Glaski vs Bank of America NA et al – FOR PUBLICATION

Glaski vs Bank of America NA et al – FOR PUBLICATION

Edstrom_MortgageSecuritization_POSTER_17_x_22_v4_1By Daniel Edstrom
DTC Systems, Inc.

On August 8, 2013 the Fifth Appellate District in the Court of Appeal of the State of California ordered the Thomas A. Glaski vs Bank of America, NA et al decision published, stating:

 

 

As the nonpublished opinion filed on July 31, 2013, in the above entitled matter hereby meets the standards for publication specified in the California Rules of Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the Official Reports.

Based on the importance of this case, the text of the July 31, 2013 ruling is listed verbatim:

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

THOMAS A. GLASKI,Plaintiff and Appellant,v.

BANK OF AMERICA, NATIONAL ASSOCIATION et al.

Defendants and Respondents.

F064556

(Super. Ct. No. 09CECG03601)

OPINION

 

APPEAL from a judgment of the Superior Court of Fresno County.  Alan M. Simpson, Judge.

Law Offices of Richard L. Antognini and Richard L. Antognini; Law Offices of Catarina M. Benitez and Catarina M. Benitez, for Plaintiff and Appellant.

AlvaradoSmith, Theodore E. Bacon, and Mikel A. Glavinovich, for Defendants and Respondents.

-ooOoo-

INTRODUCTION

            Before Washington Mutual Bank, FA (WaMu) was seized by federal banking regulators in 2008, it made many residential real estate loans and used those loans as collateral for mortgage-backed securities.[1]  Many of the loans went into default, which led to nonjudicial foreclosure proceedings.  Some of the foreclosures generated lawsuits, which raised a wide variety of claims.  The allegations that the instant case shares with some of the other lawsuits are that (1) documents related to the foreclosure contained forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true owner of the loan because its chain of ownership had been broken by a defective transfer of the loan to the securitized trust established for the mortgage-backed securities.  Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

In this appeal, the borrower contends the trial court erred by sustaining defendants’ demurrer as to all of his causes of action attacking the nonjudicial foreclosure.  We conclude that, although the borrower’s allegations are somewhat confusing and may contain contradictions, he nonetheless has stated a wrongful foreclosure claim under the lenient standards applied to demurrers.  We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date.  Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.

We therefore reverse the judgment of dismissal and remand for further proceedings.

Continue reading “Glaski vs Bank of America NA et al – FOR PUBLICATION”

The OCC Misses the Point on Toxic Waste

The OCC Misses the Point on Toxic Waste

By Daniel Edstrom
DTC Systems, Inc.
http://www.dtc-systems.net

We all see what we want to see.  But when others control the conversation, it is easy to miss the point.  As a regulator the Office of the Comptroller of the Currency should be taking the lead and controlling the conversation, but in reality, they have been bridled and are being led around by the nose.  Conspiciously absent are numerous issues they as a regulator have the responsibility of dealing with.  This article is timely in response to an article by Neil F. Garfield (http://livinglies.wordpress.com/2011/12/27/the-big-lie-banks-did-nothing-illegal/), which is a response to Yves Smith of Naked Capitalism article (http://www.nakedcapitalism.com/2011/12/more-msm-criticism-of-obama-nothing-illegal-here-move-along-stance-on-foreclosure-fraud.html), which is a response to a Reuters article (http://www.reuters.com/article/2011/12/22/us-foreclosures-idUSTRE7BL0MC20111222).  But I found none of these articles until I was finished writing this post.  Take the following random and critical issues:

  • Are the loans in the pool?  Were the loans ever in the pool?  Does the pool exist?  Did the pool perfect interest in any of the loans?  This issue is very political and the OCC in our opinion will never address this issue or look into this.
  • What loans are in default?  Can a loan be in default?  What comes first, the default or the loss?
  • Are there any compliance issues?

Continue reading “The OCC Misses the Point on Toxic Waste”

SEC CHARGES FORMER FANNIE MAE AND FREDDIE MAC EXECUTIVES WITH SECURITIES FRAUD

SEC CHARGES FORMER FANNIE MAE AND FREDDIE MAC EXECUTIVES WITH SECURITIES FRAUD

By Daniel Edstrom
DTC Systems, Inc.

The Securities and Exchange Commission just released the following information:

Companies Agree to Cooperate in SEC Actions

FOR IMMEDIATE RELEASE
2011-267

Washington, D.C., Dec. 16, 2011 — The Securities and Exchange Commission today charged six former top executives of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) with securities fraud, alleging they knew and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans.

Fannie Mae and Freddie Mac each entered into a Non-Prosecution Agreement with the Commission in which each company agreed to accept responsibility for its conduct and not dispute, contest, or contradict the contents of an agreed-upon Statement of Facts without admitting nor denying liability. Each also agreed to cooperate with the Commission’s litigation against the former executives. In entering into these Agreements, the Commission considered the unique circumstances presented by the companies’ current status, including the financial support provided to the companies by the U.S. Treasury, the role of the Federal Housing Finance Agency as conservator of each company, and the costs that may be imposed on U.S. taxpayers. Continue reading “SEC CHARGES FORMER FANNIE MAE AND FREDDIE MAC EXECUTIVES WITH SECURITIES FRAUD”

SEC Staff Issues Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization

SEC Staff Issues Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization

By Daniel Edstrom
DTC Systems, Inc.

Here is the 2011-199 release by the SEC:

SEC Staff Issues Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization
FOR IMMEDIATE RELEASE
2011-199
Washington, D.C., Sept. 30, 2011 — The staff of the Securities and Exchange Commission today issued a report summarizing the staff’s observations and concerns arising from the examinations of ten credit rating agencies registered with the SEC as Nationally Recognized Statistical Rating Organizations (“NRSROs”) and subject to Commission oversight.
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Additional Materials
2011 Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization

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The report notes that despite changes by some of the examined credit rating agencies to improve their operations, Commission staff identified concerns at each of the NRSROs. These concerns included apparent failures in some instances to follow ratings methodologies and procedures, to make timely and accurate disclosures, to establish effective internal control structures for the rating process and to adequately manage conflicts of interest. The report notes that the staff made various recommendations to the NRSROs to address the staff’s concerns and that in some cases the NRSROs have already taken steps to address such concerns. Continue reading “SEC Staff Issues Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization”

The Internal Revenue Service is Investigating the Tax-Exempt Status of REMICs

The Internal Revenue Service is investigating the Tax-Exempt Status of REMICs

By Daniel Edstrom
DTC Systems, Inc.

Reuters has announced that “The Internal Revenue Service has launched a review of the tax-exempt status of a widely-held form of mortgage-backed securities called REMICs.”  This comes after many years of homeowners, lawyers and securitization experts having discussed the shenanigans of Wall Street.  The standard industry practice is that loans were never perfected into these REMICs, which required the loans as “qualified mortgages” to be in the REMIC within 90 days of the “startup day”, which corresponds with the trust “closing date”.  However, in nearly every case we have seen, the REMIC servicers are doing an assignment of the security instrument into the trust after the loan is in foreclosure in order that whoever is foreclosing has the right to foreclose.  Unfortunately once a loan is in default it is no longer a “qualified mortgage” under REMIC laws, not to mention that it is years past the REMIC “startup day”.  Nor as Judge Arthur Schack puts it in New York, why is the trustee accepting the conveyance of a non-performing loan into the trust?

Specifically the article says “These banks’ transgressions, confirmed in court decisions and through recent action by federal bank regulators, include the failure to formally transfer ownership of mortgages to the trusts that invested in them and the subsequent creation of fraudulent mortgage assignments and other false documents.”  Cease and Desist Consent Orders were just issued against Bank of America, Citibank, HSBC, JP Morgan Chase, US Bank, Wells Fargo, Aurora Bank, EverBank, EverBank Financial Corporation, IMB HoldCo LLC, OneWest, Sovereign Bank, DocX, LPS Default and MERS.  Just wait until the Securities and Exchange Commission decides to investigate Sarbanes-Oxley legislation against the statements these entities have made under oath with what the bank regulators found actually happened with them. Continue reading “The Internal Revenue Service is Investigating the Tax-Exempt Status of REMICs”