Daily Archives: November 11, 2014

Pennington v. Ocwen- New Foreclosure Case

Matt Weidner law blog:

New Foreclosure Case

MARK PENNINGTON, Appellant,

v.
OCWEN LOAN SERVICING, LLC, Appellees.

Case No. 1D13-3072.District Court of Appeal of Florida, First District.Opinion filed November 6, 2014.George Gingo and James E. Orth Jr., of Gingo & Orth, P.A., Titusville, for Appellant.

Curtis A. Wilson of McCalla Raymer, LLC, Tampa for Ocwen Loan Servicing, LLC, David D. Rottmann, Jacksonville, for Windsor Falls Condominium Association, Inc., Colleen Colton of Shapiro & Fishman, Boca Raton, Colin Paul-Anthony Blackwood of McGlinchey St, for Appellees.

ON MOTION FOR CLARIFICATION

PER CURIAM.

We grant Appellant’s Motion for Clarification, withdraw our previous opinion filed on September 16, 2014, and substitute the following opinion in its place.

Appellant, Mark Pennington (“Pennington”), appeals the final judgment offoreclosure against him and in favor of Appellee, Ocwen Loan Servicing, LLP (“Ocwen”). Because Ocwen failed to establish its standing to foreclose, or to refute Pennington’s affirmative defense contesting standing, we reverse and remand for the trial court to enter judgment in favor of Pennington.

In April 2007, Pennington executed a promissory note and mortgage on his condominium. The note was “payable to order” under section 673.1091, Florida Statutes, because it specifically named E.Q. Financial, Inc., the lender, as payee. § 673.1091, Fla. Stat. (“A promise or order that is payable to order is payable to the identified person.”). Mortgage Electronic Registrations Systems, Inc. (MERS) acted as nominee on behalf of E.Q. Financial. The note did not have any indorsements, but attached to the note was an allonge, which made the note payable to Countrywide Home Loans, Inc. The allonge was a special indorsement because it named a specific payee: Countrywide. See § 673.2051(1), Fla. Stat. As such, negotiation of the note required both possession and an indorsement by Countrywide. Id. (A specially indorsed negotiable instrument “becomes payable to the identical person and may be negotiated only by the indorsement of that person.”).

In January 2009, MERS purported to transfer the mortgage and note to Ocwen. Countywide was not involved. When Pennington failed to make payments, Ocwen filed a May 4, 2009 complaint, initiating foreclosure proceedings against him. After the filing of the complaint, Ocwen assigned the note and mortgage to Federal Home Loan Mortgage Corporation (Freddie Mac), who eventually assigned it back to Ocwen. This final re-assignment back to Ocwen failed to transfer the note.

Throughout his pleadings, as well as at trial, Pennington asserted the affirmative defense of lack of standing, arguing that Ocwen was not entitled to enforce the note. Ultimately, however, the trial court entered the instant order in favor of Ocwen.

We review the sufficiency of the evidence to prove standing to bring a foreclosureaction de novo. Lacombe v. Deutsche Bank Nat’l Trust Co., 2014 WL 5139296 (Fla. 1st DCA Oct. 14, 2014). A plaintiff who is not the original lender may establish standing to foreclose by submitting a note with a blank or special indorsement, an assignment of the note, or an affidavit otherwise proving his status as holder of the note. Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013); see also Mazine v. M & I Bank, 67 So. 3d 1129, 1132 (Fla. 1st DCA 2011) (“To establish standing to foreclose, it must be demonstrated that the plaintiff holds the note and mortgage in question.”). Standing must be established at the time of the filing of theforeclosure action. Focht, 124 So. 3d at 310. Additionally, a bank must also have standing at the time final judgment is entered. See Boumarate v. HSBC Bank USA, N.A., 109 So. 3d 1239, 1239 (Fla. 5th DCA 2013); Beaumont v. Bank of New York Mellon, 81 So. 3d 553, 555 (Fla. 5th DCA 2012).

In this case, Ocwen failed to demonstrate it had standing to enforce the note. Its exhibits did not qualify as an indorsement from Countrywide to Ocwen or as an assignment from Countrywide to Ocwen (while Ocwen submitted a copy of a letter it had written to Pennington informing him of an assignment from Countrywide to Ocwen, the actual assignment itself was never produced). And while Ocwen filed an affidavit of lost note alleging it was the lawful owner of the note so as to establish standing at the time the lawsuit was filed, see McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 174 (Fla. 4th DCA 2012) (“[I[f the affidavit itself is executed before the lawsuit is filed, the allegation that the plaintiff is the `owner and holder of the note’ is sufficient to establish the plaintiff’s standing at the inception of the lawsuit[]”), that affidavit was a nullity since negotiation of the note required not only possession, but an indorsement from Countywide to Ocwen. See § 673.2051(1), Fla. Stat. But such was lacking here. Likewise, the record contains no proof by Ocwen that it had standing under any of the means established by section 673.3011, Florida Statutes. See Mazine, 67 So. 3d at 1130. Because Ocwen failed to establish standing either at the time of filing the suit or at the time of judgment, the trial court should have granted Pennington’s motion for involuntary dismissal for lack of standing.

While this issue is dispositive, we also note that Ocwen’s problems were further compounded when the final assignment from Freddie Mac to Ocwen was only for the mortgage; Ocwen’s own records custodian admitted this below. Notwithstanding the lack of evidence to prove the Countrywide assignment, even if Ocwen had standing at the commencement of the suit, it would have lost such standing when it was no longer legally entitled to own or enforce the note. See Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903 (Fla. 1st DCA 2013).

Accordingly, we REVERSE the judgment below, and direct the trial court to enter final judgment for Pennington.

The American people have spoken (cartoon)

As we are honoring Veteran’s Day for the current and deceased vets that sacrificed their lives for the freedoms that we have this country, I am reminded of Thomas Jefferson’s quote where our freedoms in this country are being stripped and our rights of voting is being suppressed and brought and paid for by big corporations:

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”–Thomas Jefferson

Leaked Geithner files paint EU leaders as bumblers

WASHINGTON (MarketWatch) — Former U.S. Treasury Secretary Timothy Geithner might face another “stress test” of his own amid publication of his unflattering portrait of many European financial leaders.

In blunt language largely missing from his memoir, entitled“Stress Test,” Geithner portrayed continental leaders as vindictive, obsessively short-sighted and lacking a coherent policy to stave off a financial crisis that threatened to break the European Union apart, according to documents reviewed by the Financial Times.

Take European Central Bank President Mario Draghi’s famous statement in 2012 that he would do “whatever it takes” to save the EU, such as buying the sovereign bonds of countries like Greece that were under the most pressure. Geithner said he was told by Draghi it was an off-the-cuff remark that he did not discuss with other bank members.

Read on.

NCUA Sues Deutsche Over Handling Of $140M In RMBS Trusts

Law360, New York (November 10, 2014, 9:17 PM ET) — The National Credit Union Administration sued Deutsche Bank National Trust Co. in New York federal court Monday, saying it was derelict in its duties as trustee of $140 billion worth of residential mortgage-backed securities certificates owned by five failed credit unions.

Deutsche trusteed 121 trusts, each with hundreds of mortgage loans in it, that NCUA says had an original face value of $140 billion altogether. The NCUA said Deutsche should have known from “an overwhelming number of events” that there were issues with the trusts. But…

Source: Law360

Are VA loans fulfilling their duty?

Veterans are allotted unique products through theVeterans Administration to help financially assist them in becoming homeowners. However, an article in the Credit Union Times noted that credit unions are not using the product offering to its fullest potential.

“In general, I don’t think credit unions need to create special products just for veterans,” said Debbie Guiney, CEO of the $69 million Allcom Credit Union in Worcester, Mass. “They just need us to be aware they are out there and for us to reach out to make sure they know about what we offer and how it can help them.”

Under the current system, Son Nguyen, founder and CEO of Veterans Association of Real Estate Professionals, was quoted saying he was frustrated that neither theNational Credit Union Administration nor the VA tracks the numbers of credit unions offering VA loans. But he said he is certain more credit unions need to offer them.

“No doubt reforming the VA loan would help more institutions offer it,” Nguyen said. “But nevertheless, it needs to be offered more routinely and more veterans need to be told about it,” he said.

VA loans requirs no down payments on loans less than $417,000 and may not require a down payment on higher loan amounts. Additionally, VA loans have lower interest rates and do not require mortgage insurance.

Recently, the VA chief announced that the entire department was in need of, and will get, a complete restructuring.

The Credit Union Times article explained that the way its works is the VA provides a guarantee for VA loans in much the same way the Federal Housing Administrationprovides insurance for loans, according to the agency. The guarantee, or entitlement, refers to the amount of the loan the Veterans Administration will pay in case of default.

Nguyen stopped short of charging lenders with deliberately underselling VA loans, but noted one of the reforms VAREP has been seeking would require lenders to include VA loans in the loan disclosures put in front of veterans as part of the loan process.

WashingtonFirst Chief Pushes Bank’s Employees to Become Customers

It makes intuitive sense that a bank would want its own employees to become customers, though it recently took a little more encouragement to coax a number of the WashingtonFirst Bank’s employees to open accounts.

Shaza Andersen, the Reston, Va., bank’s chief executive, sent out a companywide email late last month stating that employees who did not deposit paychecks into a WashingtonFirst account would be required to pick up paper checks — from her office.

For Andersen, the policy promotes employee loyalty and familiarity with the $1.4 billion-asset bank’s products, while offering some nice perks.

“I’m giving them free checking, free checks, free stop payments,” she said in an interview. “I’m giving them everything for free.”

Think of it as running a high-end clothing store, and expecting all your employees to wear your clothes on the sales floor.

“Just like at Vineyard Vines, if you work there, you have to wear their clothes to show up to work,” Andersen said. “But for me, we happen to be a bank, and you have to support where you work.”

Read on.

The real problem with Americans and their disrespect for Obama—according to a Canadian

From the words of a Canadian.