1 11 12 cv08-01709-2643805 (reply to in opposition) 0204 62337 03628

7/29/2019 1 11 12 CV08-01709-2643805 (Reply to in Opposition) 0204 62337 03628

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REPLY TO OPPOSITION TO PLAINTIFF'S EMERGENCY MOTION FORTRO/INJUNCTION; or PLED IN THE ALTERNATIVE; MOTION TO SET ASIDEORDER GRANTING SUMMARY JUDGMENT

Now some of these lenders/servicers/trustees and opposing counsel (which are all owned

by the same law firm in some case, like, apparently, here) like to say my stuff is incoherent,

but what about all their documents and papers and Notices and Assignments and all that? Is

that stuff any more coherent?

REPLY TO OPPOSITION TO PLAINTIFF'SEMERGENCY MOTION FOR TRO/INJUNCTION; or PLED IN THE ALTERNATIVE; MOTION TO SET

ASIDE ORDER GRANTING SUMMARY JUDGMENT

!ocument "ode# $%&'ach "oughlin, s*+N -ar No# &.%$. + &th0t+ 12eno, N 3&'45ele# %%'6&67%$%8a9# &.&677%6%.4

ach"oughlin:hotmail+comAttorney for ;laintiffs ,;laintiff

v+

AA=0 8N!IN@ "2; 5A>,!efendant

"ase No#"4364%4&!ept No# %

REPLY TO OPPOSITION TOPLAINTIFF'S EMERGENCY MOTIONFOR TRO/INJUNCTION; or PLED INTHE ALTERNATIVE; MOTION TOSET ASIDE ORDER GRANTINGSUMMARY JUDGMENT

IN 5B 0"N!


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N2"; 2> 74+ 2>I8 82=


3/53

Notice of 0ale as document number .4.7.''+ A copy of the Notice of 0ale is attached as

9hibit '+ I$ #* no* ( ol(*#on o NRS 142:44 *o +(& ( No*#% o $(l r%ordd l$$

*+(n ?D $%n(r#o9

0hortly thereafter, ach "oughlin, s*+ entered an appearance on behalf of ;laintiffs an

indicated to the undersigned that the pending =otion for 52 and/or to 0et Aside had

been or was going to be filed+ -(%*)(l3 *+ )ndr$#.nd +r#n D%l(r$ )ndr n(l*

o r8)r *+(* S%+)lr@H#n* (nd H)n*r n&r (d,#**d *+ )ndr$#.nd &r %()$

(n o *+ &(r#o)$ Tr)$* S(l$ *o b r$%+d)ld or o$*ond d) *o +#$

$B)(!6#n.3 b)* r(*+r3 H#n* (nd or H)n*r (l!($ &(.)l rrrd *o

%#r%),$*(n%$ *+(* r$)l*d #n *+ Tr)$* S(l b#n. ,o&d 8)$* ( d( or $o bor

*+ )ndr$#.nd !ro* *o *+, or $n* *+, $o, roo$d Mo*#on3 &r %)r#o)$

#ndd9 5he undersigned, in conformance with N2"; 2ule , forwarded to =r+ "oughlin

a copy of the letter dated ctober , 4 attached as 9hibit 7+ At =r+ "oughlins

re*uest the foreclosure sale has been continued twice and is presently set for 8ebruary 7,

4+ -Mr: H)n*r'$ %+(r(%*r#(*#on *+(* *+ or%l$o)r $(l !($ %on*#n)d *!#% ($

*+ )ndr$#.nd3 Mr: Co).+l#n'$ rB)$* #$ %(*.or#%(ll (l$ # H#n* (nd or

H)n*r$'$ (rl#r $*(*,n*$ #n *+(* r.(rd (r *o b bl#&d: T+ )ndr$#.nd

%o,,)n#%(* *o H#n* or H)n*r 7%l)$#&l3 + bl#&$ ( ,(#l3 $o3 (ll o *+#$ #$ #n

,(#l$ (nd ($#l ro&(bl9: n !ecember $, 4, eighteen months after entry of the

summary Gudgment rder, ;laintiffs filed the pending motion+ ;laintiffs seek an inGunction

barring the foreclosure as well as damages in e9cess of K4,444, treble damages and

sanctions under case law developed by the Nevada 0upreme "ourt relating to the Nevada

=ediation ;rogram+ - A ro.r(, *+ C(rn*#r$ ,( +(& l.(ll bn (ordd (

r#.+* *o (r*(6 #n !r #* no* or *+ )nn b)$#n$$ o $nd#n. #,or*(n* no*#% (nd

$),,(r 8)d.,n* ,o*#on$ *o on no lon.r (**orn o r%ord3 (ll *+

GINORMOUS "$%r#&nr'$ rror$" o !ron. %($ n),br3 !ron. %o)r*3 !ron.

(ddr$$ on *+ %r* o ,(#l#n.3 !ron. (ddr$$ l#$*d #n A(,$ Dl(!(r C+:11


ASIDE ORDER GRANTING SUMMARY JUDGMENT $


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%rd#*or/db*or ,(*r#7 -or,r (**orn o r%ord (l$+ (nd +#$ #r,'$ (ddr$$ !r

l#$*d9: F)r*+r3 *+ C(rn*#r'$ !rn'* B)#* (bl *o (r*(6 #n (ll *+ bn#*$ o

*+ d#$%o&r r)l$ #n (n6r)*% %o)r*3 $ ( $3 !+*+r RCS/5LS #nd$or/A(,$

* (l !r r()d)ln*l ($$r*#n. $*(nd#n.3 or ( r#.+* *o $)3 *+(* *+ !r ( r(l

(r* #n #n*r$*3 *+ $)#%#n% o $)b8%* ,(**r 8)r#$d#%*#on *%: !r *+ !r no*

$r&d #,or*(n* no*#%$ (nd l(d#n.$ rl(*d *o *+(* b(n6r)*% (nd *+ $*(3 (n

()*o,(*#% $*( *+(*3 #n%#dn*(ll3 d#d no* $*o H#n* ro, #l#n. ( J)l


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d,on$*r(* r%*#on o *#*l (* *+ *#, *+ No*#% o D()l* #$ #$$)d: A d%*#&

*#*l #$ l#6 b(d ood: On% ood +($ .on b(d3 o) %(n n&r #7 #* T+ $(, .o$ !#*+

*+ Dd o Tr)$UMor*.(.: T+ "lndr" %(nno* r*ro $#.n or "r&r$ n.#nr"

*+ C+(#n o T#*l (*r *+ (%*: )* ,o$* o *+ *#, *+#$ #$ *+ %($ !+n #* #$

+(ndld b ( or%lo$)r ,#ll: T+ +(& rob(@$#.nr$ !+o$ 8ob #$ *o $#.n bo.)$

($$#.n,n*$ (nd r&r$ n.#nr *#*l$: I* #$ o)r 8ob *o %+(lln. *+#$ o#n* !+n

o)r lndr r$n*$ $)o$d "roo' bor *+ %o)r*: O*n*#,$3 *+ !#ll br#n. #n

( +o*o%o o *+ Dd o Tr)$* ,(d (r$ (.o (* *+ l#, o) %lo$d on o)r lo(n:

T+ +o*o%o do$ no* (nd %(nno* (**$* *o !+o *+ % )rrn* r(l (nd bn#%#(r

(r* #n #n*r$* #$:


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*+(* $6 *o 7%#$ (nd nd *o (%*)(ll ro& ($$#.n,n*$ or $*(nd#n. or *+(* *+

.)$ (r ( r(l (r* #n #n*r$*3 *+(* *+ 8)d.,n* #$n'* &o#d3 *+(* *+ no* (nd dd

ollo!d *+ $(, (*+3 *+(* *+$ .)$ d#dn'* .* ( *(7 %rd#* or ( lo$$ onl *o .* *+

bon)$ o $ll#n. #* or $o, ,or ,on::::(nd !+ do$ $o, #*r(*#on o "A(,$

Ho, Mor*(.F)nd#n.Lnd#n.Sr%#n.So,*+#n.OrO*+r ((r l#6 ( #ll#on

*#,$ on !!!:(%r:.o& #n *+ b(n6r)*% $%*#on= All B)$*#on$ *+(* nd (n$!r3

b)* # ( Tr)$* S(l #$ %ond)%*d3 !ll3 #*$ 6#nd o *o).+ *o do +$#%(l *+r( on ( n

(r, (*r o) +(& (,)*(*d #*:9 All e9hibits hereto should be Gudicially noticed

because they are a public record in the Dashoe "ounty 2ecorders office+ N20 .%+$4F

N20 .%+'4F oan bankruptcy estate+ 5he fact that $+ ;laintiffs cannot establish e9cusable

neglect 5he sole basis in support of ;laintiffs claim -HOLD ON3 HUNTER3 THE

"SOLE ASIS" REALLY= REALLY= AREN'T YOU FORGETTING ALL THE

RONGLY ADDRESSED CERTIFICATES OF MAILING3 THE RONG

ADDRESS LISTED IN THE DELAARE CH:11 FOR AAMES3 ETC:3 ETC:=

MAYE THE CONFUSION IS THAT SO MANY OF THE ASIS FOR


ASIDE ORDER GRANTING SUMMARY JUDGMENT 7


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EKCUSALE NEGLECT OVERLAP ITH FRAUD3 IS THAT IT=9 of e9cusable

neglect is that the =otion for 0ummary


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N2"; 2ule 74 must be brought within 74 days of the relevant proceeding+ -REALLY3

"4 DAYS"= LAST TIME THE UNDERSIGNED READ NRCP 4-9 THERE

AS A UNCH OF MENTIONS OF 14 DAYS3 UT REGARDLESS3 THAT ONE

SECTION AOUT THERE EING NO SET LIMITATIONS PERIOD FOR

HERE A JUDGMENT IS VOID3 OTH IN LIGHT OF NRCP 4 AND THE

INHERENT POER OF THIS COURT3 IS UNDOUTEDLY IN

CONTRADICTION TO THAT ESTIMALE TREATISE "HUNTER ON RELIEF

FROM JUDGMENTS" *+(* !($ $o rodd #n oo$#n. %o)n$l'$ Oo$#*#on9 Bere,

the =otion to 0et Aside is brought eighteen months after the relevant proceeding and is,

therefore, untimely+E And that concludes my novel legal techni*ue of e9tensively

*uoting opposing counsels pposition while adding in bold the undersigneds own

interGectiosn and arguments+

5he "arpentiers hereby allege and ask this "ourt to allow them to add as causes of

action, re*uest for relief, claims etc+ the following, given that this e9cerpt from a case

involving Buston and 2"0/J>0 bear such a remarkable resemblance to the "arpentiers

own treatment at the hands of 2"0/D>0 (like that time


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agencyF each !efendant approved, ratified and authoriLed the acts of each of the other

!efendants as herein allegedF each !efendant was subGect to a right of control by the other

!efendantsF each !efendant was authoriLed to act for each and all of the other !efendantsF

and each !efendant is a successor6in6interest to each ofthe other !efendants+ %+ ;laintiffs

are informed and believe and upon such information and belief allege that at all times

material hereto, each !efendant was a mere shell, instrumentality and conduit through

which each other !efendant carried on business in a corporate or partnership name,

e9ercising complete control and dominance of such business to such an e9tent that any

individuality or separateness of the corporate or partnership !efendants and each

individual did not e9ist+ 8A"5A> A>>@A5IN0 3+ n or about 8ebruary $, 447,

;laintiffs entered into a !eed of 5rust (9hibit EIE) with =ortgage lectronic 2egistration

0ystems, Inc+ as nominee for niversal American =ortgage "ompany, >>", to secure

;romissory Note and loan against the ;roperty (9hibit E-E)+ &+ 5he ;romissory Note

indicates that at some point after ;laintiffs entered into it the loan was transferred first to

"ountrywide -ank, N+A+, and then from "ountrywide -ank, N+A+ to "ountrywide Bome

>oans, Inc+ 5he ;romissory Note produced by !efendants is endorsed in blank and as a

result of the blank endorsement, it is currently unknown who the holder thereof is+ 0ee

9hibit E+E 4+ n or about !ecember , 44, ;laintiffs were unable to make their

monthly payments due to their change in fmancial circumstances+ ;laintiffs attempted, to

no avail, to secure a loan modification from 2"0, who is the purported servicer of their

loan+ + -ased on information in the "lark "ounty 2ecorders records, 2"0 caused a

substitntion of trustees to be recorded against the ;roperty on 0eptember , 44, naming

J>0 as the 5rustee+ + -ased on information in the "lark "ounty 2ecorders records, 2"0

caused an assignment (the EAssignmentE) to be recorded against the ;roperty on November

3, 44+ ;laintiffs do not have a copy of ,said AssignmentF however, the "lark "ounty

2ecorders ffice database indicates that the !eed of 5rust was assigned to 8 2 ,

>>"+ $+ n =arch , 4, J>0 recorded a Notice of -reach and !efault and of

lection to "ause 0ale of 2eal ;roperty under !eed of 5rust (EN! E) with regard to the


ASIDE ORDER GRANTING SUMMARY JUDGMENT &


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;roperty+ 0ee 9hibit E$+E .+ n April , 4, J>0 posted on the door of the ;roperty an

unsigned, un6 notariLed, unrecorded, and different Notice of -reach and !efault and of

lection to "ause 0ale of 2eal ;roperty under !eed of 5rust (EN! E) with regard to the

;roperty+ 0ee 9hibit E.+E 5his posting was untimely pursuant to the mandatory

re*uirements ofN20 4%+43%+ '+ n 0eptember $4, 4, J>0 recorded a Notice of 0ale+

nfortunately, J>0 has never provided ;laintiffs with a signed Notice of 0ale+ Bowever,

J>0 has provided ;laintiffs with an unsigned, unrecorded Notice of 0ale by mail and

posting+ 0ee 9hibit E'+E Although ;laintiffs have never been provided with a signed,

notariLed Notice of 0ale, the 5rustees 0ale is currently scheduled for ctober 4,4 at

4#44 a+m+ 7+ n ctober $, 4, ;laintiffs notified 2"0 and J>0 of the violations

ofN20 M 4%+43% and demanded that N! be rescinded+ 0ee 9hibit E7+E %+ !espite

their knowledge of the patently obvious violations of N20 M 4%+43%, 2"0 and J>0 have

failed to rescind N! + 8I205 ">AI= 82 2>I8 (!eclaratory 2elief 6 N20 M $4+4.4

6 All !efendants) 3+ ;laintiffs re6allege each and every allegation contained herein, and

hereby incorporates them by this reference as if fully set forth below+ &+ N20 M $4+4.4

allows any person whose rightsF status or other legal relations are affected by a deed to

have the district court determine any *uestions of construction or validity arising under the

instrument and to obtain a declaration of rights, status or other legal relations thereunder+

4+ N! was recorded by J>0 on =arch ,4+ 0ee 9hibit E$+E ;ursuant to N20 M

4%+43%, N! was to be posted in a conspicuous place on the ;roperty not later than $

business days after it was recordedF thus the posting was to occur no later than =arch

',4+ + !efendant J>0 posted an unrecorded, un6notariLed, and different Notice of

!efault, on April , 4 (si9 days late)+ 0ee 9hibit E.+E Accordingly, N! was not

timely served pursuant to N20 M 4%+43%+ + N20 4%+434(')(a) states that the "ourt may

declare a sale void if# E5he trustee or other person authoriLed to make the sale does not

substantially comply with the provisions of this section or any applicable provision ofN20

4%+437 and 4%+43%+E $+ ;ursuant to A+-+ %$ 0ec+ '+3(7)%7th >eg+ (Nv+ 4), if the

"ourt finds that J>0 did not comply with any provision of N20 "hapter 4%, the "ourt




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must award to ;laintiffs an inGunction enGoining the e9ercise of the power of sale, damages

of K',444 or treble the amount of actual damages, whichever is greater and reasonable

attorneys fees and costs+ .+ ;laintiffs are entitled to a declaratory Gudgment that the

aforesaid N! is null and void+ '+ In addition, as a direct, pro9imate and necessary result

ofthe !efendants conduct, ;laintiffs have been forced to incur costs and attorneys fees and

thus ;laintiffs seek an award of costs and attorneys fees, and damages pursuant to statute,

decisionallaw, common law and this "ourts inherent powers+ 0"N! ">AI= 82

2>I8 (-reach of the Implied "ovenant of @ood 8aith and 8air !ealing 6 2"0) 7+

;laintiffs re6alleges each and every allegation contained herein, and hereby incorporates

them by this reference as if fully set forth below+ %+ 3+ 2"0 is bound by enforceable

contracts with ;laintiffs+ very contract in Nevada has imp lied into it a covenant that the

parties thereto will act in the spirit of good faith and fair dealing+ &+ ;laintiffs are

informed and believe that 2"0 breached this covenant by acting inconsistently with its

purpose and intentF such wrongful conduct include, but are not limited to# (a) intentionally

refusing and/or failing to comply with the terms of Nevada law, and (b) failing to rescind

N! after being put on notice of the violation of Nevadas non6Gudicial foreclosure laws+

$4+ $+ 5hrough this and other conduct, 2"0 has denied ;laintiffs Gustified e9pectations+

As a direct and pro9imate result of 2"0 s conduct, ;laintiffs have been, and will continue

to be, harmed in the manner herein alleged in an amount which e9ceeds K4,444+44+

DB282, ;laintiffs pmys for Gudgment against the !efendants as follows# + 8or a

declaratory Gudgment that the aforesaid N! and N! was improperly noticed in

violation ofN20 4%+43% and is null and void and shall be rescindedF + 8or an immediate,

preliminary and permanent inGunction enGoining all !efendants from taking any further

action against the ;roperty (including, without limitation, any attempts to sell, encumber,

or eGect ;laintiffs from the ;roperty) until this "ourt can determine the e9tent of the parties

rights in and to the ;roperty, and to implement verifiable controls to protect ;laintiffs from

any irreparable harm that could be caused by the !efendants actionsF $+ 8or an award of

general and special damages against the !efendants, Gointly and severally, in e9cess of




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K4,444+44 pursuant to A+-+ %$ 0ec+ '+3(7) %7th >eg+ (Nv+ 4)F .+ 8or an award of

treble damages against the !efendants, Gointly and severally, in e9cess ofK4,444+44

pursuant to A+-+ %$ 0ec+ '+3(7)%7th >eg+ (Nv+ 4)F '+ 8or an order of specific

performance re*uiring the rescission of the defective N! + 7+ 8or an award of attorneys

fees and costs pursuant to A+-+ %$ 0ec+ '+3(7) %7th >eg+ (Nv+ 4)F %+ 8or such other and

further relief as the "ourt may deem e*uitable, Gust and proper+E nd of e9cerpt

incorporated to this case by reference from Buston v 2esidential "redit 0olutions et al,

"ase #6cv64%.&6>!@ 6"DB in 8ederal "ourt (after one of the many, many magical

removals that these guys are known to do, getting these cases to 8ederal "ourt, where the

citiLens of Nevada get to have lifetime appointee 8ederal "ourt Gudges making, or

seemingly making, Nevada >aw in contravention of the doctrines of absention, comity,

etc+something so elo*uently argued against by the venerable @eof @iles, s* (no

connection or affiliation to the undersigned, Gust a fan of his work, got it off pacer+gov for

2e# 2ule 3(G) >etter, !ocket 46%$4 &th "ir !ocket Number# =aves v+ 8irst BoriLon

Bome >oans) in his 3< letter in =aves, attached as where the citiLens of Nevada get to

have lifetime appointee 8ederal "ourt Gudges making, or seemingly making, Nevada >aw

in contravention of the doctrines of absention, comity, etc+ something so elo*uently argued

against by the venerable @eof @iles, s* (no connection or affiliation to the undersigned,

Gust a fan of his work) in his 3< letter in =aves, attached as E7+#b#*


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!etermining which it is may well present a difficult *uestion, but when that *uestion

is resolved, the court must act accordingly+ -y the same token, there is no time limit

on an attack on a Gudgment as void+ + + + Oven the re*uirement that the motion be

made within a Ereasonable time,E which seems literally to apply + + + cannot be

enforced with regard to this class of motion+ nderstandably, the parties were not

attuned to our recent oretta -owman attesting that no such filing e9ists in the case

file+ 2espondents also acknowledged that no default was ever entered but argue in

their supplemental brief that


14/53

entered against the movant shall not constitute a general appearance+ 0ee, e+g+,

!obson v+ !obson, 43 Nev+ $.7, $.&, 3$4 ;+d $$7, $$3 (&&)+ Nonetheless,

since the order was void, a Gudgment based thereon would likewise be void++ Nelson

v+ 0ierra "onstr+ "orp+, %% Nev+ $$., $7. ;+d .4+ nder N2"; 74(b) a motion to

set aside a void Gudgment is not restricted to the si9 months period specified in the

rule+ N2"; '.(a) provides that the word EGudgmentE as used in these rules includes

any order from which an appeal lies+ 5herefore there is no merit to appellants

contention that the motion to vacate the Gudgment was not timely made+ 8oster v+

>ewis, %3 Nev+ $$4, $% ;+d 7%& (Nev+ 7/&/&7)+ A void Gudgment is subGect to

collateral attackF a Gudgment is void if the issuing court lacked personal Gurisdiction

or subGect matter GurisdictionF 0ee .& "+5IN0, IN"+, AN! JA>I5C

>AN 02I" "2;2A5IN0 =5IN 5 !I0=I00 2 IN 5B

A>52NA5I 82 0==A2C


15/53

doing this or that in relation to the automatic stay (which one, the one that didnt

prevent BintL from filing that


16/53

(b) a nonholder in possession of the instrument who has the rights of a holder, (c) a

person not in possession of the instrument who is entitled to enforce the instrument

pursuant to 0ection $$4& or subdivision (d) of 0ection $.3+ (e9+ lost note) A person

may be a person entitled to enforce the instrument even though the person is not the

owner of the instrument or is in wrongful possession of the instrument+ (emphasis

added)+ 5he definition of RholderS can be found in "al+ "ommercial "ode 0ection

4(a)()# RBolder,S means the person in possession of a negotiable instrument

that is?payable either to bearer or, to an identified person that is the?person in

possession+

Bad opposing counsel sent the various notices and pleadings related to the Aames

bankruptcy "h+ filing in !elaware to the correct address, rather than the address of

oan 0ervicer ("hase) motion to lift the automatic

stay was !NI!+ 5his document has most of the maGor bankruptcy cases that deal

with note ownership up to 4+ In re BwangF In re Deisband, In re eal, in re

Dalker, etc+ 5he focus is on &th circuit cases, but there are others as well+ 5his

document will save you a 5N of time in trying to get all the cases together and

organiLe an opposition to a motion to lift the automatic stay+ 5he document flows

nicely from real party in interest, to standing, to arguing about assigning a deed of

trust without the note (all the maGor cases on that point of law are included)+ 0imply

get your facts in there and you are ready to have a great motion+E Dhich is some

motion/package some "alifornian attorney is selling online+ And, the general

consensus in this field is that the bankruptcy arena is a sticky wicket for those

opposing those like the "arpentiers, allowing for discovery of all sorts of




17/53

uncomfortable truths, like who really owns the "arpentiers loan, who has standing,

etc+, etc+ "ould it be more than Gust a happy coincidence (for 2"0, J>0, Aames,

Dindsor, et al, but, certainly not for the "arpentiers) that Aames counsel listed

Dalsh and Dalshs firms address in the "h+ !elaware -ankruptcy filing creditor

matri9?

=ore from the Rwho owns my loanS series+ 5his time, it is the AriLona 0upreme "ourt

that is hearing oral arguments regarding whether or not assignments evidencing who owns

your loan must be recorded prior to a lender can pursue a non6Gudicial foreclosure+ Bere is

an article that deals with some of the high points of the debate+ 5he "ourt will rule on the

issues at a later date and we will keep you posted when we hearing something+ 5his comes

on the heels of AriLona trying to pass a law (0- '&) that forces the so6called RlendersS

of securitiLed loans and other loans to record proof of ownership with the "ounty

2ecorder before they seek to foreclose+ 5he law did not get passed likely due to the

financial lobby that of course does not want such a law passed+

http#//aLstarnet+com/articleT7.c7ed776f$$76'bfc6&%e67'%.4'4&e7cd+html De talked

on another blog post about AriLona 0- '& that was trying to re*uire proof of ownership

recorded before a lender could foreclose+ 5he debate marches on+ As a society, do we care

if a bank is allowed to foreclose in a private non6Gudicial foreclosure sale if it cannot

legally produce evidence that it is the owner of the loan, or should be not be concerned

with whether or not the true owner of the loan is foreclosing because the borrower is in

default of a loan with no way to repay it? As it stands now the Rproduce the noteS or

Rshow me the noteS or Rwho owns my loanS argument does not have much if any traction

as far as trying to prevent a non6Gudicial foreclosure sale+ 5he issue may have more life in

a bankruptcy court where issues such as RstandingS and who the Rreal party in interestS is

to pursue a motion to lift the automatic stay, or to file a proof of claim in a bankruptcy

case+ 5o this e9tent, we have discussed the in 2e eal case which we will try to

thoroughly blog on soon+ 5his is a very interesting case that deals with proof of loan

ownership, standing and real party in an AriLona -ankruptcy "ase+ 0tay tuned+


ASIDE ORDER GRANTING SUMMARY JUDGMENT %


18/53

In his recent pposition opposing counsel Bunter points to AA=0

=25@A@ IN05=N5 5205 44'6 which would strongly indicated that

the "arpentiers loan was 0"2I5I!+ It appears the EpoolE can be found here#

http#//www+secinfo+com/K/0"/8ilings+asp?

"IQU$&4&7PAsU-8"0PAs8ilerU8PAswnerU-PAsIssuerU"0 Aames

=ortgage Investment 5rust 44'6

S3 E7+#b#* 1 or do%),n*(*#on rl(*d *o AAMES MORTGAGE

INVESTMENT TRUST @< :

-oth


19/53

the riginatorF -ank A, re*uiring them to do their Gob in a breach of contract civil

action+ Cou see, a !eed of 5rust secures the promissory note+ It is the !eed of 5rust

that gives the lender the Epower of saleE clause to foreclose+ If the original lender is

forced to issue a reconveyance, then the !eed of 5rust has collapsed+ 5his is a very

effective, yet easy, method some people have used to stop foreclosure, reason being

that# a) 5he originator is often out of business and cannot respond to the civil action,

thus the homeowner wins by default+ b) 5he originator had already sold the note with

Eno recourseE, 5his means the 2=I" or the servicer can N2 go back to the

originator+ c) If the riginator loses the civil action by default, nothing bad happens

to them+ d) If the riginator wins the civil action, nothing good happens to them+

Beres the kicker+ If the riginator is still in business and they lose the civil action in

court, then there are very specific dire conse*uences that results+ If they lose, then it

can be proven that every loan they have ever originated that has lost their home is

the result of their gross negligence to perform their duty+ 5his means every

homeowner who has lost his or her home can sue the riginator+ It is for this reason

that the riginator often doesnt show up, or settles when confronted with this

strategy+

5he 8air !ebt "ollections ;ractices Act As you recall, your pretender lender

becomes a debt collector after you are 74 days delin*uent+ 5his is the only way they

can negotiate a loan modification with you, because it gets discharged out of the

2=I"+ I have included a copy of the 8!";A in the Appendi9 at the end of this

book+ Cou can also simply @oogle E8air !ebt "ollections ;ractices Act+E >ets talk a

bit more about debt collectors+ It is a scam+ !ebt collectors depend on peoples

ignorance to collect their ill6gotten gains+ 5his is one of those dirty little secrets

bankers have been hiding for years+ 5hey dont want you to know this scam+ De are

blowing their dirty laundry out in the open because we are sick of seeing so many

people suffer at the hands of bankers+ 2emember our e9ample of the farming supply

shop owner who gave me credit? 5he crops froLe and I had no money to pay back the




20/53

loan+ 2emember, as a business owner, you can do one of three things+ .) "arry the

debt as an asset+ ') Assign it to a third party through endorsement 7) Drite it off as a

loss A debt collector is someone who (is not the original creditor) buys a debt that

has been offset, and attempts to collect it+ 5hey have purchased the debt after you

have declared it a loss+ 5his is very important for you to understand+ 5his is why the

government created a set of laws called the 8air !ebt "ollections ;ractices Act (0"

5itle ' 0ection 7&) in order to minimiLe the deceit and protect people+ 0adly, not

many lawyers understand this mechanic+ 5hey think debt collectors act legitimately+

>ets say it again+ nce a debt has been written off, it is discharged+ It cannot be

collected again+ !ebt collectors use deception to convince people that they were

assigned the debt+ 0o, how does this relate to a 2=I" and a debt collector? As we

discussed earlier, the individual shareholders are the real and beneficial interest

holders+ 0ince the individual shareholders cannot endorse and assign their portion of

the loss, then they have to write it off as a bad debt+ 5he 5rustee of the 2=I"

cannot do it, either, because the 5rustee is not the real and beneficial holder of the

promissory note+ 5he 2=I" has given up that right when it chose to structure itself

as a 0pecial ;urpose ehicle (0;) for the purpose of a straight ta9 pass through+

5he only way your lender can foreclose on you is to rely on the same deception

tactics used by debt collectors+ 5he 8air !ebt "ollections ;ractices Act governs the

deceptive practices also+ 2emember, a debt collector pulls off their deception through

peoples ignorance+ 5his is whal your ElenderE is doing 4 you+ 5hat is why in all

their communications, you will see E5his is an attempt to collect a debtE+ An original

creditor is not re*uired to disclose this+ 0o if you are in court, or if you are counsel

representing your client, it is important for you to ask opposing counsel to stipulate

the nature of their ownership of the note+ ftentimes, opposing counsel will come

into the court room representing that their client has Erepurchased the note,E not

realiLing that they have, in fact, brought fraud before the court+ If opposing counsel is

ignorant, then they are not lying+ It is up to you to get them to stipulate the true nature




21/53

of the negotiable instrument through interrogatories and discoveryF including

subpoena of accounting records+ If you do this, watch how *uickly the blood drains

from opposing counsels face+ Its *uite a sight+ A defective instrument is not

enforceable+ An instrument that has been previously discharged and bought as a bad

debt is not enforceable+ !ont be fooled+ Its like buying a cheap knock off 2ole9

watch in =e9ico+ It might look the same, but underneath the face, it is not+ anyone

who disputes a debt to see if you know the law+ 5his is why it is so important for you

to know the law as wellV nder the niform "ommercial "ode 0ection $64., the

name and the signature of both the beneficiary and the original creditor must be

disclosed in the same document M $64. (d)+ 5he signature of the borrower must be

included as + well into the assignment or transferF unless a clause in the deed of

trusmortgage waives that (most deeds of trust disclose this at clause 14)+

Under Uniform Commercial Code, a note is a one of a kind negotiable

instrument that has the only legally binding chain of assignment. Oftentimes, your

lender will show up with a photocopy of the note made years ago . . . again,

obscuring the facts in order to steal your house. This is admissible unless you know

how to object. Again, consult with counsel about the Federal ules of !"idence

#$$% and #$$&. Another way banks hide their fraud is to do what's called (blank

assignments,( so that the loan may be assigned many times amongst themsel"es

that are tracked by )!* +which we will eplain later-, while keeping a blank

assignment of the note handy in the e"ent a foreclosure is needed. This is blatant

abuse of the law. The law is "ery specific here. The promissory note, as well as the

eed of Trust, must be together at all times and there must always be a clear and

unambiguous chain of title that is traceable in public records for all parties of interest

in real estate.../iolation of Applicable *tate 0aw 1n e"ery eed of Trust2)ortgage, it

states specifically that the instrument is subject to applicable *tate and Federal

laws. 1f it can be shown that an assignment of the promissory note occurs without

the corresponding assignment at the county recorder's office for the eed of




22/53

Trus/)ortgage, then the instrument has "iolated *tate law. Thus, "iolating the

terms of the eed of Trust2)ortgage, making the instrument in"alid. *ince interest

in the promissory note has been sold to a !)1C +eal !state )ortgage

1n"estment Conduit- and proper assignment was ne"er done at the county, then the

terms of the eed of Trus/)ortgage has been "iolated, making it in"alid. This will

con"ert the debt from a secured instrument to an unsecured instrument. This means

the lender might be able to sue you to collect the money, but can ne"er sell your

property to collect on the collateral....1llegal Trustee Argument There ha"e been two

instances in which a Federal Court 3udge issued a statewide injunction free4ing ali

foreclosures against homeowners against 5ank of America and econtrust. One

was in Utah in late %$#$, and more recently, in 3anuary % $ # # in 6e"ada, because

in both instances, econtrust is not registeredto do business in that state. 1f a

company wants to do business in a state, it needs to register within that stateas an

entity. This way, if someone within that state wants to sue them, they can look up

who the owners are, and where they li"e, so they can be properly ser"edwith a

summons.1n almost all instances, these foreclosure mills are not registered to do

businessin the state they are attempting to foreclose in. )any homeowners ha"e

used this defense to at least forestall foreclosure. 1t is not enough to stop a

foreclosure, but it is another claim the homeowner can make in a 7uiet Title Action

defense making the argument that the Trustee is a (non8entity.( +E pon information

and belief, @eof @iles, s*+ got some similar shutdown of 2"0 and or J>0 in

Nevada Gust last year+++

EI0 C2 >N!2 2 >AN 02I"2 !AN@>IN@ 5B BA=;

;2=ANN5 =!I8I"A5IN "A225 IN 82N5 8 C2 N0? BA=;

52IA> ;>AN 0"B= W 0aying they RwillS modify the loan if trial payments are

made proves crucial+ De have talked about this many times before on our website

5rial ;lan 8raud+ 5hat is, -anks and loan servicers promising to modify your loan if

you make your BA=; trial plan payments on time+ De get this scenario over and




23/53

over+ 5he BA=; modification agreement itself will normally promise the

modification if all payments are made (but the contract is subGect to a bunch of little

trap6holes put in place so the loan servicer can always try to back out of the

modification without having to perform)+ 0ometimes this is also buttressed over the

phone by statements from some Rloss mitigation specialistS or Rforeclosure

specialistS who promises you that you *ualify for the loan modification and if you

Gust make the trial payments Ryou will be goodS or Rwe wonHt foreclose+S 5his is

going on left and right in my honest opinion+ After all, it is a RcleverS way to get

people who may not be making their mortgage payment (potential strategic

defaulters) into making some payments and that is with the false promise of loan mod

assistance+ 0o yes, trying to get a loan modification can often turn into a game of

poker with your lender+ Cou both end up telling each other certain things, some of

which may or may not be true+ 5hatHs what happens when money is on the line,

monthly payments versus the return on investment to investors in mortgage backed

securities+ At any rate, in the case of


24/53

sanctionable because it failed to produce certain re*uired documents at the

mediation+V 0ee N20 4%+437(.), (')+ 5he record indicates that a non6party, "hase

Bome 8inancing, >>", attended the mediation+ -ecause =20 maintains that "hase

attended the mediation on its behalf, "hases conduct at the mediation is properly

imputed to =20 for purposes of this appeal+EDO + e ++ + reIew a district courts

decision regarding the imposition of sanctions for a partys participation in the

8oreclosure =ediation ;rogram under an abuse of discretion standard+ E ;asillas v+

B0-" -ank 0A, % Nev+ T, T, '' ;+ $d 3, 37 (4)+ =20 failed to

produce the re*uired documents 5o obtain a foreclosure certificate, a deed of trust

beneficiary must strictly comply with four re*uirements# () attend the mediation, ()

participate in good faith, ($) bring the re*uired documents, and (.) if attending

through a representative, have a person present with authority to modify the loan or

access to such a person+ N20 4%+437(.), (')F >eyva v+ National !efault 0ervicing

"orp+, % Nev+ T, T, '' ;+$d %', %& (4) (concluding that strict compliance

with the ;rograms re*uirements is necessary)+ N20 4%+437(.) states that the deed

of trust beneficiary or its representative Eshall bring to the mediation the original or a

certified copy of the deed of trust, the mortgage note and each assignment of the deed

of trust or mortgage note+ E =oreover, the 8oreclosure =ediation 2ules (8=2s)

re*uire the beneficiary or its representative to conduct an appraisal of the

homeowners home+ 8=2 ($)(b)+ Bere, the record demonstrates that =20 failed

to produce the deed of trust and any assignments+ =oreover, it failed to conduct an

appraisal of -onnets home+ -ecause =20 failed to strictly comply with De

recogniLe that -onnets original lender may still own her loan, in which case no

assignments would e9ist+ Bowever, =20 inability to verify who currently owns

-onnets loan necessarily means that =20 was unable to confirm that no

assignments needed to be produced+the ;rograms re*uirements, the district court

abused its discretion in ordering a foreclosure certificate to be issued+ >eyva, %

Nev+ at T, '' ;+$d at %&F ;asillas, % Nev+ at T, '' ;+$d at 37+ n remand,


ASIDE ORDER GRANTING SUMMARY JUDGMENT .


25/53

the district court must determine how =20 should be appropriately sanctioned+

;asillas, % Nev+ at T, '' ;+$d at 3763% (construing N20 4%+ 437(') to mean

that a violation of one of the four statutory re*uirements must be sanctioned and that

the district court is to consider several factors in determining what sanctions are

appropriate)+

0"5IN .# "N">0IN XY 0ecuritiLation and =20 re*uired many

changes in established practices+ 5hese practices were not and have not codified, so

they are maGor points of contention today+ Dhen a lender, title company, foreclosure

company or other firm signed up to become a member of =20, one of more of their

people were designated as ZM"orporate fficersZ[ of =20 and given the title of

either Assistant 0ecretary or ice ;resident+ 5hese personnel were not employed by

=20, nor received income from =20+ 5hey were named ZM"ertified fficersZ[

solely for the purpose of signing foreclosure and other legal documents in the name

of =20+ (Apparently, there are some agreements which ZMauthoriLeZ[ these people

to act in an Agency manner for =20)+ 5his ZMsolvedZ[ the issue of not having

enough personnel to conduct necessary actions+ It would be the 0ervicers, 5rustees

and 5itle "ompanies conducting the day6to6day operations needed for =20 to

function+ As well, it was thought that this would provide =20 and their

ZM"orporate fficersZ[ with the ZMlegal standingZ[ to foreclose+ Bowever, this brought

up another issue that now needed addressing# XY Dhen the Note is transferred, it

must be endorsed and signed, in the manner of a person signing his paycheck over to

another party+ "ustomary procedure was to endorse it as ZM;ay to the rder ofZ[ and

the name of the party taking the Note and then signed by the endorsing party+ Dith a

new party holding the note, there would now need to be an Assignment of the !eed+

5his could not work if =20 was to be the foreclosing party+ =20 has recogniLed

the Note endorsement problem and on their website, stated that they could be the

foreclosing party only if the Note was endorsed in blank+ If it was endorsed to

another party, then that party would be the foreclosing party+ As a result, most Notes


ASIDE ORDER GRANTING SUMMARY JUDGMENT '


26/53

are endorsed in blank, which purportedly allow =20 to be the foreclosing party+

Bowever, "A "II> "! &$+' has a completely different say in the matter+ It

re*uires that the Assignment of the !eed to the -eneficial Interest Bolder of the note+

"A "II> "! &$+' Z A00I@N=N5 Dhere a power to sell real property is

given to a mortgagee, or other encumbrance, in an instrument intended to secure the

payment of money, the power is part of the security and vests in any person who by

assignment becomes entitle to payment of the money secured by the instrument+ 5he

power of sale may be e9ercised by the assignee if the assignment is duly

acknowledged and recorded+ As is readily apparent, the above statute would suggest

that Assignment of the !eed to the Note Bolder is a re*uirement for enforcing

foreclosure+ ;age $ ;aladin Associates Z 8orensic =ortgage 9perts XY 5he first

Assignment purports to be e9ecuted by =20, signed by Dendy ;erry holding the

position of Asst+ 0ecretary+ Dendy ;erry is an employee of "al6Destern

2econveyance "orp, original foreclosing company+ 5he second Assignment purports

to be e9ecuted by !eutsche -ank National 5rust "ompany, signed by 0tarlene >+

0tarling, who is in fact ice ;resident and Asst+ 0ecretary of >" did an invalid non6Gudicial foreclosure proceeding on November

$, 44+ ;rior to the e9ecution of 5rustee+s !eed upon 0ale against the subGect

property, N!Y D05, >>" did not maintain a secured interest in the subGect




27/53

property+ XY 5he mortgage securing the note, while naming D=" =ortgage "orp+

as ZM>ender,Z[ separately names the =ortgage lectronic 2egistration 0ystems, Inc

(=20) as the ZM=ortgagee+Z[ 5he conveyancing language granted the mortgage to

=20 ZMsolely as nominee for >ender and >ender+s successor+s and assigns+Z[ D="

=ortgage "orp+ was a ZMcorrespondent lenderZ[ that originated mortgage loans which

in turn, was sold and transferred into a ZMfederally6approved securitiLationZ[ trust

named =organ 0tanley "apital I Inc+ 5rust 4476B XY 5he Note and !eed have

taken two distinctly different paths+ 5he Note was securitiLed into =organ 0tanley

"apital I Inc+ 5rust 4476B+ XY 5he written agreement that created the =organ

0tanley "apital I Inc+ 5rust 447 B is a ZM;ooling and 0ervicing AgreementZ[

(;0A), and is a matter of public record, available on the website of the 0ecurities

9change "ommission+ 5he 5rust is also described in a ZM;rospectus 0upplement,Z[

also available on the 0" website+ 5he 5rust by its terms set a ZM">0IN@ !A5Z[

of 8ebruary 3, 447+ 5he promissory note in this case became trust property in

compliance with the re*uirement set forth in the ;0A+ 5he 5rust agreement is filed

under oath with the 0ecurities and 9change "ommission+ 5he ac*uisition of the

assets of the subGect 5rust and the ;0A are governed under the law+ ;age . ;aladin

Associates Z 8orensic =ortgage 9perts In view of the foregoing, all assignments

e9ecuted filed three years after the 5rust+s "losing !ate would be a void act for the

reason that it violated the e9press terms of the 5rust instrument+ XY 5he loan was

originally made D=" =ortgage "orp and was sold and transferred to =organ

0tanley "apital I Inc+ 5rust 447 B+ 5here is no record of Assignments to either

the 0ponsor or !epositor as re*uired by the ;ooling and 0ervicing Agreement+ In

"arpenter v+ >ongan 7 Dall+ %,3$ +0+ %, %., >+d+ $$ (3%), the +0+

0upreme "ourt stated ZM5he note and mortgage are inseparableF the former as

essential, the latter as an incident+ An assignment of the note carries the mortgage

with it, while assignment of the latter alone is a nullity+Z[ An obligation can e9ist with

or without security+ Dith no security, the obligation is unsecured but still valid+ A


ASIDE ORDER GRANTING SUMMARY JUDGMENT %


28/53

security interest, however, cannot e9ist without an underlying e9isting obligation+ It

is impossible to define security apart from its relationship to the promise or

obligation it secures+ ("ivil "ode Z]Z] 3%, &4&, &4F "alifornia =ortgages and

!eeds of 5rust, and 8oreclosure >itigation, by 2oger -ernhardt, 8ourth dition, Z]

+) 5he obligation and the security are commonly drafted as separate documents Z

typically a promissory note and a deed of trust+ If the creditor transfers the note but

not the deed of trust, the transferee receives a secured noteF the security follows the

note, legally if not physically+ If the transferee is given the deed of trust without the

note accompanying it, the transferee has no meaningful rights e9cept the possibility

of legal action to compel the transferor to transfer the note as well, if such was the

agreement+ (Qelley v+ pshaw &&') $& "+d %&, .7 ;+d $F ;olhemus v+

5rainer (377) $4" 73') ZMDhere the mortgagee has ZMtransferredZ[ only the

mortgage, the transaction is a nullity and his ZMassigneeZ[ having received no interest

in the underlying debt or obligation, has a worthless piece of paper (. 2ichard 2+

;owell), ;owell on 2eal ;roperty, Z] $%+% O (444) -y statute, assignment of the

mortgage carries with it the assignment of the debt+ + + Indeed, in the event that a

mortgage loan somehow separates interests of the note and the deed of trust, with the

deed of trust lying with some independent entity, the mortgage may become

unenforceable+ 5he practical effect of splitting the deed of trust from the promissory

note is to make it impossible for the holder of the note to foreclose, unless the holder

of the deed of trust is the agent of the holder of the note+ Dithout the agency

relationship, the person holding only the note lacks the power to foreclose in the

event of default+ 5he person holding only the deed of trust will never e9perience

default because only the holder of the note is entitled to payment of the underlying

obligation+ 5he mortgage loan becomes ineffectual when the note holder did not also

hold the deed of trust+Z[ ANC A55=;5 5 52AN082 5B -N8I"IA>

IN5205 8 A 5205 !! DI5B5 DN20BI; 8 5B

N!2>CIN@ N5 I0 I! N!2 "A>I82NIA >AD




29/53

Now, one might suppose the "arpentiers could always 5he -ankruptcy

Automatic 0tay =ethod 5o buy time, some homeowners declare bankruptcy+ Dhen

you declare bankruptcy, you receive an automatic stay from all creditors, including

the lender+ =any homeowners feel this is the best and most assured way to stop the

sale from happening+ -e warned+ -ankruptcy is not for the weak hearted+ !o not

enter bankruptcy lightly+ Cou will need to declare all your assets, income and

financial details+ It is like having a permanent anal probe of your financial details+ It

is not pleasant+ Never ever lie, especially in bankruptcy court+ Cou will go to Gail+ As

great as the temptation to hide the precious little money you have from your creditors

is, dont do it+ 5he other down side of bankruptcy is that it is a mark in your public

credit score+ -ut frankly, having a bankruptcy or a foreclosure these days is not as big

a deal as it once was+ Almost half the country has been through it+ Its like being a

leper in a leper colony+ Its not as big a deal anymore+ 5he fact is, however, for most

homeowners this might be the only way to keep their house from the auction block

while they buy time to build their case for their foreclosure defense+ 5he other thing

about bankruptcy is, that in my e9perience, I have found that most of the wins come

from the bankruptcy courts+ 5he thing about bankruptcy is that it has the nice 2ule

$44(d)+ 8ederal 2ules of -ankruptcy $44 (d) vidence of perfection of security

interest+ If a security interest in property of the debtor is claimed, the proof of claim

shall be accompanied by evidence that the security interest has been perfected+ It

re*uires the lender to provide proof of claim+ 5his means that the table is suddenly

turned+ It is now the lender who has to come up with the proof of claim+ And if you

know how their fraud is being perpetrated, then you know how to obGect and deflect

their deception+ Dhat many people do after they file for bankruptcy is to file an

adversary proceeding+ As a debtor, this is absolutely free+ An adversary proceeding is

like a normal civil action, but done under bankruptcy court, and under bankruptcy

rules+ It allows the debtor to challenge the bank to provide proof of standing+ 5he

other thing many homeowners do is file their house as an unsecured debt+ ;lease




30/53

note, you cannot file an adversary proceeding under "hapter %+ 5his is very important

to remember+ 5his will then prompt the lender to complain+ -ut in doing so, they are

then re*uired to provide proof of claim which they often are unable to do+E or

Emotion to oppose the lifting of the automatic stay in bankruptcy court+ Bere is

another pleading for warrior lawyers# "alifornia 52 InGunction ;ackage W K'&' 6 If

you have clients seeking to stop the foreclosure sale of their home, and you have

valid legal grounds to file a lawsuit, here are the materials you will need to seek to

obtain a 52 (temporary restraining order) and preliminary inGunction+ "omplete

with intel from the foreclosure trenches from Attorney 0teve ondran+ 5hese tips,

insights and sample pleadings will save you alot of time if you have never been

through the foreclosure 52 process in "alifornia+ "ertain additional local rules may

apply, but this is a good collection of documents to assist you+ Bere is what you get

in this valuable kit# + . page 52 and InGunction checklist (guide6sheet with tips)

+ 0ample Notice of 52 to opposing parties $+ 52 / 0" application (with sample

memorandum of points and authorities) .+ !eclarations in 0upport of 52 .+

;roposed rder for 52 / 0" '+ 2e*uest for is ;endens

5emplate %+ Dithdrawal of >is ;endens 5emplate 3+ 0ample "ivil "omplaint

5emplate

"arpentiers allege and wish to amend their complaint to add this too#

EBomeowner Dins# "ase >aw 0uccesses ;atton v+ !iemer, $' hio 0t+ $d 73F '3

N++d &.F &33)+ A Gudgment rendered by a court lacking subGect matter

Gurisdiction is void ab initio+ "onse*uently, the authority to vacate a void Gudgment is

not derived from hio 2+ eiv+ ;+ 74(-), but rather constitutes an inherent power

possessed by hio courts+ I see no evidence to the contrary that this would apply to

All courts+ EA party lacks standing to invoke the Gurisdiction of a court unless he has,

in an individual or a representative capacity, some real interest in the subGect matter

of the action+ >ebanon "orrectional Institution v+ "ourt of "ommon ;leas $' hio

0t+d %7 (&%$)+ EA party lacks standing to invoke the Gurisdiction of a court unless


ASIDE ORDER GRANTING SUMMARY JUDGMENT $4


31/53

he has, in an individual or a representative capacity, some real interest in the subGect

matter of a n action+E Dells 8argo -ank, v+ -yrd, %3 hio App+$d 3',

443++hio^.74$, 3&% N++d % (443)+ It went on to hold, EIf plaintiff has offered

no evidence that it owned the note and mortgage when the complaint was filed, it

would not be entitled to Gudgment as a matter of law+E (5he following court case was

unpublished and hidden from the public) Dells 8argo, litton loan v+ 8armer, 37%

N++0+d (443)+ EDells 8argo does not own the mortgage loan +++ 5herefore,

the +++ matter is dismissed with preGudice+E (5he following court case was unpublished

and hidden from the public) Dells 8argo v+ 2eyes, 37% N++0+d (443)+

!ismissed with preGudice, 8raud on "ourt P 0anctions+ Dells 8argo never owned the

=ortgage+ (5he following court case was unpublished and hidden from the public)

!eutsche -ank v+ ;eabody, 377 N++0+d & (440)+ *ui8irst, when making the

loan, violated 2egulation of the 8ederal 5ruth in >ending Act ' 0" M74 and

the 8air !ebt "ollections ;ractices Act ' 0" M7&F Eintentionally created fraud

in the factumE and withheld from plaintiff+++ Evital information concerning said debt

and all of the matri9 involved in making the loan+E (5he following court case was

unpublished and hidden from the public) Indymac -ank v+ -oyd, 334 N++0+d .

(44&)+ 5o establish a prima facie case in an action to foreclose a mortgage, the

plaintiff must establish the e9istence of the mortgage and the mortgage note+ It is the

laws policy to allow only an aggrieved person to bring a lawsuit + + + A want of

Estanding to sue,E in other words, is Gust another way of saying that this particular

plaintiff is not involved in a genuine controversy, and a simple syllogism takes us

from there to a EGurisdictionalE dismissal# www+consumerdefenseprograms+com 4.

(5he following court case was unpublished and hidden from the public) Indymac

-ank v+ -ethley, 334 N+C+0+d 3%$ (44&)+ 5he "ourt is concerned that there may be

fraud on the part of plaintiff or at least malfeasance ;laintiff IN!C=Ae (!eutsche)

and must have EstandingE to bring this action, (5he following court case was

unpublished and hidden from the public) !eutsche -ank National 5rust "o v+5orres,


ASIDE ORDER GRANTING SUMMARY JUDGMENT $


32/53

NC 0lip p '.% (44&)+ 5hat Ethe dead cannot be suedE is a well established

principle of the Gurisprudence of this state plaintiffs second cause of action for

declaratory relief is denied+ 5o be entitled to a default Gudgment, the movant must

establish, among other things, the e9istence of facts which give rise to viable claims

against the defaulting defendants+ E5he doctrine of ultra vires is a most powerful

weapon to keep private corporations within their legitimate spheres and punish them

for violations of their corporate charters, and it probably is not invoked too often +++ E

inc "arbonate "o+ v+ 8irst National -ank, 4$ Dis+ ', %& ND & (3&&)+ Also

see# American 9press "o+ v+ "itiLens 0tate -ank, 3 Dis+ %, &. ND .%

(&$)+ (5he following court case was unpublished and hidden from the public)

Dells 8argo v+ 2eyes, 37% N++0+d (443)+ "ase dismissed with preGudice, fraud

on the "ourt and 0anctions because Dells 8argo never owned the =ortgage+ (5he

following court case was unpublished and hidden from the public) Dells 8argo, litton

loan v+ 8armer, 37% N+C+0+d (443)+ Dells 8argo does not own the mortgage

loan+ EIndeed, no more than (affidavits) is necessary to make the prima facie case+E

nited 0tates v+ Qis, 7'3 8+d, '7 (%th "ir+ &3)+ (5he following court case was

unpublished and hidden from the public) Indymac -ank v+ -ethley, 334 N++0+d

3%$ (44&)+ 5he "ourt is concerned that there may be fraud on the part of plaintiff or

at least malfeasance ;laintiff IN!C=A" (!eutsche) and must have EstandingE to

bring this action+ lawyer responsible for false debt collection claim 8air !ebt

"ollection ;ractices Act, ' 0"0 MM 7&++7&4,BeintL v+


33/53

"ir+ &3)+ "ert !enied, '4 +0+ loD+ 7&F 0+ "t+ =arch , (&3)+ E0ilence can

only be e*uated with fraud where there is a legal or moral duty to speak or when a n

in*uiry left unanswered would be intentionally misleading+E +0+ v+ 5weel, '04 8+d

&% (&%%)+ EIf any part of the consideration for a promise be illegal, or if there are

several considerations for an un6severable promise one of which is illegal, the

promise, whether written or oral, is wholly void, as it is impossible to say what part

or which one of the considerations induced the promise+E =enominee 2iver "o+ v+

Augustus 0pies l P " "o+, .% Dis+ ''& at p+ '%F $ ND 3 (&)+ 8ederal

2ule of "ivil ;rocedure %(a)(l) which re*uires that EIaOn action must be prosecuted

in the name of the real party in interest+E 0ee also, In re


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"apital, Inc+ v+ ;arsons, "A0 N+ 4%6=A6% (443)+ A genuine issue of material

fact e9isted as to whether or not appellee was the real party in interest as there was no

evidence on the record of a n assignment+ 2eversed for lack of standing+ verhome

=ortgage "ompany v+ 2owland, No+ 4%A;67' (hio 443)+ =ortgagee was not the

real party in interest pursuant to 2ule %(a)+ >ack of standing+ In lambert v+ 8irstar

-ank, 3$ Ark+ App+ '&, % 0+D+ $d '$ (44$), complying with the 0tatutory

8oreclosure Act does not insulate a financial institution from liability and does not

prevent a party from timely asserting any claims or defenses it may have concerning a

mortgage foreclosure A+"A+ M36046 7(d)_` and violates honest services 5itle 3

8raud+ Notice to credit reporting agencies of overdue payments/foreclosure on a

fraudulent debt is defamation of character and a whole separate fraud+ A "ourt of

Appeals does not consider assertions of error that are unsupported by convincing

legal authority or argument, unless it is apparent without further research that the

argument is well taken+ 82A! is a point well takenV lambert 0upra+ No lawful

consideration tendered by riginal >ender and/or 0ubse*uent =ortgage and/or

0ervicing "ompany to support the alleged debt+ EA lawful consideration must e9ist

and be tendered to support the NoteE and demand under 5I>A full disclosure of any

such consideration+ Anheuser6-usch -rewing "ompany v+ mma =ason, .. =inn+

$3,.7 N+D+ ''3 (3&4)+ National -anks and/or subsidiary =ortgage

companies+cannot retain the note, EAmong the assets of the state bank were two

notes, secured by mortgage, which could not be transferred to the new bank as assets

under the National -anking laws+ National -ank Act, 0ect 3 P '7E National -ank

of "ommerce v+ Atkinson, 3 Qan+ App+ $4, '. ;+ 3 (3&3)+ EA bank can lend its

money, but not its credit+E 8irst Natl -ank of 5allapoosa v+ =onroe, $' @a 7., 7&

0++ l$ (&l)+ It is not necessary for rescission of a contract that the party making

the misrepresentation should have known that it was false, but recovery is allowed

even though misrepresentation is innocently made, because it would be unGust to

allow one who made false representations, even innocently, to retain the


ASIDE ORDER GRANTING SUMMARY JUDGMENT $.


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fruits of a bargain induced by such representations+E Dhipp v+ Iverson, .$ Dis+

d 77, 73 N+D+d 4 (&7&)+ EA bank is not the holder in due course upon merely

crediting the depositors account+E 0ankers 5rust v+ Nagler, $ A+!+d 7.', '%

N+C+0+d &3 (&7')+ EAny conduct capable of being turned into a statement of fact

is representation+ 5here is DND+consumerdefenseprograms+com 4% no distinction

between misrepresentations effected by words and misrepresentations effected by

other acts+E (5he seller or lender) EBe is liable, not upon any idea of benefit to

himself, but because of his wrongful act and the conse*uent inGury to the other party+E

>eonard v+ 0pringer, &% '$+ 7. N && (&4)+ EIf any part of the

consideration for a promise be illegal, or if there are several considerations for an un6

severable promise one of which is illegal, the promise, whether written or oral, is

wholly void, as it is impossible to say what part or which one of the considerations

induced the promise+E =enominee 2iver "o+ v+ Augustus 0pies l P " "+,.% Dis+

''& at p+ '%F $ ND 3 (&)+ E5he contract is void if it is only in part

connected with the illegal transaction and the promise single or entire+E @uardian

Agency v+ @uardian =ut+ 0avings -ank, % Dis+ ''4, %& ND %& (&$3)+ =oore v+

=id6;enn "onsumer !iscount "o+, "ivil Action No+ &467.' +0+ !ist+ lYI0

4$. (;a+ &&)+ 5he court held that, under 5I>As 2egulation , "82 M7+.

(a), a lender had to e9pressly notify a borrower that he had a choice of insurer+

=arshall v+ 0ecurity 0tate -ank of Bamilton, -+2+ 3. (III+ &&4) violation of

8ederal 5ruth in lending ' 0"0 M7$3(a`(&), and 2egulation + 5he bank took a

security interest in the vehicle without disclosing the security interest+ 0teinbrecher v+

=id6;enn "onsumer !iscount "o+, 4 -+2+ '' (;a+ &&4)+ =id6;enn violated

5I>A by not including in a finance charge the debtors purchase of fire insurance on

their home+ 5he purchase of such insurance was a condition imposed by the

company+ 5he cost of the insurance was added to the amount financed and not to the

finance charge+ Nichols v+ =id6;enn "onsumer !iscount "o+, &3& Dl .773 (;a+

&3&)+ =id6;enn misinformed Nichols in the Notice of 2ight to "ancel =ortgage+


ASIDE ORDER GRANTING SUMMARY JUDGMENT $'


36/53

=clvany v+ Bousehold 8inance 2ealty "orp+, &3 3+2+ $% (;a+ &3&)+ debtor filed

an application to remove the mortgage foreclosure proceedings to the nited 0tates

!istrict "ourt pursuant to 3 0"0 M.4&+ It is strict liability in the sense that

absolute compliance is re*uired and even technical violations will form the basis for

liability+ lauletta v+ alley -uick Inc+, . 8+ 0upp+ 4$7 at 4.4 (;a+ &%7)+

ending Act, ' +0+"+0+ M 746

77%c and 2egulation of the 8ederal 2eserve -oard, "82 M7+ =c"ausland

v+ @=A" =ortgage "o+, 7$ -+2+ 77', (;a+ &37)+ @=A" failed to provide

information which must be disclosed as defined in the 5I>A and 2egulation ,

"82 M7+ ;erry v+ 8ederal National =ortgage "orp+, '& -+2+ &.% (;a+ &37) the

disclosure statement was deficient under the 5ruth In >ending Act, ' +0+"+0+ M

7$3(a)(&)+ !efendant =ortgage "o+ failed to reveal clearly what security interest

was retained+ 0chultL v+ "entral =ortgage "o+, '3 -+2+ &.' (;a+ &37)+ 5he court

determined creditor mortgagor violated the 5ruth In lending Act, ' +0+"+0+ M

7$3(a)($), by its failure to include the cost of mortgage insurance in calculating the

finance charge+ 5he court found creditor failed to meet any of the conditions for

e9cluding such costs and was liable for twice the amount of the true finance charge+

0olis v+ 8idelity "onsumer !iscount "o+, '3 -+2+ &3$ (;a+ &37)+ Any misgivings

creditors may have about the technical nature of the re*uirements should be

addressed to "ongress or the 8ederal 2eserve -oard, not the courts+ !isclosure

re*uirements for credit sales are governed by ' +s+"+0+ M 7$3 "82 M 7+3_b),

(c)+ !isclosure re*uirements for consumer loans are governed by ' +s+"+0+ M 7$&

"82 M 7+3_b), (d)+ A violator of the disclosure re*uirements is held to a




37/53

standard of strict liability+ 5herefore, a plaintiff need not show that the creditor in fact

deceived him by making substandard disclosures+ 0ince 5ransworld 0ystems Inc+

have not cancelled the security interest and return all monies paid by =s+ 0herrie I+

>a8orce within the 4 days of receipt of the letter of rescission of ctober %, 44&,

the lenders named above are responsible for actual and statutory damages pursuant to

' +s+c+ 7.4(a)+ ;orter v+ =id6;enn "onsumer !iscount "o+, &7 8+d 477 ($rd

eir+ &&)+ ;orter filed an adversary proceeding against appellant under ' +0+c+

M7$', for failure to honor her re*uest to rescind a loan secured by a mortgage on her

home+ 2owland v+ =agna =illikin -ank of !ecatur, N+A+, 3 8+0upp+ 3%' (&&)

ven technical violations will form the basis for liability+ 5he mortgagors had a right

to rescind the contract in accordance with ' +s+c+ M7$'(c)+ New =aine Nat+ -ank

v+ @endron, %34 8+0upp+ ' (l&&)+ 5he court held that defendants were entitled to

rescind loan under strict liability terms of 5I>A because plaintiff violated 5I>As

provisions+ !i9on v+ 0 P 0 loan 0ervice of Daycross, Inc+, %'. 8 +0upp+ '7%

(&&4)F 5I>A is a remedial statute, and, hence+ is liberally construed in favor of

borrowers+ 5he remedial obGectives of 5I>A are achieved by imposing a system of

strict liability in favor of consumers when www+consumerdefenseprograms+com 4&

mandated disclosures have not been made+ 5hus, liability will flow from even minute

deviations from the re*uirements of the statute and the regulations promulgated

under it+ Doolfolk v+ an 2u "redit "orp+, %3$ 8+0upp+ %. (l&&4) 5here was no

dispute as to the material facts that established that the debt collector violated the

8";A+ 5he court granted the debtors motion for summary Gudgment and held that

() under ' +s+c+ M7&(e), a debt collector could not use any false, deceptive, or

misleading representation or means in connection with the collection of any debtF

nfair !ebt "ollection ;ractices Act+ andmark =ortg+ "orp+ of irginia,

7&7 8+0upp+ 43& (D+!+ a+ &33)+ ;laintiff was also misinformed regarding the

effects of a rescission+ 5he pertinent regulation states that Ewhen a consumer rescinds

a transaction, the security interest giving rise to the right of rescission becomes void


ASIDE ORDER GRANTING SUMMARY JUDGMENT $%


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and the consumer shall not be liable for any amount, including any finance charge+E

"82 M7+$(d) ()+ >aubach v+ 8idelity "onsumer !iscount "o+, 737 8+'upp+

'4. (+!+ ;a+ &33)+ monetary damages for the plaintiffs pursuant to the 2acketeer

Influenced and "orrupt rganiLation Act, 3 0" M&7+ ("ount I)F the 5ruth6in6

lending Act, ' 0" M74+ 0earles v+ "larion =ortg+ "o+, &3% D> 7&$ (+!+

;a+ &3%)F liability will flow from even minute deviations from re*uirements of the

statute and 2egulation + failure to accurately disclose the property in which a

security interest was taken in connection with a consumer credit transaction involving

the purchase of residential real estate in violation of ' 0"s M7$3(a)(&)+ and

"82 M7+3(m)+ !i9on v+ ' P ' loan 0ervice of Daycross, Inc+, %'. 8+0upp+ '7%,

'%4 (0+!+ @a+ &&4)+ "ongresss purpose in passing the 5ruth in >ending Act

(5I>A), ' 0"s M74(a)+ was to assure a meaningful disclosure of credit terms so

that the consumer will be able to compare more readily the various credit terms

available to him+ ' 0"s M74(a)+ 5I>A is a remedial statute, and, hence, is

liberally construed in favor of borrowers+F "ervantes v+ @eneral lectric =ortgage

"o+, 7% -+2+ 37 (+!+ ;a+ &37)+ 5he court found that the 5I>A violations were

governed by a strict liability standard, and defendants failure to reveal in the

disclosure statement the e9act nature of the security interest violated the 5I>A+ ;erry

v+ 8ederal National =ortgage, '& -+2+ &.% (+!+ ;a+ &37)+ !efendant failed to

accurately disclose the security interest taken to secure the loan+ ;orter v+ =id6;enn

"onsumer !iscount "o+, &7 8 +d 477 ($rd "ir+ &&)+ Adversary proceeding

against appellant under ' 0c+ M7$', for failure to honor her re*uest to

DIo/II+consumerdefenseprograms+com 4 rescind a loan secured by a mortgage

on her home+ 0he was entitled to the e*uitable relief of rescission and the statutory

remedies under ' 0c+ M7.4 for appellants failure to rescind upon re*uest+ 0olis v+

8idelity "onsumer !iscount "o+, '3 -+2+ &3$ (;a+ &37)+ Any misgivings creditors

may have about the technical nature of the re*uirements should be addressed to

"ongress or the 8ederal 2eserve -oard, not the courts+ !isclosure re*uirements for




39/53

credit sales are governed by ' +0+"+0+ M 7$3 "82 M 7+3(b), (c)+ !isclosure

re*uirements for consumer loans are governed by ' +0+"+0+ M 7$& "82 M

7+3(b), (d)+ A violator of the disclosure re*uirements is held to a standard of strict

liability+ 5herefore, a plaintiff need not show that the creditor in fact deceived him by

making substandard disclosures+ 2owland v+ =agna =illikin -ank of !ecatur, N+A+,

3 8+0upp+ 3%' (&&), ven technical violations will form the basis for liability+

5he mortgagors had a right to rescind the contract in accordance with ' +0+c+

M7$'(c)+ New =aine Nat+ -ank v+ @endron, %34 8+0upp+ ' (!+ =e+ &&)+ 5he

court held that defendants were entitled to rescind loan under strict liability terms

of 5I>A because plaintiff violated 5I>As provisions+ @oogle# E5he -oyko

!ecisionE E2ickie Dalker "aseE+++"82 5itle # -anks and -anking ;A25 76

525B IN >N!IN@ (2 @>A5IN ) M7+$& =ortgage transfer disclosures+

>ink to an amendment pu blished at %' 82 '3'4, 0ept + ., 44+ (a) 0cope+ 5he

disclosure re*uirements of this section apply to any covered person e9cept as

otherwise provided in this section+ 8or purposes of this section# () A Ecovered

personE means any person, as defined in M7+(a)(), that becomes the owner of an

e9isting mortgage loan by ac*uiring legal title to the debt obligation, whether through

a purchase, assignment, or other transfer, and who ac*uires more than one mortgage

loan in any twelve6month period+ 8or purposes of this section, a servicer of a

mortgage loan shall not be treated as the owner of the obligation if the servicer holds

title to the loan or it is assigned to the servicer solely for the administrative

convenience of the servicer in servicing the obligation+ () A Emortgage loanE means

any consumer credit transaction that is secured by the principal dwelling of a

consumer+ (b) !isclosure re*uired+ 9cept as provided in paragraph (c) of this

section, any person that becomes a covered person as defined in this section shall

mail or deliver the disclosures re*uired by this section to the consumer on or before

the $4th calendar day following the ac*uisition date+ If there is more than one

covered person, only one disclosure shall be given and the covered persons shall


ASIDE ORDER GRANTING SUMMARY JUDGMENT $&


40/53

agree among themselves which covered person shall comply with the re*uirements

that this section imposes on any or all of them+ () Ac*uisition date+ 8or purposes of

this sect ion, the date that the covered person ac*uired the mortgage loan shall be the

date of ac*uisition recog niLed in the books and records of the ac*uiring party+ ()

=ultiple consumers+ If there is more than one consumer liable on the obligation, a

covered person may mail or deliver the disclosures to any consumer who is primarily

liable+ (c) 9ceptions+ Notwithsta nding paragraph (b) of this section, a covered

person is not subGect to the re*uirements of this section with respect to a particular

mortgage loan if# () 5he covered person sells or otherwise transfers or assigns legal

title to the mortgage loan on or before the $4th calendar day following the date that

the covered person ac*uired the mortgage loanF or () 5he mortgage loan is

transferred to the covered person in connection with a repurchase agreement and the

transferor that is obligated to repurchase the loan continues to recog niLe the loan as

an asset on its own books and records+ Bowever+ if the transferor does not repurchase

the mortgage loan, the ac*uiring party must make the disclosures re*uired by M7+$&

within $4 days after the date that the transaction is recogniLed as an ac*uisition in its

books and records+ (d) "ontent of re*uired disclosures+ 5he disclosures re*uired by

this section shall identify the loan that was ac*uired or transferred and state the

following# ( ) 5he identity, address, and telephone number of the covered person

who owns the mortgage loan+ If there is more than one covered person, the

information re*uired by this paragraph shall be provided for each of them+ () 5he

ac*uisition date recogniLed by the covered person+ ($) Bow to reach an agent or party

having authority to act on behalf of the covered person (or persons), which shall

identify a person (or persons) authoriLed to receive legal notices on behalf of the

covered person and resolve issues concerning the consumers payments on the loan+

Bowever, no information is re*uired to be provided under this paragraph if the

consumer can use the information provided under paragraph (d)() of this section for

these purposes+ If multiple persons are identified under this paragraph, the disclosure


ASIDE ORDER GRANTING SUMMARY JUDGMENT .4


41/53

shall provide contact information for each and indicate the e9tent to which the

authority of each agent differs+ 8or purposes of this paragraph (d)($), it is sufficient if

the covered person provides only a telephone number provided that the consumer can

use the telephone number to obtain the address for the agent or other person

identified+ (.) 5he location where transfer of ownership of the debt to the covered

person is recorded+ Bowever, if the transfer of ownership has not been recorded in

public records at the time the disclosure is provided, the covered person complies

with this paragraph by stating this fact+ (e) ptional disclosures+ In addition to the

information re*uired to be disclosed under paragraph (d) of this section, a covered

person may, at its option, provide any other information regarding the transaction+E

8erguson v+ Avelo =ortgage, >>" ("al+App+ !ist+ oan 0ervice "orporation (J>0") W Note that the trustee under

the !eed of 5rust was 8irst American 5itleF () 3/$4/4% Assignment of !eed of 5rust

was recorded (=20 assigned its beneficial interest to Avelo =ortgage) W Note the

typical assignment of the !eed of 5rust together with Rnotes thereinS (5he 8ontenot

case sees this as proper even though =20 does not, and has never held any note in

its possession)+ ($) /&/4% Notice of 0ale by J>0"+ (.) /&/4% (same day but

after the Notice of 0ale was recorded) 0ubstitution of 5rustee was recorded

substituting J>0" for 8irst American 5itle (note, apparently this document was

e9ecuted on 3//4% prior to the notice of default being recorded by J>0")F


ASIDE ORDER GRANTING SUMMARY JUDGMENT .


42/53

5hereafter, the property was sold at non6Gudicial foreclosure trustee sale on %/43+ 5he

purchaser at the foreclosure sale was Avelo =ortgage, allegedly paying .44k for the

property+ Avelo recorded the 5rustees !eed upon sale+ After the sale, BCNB (the

original borrower), Juitclaimed his interest to 8erguson (the ;laintiff in this action)

on 7/%/4&+ 8erguson recorded his Juitclaim deed on %//4& and brought suit to

Juiet 5itle against Avelo =ortgage arguing the foreclosure sale was illegal as Avelo

received no valid interest from =20 in the Assignment of !eed of 5rust since

=20 had no note to assign, and thus Avelo had no authority to foreclose+ nder

this theory, 8erguson argued there was no re*uirement to tender the full amount of

the loan balance to try to set aside the foreclosure sale and claim the property as his

own since he was challenging the foreclosure RsaleS and not the foreclosure

RprocedureS+ In addition, 8erguson argued there can be no tender rule re*uirement

where Avelo is not the true beneficiary (since they never got the note+ 8erguson also

sued BCNB for fraud+ 5he "ourt disagreed with the ;laintiff 8erguson, and held

that the tender rule applies whether or not Avelo had any note+ Bere is the relevant

language of the case# ($) 5he power of sale in a deed of trust allows a beneficiary

recourse to the security without the necessity of a Gudicial action+ (0ee =elendreL

v+ + + + Investment, Inc+ (44') % "al+App+.th $3, .& 7 "al+2ptr+$d .$O+)

Absent any evidence to the contrary, a nonGudicial foreclosure sale is presumed to

have been conducted regularly and fairly+ ("iv+ "ode, M &.+) Bowever,

irregularities in a nonGudicial trusteeHs sale may be grounds for setting it aside if they

are preGudicial to the party challenging the sale+ (0ee >o v+


43/53

court of e*uity to set aside a trust deed foreclosure on allegations of unfairness or

irregularity that, coupled with the inade*uacy of price obtained at the sale, mean that

it is appropriate to invalidate the sale+EO+) A court will not grant e*uitable relief to a

plaintiff unless the plaintiff does e*uity+ (0ee Arnolds =anagement "orp+ v+ ischen

(&3.) '3 "al+App+$d '%', '%36'%& 4' "al+2ptr+ 'OF see also $ Ditkin,

0ummary of "al+ >aw (4th ed+ 44') *uity, M 7, pp+ 3763%+) 5hus, RiOt is settled

that an action to set aside a trusteeHs sale for irregularities in sale notice or procedure

should be accompanied by an offer to pay the full amount of the debt for which the

property was security+S (Arnolds =anagement "orp+ v+ ischen, supra, '3

"al+App+$d at p+ '%3F see also 8;"I 26BA- 4 v+ P @ Investments, >td+ (&3&)

4% "al+App+$d 43, 4 '' "al+2ptr+ '%O rationale behind tender rule is that

irregularities in foreclosure sale do not damage plaintiff where plaintiff could not

redeem property had sale procedures been properO+) Bowever, a tender may not be

re*uired where it would be ine*uitable to do so+ (0ee nofrio v+ 2ice (&&%) ''

"al+App+.th .$, .. 7. "al+2ptr+d %.OF see also !imock v+ merald ;roperties

(444) 3 "al+App+.th 373, 3%763%3 &% "al+2ptr+d ''O when new trustee has

been substituted, subse*uent sale by former trustee is void, not merely voidable, and

no tender needed to set aside saleO+) 0pecifically, Rif the plaintiffsO action attacks

the validity of the underlying debt, a tender is not re*uired since it would constitute

an affirmative of the debt+HS (nofrio v+ 2ice, supra, '' "al+App+.th at p+ ..+)

Appellants contend they are not challenging irregularities in the foreclosure

proceeding+ 2ather, they argue that respondent is not the holder of the underlying

promissory note and therefore cannot invoke the tender rule against them+ In their

complaint, appellants alleged that New "entury remains in possession of the

promissory note and that appellants owe no obligation to respondent+ n appeal,

appellants contend that whether respondent holds the promissory note is a factual

dispute, and sustaining respondentHs demurrer presupposes that respondent has

authority to enforce the loan obligation+ 5hey assert that while =20 had the


ASIDE ORDER GRANTING SUMMARY JUDGMENT .$


44/53

authority to transfer its beneficial interest under the deed of trust, there is no evidence

that =20, which was acting as a nominee of New "entury, held the promissory

note and was authoriLed to assign the note itself to respondent+ 5he role of =20 is

central to the issues in this appeal+ R=20 is a private corporation that administers

the =20 0ystem, a national electronic registry that tracks the transfer of ownership

interests and servicing rights in mortgage loans+ 5hrough the =20 0ystem, =20

becomes the mortgagee of record for participating members through assignment of

the membersH interests to =20+ =20 is listed as the grantee in the official records

maintained at county register of deeds offices+ 5he lenders retain the promissory

notes, as well as the servicing rights to the mortgages+ 5he lenders can then sell these

interests to investors without having to record the transaction in the public record+

=20 is compensated for its services through fees charged to participating =20

members+HS (@omes v+ "ountrywide Bome >oans, Inc+ (4) & "al+App+.th .&,

' "al+2ptr+$d 3&O (@omes v+ "ountrywide), *uoting =ortgage lectronic

2egistration 0ystems, Inc+ v+ Nebraska !ept+ of -anking P 8inance (44') %4 Neb+

'& %4. N+D+d %3., %3'O+) (.) Appellants cite two federal cases for the proposition

that =20, as the nominee of the lender under a deed of trust, does not possess the

underlying promissory note and cannot assign it, absent evidence of an e9plicit

authoriLation from the original lender+ (0ee 0a9on =ortgage 0ervices, Inc+ v+ Billery

(N+!+"al+, !ec+ &, 443, No+ "6436.$'%) 443 +0+!ist+ >e9is 444'7F see also In re

Agard (-ankr+ +!+N+C+ 4) ... -+2+ $+) Not all courts agree on this issue and

appellants do not distinguish nor address other cases that have upheld =20Hs ability

to assign a mortgage+ (0ee 0 -ank, N+A+ v+ 8lynn(N+C+0up+ 44) % =isc+$d 34

3&% N+C+0+d 3'', 3'&O assignee of =20 has standing to initiate foreclosure

proceeding because where Ean entity such as =20 is identified in the mortgage

indenture as the nominee of the

1 11 12 cv08-01709-2643805 (reply to in opposition) 0204 62337 03628

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