(BREAKING NEWS — OP-ED) — The author of this post is a paralegal and consultant to attorneys in foreclosure matters and issues involving “the system of things”. None of what you’re reading in this post should be construed as legal advice nor posited to guarantee a legal outcome.
UPDATE: Now that the legal community has had somewhat of a chance to review the previously discussed Fifth U.S. Circuit ruling (in THIS case), let’s see what one law firm has to say: 5th Circuit Holds Bankruptcy Stay Tolls Statute of Limitations | Weiner Brodsky Kider PC – JDSupra
This will certainly give you an idea of how the other side thinks.
As promised, I bring you the latest relevant case from the Fifth U.S. Circuit Court of Appeals in the Big Easy. But wait … it wasn’t a “big easy” for the borrower, whose case I worked on long ago (in doing a chain of title assessment for) and whose assignments of deed of trust I use in my chain of title workshops to show “document manufacturing gone wrong”. Wilshire Credit Corporation, used by Countrywide as one of its servicers, is to blame for that screw-up.
None of what you’re about to read in this ruling appears proper because no one ever attacked the assignments head on, even when it was suggested to do so. Remember, I can’t give legal advice and it’s sad when I have to read rulings like this, knowing what I know that should have been done, but wasn’t.
So … let’s read the ruling first, then we’ll analyze how the homeowner shot himself in the foot because he put his money where it shouldn’t have been put and didn’t put his money where it should have been put:
HSBC Bank USA NA v Crum, 5th App Cir No 17-11206 (Oct 17, 2018)
We’ll do a little analysis on the chain of title and show you what suspect document manufacturing looks like and my perspective on HOW it should have been challenged. Is it because of attorney ignorance or just plain and simple frustration?
Let’s see how sharp you are in detecting WHAT went wrong here:
ASSIGNMENT NUMBER ONE
NOTE: Click on the assignment to see it in larger print and click the BACK tab on your computer screen to get back to the article.
I put this assignment FIRST for a reason … look at the time (in the upper, right-hand corner) as to WHEN the assignment was recorded … 11:04:32 a.m. on July 14, 2009. I surmise that this document was manufactured by employees of the servicer, Wilshire Credit Corporation, to create standing for HSBC Bank USA NA as Trustee for MLMI (that’s Merrill Lynch Mortgage Investors) Trust Series 2005-WMC1. It should be clear to you that “WMC” in the REMIC series was a REMIC set up by WMC Mortgage Corporation, which was the alleged original lender.
The 5th Circuit has already ruled that it doesn’t matter if the original lender went bust BEFORE the documents were created. How could they do that? Corruption? Maybe? Maybe it was given the wrong information in the pleading. Maybe? The appellate court can only rule on the information it was provided and I don’t believe that any of this stuff I’m showing you here was properly vetted in discovery, was it?
Notice something else? The signer executing this document (a known robosigner), claims to be an “Attorney-in-Fact” for MLMI Lending, Inc., however; as I will show you, she’s not acting as an attorney in fact for WMC Mortgage Corporation, is she? There’s no written evidence of where the Limited Power of Attorney is recorded on this document, is there?
Also notice that Wilshire Credit Corporation (the mortgage loan servicer) prepared this document and after it was recorded, got it back through the U.S. Mail. This will be important to note for future discussion.
This recording was a 3-page document. Page 2 contained the legal description. Now … wait until you see Page 3!
What’s wrong with this picture? These F**KTARDS can’t even do their job right, can they? The executor of this document prepared this Allonge to show that the Depositor conveyed it into the REMIC on July 6, 2009. If you look at the Trust’s 424(b)(5) Prospectus (shown below), the Cut-Off Date for assigning the note and mortgage to the REMIC was January 1, 2005, because (according to the IRS’s Start-up Date for the REMIC) the Closing Date of the REMIC was January 27, 2005. This Allonge was done over 4-1/2 years later … in violation of the REMIC’s own regulations! Besides, what do $10/hour employees of Wilshire Credit Corporation know anyway, right? Who investigated this? I did! I told the Borrower long ago what happened to his chain of title. His attorney apparently didn’t care enough to depose anyone.
Here’s what wrong with this picture:
First, you attach an “Allonge” to the promissory note, NOT an assignment!
Second, the executor of the document, a robosigner-employee of the servicer, claiming to be an attorney-in-fact for MLMI Lending, Inc., not WMC Mortgage Corporation, executed this Allonge less than a WEEK PRIOR TO the actual recording of this assignment! How convenient is that, considering she is NOT the Lender.
Third, WMC Mortgage Corporation, owned by GE, was closed in 2007 due to the subprime mortgage collapse. So here we have a servicer’s employee, two years later, claiming she has “attorney-in-fact” status, when most powers of attorney expire when the company GRANTING the LPOA ceases to do business! It doesn’t take a rocket scientist to figure this out! AND …
Fourth, the signer of this document and Allonge is claiming she has power of attorney for MLMI Lending, Inc., right? Would you please look at the above list of Principal Parties and tell me you see MLMI Lending Inc. anywhere in that document as a listed party to the equation? So where is Treva Moreland’s authority as a $10/hour mortgage loan servicer’s employee attorney-in-fact status for a lender that closed up shop years earlier? Oh, wait, the Pro-Bank 5th Circuit doesn’t give a shit, do they? Or was it the Borrower or the Borrower’s attorney’s fault for not checking into this further?
But wait … it gets better! (That’s an Al West sarcastic remark!)
ASSIGNMENT NUMBER TWO
I put this assignment SECOND for a reason … look at the time (in the upper, right-hand corner) as to WHEN the assignment was recorded … 11:13:08 a.m. on July 14, 2009. This document was recorded SEVEN MINUTES AFTER THE FIRST ASSIGNMENT! Again, I surmise that this document was manufactured by F**KTARD employees of the servicer, Wilshire Credit Corporation, to create standing for HSBC Bank USA NA as Trustee for MLMI (that’s Merrill Lynch Mortgage Investors) Trust Series 2005-WMC1. Notice the same Oregon notary (Justin M. Burns) appears on this assignment as well, claiming that on July 6, 2009, the same day as Treva Moreland, the signer of the first-recorded assignment claims to have attorney-in-fact status …
Here comes Melissa Tomlin (another $10/hour Wilshire Credit Corporation F**KTARD employee), claiming she’s an Assistant Secretary for “MERS” as Mortgage Electronic Registration Systems, Inc. for then-defunct WMC Mortgage Corporation … AND … she’s assigning BOTH the Note and Mortgage to Merrill Lynch Mortgage Lending, Inc. from WMC Mortgage Corporation who (now-defunct) is a “valid Assistant Secretary” for MERS … WOW! MERS’s resolutions must really be legally sound to be able to have servicer’s employees creating shit documents out of thin air using MERS as a nominee for a closed company … Hmmm … I wonder what agency relationship existed between MERS and WMC after GE closed WMC over two years earlier?
This assignment was also 3 pages in length and was prepared and mailed back to Wilshire Credit Corporation after it was recorded. Page 2, like before, contains the legal description of the subject property. And now … for the GRAND FINALE … let’s see what’s on Page 3, shall we? (I am chuckling at this juncture, see if you can figure out why):
Notice what’s on the last page? AN INDORSEMENT STAMP to Merrill Lynch Mortgage Lending, Inc. by WMC Mortgage Corporation! Again, I surmise the following:
First, endorsements belong on either the promissory note or the allonge to note (if the promissory note is full of endorsements and cannot accommodate any more of them) … NOT ON A RECORDED ASSIGNMENT!
Second, the executor of the document, a robosigner-employee of the servicer, claiming to be an Assistant Secretary for MERS as nominee for then-defunct WMC Mortgage Corporation, HAD KNOWLEDGE OF what she signed when she affixed her signature to the document (that the indorsement stamp was affixed to page 3 therein), or should have had knowledge of it, right?
Third, you’d think she’d have every opportunity, being an Officer of Mortgage Electronic Registration Systems, Inc. (Assistant Secretary), by alleged resolution ONLY and not attorney-in-fact, that she’d have some smarts about stuff like this. Nope! Doesn’t appear that way, does it? In fact, I’m not even sure that Melissa Tomlin (after doing several signature comparisons on assignments from around the country) actually was the party executing this document!
Fourth, remember, WMC Mortgage Corporation, owned by GE, was closed in 2007 due to the subprime mortgage collapse. So here we have a servicer’s employee, two years later, claiming she has an agency relationship with MERS as an Assistant Secretary, when in fact she’s a Wilshire Credit Corporation employee (clearly, a misrepresentation of fact), when the company GRANTING the nominee status to MERS to create an alleged (unproven) agency relationship in the first place, is no longer business!
Fifth, it doesn’t take a rocket scientist to figure out that when a company goes bust, agency relationships can be challenged! I don’t ever see that happening in this case, do you? (If you do, please correct me in the comments section of this post so everyone can see how uninformed I am!)
But wait … it gets better! (That’s another Al West sarcastic remark!)
No one knows how this happened … BUT … either the documents were improperly submitted wrong by Wilshire Credit Corporation when they mailed the packet to the Dallas County Clerk’s Office for recording in his Official Real Property Records … OR … the Clerk’s office juxtaposed the documents … SO … here’s what happened (you may have already figured this out … this is a fun example of a brain teaser for you researchers out there) to screw up the borrower’s chain of title with suspect documents (fact check these if you will):
(1) At the time BOTH assignments were executed, WMC Mortgage Corporation was no longer in business (not that the 5th U.S. Circuit really cares).
(2) MERS was used to cover up the chain of title, even though the agency relationship more than likely ended when WMC closed up shop (there was never a repudiation agreement against the MERSCORP executory contract ever filed in WMC’s bankruptcy, if it fact, it filed for such).
(3) In order for the facts to present themselves in proper order, the second assignment SHOULD HAVE BEEN recorded FIRST to reflect the transfer of the Note and Mortgage to MLMI Lending, Inc. from WMC, so MLMI Lending, Inc. could properly convey it into the REMIC Trust.
(4) But wait! MLMI Lending, Inc. is nowhere to be found in the Prospectus for the REMIC under “Principal Parties”. The originating lender was subprime mortgage lender WMC Mortgage Corporation. True sale #1 would have been from WMC to the Seller, Merrill Lynch Mortgage Capital, Inc., an entirely separate corporation from Merrill Lynch Mortgage Investors Lending, Inc., right? So True Sale #1 was F**KED UP!
(5) True Sale #2 should have been from Merrill Lynch Mortgage Capital Inc. to Merrill Lynch Mortgage Investors, Inc., the Depositor for the trust, who, under the Pooling and Servicing Agreement found in the Prospectus, signed under penalty of perjury under the Sarbanes-Oxley Act, would have and should have completed True Sale #3 by transferring it into the REMIC itself, as the Issuer of the Certificates!
(6) All true sales had to be completed before the Cut-Off Date … so in fact we have a violation of the trust agreement and a misrepresentation in the Prospectus, if we are to believe what just happened here was factual.
(7) The misrepresentations contained within the Assignments themselves purport to have transferred everything (in order) from WMC to MLMI Lending, Inc. and from MLMI Lending, Inc. to the REMIC Trust; however, with them being recorded in reverse, it would have been impossible to represent this the other way around, so the entire chain of custody of the note is convoluted and so is the chain of title, creating suspect issues for discovery.
(8) Because MERS (Mortgage Electronic Registration Systems, Inc.) cannot convey Notes because it doesn’t have an interest in the Notes (it only allows lenders to record them in the MERS® System database), then the entire claimed transfer by the servicer’s employee (and NOT the lender itself, who was by then defunct) was also misrepresentative in fact.
(9) Further, all of these misrepresentations appear to constitute violations of the Texas Penal Code and the fact the U.S. Mails were used could constitute felony mail fraud (two counts), which is a 95% slam dunk for the prosecution. Thus, had “the system of things” played itself out the way it should have been played out, Treva Moreland, Melissa Tomlin and Justin Burns would all be doing time instead of going about their feeble lives doing whatever.
(10) Under “the system of things”, the attorneys for the bank relied on these assignments to steal Mr. Crum’s property and should be disbarred. The judge in the state court could obviously NOT be held accountable for the fraud on his court, because he wasn’t made aware of it at the time the suit was filed and answered (the Texas Constitution requires all HELOC’s to be judicial challenges under Rule 736 of the Texas Rules of Civil Procedure). If the judge was made aware, he could have lost his bond and have been removed from the bench and the headlines would have grabbed national attention!
(11) And now … for the piece d’resistance … the lawsuit filed by the alleged REMIC, for which it got a judgment against Mr. Crum, conveniently alleged that Mr. Crum was in default, when in fact, the REMIC’s own Prospectus required Wilshire Credit Corporation to make Mr. Crum’s payments on the home if he couldn’t make them … see here, see here:
Notice where is says (in Paragraph 2 of the foregoing paragraphs) that the Servicer (Wilshire) is obligated to make such advances with respect to delinquent payments of principal and interest on each Mortgage loan … how then, could Mr. Crum be in default? If MLMI 2005-WMC1 was never aware of the default, which we know probably didn’t happen since the servicer was making all of the advance payments, then WHO actually was foreclosing on Mr. Crum?
(12) Wilshire Credit Corporation … using what I claim are false and misrepresentative documents! But I’m not the expert witness here (but I have an attorney who is though). I still see a mess in the constructive notice to the world of when the documents were juxtaposed. Improperly recorded documents put the cart before the horse, didn’t they? Can you see it spelled out now?
Any decent, well-informed, non-agenda’d judge should have been aware of all of this … but then again, they only review what’s put in front of them and what’s challenged and why. You be the judge as to WHO failed WHO here and why.
I had all the facts in 2011. Now they’ve come home to roost over seven years later … in a bad way! I can definitely say discovery was sorely lacking here!
Join Dave Krieger and R. J. Malloy for another exciting segment of City Spotlight – Special Edition on WKDW-FM, 97.5 in North Port, Florida, this Friday night at 6:00 p.m. (Eastern) … the subject matter this week … blockchain, jurisdictional issues, societal breakdown and the latest from the ABA blogs! To listen to the show, CLICK HERE!