Tag Archives: standing

Just Shoot Me

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Florida Twelfth Judicial Circuit Magistrate Bailey issued a Recommended Order in HSBC Bank USA, National Association, et al. v. Marra, No. 2008 CA 000630 NC (Aug. 14, 2013) that makes you want to give up.  Not because of the judge, but  because of what she documents in what is in all likelihood a run of the mill foreclosure in Florida.

Somewhat amazingly, the defendant was unrepresented but was able to get the Court to focus on various inconsistencies in the court filings and implausible assertions made by the Plaintiff, particularly those relating to whether the plaintiff owned and held the note and mortgage as it alleged in the complaint.

It would require about as many words to summarize the opinion as are in it, so I refer you to the link above if you want to see it in all of its glory. Let me leave you with the Court’s conclusion:

After taking into consideration the above-cited information from the [Pooling and Servicing Agreement], it appears that the transfers that have been variously asserted by the Plaintiff in several Motions and/or documents attached to those Motions as conferring standing upon it could  not possibly have occurred as the Plaintiff represents. Further, the Magistrate cannot  conceive of any manner in which the Plaintiff could possibly create additional  documentation in an effort to manufacture standing in this action. (5)

Said less politely, the Plaintiff appear to have lied to the Court or at least been unbelievably negligent in preparing its papers.  The Court also had these things to say about the Plaintiff’s filings:

  • the procedural history recounted by the Plaintiff in its Motion is inaccurate. (4)
  • it is not even likely that GreenPoint was the “owner and holder” of Marra’s loan documents at the time this case was filed in 2008, as was alleged in the original Complaint. (4)

As a law professor, I teach students about the importance of procedure to the functioning and legitimacy of our system of adjudication.  Reading cases like this, replete with a factual summary of obfuscation and possibly outright lies, I wonder what the lesson is that we should take away from the foreclosure epidemic.

One lesson is that you can say anything you want in court and you are unlikely to be punished even if you are caught.  If that is the lesson we are left with, just shoot me now.

An alternative lesson is that we should severely punish those who treat the courthouse as no better than a white-collar fight cage where trained mercenaries lord it over ill-prepared amateurs, with no holds barred. If that is the one we take, lower your gun, roll up your sleeves and start thinking about what a well-functioning judicial system would look like for unrepresented parties in civil suits, such as homeowners in foreclosure and consumers facing debt collectors.

[HT April Charney]

Arizona Court Grants Summary Judgment in Favor of MERS in Show Me the Note Claim

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The Arizona court in deciding the case of Sparlin v. BAC Home Loans Servicing, CA-CV-2010-0173 (Ct. Ap. AzDiv. 2, 2011), had to consider arguments based on the theory of ‘show me the note.’ Sparlin had appealed the lower court decision to grant summary judgment to MERS. Upon reconsideration, the court affirmed the lower court decision and granted summary judgment.

In arguing their ‘show me the note’ claim, the borrowers alleged that MERS was required to actually prove that it was in possession of the original promissory note in order to execute a substitution of trustee appointing Recon-Trust as the substitute trustee and executing an assignment to BAC Home Loans Servicing. These were the documents that allowed the trustee to initiate foreclosure.

The court, in affirming the lower court’s dismissal, found that MERS, as the beneficiary on the deed of trust, had the right to enforce the security instrument. Additionally, the court found that under Arizona law, it was not required of MERS to be the note holder.

Arizona Court Affirms a Lower Court Decision That Possession of Note Was Not Needed for a Party to Initiate a Non-Judicial Foreclosure

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The Arizona court in Maxa v. Countrywide Loans, Inc., 2010 WL 2836958 (D. Ariz. 2010) affirmed a lower court decision that possession of the note was not needed for a party to initiate a non-judicial foreclosure. The court also affirmed that MERS had the authority under the deed of trust to commence foreclosure.

The court in reaching their decision rejected the plaintiff‘s claim that the defendants lacked the right to enforce the note; therein making the foreclosure was invalid. The court noted that a trustee’s sale was not an action to enforce the note, but rather it was an exercise of the power of sale upon default.

The court explicitly held that Arizona law bestowed power of sale on the trustee upon default or breach of the contract secured by the trust deed without reference to enforcing or producing a note or other negotiable instrument.

The court in reaching their decision also found that the plaintiff not only gave the power of sale to the trustee, but also agreed to empower MERS, as the lender’s nominee, to exercise the right to foreclose. Lastly, the court directly rejected the plaintiff’s claims of fraudulent misrepresentation based upon the notion that MERS was not a valid beneficiary.

Arizona Court Rejects Plaintiff’s Argument That MERS Lacked Authority to Foreclose

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The Arizona court in Kane v. Bosco, No. 10-CV-01787-PHX-JAT, 2010 WL 4879177 (D.Ariz. 2010), after considering the plaintiffs contentions that MERS lacked the power to assign mortgages, proceeded to reject those arguments.

In making such a rejection, the court held that MERS could assign mortgages. Contrary to plaintiffs‘ allegations, the court failed to see how the MERS System lacked authority as a nominee of lenders to assign deeds of trust. Further, the court failed to see how MERS, in assigning deeds of trust, committed any form of fraud as the plaintiff alleged.

Arizona Court Dismisses Plaintiff’s Show-Me-The-Note Claim in Its Entirety

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The Arizona Court that decided AOM Group LLC et al v. Mortgage IT, Inc. et al., No. CV 09-2639-PHX-SRB (D.Ariz.)(2010) held that the plaintiff’s ‘show me the note’ argument was lacking in merit.

The plaintiff brought an action that challenged the validity of completed trustee sale. The plaintiff made several allegations, one of which was unlawful fraudulent foreclosure by MERS and the servicer. The court after considering the arguments dismissed the plaintiff’s action its entirety.

The United States District Court for the District of Arizona Finds That the Borrower Gave MERS the Ability to Take Any Action, Which the Lender Would be Able to Take

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The United States District Court for the District of Arizona, in Blau v. America’s Servicing Company, et al, No. CV-08-773 (D. Ariz., 2009), acknowledged that MERS, acting as a beneficiary, was the proper party to execute an assignment of the deed of trust.

The borrower gave MERS the ability to take any action, which the lender would be able to take. Thus, this included the ability to assign, foreclose, and even substitute the trustee. The court also found that MERS had no liability under The Truth in Lending Act (TILA) since it had not been involved in making the loan to the plaintiff.

Alabama Court Holds That MERS’ Assignment to Current Servicer of the Mortgage Loan was Valid

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The Alabama court in Mortensen v. MERS et al, S.D. Ala. No. CV10-234-S (2010) after considering both arguments, granted summary judgment to MERS as well as all defendants.

The court found that the borrower, from his own volition, knowingly and willingly gave a mortgage interest in the property to MERS. The court also found that the mortgage in this case expressly stated that MERS was the mortgagee under the security instrument.

Accordingly, the court held that the MERS’ assignment to the current servicer of the mortgage loan was valid and assigned all MERS’ interest in the mortgage to the servicer.