Source: http://www.wallstreetmainstreet.com/2011/04/
Timestamp: 2019-04-26 16:17:46+00:00

Document:
Nicholas M. Moccia, Esq., of counsel for the Law Offices of Robert E. Brown, P.C., appears for oral argument in the Eastern District of New York in Yanki Tshering v. Fairfield Financial, 08-CV-2777, wherein District Judge Sterling Johnson rendered a judgment voiding a $900,000 high cost loan. Attorneys for Deutsche Bank attempt to convince Judge Johnson to vacate the judgment and allow them to intervene as the "real parties in interest". Judge Johnson criticizes MERS and Deutsche Bank for a troubling "lack of transparency" with regard to the transfer of notes and mortgages, and expresses concerns that MERS may be a vehicle for banks to avoid taxes and filing fees in connection with the transfer and recordation of mortgages. As of now, Judge Johnson is reserving his decision as to whether to allow Deutsche Bank and MERS to intervene and vacate the judgment.
Context, put simply: This office represents a homeowner with $900K mortgage given by Fairfield Financial. We convinced the judge to cancel the mortgage so that she does not owe the money anymore. A different bank comes out of the woodwork, namely Deutsche Bank, and argues that the mortgage really belongs to Deutsche, and that Deutsche did not get a chance to defend in this law suit. Accordingly, Deutsche Bank is asking the judge to let them intervene in the law suit, cancel the judgment, because our client purportedly owes Deutsche Bank the money, not Fairfield. Our position is that Deutsche should not intervene at Deutsche should sue Fairfield, its predecessor-in-interest for failing to notify Deutsche about our law suit. Basically, the judge is critical of the bank attorney's position and seems to be saying that it is too late for Deutsche to intervene, and that Deutsche should be more transparent with regard to the loans it owns at any given time.
**If you are unable to access the entire transcript on the viewer below, you can access the entire transcript by downloading it from scribd.com.
Law Office of Robert E. Brown, P.C.
Justice James D. Pagones of the Supreme Court of the State of New York, County of Dutchess, has rendered an interesting set of decisions in the foreclosure practice area—see JPMorgan Chase, N.A, v. Sosa, 2011 NY Slip Op 50537[U] (Sup. Ct. Dutchess County April 8, 2011)(hereinafter “JPMorgan v. Sosa”); see also US Bank Natl. Assn. v. Padilla, 2011 (Sup. Ct. Dutchess County April 8, 2011)(hereinafter “US Bank v. Padilla”). These decisions are of especial interest to homeowners facing the prospect of foreclosure, since they highlight some of the pitfalls homeowners may face during the foreclosure process.
The good news for New York homeowners in foreclosure, is that the residential foreclosure process takes many months to bring to completion. In some cases, it may take several years, if properly contested. One of the procedural mechanisms which slows down the process for homeowners is the mandatory settlement conference pursuant to section 3408 of the Civil Practice Law and Rules (“CPLR §3408”) and section 1304 of the Real Property Actions and Proceedings Law (“RPAPL §1304”). The legislative intent underlying these statutes is to foster early settlement of foreclosure actions as a means of preserving home ownership and to mitigate the subprime credit crises, through the auspices of the courts. See end note 1. To this end, every bank is required to participate in the mandatory settlement conference before it is permitted to move for a judgment of foreclosure and auction off a home. Specifically, every bank is required, “in good faith”, to attempt to settle the foreclosure action by giving homeowners an opportunity to do one of three things: 1. apply for a loan modification; 2. enter into a short sale; or 3. settle by way of a “deed in lieu of foreclosure”, which ideally amounts to walking away from the home without any further liability to the bank.
Defendant Sosa contends she did not appear and answer the plaintiff’s complaint because she had been offered participation in the HAMP program and had been assured by the plaintiff that her participation would bring her mortgage back into compliance and would result in the termination of the foreclosure action…The documents submitted by both of the parties demonstrate that defendant Sosa made a down payment to the plaintiff in April 2009…Although defendant Sosa made each of the required trial period payments, she ultimately received a letter from the Plaintiff dated December 21, 2009, that she did not qualify for any loan modification programs due to her insufficient income.
During the eight month period when the Defendant Sosa was attempting to work out a loan modification, the bank was continuing to proceed with the foreclosure. It is noteworthy that Defendant Sosa made the mistake of failing to contest to the foreclosure action from the very beginning by neglecting to file an answer with counterclaims. As a result, a judgment was rendered against Defendant Sosa even as she was attempting negotiate a settlement.
Once it was clear that bank was not going to offer Defendant Sosa a loan modification, and after many months of making “trial payments”, Defendant Sosa found herself at the threshold of the foreclosure auction block. Luckily for Defendant Sosa, Justice Pagones “in the furtherance of justice” granted Defendant Sosa’s application to vacate the judgment of foreclosure and allowed her to submit a late answer with counterclaims. Justice Pagones was by no means obliged to vacate the judgment, but it is clear that the he exercised his equitable discretion due to the questionable of the bank during the foreclosure settlement conference. Indeed, it is commonplace for a bank to string borrowers along for many months accepting payments during a “trial period” for a loan modification, only to renege on offering a final loan modification agreement and to proceed with the foreclosure. Had Defendant Sosa served an answer on the bank from the beginning and challenged the bank with a set of colorable counterclaims, the bank would undoubtedly have taken her application for a loan modification more seriously. Since, however, the bank was able to get an uncontested judgment, the bank had, practically speaking, no real incentive to work with Sosa toward an reasonable settlement.
In US Bank v. Padilla, Justice Pagones again found that the bank’s “unnecessary, dilatory tactics and contradictory information [had] the inexorable effect, whether or not intentional, of plunging the homeowner deeper and deeper in arrears, raising the very real probability that she will never be able to extricate herself from this debt and work out an affordable loan modification.” Specifically, Justice Pagones noted that the bank, even as the Defendant Padilla made her “trial period” loan modification payments, made all sorts of excuses as to why Defendant Padilla could not be offered a final loan modification. First, the bank misplaced Defendant Padilla documents, which were submitted as a part of her application. Defendant Padilla resent the documents. Then the bank tells her there was a “mix-up” with her records, and that a second mortgage on her home made her monthly expenses too high to offer her a loan modification under the HAMP program. Upon her next appearance in court, she is advised that she may be eligible for the HAMP program after all, and should resubmit all her financial documentation to be considered. Then when Defendant Padilla resubmitted her financial documentation and confirmed that no additional documentation was needed, she was soon thereafter advised that she was rejected for a loan modification because she did not provide the bank all the information needed within the required time frame.
In response to the bank’s gamesmanship—or ineptitude, as the case may be—Justice Pagones threatened to sanction the bank with $100,000.00 in exemplary damages and to bar the bank from collecting any interest on the remainder of the principal balance for the life of the loan. Indeed, such sanctions are not unheard of. Justice Pagones cited Justice Jeffrey Arlen Spinner of Suffolk County, who has been known to mete out harsh penalties where a bank’s conduct had been “inequitable, unconscionable, vexatious and opprobrious” in the context of the foreclosure settlement conference. See Emigrant Mtge. Co., Inc. v. Corcione, 28 Misc 3d 161 (Sup. Ct. Suffolk County April 16, 2010).
Justice Pagones should be credited for his advocacy of homeowners; however, it should be noted that not all judges are equally solicitous of the legal rights of homeowners or the particular equities of their situation. For this reason, it is generally recommended that individuals facing foreclosure seek counsel as early as possible in the foreclosure process—ideally, as soon as a defendant is served with a summons and complaint.
1. See Sponsor’s Mem., Bill Jacket, L.208, ch. 472.
Law Offices Robert E. Brown, Esq.
Below is a great article by Christine Stapleton about the very issue I touched upon in my previous blog post. We're on to you, Elpiniki!
At Lender Processing Services workers who signed tens of thousands of sworn foreclosure affidavits with someone else’ name were called “surrogate signers”, according to Cheryl Denise Thomas, a former LPS worker who admitted to notarizing as many as 1,000 sworn affidavits daily - often without witnessing the signature.
When Thomas questioned her supervisors about not witnessing signatures before she notarized documents she said was told, “We’re legal. You can do it. That’s fine. Just notarize it.” Thomas said she has been questioned by FBI investigators about the document processing practices at LPS. She also said her daughter, Tywanna Thomas - whose name appears on thousands of sworn affidavits - also worked at LPS along with Thomas’ nephew.
Thomas said her supervisor was Renee Gaglione, whose name popped up in a Palm Beach county foreclosure case on Tuesday. Gaglione is also believed to have been the supervisor of Linda Green. Variations of Green’s signature appear on thousands of foreclosure documents, including the foreclosure of Lynn Szymoniak, a Palm Beach Gardens lawyer who specializes in white collar crime.
Szymoniak discovered the practice of robo-signing: employees at banks and mortgage servicing companies who sign sworn affidavits without any knowledge of the case. Linda Green is believed to be among the most prolific robo-signatures.

References: v. 
 v. 
 v. 
 v. 
 v. 
 §3408
 §1304
 v. 
 v.