE SUITE 1100 IRVINE, CA 92612 949-417-0999 ANGELA SACCHI, ET AL. VERSUS SYSTEMS, INC., ET AL.: FOR THE PLAINTIFFS SACCHI: ¢ ATTORNEY AT LAW RTHUR BOULEVARD SUITE 1110 NEWPORT BEACH, 800-946-8655 FOR THE DEFENDANTS AHMSI, MERS, POWER DEFAULT, RCS WRIGHT, FINLAY & ZAK BY: TODD CHVAT, ATTORNEY AT LAW 4665 MACARTHUR COURT SUITE 280 NEWPORT BEACH, CA 926 949-477-5050 UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 Log ANGELES, CALIFORNIA; MONDAY, MAY THE CLERK: Calling Item Numbers 3 and §, CV11-1 Diane Wells Guerrero versus First NLC Financial Services, et al., and Mortgage Item Number 5, CV11-1658, Angela Sacchi, et al. versus Electronic Systems, Inc. counsel, MR. CHEN: Good morning, Your Honor. Cyrus Chen on behalf of defendant New York Bank Mellon on the Guerrero matter THE COURT: Tell me your name again, please. MR. CHEN: Cyrus Chen. CBVAT: Good morning, Your Honor. Todd Chvat appearing on behalf of defendants AHMSI, MERS, Power Default and Res, time. Honor I ai using abbreviations to save the Court some THE COURT: In the Sacchi matter? MR. CHVAT: In the Sacchi matter, correct. THE COURT: And tell me your name again. MR. CHVAT: Todd Chwat THE COURT: Hold on a minute. Okay. So who's your client, Mr. Chen? MR. CHEN: It's the Bank of New York Mellon, Your UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 okay. So you're in the Guerrero matter? MR. orrect. THE Guerrero is not here. Okay And MR. COLBY: d morning, Your Honor. Deron Colby on behalf of the plaintiffs Sacchi in the Sacchi matter. THE COURT: Okay. All of you may be seated I called both matters time because I'm going to deal with them in the same way, but they are in certain important respects different kinds of cases and they're at a different procedural statu, Did the clerk distribute to you -- and now I'm asking you, all three of you, as collective counsel -- the draft orde requiring subsequent submission? MR. CHEN: Yes, Your Honor. MR. CHVAT: Yes, Your Honor. MR. COLBY: Yes, Your Honor. THE COURT: All right. The background to that is probably already clear to you, but t aim in this case are replete with understandable and © Gi pervasive confusion about to whom they might owe obligations and who had any right, if anyone had a right, to initiate ‘foreclosure proceedings. This is a very vexing problem, And I prepared written orders on the motions, and I've decided not to circulate them UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 ‘I'm going to deny the effort to lift the injunction in the Sacchi case and grant the TRO in the Guerrero case ‘temporarily. ‘Ivwant no efforts taken from here on forward, until ‘this matter is considered more carefully, to throw these homeowners out of their residences, assuming that they're currently there. ‘I can make all of the necessary findings. I'll do so ina sweeping way that, based upon the current state of the ‘Court's -- of the pleadings and the Court's recognition, the usual factors in weighing injunctive relief, especially the irreparability of the injury, the public interests, clearly favor homeowners borrowers. The probability of success is very different, but the probability of success factor needs to be addressed from a new perspective, and that's the second part of what I am ordering the lawyers to do. And just to explain that, Sacchi matter, the borrower referred to the Salazar and that hasn't been briefed by any of the lawyers repre the foreclosing parties and the lenders and the assignees and the mortgage services and the usual litany of absolutely baffling entities that got involved in this horrendous mess The Salazar decision, which I have read this morning, only decision that I'm currently aware of -- but you UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 have an opportunity now to brief it -- that deale with the confusion that is present in both of these cases and in numerous other cases about who has rights to proceed to oust a borrower from a residence in a home that's being foreclosed And without getting into the precise -- and there are somewhat different issues that exist in these two cases, the Guerrero case and the Sacchi case. I'm ordering the lawyers, including the lawyer for this case in the reply papers, to, on a consid: b brief the impact of Salazar. with © not just that case narrowly bw And in the meantime, I want -- and I know that not going to get any help, really, from Guerrero. She's se, and she's floundering around like pro ses are almost inevitably forced to do, but I still want the case to be treated as if there were -- and there is -- an open question as to what her rights are, if any None of this is a way of saying that I have any particular bias in favor of the homeowner, particularly somebody that took out 4 lean that was way beyond the borrower's means and should have been perceived as totally UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 improvident in the first place, but I don't have a basis to make that finding here. The other part of what you are required to do -- and I hope you can de it by Friday, but if you think you need more time, then please tell me -- is what I circulated in these draft memos. It is impossible, without spending an enormous amount of time going through what is almost certainly going to be an incomplete showing, to figure out what happened here and who's proceeding in what claim of right and in whose shoes that may have had a right pre So I want two things to be prepared. @ aim diagram (SERENE And the sample that I gave you —~ and IT want you to do it as counsel for Ms. Sacchi, Mr. Colby, too not just the lawyers for the defendants. This 1s Just a representative example, and it's meant to do two things. @i GS @S Gave che Glow GP Kep GrETES GED forth in diagram form top to bottom, meaning vertically, and the transfers of authority, of omership, of servicing ciants, of foreclosure rights, of trustee ownership to be signified ‘through horizontal or diagonal flow chart that shows whe got into the picture when, on behalf of whom and in place of whom, | and then to have a chronology geared to the diagram. And the only difference in the chronology -- the numbers would be the same. Each block would have its own UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA10 qt 12 number, but the chronology, in order to avoid having too much information incorporated into one of the blocks, the chronology would specify the exhibit in the pleadings. And I want the exhibits to be attached anew to the Even if you filed them in your motion papers previously, I want to see them now. And you can give them a different number or a different letter, if you want, but @ @am® £9 see the documentation, and I want to see the flow chart ‘figuring out whe fits in where and who's out and who's in and at_what point in time, as well as the ongoing sequence of key events from the issuance of the loan or the execution of the note or the Deed of Trust, which could be separate items. So don't feel bound by the number system I have here. This is” just designed to give you an idea of what I'm looking for. Are there any questions about the two things, the chart, slash, diagram that -- I mean the chronology, diagram on the one hand and the analysis of Salazar on the other that any of you wish to bring to my attention? MR. COLBY a question, Your Honor THE COURT: All right. Go to the lectern, please. OWEN Thank you, ¥ ‘In these cases, one of the issues is where the Deed of Trust went versus where the note went, so if I can make ‘suggestion that our chart would include showing, if they took different paths, where the Deed of Trust went and where the UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA