The Appellate Division of the State of New Jersey has reversed a summary judgment

Original Article can bee seen here at Foreclosure Defense Nationwide

The Appellate Division of the State of New Jersey has reversed a summary judgment which had been entered in favor of Aurora Loan Services, LLC. The opinion cited decisional law that a party must generally “own or control the underlying debt” in order to foreclose, and if the debt is evidenced by a negotiable instrument such as a promissory note, the determination whether a party owns or controls the underlying debt is governed by Article III of the UCC.
The Court found that Aurora was neither a holder of the note nor a person not in possession who is entitled to enforce, and that the Certification of Aurora’s “Vice President” did not state that she personally confirmed that the copies of the note, mortgage, and assignment were copies of originals in Aurora’s files.
More importantly, the Court found that the assignment, signed by a “Vice President” of MERS as nominee for Lehman Brothers, was ineffective first as there was no Certification by this VP or any other representatiive of MERS regarding the VP’s authority to execute the assignment or circumstances of the assignment. The problem with the assignment was further compounded by the fact that Lehman filed for Bankruptcy in 2008, which was before the date of what the Court termed the “purported assignment” in 2009, and the Court thus questioned whether Lehman’s designation of MERS as nominee remained in effect after Lehman filed BK absent ratification of that designation by the BK Trustee.
This same situation is present is many of our cases: the original lender (e.g. Lehman, WaMu, American Home Mortgage, Accredited Home Lenders, and others) files for BK, and the securitized trustee or servicer then purports to foreclose based on a post-BK filing assignment without any evidence that the assignment was permitted by the BK trustee. This opinion is what we believe to be the first which actually addresses this precise issue which relates directly to the threshold issues in any foreclosure of standing, real party in interest, and the “person entitled to enforce” issue under the UCC.
In Missouri, a probate Judge has dismissed a claim by HSBC Bank USA, N.A. as the claimed trustee of a series of Nomura ”Asset-Backed Certificates”, finding that HSBC is not a “person” under either of the Missouri statutes which permit a “person” to make a claim in a probate proceeding. The Motion which precipitated the dismissal characterized HSBC as Trustee for the certificates as “nothing more than a stack of paper”. Apparently the Court agreed, and found that HSBC had no standing to sue.
This decision is important as it relates directly to who can make a claim relating to a mortgage and note. If a particular state statute provides only that a “person” may institute a foreclosure, and the trustee of a series of MBS does not quality as a “person”, then there should be no standing for that trustee to foreclose. Obviously, the individual state statute must be consulted, but this ruling provides a new avenue of attack on securitized “trustees” seeking to make claims.

Pending Legislation in VA Would Give End Use of MERS, Give Borrowers More Foreclosure Defenses « naked capitalism

Pending Legislation in VA Would Give End Use of MERS, Give Borrowers More Foreclosure Defenses « naked capitalism

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Legislation may be moving toward more common sense regarding the chain of title abuses that have gone un checked the past several years since the creation/ or fabrication of MERS. The recklessness may be slowing down some but it of course this is just proposed legislation. Likely it will be just a momentary shove rather than the true push back against the banks that is desperately needed.

Wells Fargo Hammered By District Court Judge in MN

How did Wells Fargo take undue financial risk with investment customers? 

The Star Tribune reported Banks like Wells Fargo lend clients' securities, mostly stocks, to Wall Street brokers who need them temporarily to conduct short sales and other transactions. In exchange, the borrowing brokers hand over cash collateral, which the bank invests, earning small gains for the clients lending out their securities.


But Wells Fargo's investments in asset-backed securities carried risks that led to losses in the credit crisis beginning in 2007. As losses mounted, Wells Fargo made it difficult for some investors to extract themselves from the program, so they sued.

The Judge said he found the testimony of former Wells Fargo Chairman Richard Kovacevich and CEO John Stumpf "to be almost childlike" and that he accepts "that one of the primary functions of subordinates in today's corporate America is to shield their ultimate superiors from accumulating embarrassing information."


It is ridiculous for the Chairman and former chairman to say they new nothing of the increased risk to the securities lending program. The judge also said it was clear that Wells knew of the heightened risk and put securities owned by customers at grave risk. He continued by saying that they bank breached its duty of full disclosure once its line managers were taking greater risks with the customers securities. 

It is clear now that the banks have never had the best interest of anyone in mind except their own.  They were happy to put everyone else's money at risk in asset backed securities knowing they would not be taking the loss, still be collected management fees and probably were buying CDS or Credit Default Swaps that would pay the bank in the event of failure to any of the  ABS products. 

If Wells was buying CDS against their own clients it would be a major scandal.  It would not surprise me though because we have seen similar practices done by Goldman Sachs.  It also wouldn't surprise me if the banks all played both sides of the ABS trade.  This could have added to the increased demand for Sub Prime assest backed securities because the banks could make money on the failure of  these securities through their CDS, which would pay them if the Assest Backed Security failed. 

The industry was set up to allow the banks to profit whether their clients had gains or losses.  They perfect market had been created for Wall Street and the Banks by Wall Street and the Banks.  Unfortunately, this is also what led to collapse of  the housing industry. 

The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.(Book review): An article from: Journal of Economic Issues

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Wells Fargo says no to more tarp money

Wells Fargo Reports Loss, Won’t Ask for More U.S. Aid Isn't that what Bank of America said before they visited the fed and left with a huge suitcase full of 100's?????? Maybe Wells Fargo only needed 25 Billion to keep above water. Sure glad they get to keep paying that dividend with tax payer funds.