Académique Documents
Professionnel Documents
Culture Documents
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No. SC09-1460
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IN RE: AMENDMENTS TO THE FLORIDA RULES OF CIVIL
PROCEDURE
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are consumer and investor advocates1 who aim to protect the public interests
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and Lavalle file this pro se response to Shapiro & Fishman’s (“the Shapiro
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Firm” or “Movant”) Motion For Rehearing seeking the denial of the Motion
1
http://en.wikipedia.org/wiki/Nye_Lavalle
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of mortgage foreclosure complaints involving residential real property. The
primary purposes of this amendment are (1) to provide incentive for the
are accurate; (2) to conserve judicial resources that are currently being
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wasted on inappropriately pleaded “lost note” counts and inconsistent
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allegations; (3) to prevent the wasting of judicial resources and harm to
The Court filed its original Petition to amend the rules of court on
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the Florida Justice Institute and Florida Legal Services, Inc; the Housing and
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North Florida, Inc., and North Florida Center for Equal Justice, Inc.; the
Florida Bankers association; Florida Default Law Group; Ben-Ezra & Katz,
P.A.; Tomas H. Bateman III and Janet Ferris; Henry P. Trawick, Jr.; and
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Respondent Epstein. Oral Argument was heard on the matter on November
4, 2009.
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On February 11, 2010, the Court contemporaneously, published its
penalty of perjury, I declare that I have read the foregoing, and the facts
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alleged therein are true and correct to the best of my knowledge and belief.”
[emphasis added]
d.
On February 26, 2010, the Shapiro Firm filed a Motion for Rehearing
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and Clarification of the Court’s Opinion. In its Motion, the Shapiro Firm
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states “the rule fails to specify who is responsible for verifying the mortgage
foreclosure complaints. It is on this very limited issue that the Shapiro Firm
The Shapiro Firm virtually admits to the Court that it and its alleged
clients are unable, under penalty of perjury, to verify and attest to which
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party (or client) can be held accountable for bringing meritorious foreclosure
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actions and delineates as rationale for this legal handicap its inability to: a)
Allege the proper and lawful amounts claimed due; b) Attest to the default
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promissory note; d) Reveal the true owner of the note and holder in due
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who can lawfully receive and approve modifications, short pays, settlements,
“The holders of the note are often unfamiliar with the status of the loans and
rely upon loan servicers to manage the loans, payments on the loans and the
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allegedly own and hold the note and the servicers of the mortgage that often
have intentionally separated and bifurcated the mortgage securing the note’s
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trusts and securitizations that allegedly hold the note for the Shapiro Firm to
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servicing practices, a term coined by Respondent Lavalle2 in his 1999/2000
wide predatory and fraudulent practices that have fallen under recent and
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intense judicial and regulatory scrutiny due to the foreclosure crisis
impacting the nation as a whole, while Florida has attained first place for
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defaults and foreclosures. The actual owners and holders of the notes, the
trust funds, have not appeared before this most high honorable Court.
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titles by the hundreds of thousands in their wake. They collectively seek this
2
http://en.wikipedia.org/wiki/Predatory_mortgage_servicing
3
http://www.scribd.com/doc/13625416/AAMA-Report
4
http://www.businessweek.com/magazine/content/06_52/b4015147.htm?chan=search
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conduct as discussed herein and by other Federal and state justices across the
nation. The “old adage” that the bank (i.e. legacy “real lender”) doesn’t
want your home is true! It is not the lender, but the undamaged servicer
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that’s after the “collateral.” These interlopers profit from a system they
the extra points charged at closing or higher interest rates paid for in
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monthly-payments by borrowers.
assumption fees, late charges, property inspection, and BPO fees; float on
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premiums; and other accrued disbursements and advances incurred that often
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5x’s median rates or rejecting late or partial payments as ploys to jolt the
upon, prior to remittance of any sale proceeds to the real owners and holders
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of the note.5
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Additionally, per the PSAs filed with the SEC, most servicers and
master servicers are required to remit advances, servicer advances, and non-
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recoverable advances all designed to cover missed payments to be
transmitted to the true owners of the notes thus begging the question if the
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actual true lender has been paid by another 3rd party (“servicer”) that has no
privity of contract with the borrower, is the borrower in actual default to his
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default, claims, or damages by the note’s defined lender who may not realize
Servicers and the true owners of the note (i.e. real Lenders) may be
5
Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior, Servicer
Compensation and its Consequences, National Consumer Law Center Inc, Oct. 2009 found at
http://www.consumerlaw.org/issues/mortgage_servicing/content/Servicer-Report1009.pdf
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missed payments, defaults, or payment of total principal by other subrogated
parties such as: private mortgage, mortgage pool, and Net Interest Margin
Securities (“NIMS”) insurers; Fannie Mae, Freddie Mac, Ginnie Mae, FHA,
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VA and other government guarantors; and holders of complex investment
derivatives such as credit default swaps. These sums are often conveyed to
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the owners and holders of a note, and should be included in any full
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accounting of amounts due and owing and clearly represented as individual
line items in affidavits attesting to amounts due and owed an actual and real
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lender seeking to foreclose upon property in Florida.
may have subrogated, yet unsecured claims, to the foreclosure action and/or
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PSAs often contain language analogous to, “The Trustee shall have no duty
Quoting the Shapiro Firm’s Motion for Rehearing, the holder of the
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note “may have some limited knowledge in order to verify portions of the
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complaint” and the “loan servicer would, presumably, have” some limited
knowledge in order to verify other portions of the complaint but “likely will
dollar to private hedge funds and other undisclosed indispensable and real
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parties in interest) despite the admitted inability of any lawful party to elicit
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affiliates, custodians, underwriters, aggregators, successors, trustees,
In a relay track meet, the baton is handed off from the leadoff runner
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to subsequent waiting receiving runners, ending with the runner who finishes
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the race as an individual. Each runner on the relay team is fully dependent
are each “liable” for their performance during their “assigned” leg of the
able to show the proper handoff and receipt (possession, negotiation, and
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to perfect their lien interests and claims to not only the obligation, but the
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right to secure the collateralized property and foreclose. Plaintiffs bear the
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Lender C and any subsequent Lenders and holders in due course. Moreover,
plaintiffs must prove that the mortgage that secures such indebtedness
(note), was not intentionally separated and bifurcated from the note itself in
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which case, the borrower could still owe the actual Lender the performance
disqualification.
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Enforcement of a note always requires that the person seeking to
collect show that it is the holder. A holder is an entity that has acquired the
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law controls the rights of note and lien holders, as the Supreme Court
pointed out almost forty (40) years ago in United States v. Butner, 440 U.S.
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Committee titled “Where’s The Note, Who’s The Holder: Enforcement Of
as Plaintiff to enforce the note. Assuming that the servicing agent states that
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it is the authorized agent of the note holder, which is “Trust Number XX-
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99.” The servicing agent is certainly a party in interest, since a party in
the servicing agent may not have standing: “Federal Courts have only the
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power authorized by Article III of the Constitutions and the statutes enacted
Cases, 521 F.Supp. 3d 650, 653 (S.D. Ohio, 2007) (citations omitted).
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owned in fact by the state of Florida (whose “certificate holders” are its
or
citizens).
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Recent Florida Appeals Court rulings seem to follow this line of logic.
Jean-Jacques et al, Florida 2d DCA Case No. 2D08-3553, the Court reversed
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a summary judgment of foreclosure which had been obtained by US Bank as
Trustee of a securitized mortgage loan trust for mortgage loan asset backed
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certificates series 2006-CB5. The decision confirmed what Respondents,
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consumer lawyers, and other advocates have been advancing in the courts
for years. The Court held that US Bank failed to meet its burden for
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summary judgment because the record revealed a genuine issue of material
citations to Florida case law, that the proper party with standing to foreclose
a note and mortgage is the holder of the note and mortgage or the holder’s
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representative. The Court found that while US Bank alleged in its unverified
Complaint that it held the note and mortgage, the copy of the mortgage
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attached to the Complaint listed Fremont Investment and Loan as the lender
and MERS as the “mortgagee.” The Court concluded that the exhibits to the
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The Court further found that while US Bank subsequently filed the
original note, that note did not identify US Bank as the lender or holder and
that US Bank did not attach any assignment or other evidence to establish
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that it had purchased the note and mortgage or file any supporting affidavits
the note and mortgage and so had standing to foreclose the mortgage
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before it would be entitled to summary judgment in its favor.” Even more
significantly, the Court held that whether US Bank did provide such
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that it validly held the note and mortgage it sought to foreclose. [emphasis
added]
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dozens of state and federal courts have recently decided, in the cases
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illustrated in Exhibit 3 the constitutional issue of lawful standing arises in
virtually each foreclosure action. This very issue is the antecedent for this
foreclosure bar to the shed in his footnotes when he publicly rebuked their
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the homeowner who finds himself/herself in financial straits fails to make the
counsel. Their focus is either, ‘how do I save my home,’ or ‘if I have to give
or
6
http://www.msfraud.org/LAW/Lounge/Deutsche%20Bank%20Foreclosures%20Dismissed.pdf
7
http://www.msfraud.org/LAW/Lounge/RoseRuling20071115.pdf
8
http://www.msfraud.org/LAW/Lounge/Foreclosure_Dismissals.OMalley.pdf
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it up, I’ll simply leave and find somewhere else to live.’ In the meantime, the
default judgment and then sit on the deed, avoiding responsibility for
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maintaining the property while reaping the financial benefits of interest
foreclosure process is driven by money. And the legal work which flows
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from winning the financial institution’s favor is highly lucrative. There is
profit — to the contrary, they should be rewarded for sound business and
courts must act as gatekeepers, assuring that only those who meet diversity
and standing requirements are allowed to pass through. Counsel for the
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institutions are not without legal argument to support their position, but
their arguments fall woefully short of justifying their premature filings, and
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institutions seem to adopt the attitude that since they have been doing this
Finally put to the test, their weak legal arguments compel the Court to stop
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them at the gate. The Court will illustrate in simple terms its decision:
The honorable Arthur Schack and several judges in New York State
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and its clients to create standing and detail the true owner and holder in due
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This Court’s rule was amended to reduce confusion and waste of both
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lawsuits forcing the determination of the true and rightful owners of their
represented to investors, to ensure they have clear and marketable title via a
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valid chain of endorsements and assignments of the notes they are
complaint.”
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Excluding the actual lenders, are the servicers and other parties, including
The Shapiro Firm itself and other foreclosure bar firms, receiving double or
or
multiple recovery without disclosure wherein other firms which may have
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subrogation claims have paid off the lawful obligation and debt to the actual
lender; d) Exactly who does counsel represent and who are their clients
real and indispensable parties, all determined to subvert their role, avoid
liability, and demand an outside agency (i.e.: the Florida Supreme Court) to
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determine who should tell the truth under penalties or perjury or sanctions?
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direction to the Shapiro Firm as to who shall bear the ultimate responsibility
for verification of a foreclosure claim and states, “A lawyer shall not bring
or
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or defend a proceeding, or assert or controvert an issue therein, unless there
motions to dismiss must be accorded studied judicial review. Now is not the
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time for experimentation with ex-parte orders of denial on defendants’
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motions to dismiss, an idea batted about in some Florida Circuit courts.
the Plaintiff, the obligation, amount, and secured status of any debt, and
other facts presented to the court. The across the board stonewalling of
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simplest of discovery requests only adds to the lack of transparency and may
or
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be a major contributor to the Shapiro Firm’s own “questions and
uncertainty.”
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IV. No Room For Perjury With Impunity
The Shapiro Firm, disquieted over the new verification rule, anguishes
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over the implications; civil, criminal, ethical, and professional. An attorney
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bringing a Florida foreclosure action on behalf of a client now must verify
the following: a) I declare I have read the foregoing; and b) The facts alleged
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therein are true and correct to the best of my knowledge and belief.
foreclosure action. A “no” would obviate the attorney query his client
further regarding the material facts of the case prior to bringing the action,
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direction to The Shapiro Firm as to who shall bear the ultimate responsibility
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for verification of a foreclosure claim and states, “A lawyer shall not bring
or an agent of the holder of the note may constitute fraud upon the court.
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Defendants and their counsel are entitled to insist that Plaintiffs establish
their standing.
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A day spent in any file room of any courthouse in the state reveals the
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criminal investigation;9 free-floating allonges produced after the fact; notes
and its affiliates, that regardless of how the Court rules, that there will be
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compliance with this or any Court’s requirements or rules. Simply put, the
miles MPH.
or
9
http://online.wsj.com/article/SB10001424052702303450704575160242758576742.html?mod=rss_Today
's_Most_Popular
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This Court is very familiar and sensitive to the industry-wide practices
Security National Servicing Corp. (Case No.: SC06-361 and 4th DCA Case
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No.: 4D04-776), this Court was asked by the Stern Law Firm to resolve
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issues regarding its liability for malpractice by a conflicting confluence of
amongst themselves who is a client and/or note owner and the time frame of
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that ownership, how can a borrower and their counsel determine these facts
As for the movant, the Shapiro Firm, the Respondents would ask this
high honorable Court to take judicial notice in the case of Rivera (Debtor) in
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the United States Bankruptcy Court District Of New Jersey Case No. 01-
42625 (MS) wherein a sister firm of the Shapiro Firm, Shapiro & Diaz
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employed at the firm for more than a year. [emphasis added] The
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honorable Morris Stern, the federal bankruptcy judge overseeing the
sanction against the S&D firm, which is a part of the Shapiro Attorneys
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Network that controls the Shapiro Firm. The judge found that S&D had
filed 250 motions seeking permission to seize homes using the pre-signed
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certifications by the ex-employee.
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In testimony before the judge, an S&D employee stated that the firm used
the pre-signed documents beginning in 2000 and that they were attached to
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“95 percent” of the firm’s motions seeking permission to seize a borrower’s
home. Individuals making such filings attest to their accuracy. Judge Stern
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foreclosure bar firm, Florida Default Law Group (“FDLG”) and wrote,
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S&D as well as the movant, the Shapiro Firm, are part of a national
Ajmo operate.
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According to Judge Sterns’ 58-page ruling,10 until June or so of 2004,
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Shapiro and Kreisman operated a mortgage loan default outsourcing service
called “LOGS Financial Services, Inc.” LOGS is an acronym for the Law
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Offices of Gerald Shapiro. LOGS interfaces with the alleged mortgage
Shapiro Firm and other foreclosure bar members are an integral part or even
providers.
The actual lenders, servicers, and trusts have thus abdicated their
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servicing systems and accountings to these third party outsourcers who are
or
10
http://www.msfraud.org/LAW/Lounge/Standing/Jenny_Rivera.pdf
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not subsidiaries, employees, managers, or executives of the actual lender and
holder in due course, and as such, can not testify to the actual records
twenty-seven (27) states that bear the Shapiro name (brand) with local
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foreclosure counsel. On its website, LOGS advertises its “industry
performance.”
The Shapiro Firm, S&D and other Shapiro network law firms and
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LPS is now under a federal criminal investigation by the U.S.
attorney's office for the middle district of Florida for alleged false,
Respondent Lavalle’s 2008 report titled Sue First & Ask Questions
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Later13 not only laid the foundation for other advocates and lawyers’
foreclosure complaint, but also the current criminal investigations led by the
U.S. trustee and attorneys’ office. In the report, on page 3, Lavalle states
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that often the entity filing foreclosure: a) Does not own the note; b) Made
authority to foreclose; d) Does not have possession of the note; and/or e) All
or
11
http://online.wsj.com/article/SB10001424052702303450704575160242758576742.html?KEYWORDS=
%22lender+processing%22
12
Report found at http://www.scribd.com/doc/3683593/Predbear
13
http://www.scribd.com/doc/20955838/PMI-Ocwen-Anderson-Report-Sue-First-Ask-Questions-Later
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indispensable parties (the actual owners) are not before the court or
across the nation and particularly in Florida and his findings illustrate: a)
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That servicers, default servicing outsourcers and their lawyers are forging
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documents with “squiggle marks” that are not the marks or signatures of the
squiggle mark that are consistently different than several or a dozen other
for dozens of other banks and lenders; f) The same “officer” or “vice
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assignments, affidavits, and satisfactions; h) Pre-stamped assignments and
computer of “both” the notary and the signatory; and k) Backdating of dates
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on assignments and signatures of officers dating years after a company has
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been out of business or gone bankrupt.
The U.S. Trustees office has also sought severe sanctions against JP
Morgan Chase18 and others for falsifying documents as the New York Post
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14
Deposition of manager of David J. Stern Law Offices found at http://mattweidnerlaw.com/blog/wp-
content/uploads/2010/03/depositionsammons.pdf
15
Deposition of IndyMac officer found at http://mattweidnerlaw.com/blog/wp-
or
content/uploads/2010/03/depositiongmac.pdf
16
http://mattweidnerlaw.com/blog/wp-content/uploads/2010/03/depositionnolan.pdf
17
http://mattweidnerlaw.com/blog/wp-content/uploads/2010/03/depositionseck.pdf
18
http://online.wsj.com/public/resources/documents/NuerStatement0402.pdf
19
http://www.nypost.com/p/news/business/liening_on_brXWsORtBjnxgpXskq8x5N
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against the Chase for a string of bad behavior, including seeking to foreclose
on homes after they rejected the attempts to make on-time payments and for
failing to prove they own the mortgage on a home even as they move to
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seize it.” [emphasis added]
interest rates where applicable, escrow balances, adjusted e.g., for real estate
tax and casualty insurance premium payments, and allowable charges for
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fees and costs, including those of law firms such as the Shapiro Firm.
Foreclosure Mill law firm, Butler & Hosch, P.A was sanctioned by a South
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submitted by Shiver, the Court issued show cause orders to attorneys and
Hosch, P.A.
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Shiver and Branham appeared at a later hearing and admitted: a) they
did not always read documents bearing their signatures that were filed with
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the Court, relying on paralegals or other firm support, b) affidavits submitted
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to this Court were not always executed in person before a notary as
purported in the documents and some purported affidavits may not have
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been reviewed and actually signed by the attorney purported to have signed
the paper; and c) the attorneys, despite having support staff in South
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Carolina, did not have an adequate system for observing and being notified
major title insurers, Fidelity National Financial and First American. Both
d.
firms stand to suffer significant losses in the tens, if not hundreds of billions
of dollars in title claims, caused by the uninsurability and clouded titles, due
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It is these firms that not only create assignments of mortgages, many
of them forged and fraudulent and now under criminal investigation, but
actually select the lawyers and refer the foreclosure cases and prepare the
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pleadings and other motions for their designated counsel who they score on
report cards whose measures are based on expediency, rather than accuracy
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and lawful execution.
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In essence, plaintiffs and their lawyers practice foreclosure law in the
state of Florida and across the nation in an automated and robotic fashion
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devoid of lawful and knowledgeable review of facts, evidence, and even
Law firms have automated the default, foreclosure, and bankruptcy legal
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profession into a robotic system wherein human checks and balances, not to
ignored and done away with. However, the homes of Floridian families
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Foreclosure bar lawyers have become perfunctory puppets of their
apparent guardianship over their professional duty to uphold the law, and
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exhibiting a blithe disregard to the practice of their profession and the very
documents that bear their signature. The grand irony is that the borrower in
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a Florida foreclosure rocket-docket courtroom is viewed with suspicion and
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disdain, cowed under “scumbag-deadbeat” stigma, as questions and
concerns in step with those voiced by the Shapiro Firm are put forth in an
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attempt to defend against an unfounded foreclosure action. One mortgage
borrowers in default as Joe and Jane Smuck versus Jane and John Doe in
The pervasive fraud upon state and federal Courts in Florida and across
the nation, as evidenced by Movant’s sister firm in New Jersey, S&D, and
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Registration Systems, Inc. (“MERS”) filed a foreclosure action against
Lawrence Rumbough claiming it owned and held his “lost” promissory note,
movant in this matter, Marisa Ajmo of the Shapiro Firm. The court ruled
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MERS’ favor in its summary judgment of foreclosure in October of 2002.
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Thus, MERS’ obtained a judgment in its name for property and value.
The case was over dispute with Midland Mortgage that Rumbough made
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payments due later claimed to be 12 days late and Rumbough claimed
Midland misapplied his payments and rejected others and was never late.
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Yet, MERS, Ajmo, LOGS, and Midland spent over $200,000 in legal fees
In the original complaint, MERS via its law firm (the Shapiro Firm)
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averred that the chain of title went from Residential Mortgage Services (A)
(C). Ajmo, under oath, even testified that MERS owned the note and
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A hearing on the case was held on October 9, 2006, at the Orange County
Q: Well, you represented -- in this case, did MERS hold the note
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The mortgage assignments and title search showed the original lender
on 2/8/06 (E).
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Yet, when the note was produced years later after the patently false
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pleading that the note was lost, the chain of assignments on the note itself
Milestone document which reflects the transactions input into the private
note) was sold to Ginnie Mae on 2/1/94 (less than a month after its
d.
origination) and placed into the GNMA group/pool No. 360782X with a
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These facts, without evidence of payment, but in the internal computer
records of Chase and MERS showed that the U.S. government’s Ginnie Mae
program bought the note on or about 2/1/94 and allegedly sold the note to
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MidFirst Bank, not Midland Mortgage on 8/28/03 over a year after the
industry were warned of the consequences of their bad deeds and acts as far
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Respondent Lavalle of the false pleadings and affidavits that Judge Gordon
took judicial notice of in his sua sponte show cause hearing in MERS v.
d.
Cabrera; Case No. 05-02425 CA 05 In the 11th Judicial Circuit for Miami-
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Logan in Pinellas County when counsel for MERS stated on the record “So
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by the time it comes to foreclosure, it’s not certain who has the beneficial
Lavalle's most dire prediction came from the second report he released at
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the 2000 National Consumer Law Conference in Broomfield Colorado.
on many, not just the borrowers being abused. This includes the predator’s
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20
http://charleslincoln3.files.wordpress.com/2010/02/judge-logans-order-on-mers.pdf
21
http://www.scribd.com/doc/13625416/AAMA-Report
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mortgage backed securities; 8) reduced value and marketability of mortgage
backed securities; 9) reduced stock and option prices; 10) elimination of jobs
due to cuts and layoffs; 11) overpayment of false and fraudulent claims by
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federal government; and 12) increase in foreclosed and abandoned homes in
Wall Street firms including Bear Stearns, WAMU, Ocwen, Fannie Mae,
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Freddie Mac, PMI, JPMorgan Chase and others to allow Lavalle the
of each company.
Lavalle’s reports to Fannie Mae led to Fannie Mae’s board and CEO’s
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where two Florida judges, Judge Logan of Pinellas County and Judge
Mark Cymrot of the Washington D.C. law firm of Baker Hostetler led the
investigation and also concluded that false pleadings were being executed by
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the foreclosure factory/mill firms, including the Shapiro Firm. Fannie Mae
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amended and changed many of its servicing policies after Lavalle’s report
and the independent counsel’s investigations and most recently barred any
in Florida Courts that MERS and other servicers actually owned the notes
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they claimed ownership of or their loss. The posts, attached as Exhibit 7,
In his questioning of the industry and its lawyers, Judge Gordon used
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counsel as the basis for his first questions (transcript22 pgs 16 – 23) directed
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to MERS, its counsel, and other law firms present, including the movant and
its clients.
d.
concerns when he stated: “It truly concerns me, however, that thousands and
or
22
http://www.floridalegal.org/Umbrella%20Groups/MERS/MERS1.PDF and
http://www.floridalegal.org/Umbrella%20Groups/MERS/MERS2.PDF
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thousands -- thousands and thousands of mortgage foreclosure actions have
been filed with these allegations. I am not certain what remedy, if any, these
people would have were it to be determined that MERS was not ever the
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proper party notwithstanding that these folks [might] have been in default
what their recourse, if any, would be. I'm not certain with the satisfaction of
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mortgages that have been filed on behalf of MERS how good those are and I
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am not certain how good title to property is that people bought at these
affidavits that they held something they didn't own, so I'm not certain of the
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Judge Gordon called the foreclosure bar, their clients (servicers) and
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addressing the frauds upon his Court, Judge Gordon laid out the parameters
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of false and sham pleadings as well as the warnings of Lavalle to MERS and
In his order, Judge Gordon wrote: “Now we address the more troubling
23
Order found at http://www.msfraud.org/LAW/Lounge/MERS%20is%20a%20SHAM.pdf
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knowingly filing pleadings which contain allegations which are clearly false,
as a mere pretense set up in bad faith and without color of fact. "A plea is
considered 'sham' when it is palpably or inherently false, and from the plain
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or conceded
facts in the case, must have been known to the party interposing it to be
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untrue." See Rhea v. Halkney, 157 So. 190,193 (Fla. 1934). The Corrected
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Order to Show Cause… MERS had adequate notice and a fair opportunity to
offer any evidence in response to the Corrected Order to Show Cause. The
only evidence admitted at the hearing was the Courts' composite exhibit
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Judge Gordon further stated that “the evidence is clear and convincing
d.
the MERS's allegations that it "owned" "held" and "possessed" the Mortgage
Notes in questions are clearly, palpably and inherently false based upon the
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plain and conceded facts in the case. [emphasis added] The evidence is
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likewise clear and convincing that MERS at all times prior to making these
allegations acted in bad faith knowing them to be false and indeed, it was
forewarned (by Lavalle) of the potential consequences for making such false
w.
allegations.
VI. The Shell Game of Passing the Buck then Passing the Bid & The
Ramifications of Assigning Millions of Defective Titles into
Perpetuity
Fr
We are all familiar with the notorious “shell game” and its variations.
au
(Three shells and a pea or marble, the old army game). The shell game is
In the mortgage industry today, the shell game continues with the
or
transfer and assignment of notes and mortgages and it is only when a wager
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note shown with actual “slight of hand” via false facts, corporate identities,
alleged copy of the promissory note the Uppers originally executed with
On the front of the promissory note listed in Exhibit 8 is clearly a stamp that
of the note attached in Exhibit 8 is a copy of the allonge attached to the note
on page 4 referenced on the stamp on the first page of Exhibit 8. The copy
d.
of the allonge indicates that Ocala National Bank sold or transferred its
recourse and the chain ends there since there is no further endorsement or
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blank endorsement on the note or allonge. The allonge was executed by
Rance Kayon or about same date as the promissory note, December 12,
2005.
w.
Yet, allegedly, on the very same day, December 12, 2005, Rance Kay,
action wherein it claims to own and hold the note, clearly demonstrates that
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the note was sold, transferred, pledged and/or assigned to Ohio Savings
Bank.
re
Ohio Savings Bank then became known as AmTrust Bank and in the
past year, far after the foreclosure, AmTrust Bank, Cleveland, OH was
Fr
closed by the Office of Thrift Supervision (OTS), and the Federal Deposit
were then sold to New York Community Bank, Westbury, NY, and the
“assuming institution.”
d.
Freddie Mac website the information shown in Exhibit 9 which clearly states
or
that Freddie Mac is the owner of the Upper loan and promissory note with
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no assignment or endorsement to them anywhere evidenced in the county
Besides the complication and expense for Upper to defend such a suit, which
w.
party does she defend against and sue in any counterclaims? Which party is
claiming the loss or asset on their books and how does that effect
4
shareholders and investors? This is a prime example of why the Court’s
clo
decision to verify the pleadings must remain since this is not an isolated
case. How will Upper or any Florida homeowner achieve clear title to
su
property in such a case?
in their names, rather than the name of the real owner and holder of the note.
The question must be asked, why? If the servicer can bring a foreclosure
Fr
action as an agent, why can’t it identify who the actual real lender is,
especially if it’s a tax payer supported GSE such as Fannie Mae, Freddie
au
are the legitimate motivation behind the shell game and concealing the true
d.
identity of the lender? What are lenders and servicers afraid of, unless its
assignee liability or the inability to prove up the chain of title because they
or
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are multi-pledging notes to different securitizations and defrauding
investors?
The Shapiro Firm asks the Court, “How does a member of the
su
foreclosure bar verify complaints in compliance with amended rule 1.110(b),
hundreds of times over, while possessing full awareness of the legal shell
re
case styled Chase Home Finance v Yoanys Suau, Case No: 502008CA0078,
Palm Beach County, FL was filed. Item 2 of Count I of the complaint states,
au
“On August 16, 2006, Yoanys Suau executed and delivered a promissory
note and Yoanys Suau and Jose Luis Suau executed and delivered a
d.
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Item 3 of Count I of the complaint states, “Plaintiff, as servicer for the
owner and acting on behalf of the owner with authority to do so, is the
present designated holder of the note and mortgage with the authority to
w.
pursue the present action. No document, such as a PSA or Power of
Chase?
su
Attached to the complaint is a letter dated February 13, 2008, from the
Chase Home Finance, LLC is the creditor to whom the debt is owed by those
individuals who are obligated under the promissory note and mortgage.”
Fr
Why can’t the letter simply state that Chase Home Finance, just like
Collection Practices Act collecting the debt on behalf of Fannie Mae? The
Watson firm knew at this juncture that title would be vesting in Fannie Mae
d.
assignments of the mortgage in question were recorded with the Palm Beach
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County, Florida clerk of the court on or about the same date. Assignment
#1: had JP Morgan Chase Bank, N.A. located at 3415 Vision Dr. Columbus,
Home Finance, LLC. The effective date is left blank. The document was
within weeks to 45 days after loan origination. This loan was taken out
d.
years prior to the assignment that Chase made and the assignment only came
when the foreclosure was commenced. The assignment was made not to
or
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transfer a note and mortgage, but to give the illusion to the Court that the
also U.S. Bank National Association, Trustee for Lehman Sail 2005-10. The
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document executed on behalf of Lehman is especially perplexing having
these documents show that 3415 Vision Dr. Columbus, OH, 43219 is also
Fr
for Substitution of Party Plaintiff was granted and the order states, “Federal
Chase Home Finance, LLC and the style of the case shall be amended to
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by a representative J.P. Morgan Chase Bank, N.A., TJ Cox, Assistant Vice
President, was filed. On March 3, 2009, a certificate of title was filed with
the Palm Beach County clerk of the court, showing that on February 12,
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2009, the property “was sold to Federal National Mortgage Association c/o
Chase Home Finance, LLC 3415 Vision Drive – Mail code O, Columbus,
4
OH 43219, thus confirming what Watson, Chase, and Fannie Mae knew all
clo
along, that Fannie Mae was the owner of the note.
the money, property, and proceeds trail to insure that investors, the
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billions of dollars in bonuses given bank and Wall Street executives off the
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plaintiff and its counsel as Judge Gordon opined and as Judge Long in
d.
our state?
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VII. The Actual Ramifications of the Mortgage Shell Game On
Massachusetts
w.
Perhaps its fate or a bit of synchronicity that just weeks ago, the state
Massachusetts.25
su
U.S. Bank v. Ibanez (08 MISC 384283 (KCL) and 08 MISC 386755
originating banks assigned the notes and mortgages “in blank,” and the
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documents were then given to a custodian who kept them safely filed away
an entity without any record interest in the mortgages at the time of notice
or
24
Decision located at: http://www.scribd.com/doc/21062165/US-Bank-v-Ibanez-Memo-of-Decision-
Denying-US-Bank
25
http://www.boston.com/business/articles/2010/03/24/sjc_will_review_ruling_that_left_foreclosure_sales_i
n_question/
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and sale. In each case, the plaintiff was both the foreclosing party and the
only bidder at the sale and the plaintiffs purchased the property at a
substantial discount from its appraised value, wiping out all of the
w.
defendants’ equity in the properties and leaving one of them with a
substantial loan deficiency that would not have been owed had the property
4
sold for its appraised value. This is the identical industry-wide practice
clo
complained of herein and that the Court sought to correct by its order.
In each case, the plaintiff could not obtain insurance for the title it
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purportedly received from the sales and the plaintiffs then brought actions to
plaintiffs themselves phrased it, did the plaintiffs have “the right . . . to
foreclose the subject mortgage in light of the fact that the assignment of the
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foreclosed mortgage into the Plaintiff was not executed or recorded until
after the exercise of the power of sale” (the “present holder of the mortgage
au
issue”).26
d.
The “present holder of the mortgage issue,”, was decided against the
plaintiffs in Ibanez and Larace. Id. because the factual allegations in the
or
26
In the Notice of Mortgagee’s Sale of Real Estate in both Ibanez and Larace, the plaintiffs (U.S. Bank in
Ibanez and Wells Fargo in Larace) represented themselves to be “the present holder of said mortgage.”
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complaints (binding on the plaintiffs pursuant to G.L. c. 231, § 87) showed
that neither U.S. Bank (in Ibanez) nor Wells Fargo (in Larace) was the
holder of the mortgage (either on or off record) at the time notice of the
w.
foreclosure sale was given or at the time the sale actually took place.
According to those allegations, both were assigned the mortgage long after
4
the foreclosure sales occurred.27 Thus, on those facts, as a matter of law, the
clo
sales were invalid.
Incredulously, U.S. Bank (in Ibanez) and Wells Fargo (in Larace) then
su
they contended that the “present holder of the mortgage issue” came as a
re
surprise to them and should not have been decided in connection with these
cases.28 Second, they argued that had they known the issue was going to be
Fr
addressed, they would have pled their case differently and either limited
their request for relief to the “Boston Globe issue” or further supplemented
au
their evidentiary offerings. Third, they insist that since the defendants had
27
As set forth in the complaints, the notices in Ibanez and Larace were published on June 14, 21,
d.
and 28, 2007 for auctions that took place on July 5, 2007. Ibanez, Complaint at 2, ¶ 5; 3, ¶ 8; Larace,
Complaint at 2, ¶ 5; 3, ¶ 8. The Ibanez notice named U.S. Bank as the foreclosing party, the Larace
notice named Wells Fargo as the foreclosing party, and the foreclosure sales were conducted in their
respective names. Ibanez, Complaint at 2, ¶ 5; 3, ¶ 8; Larace, Complaint at 2, ¶ 5; 3, ¶ 8. As
or
established by the allegations in the Complaints, however, U.S. Bank was not assigned the Ibanez
mortgage until September 2, 2008, fourteen months after the sale (Ibanez, Complaint at 2, ¶ 3), and Wells
Fargo was not assigned the Larace mortgage until May 7, 2008, ten months after the sale (Larace,
Complaint at 2, ¶ 3).
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been defaulted, it was inappropriate for judgment to be entered against the
plaintiffs and, at worst, their motion for default judgment should simply
have been denied with leave for them to amend and try again. Fourth, based
w.
on new evidence and new arguments they have now submitted post-
judgment, they maintain they were the “present holder of the mortgage”
4
within the scope and meaning of G.L. c. 244, § 14 at the time of notice and
clo
sale. This is so, they say, because they possessed the note (endorsed in
Fifth, in the event the court disagrees that their possession of the note, a
re
“present holders of the mortgage,” they contend that the foreclosure sales
Fr
were nonetheless valid because they were authorized by the last record
holder of the mortgage and the plaintiffs acted as the “agent” of that holder.
au
that Judge Long denied and stated as follows… “The plaintiffs cannot
d.
credibly claim surprise at the judgment that was entered and, having asked
or
for (and received) a declaration on the issues they chose and on the facts
29
They concede, however, that the mortgage assignment they ultimately recorded (an assignment
specifically to them) was an entirely new and different document, executed months after the notice and sale.
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exactly as they pled them, they have no right to a “do-over” because the
presented facts do not lead to a different result. Instead, they show that the
w.
plaintiffs themselves recognized that they needed mortgage assignments in
original judgment. They also show that the problem the plaintiffs face (the
su
present title defect) is entirely of their own making as a result of their failure
to comply with the statute and the directives in their own securitization
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documents.
warnings of Lavalle and other courts while the syndication and foreclosure-
always were a subsidiary or affiliated entity. The Depositor would then sell
d.
the loan into a Trust, managed by a Trustee, who was typically a different
or
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other original documents in the collateral/custodial file would allegedly be
including the Wall Street investment banks themselves. The Wall Street
or public offerings.
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broker/lender to the warehouse lender onto the depositor and then trust. The
au
in recordable form and that these assignments form a clean chain or title to
d.
the trust.
Page 59 of 66
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promissory note went into default, the computerized servicing system of the
As illustrated herein, it was only after the foreclosure had taken place
assignments.
Fr
Title insurers have not only stopped issuing title insurance in the state
new title policies across America not to be liable for such acts by the
servicers. Clouds on all title to all foreclosures there now exist, as Judge
d.
technicalities, but they themselves use the same technicalities when they
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argue for decisions in their favor. What is good for the goose is not only
good for the gander, but for the citizens, homeowners, and judges of this
state.
w.
VIII. The State Legislative Branch May Moot This Court’s Decision.
4
The Florida Bankers Association (“FBA) and the mortgage industry,
clo
realize the hurdles presented by the inability to account to borrowers and
attest to a proper chain of title. The FBA has successfully lobbied and found
Page 61 of 66
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IX. Conclusion
their servicer clients fall woefully short in meeting their lawful obligation
4
of not only identifying the lawful lender and owner of a borrower’s note,
clo
but even knowing who their actual client is.
Thus, the only way to legitimately determine the true chain of title to
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the note and the real parties entitled to enforce and foreclose upon the
note came on and off the lenders’ books, general, and sub-ledgers as an
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certainty, the chain of title to the note and the rightful parties to appear
d.
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ledger, sub-ledger and schedules of the alleged lender’s books evidencing
the note as an asset; 2) the cancelled checks and/or wire transmittals for
and protect Florida homeowners and investors, but it would expedite the
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Wherefore the Respondents pray that this honorable high Court deny
d.
mandatory disclosures that would identify for investors, borrowers and the
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