Source: http://stopforeclosurefraud.com/tag/note/
Timestamp: 2019-04-23 18:36:02+00:00

Document:
Reader Lisa N. pointed me to a troubling October 2010 press release by SolomonEdwardsGroup, a company that describes itself as a “national financial services consulting and staffing firm” about its remediation services for “significant loan documentation problems.” Alert readers will recognize that this is shortly after the robosiging scandal broke.
SEG’s teams can also be rapidly deployed across the U.S., to help banks and servicers “scrub” files and determine which foreclosures may have been tainted by incorrect loan documentation and processing issues such as robo-signing….
For instance on a recent engagement, SEG quickly deployed a 25-person team to review a single-family loan portfolio containing 5,000 loans and within six weeks brought the portfolio into compliance with investor guidelines. During another recent engagement, SEG successfully completed the same type of project involving 20,000 single-family loans tainted by fraud allegations.
Needless to say, this sounds consistent to the charges we’ve heard from borrower attorneys and have even seen at trial: that of “tah dah” documents appearing suddenly in court that solved all the problems with the evidence presented. A not that unusual case occurred last week, in Kings County, New York, where in HSBC v. Sene, when the lawyers for the bank tried submitting two notes (borrower IOUs), the second attempting to remedy problems raised by the first one, each presented as the original. The judge not only ruled against the foreclosure but referred the case to the district attorney and the state attorney general.
Howard Smith, ET AL, Defendants.
Plaintiff’s brings this application for an Order of Reference, in this mortgage foreclosure action. The mortgagor, Howard Smith has not served an answer and is in default.
MERS, was not a party to the underlying note, for $568,000, also dated January 11, 2008, between American Brokers Conduit and Howard Smith. Accordingly, when MERS assigned the mortgage to Plaintiff, Citigroup Global Markets Realty Corp. there was no assignment of the subject note and “a transfer of [a] mortgage without the debt is a nullity, and no interest is acquired by it.” (citations omitted) Bank of New York v Silverberg, 86 AD3d at 280, (2nd Dep’t, 2011). Apparently., there was an attempt made to transfer the note to Plaintiff, as the note contains an undated endorsement to Citimortgage, Inc., which is obviously a different corporate entity than the Plaintiff, Citigroup Global Markets Realty Corp. There is no evidence submitted as to the relationship between these two corporations. There is also no evidence that Plaintiff owns this note.
The Appellate Division, Second Department’s decision in Silverberg, holds that a plaintiff does not have standing to bring a foreclosure action if, as here, it does not own the note. Here, any objection to Plaintiff’s standing has been waived, as the debtor has not served an answer or moved to dismiss. See, Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 242 (2nd Dept, 2007).Notwithstanding this waiver on standing, it would be inappropriate to grant Plaintiff an order of reference, where it is clear that it cannot make out its prima- facie case of entitlement to Judgment. In Horizon Bancorp v Pompee, 82 AD3d 935 (2d Dept 2011) ), the Court held that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish existence of a promissory note and a related mortgage referable to the subject property, its ownership of the mortgage, and the default of the defendant.” ( See Campaign v Barba, 23 AD3d 327 (2nd Dep’t, 2005), Ocwen Federal Bank FSB v. Miller, 18 AD3d 527 (2d Dept 2005).
Accordingly, Plaintiff, Citigroup Global Markets Realty Corp’s application for an Order of Reference is denied.
Continue to the Link below for Max Gardner’s 65 Tips For Mortgage Documents.
Mohamed Y. Sharif, appellant, et al., defendants.
Steven Alexander Biolsi, Forest Hills, N.Y., for appellant.
Shapiro, DiCarlo & Barak, LLC, Rochester, N.Y. (Ellis M.
Oster of counsel), for respondent.
In an action to foreclose a mortgage, the defendant Mohamed Y. Sharif appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), entered August 20, 2010, as granted those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against him and for an order of reference, and denied those branches of his cross motion, made jointly with the defendant Nazimah Sharif, which were for leave to serve and file an amended answer to assert a defense based on lack of standing and, thereupon, to dismiss the complaint insofar as asserted against him based on lack of standing.
ORDERED that the order is reversed insofar as appealed from, on the law, on the facts, and in the exercise of discretion, with costs, those branches of the plaintiff’s motion which were for summary judgment on the complaint insofar as asserted against the defendant Mohamed Y. Sharif and for an order of reference are denied, and those branches of the cross motion of the defendant Mohamed Y. Sharif, made jointly with the defendant Nazimah Sharif, which were for leave to serve and file an amended answer, and thereupon, to dismiss the complaint insofar as asserted against the defendant Mohamed Y. Sharif based on lack of standing are granted.
Here, the defendant Mohamed Y. Sharif (hereinafter Sharif) initially did not raise a defense based on lack of standing in his answer or in a pre-answer motion to dismiss. “[A]n argument that a plaintiff lacks standing, if not asserted in the defendant’s answer or in a pre-answer motion to dismiss the complaint, is waived pursuant to CPLR 3211(e)” (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d at 242; see JP Morgan Chase Bank, N.A. v Strands Hair Studio, LLC, 84 AD3d 1173, 1173). However, defenses waived under CPLR 3211(e) can nevertheless be interposed in an answer amended by leave of court pursuant to CPLR 3025(b) so long as the amendment does not cause the other party prejudice or surprise resulting directly from the delay (Complete Mgt., Inc. v Rubenstein, 74 AD3d 722, 723; see Nunez v Mousouras, 21 AD3d 355, 356; Aurora Loan Servs., LLC v Thomas, 70 AD3d 986, 987).
After the plaintiff moved for summary judgment, Sharif, with the defendant Nazimah Sharif, cross-moved, inter alia, for leave to serve and file an amended answer to assert a defense based on the plaintiff’s lack of standing, and, upon the assertion of that defense, to dismiss the complaint insofar as asserted against them. “Motions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit” (Aurora Loan Servs., LLC v Thomas, 70 AD3d at 987; see CPLR 3025[b]; Lucido v Mancuso, 49 AD3d 220, 222). ” Mere lateness is not a barrier to the amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine'” (Public Adm’r of Kings County v Hossain Constr. Corp., 27 AD3d 714, 716, quoting Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959; see Abrahamian v Tak Chan, 33 AD3d 947, 949).
The Supreme Court improvidently exercised its discretion in denying that branch of Sharif’s cross motion which was for leave to serve and file an amended answer to assert a defense based on lack of standing. In opposition to that branch of the cross motion, the plaintiff failed to demonstrate the existence of any prejudice or surprise that would result from the amendment, or that the proposed amended answer was palpably insufficient or patently devoid of merit (see Aurora Loan Servs., LLC v Thomas, 70 AD3d at 987).
Upon Sharif’s assertion of the defense of lack of standing, the plaintiff was required to demonstrate its standing to prosecute this action (see U.S. Bank, N.A. v Collymore, 68 AD3d at 753). In opposition to that branch of Sharif’s cross motion which, upon the amendment of the answer, was to dismiss the complaint insofar as asserted against him, the plaintiff failed to make any showing that it had standing to maintain this action. The plaintiff did submit an assignment of the mortgage. However, “[w]here a mortgage is represented by a bond or other instrument, an assignment of the mortgage without assignment of the underlying note or bond is a nullity” (U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see Merritt v Bartholick, 36 NY 44, 45; Kluge v Fugazy, 145 AD2d at 538). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident” (U.S. Bank, N.A. v Collymore, 68 AD3d at 754). In opposing the cross motion, the plaintiff did not submit a written assignment of the note. Moreover, the plaintiff submitted no evidence to establish physical delivery of the note. Accordingly, in the absence of any evidence to demonstrate the existence of a written assignment of the note or physical delivery of the note, the Supreme Court should have granted that branch of Sharif’s cross motion which, upon the amendment of the answer, was to dismiss the complaint insofar as asserted against him for lack of standing (see CPLR 3211[a]; Bank of N.Y. v Silverberg, 86 AD3d 274; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 109; U.S. Bank, N.A. v Collymore, 68 AD3d at 753-754).
DILLON, J.P., DICKERSON, CHAMBERS and MILLER, JJ., concur.
U.S. BANK NATIONAL ASSOCIATION, as TRUSTEE of MASTR ADJUSTABLE RATE MORTGAGES TRUST 2007-3, Appellee.
Case No. 2D10-3727.District Court of Appeal of Florida, Second District.
Opinion filed October 19, 2011.Jacqulyn Mack of The Mack Law Firm, Englewood, for Appellant.Roy A. Diaz and Diana B. Matson of Smith, Hiatt & Diaz, P.A., Ft. Lauderdale for Appellee.
Julia Feltus appeals a final summary judgment of foreclosure in favor of U.S. Bank National Association, as Trustee of Mastr Adjustable Rate Mortgages Trust 2007-3 (U.S. Bank or the Bank). We reverse because material issues of fact as to which entity holding the promissory note executed by Feltus existed at the time the trial court entered summary judgment.
On August 24, 2009, U.S. Bank filed an unverified complaint seeking to reestablish a lost promissory note and to foreclose the mortgage on Feltus’s home. U.S. Bank attached to the complaint a copy of the note and the mortgage, but both documents showed the lender to be Countrywide Bank, N.A. In the count to reestablish the note pursuant to section 673.3091, Florida Statutes (2009), U.S. Bank alleged that the note was executed by Feltus on February 16, 2007; U.S. Bank is the owner and holder of the note; the original note has been lost and is not in U.S. Bank’s custody or control; the note was continuously in the possession and control of the Bank’s assignor and predecessor from the date of execution until the loss, at which time the assignor and predecessor was entitled to enforce the note; and the note has not been paid or otherwise satisfied, assigned, or transferred, or lawfully seized. Notably, these allegations did not include an allegation that Countrywide had assigned the note to U.S. Bank.
After Feltus filed a motion to dismiss alleging that U.S. Bank had failed to establish that it owned or held the subject note, on November 16, 2009, U.S. Bank filed an affidavit of indebtedness executed by Kathy Repka, an assistant secretary of BAC Home Loan Servicing, L.P., f/k/a Countrywide Home Loan Servicing, L.P. Repka asserted that her affidavit was based on the loan payment records of the servicing agent and her familiarity with those records. After she explained that the purpose of the records was “to monitor and maintain the account relating to a note and mortgage that are the subject matter of the pending case,” Repka asserted that U.S. Bank owns and holds the note described in its complaint. Then on November 18, 2009, U.S. Bank filed another copy of the note as a supplemental exhibit to its complaint. In contrast to the copy attached to the complaint that contained no endorsements, this copy contained two endorsements that were side by side on the last page—the first stated “PAY TO THE ORDER OF: COUNTRYWIDE HOME LOANS, INC. WITHOUT RECOURSE COUNTRYWIDE BANK, N.A.” and the second stated “PAY TO THE ORDER OF: __________ WITHOUT RECOURSE COUNTRYWIDE HOME LOANS, INC.” Notwithstanding this filing, eight days after Feltus filed her answer and affirmative defenses, on May 26, 2010, U.S. Bank filed a motion for summary final judgment alleging that it “owns and holds a promissory note and mortgage” and that the original note had been lost and is not in U.S. Bank’s control. But on June 4, 2010, the Bank filed a reply to Feltus’s affirmative defenses in which it asserted that it is now in possession of the original note, which it attached and which is the same note it filed on November 18, 2009. The Bank further asserted that because the note is endorsed in blank and it is in possession of the note, it is the bearer and entitled to foreclose the mortgage. See Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932, 933 (Fla. 4th DCA 2010) (noting that pursuant to Uniform Commercial Code, negotiation of note by transfer of possession with blank endorsement makes transferee the holder of the note entitled to enforce it).
We view U.S. Bank’s filing of a copy of the note that it later asserted was the original note as a supplemental exhibit to its complaint to reestablish a lost note as an attempt to amend its complaint in violation of Florida Rule of Civil Procedure 1.190(a). U.S. Bank did not seek leave of court or the consent of Feltus to amend its complaint. A pleading filed in violation of rule 1.190(a) is a nullity, and the controversy should be determined based on the properly filed pleadings. Warner-Lambert Co. v. Patrick, 428 So. 2d 718 (Fla. 4th DCA 1983).
Before a court may grant summary judgment, the pleadings, depositions, answers to interrogatories, admissions, and any affidavits must “`conclusively show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'” Allenby & Assocs., Inc. v. Crown St. Vincent Ltd., 8 So. 3d 1211, 1213 (Fla. 4th DCA 2009) (quoting Fini v. Glascoe, 936 So. 2d 52, 54 (Fla. 4th DCA 2006)). The party moving for summary judgment bears the burden to show conclusively that there is a complete absence of any genuine issue of material fact. Id.
The properly filed pleadings before the court when it heard the Bank’s motion for summary judgment were a complaint seeking to reestablish a lost note, Feltus’s answer and affirmative defenses alleging that the note attached to the complaint contradicts the allegation of the complaint that U.S. Bank is the owner of the note, a motion for summary judgment alleging a lost note of which U.S. Bank is the owner, an affidavit of indebtedness alleging that U.S. Bank was the owner and holder of the note described in the complaint, and U.S. Bank’s reply to Feltus’s affirmative defenses asserting that it was now in possession of the original note, which it attached to the reply. But the note attached to the complaint showed the lender to be Countrywide Bank, N.A. And the complaint failed to allege that “[t]he person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred.” § 673.3091(a). In addition, the affidavit of indebtedness revealed no basis for the affiant’s assertion that U.S. Bank owns and holds the note. The affiant is an assistant secretary for the alleged servicing agent of the Bank, and she asserted that she had personal knowledge of the loan based on the loan payment records. She did not assert any personal knowledge of how U.S. Bank would have come to own or hold the note. See Shafran v. Parrish, 787 So. 2d 177, 179 (Fla. 2d DCA 2001) (“When affidavits are filed to establish the factual basis of the motion [for summary judgment], they must be made on personal knowledge, demonstrate the affiant’s competency to testify, and be otherwise admissible in evidence.”).
The trial court erred in entering final summary judgment of foreclosure because the documents before it created a genuine issue of material fact of who owned or held the note. Accordingly, we reverse and remand for further proceedings.
CASANUEVA, J., Concurs with opinion.
I fully concur with the majority opinion and write only to point out further failings in the affidavit of indebtedness.
The affidavit of indebtedness was the sole affidavit offered in support of U.S. Bank’s motion for summary judgment. The affiant was an assistant secretary employed by the Bank’s loan servicing agent. She set forth, under oath, that her direct personal knowledge was restricted to that learned in maintaining the loan payment records of the servicing agent. And, as the majority opinion points out, she did not assert any personal knowledge of how U.S. Bank had come to own or hold the note. Beyond this deficiency noted in the majority opinion, the affiant also stated that U.S. Bank had accelerated the entire principal balance due and had “retained Smith, Hiatt & Diaz, P.A. to represent it in this matter.” Because the affiant’s competency was based only on her review of the loan payment records, she was not competent to aver as to actions of the Bank in accelerating the loan or hiring counsel, and her averments are hearsay and inadmissible at trial. The Bank could have easily established the facts of acceleration of the note and hiring of counsel with affidavits from the Bank’s official in charge of foreclosing this loan and/or the Bank’s counsel to establish the fact of hiring and of the fee arrangement. Such bank official or counsel would have direct personal knowledge, would be competent, and would have presented evidence admissible at trial.
The affidavit the Bank submitted fell woefully short of these requirements and could not aid the Bank in any way to support its motion for summary judgment of foreclosure.

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