Friday, October 1, 2010

FYI: Senator Franken Requests Feds Prosecute Ally, Require Compensation to Borrowers

Senator Al Franken of Minnesota sent a letter to the United States Treasury, DOJ, HUD, FRB, OCC and FDIC requesting investigation and prosecution of Ally and and its employees for "any criminal conduct," that the agencies require "proper restitution and compensation" for "illegitimate foreclosure actions," and that the agencies confirm that no FHA or HAMP related loans "were associated with Ally's misconduct."
 
A copy of Franken's letter is available at:
 
Specifically, the letter states:
 

Each of your agencies has an important role to play in addressing this egregious situation and holding all appropriate actors fully accountable. As such, I respectfully request that you collaborate to conduct a thorough investigation into the alleged misconduct. As part of this investigation, it is crucial that Ally and its employees are held fully accountable for any criminal misconduct. Additionally, all homeowners who may have experienced illegitimate foreclosure sales, those who have been forced to defend against illegitimate foreclosure actions, and those who have been harmed must be identified. These individuals must receive proper restitution and compensation, as provided for under the law. It is also critical to confirm that no loans provided through the Federal Housing Administration or in conjunction with the Home Affordable Modification Program were associated with Ally's misconduct.

Unfortunately, concerns have been raised that Ally's practices are not an anomaly in this industry, and that these bad practices are used by numerous other companies as well. Therefore, I request that you report on the actions your agencies are taking (and plan to take) to improve oversight of mortgage servicers overall. In particular, please inform me of steps that you will take to ensure that similar misconduct is not currently occurring within other mortgage service companies and how future improper activity can best be prevented. This should include any measures that may be taken within the Home Affordable Modification Program and by the Federal Housing Administration.

 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 


From: Ralph Wutscher [mailto:rwutscher@kahrlwutscherllp.com]
Sent: Thursday, September 30, 2010 5:50 PM
To: rwutscher@kw-llp.com
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: GMAC/Ally Affidavit Issue - Purported Deposition Transcripts

As many of you have requested, please see the following links for the purported deposition transcripts regarding the GMAC/Ally affidavit news media blitz issue:
 
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 


From: Ralph Wutscher [mailto:rwutscher@kahrlwutscherllp.com]
Sent: Thursday, September 30, 2010 3:58 PM
To: rwutscher@kw-llp.com
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: Ohio Sec of State Refers Chase to DOJ for Allegedly Improper F/C Affidavits

In the latest assault on MERS, and in connection with the Ally affidavit news media blitz, Ohio Secretary of State Jennifer Brunner, Ohio's chief elections officer and the Ohio state officer responsible for licensing notary publics, today issued a directive to Ohio boards of elections that foreclosures cannot be used without further investigation to disqualify voters, notably allowing the defaulted mortgagors until Election Day to update their addresses.
 
 
Ohio Secretary Brunner also referred matters of alleged notary abuse in thousands of home mortgage foreclosures by Chase Home Finance LLC and Mortgage Electronic Registration Systems, Inc. to U.S. District Attorney Steven Dettelbach in Cleveland.
 
Brunner cited depositions of a Chase employee and a MERS corporate officer. The cited deposition transcripts are available at:
 
 
According to the Ohio Secretary, these depositions supposed reveal that 18,000 documents per month are executed and notarized per month by eight people at Chase, supposedly with testimony that:  (1) the notary and not the document fills in numbers in the affidavits used in court ordered foreclosures;  (2) no oath is administered for the signing of each document;  (3) notarized documents are not verified by the person signing and giving oath that they have personal knowledge of the contents of the documents, but rather, signers are relying on verification by others;  (4) documents are signed in bulk and notarized in bulk separately;  (5) the acknowledging notaries know this at the time they notarize documents in this process.
 
In addition, according to the Ohio Secretary, the MERS deposition supposedly demonstrates that after corporate status changes occurred for MERS, new designations of authority were not executed, leaving one or more individuals for the former MERS corporation continuing to delegate authority on behalf of the new corporation without authorization by the new corporation.
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 

Posted by at

Thursday, September 30, 2010

FYI: GMAC/Ally Affidavit Issue - Purported Deposition Transcripts

As many of you have requested, please see the following links for the purported deposition transcripts regarding the GMAC/Ally affidavit news media blitz issue:
 
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 


From: Ralph Wutscher [mailto:rwutscher@kahrlwutscherllp.com]
Sent: Thursday, September 30, 2010 3:58 PM
To: rwutscher@kw-llp.com
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: Ohio Sec of State Refers Chase to DOJ for Allegedly Improper F/C Affidavits

In the latest assault on MERS, and in connection with the Ally affidavit news media blitz, Ohio Secretary of State Jennifer Brunner, Ohio's chief elections officer and the Ohio state officer responsible for licensing notary publics, today issued a directive to Ohio boards of elections that foreclosures cannot be used without further investigation to disqualify voters, notably allowing the defaulted mortgagors until Election Day to update their addresses.
 
 
Ohio Secretary Brunner also referred matters of alleged notary abuse in thousands of home mortgage foreclosures by Chase Home Finance LLC and Mortgage Electronic Registration Systems, Inc. to U.S. District Attorney Steven Dettelbach in Cleveland.
 
Brunner cited depositions of a Chase employee and a MERS corporate officer. The cited deposition transcripts are available at:
 
 
According to the Ohio Secretary, these depositions supposed reveal that 18,000 documents per month are executed and notarized per month by eight people at Chase, supposedly with testimony that:  (1) the notary and not the document fills in numbers in the affidavits used in court ordered foreclosures;  (2) no oath is administered for the signing of each document;  (3) notarized documents are not verified by the person signing and giving oath that they have personal knowledge of the contents of the documents, but rather, signers are relying on verification by others;  (4) documents are signed in bulk and notarized in bulk separately;  (5) the acknowledging notaries know this at the time they notarize documents in this process.
 
In addition, according to the Ohio Secretary, the MERS deposition supposedly demonstrates that after corporate status changes occurred for MERS, new designations of authority were not executed, leaving one or more individuals for the former MERS corporation continuing to delegate authority on behalf of the new corporation without authorization by the new corporation.
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 

Posted by at

FYI: Ohio Sec of State Refers Chase to DOJ for Allegedly Improper F/C Affidavits

In the latest assault on MERS, and in connection with the Ally affidavit news media blitz, Ohio Secretary of State Jennifer Brunner, Ohio's chief elections officer and the Ohio state officer responsible for licensing notary publics, today issued a directive to Ohio boards of elections that foreclosures cannot be used without further investigation to disqualify voters, notably allowing the defaulted mortgagors until Election Day to update their addresses.
 
 
Ohio Secretary Brunner also referred matters of alleged notary abuse in thousands of home mortgage foreclosures by Chase Home Finance LLC and Mortgage Electronic Registration Systems, Inc. to U.S. District Attorney Steven Dettelbach in Cleveland.
 
Brunner cited depositions of a Chase employee and a MERS corporate officer. The cited deposition transcripts are available at:
 
 
According to the Ohio Secretary, these depositions supposed reveal that 18,000 documents per month are executed and notarized per month by eight people at Chase, supposedly with testimony that:  (1) the notary and not the document fills in numbers in the affidavits used in court ordered foreclosures;  (2) no oath is administered for the signing of each document;  (3) notarized documents are not verified by the person signing and giving oath that they have personal knowledge of the contents of the documents, but rather, signers are relying on verification by others;  (4) documents are signed in bulk and notarized in bulk separately;  (5) the acknowledging notaries know this at the time they notarize documents in this process.
 
In addition, according to the Ohio Secretary, the MERS deposition supposedly demonstrates that after corporate status changes occurred for MERS, new designations of authority were not executed, leaving one or more individuals for the former MERS corporation continuing to delegate authority on behalf of the new corporation without authorization by the new corporation.
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 

Posted by at

Tuesday, September 28, 2010

FYI: Cal App Says Judgment in Unlawful Detainer Action Bars Challenge to Foreclosure

A California appellate court recently affirmed a trial court's judgment against homeowners whose property had been sold in nonjudicial foreclosure and who had entered into a stipulated judgment in an eviction and unlawful detainer action.  In so doing, the court held that the homeowner's attempt to bring this subsequent action against the purchaser, beneficiary and trustee as to the subject property was barred by the stipulated judgment, as the unlawful detainer judgment had a claim preclusive effect in the action challenging the validity of the purchaser's title. 
 
A copy of the opinion is available at: http://www.courtinfo.ca.gov/opinions/documents/B221470.PDF 
 
When plaintiffs became delinquent on their refinance home mortgage loan, a notice of default was served and recorded on the property.  The notice identified a different beneficiary and trustee from those that were identified in the original deed of trust, but no substitution had been served or recorded showing the new trustee/beneficiary.  A substitution was recorded evidencing the change in trustee before the nonjudicial foreclosure sale, but there was no recording showing substitution of the beneficiary until two months after the new trustee conducted the nonjudicial foreclosure sale.   
 
The purchaser at the sale instituted an eviction and unlawful detainer action,  and the former homeowners responded alleging that the foreclosure sale was invalid due to improper notice, as well as unspecified "irregularities in the sale."  A stipulated judgment was entered in the unlawful detainer action, and the former homeowners then filed this action against the purchaser, the new trustee and the new beneficiary, asserting claims for, among other things: declaratory relief, quiet title and willful wrongful foreclosure.  The trial court sustained defendants' demurrer without leave to amend and this appeal followed.
The appellate court held that the demurrer was properly sustained without leave to amend, because the stipulated judgment in the unlawful detainer action barred this action.  More specifically, the court held that the "stipulated judgment in the related unlawful detainer action brought by [purchaser] against plaintiffs was res judicata as to plaintiffs' claims in this action which all arise from the alleged invalidity of the foreclosure sale."  Because the court ruled that this ground was "dispositive," it did not consider whether there were also defects in the foreclosure sale.

The court acknowledged that a judgment arising from an unlawful detainer action generally is given limited res judicata effect, it pointed to the "qualified exception to the rule that title cannot be tried in unlawful detainer that is contained in Code of Civil Procedure section 1161a, which extends the summary eviction remedy beyond the conventional landlord-tenant relationship to include certain purchasers of property" in making its decision.  More specifically, "Code of Civil Procedure section 1161a ... provides an unlawful detainer action may be filed '[w]here the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust . . . and the title under the sale has been duly perfected.'"   
 
Moreover, under California law,  a "judgment entered without contest, by consent or stipulation, is usually as conclusive a merger or bar as a judgment rendered after trial."  Here, because the unlawful detainer complaint was brought under section 1161a, "it was proper for limited issues pertaining to the validity of title obtained by [the purchaser] in the sale to be raised and conclusively resolved."  Because all six claims in the plaintfifs' complaint were premised on the alleged invalidity of the sale, and because the sole basis upon which the purchaser asserted its right to possession of the property in the unlawful detainer action was its "duly perfected" legal title obtained in the nonjudicial foreclosure sale, the validity of the purchaser's title had to be resolved in the unlawful detainer action.
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 

Posted by at

Sunday, September 26, 2010

FYI: 6th Cir Vacates Trial Court's Absention Order in Housing Court Action Removed Under Diversity Jurisdiction

The U.S. Court of Appeals for the Sixth Circuit recently vacated an abstention order entered by a federal court in a public nuisance action brought against a bank in relation to twenty-five vacant properties owned by the bank.

A copy of the opinion is available at: http://www.ca6.uscourts.gov/opinions.pdf/10a0306p-06.pdf

The Cleveland Housing Renewal Project, Inc. ("CHRP") filed this public nuisance action in state court against a bank and its affiliated companies.  CHRP sought: (1) a declaration that the 25 named properties constituted a "public nuisance;" (2)  injunctive relief requiring the bank to abate the alleged nuisances and (3) an injunction prohibiting the bank from selling foreclosed properties at "extremely distressed prices."  The bank removed the action to federal court and CHRP moved to remand.  The district court concluded that subject matter jurisdiction was established through diversity and that CHRP had Article III prudential standing, but nonetheless remanded the action to state court pursuant to Burford abstention, to avoid federal disruption of a coherent state policy regarding a substantial public concern.  This appeal followed. 

In vacating the abstention order and remanding the case to the federal district court, the Court addressed: (1) the federal court's subject matter jurisdiction; (2) CHRP's Article III Standing; and (3) the district court's remand of the case to state court.

As to the federal court's subject matter jurisdiction, the Court agreed that district court had subject matter jurisdiction over the matter, holding that, although the City of Cleveland was named as a defendant, "the district court properly realigned the City as a plaintiff and properly held there is complete diversity between the parties.  The Court also agreed that the amount-in-controversy requirement for diversity jurisdiction was met, holding that "[w]hile the value of the requested injunctive relief to CHRP may be difficult to quantify, the notion that abatement of nuisances on twenty-five parcels of abandoned property would amount to improvement valued at less than $75,000 is patently suspect."

As to CHRP's Article III standing, the Court stated: "we find not error in the district court's holding that CHRP has standing to prosecute this action in federal court."

Finally, the Court disagreed with the district court's remand of the case to state court under Burford abstention, which derives from the Supreme Court's ruling in Burford v. Sun Oil Co. that federal courts "should exercise their discretionary power with proper regard for the rightful independence of state governments in carrying out their domestic policy."  The Court first examined federal interests in this matter, noting that this particular case "falls within one of those 'classes of cases' to which a 'strong federal interest' attaches," in particular the "strong federal interest in adjudicating cases brought under the congressional grant of diversity jurisdiction."  Specifically, the Court noted that "we believe the district court improperly undervalued the strength of the federal interest in affording a neutral forum for the adjudication of disputes between parties of diverse citizenship."  The Court next examined the state interests that "may be deemed to outweigh the federal interests," noting first that it is "not immediately apparent what makes CHRP's business practices claim 'difficult,' as opposed to merely 'novel.'" 

The Court also ruled that, because Ohio common law of public nuisance is settled, "there is no reason to believe that the federal court's application of settled law to the facts alleged in support of CHRP's common law public nuisance claim would be disruptive of any coherent state policy" and "there is precious little showing" of how adjudication in a federal court "would disrupt or impair state efforts to implement a statewide policy."

Ultimately, the Court held that the district court "undervalued the importance of the federal interest at stake and overvalued the strength of the state interests"

Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com

 

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