Tag Archives: foreclosure

New Jersey Court Finds that Plaintiff had Both Possession of the Original Note and Assignment

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The court in deciding Assets Recovery 23, LLC v. Odoemene, 2013 N.J. Super. (App.Div., 2013) this court affirmed the ruling of the lower court that the plaintiff was permitted to foreclose.

In this foreclosure matter, defendants Emmanuel C. Odoemene and Doris D. Odoemene appealed from a June 11, 2012 Chancery Division order, which granted summary judgment to plaintiff Assets Recovery 23, LLC and dismissed defendants’ answer, and denied defendants’ cross-motion to dismiss the complaint. After considering the plaintiff’s contentions this court affirmed the decision of the lower court.

On appeal, defendants merely reiterated that plaintiff lacked standing because it did not physically possess the note at the time it filed the foreclosure complaint. They also argued that the April 2011 assignment did not properly assign the note; however, the court found this argument to be lacking.

This court also found that the evidence in this case clearly established that plaintiff had standing when it filed the foreclosure complaint. Here, the plaintiff had both possession of the original note and an assignment of the mortgage and note prior to filing the complaint.

Court Dismissed Minn. Stat. § 559.01 Claims

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The court in deciding Lubbers v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. (D. Minn., 2013) dismissed plaintiff’s claims.

Plaintiffs sought to invalidate the foreclosure of the mortgage on their home. Plaintiffs asserted three claims against defendant: (1) quiet-title, to determine adverse claims under Minn. Stat. § 559.01; (2) declaratory judgment; and (3) slander of title.

Plaintiffs alleged the following causes of action:

In count I, plaintiffs asserted a quiet title action pursuant to Minn. Stat. § 559.01, and sought a determination regarding Deutsche Bank’s adverse interest in the Property. According to plaintiffs, in a quiet title action, the burden of proof was on the mortgagee asserting an adverse interest in the property to show that both record title and legal title concur and co-exist at the same time and in the same entity to foreclose by advertisement.

In count II, plaintiffs sought a declaratory judgment under Minn. Stat. § 555.02 that the various assignments of mortgage, notices of pendency, and powers of attorney were all void, and that plaintiffs remain the owner of the property in fee title.

Count III, plaintiff alleged slander of title, plaintiffs asserted that Wilford, acted at direction of Deutsche Bank, drafted and recorded documents that were false and not executed by legally authorized persons, and that Deutsche Bank knew that the documents were false because unauthorized persons executed the power of attorneys and the assignments of mortgage.

As relief, plaintiffs sought: (1) a determination of adverse interest in the Property; (2) a declaration that the sheriff’s certificate of sale, the various assignments of mortgage, notices of pendency, and powers of attorney are all void; (3) a declaration that plaintiffs remain the owner of the Property in fee title; and (4) money damages. Id., Prayer for Relief.

After considering the plaintiff’s claims, this court granted the defendant’s motion to dismiss.

Reiss on Abandoned Homes

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Interest.com quoted me in How to Deal with An Abandoned Home. It reads in part,

5 places to look for help

An abandoned home in an otherwise thriving neighborhood can be an eyesore – or worse.

What happens if the lawn goes uncut for weeks or months? If a pipe bursts inside? If a squatter takes up residence?

This abandoned property can quickly move from nuisance to become a real hazard. And if you’re trying to sell your home, an empty property next door can scare away potential buyers, or lead to lower bids than if your neighbor maintained that property.

You don’t need to fight this battle alone, though.

There are resources available to help turn that property around, whether you just want to cut the lawn, or try to get it out of the hands of an owner who is trying to squeeze every dime out of the property, at the expense of your street. Here’s who to call in what situation.

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Call the homeowner’s association

If you’re part of a homeowner’s association, it can help, too.

“HOAs have broad powers to enforce standards for homeowners,” says David Reiss, professor of law at the Brooklyn Law School in New York, where he teaches courses on real estate practice.

How much power they have depends on the HOA’s bylaws, rules and regulations, but HOAs can impose fines for non-compliance with standards laid out in those rules.

“Some might go further and allow and HOA to enter onto a property to conduct maintenance,” Reiss says, which can take care of immediate problems.

He warns, though, that an HOA should consult a lawyer before taking that step, not only to make sure what they’re doing is allowed according to its bylaws, but also because, even if the owner is delinquent on maintenance, they could still accuse the HOA of trespassing or stealing for entering the property.

Premature End to Foreclosure Review

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Congressman Cummings (D), the ranking minority member of the House Committee on Oversight and Government Reform, has sent a letter to Congressman Issa, the Chairman of the Committee, regarding the Independent Foreclosure Review. It opens,

I am writing to request that the Committee hold a hearing on widespread foreclosure abuses and illegal activities engaged in by mortgage servicing companies.  I request that the hearing also examine why the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) appear to have prematurely ended the Independent Foreclosure Review (IFR) and entered into a major settlement agreement with most of the servicers just as the full extent of their harm was beginning to be revealed. (1)

It goes on to assert that “some mortgage servicing companies engaged in widespread and systemic foreclosure abuses, including charging improper and excessive fees, failing to process loan modifications in accordance with federal guidelines, and violating automatic stays after borrowers filed for bankruptcy.” (2) It concludes that it “remains unclear why the regulators terminated the IFR prematurely, how regulators determined the compensation amounts servicers were required to pay under the settlement, and how regulators could  claim that borrowers who were harmed by these servicers would benefit more from the settlement . . . than by allowing the IFR to be completed.” (2)

The letter raises a number of important concerns, but I will focus on just one — “how did the regulators arrive at the compensation amounts in the settlement?” (9) This particular settlement was for billions of dollars from BoA, PNC, JPMorgan and Citibank. This is an extraordinarily large sum, but the public is left with no sense of whether this sum is proportional to the harm done. I have raised this concern with other billion dollar settlements. As the federal government moves forward with these large settlements, it should carefully consider their expressive function — does the penalty fit the wrongdoing?  And if so, how was that calculated? People want to know.

Texas Court Dismisses Claims Centered Around FDCPA and TDCPA Violations

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The court in deciding Warren v. Bank of Am., N.A., 2013 U.S. Dist. (N.D. Tex., 2013) granted defendant’s motion to dismiss all of the claims brought by the plaintiff.

Plaintiff alleged that MERS could not assign the note or deed of trust because it was not a party to, and never had a beneficial interest in, the note. Plaintiff further alleged that the note was “securitized”, thus defendant was not the owner of the note or deed of trust and had no right to foreclose on the Property. Plaintiff asserted a claim to quiet title and requested declaratory judgment and injunctive relief to restrain defendant from foreclosing and evicting him from the Property.

Although the complaint did not formally list any substantive claims, plaintiff’s request for injunctive relief contained allegations that may liberally construed as claims for wrongful foreclosure and violations of the Tex. Const. art. XVI, § 50(a)(6)(B), the Fair Debt Collection Practices Act (FDCPA), and the Texas Debt Collection Practices Act (TDCPA).

Plaintiff alleged that the defendant failed to notify him of the pending foreclosure sale, since the foreclosure notice was “returned as undeliverable” by the U.S. Postal Service (USPS). Before filing suit, he sent the defendant a request “for a verification of the debt” pursuant to the federal FDCPA and the TDCPA. Plaintiff believed that pursuant to the FDCPA, the foreclosure could not have been conducted until 30 days had passed after the date he sent his request.

Plaintiff further claimed that the defendant could not foreclose because there were defects in the original loan financing and the original foreclosure order and because defendant failed to “physically post” a copy of the foreclosure sale notice at “the courthouse” where the sale was to take place.

This court considered the plaintiff’s contentions and eventually found them without merit.

Texas Court Rejects Break-in-the-Chain Claim

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The court in deciding Martinez v. Wilmington Trust Co., 2013 U.S. Dist., (W.D. Tex. 2013) found that plaintiffs’ petition failed to state a claim to which relief could be granted and dismissed the action.

Plaintiffs argued that the 2005 assignment was “fraudulent and forged,” “manufactured,” and “void and invalid,” constituting a “break in the chain.” Plaintiffs also claimed that defendant had no standing to foreclose on the instrument.

Plaintiffs alleged the 2005 assignment from Washington Mutual to Wells Fargo was “suspicious” due to the five year delay in recordation and because “Washington Mutual was bankrupt in August of 2010 and no longer existed in 2010.” According to plaintiffs, the 2005 assignment was flawed because it was recorded “some twelve years after the original transaction.”

Defendant argued that the plaintiffs’ claims should be dismissed because plaintiffs lacked standing to complain of any alleged defects in the assignments, and, standing aside, plaintiffs’ claims lack viability. Plaintiffs argued that defendant’s motion was moot. This court ultimately found that the defendant’s motion to dismiss had merit and granted it.

The Ghosts of the Housing Bubble

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NYC Councilmember Daniel Garodnick has released a report, The Ghosts of the Housing Bubble: How Debt, Deterioration, and Foreclosure Continue to Haunt New York after the Crash. The report opens,

New York continues to have the highest rents in the country and a housing crisis that has lasted for decades. Many residential rents are below market value – a result of the myriad of state and local laws that have been implemented to protect working and middle class tenants from being forced out of their homes. This gap between the current affordable rent and potential fair market value can fuel the imaginations of investors and owners who dream of squeezing out the unrealized value hidden in these properties. This leads some developers to make riskier and riskier decisions following visions of real estate fortune, only to find themselves tilting at windmills, stuck with unpayable mortgages and escalating maintenance costs. (1)

The report proposes a number of interesting solutions to the problems it identifies, all of which should be looked into further. I am particularly intrigued by the proposal that Community Reinvestment Act exams should include a review of “the quality of the investments being made, measuring if banks are lending mortgages to landlords with portfolios of distressed housing. Were their bad loans to be reflected in their CRA ratings, banks might change their behavior.” (8)

But as with a similar ANHD report, the magnitude of the proposed solutions does not seem to match that of the identified problems. Market forces are extraordinarily powerful in NYC right now. It is unclear whether initiatives such as the “First Look Program,” which gives “good developers the first opportunity to buy” properties in foreclosure, can do anything when valuations are so frothy and predatory equity is on the prowl. (1)

That being said, the report is still quite valuable for shining light once again on the problem of owners who seek to illegally force rent regulated tenants out of their homes.