Bergeron v. New York Community Bank
July 31, 2015
Plaintiff Jillian Bergeron appeals a Superior Court order lifting a preliminary injunction on the foreclosure sale of her home and dismissing her case. Plaintiff executed a promissory note in favor of Drew Mortgage Associates, Inc. The Mortgage identified Drew Mortgage as the lender, plaintiff as the mortgagor, and Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee. MERS later assigned the Mortgage to defendant New York Community Bank. The Note was also apparently transferred a number of times, because an allonge with a number of endorsements appears in the record. Defendant notified plaintiff of the foreclosure sale. On or about April 15, 2013, plaintiff filed a verified petition to enjoin the foreclosure sale and for an ex parte restraining order. She admitted falling behind on her payments, but challenged defendant’s authority to foreclose because “[i]t appears that at the very least, [the defendant] does not own the note.” Following denial of plaintiff’s loan modification application, defendant requested that the court lift the injunction and allow the foreclosure sale to proceed. The court did so, ruling, in relevant part, that defendant “has the authority to foreclose whether it actually holds the note or is merely acting as an agent for the entity which holds the note.” On appeal, plaintiff argued that the trial court erred in: (1) ruling that the entity foreclosing a mortgage need not hold both the mortgage and the note; (2) finding that plaintiff clearly intended that the Note and Mortgage be held by separate entities; and (3) failing to make the necessary finding that defendant was entitled to enforce the Note. These specific arguments, however, were largely subsumed within plaintiff’s more general contention that because “the mortgage and note are not severable,” a mortgagee must be entitled to enforce the promissory note in order to conduct a foreclosure sale pursuant to RSA chapter 479. The Supreme Court affirmed. Because the Mortgage evidenced an agency relationship between the lender (Drew Mortgage) and the mortgagee (MERS), and the Mortgage contemplated that both the lender and MERS could assign their interests, and plaintiff did not challenge the validity of the assignment of either the Note or the Mortgage, the Court concluded that defendant has the authority, as agent of the noteholder, to exercise the power of sale. Therefore, the Court held that the trial court did not err in lifting the injunction and dismissing the action. The Court did not address whether defendant could foreclose if the agency relationship was irregular or legitimately challenged by the plaintiff. We also need not decide whether, absent an agency relationship between the noteholder and the mortgage holder, a party who holds only the mortgage has the authority to foreclose.
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Cosajay v. MERS - Homeowners Have the Right to CHALLENGE Assignments
July 12, 2015
A Watershed Moment in Foreclosure Battle: Judge McConnell Hailed as Savior to Thousands of Downtrodden Homeowners
Federal Court Judge John J. McConnell issued a decision in the Cosajay v. MERS case this week. This case provides the plaintiffs with an opportunity to over-turn thousands of home foreclosure cases and will be viewed as a watershed moment in foreclosure law. Judge McConnell's decision in the case puts to bed once and for all the contention that homeowners have no right to challenge fraudulent assignments appearing in their chain of title.
In the 11 page decision, he wrote, in part:
“The Court DENIES Defendants’ Motion to Dismiss (ECF No. 5) and finds that Ms. Cosajay has standing to bring this lawsuit against Defendants … the Court finds that Rhode Island law provides that same dual ideas basis for deviating from the general contract rule … Therefore, the Court finds that Rhode Island law provides that same protection to mortgagors in the same situations in which the first circuit found the Culhane and Woods plaintiffs under Massachusetts law.”
This ruling will impact not only every foreclosure case filed in Rhode Island Supreme Court, but also every foreclosure case across the country. “By far, this is the biggest decision concerning home foreclosure by a judge in the country in recent years.” said Attorney Babcock. “Judge McConnell took one swoop of his pen and changed the outcome of thousands of home foreclosure cases”
Over the last five years the issue of whether or not a plaintiff (homeowner) can sue a defendant (a lender) has been challenged at every step of the ongoing home foreclosure battle. This ruling by McConnell will bring a new perspective to every home foreclosure case ruling thus far in the Rhode Island Courts, and reinvigorates homeowners resolve to continue fighting the bank and mortgage servicers.
“As a result of the visionary decision by Judge McConnell, today is a new day in home foreclosure law.”
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Phyllis Horace vs. LaSalle Bank National Association et. el.
March 30, 2011
The judge issued a summary judgment ruling, tossing out the foreclosure action due to lack of trustee standing:“The ruling prevents defendant LaSalle Bank – as the trustee holding the plaintiff’s securitized mortgage – from proceeding with a foreclosure because the trust failed to follow its own pooling and servicing agreement, and did not follow applicable New York law when trying to “obtain assignment of Horace’s note and mortgage,” according to the court order. Without proof the mortgage had been assigned to the trust, in this case a Bear Stearns-related mortgage trust, the trustee lacked standing to foreclose, the court found.”
In other words, if the process of securitizing mortgages is not done properly by failing to assign the loan note (and/or physically keep track of it), you lose the right to subsequently foreclose in the event of a default.
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Deutsche Bank Natl. Trust Co. v. Francis
2011 NY Slip Op 50423(U)
March 25, 2011
The borrowers originally borrowed from Fremont Investment & Loan and the note was recorded by MERS. MERS then assigned the mortgage and note to Deutsche Bank but the alleged assignment was never recorded in ACRIS. Therefore, the Court ruled that Deutsche Bank was not the holder of the note and mortgage on the day the foreclosure action commenced therefore Deutsche Bank lacked standing.
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Countrywide Home Loans, Inc. v. Gress
2009 NY Slip 08989
December 1, 2009
The subject mortgage was not assigned to Countrywide until five months after the commencement of the foreclosure action. Therefore, Countrywide lacked standing to bring the foreclosure action. The assignment recited that it was retroactive, however a retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of the assignment.
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Wells Fargo Bank, N.A. v. Marchione
2009 NY Slip Op 07624
69 AD3d 204
October 20, 2009
Borrower’s executed a mortgage with lender Option One Mortgage. Option One Mortgage subsequently assigned its right, title, and interest in the mortgage to Wells Fargo. The assignment had not yet existed at the time of the commencement of the foreclosure action, therefore, Wells Fargo was barred from bringing a foreclosure action because they lacked standing.
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OneWest Bank F.S.B. v. Drayton
29 Misc 3d 1021
October 21, 2010
The Court dismissed the foreclosure action and ruled that OneWest relied on admitted robo-signers to transfer a mortgage and failed to prove that it owns the property in question. The robo-signer, Eric Johnson-Seck admitted that she executes 750 foreclosure documents a week, without a notary present, does not spend more then 30 seconds signing each document, and does not read the documents before signing.
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Wells Fargo, Litton Loan v. Farmer
2008 NY Slip Op 51133(U)
19 Misc 3d 1141
Plaintiff has renewed its application for an order of reference for the subject premises, but
the papers submitted fail to cure the defects enumerated in the prior decision and order. Two invalid assignments of the instant mortgage and note took place, and both of these assignments were not recorded for more than fourteen months, when they were both recorded at that same time. The plaintiff, WELLS FARGO, does not own the instant mortgage loan. Therefore, this action was dismissed with prejudice.
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Wells Fargo Bank N.A. v. Reyes
NY Supp 2008
In Wells Fargo v. Reyes, the plaintiff by an ex parte motion attempts to serve the defendant by publication when they cannot locate defendant. Judge Schack denies the motion and finds that Wells Fargo does not now and has never owned the property they are trying to foreclose upon. Since Wells Fargo does not own the mortgage they do not have standing and their complaint is dismissed. Judge Schack further stated that the attorney’s actions could be considered frivolous and set a hearing for Wells Fargo’s attorneys to explain their actions.
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Indymac Bank,FSB v. Boyd
2009 NY Slip Op 50094(U)
22 Misc 3d 1112
In Indymac Bank,FSB v. Boyd, Judge Schack denies IndyMac’s request for an order of reference with leave to renew. The judge finds that because the assignment of the mortgage took place after the initiation of foreclosure the bank does not have standing to foreclose. Since at the time of foreclosure the bank could not show that they had ownership of the mortgage they did not have the ability to foreclose.
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Lasalle Bank v. Smith, MERS
2010 NY Slip Op 50470(U)
26Misc 3d 1239
In Lasalle Bank v. Smith, MERS, Judge Schack denied Lasalle Bank an order of reference for failing to provide the court with the proper documentation to foreclose. Lasalle did not follow the appropriate statute and failed to submit an affidavit of facts from someone with knowledge at Lasalle or an affidavit from someone with power of attorney from the bank. MERS also failed to provide an affidavit for itself or from someone with power of attorney from MERS. The attorneys for the foreclosing parties did not produce affirmations explaining how they were able to act as counsel for both Lasalle and MERS in the same action without it being a conflict of interest.
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Wells Fargo Bank, Americas Servicing Company, MERS v Hunte
2010 NY Slip Op 50637 (U)
Judge Schack denied Wells Fargo’s motion for foreclosure with prejudice and dismissed the complaint because Wells Fargo lacked standing to foreclose. The judge through his own research found out that this mortgage had already been satisfied ten months before and the bank’s attorneys never informed the court. Judge Schack also set a hearing for the plaintiff’s attorneys to be given a chance to explain why their conduct was not frivolous and possibly to impose sanctions for their behavior.
July 31, 2015
Plaintiff Jillian Bergeron appeals a Superior Court order lifting a preliminary injunction on the foreclosure sale of her home and dismissing her case. Plaintiff executed a promissory note in favor of Drew Mortgage Associates, Inc. The Mortgage identified Drew Mortgage as the lender, plaintiff as the mortgagor, and Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee. MERS later assigned the Mortgage to defendant New York Community Bank. The Note was also apparently transferred a number of times, because an allonge with a number of endorsements appears in the record. Defendant notified plaintiff of the foreclosure sale. On or about April 15, 2013, plaintiff filed a verified petition to enjoin the foreclosure sale and for an ex parte restraining order. She admitted falling behind on her payments, but challenged defendant’s authority to foreclose because “[i]t appears that at the very least, [the defendant] does not own the note.” Following denial of plaintiff’s loan modification application, defendant requested that the court lift the injunction and allow the foreclosure sale to proceed. The court did so, ruling, in relevant part, that defendant “has the authority to foreclose whether it actually holds the note or is merely acting as an agent for the entity which holds the note.” On appeal, plaintiff argued that the trial court erred in: (1) ruling that the entity foreclosing a mortgage need not hold both the mortgage and the note; (2) finding that plaintiff clearly intended that the Note and Mortgage be held by separate entities; and (3) failing to make the necessary finding that defendant was entitled to enforce the Note. These specific arguments, however, were largely subsumed within plaintiff’s more general contention that because “the mortgage and note are not severable,” a mortgagee must be entitled to enforce the promissory note in order to conduct a foreclosure sale pursuant to RSA chapter 479. The Supreme Court affirmed. Because the Mortgage evidenced an agency relationship between the lender (Drew Mortgage) and the mortgagee (MERS), and the Mortgage contemplated that both the lender and MERS could assign their interests, and plaintiff did not challenge the validity of the assignment of either the Note or the Mortgage, the Court concluded that defendant has the authority, as agent of the noteholder, to exercise the power of sale. Therefore, the Court held that the trial court did not err in lifting the injunction and dismissing the action. The Court did not address whether defendant could foreclose if the agency relationship was irregular or legitimately challenged by the plaintiff. We also need not decide whether, absent an agency relationship between the noteholder and the mortgage holder, a party who holds only the mortgage has the authority to foreclose.
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Cosajay v. MERS - Homeowners Have the Right to CHALLENGE Assignments
July 12, 2015
A Watershed Moment in Foreclosure Battle: Judge McConnell Hailed as Savior to Thousands of Downtrodden Homeowners
Federal Court Judge John J. McConnell issued a decision in the Cosajay v. MERS case this week. This case provides the plaintiffs with an opportunity to over-turn thousands of home foreclosure cases and will be viewed as a watershed moment in foreclosure law. Judge McConnell's decision in the case puts to bed once and for all the contention that homeowners have no right to challenge fraudulent assignments appearing in their chain of title.
In the 11 page decision, he wrote, in part:
“The Court DENIES Defendants’ Motion to Dismiss (ECF No. 5) and finds that Ms. Cosajay has standing to bring this lawsuit against Defendants … the Court finds that Rhode Island law provides that same dual ideas basis for deviating from the general contract rule … Therefore, the Court finds that Rhode Island law provides that same protection to mortgagors in the same situations in which the first circuit found the Culhane and Woods plaintiffs under Massachusetts law.”
This ruling will impact not only every foreclosure case filed in Rhode Island Supreme Court, but also every foreclosure case across the country. “By far, this is the biggest decision concerning home foreclosure by a judge in the country in recent years.” said Attorney Babcock. “Judge McConnell took one swoop of his pen and changed the outcome of thousands of home foreclosure cases”
Over the last five years the issue of whether or not a plaintiff (homeowner) can sue a defendant (a lender) has been challenged at every step of the ongoing home foreclosure battle. This ruling by McConnell will bring a new perspective to every home foreclosure case ruling thus far in the Rhode Island Courts, and reinvigorates homeowners resolve to continue fighting the bank and mortgage servicers.
“As a result of the visionary decision by Judge McConnell, today is a new day in home foreclosure law.”
________________________________________________________________________________________________________________________
Phyllis Horace vs. LaSalle Bank National Association et. el.
March 30, 2011
The judge issued a summary judgment ruling, tossing out the foreclosure action due to lack of trustee standing:“The ruling prevents defendant LaSalle Bank – as the trustee holding the plaintiff’s securitized mortgage – from proceeding with a foreclosure because the trust failed to follow its own pooling and servicing agreement, and did not follow applicable New York law when trying to “obtain assignment of Horace’s note and mortgage,” according to the court order. Without proof the mortgage had been assigned to the trust, in this case a Bear Stearns-related mortgage trust, the trustee lacked standing to foreclose, the court found.”
In other words, if the process of securitizing mortgages is not done properly by failing to assign the loan note (and/or physically keep track of it), you lose the right to subsequently foreclose in the event of a default.
________________________________________________________________________________________________________________________
Deutsche Bank Natl. Trust Co. v. Francis
2011 NY Slip Op 50423(U)
March 25, 2011
The borrowers originally borrowed from Fremont Investment & Loan and the note was recorded by MERS. MERS then assigned the mortgage and note to Deutsche Bank but the alleged assignment was never recorded in ACRIS. Therefore, the Court ruled that Deutsche Bank was not the holder of the note and mortgage on the day the foreclosure action commenced therefore Deutsche Bank lacked standing.
________________________________________________________________________________________________________________________
Countrywide Home Loans, Inc. v. Gress
2009 NY Slip 08989
December 1, 2009
The subject mortgage was not assigned to Countrywide until five months after the commencement of the foreclosure action. Therefore, Countrywide lacked standing to bring the foreclosure action. The assignment recited that it was retroactive, however a retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of the assignment.
________________________________________________________________________________________________________________________
Wells Fargo Bank, N.A. v. Marchione
2009 NY Slip Op 07624
69 AD3d 204
October 20, 2009
Borrower’s executed a mortgage with lender Option One Mortgage. Option One Mortgage subsequently assigned its right, title, and interest in the mortgage to Wells Fargo. The assignment had not yet existed at the time of the commencement of the foreclosure action, therefore, Wells Fargo was barred from bringing a foreclosure action because they lacked standing.
________________________________________________________________________________________________________________________
OneWest Bank F.S.B. v. Drayton
29 Misc 3d 1021
October 21, 2010
The Court dismissed the foreclosure action and ruled that OneWest relied on admitted robo-signers to transfer a mortgage and failed to prove that it owns the property in question. The robo-signer, Eric Johnson-Seck admitted that she executes 750 foreclosure documents a week, without a notary present, does not spend more then 30 seconds signing each document, and does not read the documents before signing.
________________________________________________________________________________________________________________________
Wells Fargo, Litton Loan v. Farmer
2008 NY Slip Op 51133(U)
19 Misc 3d 1141
Plaintiff has renewed its application for an order of reference for the subject premises, but
the papers submitted fail to cure the defects enumerated in the prior decision and order. Two invalid assignments of the instant mortgage and note took place, and both of these assignments were not recorded for more than fourteen months, when they were both recorded at that same time. The plaintiff, WELLS FARGO, does not own the instant mortgage loan. Therefore, this action was dismissed with prejudice.
________________________________________________________________________________________________________________________
Wells Fargo Bank N.A. v. Reyes
NY Supp 2008
In Wells Fargo v. Reyes, the plaintiff by an ex parte motion attempts to serve the defendant by publication when they cannot locate defendant. Judge Schack denies the motion and finds that Wells Fargo does not now and has never owned the property they are trying to foreclose upon. Since Wells Fargo does not own the mortgage they do not have standing and their complaint is dismissed. Judge Schack further stated that the attorney’s actions could be considered frivolous and set a hearing for Wells Fargo’s attorneys to explain their actions.
________________________________________________________________________________________________________________________
Indymac Bank,FSB v. Boyd
2009 NY Slip Op 50094(U)
22 Misc 3d 1112
In Indymac Bank,FSB v. Boyd, Judge Schack denies IndyMac’s request for an order of reference with leave to renew. The judge finds that because the assignment of the mortgage took place after the initiation of foreclosure the bank does not have standing to foreclose. Since at the time of foreclosure the bank could not show that they had ownership of the mortgage they did not have the ability to foreclose.
________________________________________________________________________________________________________________________
Lasalle Bank v. Smith, MERS
2010 NY Slip Op 50470(U)
26Misc 3d 1239
In Lasalle Bank v. Smith, MERS, Judge Schack denied Lasalle Bank an order of reference for failing to provide the court with the proper documentation to foreclose. Lasalle did not follow the appropriate statute and failed to submit an affidavit of facts from someone with knowledge at Lasalle or an affidavit from someone with power of attorney from the bank. MERS also failed to provide an affidavit for itself or from someone with power of attorney from MERS. The attorneys for the foreclosing parties did not produce affirmations explaining how they were able to act as counsel for both Lasalle and MERS in the same action without it being a conflict of interest.
________________________________________________________________________________________________________________________
Wells Fargo Bank, Americas Servicing Company, MERS v Hunte
2010 NY Slip Op 50637 (U)
Judge Schack denied Wells Fargo’s motion for foreclosure with prejudice and dismissed the complaint because Wells Fargo lacked standing to foreclose. The judge through his own research found out that this mortgage had already been satisfied ten months before and the bank’s attorneys never informed the court. Judge Schack also set a hearing for the plaintiff’s attorneys to be given a chance to explain why their conduct was not frivolous and possibly to impose sanctions for their behavior.
HELPING TO PRESERVE THE AMERICAN DREAM
SINCE 2008
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A Brixton International Subsidiary
