SHERIFF SALES STOPPED TO DATE

I was keeping track of the number of Sheriff's Sales stopped, but I decided that this gave the wrong impression to viewers. An attorney should not be consulted as a matter of last resort. Instead an attorney should be consulted early in the process and the sooner an attorney is consulted the more likely a Homeowner will have a favorable result







The Law Office of Bruce M. Broyles



5815 Market Street, Suite 2, Boardman, Ohio 44512



Phone: (330) 965-1093 Fax: (330) 953-0450



bruce@brucebroyleslaw.com





The Ohio Rules of Professional Conduct suggest that the reader be informed that one of the purposes of this blog is to attract potential clients, and therefore should be considered attorney advertisement





Sunday, March 6, 2016

Yvanova vs. New Century Mortgage Corporation No.S218973 Supreme Court of California

When the California Courts issued the decision of Glaski v. Bank of America, supra, 218 Cal.App.4th 1079, I did not get that excited and did not pay much attention.  Glaski was issued in a "non-judicial" state; Glaski involved a claim for wrongful foreclosure; it was an appellate decision; and other Appellate decisions distinguished or criticied Glaski.  However, the recent decision of Yvanova vs. New Century Mortgage Corporation, in which the California Supreme Court determines that a homeowner can challenge an assignment as void, is exciting.

There are still all of those reasons to criticize the California decision.  It is a "non-judicial" state, and even the opinion states that the opinion is on a limited and narrow issue.  However, in Yvanova, the Court discusses the issue with such clarity and in such plain language that Courts will be hard pressed to ignore its holding.  Yvanova starts with the simple premise that only a person or entity with an interest in the promissory note or mortgage can sue to enforce the promissory note or foreclose upon the mortgage.  (A simple concept that the Courts and Banks have contorted into unrecognizable pretzel like images of the original concept.).  Yvanova then discusses the difference between a void and a voidable transaction.  

The Yvanova Court discusses many of the other cases from other jurisdictions that the Ohio Courts have ignored and continue to ignore.   However, the California Supreme Court has gathered many of these cases from other jurisdictions in one place and discusses them all in detail.  In Yvanova the Court addresses the debate; engages in the debate, and makes a well reasoned choice between the two sides.  Yvanova determines that the Homeowner can challenge the validity of an assignment as being void, and does so in a manner that does not appear to be the result of result oriented circuitous reasoning.

With the recent decision of U.S. Bank Natl. Assn. v. George (Ohio App. 10th Dist.), 2015-Ohio-4957, and Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari, the issue of standing, and now the California Supreme Court issuing a well reasoned opinion in support of the homeowners right to challenge the validity of an assignment, it may be that the tide is turning in favor of the homeowner.

The Law Office of Bruce M. Broyles: Ohio Homeowners may be able to Assert Failure to C...

The Law Office of Bruce M. Broyles: Ohio Homeowners may be able to Assert Failure to C...: In several  previous posts; April 5, 2013 Failure to Comply with PSA Results in Void Judgment; and August 2, 2013 Update on Failure to Comp...

Ohio Homeowners may be able to Assert Failure to Comply with PSA

In several  previous posts; April 5, 2013 Failure to Comply with PSA Results in Void Judgment; and
August 2, 2013 Update on Failure to Comply with PSA, I argued that Homeowners facing foreclosure are entitled to assert the failure to comply with the pooling and servicing agreement.  I stated that the failure to comply with the PSA would result in a void transfer of the promissory note or a void assignment of the mortgage.  In a post September 29, 2015 Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari, I asserted that Anh Nguyet Tran highlighted a similar battle being fought in Ohio as Homeowners are prevented from asserting challenges to the validity of the assignment based upon appellate court decisions that rely upon Bank of New York Mellon vs. Unger (Ohio App. 8th Dist.) 2012-Ohio-1950.  

The argument that I have been making that the federal cases relied upon by Unger were being misinterpreted.  I relied upon the Alexander vs. Deutsche Bank National Trust Co. (N.D. Ohio West Dis.) Case No.: 3:12-CV-02704; and Slorp vs. Lerner Sampson & Rothfuss587 Fed.Appx. 249.  According to Alexander and Slorp Ohio Homeowners should be able to challenge the validity of assignments if the challenge would result in a void transaction.

Now the Court of Appeals for the Tenth District has made the same argument in granting a homeowner facing foreclosure the right to challenge an assignment as being void.  

In U.S. Bank Natl. Assn. v. George (Ohio App. 10th Dist.), 2015-Ohio-4957, the Court held:

Because we have reversed the trial court's summary judgment on issues concerning the note and appellants' challenge to appellee's standing to enforce the note, we necessarily overrule our prior holding in LSF6 Mercury REO Invests. Trust Series 2008-1 v. Locke , 10th Dist. No. 11AP-757, 2012-Ohio-4499. In Locke, we held that the makers of notes and mortgages are without standing to challenge the validity of transfers or assignments to which they were not parties.  ***

We believe that at least one of the underlying cases relied on by the court in Locke has been clarified to the point that its premise as we surmised it no longer supports what we previously held in Locke denying standing to non-privity challengers of note and mortgage transfers and assignments. We thus extend our holding in Pasqualone to clarify that standing broadly exists for persons to challenge the validity of the transfer of a note4 or assignment of the mortgage, whether or not in privity with the person entitled to enforce the note or mortgage, regardless of whether or not the note has been negotiated and transferred under R.C. Chapter 13, Ohio's codification of the Uniform Commercial Code.
***
The maker of a note or mortgagor who is facing enforcement at law on the note or enforcement in equity on the mortgage has a personal stake in challenging whether a person claiming to be entitled to enforce such a note or a mortgage has been duly transferred or assigned rights under either or both instruments, regardless of whether or not the challenger is in privity with the person claiming the right to enforce.

The Court in George went on to explain that the cases upon which it relied upon in Locke had been clarified, stating:

Locke's holding is based in part on a line of federal court decisions5 that, even since we decided Pasqualone, has been modified by the Sixth Circuit Court of Appeals. In Slorp v. Lerner, Sampson & Rothfuss, 587 Fed.Appx. 249, 254-56 (6th Cir. 2014), the United States Sixth Circuit Court of Appeals held: [Slorp] attributes his injuries to the improper foreclosure litigation. According to the complaint, [defendant] Bank of America (through LSR) filed a foreclosure action against Slorp despite its lack of interest in the mortgage; the defendants misled the trial court by fraudulently misrepresenting Bank of America's interest in the suit; and Slorp incurred damages when he was compelled to defend his interests. If Bank of America had no right to file the foreclosure action, it makes no difference whether Slorp previously had defaulted on his mortgage. * * * [T]he district court erred when it held otherwise. * * * Much of the district court's analysis was taken from Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, [717 F.Supp.2d 724 (E.D.Mich.2010), aff'd, 399 Fed.Appx. 97 (6th Cir.2010)] where we held that a homeowner did not have standing to challenge the validity of a home-loan assignment in an action contesting a foreclosure. 399 Fed.Appx. 97, 102 (6th Cir.2010). We analyze the district court's holding in more detail than might ordinarily be necessary because our Livonia Properties opinion has confounded some courts and litigants, see, e.g., Etts v. Deutsche Bank Nat'l Trust Co., No. 13-11588, 2014 WL 645358, at *4 (E.D.Mich. Feb. 19, 2014) * * *. 5 See, e.g., Livonia Properties Holdings, L.L.C. v. 12840-12976 Farmington Rd. Holdings, L.L.C., 717 F.Supp.2d 724 (E.D.Mich.2010), aff'd, 399 Fed.Appx. 97 (6th Cir.2010). No. 14AP-817 14 The district court held, and the defendants now maintain, that Slorp lacked standing to assert his claims because an individual who is not a party to an assignment may not attack the assignment's validity. We differ with this interpretation of Livonia Properties. The sweeping rule that the district court extrapolated from Livonia Properties dwarfs our actual holding in that case. (Footnote deleted.) On summary judgment or otherwise, it is the movant's burden to establish the chain of transfers and assignments, if it is not the original mortgagee, and this is well-established in the law. Seimer at ¶ 19. That the mortgagor may not be a party or in privity to a party to an assignment contract should not operate to diminish in any way that burden. See Slorp at 255 ("a non-party homeowner may challenge the validity of an assignment to establish the assignee's lack of title, among other defects"). Thus, we clarify governing case law and overrule our previous holding in Locke, fully restoring the burden placed on the person asserting entitlement to enforce the note or mortgage. Accordingly, the maker of the note or mortgage has standing to challenge their enforcement against the maker, even if not a party in privity to the particular transfer or assignment challenged.

If U.S. Bank Natl. Assn. v. George allows the Homeowner to challenge the validity of an assignment then homeowners throughout the State of Ohio should be making this argument.

Tuesday, September 29, 2015

Anh Nguyet Tran vs. Bank of New York Petition for Writ of Certiorari

An amended complaint asserting a RICO action against REMIC trusts was dismissed on the grounds that Plaintiffs lacked standing to assert the failure to comply with the Trust's pooling and servicing agreement.  The writ asserts that a split exists within the U.S. Circuits on the issue of Plaintiffs' standing.  The Second Circuit held that Plaintiffs lacked standing to challenge the validity of the assignment.  The First Circuit in Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.2013) held that Plaintiffs have standing to challenge the validity of the assignment.

Both Anh Nguyet Tran and Culhane address the issue of whether Plaintiffs have standing to challenge the validity of an assignment.  However, rather than determining only the threshold issue that Plaintiffs have standing to challenge the validity of the assignment as in Culhane, the Court in Anh Nguyet Tran addressed the merits of the challenge to the validity of the assignment.  In Culhane, the Court determined that if the Plaintiff's challenge was correct the foreclosure would be void.  As such, Culhane found the Plaintiffs had standing, but then determined that the Plaintiffs' challenge to MERS involvement in the transaction did not render the assignment void.  In Anh Nguyet Tran, the Court determined that Plaintiffs' lacked standing to challenge the validity of the assignment based upon the Court's determination of the merits.  In Anh Nguyet Tran, the Court determined that the challenge to the validity of the assignment would not succeed and therefore determined that Plaintiffs lacked standing.


One of the main issues is whether the failure to comply with the Trust's governing documents renders the transaction void or merely voidable.  If the promissory note and mortgage are transferred after the closing date, and in a manner not described by the Pooling and Servicing Agreement, then the terms of the Pooling and Servicing agreement are violated.  The majority of these trusts are governed by New York Law. The New York Law of Estates, Powers and Trusts, N.Y. EPT. LAW § 7-2.4, states:


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.

The Second Circuit relied upon standard Trust Law and determined that the beneficiaries could ratify invalid acts of the Trustee.  If the invalid acts could be ratified, then these transactions were merely voidable, not void.  A voidable transaction does not give Plaintiff mortgagors standing to challenge the validity of the assignment.

The problem in Anh Nguyet Tran is that the Court addresses the merits of the case upon a motion to dismiss based upon the threshold issue of standing.  There has been no discovery and no argument presented on the issue upon which the Court ultimately determined the case; whether the beneficiaries could ratify the invalid act of the Trustee.  Generally speaking, it is true that beneficiaries can ratify the invalid acts of the Trustee.  However, in mortgage securitization the Courts are dealing with REMIC Trusts, and these Trusts have provisions which prevent the Trustee from taking any action that would render the REMIC election invalid.  The invalid acts of a Trustee of a REMIC Trust cannot be ratified.  As such, these invalid transactions are void not merely voidable.

A similar battle is being fought in Ohio.  Homeowners are prevented from asserting challenges to the validity of the assignment based upon appellate court decisions that rely upon Bank of New York Mellon vs. Unger (Ohio App. 8th Dist.) 2012-Ohio-1950.  However, the Sixth Circuit has expressly stated that the federal cases relied upon by Unger are too broadly interpreted.  See, Alexander vs. Deutsche Bank National Trust Co. (N.D. Ohio West Dis.) Case No.: 3:12-CV-02704; and Slorp vs. Lerner Sampson & Rothfuss,
587 Fed.Appx. 249.  According to Alexander and Slorp Ohio Homeowners should be able to challenge the validity of assignments if the challenge would result in a void transaction.

Tuesday, July 28, 2015

CLIENT RECEIVES HELP FROM EXPERT WITNESS

I previously represented a client in a foreclosure case.  The client decided he no longer wanted to contest his foreclosure, and asked me to cease any further efforts.  Recently, the client contacted my office stating that he had a federal criminal matter in which the potential sentence was being greatly increased due to the Lender significantly increasing the amount it allegedly lost on a mortgage it foreclosed upon.  Through Attorney Jeff Barnes' network of attorneys and experts I was able to put my client in contact with Richard Kahn of FPG-USA.  Mr. Kahn worked on my client's report while away from his office on a previously scheduled trip; had the report to my client's criminal defense attorneys, and Mr. Kahn's report made a dramatic change in the outcome of the sentence.
See, the testimonial at the link below.

 http://www.fpg-usa.com

http://www.fpg-usa.com/#!testimonials/c1yws

Sunday, June 28, 2015

Evidence of Ratification

The New York law of Trusts states expressly that transactions in violation of the Trust governing documents are void.  Most Courts do not analyze the  the trust documents and simply say that the mortgagor is not a party tovthe PSA and therefore cannot enforce the terms of the PSA.  Those Courts that do lookvfurther into the issue, eventually say that the beneficiaries can ratify the conduct of the Trustee and therefore the failure to comply with yhe PSA renders the transactions merely voidable.  However if one reads the PSA the PSA expressly prohibits the trust from taking any action that would render the trust subject to a tax or invalidate the REMiC.  As such yhe beneficiaries can not ratify these acts or transactions.  In yhe alternative,  shouldn't the Platiff trust be required ro demonstrate thst the beneficiaries actually ratified the act or transaction.

Friday, November 7, 2014

Rolling Stones Article on JPMorgan Chase

http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106 I normally do not repost articles, but the above article gives some in depth information about the information that JPMorgan Chase's management was telling Congress. While the article has little to do with Homeowners Facing Foreclosure, it does demonstrate the depth to which Lenders will go to seek profits. JPMorgan Chase's management was also before a Congressional hearing discussing loan modifications and the moral hazard of principle reductions. First, how "moral" does this guy appear now? Second, the "principle" that would have been reduced is simply recapitalized late fees, interest, legal fees, inspection fees, forced placed insurance fees. Suddenly, the "moral" hazard disappeared when JPMorgan Chase could use these accounting gimmics of "consumer assistance" to obtain huge credits towards the fines that were imposed.