Respectfully
submitted,
________________________
John
A. Reed
40 Maple Ave..
Centerville, Ohio 45459
937-890-2576
Yotraj@Yahoo.comSERVICE
A true and exact copy of the foregoing has been served this 16th day
of August, 2010 via email as follows:
Attys for Plaintif
Amelia A. Bower (0013474)
and
David Van Slyke (0077721)
300 East Broad St., Suite 590
Columbus, Ohio 43235
Via email @ abower@plunkettcooney.com
And dvanslyke@plunkettcooney.com
and
Sara M. Petersmann 0055402
Lerner, Sampson & Rothfuss
P.O. Box 5480
Cincinnati, Ohio 45201-5480
Via email @ attyemail@lsrlaw.com
Atty for Defendant John L. Reed
Thomas W. Kendo
7925 Paragon Rd.
Dayton, Ohio 45459
Via email @ tkendo@midam-title.com
CERTIFICATE OF SERVICE
THE UNDERSIGNED HEREBY CERTIFIES that a true and correct
copy of the foregoing has been forwarded, via U,
Introductory Statement
As an initial matter, Defendant freely acknowledges that Plaintiff filed
this lawsuit in 2008, and much litigation has since ensued, including an
appeal and motion for relief from judgment pursuant to Civ. R. 60(B). This
does not, however, change the fact that the Court did not have jurisdiction
to hear this matter, nor was Plaintiff Wells Fargo Bank N.A. as Trustee the
real party in interest entitled to enforce the note and mortgage on February
27th, 2008, the date Plaintiff filed the foreclosure complaint, or can it be at
any point thereafter, without Plaintiff having first been assigned or
otherwise been legally vested as the true Holder in Due Course of the note
& mortgage in question. Defendant submits that Plaintiff is and was not.
Plaintiff Wells Fargo Bank N.A. as Trustee lacked standing to bring this
action because it was not the holder of the note or the assignee of the
mortgage at the time it filed suit. If a party does not have standing at the
time the complaint is filed, it is a jurisdictional problem that cannot later be
cured.
The question of standing is a threshold question of whether the party has
a personal stake in the outcomeand if that personal stake does not exist
when the lawsuit is filed, the suit must be dismissed. Plaintiff Wells Fargo
Bank N.A. as Trustee had no legal interest at the time it filed the complaint,
and standing cannot exist without a legal right or claim.
Since the foreclosing bank relied on an after-acquired interest in the
note and mortgage to establish its right to enforce the agreements, then I
Move the Court to vacate the judgment. I need not proceed under Civ.R.
60(B) because the judgment is void. The Schwartzwald decision states that
standing has to exist at the time the case is filed, and if it doesnt exist, the
jurisdiction of the common pleas court was not, could not have been
invoked. A court without jurisdiction cannot enter any judgment (except one
dismissing the case for lack of jurisdiction). A motion to vacate a void (as
II.
2 Civ.R. 10(D) requires attachment to the pleading of a copy of the written account or any other written instrument when a claim
or defense is founded on those documents.Fed. Home Loan Mtge. Corp. v. Schwartzwald, 2012-Ohio-5017. (Standing is required
to invoke the jurisdiction of the common pleas court, and it is determined as of the filing of the complaint.)
Wells Fargo v. Burrows, 2012-Ohio-5995 (9th Dist.)(A plaintiff must attach documents evidencing the right to enforce both the
note and the mortgage to the complaint to show standing, or be subject to dismissal.)
HSBC Bank USA, N.A. v. Sherman, 2013-Ohio-4220 (1st Dist.)(Determination of standing should be made based on attachments
to a complaint, but standing in a foreclosure action can be established by showing the right to enforce either the note or mortgage.
Also adopted in the Second, Fifth, Eleventh, and Twelfth Districts.)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (To survive a motion for summary judgment for lack of standing, a party
must set forth by affidavit or other evidence specific facts to support its claim.)
3 I would write Blank but according to SEC Law, if I did that then I would be representing that only Blank was
the authorized holder, those would be the same SEC laws which require the word Bearer to be inserted before this
Allonge can be treated as a Bearer instrument.
4 Blacks 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. While motive is the
inducement to do some act, intent is the mental resolution or determination to do it. When the intent to do an act that
violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.
the SPV containing Defendants alleged Note & Mortgage (again without a
physical assignment, no proof of transfer, no proof of negotiation, no receipt
of delivery, etc.) to the securitized trusts Depositor,8 Securitized Asset
Backed Receivables LLC(Entity D) (SABR) who then allegedly deposits
and transfers all of their interests and rights (yet again without a physical
assignment, no proof of transfer, no proof of negotiation, no receipt of
6 Blacks 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. While motive is the
inducement to do some act, intent is the mental resolution or determination to do it. When the intent to do an act that
violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.
delivery, etc.) to the notes and mortgages in the SPV9 to the Trust (Entity
E).
10
Option One (Entity B) then alleges (with intent and scienter11) to have
assigned the note and mortgage to Plaintiff (Entity E) by assignment of
Mortgage (ex**) executed March 7th, 2008. Plaintiff had previously initiated
suit on February 27th, 2008.
Defendant request Courts Judicial notice that Plaintiffs proffered
Assignment goes from Entity B to Entity E which is a legal and physical
impossibility.
10 It is important here to note that in each transaction listed above, Plaintiff also produces no
receipts, no delivery acceptance, nothing whatsoever to show proof of conveyance or transfer or
negotiation or sale of, in the end, an alleged $5 Billion worth of financial instruments from any
party to any other party whatsoever.
43.
and/or mortgage that is the subject of this action, and lacking any authority
given by the trusts governing document, the PSA, Plaintiff Trustee lacked
the capacity to invoke the jurisdiction of this court therefore Plaintiff lacked
standing to initiate this suit.
44.
Real Party in Interest Rule. Plaintiff Trustee fails to satisfy the U.S.
Constitution Article IIIs standing requirements that a plaintiff must show:
(a) it has suffered an injury in fact that is concrete and particularized
and actual or imminent, not conjectural or hypothetical;
(b) the injury is fairly traceable to the challenged action of the
defendant; and (c) it is likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.
chain that provides the Bankruptcy remoteness necessary to the Notes and
the Mortgages deposited into the trust, so that the trust can obtain the AAA
rating with the securities ratings agencies and mandated for compliance
with IRS rule 86012
the trust.
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Sponsor, Barclays Bank (Entity C), ever received Defendants Note and/or
Mortgage.
12
IRC 860 requires that, among other things, the REMIC trust be a closed entity and bankruptcy remote. New Yorks Estate
Powers & Trust laws were chosen by RMBS sponsors (in the PSAs) as the controlling statutes to govern REMIC trusts, as the
EPTLs rules and concomitant common law establish common law trusts that conform the REMIC tax free pass-through
requirements. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 7
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Depositor (Entity D) ever received Defendants Note and/or Mortgage OR
the alleged and previously allegedly created SPV (from Sponsor Barclays
Bank) containing Defendants alleged Note and/or Mortgage.
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Depositor (SABR) ever received or deposited the alleged Mortgage and
Note (or SPV) into the Plaintiff Trust.
In the case at Bar, Plaintiff shows not 1 iota of proof that said Plaintiff
Trust ever transferred the alleged Mortgage and Note to the Plaintiff
Trusts Trustee, Wells Fargo Bank N.A. who is the Plaintiff in this case.
But it is essential for the courts to understand that before the alleged
note & mortgage could be placed within any REMIC trust, each of these
steps was mandated by N.Y. E.P.T.L (New York Estate Powers & Trust Law),
I.R.C. (Internal Revenue Code) requirements AND by the contractual terms
found within the PSA which was signed and agreed upon by the participants
of the securitization. The rules for the deposit of all of the Notes &
Mortgages allegedly held within the pool of assets owned by the trust are
strict and are mandated to be adhered to punctiliously.
As stated in the NYSBA NY Business Law Journal |Summer 2012 |Vol.
16 |No. 1 pg. 77;
The Mortgage Securitization Transaction In 1986, Congress changed the tax code. One of
these changes was the creation of the Real Estate Mortgage Investment Conduit (REMIC). A
REMIC or special purpose vehicle (SPV) is an entity that is created for the specific purpose of
being a tax-free pass-through for interest income generated by pooled mortgages. This allowed
investors to purchase shares or certificates in a mortgage pool that was only taxed once at the
investor level. The REMIC rules allowed the mortgage pools to collect interest income from the
pool and disburse that income to the certificate holders tax-free at the pool level. Prior to the
REMIC, interest income from pooled mortgage investments were taxed twice, once at the pool
level and again at the investor level.
REMIC rules are very specific,13 and to qualify as a REMIC under federal and state tax codes,
the SPV had to meet very stringent requirements. With respect to RMBS the controlling trust
document is known as the Pooling and Servicing Agreement (PSA). One function of the PSA is
to establish the rules governing the trust such that the trusts activities and management conform
to IRC 860. If the trust did not conform, it could lose its REMIC status and its tax-free passthrough status.14
NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 pg. 77
14
If a tax-free pass-through trust lost its REMIC status, the tax penalties to an investor that purchased certificates would be
devastating. It would also trigger an event called a put back. There was considerable argument over whether these trusts were
business trusts or common law trusts, but the trend appears to be a judicial recognition that they are in fact common law trusts.
NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 8
The PSA16 requires that each party to the sale of the mortgage loans
endorse each promissory note to the next party in the chain of title until
the promissory note is endorsed to the Trustee for the benefit of the Trust.
This requirement is included in the PSA and is found at Section 2.01 (b)
which in part reads;
15
Blacks 9th. trust indenture. 1. A document containing the terms and conditions governing a
trustee's conduct and the trust beneficiaries' rights. - Also termed indenture of trust. [Cases:
Trusts C=> 19-29.] 2. See deed of trust under DEED.
(b) In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered or
caused to be delivered to the Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i)
the original Mortgage Note bearing all intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee...
(ii) the original of any guarantee executed in connection with the Mortgage Note;
16
The Trusts Pooling and Servicing Agreement is a Public Document available here
http://www.secinfo.com/dRSm6.v8h.d.htm
(iii)
the original Mortgage with evidence of recording thereon or a certified true copy of such Mortgage
submitted for recording.17
(iv)
the originals of all assumption, modification, consolidation and extension agreements, if any, with
evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan endorsed in blank;
(vi)
the originals of all intervening assignments of Mortgage (if any) evidencing a complete chain of
assignment from the applicable originator to the last endorsee with evidence of recording thereon....
17
Note: indeed NY EPTL law requires recordation of the note before its acceptance as a part of the trust is
consummated.
(viii)
the original or, if unavailable, a copy of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if provided) ...
Under either the terms of the trust (NY E.P.T.L.), the contracts
between the parties, or UCC 9 in the case at Bar, there are unmet
requirements for the chain of title by the foreclosing entity to be qualified
as a PETE (person entitled to enforce). In other words, single
endorsements in blank, claiming that any party in possession of a note can
enforce a note, even a thief, skipped assignees, no proof of Holder in Due
Course does not work.
The evidence in the collateral file shows an utter and complete failure
of the parties to this alleged securitization to actually convey this alleged
promissory note to this Trust as was articulated by the Defendant in each
and every previous pleading. The plaintiff Trustee has offered no proof of
ownership and the collateral file proffered by the Plaintiff through Discovery
clearly demonstrates that this loan was not securitized nor was it ever
transferred to this Trust.
Assuming the note and/or mortgage at issue could somehow
retroactively be properly and legally deposited into the Trust, the Court
should also be made aware that Sections 2.07 d., e., h., 3.01 c., 3.17 (h),
5.02, c, 8.11 of the PSA are all specific to the case at bar which set forth
further explicit restrictions on the powers of the Trustee, Depositor and the
Servicer of the trust and which prohibits the Trustee, Depositor and the
Servicer from taking any action which would jeopardize the REMIC status
of the Trust. The production of the post dated, forged and fabricated
Assignment of Mortgage is itself a prohibited action. These types of
limitations are common and are present in this or a similar form in every
pooling and servicing agreement which seeks to create a securitized trust
that can claim the tax benefits of REMIC status under the US Tax Code.
Any attempt to accept a transfer of this alleged Promissory note after
the January 26, 2006, 90 day closing date of the trust would have violated
both SEC code 424 & 1122 and the REMIC provisions of the IRS tax code 26
USC 860 A thru F -for a number of reasons.
a. First, the alleged loan is in default at this time. Therefore the
alleged loan cannot be a qualified mortgage loan under the IRS
tax code because a qualified mortgage loan is a performing
mortgage loan.
b. Second, an attempted transfer to the trust is now at a point in
time after the closing day of the Trust and after the certificates
were issued, in effect, the Plaintiff would be claiming to have
transferred an asset to a trust that had by its own terms been
closed for more than 2 years at the time the alleged transfer took
place.
c. Third, the alleged promissory note was never endorsed to the
Trust by the Depositor and as such is devoid of the required chain
of endorsements required within the PSA and which any
reasonable market participant would expect to be present for the
purposes of establishing the series of true sales set forth in the
PSA to establish a whole and complete chain of title of the
promissory note for the purposes of bankruptcy remoteness.
d. Fourth, The claim that the alleged note has been transferred to
the Trust only because it is endorsed in blank simply flies in the
face of the mandatory terms of the PSA and is an extreme deviation
from the industry standards, customs and practices which
prevailed at all times material to this transaction and which prevail
today.
e. Fifth, any transfer allowed to be accepted into the trust past the
trusts own cut-off date of deposits invokes the rather draconian
IRS mandate of taxing the REMIC trusts assets not at the favorable
rate of 0% that they now enjoy, but at the rate of 100% of the value
of their assets causing, massive financial losses to the Certificate
Holder Investors.
f. The Trustee, as an entity of the Trust itself, ceases to exist for
any transaction outside of the realm of those duties specifically
articulated within the Trusts Indenture.
Equally, by allowing a Deposit into the trust after the trusts closing
date as Plaintiffs Assignment of Mortgage alleges, Plaintiff Wells Fargo
Bank as Trustee again violates the plain language found within the PSA at
section 8.11 titled Tax Matters section (j) para. 6 which reads in part;
Neither the Servicer nor Trustee shall (i) permit the creation of any interests in any Trust
REMIC other than the regular and residual interests set forth in the Preliminary Statement,
or (iii) otherwise knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken)any action reasonably within its
control and the scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (A) endanger the status of any
Trust REMIC as a REMIC or (B) result in the imposition of a tax upon any Trust REMIC or
the Trust Fund (including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a Trust REMIC set forth in
Section 860G(d) of the Code, or the tax on "net income from foreclosure property") unless the
Trustee receives an Opinion of Counsel (at the expense of the party seeking to take such
action or, if such party fails to pay such expense, and the Trustee determines that taking such
action is in the best interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the Trust Fund or any Trust REMIC created hereunder,
endanger such status or, unless the Trustee determines in its sole discretion to indemnify the
Trust Fund against such tax, result in the imposition of such a tax).
To Summarize, (The closing date of this trust was January 26, 2006.
The creation date of Plaintiffs alleged Assignment of Mortgage is March 7,
2008 or 25+ Months past the trusts closing date) as such it is in violation
of the trusts own controlling document, the Pooling and Servicing
Agreement (PSA), I.R.C. regulations and the trusts controlling law, N.Y.
E.P.T.L. Plaintiffs and Plaintiffs counsel clearly show scienter by having
acted in contravention to the trust by;
1. creating or manufacturing, (forgery with intent to defraud)
2. attempting the use of (distribution) and (intent to fraud)
3. actually submitting (selling) false, forged and fraudulent
documents within this very Court of Law and Equity, evidenced
not only by their late creation date as it concerns legal standing
to invoke the jurisdiction of the Court, but also in contravention
of IRS REMIC Law as explained above and again within the PSA
at Section 8.11 Tax Matters (g) which reads;
into it. Aside from the creation post foreclosure issue related above, by the
terms of the Trusts own PSA, N.Y. E.P.T.L. & I.R.C. regulations all mandate
that this Assignment was void at its inception.
The Trust is also a Real Estate Mortgage Investment Conduit
(REMIC) trust and as such is held in strict regulations with both I.R.S.
REMIC trust rules of Law and the Laws and Rules created specifically in
accordance with the Trust laws of either the State of the Trusts creation or
by the contractual choice of the participants of the Trust, as is the case at
bar. The agreed contractual choice of Law to be adhered to by the Trusts
participants in the case at Bar is New York Trust Law E.P.T.L..
Plaintiffs production of the Assignment is contrary to New York Law
and IRS 860. In short, the Plaintiff Trust exercised a prohibited act on
March 7th, 2008.
The aforementioned Assignment is contrary to the Trusts
Instruments and therefore Void pursuant to IRS 860A-G and New York
Estates, Powers & Trusts (E.P.T.L) - Part 2 - 7 2.4 and the Trusts
Indenture requirements.
"Any action which deviates from the Trust documents is void. 7-2.4 Act of trustee in
contravention of trust If the trust is expressed in the instrument creating the estate of the trustee,
every sale, conveyance or other act of the trustee in contravention of the trust, except as
authorized by this article and by any other provision of law, is void".
No possession of the Asset exists until there has been a delivery and
an acceptance of the Asset and the giver of the Asset has relinquished all
dominion and control over the Asset signifying a true sale of the Asset to the
Plaintiff Trust thereby making the Asset, inter alia, bankruptcy remote and
securely within the Trust Vault.
The assignment of the note and the mortgage which alleges the
transfer of the Note & Mortgage in this case was dated March 7th, 2008,
however, pursuant to the terms of the PSA the trust closed on January 1st,
2006. Acceptance of the alleged Note & Mortgage into Plaintiff Trust at the
date shown on Plaintiffs Assignment is in violation of IRC 860G(d)(2) and as
such is mandated to be declared VOID by the terms found within the PSA
and by N.Y. E.P.T.L. & I.R.C. regulations.
THE POST DATED ASIGNMENT 2
In the case at bar, Wells Fargo Bank, N.A, as Trustee of the Trust,
claims to be the sole and exclusive owner of the securitized note &
mortgage. If Wells, as Trustee for the Trust is in fact the true and legal
owner, it must have acquired legal title to the loan within 90 days of January
1, 2006 (the trusts closing date).
For clarification of the above; New York law states that transfers to a
REMIC trust after the closing date of the trust are void. N.Y. Estates,
Powers and Trusts Law 7-1.18, 7-2.4. Glaski v. Bank of America, N.A.,
218 Cal.Rptr.4th 1079 (2013). See also, Saldivar v. JPMorgan Chase,
2013 WL 2452699 (Bky. SD Tex. 6/5/13) (holding that trustee mortgagees
position is void if notes and assignments of mortgage not delivered within
90 day of closing of trust); Wells Fargo v. Erobobo, 2013 WL 1831799 (NY
Slip Op. 4/29/13) (holding that NY trust law governs securitization (not Ohio
law) and that notes and assignments of mortgage must be physically
delivered to trustee within 90 days of closing for trustee to have claim of
ownership). The Internal Revenue Code provides for 100 percent tax
penalties for asset transfers to the trust after the closing date of the trust
and the Trusts controlling document, the PSA, specifically Section 9.02,
forbids all participants in the securitization of the assets of the trust to
perform any action in contravention to the IRS code.
Further, Section 9.02 of the PSA specifically prohibits the acquisition
of any asset for a REMIC fund after the closing date unless the party
permitting the acquisition and the NIMS (net interest margin securities)
Insurer have received an Opinion letter from counsel, at the party's
expense, that the acceptance of the asset will not affect the REMIC's status.
Plaintiff offers no such evidence or proof that a letter has been
provided to show compliance with the requirements of the PSA. Plaintiff has
provided no evidence of Depositors depositing of the note and mortgage
into the Trust and has provided no evidence that the trustee had authority
to acquire the note and mortgage herein after the trust had closed or for
the purpose of foreclosure.
Defendant asserts that the alleged transfer of the note & mortgage to
Plaintiff Trust herein is void because the note is represented to have been
acquired after the trusts closing date and as such is a violation of the
contractual terms of the Trusts controlling document, the PSA.
the post dated, post created and filed with the court months
after foreclosure initiation, Assignment of Mortgage which
is Robo-Signed by a Ms. Topaka Love.
2.
The post dated, post created and filed with the court months
after foreclosure initiation, Affidavit of Status of Account and
Military Status again signed by the same Robo-Signer Ms.
Topaka Love
3.
distinctly separate under law from bearer paper), allonge dated June 9,
2005 from Option One to blank.19
It is Defendants position that the proffered Allonge from Option One
Mort. Co. to blank is a fraud and a shame created solely to represent to
this Court Plaintiffs interest in the Note & Mortgage which in truth has no
legal value whatsoever except to prove Plaintiffs and Plaintiffs Counsels
willingness to create and bring into this court fraudulent documents created
solely to influence the Courts bias.
The Wells Fargo Manual
Defendant submits new and previously unobtainable evidence in this
case of Plaintiff Wells Fargo Banks recently published in house manual
titled Wells Fargo Home Mortgage Foreclosure Attorney Procedure
Manual, Version 1 proving scienter through a pattern and practice of
Plaintiffs and Plaintiffs Counsel in the creation of fraudulent documents
created solely to allow Plaintiff and Plaintiffs Counsel to fraudulently take
homes from homeowners when they lacked the right because they lacked
the proof to accomplish it legally.
19
Comments Of Nye Lavalle To Florida Supreme Court Page 52 Nye Lavalle, Pew Mortgage Institute, 407/968-9097
mortgagefrauds@aol.com
243. In fact, a common industry practice was to create an unattached and an undated endorsed in blank piece of paper the
industry wrongly inferred was an allonge! 244. The unattached piece of paper with an executed endorsement upon its face
would then be placed in a file with or without a note, scanned and imaged into an imaging system and then discarded, destroyed,
concealed, or even later attached if necessary, upon default by a borrower when a servicer needed to create evidence of note
ownership or holder status. 245. Under UCC Article 3, indorsement means a signature on an instrument, not on a blank piece
of paper. 246. In order for the endorsement on an allonge to be valid, the proper document custody process that should have
been followed was to: a) determine if room existed on the last page of the note or its backside to see if any room existed for the
endorsement; b) only if no room existed, a blank piece of paper should be firmly affixed to the last page of the original wet-ink
note, so as to prevent its removal and replacement; c) the first page on the face of the note should then be stamped Allonge
property address, loan number etc. should be placed upon the blank piece of paper; and then e) the endorsement stamp and
signature should be placed on the affixed piece of paper to the note (i.e. an allonge). 247. An unattached to an original note blank
piece of paper is not an allonge. An unattached to an original note blank piece of paper with an endorsement on its face is not an
allonge either. If the endorsement is placed upon the blank piece of paper and then the endorsement and signature are placed on
the blank piece of paper while unattached, all someone has endorsed was the blank piece of paper, not the original note itself.
248. Darrell W. Pierce is a Michigan lawyer for the national law firm of Dykema Gossett. Mr. Pierce served as member of the
Article 9 Study Committee for the Permanent Editorial Board for the Uniform Commercial Code, as Chair of the Article 9 Filing
Project and as the primary drafter of the International Association of Commercial Administrators Model Administrative Rules for
Article 9 filing offices. He is a frequent lecturer and writer regarding UCC matters. 249. Mr. Pierce authored an article for the
Association of Corporate Counsel titled Allonges: Separate Indorsements Not Effective Unless Affixed. In this article, Mr.
Pierce exposes the lenders dirty secret of the motives and use of allonges by the mortgage industry when he writes:
Secured lenders routinely take pledges of instruments (including negotiable instruments under UCC Article 3 and other
promissory notes) as collateral. Instruments are subject to special priority rules.
Security interests perfected merely by filing a UCC1 financing statement are junior to security interests
perfected by possession, without regard to time of filing or possession.
Security interests perfected by control (possession plus indorsement) are senior to those perfected merely by filing or
possession. Accordingly, secured parties who are relying on instruments as collateral will want to have control over the
instruments.
Instruments may be indorsed to secured parties, but it is a cumbersome process that has to be unwound when the loan
is repaid as expected. It is, therefore, convenient and common practice
to have the requisite indorsements supplied on a separate piece of paper. This keeps the instrument
clean so that it can be returned clean when the secured obligations are paid. The separate piece of
paper is kept with the instrument but is not typically attached to it, though the lender or its custodian
has authority to do so, at least upon default.
This practice works well in most cases. Even though the lender is not yet a holder under Article 3, because the
indorsement is not attached, the lender has possession and the related loan documents should cause the lender to be a
nonholder in possession of the instrument who has the rights of a holder, that is one who can enforce the
instrument as such under UCC 3-301 , and compel indorsement under UCC 3-203.
In addition, secured parties in (mere) possession have priority over other secured parties except those who have
control (possession plus indorsement), so the failure to achieve full control does not normally impair priority (no one else
will have possession except in rare cases). UCC 9-330(d).
So, even if a separate indorsement is not initially affixed to an instrument, a secured party in Attached; d)
Wells Fargo, the nations biggest mortgage servicer, appears to have set up detailed
internal procedures to fabricate foreclosure papers on demand, according to
allegations in papers filed Tuesday in a New York federal court. In a filing in New Yorks
Southern District in White Plains for a local homeowner in bankruptcy, attorney Linda Tirelli
described a 150-page Wells Fargo Foreclosure Attorney Procedures Manual created
November 9, 2011 and updated February 24, 2012. According to court papers, the Manual
details a procedure for processing [mortgage] notes without endorsements and
obtaining endorsements and allonges.
This manual, is the foundation for the strong rebuke of Wells Fargo in
recent 30- page opinion (attached as Exhibit G) of Federal Bankruptcy Judge
Robert Drain in New Yorks Southern District wherein in his opinion, Judge
Drain stated:
[T]he blank indorsement, upon which Wells Fargo is relying, was
forged, Nevertheless it does show a general willingness and
practice on Wells Fargos part to create documentary evidence, after
the-fact, when enforcing its claims, WHICH IS EXTRAORDINARY,
wrote Judge Drain with emphasis.
This was on the heels of another major defeat for Wells Fargo
wherein a family who had actually paid off their mortgage was unlawfully
foreclosed on by Wells Fargo and the Judge awarded over $3 million in
punitive and compensatory damages by Judge R. Brent Elliott of Missouris
43rd Judicial Circuit.
we now have a legal definition of "Robo-signer" from the U.S.C.O.A. for the 5th Circuit (TX) in the case of REINAGEL v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, No. 12-50569 (5th Cir. Oct. 29, 2013). The court defined "Robo-signing"
as follows;
"Robosigning is the colloquial term the media, politicians, and consumer advocates have used to describe an array of
questionable practices banks deployed to perfect their right to foreclose in the wake of the subprime mortgage crisis, practices
that included having bank employees or third-party contractors: (1) execute and acknowledge transfer documents in large
quantities within a short period of time, often without the purported assignors authorization and outside of the presence of the
notary certifying the acknowledgment, and (2) swear out affidavits confirming the existence of missing pieces of loan
documentation, without personal knowledge and often outside of the presence of the notary."
22
21
The term "robosigning" does not accurately describe the pattern and practice. The pattern and practice are more accurately
described as contract perjury, contract forgery, evidence fabrication, fraud upon the Court, and theft in which families are
rendered homeless as a result of criminal behavior.
The practice from investopedia, "In the third and fourth quarters of 2010, a robo-signing scandal emerged in the United States
involving GMAC Mortgage and a number of major U.S banks. Banks had to halt thousands of foreclosures in numerous states
when it became known that the paperwork was illegitimate because the signers had not actually reviewed it. While some robosigners were middle managers, others were temporary workers with virtually no understanding of the work they were doing."
specifically with the account of John L. Reed, defendant herein. Love also
avers that said account is in default and that plaintiff has elected to call
the entire balance of said account due and payable... While the Love
Affidavit states that Loves personal knowledge is limited to her review of
Option One Mortgage Co. as Servicing Agent for Plaintiff, Love fails to
identify, describe or annex the particular business records upon which her
limited knowledge is based.
Significantly, the Love Moving Affidavit makes the conclusory
representation that plaintiff has been in continuous possession of the note
and mortgage since prior to the commencement of this action without
providing any factual details, or the source of Loves knowledge. In addition
to a lack of foundation, the Love Moving Affidavit fails to provide evidence
that the originating lender, H&R Block Inc., indorsed and physically
delivered the alleged Reed Note to the Asset Backed Receivables Trust.
Defendant has repeatedly denied plaintiffs actions on the ground that
Plaintiff Wells Fargo Bank as Trustee for trust lacks standing to foreclose.
Specifically, Defendant contends and has always contended in each
and every of his pleadings that Ms. Love also lacked the actual authority to
execute the Option One Assignment.
The above referenced affidavit of John Obrien, combined with the
several other factual inconsistencies the Defendant has previously
24 25 26
23
Answer of Defendant John Reed (5/26/2008) 8, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, and throughout the rest of the
pleadings.
Answer of Defendant John A. Reed Memorandum in Opposition to Plaintiffs Motion For Summary Judgment and Request For
Trial By Jury (filed Aug, 15th, 2008) The opening statement Firstly, You Honor, the plaintiff hasnt even proven that it owned
or held the promissory note which is the subject of the complaint 1, 2,
25
the Civil Court with instruction to dismiss, instruction to quiet title and each
of Defendants Counterclaims to be lawfully adjudged.
Each and every other pleading submitted by Defendant and already a part of this legal actions record.
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MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY AMENDED
Respectfully submitted,
________________________
John A. Reed
40 Maple Ave.
Centerville, Ohio 45459
937-890-2576
Yotraj@Yahoo.com
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MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY AMENDED
MOTION TO VACATE A VOID JUDGMENT at 4 thru 16, 35, 45, 46, 47,48, 50, 52, 58, 60, 67, 239, 240, 241, 242, .