Category Archives: Lawsuit

MERS Wins One in Nevada Too

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It looks like MERS has won another case, this time in Nevada. In the case of Volkes vs. BAC Home Loans Servicing the court ruled in favor of the defendant.

The Nevada Supreme court ruled that the MERS assignment was valid.

It was not clearly erroneous for the district court to determine that
the MERS assignment was valid.

The appellants also claimed BAC did not participate in mediation in good faith, but that claim was apparently not included for judicial review.

Apparently this link is to an unpublished order, and cannot be considered precedent.

Read the order: http://www.buckleysandler.com/uploads/104/doc/volkes-v-bac-2-24-12.pdf

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MERS Wins Case in Kentucky

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The U.S. Court for the Western District of Kentucky, Paducah Division, has ruled in favor of Mortgage Electronic Registration Systems Inc. (MERS). The case was filed against MERS by the clerks of two Kentucky counties where they sought to collect the recording fees that the banks avoided by using MERS.

Kentucky law, like most other states specifies that when a loan is assigned the holder of the loan must record the assignment within 30 days. It appears to me that MERS did NOT comply with Kentucky law and may still face some consequences. But, the judge ruled that the county clerks had no standing in the case because the law was designed to protect the property owner, not the clerks.

First, the county clerks are not members of the class of persons the General Assembly intended to protect by the recording statutes cited by Plaintiffs. Here, the class of persons intended to be protected by Kentucky’s land recording system consists of existing lienholders seeking to give notice of their secured status; prospective purchasers and creditors seeking information about prior liens; and owners of property seeking release of liens once debts are paid off.

And:

The purpose of the statutes cited by Plaintiffs is to assure that liens are discharged when an underlying loan is paid off, to give subsequent purchasers and lenders notice of recorded liens, and to allow creditors to give notice of their secured interest in the property.

The suit was dismissed with prejudice.

Read more: http://nationalmortgageprofessional.com/news28486/legal-action-against-mers-dropped-kentucky

And the ruling: http://www.leagle.com/xmlResult.aspx?page=1&xmldoc=In%20FDCO%2020120221C28.xml&docbase=CSLWAR3-2007-CURR&SizeDisp=7

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Would I buy a Belvedere Condominium?

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My posts on this blog about the Belvedere condominium project and developer Bijan Madjlessi generated more interest than any other so far. Readers have even contacted me asking what I thought about buying units in the project.

I must begin with this disclaimer because except for what I have read or learned in newspaper or other reports my direct knowledge of the Belvedere is almost nonexistent. I’ve never been in the Belvedere nor have I ever met any of the players that I am aware of. As I said the extent of my knowledge has come only from news articles or from comments on this or other blogs. Therefore I believe I am not qualified to recommend in any way either positive or negative about the benefits of purchasing a Belvedere condominium unit.

My concern with the Belvedere project is that I am not convinced that the legal difficulties are yet over. There are some other reasons that I do not like condominiums but I will save that for another time.

As we have learned from the Reno Gazette Journal, the Belvedere condominiums were purchased at a Washoe County tax foreclosure sale by David Lonich, the attorney for Madjlessi. It would appear to me that Lonich is nothing but the straw buyer for Madjlessi.

We learned that Madjlessi failed to pay his mortgages, failed to pay his vendors, and failed to pay property taxes, thus resulting in tax foreclosure.

We learned that Madjlessi had been arrested in California for insurance fraud. Then as information began to grow we learned that Madjlessi was involved in the failure of Sonoma Valley bank. We further learned that Madjlessi had been involved in at least three other failed developments in California in the Sonoma and Petaluma area.

I would be concerned that the Belvedere is still a target rich environment for attorneys and law suits. I can only imagine that some hungry attorney will see an opportunity in coming to aid of the vendors that lost so much by their supplying goods and services to the project.

I just can’t imagine that they will be happy seeing Madjlessi win at their expense.

So, no. I would not personally be comfortable buying a condominium in the Belvedere project.

I would welcome comments from anyone having a different opinion.

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MERS Foreclosure Upheld by California Courts

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Two different courts in California have upheld foreclosures by MERS corp.

The court ruled the statute cited by plaintiffs to prove an improper foreclosure applies only to mortgages, not deeds of trust, and other state laws give MERS authority to foreclose.

With the battles that have preceded these decisions, I would not expect that the issue will be soon resolved. And, it may, or may not have any impact on any Nevada laws.

Read the article: http://www.housingwire.com/2011/09/19/two-california-appellate-court-uphold-mers-foreclosures?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29

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State of Washington Sues B of A over Foreclosures

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The Washington state Attorney General filed suit against Bank of America over its foreclosure practices. Bank of America denies the charges.

Attorney General Rob McKenna alleged that a unit of Bank of America Corp. that handles foreclosures on behalf of the bank had improperly executed thousands of foreclosures over the last three years. The suit alleges that ReconTrust Co., a wholly owned BofA subsidiary that serves as a trustee in foreclosure sales, didn’t act in good faith when foreclosing on homeowners.

Washington is one of 27 so-called “non-judicial” states where, rather than going before a judge to foreclose, banks hire a trustee to carry out an administrative process that varies slightly from state to state. Trustees notify homeowners that they are in default and, if the borrower doesn’t become current or work out a modification, the trustee eventually carries out the foreclosure.

The lawsuit alleges that ReconTrust “committed unfair and deceptive acts” by failing to act as a neutral party between borrowers and lenders. ReconTrust “has failed to comply” with state foreclosure law “in each and every foreclosure it has conducted since at least June 12, 2008,” said the lawsuit.

The Washington lawsuit has listed a number of violations of Washington law and is asking for a court injunction against the foreclosures and fines for every violation.
Read more.

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Foreclosure Overturned by Oregon Judge

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An Oregon judge overturned a foreclosure  and subsequent eviction. This case, like many nationwide, also involves MERS, the Mortgage Electronic Registration System.

MERS was created, in part to avoid the expense of paying recording fees to the local county recorder.

A Wells Fargo & Co. unit foreclosed on Flynn after she fell behind in her payments. Wells Fargo sold the mortgage to U.S. Bank, the second lienholder, in December 2010, Cutler said.

I don’t understand how Wells Fargo could have sold the mortgage.  This may due either to Oregon law or a reporter getting the story wrong.

U.S. Bank tried to evict Flynn from her Vernonia home during a May 24 court hearing. But on June 23, Columbia County Circuit Judge Jenefer Grant ruled against the bank and awarded legal costs to Flynn.

Grant found that the original lender, Eagle Home Mortgage, held beneficial interest in the property. But while Eagle Home eventually sold the mortgage to other parties, the exchanges were never recorded, or assigned, in the county’s recorder office.

“I am concluding the recording never occurred,” she wrote in a two-page ruling. “MERS does not become the beneficiary, irrespective of what is stated in the deed of trust.”

Oregon law requires any transfer of ownership of debt to be recorded at the county recorder.  The banks, by using MERS decided that it was not necessary to comply.

Read more on MERS and Oregon Foreclosure law.

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Belvedere Developer and the Glassman

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Bijan Madjlessi is the real estate developer that was arrested because of dual insurance claims because of a fire at the Belvedere towers condo project.

It appears that he had a history of using and abusing people.  It seems that not paying his contractors and vendors was his standard practice.

One of these vendors was Chad Empey of Petaluma, CA and it appears that he is fighting back.  He has posted videos that explain in detail how Madjlessi ran his operation.  This video is only one of many describing Madjlessi, his operation, and the corrupt bankers that enabled this fraud.

http://youtu.be/zhMpSmAS5tA

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A New York Appeals Court Rules Against MERS

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Another foreclosure proceeding involving MERS was thrown out by a New York appeals court.

In part, the court ruled:

In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.

The ruling does not bode well for MERS, but is clearly not the end, either.

Click here to read the court’s ruling on MERS.

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A Legal Victory for MERS in California

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A California appeals court granted MERS, (Mortgage Electronic Registration Systems) a legal victory by ruling MERS can launch foreclosure procedures even when it lacks possession of a promissory note.

In its Ferguson v. Avelo Mortgage verdict, the California Second District Court of Appeals refused to accept the plaintiff’s assertion that MERS as nominee of lender lacked possession of the original promissory note. Ferguson argued MERS could not foreclose if it did not hold the note.

Read more on MERS.

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Foreclosure by Facebook

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Consider this: suppose you were delinquent on you mortgage payments.  And suppose the bank was not able to contact you or to find you.  Perhaps you have moved and left no forwarding address or phone number.

So, if they were to serve you foreclosure or other papers, how could it be done?

Would you think Facebook?

Think again.  It has already happened in Australia.

A couple in Canberra defaulted on a six-figure loan. A lawyer acting for the lender could not trace the couple at their home or via email. So he applied and was granted the right to serve legally binding documents on Facebook.

Read more:

http://www.abc.net.au/worldtoday/content/2008/s2447627.htm

http://www.guardian.co.uk/technology/blog/2008/dec/16/facebook-repossession-australia

 

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