Homeowner Takes Goldman Sachs to Task and Gets a Favorable Loan Modification in Bankruptcy

Homeowner Takes Goldman Sachs to Task and Gets a Favorable Loan Modification in Bankruptcy

By Daniel Edstrom
DTC Systems, Inc.

This bankruptcy case is a few years old (bankruptcy filed on 6/11/2007 and loan mod dated approx. 2009).  The Homeowners fight to find the identity of MTGLQ Investors, LP – a Goldman Sachs subsidiary.  They end up forcing Goldman Sachs to abandon foreclosure and accept a loan modification.  This is a complex case and the debtors acted as their own attorney.

Read the Motion for Relief from Stay here:  http://dtc-systems.net/wp-content/uploads/2012/04/22-Motion-for-Relief-from-Stay.pdf

 – filed by Attorneys for WMC MORTGAGE CORP., its successors and/or assigns

Read the Amended Motion for Relief from Stay here: http://dtc-systems.net/wp-content/uploads/2012/04/34-Amended-Motion-for-Relief-from-Stay.pdf

 – filed by Attorneys for MTGLQ INVESTORS, L.P., its successors and/or assigns

(Yes that is right, one creditor files the motion, then another creditor amends the motion)

Read the Amended Motion for Relief from Stay exhibits here: http://dtc-systems.net/wp-content/uploads/2012/04/34-Amended-Motion-for-Relief-from-Stay_Exhibits.pdf

Read the Motion for Loan Mod Approval here:  http://dtc-systems.net/wp-content/uploads/2012/04/96-Motion-for-Loan-Mod-Approval.pdf

Read the Notice of Recorded Loan Mod Agreement here:  http://dtc-systems.net/wp-content/uploads/2012/04/102-Notice-of-Recording-of-Loan-Mod-Agreement.pdf

Legal Standing At Inception

Legal Standing At Inception

By Daniel Edstrom
DTC Systems, Inc.

No I am not an attorney and no I am not providing legal advice.  This is the name of an article I just read posted on Neil Garfield’s LivingLies blog.  The article is from Mark Stopa, an attorney in Florida.  Read this article first and then come back and read my comments below: http://livinglies.wordpress.com/2011/12/19/legal-standing-at-inception/

When I saw the title, I thought awesome, they will go back to the origination of the loan.  But they went back to the time the judicial foreclosure case was filed.  This is a good argument and it should be fairly straight forward, or at least as straight forward as anything can be in a legal proceeding.  What I was looking for was what I heard this last week from somebody.  They went to bankruptcy court and told the judge that they had evidence that their loan was table funded, which means the named lender did not provide the money to fund the loan.  The money to fund the loan came from an unknown and undisclosed third party.  The bankruptcy judge made a simple statement.  The judge said that if the named originator did not fund the loan, then they have nothing to transfer, and the movant in the motion for relief from stay (the bank) would therefore have nothing.  This judge understands that the note is only evidence of the obligation, it is not the actual obligation.  Transfer of the note or the security instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed) without an interest in the obligation itself, is meaningless.  That is the type of standing issue that I would like to see attorneys make in all states.

Is this why under Regulation “Z” table funded loans have the presumption of being predatory?

Pro Per Debtor Stops Attorneys for US Bank – in RE Deamicis

Pro Per Debtor Stops Attorneys for US Bank – in RE Deamicis

By Daniel Edstrom
DTC Systems, Inc.

She has been fighting toothe and nail.  Nobody was listening.  The current bankruptcy judge was skeptical when she showed up in bankruptcy.  But now his ruling on a motion for relief from stay blows the doors off her case.  It seems that bank attorneys are confused by something that should be very simple for an attorney.  The issue is who is the real party in interest?  Many have failed to comprehend what is in a name.  If a very large bank is included in the name, most just glaze over it and go right to the pleadings.  Here it is in a nutshell: US Bank, NA as Indenture Trustee is MEANINGLESS.  This is because when a trust is involved, the trust is the real party, not the bank.  US Bank is a trustee of hundreds if not thousands of trusts.  Naming them as Trustee does not identify an entity that is real.  In the debtors case, the bank foreclosed on her home in the name of US Bank as Indenture Trustee of [some Terwin Trust].  This was a non-judicial foreclosure.  In the UD (unlawful detainer), which is a judicial case to evict her, the name used was US Bank as Indenture Trustee.  The lawyers did not specify a specific trust.  She lost that case in state court and before she was evicted she filed bankruptcy.  She had to keep objecting and protesting.  Eventually the judge came to the realization that something was wrong.  In fact the judge ruled as follows: 

“The defect cannot be cured, either directly or implicitly, by any ruling this court can make on behalf of the Terwin Trust in the Second 362 Motion.”

I almost fell out of my chair when I read that.  If they put the wrong name, they have to cure the problem.  Based on my research, in a very large number of cases the wrong party is named.  Including yours truly.  Have a nice day, I know I will.

Download the case here: http://dtc-systems.net/wp-content/uploads/2011/08/in-RE-Deamicis-Real-Party-in-Interest-For-Publication.pdf

Bankruptcy Judge Margaret M. Mann GETS IT!

Bankruptcy Judge Margaret M. Mann GETS IT!

By Daniel Edstrom
DTC Systems, Inc.

Coming off of the heels of in re: Agard (http://dtc-systems.net/2011/02/mers-agency-york-bankruptcy-court-agard/), the Honorable Judge Mann from the United States Bankruptcy Court Southern District of California took 76 days to review the Motion for Relief From Automatic Stay for the in re: Salazar Chapter 13 bankruptcy (Bankruptcy No: 10-17456-MM13).   The findings of fact and conclusions of law were an amazing reading that confirms many of the issues we have been discussing in regards to loans, securitization and foreclosure.  Like Judge Grossman in the agard case, Judge Mann goes to great lengths to research the details that are applicable to this case.   Here are some highlights: Continue reading “Bankruptcy Judge Margaret M. Mann GETS IT!”

MERS has no agency – New York Bankruptcy Court: in re Agard

The following is a New York Bankruptcy motion for relief from stay ruling from February 10th, 2011




In re:

Case No. 810-77338-reg


Chapter 7




Before the Court is a motion (the “Motion”) seeking relief from the automatic stay

pursuant to 11 U.S.C. § 362(d)(1) and (2), to foreclose on a secured interest in the Debtor’s real

property located in Westbury, New York (the “Property”). The movant is Select Portfolio

Servicing, Inc. (“Select Portfolio” or “Movant”), as servicer for U.S. Bank National Association,

as Trustee for First Franklin Mortgage Loan Trust 2006-FF12, Mortgage Pass-Through

Certificates, Series 2006-FF12 (“U.S. Bank”). The Debtor filed limited opposition to the Motion

contesting the Movant’s standing to seek relief from stay. The Debtor argues that the only

interest U.S. Bank holds in the underlying mortgage was received by way of an assignment from

the Mortgage Electronic Registration System a/k/a MERS, as a “nominee” for the original

lender. The Debtor’s argument raises a fundamental question as to whether MERS had the legal

authority to assign a valid and enforceable interest in the subject mortgage. Because U.S. Bank’s

rights can be no greater than the rights as transferred by its assignor – MERS – the Debtor argues

that the Movant, acting on behalf of U.S. Bank, has failed to establish that it holds an

enforceable right against the Property.1 The Movant’s initial response to the Debtor’s opposition was that

MERS’s authority to assign the mortgage to U.S. Bank is derived from the mortgage itself which

allegedly grants to MERS its status as both “nominee” of the mortgagee and “mortgagee of

record.” The Movant later supplemented its papers taking the position that U.S. Bank is a

creditor with standing to seek relief from stay by virtue of a judgment of foreclosure and sale

entered in its favor by the state court prior to the filing of the bankruptcy. The Movant argues

that the judgment of foreclosure is a final adjudication as to U.S. Bank’s status as a secured

creditor and therefore the Rooker-Feldman doctrine prohibits this Court from looking behind the

judgment and questioning whether U.S. Bank has proper standing before this Court by virtue of a

valid assignment of the mortgage from MERS.
Continue reading “MERS has no agency – New York Bankruptcy Court: in re Agard”