Daily Archives: July 30, 2014

Chase Mortgage And The Case of The Original Note That Isn’t Original At All…(They Got Away With Foreclosure After All)

Matt Weidner law blog:

In 2010, Chase filed a document that they called an “Original Note”.  Except that at trial it turns out this was only a photocopy.  But it’s even worse than that…..after the foreclosure judgment was entered…we discovered that the mortgage had been assigned to the Secretary of Housing and Urban Development…


The judgment must be vacated because Plaintiff failed to SURRENDER the original promissory note or give a reasonable explanation for its failure to do so
 Plaintiff’s parlor tricks do not constitute competent, substantial evidence that Plaintiff has surrendered the original note to the Court
In its opening statement, Plaintiff alleged that
This is a foreclosure matter,
the original Note and Mortgage were filed
with the court back in September 30, 2010.
Trial Transcript, pg. 4, lines 12-14.

However, Plaintiff thereafter contended that the September 30, 2010 “filing” was in fact not the original note:

Well, I was unaware that
this was not an original blue ink copy of
the Note. So I’m going to be moving the
Court to amend to allow the plaintiff to
proceed under a lost note when it’s clear
that there is partial –
Trial Transcript, pg. 27, lines 7-12.

Plaintiff thereafter “withdrew” its motion to amend to “conform to the evidence” because it represented that that the purported original note “was misfiled and I don’t know why.” Trial Transcript, pg. 29, lines 11-12.
When Plaintiff presented this purported original note to defendant Ricardo Lopez on direct examination, Mr. Lopez testified as follows:

I don’t know if this is the exact one
I signed because that’s where I had — I had
been requesting to inspect these documents. So
when you said you didn’t have any knowledge that
it wasn’t in here, I’d been requesting this
since this whole thing started. I even
requested special dates and times to meet with
you guys to see it, and I never got any of that
afforded to me.
So I’ve also had other documents here
where I saw date changes. I don’t know what’s
original and what’s not.

Trial Transcript, pg. 30, lines 14-25. Bold emphasis added.
I don’t see any blue ink on that, so I
don’t know that that’s the original. You said
the other one is a copy, now you’re showing this

Trial Transcript, pg. 30, lines 14-22. Bold emphasis added.
On cross-examination, Mr. Lopez testified as follows:
I want you to compare what is marked
as Plaintiff’s Exhibit 1B, I suppose, and I want
to ask you, for the record, is there anything
that’s different about this signature and the
way it appears on 1A and 1B?

A. Yes.
Q. What’s the difference, sir?
A. The color is different.
Q. And Plaintiff’s Exhibit 2, I’m showing
that to you, do you recognize that as the
original Mortgage that you signed?

A. Yes.

Q. And were these — are these documents
all dated on the exact same day?
A. Yes.

Q. Did you sign these documents the same
A. Yes.
Q. Can you explain to the Court why one
is — well, can you describe what this subset of
Exhibit 1 is? Read from the top there.

A. The name affidavit.

Q. Yes, sir. Can you describe it for the

A. Yes. It’s all in blue ink

Trial Transcript, pg. 46, lines 1-25. Bold emphasis added.

Q. The next document, this I believe is
Plaintiff’s 2, can you describe what that
document looks like to you?

A. The Mortgage where we initialled the
bottom of every page.

Q. What color is that initial?
A. All in blue ink.
Q. And then turning to the last page of
that document, describe this document for the
record, please.

A. The signatures for the Mortgage.

Q. And what else can you tell us about
A. Those are all in blue ink.

Trial Transcript, pg. 47, lines 9-22. Bold emphasis added.

Q. (By Mr. Weidner) The documents, which
are Plaintiff’s Exhibits 1 and 2, which are the
Mortgage and which are these name affidavits,
which are signed in bright blue ink.

A. Yes.

Q. Were they signed in sequence or at the
same time and at the same place as what is
marked as Plaintiff’s Exhibit 1A?
A. Yes.

Q. And where was that?

A. At my house.

Q. And remembering back to that closing,
did you change pens?
A. No, everything was in blue ink.
Trial Transcript, pg. 50, lines 9-21. Bold emphasis added.


Q. (By Mr. Weidner) Again, did you change
your pen in the middle of closing?
A. No.
Q. Were these documents signed in
sequence one after the other?
A. Yes.

Trial Transcript, pg. 51, lines 22-25 through pg. 52, lines 1-2. Bold emphasis added.
Mr.  unrebutted testimony therefore established that the note Plaintiff introduced as Exhibit 1A was in fact not the original because: (1) there was only one closing; (2) at the closing he executed Plaintiff’s Exhibit 1B and Exhibit 2; (3) Exhibits 1B and 2 were all signed in blue ink; and (4) he did not change his pen in the middle of closing.
Rather than conceding the undisputed, Plaintiff attempted to “authenticate” its Exhibit 1A as the “original” by having its corporate representative lick his fingers and run his bodily fluids over the signature page to see whether the signature would “smudge.”  Trial Transcript, pg. 132, lines 7-11.
Such testimony cannot be considered anything other than a pallor trick by Plaintiff which provides absolutely no evidentiary support. Further, Plaintiff conceded that it was not attempting to introduce its corporate representative’s testimony as an expert witness opinion. Trial Transcript, pg. 129, lines 7-10. As such, Plaintiff’s corporate representative testified as a fact witness only.
However, upon cross-examination, the witness admitted that he had no personal knowledge of the facts at hand, that he was not present when the loan was originated or closed, and that his testimony was based solely upon his review of Plaintiff’s purported “business records”:
Q. (By Mr. Weidner) Just so the record is
clear, you were not present when this loan was
originated, correct?

A. When it was originated, no.

Q. And you were not present at any
closing, correct?

A. No, I was not.

Q. And your testimony is based
exclusively on business records?

A. Correct.

Trial Transcript, pg. 137, lines 4-13.

Consequently, Plaintiff’s attempt to “smudge” the promissory note provides absolutely no evidentiary weight upon which the Court can rely in determining that Plaintiff’s Exhibit 1A was, in fact, the original promissory note.
Most importantly, and filed in support of this motion, Defendants have retained a qualified expert witness who has averred that it is “highly probable” that Plaintiff’s Exhibit 1A is a “machine-copy” and therefore not the original note. See Defendants’ Notice of Filing Expert Findings and attached findings.
Consequently, there is no competent, substantial evidence to support a finding that Plaintiff’s Exhibit 1A is the original note.
By law, Plaintiff is required to surrender the original promissory note prior to judgment
It is an axiomatic principle of black letter law that “To maintain a mortgage foreclosure, the plaintiff must either present the original promissory note or give a satisfactory explanation for its failure to do so.” State Street Bank and Trust Company v. Lord, 851 So. 2d 790, 791 (Fla. 4th DCA 2003).
Indeed the failure to surrender the promissory note at a foreclosure trial requires the appellate court to either affirm an involuntary dismissal in favor of a defendant or reverse a final judgment of foreclosure in favor of a plaintiff. See e.g. Deutsche Bank National Trust Company v. Huber, Case No. 4D12-3696 (Fla. 4th DCA April 23, 2014) (affirming involuntary dismissal in favor of defendant in foreclosure case where plaintiff presented original promissory note but moved a copy of the note into evidence and noting that “Because a promissory note is a negotiable instrument, a plaintiff seeking to foreclose on a defendant must produce the original note (or provide satisfactory explanation of the failure to produce) and surrender it to the court or court clerk before the issuance of a final judgment in order to take it out of the stream of commerce.”); Fair v. Kaufman, 647 So. 2d 167 (Fla. 2d DCA 1994) (reversing final judgment of foreclosure after trial because plaintiff failed to introduce, at trial, the original note even though “the original note…[was] filed and placed into evidence at the summary judgment hearing. This is not sufficient. The introduction of such documents at a summary judgment proceeding does not obviate the necessity for proper introduction at trial.”)
Therefore, Plaintiff’s failure to surrender the original note requires either judgment in Defendants favor, or in the alternative, a new trial.
The Court did not make a finding that the original note had been surrendered
When it accepted Plaintiff’s Exhibit 1A into evidence, the Court did not make a factual determination that the proffered “note” was in fact the original. Rather, the Court merely “received into evidence as the documents of the original of the Note.” Trial Transcript, pg. 40, lines 24-25 through pg. 41, lines 1-6.
Moreover, while the Court’s written trial findings and orders “found that the Note and Mortgage were duly authenticated,” it failed to contain any finding that Plaintiff’s Exhibit 1A was in fact the original promissory note. See Trial Findings and Orders, Trial Proceedings, ¶4.
Consequently, and without a determination that Exhibit 1A was, in fact, the original promissory note at issue, the Court simply cannot predicate a judgment in Plaintiff’s name.
Newly discovered evidence reveals that Plaintiff may not have had the right to enforce the promissory note and mortgage
Trial courts have broad discretion to grant a new trial for newly discovered evidence provided that the newly discovered evidence fits in the following parameters:
Would the new evidence probably change the result if a new trial is granted? Has it been discovered since the trial? Could it have been discovered before the trial by the exercise of due diligence? Is it material to the issues? Is it merely cumulative or impeaching?

EI Du Pont de Nemours v. Native Hammock, 698 So. 2d 267, 269 (Fla. 3d DCA 1997).
The newly discovered evidence in this case is the assignment of mortgage which Defendants filed on March 17, 2014. Because the answer to each of the EI Du Pont analysis questions is a resounding “yes,” this newly discovered evidence creates a second basis for vacating the final judgment.
First, the assignment probably would change the result because it is further evidence that Plaintiff does not have the right to enforce the subject promissory note even had it tendered the original.
Second, the assignment was discovered after the trial.
Third, the assignment could not have been discovered before the trial because: (1) it was not recorded in Public Records of Pinellas County until three days after the trial was complete; and (2) Plaintiff refused to provide it when responding to Defendant’s pro-se second request for production #9, which was filed on July 11, 2013 and explicitly requested “[c]opies of all assignments…concerning the note and mortgage.” To the extent Plaintiff argues the assignment came into existence after this request, Plaintiff was under the continual ethical duty to furnish updated documents previously requested by Defendants.
Finally, the assignment is material to a central issue of this case, namely whether Plaintiff had standing to sue. Indeed, the Court’s trial findings and orders specifically “found that Plaintiff had standing to prosecute the foreclosure.” See Trial Findings and Orders, Trial Proceedings, ¶2. Consequently, the newly discovered evidence cannot be said to be merely cumulative or impeaching.
Therefore, the final judgment should be vacated and a new trial ordered.

House Bill Seeks Nationwide Tax On Soda

Law360, New York (July 30, 2014, 2:50 PM ET) — U.S. Congresswoman Rosa DeLauro, D-Conn., on Wednesday introduced a proposed tax on sodas and sugary beverages, a move poised to reignite a debate on the efficacy of these types of measures that have largely been non-starters at the state and local level.

The SWEET Act, as it is being referred to by DeLauro, would impose a tax of 1 cent per teaspoon of caloric sweetener — like sugar or high-fructose corn syrup — that is used in beverages. Revenues from the proposed tax would be used…

Source: Law360

County in South Carolina filing suit against MERS



The lawsuit to be filed against Mortgage Electronic Registration Systems seeks to have the database owned by nearly two dozen lenders follow the letter of South Carolina law in recording property records.

Each county’s register of deeds is required to keep records on the liens, like a mortgage, against properties in the county.

MERS, established in 2002, allegedly skirts that requirement. Every time a financial institution sells or buys a loan, a county’s register of deeds is to be notified and the new holder of the mortgage recorded.

The financial institutions that own MERS avoid the cost of making those changes by stating that MERS owns the mortgage, the mortgage holder and the county doesn’t know which financial institution holds the note.

The county’s case against Mortgage Electronic Registration Systems is being handled by Jim Scheider of the Bluffton law firm of Vaux & Marscher.

The suit being prepared for Colleton County alleges “The MERS System has created massive confusion as to the true owners of beneficial interest in mortgage loans and mortgages throughout the United States, including South Carolina, and has harmed U.S. counties, including plaintiff Colleton County. In short, the MERS System has eroded the transparency and corrupts the chain of title of the public recording system in the United States and the state of South Carolina.”

Read on.

Bank of America : BofA CEO Brian Moynihan Imposing His Own Sanctions On Russia

The amount of money Bank of America stands to lose if Vladimir Putincontinues to be Vladimir Putin is getting smaller and smaller every quarter.

The bank said in a regulatory filing late Tuesday that its net exposure toRussia stood at $3.94 billion, down more than 40% from $6.72 billion at the end of December and down from $5.21 billion at the end of March.

The bank repeated language it used in a regulatory filing in early May, citing geopolitical tension caused by “Russian intervention in Ukraine.” The U.S. and the European Union adopted broad economic sanctions against Russia on Tuesday, including against its banks and oil industry.

Read on.

Bank of America ordered to pay $1.27 bln for Countrywide fraud

A federal judge on Wednesday ordered Bank of America Corp (>> Bank of America Corp) to pay $1.27 billion of damages after a federal jury found the second-largest U.S. bank liable for fraud over defective mortgages sold by its Countrywide unit.

A federal judge on Wednesday ordered Bank of America Corp (>> Bank of America Corp) to pay $1.27 billion of damages after a federal jury found the second-largest U.S. bank liable for fraud over defective mortgages sold by its Countrywide unit.

Read on.

FTC: Bill collectors posed as cops to threaten arrest

Right on the heels of news that one in three Americans is behind on bills, comes this report about the lengths some are going to collect those debts.

The latest Consumer Financial Services Alert, from law firmBallard Spahr, is highlighting some alleged nefarious tactics from bill collectors in New York.

The New York Attorney General and Federal Trade Commission are working together to put an end to several companies, working together, who violated the rights of distressed borrowers.

“This filing is further evidence of the heightened scrutiny faced by debt collectors in New York at both the state and federal level,” the note to Ballard Spahr clients said.

Read a copy of the asset freeze and temporary restraining order, by clicking here.

The main defendant is the National Check Registry, though many other companies are named in concert.

“Weighing the equities and considering Plaintiffs’ likelihood of ultimate success, a temporary restraining order with an asset freeze, appointment of a receiver, immediate access to business premises, expedited discovery as to the existence and location of assets and documents, and other equitable relief is in the public interest,” the order states.

So what did the collectors do to deserve such an extensive correction and potential restitution for the borrowers they allegedly hounded?

According to the complaint, the defendants are suspected of, among other things:

1. Pretending to be affiliated with government entities, including law enforcement agencies.

2. Pretending to act on behalf of an attorney.

3. Telling people that nonpayment of debt will result in arrest, garnishment of wages and/or confiscation of their driver’s license.

4. Threatening other legal action if debt doesn’t get paid.

Read on.

CFPB Proposes Rule to Improve Information About Access to Credit in the Mortgage Market

Bureau Aims to Simplify the Reporting Process for Financial Institutions

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) proposed a rule to improve information reported about the residential mortgage market. The rule would shed more light on consumers’ access to mortgage credit by updating the reporting requirements of the Home Mortgage Disclosure Act (HMDA) regulations. The Bureau also aims to simplify the reporting process for financial institutions.

“It is critical that we shed more light on the mortgage market – the largest consumer financial market in the world,” said CFPB Director Richard Cordray. “The Home Mortgage Disclosure Act helps financial regulators and public officials keep a watchful eye on emerging trends and problem areas in the mortgage market. Today’s proposal would help us understand better how to protect consumers’ access to mortgage credit while simplifying the reporting requirements for financial institutions.”

HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities and identify possible discriminatory lending patterns.

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in 2010 in response to the mortgage market crisis. The Dodd-Frank Act directed the CFPB to expand the HMDA dataset to include additional information about loans that would be helpful to better understand these aspects of the mortgage market.

In 2012, 7,400 financial institutions reported information about approximately 18.7 million mortgage applications and loans. While the HMDA dataset is the leading source of information about the mortgage market, it has not kept pace with the market’s evolution. For example, the HMDA data do not provide adequate information about certain loan features that helped contribute to the mortgage crisis, such as adjustable-rate mortgages and non-amortizing loans.

Today’s announcement is part of the Bureau’s public rulemaking process to improve HMDA that began in February when the CFPB convened a panel of small businesses to provide feedback on possible changes to the regulations. The Bureau is proposing to improve the quality and type of HMDA data as required by the Dodd-Frank Act. The Bureau is also looking at ways to make submission of data easier for lenders and to improve the user experience in accessing the public data.

Better Information About the Mortgage Market

To provide better information about residential mortgage credit, the Bureau is proposing changes to the rules that establish what data financial institutions are required to provide. The Bureau wants to improve the quality of HMDA data in today’s housing market. The proposed changes include:

  • Improving market information: In the Dodd-Frank Act, Congress directed the Bureau to update HMDA regulations by having lenders report specific new information that could help identify potential discriminatory lending practices and other issues in the marketplace. This new information includes, for example: the property value; term of the loan; total points and fees; the duration of any teaser or introductory interest rates; and the applicant’s or borrower’s age and credit score.
  • Monitoring access to credit: The Bureau is proposing that financial institutions provide more information about underwriting and pricing, such as an applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan. This information would help regulators determine how the Ability-to-Repay rule is impacting the market, and would also help the Bureau monitor developments in specific markets such as multi-family housing, affordable housing, and manufactured housing. The proposed rule would also require that covered lenders report, with some exceptions, all loans related to dwellings, including reverse mortgages and open-end lines of credit.

Read on.

Stephen Colbert Announces He Owns ‘TheSarahPalinChannel.com’

Absolutely hilarious:

This is just hilarious. Following the announcement that Sarah Palin was going to launch her own online subscription channel, and after quite a bit of mockery on that same subject, Stephen Colbert announced that they’ve bought thesarahpalinchannel.com.

The only Sarah Palin Channel on the internet with a definite article in the address!

Palin’s new site is sarahpalinchannel.com.

Here is The Colbert Report video. Click here.

Homeowner Program Faces Mounting Application Backlog

The Obama administration’s signature program to aid struggling homeowners has hit another speed bump: The mortgage companies processing applications can’t keep up with demand.

More than 221,000 applications to the Home Affordable Modification Program were waiting to be processed by mortgage servicers at the end of May, according to a government report scheduled for release Wednesday. That is up from a backlog of 133,649 unprocessed applications at the end of November.

Read on.

Multiple interests at stake in Mass. title-clearing bill talks

Improper foreclosures have jammed up homeowners who purchased the properties from banks leading to a late-session push for legislation that opponents claim would unfairly bar those who lost their homes from winning back the titles.

The bill (S 1987) would create a one-year period starting the day it takes effect as law where those who lost homes because of improper foreclosures could sue to regain the title. Going forward, the House and Senate have differed on the window of time until any discrepancy in title would be cleared by another document. The legislation would not limit those who lost homes from suing banks for monetary damages.

“We’re hoping frankly that the bill goes nowhere,” said Roxanne Reddington-Wilde, treasurer of the Massachusetts Alliance Against Predatory Lending. Though the organization opposes both versions, Reddington-Wilde said the alliance prefers language recently adopted in the House that would provide a 10-year window going forward rather than the 3-year window approved by the Senate in January.

Read on.