Glaski v. Bank of America, et al (Void Assignments)

May 30

2014 This white paper reviews, from a layman's perspective, the California Appellate Decision and its impact on homeowners fight against corrupt and illegal foreclosure practices specific to VOID assignments.

Homeowner Victories White Paper Series

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TABLE OF CONTENTS PREFACE............................................................................................................................. 9

I. WHAT VICTORY DOES GLASKI PRESENT? ............................................................... 10

II. KEY ISSUES AT STAKE IN GLASKI ........................................................................... 10

KEY ONE: Borrower CAN challenge the Assignment if it is VOID. ................... 13

Black's Law (thelawdictionary.org) goes into great detail when describing VOID: (This is a cut/paste from its website)...................................................................... 14

KEY TWO: Determining if the Assignment is VOID ........................................... 16

A. New York Law Confirms Ultra Vires Act ................................................................ 17

B. Internal Revenue Codes Threaten Severe Tax Consequences ............................... 19

KEY THREE: Foreclosure Statutes Violated with VOID Assignment ................20

III. BANKS ARGUMENTS AGAINST GLASKI ................................................................. 22

A. De-publication Efforts ..................................................................................... 22

B. Stare Decisis: Glaski is a PRECEDENT Opinion not a Minority Opinion! ... 23

Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (May 17, 2013) ...... 25

Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, (2011) ............... 26

Diunugala v. JP Morgan Chase Bank, N.A. (Case No. 12-cv-02106-WQH-NLS) (October 3, 2013) ........................................................................................................ 27

IN RE SANDRI, Bankr. Court, ND California 2013 ................................................... 28

Patel v. Mortgage Electronic Registration Systems, Inc., 2013 WL 4029277 (N.D. Cal. Aug. 6, 2013) .......................................................................................... 29

Aniel v. GMAC Mortg., LLC, 2012 WL 5389706 at *4 (N.D. Cal. Nov. 2, 2012) 29

Ganesan v. GMAC Mortgage, LLC, 2012 WL 4901440 at *4 (N.D. Cal. Oct. 15, 2012) ........................................................................................................................ 29

Gilbert v. Chase Home Fin., LLC, 2013 WL 2318890 at *3 (E.D. Cal. May 28, 2013) ........................................................................................................................ 29

Siliga v. Mortgage Electronic Registrations Systems, Inc., 219 Cal. App. 4th 75, 161 Cal. Rptr. 3d 500 (Cal. App. 2d Cir. 2013) (decided on August 27, 2013) . 30

Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 156 Cal. Rptr. 3d 912 (Cal. App. 4th Dist. 2013) ............................................................................ 30

Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 272, 129 Cal. Rptr. 3d 467 (1st Dist. 2011) ............................................................................................. 30

Yvanova v. New Century Mortgage, et al. April 2014 ................................................ 31

C. Alleging Prejudice ............................................................................................ 32

IV. DELAWARE VERSUS NEW YORK LAW -Would the Glaski Decision have been different? ........................................................................................................................... 34

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V. FOLLOW THE LEADER .............................................................................................. 34

MERS Role ........................................................................................................... 34

Assignments from Mortgage Electronic Registration Systems, Inc. (MERS) as Nominee for a bankrupt entity (or a bankrupt entity that has a liquidating trustee)..................................................................................................................................... 36

Assignments from MERS in which MERS fails to identify the principal for whom it is assigning. ................................................................................................................. 37

Assignment of the Deed of Trust without the Note is a Nullity ................................. 38

V. PLEADING THE ELEMENTS OF GLASKI .................................................................. 39

Glaski Second Amended Complaint ................................................................................. 41

Glaski v. Bank of America, Inc., et al RULING (from Google Scholar) ........................... 42

THOMAS A. GLASKI, Plaintiff and Appellant, v. BANK OF AMERICA, NATIONAL ASSOCIATION, et al., Defendants and Respondents. ............................................... 42

OPINION .............................................................................................................. 42

INTRODUCTION ................................................................................................. 42

FACTS .................................................................................................................. 43

The Loan .............................................................................................................. 43

Creation of the WaMu Securitized Trust ............................................................. 44

WaMu's Failure and Transfers of the Loan ......................................................... 44

Notice of Default and Sale of the Property .......................................................... 45

PROCEEDINGS ................................................................................................... 46

DISCUSSION ....................................................................................................... 49

I. Standard of Review ........................................................................................... 49

II. Fraud ............................................................................................................... 50

A. Rules for Pleading Fraud ................................................................................. 50

B. First Cause of Action for Fraud, Lack of Specific Allegations of Reliance...... 50

C. Second Fraud Cause of Action, Lack of Specific Allegations of Reliance ....... 51

III. Wrongful Foreclosure by Nonholder of the Deed of Trust ........................... 52

A. Glaski's Theory of Wrongful Foreclosure ........................................................ 52

B. Wrongful Foreclosure by a Nonholder of the Deed of Trust .......................... 52

C. Borrower's Standing to Raise a Defect in an Assignment ............................... 53

D. Voidness of a Post-closing Date Transfers to a Securitized Trust .................. 54

E. Application of Gomes ...................................................................................... 56

F. Tender .............................................................................................................. 58

G. Remedy of Setting Aside Trustee's Sale .......................................................... 59

H. Causes of Action Stated ................................................................................... 59

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IV. Judicial Notice ................................................................................................ 59

A. Glaski's Request for Judicial Notice ................................................................ 59

B. Defendants' Request for Judicial Notice of Assignment ............................... 60

DISPOSITION ...................................................................................................... 61

APPENDIX of CASE RULINGS ........................................................................................ 65

In the appendix are the following rulings: Saldivar v. JP Morgan Chase (Glaski cites to this case) Wells Fargo, N.A. v Erobobo (Glaski cites to this case) Vogan v. Wells Fargo, N.A. (frontrunner to Glaski) Jenkins v. JP Morgan Chase Diunugala v. JP Morgan Chase Fontenot v. Wells Fargo, N.A Sandri v. Capital One Gomes v. Countrywide Home Loans, Inc. Yvanova v. New Century Mortgage, et al

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Cases Alexander v. Nelson. 42 Ala. 462 ...................................................................................... 15 Allis v. Billings, 6 Mete. (Mass.) 415, 30 Am. Dec. 744 .................................................... 15 Allison & Ver Valen Co. v. McNee, 170 Misc. 144, 146 (N.Y. Sup. Ct. 1939) .................... 18 Angelo-American Mortgage Co. v. Lombard (1904) 132 Fed. 721 ................................... 13 Application of Muratori, 183 Misc. 967, 970 (N.Y. Sup. Ct. 1944) ............................ 19, 28 Bisno v. Sax (1959) 175 Cal.App.2d 714, 720, 346 P.2d. ................................................... 21 Bodell v. Walbrook (9th Cir. 1997) 119 F. 3d 1411, 1422 ................................................... 25 Boskowitz v. Held, 15 App.Div. 306, 310-311, 44 N.Y.S. 136, affd. 153 N.Y. 666, 48 N.E.

1104 ................................................................................................................................ 28 Bovard v. Dickenson, 131 Cal. 162 [63 P. 162]; Nakagawa v. Okamoto, 164 Cal. 718 [130

P. 707]). .......................................................................................................................... 38 Brown v. Brown, 50 N. II. 53S, 552 .................................................................................. 14 Cal. Pro-Life Council, Inc. v. Getman, 328 F.3d 1088, 1099 (9th Cir. 2003) .................. 24 California Bank v. Kennedy (1987) 167 U.S. 362 .............................................................. 13 California Golf v. Cooper, (2008) 163 Cal.App.4th 1053, 1070 ........................................ 13 Carpenter v. Longan, 83 U.S. 271, 275 (1872) .................................................................. 39 Cuccia v. Superior Court, 153 Cal. App. 4th 347, 353-354 (2007) ................................... 24 Culhane v. Aurora Loan Services of Nebraska, supra, 708 F.3d at p. 290 ....................... 16 Curtis v. Leavitt, 15 N. Y. 9, 90 .......................................................................................... 15 Deutsche Bank National Trust Company as Trustee under Pooling & Servicing

Agreement Series Index 2006-AR6 v. Maraj, 856 N.Y.S. 2d 497, WL 253926 ............ 37 Deutsche Bank Nat'l Trust Co. v. Adolfo, No. 12 C759, 2013 WL 4552407 * 3 (N.D. Ill.

Aug. 28, 2013) ................................................................................................................ 28 Dimrock v. Emerald Properties, 81 Cal.App.4th 868, 878 (2000) .................................. 21 Diunugala v. JP Morgan Chase Bank, N.A. (Case No. 12-cv-02106-WQH-NLS) (October

3, 2013) ........................................................................................................................... 27 Dye v. Lewis, 67 Misc. 2d 426, 324 NYS2d 172 (1971) ............................................... 19, 28 Fisher v. Salmon ................................................................................................................ 37 Ford v. Bushard, 116 Cal. 273 [48 P. 119]; ........................................................................ 38 Forte v. Nolfi (1972) 25 Cal.App.3d.656, 685-686 [102 Cal.Rptr. 455] ........................... 21 Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149 [121 Cal.Rptr.3d

819] ................................................................................................................................. 48 Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, (2011) ...................... 26 Gustafson v. Stockton etc. R. R. Co., 132 Cal. 619 [64 P. 995] ......................................... 38 Herrera, supra, 205 Cal.App.4th at p. 1507, 141 Cal.Rptr.3d 326 .................................... 26 In re Correia (1st Cir. BAP 2011) 452B.R. 319, 324325 .................................................. 26 In re IBJ Schroder Bank & Trust Co., 271 A.D.2d 322 (N.Y. App. Div. 1st Dept 2000 ... 19 In re New Century TRS Holdings, Inc. Case No. 07-10416 .............................................. 37 In re New Century TRS Holdings, Inc. v. New Century Liquidating Trust, 407 B.R. 576

(2009) ............................................................................................................................ 36 In re Osborne, 76 F. 3d 306, 309 (9th Cir. 1996) ............................................................. 23 In re Saldivar (Bankr. S.D.Tex., Jun. 5, 2013, No. 11-10689) 2013 WL 2452699, .......... 18 In re Veal (B.A.P. 9th Cir. 2011) 450 B.R. 897, 910 .......................................................... 33 Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (May 17, 2013) ............. 25 Johnson v. Frankell, 520 U.S. 911, 916 (1997) .................................................................. 24 Kachlon v. Markowitz , (2008) 168 Cal. App. 4th 316, 334. ............................................ 20

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Kawamata Farms v. United Agri Products, 88 Hawaii 214 (1997) at [69] [70][ 71][72][ 73][ 74] at 257-258......................................................................................................... 37

Kearney v. Vaugliau, 50 Mo. 2S4 ...................................................................................... 14 Kelley v. Howarth, 39 Cal. 2d 179, 192 (1952); Johnson v. Razy, 181 Cal. 342, 344 (1919)

........................................................................................................................................ 39 Kelley v. Upshaw (1952) 39 Cal.2d 179, 192 ..................................................................... 39 Knight v. Knight, 589 N.Y.S.2d 195, 197 (App.Div. 1992) ................................................ 28 LaSalle Bank Nat'l Ass'n v. Lamy, No. 030049/2005, 2006 NY Slip Op 51534U, slip op.

2 (N.Y. Sup. Ct. 2006) .................................................................................................... 35 MERS v. Saunders, 2 A.3d 289, 295 (Me. 2010) .............................................................. 35 National Surety Co. v. Manhattan Mortgage Co., 185 App.Div. 733, 736-737, 174 N.Y.S.9,

affd. 230 N.Y. 545, 130 N.E. 887 ................................................................................... 28 Ohlendorf v. American Home Mortg. Servicing (E.D. Cal. 2010) 279 F.R.D. 575 ........... 27 People v. Shall, 9 Cow. (N. Y.) 778, 7S4 ............................................................................ 15 Polhemus v. Trainer, 30 Cal. 686, 688 (1866) ................................................................. 39 Qualified Patients Ass'n v. City of Anaheim, 187 Cal. App. 4th 734, 764 (2010) ............ 25 Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783] ........................................................ 38 Read v. Buffum, supra, 79 Cal. 77 [21 P. 555, 12 Am.St.Rep. 131] .................................... 38 Reinagel v. Deutsche Bank National Trust Co. (5th Cir., July 11, 2013, No. 12-50569)

F.3d [2013 WL 3480207 ................................................................................................ 15 Shannon v. General Petroleum Corp., 47 Cal. App. 2d 651, 661 (1941) ........................... 35 Svoboda v. Bank of America, 2013 WL 4017904 (W.D. Tex.) .......................................... 28 System Inv. Corp. v. Union Bank (1971) 21 Cal.App.3d 137, 152-153, 98 Cal.Rptr. 735 .. 21 United States Trust Co. v First Natl City Bank, 57 A.D.2d 285, 295-296, affd 45 NY2d

869 ................................................................................................................................. 18 Videau V. Griffin ................................................................................................................ 37 Vogan v. Wells Fargo Bank, NA, 2011 W.L. 5826016 (2011) ............................................ 40 Wells Fargo Bank, N.A. v. Erobobo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A) [2013 WL

1831799, ......................................................................................................................... 18

Statutes 26 CFR 1.860F-2 - TRANSFERS TO A REMIC ................................................................ 20 2935 ................................................................................................................................... 39 Calif. Civil Code 47 ......................................................................................................... 21 Calif. Civil Code 2356 .................................................................................................... 36 Calif. Civil Code 2937 .................................................................................................... 39 Calif. Civil Code 2935 .................................................................................................... 39 Calif. Civil Code 2936 .................................................................................................... 39 Calif. Civil Code 2309 ..................................................................................................... 37 Calif. Civil Code 2924 ..................................................................................................... 21 Calif. Civil Code 2924(a)(1) ............................................................................................ 26 Calif. Civil Code 2924, subd. (a)(1) ................................................................................ 48 Calif. Civil Code 2924a(e) ............................................................................................... 21 Calif. Civil Code 2924h ................................................................................................... 21 Calif. Civil Code 2934a ................................................................................................... 21 Calif. Civil Code 3539 ..................................................................................................... 25

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Calif. Civil Code 2936; 2924(a)(1)(c)............................................................................ 20 California Statute of Frauds 1624(a)(3) ......................................................................... 37 IRC 26 U.S.C. 860G ......................................................................................................... 19 New York Estate & Power Law (NYEPL) 7-2.4 .............................................................. 12 Sections 860A through 860G ............................................................................................ 17 Sections 860A to 860G ..................................................................................................... 19 UCC 3418(b). ................................................................................................................ 33

Other Authorities California Mortgage and Deed of Trust Practice (Cont.Ed. Bar 1979) s 6.40, p. 295 ...... 21 Miller & Harrell, supra, 6.03[6][b][ii], .......................................................................... 33 Miller & Starr, Cal. Real Estate (3rd ed. 2000) ................................................................ 37 New York Estates Powers and Trust Law Section 7-2.4 ............................................. 19, 28 Restatement (3d) of Property (Mortgages) 5.4[[a] ...................................................... 39 Restatement [Second] of Trusts 186, comments a, d) ................................................... 18

Footnote 11 Los Angeles County Bar Association Newsletter, April 2008, Vol. 28 No. 4

.................................................................................................................. 25

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PREFACE This white paper seeks to break down, in layman's terms why the Glaski ruling was a huge

win for homeowners and how others can use the same logic, if applicable, in their own

battle against fraudulent and illegal foreclosure practices.

It requires that the reader have a fundamental, basic understanding of the key

issues presented in Glaski, which are:

1) Understanding the basics of litigation 101 - why Glaski, after winning the Appeal on the Demurrer, has not won.

2) Understanding the title records that are recorded against the title, most specifically an Assignment of Deed of Trust.

3) What a REMIC Trust is and how to source the REMIC Trust documents (if public).

4) The difference between a Trustee of the Deed of Trust and the Trustee of the REMIC Trust.

5) The servicer versus the beneficiary.

This victory was on the "pleading" stage of the litigation. Here, Glaski lost at the

Demurrer (California's version of a Motion to Dismiss) stage and the California Appellate

Court reversed the decision, remanding the case back to the trial court with the

instruction to overrule the Demurrer on the third, fourth, fifth, eighth and ninth causes

of action. This means Glaski is now back in court and his lawsuit is to proceed to trial (or

a Motion for Summary Judgment). This win is HUGE in that in Federal Courts almost

91% of foreclosure cases are being dismissed at the pleading stage1(the percentage in state

cases is unknown) and homeowners are getting turned out before there is any substantive

discovery or litigation of the actual foreclosure issues.

Finally the Courts are beginning to look a little deeper under the "hood" and beginning

to recognize that homeowners claims are not about delaying the inevitable but about

fighting against massive corruption and fraud being perpetrated by the Notorious Five2

and their industry.

1 Go to http://infotofightforeclosure.com/?p=1703 to download a copy of the Motion to Dismiss For Failure to State a Claim, Report to the Judicial Conference Advisory Committee, March 2011. 2 Notorious Five: Wells Fargo, N.A.; JP Morgan Chase Bank, N.A.; Bank of America, N.A.; GMAC/Ally Bank; Citibank, N.A.

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I. WHAT VICTORY DOES GLASKI PRESENT?

Glaski sought to bring 9 claims against Bank of America, Chase Home Finance, LLC;

California Reconveyance Corporation and Doe Defendants. The nine claims were for

fraud, quiet title, wrongful foreclosure, declaratory relief, injunctive relief, intentional

infliction of emotional distress, cancellation of instruments, and unfair business

practices. The original, first amended, and second amended complaints were met with

Demurrers, which eventually lead to a total dismissal from the State Court, without leave

to amend. In response to the dismissal, Glaski filed an appeal with the 5th District Court

of Appeals.

The Court of Appeals overturned the dismissal and remanded the matter back to the

trial court with instructions to overrule the Demurrer on the third, fourth, fifth, eighth

and ninth causes of actions. (Quiet Title, Wrongful Foreclosure, Declaratory Relief,

Cancellation of Instruments, and Unfair Business Practices under Bus. & Prof. Code

17200 et. seq.) Key to the reversal was the Court's finding that a borrower can challenge

an Assignment of Deed of Trust ("Assignment") as void if the borrower factually and

specifically pleads why the Assignment is void.

The Glaski win represents the first Appellate Court to recognize a borrower's right to

challenge, as a 3rd party3, a void contract which is the Assignment that was filed by the

defendants in the public county records and used as the basis to enter the statutory

framework of Calif. Civil Code 2924. The battle forming is on the second key point of

the Glaski ruling, is the assignment actually void?

II. KEY ISSUES AT STAKE IN GLASKI

There are three key issue at stake in the Glaski ruling. The key issue in Glaski is

a borrower (homeowner) can challenge a VOID assignment. While Glaski deals

3 It is important to note that U.S. Bank has gone on record through their website that the "borrower" IS a party to the Pooling & Servicing Agreement. See https://www.usbank.com/pdf/community/Role-of-Trustee-Sept2013.pdf. Please email simonee@infotofightforeclosure.com if you need assistance locating this document, or visit website.

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specifically with late assignments into REMIC Trusts, there are a variety of reasons why

an Assignment may be void ranging from MERS making assignments without the Note,

without subscribing the principal or assignment for entities that are defunct (most are

bankrupt), having 3rd party loan document firms sign as a servicer employee, or for

entities that are not members of MERS. Across the board, in almost ALL of the rulings

that are being proclaimed to not follow Glaski the Court AGREES with Glaski that

if the assignment is void, the borrower can challenge the assignment.

Where the battle lines are being drawn is what makes the assignment void. For the

past six or seven years, Banks have been recording Assignments to a "trustee" for a

REMIC4 trust years after the trust closed and for all intent and purposes, the trust was

not legally allowed to accept an Assignment after the trust closed. When homeowners

sought to challenge the Assignment, the oft heard refrain was the Assignment was a

contract between the parties on the Assignment (the assignee and the assignor) not the

homeowner; therefore the homeowner was a 3rd party and had no legal right to challenge

the assignment.

EXAMPLE:

Imagine homeowner 1 has a five year contract with a local gardening service that

homeowner 1 paid in full at the beginning of the five year term; the gardener is obligated

to continue the service through the end of the term. Homeowner 1 sells the house to

homeowner 2; and part of that sale includes assigning the gardening contract over to

homeowner 2. Now the gardening service doesn't want to continue the service so he

attacks the assignment between the two homeowners. Since the gardener is not a party

to that assignment, he can't challenge the assignment - homeowner 2 paid homeowner

1 for the contract; therefore the gardener is obligated to continue to fulfill the contract.

In essence, the Assignment is the original lender (or its successor or assign) selling the

loan to another bank (or entity), and assigning the deed of trust so if the payments are not

made, the property can be liquidated through a foreclosure and the bank can get the

money back through the trustee sale.

4 Real Estate Mortgage Investment Conduit governed by Internal Revenue Codes 860A - 860G.

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None of this is rocket science; it is pretty basic contract law and usually, legal. Here is

where it gets sticky though; and this is where the Glaski Court recognized the problem

with late Assignments, most specifically into REMIC trusts and, again, is the second

KEY point (or step) of the Glaski decision. Usually a late assignment into the REMIC

Trust destroys any tax advantages it may have had and exposes the investors (the real

owners of the Trust) to substantial losses through taxation. And when you read the Glaski

ruling, you see the Court spent an interesting amount of time explaining this financial

impact and dilemma for the investors.

This of course, then lead the Court into examining why a Trustee could take an act that

would have such devastating consequences; and lo and behold, the Court found the

Trustee was prohibited from taking such an act! In fact, the act was what is called ultra

vires.

Investopedia describes ultra vires as:

Any act that lies beyond the authority of a corporation to perform. Ultra Vires acts fall outside the powers that are specifically listed in a corporate charter or state law. They can also be any action that is specifically prohibited by the corporate charter. Legal Dictionary describes ultra vires as: [Latin, Beyond the powers.] The doctrine in the law of corporations that holds that if a corporation enters into a contract that is beyond the scope of its corporate powers, the contract is illegal. (Emphasis added)

Ultra vires acts cannot be legally defended in court; and if there is one state

that has thoroughly examined ultra vires acts, it is New York State! See New

York Estate & Power Law (NYEPL) 7-2.4 which states:

"If the trust is expressed in an instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void."

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What the Glaski Court found is that an Assignment after closing was prohibited5 and

therefore the act itself was ultra vires. The United States Supreme Court in Angelo-

American Mortgage Co. v. Lombard (1904) 132 Fed. 721, treated an ultra vires contract

as absolutely void. The reasoning is that an ultra vires contract is void not because it is

forbidden but because the corporation had no capacity to make it. (Banks claim the

Assignment is a contract between the assignee and assignor).

The act thus being void ab initio6 cannot be validated by any subsequent ratification,

and there can therefore be no ground for the operation of estoppel. California Bank v.

Kennedy (1987) 167 U.S. 362. In one of the letters requesting Glaski be depublished to

the California Supreme Court one of the bank's attorneys argued the act could be ratified.

That is laughable, what investor would ratify an act of the Trustee that would incur tax

consequences so severe it could wipe out the investors investment? Ratification also

requires 100% AGREEMENT of all investors; if just ONE investor disagrees the act cannot

be ratified. The Trustees, servicers and their attorneys are claiming the act can be ratified,

therefore the late assignment is voidable not void. (That is the argument used in the Ill.

Opinion Federal courts are relying on). Seems to me that should be a disputable fact but

the courts are finding that because it is possible that is all that is required. This is point

I would want to argue, some New York Cases (and US Supreme Court cases) state that an

ultra vires can NOT be ratified; so the claim to be able to ratify is one that should be hotly

disputed. (See Banks Arguments below).

Whenever a court becomes aware that a contract is illegal, it has a duty

to refrain from entertaining an action to enforce the contract." California

Golf v. Cooper, (2008) 163 Cal.App.4th 1053, 1070. (Emphasis added)

KEY ONE: Borrower CAN challenge the Assignment if it is VOID.

In my humble opinion, this is probably the most important element of this

ruling. Borrowers can challenge the Assignment if it is VOID. In the majority

5 Prohibited acts are detailed in the Pooling & Servicing Agreement for the REMIC

Trust.

6 Ab initio is a Latin term for "from the beginning".

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of the rulings that have come out over the last six or seven years, the Courts have soundly

told Borrowers they are not parties to the Assignment and therefore have no right to

challenge the Assignment....because it is voidable. In the majority of these rulings the

Courts never even investigated whether the assignment was void or merely voidable, the

Courts just assumed it was voidable or the borrower alleged the assignment was invalid

or voidable. (See below Bank's Arguments)

Legal Dictionary describes VOID as: That which is null and completely without legal force or binding effect.

The term void has a precise meaning that has sometimes been confused with the more liberal term voidable. Something that is voidable may be avoided or declared void by one or more of the parties, but such an agreement is not void per se.

Webster describes VOID as:

law : having no legal force or effect

Black's Law (thelawdictionary.org) goes into great detail when describing VOID: (This is a cut/paste from its website) Null; Ineffectual; nugatory; having no legal force or binding effect; unable,

in law, to support the purpose for which it was intended. Void does not

always imply entire nullity; but it is, in a legal sense, subject to

large qualifications in view of all the circumstances calling for

its application, and the rights and interests to be affected in a given case. Brown v. Brown,

50 N. II. 53S, 552. Void, as used in statutes and by the courts, does not usually mean

that the act or proceeding is in absolute nullity. Kearney v. Vaugliau, 50 Mo. 2S4.

There is this difference between the two words void and voidable; void means that

an instrument or transaction is so nugatory and ineffectual that nothing can cure it;

voidable, when an imperfection or defect can be cured by the act

or confirmation of him who could take advantage of it. Thus, while acceptance

of rent will make good a voidable lease, it will not alter in a void lease. Wharton. The true

distinction between void and voidable acts, orders, and judgments is that the former can

always be assailed in any proceeding, and the latter only in a direct proceeding. Alexander

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v. Nelson. 42 Ala. 462. The term void as applicable to conveyances or other

agreements, has not at all times been used with technical precision, nor

restricted to its peculiar and limited sense, as contradistinguished from

voidable; it being frequently introduced, even by legal writers and jurists,

when the purpose is nothing further than to indicate that a contract was

invalid, and not binding in law. But the distinction between the terms void and

voidable, in their application to contracts, is often one of great practical importance;

and, whenever entire technical accuracy is required, the term void can only be properly

applied to those contracts that are of no effect whatsoever, such as are a mere nullity, and

incapable of confirmation or ratification. Allis v. Billings, 6 Mete. (Mass.) 415, 30 Am.

Dec. 744. Void in part, void in toto. Curtis v. Leavitt, 15 N. Y. 9, 90.

Void things are as no things. People v. Shall, 9 Cow. (N. Y.) 778, 7S4.

Law Dictionary: http://thelawdictionary.org/void/#ixzz2sTpq81TM

As you can see, if the Assignment is VOID it would mean that the WRONG PARTY is

foreclosing because no ownership rights were established via the Assignment. (See

Foreclosure Statutes Violated with VOID Assignment below); See Glaski at Section III,

Part C, below.

GLASKI at 1095:

California's version of the principle concerning a third party's ability to challenge an

assignment has been stated in a secondary authority as follows: "Where an assignment

is merely voidable at the election of the assignor, third parties, and particularly the

obligor, cannot ... successfully challenge the validity or effectiveness of the transfer." (7

Cal.Jur.3d (2012) Assignments, 43, p. 70.)

This statement implies that a borrower can challenge an assignment of his or her

note and deed of trust if the defect asserted would void the assignment. (See Reinagel

v. Deutsche Bank National Trust Co. (5th Cir., July 11, 2013, No. 12-50569) F.3d [2013

WL 3480207, p. *3] [following majority rule that an obligor may raise any ground that

renders the assignment void, rather than merely voidable].) We adopt this view of the

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law and turn to the question whether Glaski's allegations have presented a theory under

which the challenged assignments are void, not merely voidable.

We reject the view that a borrower's challenge to an assignment must fail once it is

determined that the borrower was not a party to, or third party beneficiary of, the

assignment agreement. Cases adopting that position "paint with too broad a brush."

(Culhane v. Aurora Loan Services of Nebraska, supra, 708 F.3d at p. 290.) Instead,

courts should proceed to the question whether the assignment was void.

Here is where the Glaski distinction arises. First, Glaski specifically and factually

alleged the Assignment was VOID; this lead the Glaski Court to ponder the effect of the

VOID or voidable elements. Upon determining that if the Assignment is VOID the

borrower could challenge the assignment, then the next step is to investigate whether it

was void or voidable. This is where the MAJORITY of Courts stopped! (Mostly because

the borrower did not specifically and factually plead the Assignment as VOID). So when

you read cases that decline to follow Glaski, you need to read the ruling and see what the

borrower plead, and what the Court considered. ( See Banks Arguments below for details

on some of the Cases being argued as of May 2014.) And keep in mind, that when you

read those rulings almost ALL OF THEM across the board agreed with the Glaski ruling

that IF the assignment IS void, it can be challenged; where they depart is whether a late

assignment is void.

KEY TWO: Determining if the Assignment is VOID

Once the Glaski Court decided that a borrower could challenge a VOID

assignment, the next step was determining IF the Assignment was indeed

VOID versus VOIDABLE. This is where Glaski gets a little confusing, but the reasoning

of the Court is still viable and sound.

17

The Plaintiff (Glaski) alleged and plead the REMIC Trust was governed by

New York law, and for some reason the Defendants (Bank of America, Chase)

never disputed this fact. This was what was in the record and what the Appeals

Court relied on in reviewing the record. The Court did NOT assume this, again

this was what was alleged/plead; the defendants had the opportunity to dispute

this but chose not to for some reason. The arguments and legal reasoning of the

Court is still sound because even if you apply Delaware law to the argument, the

outcome is the same. (See Delaware v. New York Law below)

Based on Glaski's specific and factual allegations the assignment was VOID, the Court

looked at several things in determining whether the Assignment was VOID or merely

voidable. The three key items investigated were the Pooling & Servicing Agreement

("PSA") which is the contract between the parties who established the REMIC Trust; the

Internal Revenue Codes ("IRC") Sections 860A through 860G, which governs the

formation and management of the REMIC Trust; and New York Law which the parties

had gone on record as being the governing law of the PSA. (See Glaski Second Amended

Complaint)

A. New York Law Confirms Ultra Vires Act

Glaski alleged Washington Mutual, F.A. never transferred the Note and Deed of Trust

to the Depositor (Sponsor) of the Securitized Trust. This is a very important distinction

in what Glaski alleged versus what other pleadings from homeowners (borrowers) tend

to say. Here Glaski claims the REMIC Trust never acquired the Note and Deed of

Trust; a lot of pleadings tend to plead the theory that transfer of the Note and /or Deed

of Trust into a REMIC Trust somehow renders the Deed of Trust unenforceable. Not sure

what that logic is but clearly one theory is conceding the transferred occurred but

invalidated the Deed of Trust in the process; while others, such as Glaski, are saying no

such transferred occurred. Where the invalidation theory appears to not be supported

by law; the FAILURE of the REMIC Trust to actually acquire the Note and Deed of Trust

is in fact, supported by law and is in fact, what happened. The REMIC Trusts never

acquired the loans and therefore are not the owners.

18

In Glaski, JP Morgan Chase Bank, N.A., claiming to be a successor in interest to

Washington Mutual7, executed and recorded the Assignment directly from JP Morgan

Chase Bank, N.A. to Bank of America, N.A. as Trustee of the REMIC Trust. This

transfer was supposed to occur no later than December 21, 2005 or 90 days after (so

approximately March 21, 2006) but according to the Assignment, was occurring three

and half years (3 1/2) later.

Glaski specifically challenged the late transfer as VOID pursuant to New York law

which Glaski alleged (and the Defendants failed to dispute) was the governing law of the

REMIC Trust. (See Glaski SAC 7) The Glaski court decided to follow the New York

statute literally because in this matter (and any REMIC Trust matter) by following the

statute, the Court was protecting the interest of the investors from adverse tax

consequences that could, well, pretty much wipe out the entire investment for the

investors.

The Glaski Court relied on a couple of different rulings that are under attack, those

being Wells Wells Fargo Bank , N.A. v. Erobobo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A)

[2013 WL 1831799, p. *8 and In re Saldivar (Bankr. S.D.Tex., Jun. 5, 2013, No. 11-10689)

2013 WL 2452699, p. *4. You can review the Glaski ruling below and access those cases

and read in further detail the Court's reasoning. However, Erobobo and In re Saldivar

are hardly the first cases to address the void acts of a trustee; there are many cases in New

York that address the impact of a void act.

The failure to convey to a trust per the controlling trust document is not a matter that

may be cured by the breaching party. New York law is unflinchingly clear that a trustee has

only the authority granted by the instrument under which he holds, either deed or will. This

fundamental rule has existed from the beginning and is still law. Allison & Ver Valen Co. v.

McNee, 170 Misc. 144, 146 (N.Y. Sup. Ct. 1939).

It is settled that the duties and powers of a trustee are defined by the terms of the trust

agreement and are tempered only by the fiduciary obligation of loyalty to the beneficiaries.

See, United States Trust Co. v First Natl City Bank, 57 A.D.2d 285, 295-296, affd 45 NY2d

869; Restatement [Second] of Trusts 186, comments a, d). See In re IBJ Schroder Bank &

7 The claim by JP Morgan Chase Bank, N.A. to be a "successor in interest" is another hotly disputed claim. While Chase relies on the purchase & assumption agreement; federal law doesn't support that claim. See our white paper on "JP Morgan Bank's Purchase & Assumption Scam".

19

Trust Co., 271 A.D.2d 322 (N.Y. App. Div. 1st Dept 2000) New Yorks law is so well-settled

regarding the limitations of a trustees power to act that the New York Estates Powers and

Trust Law Section 7-2.4 states "every sale, conveyance or other act of the trustee in

contravention of the trust.... is void. " See Application of Muratori, 183 Misc. 967, 970 (N.Y.

Sup. Ct. 1944) See also Dye v. Lewis, 67 Misc. 2d 426, 324 NYS2d 172 (1971), mod on other

grounds, 39 App. Div. 2d 828, 332 NYS2d 968 (1972, 4th Dept.) (finding the authority of a

trustee to whom a mortgage had been delivered under a trust indenture was subject to any

limitations imposed by the trust instrument, and every act in contravention of the trust was

void.)

Whether the act is void can also be further supported by taking a look at the

prohibited acts as detailed in the PSA of the REMIC Trust. Verbiage typically can be

found under the Trustee Section and often has its own section called "Prohibited

Transactions and Activities".

B. Internal Revenue Codes Threaten Severe Tax Consequences

The Internal Revenue Codes ("IRC") that govern a REMIC Trust are Sections 860A to

860G found under 26 U.S.C. and 26 C.F.R. Key in these codes is that a mortgage must be

a qualified mortgage; all of the mortgage loans, along with the supporting contracts (Note

and Deed of Trust) must be deposited (transferred) to the REMIC Trust by the closing

date, with a 90 day "clean up" time to wrap up the paper work; and the mortgage must

have be acquired and then transferred by the sponsor (or depositor) of the REMIC Trust.

IRC 26 U.S.C. 860G8

(a) (3) Qualified mortgage

The term qualified mortgage means

(A) any obligation (including any participation or certificate of beneficial

ownership therein) which is principally secured by an interest in real property

and which (i) is transferred to the REMIC on the startup day in exchange for regular or residual interests in the REMIC, (ii) is purchased by the REMIC within the 3-month period beginning on the startup day if, except as provided in regulations, such purchase is pursuant to a fixed-price contract in effect on the startup day, or......

8 Information from Legal Information Institute at http://www.law.cornell.edu/uscode/text/26/860G

20

26 CFR 1.860F-2 - TRANSFERS TO A REMIC9

(a) Formation of a REMIC

(1) In general. For Federal income tax purposes, a REMIC formation is

characterized as the contribution of assets by a sponsor (as defined in paragraph

(b)(1) of this section) to a REMIC in exchange for REMIC regular and residual

interests. If, instead of exchanging its interest in mortgages and related assets for

regular and residual interests, the sponsor arranges to have the REMIC issue some

or all of the regular and residual interests for cash, after which the sponsor sells its

interests in mortgages and related assets to the REMIC, the transaction is,

nevertheless, viewed for Federal income tax purposes as the sponsor's exchange of

mortgages and related assets for regular and residual interests, followed by a sale

of some or all of those interests. The purpose of this rule is to ensure that the tax

consequences associated with the formation of a REMIC are not affected by the

actual sequence of steps taken by the sponsor.

(b) Treatment of sponsor

(1) Sponsor defined. A sponsor is a person who directly or indirectly exchanges

qualified mortgages and related assets for regular and residual interests in a

REMIC. A person indirectly exchanges interests in qualified mortgages and related

assets for regular and residual interests in a REMIC if the person transfers, other

than in a non-recognition transaction, the mortgages and related assets to another

person who acquires a transitory ownership interest in those assets before

exchanging them for interests in the REMIC, after which the transitory owner then

transfers some or all of the interests in the REMIC to the first person.

KEY THREE: Foreclosure Statutes Violated with VOID Assignment Once an Assignment is determined void, all the rest of the foreclosure

crumbles.

A Notice of Default may only issue based on actual default incurred by the

beneficiary entitled to payments on the Note. See Calif. Civil Code 2936; 2924(a)(1)(c).

"When the trustor defaults on the debt secured by the deed of trust, the beneficiary may

declare a default and make a demand on the trustee to commence foreclosure." Kachlon

v. Markowitz , (2008) 168 Cal. App. 4th 316, 334. (emphasis added). In Miller v.

9 Information from Legal Information Institute at http://www.law.cornell.edu/cfr/text/26/1.860F-2

21

Cote, 179 Cal.Rptr. 753, (Ct of App. Fourth Dist. Div. 2 1982), the Court, in calling the

notice of default fatally defective stated:

The procedure for foreclosing on security by a trustees sale pursuant to a deed of

trust is set forth in Civil Code section 2924, et seq. The statutory requirements must be

strictly complied with, and a trustees sale based on a statutorily deficient notice of

default is invalid. (System Inv. Corp. v. Union Bank (1971) 21 Cal.App.3d 137, 152-153,

98 Cal.Rptr. 735; see California Mortgage and Deed of Trust Practice (Cont.Ed. Bar

1979) s 6.40, p. 295; see also Bisno v. Sax (1959) 175 Cal.App.2d 714, 720, 346 P.2d.

The Substitution of Trustee can only be done by the beneficiary of the Deed of

Trust pursuant to Calif. Civil Code 2934a. If a Substitution of Trustee is not valid, the

resulting sale is VOID with no requirement for tender. See Dimrock v. Emerald

Properties, 81 Cal.App.4th 868, 878 (2000)

An invalid SOT can also lead to the argument for Slander of Title. It can be argued that

any documents filed by that entity is not subject to privilege under Calif. Civil Code 47

or Calif. Civil Code 2924, but are in fact, slander of title. The recordation of an

instrument facially valid but without underlying merit will, of course, give rise to an action

for slander of title. See Forte v. Nolfi (1972) 25 Cal.App.3d.656, 685-686 [102 Cal.Rptr.

455]. ).

The Notice of Trustee Sale must identify the proper trustee pursuant to Calif. Civil

Code 2924a(e).

If you are fighting a wrongful foreclosure, and the alleged beneficiary credit bid, then

the Trustee Deed Upon Sale can be attacked as only the beneficiary may make a credit

bid. See Calif. Civil Code 2924h.

Since Bank of America's only claim to ownership was based on the Assignment, Bank

of America does not appear to be the proper party foreclosing, and certainly had no right

to credit bid at the Trustee Sale. Therefore not only is the Assignment void, but all

documents flowing from that Assignment are void including the Notice of Default, Notice

of Trustee, Substitution of Trustee and Trustee Deed Upon Sale.

22

III. BANKS ARGUMENTS AGAINST GLASKI Now you don't really think the Notorious Five and their ilk will just

pack up and go away do you? Homeowners won this round but the

fight is far from being over. The Notorious Five are on a campaign to discredit Glaski

and attempted to minimize its impact on California law. Unfortunately they use skilled

lawyers who know how to parse the words and rely on Judges who don't really dig down

into the cites where the Banks are now claiming that Glaski is a minority opinion and

not in the majority. It is precedent; precedent is a guidea standard a model. Do

not get lost is this claim that Glaski is not being followed. Prove the assignment is VOID

for ANY reasonand your argument is supported.

A. De-publication Efforts

The first line of attack by the Notorious Five was their effort to de-publish Glaski.

Note when the ruling first released in August of 2013 it was unpublished; through the

efforts of some homeowner advocates, the Appellate Court published the ruling. In

response, the Notorious Five who had previously sought a rehearing with the Appellate

Court (which was denied) and failed to take the matter up with the Supreme Court, felt

their next best effort was to ask the Supreme Court to de-publish the ruling, rendering it

ineffective. On February 26, 2014 the Supreme Court denied the Notorious Five's

request. Glaski is and remains Case law.

De-publication is not a common day word or procedure, many people are not

even aware this is an option or what its impact is. California, in all its glory, is the ONLY

state that allows this end run around the appellate process. At its finest, the de-

publication process allows the Supreme Court to stop the impact of a bad ruling without

investing resources by simply de-publishing the opinion. It is a process that, again at its

finest, makes sense. For example, say an Appeals Court rules that December follows

October and there is no November this is such a blatantly bad ruling that it would be

silly to spend 1,000s of dollars in court resources explaining why this is a bad

ruling. Yet if left to stand, it could and would create chaos in the lower courts in which

23

other Appeals Courts would eventually have to spend money defeating the ruling in their

own districts. So rather than spend anyones time on the bad ruling, the Supreme Court

simply orders the ruling be de-published and therefore, preventing anyone from using it

as any form of authority in supporting their arguments. Again, at its finest it makes

sense.

The Glaski ruling is not a blatantly bad ruling it is in fact, a well-reasoned and fair

ruling. For details on the letters submitted by the banks, and by homeowner advocates

in opposition to the bank's letters, go to http://infotofightforeclosure.com/?p=1685 . At

the bottom of the blog you can access the letters, and access is free.

B. Stare Decisis: Glaski is a PRECEDENT Opinion not a Minority Opinion!

Glaski is a California Appellate Decision and therefore, based on Stare Decisis10 is

Case law in California. In simple terms, the decisions of higher courts are binding on

lower courts. Where this gets tricky is are the decisions of higher state court rulings

binding on lower federal courts; and vice versa? How does this cross over? This is

important in understanding how banks are starting to argue Glaski and attempt to

prevent homeowners from using the power of this ruling to advance their claims.

Most of the Court's have three levels - trial (called district in Federal Courts),

appellate, and supreme11.

State (California) Federal

United States Supreme Court

California Supreme Court

10 Stare Decisis et non quieta movere, meaning to adhere to a precedent and not unsettle what is established. See In re Osborne, 76 F. 3d 306, 309 (9th Cir. 1996) 11 For more detailed information on the hierarchy of the Courts, please go to www.infotofightforeclosure.com and click on State and/or Federal Litigation Process and Tools.

24

9th Circuit (Covers Western States and

has different Courthouses for each

District)

Court of Appeals (Six Districts, each

district has divisions)

|

Superior Court (also referred to as

"Trial")

District Court (Northern California,

Southern California, Central California,

Eastern etc.)

Where the Federal 9th Circuit rulings only bind those District Court's within that

particular Appeals Court's geographic territory, California's Court of Appeals binds ALL

trial courts in California! (This is a common misperception in that some legal folks,

including judges, don't think they have to follow Stare Decisis in a Court of Appeals

Ruling that is not from their district/division). Every superior court must follow any

published decision from any district and any division of any court of appeal. Cuccia v.

Superior Court, 153 Cal. App. 4th 347, 353-354 (2007). [stare decisis requires a superior

court to follow a published court of appeal decision even if the trial judge believes the

appellate decision was wrongly decided.] However, if there are several different

decisions from different Appellate Courts, then the trial court is free to pick which of the

decisions to follow. (Ergo why there is a Supreme Court which decides issues that the

different Appeals Court are not agreeing on).

A federal court, when applying state law is bound by the highest state

court authority to have ruled. See Johnson v. Frankell, 520 U.S. 911, 916 (1997)

[federal courts must follow state's highest court on question of state law); Cal. Pro-Life

Council, Inc. v. Getman, 328 F.3d 1088, 1099 (9th Cir. 2003) [federal courts must

follow state's intermediate appellate courts absent convincing evidence that the state's

highest court would rule differently). However, federal court decisions on state law are

25

not binding on state courts. Qualified Patients Ass'n v. City of Anaheim, 187 Cal. App.

4th 734, 764 (2010); Bodell v. Walbrook (9th Cir. 1997) 119 F. 3d 1411, 1422.12

This concept is very important when you start

looking at how courts are not following Stare Decisis

and/or claiming Glaski is a minority opinion. Arguing

Stare Decisis may make the difference between success or

failure in your arguments!

As of February 8, 2014 the following are some Rulings that are being used to

persuade Courts that Glaski should not be followed. It is our opinion these arguments

are flawed and it is in your interest to understand the difference between what the

banks are saying and what the rulings actually say. As you get further into each of

these rulings you will see that these rulings rely on each other and they ALL FAIL to

recognize STARE DECISIS. (Each of the rulings are included in the appendix)

Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497 (May 17, 2013) This ruling came out three months before Glaski. Key to this ruling is Jenkins

did not plead or allege the Assignment was VOID, she alleged it was "invalid". Invalid

usually results in a discussion of voidable and a voidable assignment cannot be

challenged by a 3rd party; only a VOID Assignment can be challenged.

Time does not confirm a void act. See Calif. Civil Code 3539 This is not an easy

distinction to make with the Courts the judges tend to go with the flow and forgive

the banks whatever borrowers not so much. This appears to be a major point of

distinction that must be argued clearly and with an eye to establishing the argument for

appeal. Jenkins continues to gain momentum so busting through the Judges mindset

and shifting that paradigm requires creating some real chaos that has the judge

scratching their head and then actually doing some independent thinking. (It does

12 For more details on the different stare decisis please see the Los Angeles County Bar Association Newsletter, April 2008, Vol. 28 No. 4.

26

happen!). It appears the Court also once again, claimed that the borrower did not allege

any prejudice from the wrong party foreclosing (common sense just doesnt play in

this argument for some reason.)

[15]Despite these facts, Jenkinss first cause of action attempts to construct a dispute

between herself and Defendants with regard to the alleged improper transfer of the

promissory note during the securitization process. However, even if the asserted

improper securitization (or any other invalid assignments or transfers of the

promissory note subsequent to her execution *515 of the note on March 23, 2007)

occurred, the relevant parties to such a transaction were the holders (transferors) of the

promissory note and the third party acquirers (transferees) of the note. Because a

promissory note is a negotiable instrument, a borrower must anticipate it can and

might be transferred to another creditor. As to plaintiff, an assignment merely

substituted one creditor for another, without changing her obligations under the note.

(Herrera, supra, 205 Cal.App.4th at p. 1507, 141 Cal.Rptr.3d 326.) As an unrelated

third party to the alleged securitization, and any other subsequent transfers of the

beneficial interest under the promissory note, Jenkins lacks standing to enforce any

agreements, including the investment trusts pooling and servicing agreement, relating

to such transactions. (See In re Correia (1st Cir. BAP 2011) 452B.R. 319, 324325

[debtors lacked standing to raise violations of pooling and service agreement].)

Keep in mind that Jenkins failed to allege with specific facts the Assignment was

VOID and attacked failure to comply with governing documents rather than by

operation of law-- this is a major distinction with Glaski who not only alleged it was

VOID, he used New York law in his arguments to support this claim that the Trust was

prohibited from accepting the late transfer; and therefore by law the act was void.

Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, (2011)

Gomes, a pre-foreclosure not post foreclosure complaint, held that Calif. Civil Code

2924(a)(1) does not provide for a judicial action to determine whether the person initiating

27

the foreclosure process is indeed authorized by the proper party. But the issue in Gomes

was not whether the wrong entity had ordered the foreclosure, Gomes involved whether

the party selling the foreclosed property (MERS as nominee of the Lender) was authorized

to do so by the owner of the promissory note, not whether there was some infirmity in the

assignment leading to the wrongful foreclosure. Id. at 1155 (rejecting the argument a

plaintiff may test whether the person initiating the foreclosure has the authority to do so).

Thus, Gomes explicitly avoided the scenario plead in Glaski, in which the "plaintiff's

complaint identified a specific factual basis for alleging that the foreclosure was not

initiated by the correct party (emp. in original)" Id at 1156. Gomes is therefore inapposite

when evaluating it against Glaski.

Similarity, in distinguishing the facts before the Court in Ohlendorf v. American Home

Mortg. Servicing (E.D. Cal. 2010) 279 F.R.D. 575, the Gomes court noted that its decision

did not involve facts concerning whether an "assignment[....] of the deed of trust had been

improperly backdated, and thus the wrong party had initiated the foreclosure process." Id.

at 1155. Importantly the Gomes Court held that "no such infirmity [was] alleged" by

plaintiff.

The fundamental difference was that Gomes questioned whether MERS (the nominee)

had the authority; where in Glaski he specifically and factually plead that Bank of America

was NOT the proper party, and provided the basis of those allegations. (i.e. the Assignment

was void, thereby showing that Bank of America was not the lender and Chase and

California Reconveyance Corp. as Bank of America's agents, had no authority).

Diunugala v. JP Morgan Chase Bank, N.A. (Case No. 12-cv-02106-WQH-NLS) (October 3, 2013) First, Diunugala is a federal district court ruling; go back to the above chart. It is

a lower court than the Court of Appeals. Any state court judge relying on Federal

District Court decisions should be respectfully reminded that stare decisis would render

any decision in contravention to Glaski an appealable error. If it is a Federal District

Court, then there are plenty of other cases demonstrating that the Illinois court ruling

this district court judge relied on ignored the higher New York State cases that find the

assignment void.

28

In this ruling, the district court relied on another federal district court's ruling,

Deutsche Bank Nat'l Trust Co. v. Adolfo, No. 12 C759, 2013 WL 4552407 * 3 (N.D. Ill.

Aug. 28, 2013) in which that Court held that a late transfer is voidable and not void.

Apparently, relying on yet another district court ruling, Svoboda v. Bank of America,

2013 WL 4017904 (W.D. Tex.) in which that federal district court held "[B]ecause New

York law permits a beneficiary to ratify a trustee's ultra vires transactions, 'such

transactions are, accordingly, voidable".

No. That is not true. It appears the Court was looking at a family trust; not a

business/investment trust. First, ultra vires acts are those acts that cannot be ratified.

New Yorks law is so well-settled regarding the limitations of a trustees power to act that

the New York Estates Powers and Trust Law Section 7-2.4 states "every sale, conveyance

or other act of the trustee in contravention of the trust.... is void. " See Application of

Muratori, 183 Misc. 967, 970 (N.Y. Sup. Ct. 1944) See also Dye v. Lewis, 67 Misc. 2d

426, 324 NYS2d 172 (1971), mod on other grounds, 39 App. Div. 2d 828, 332 NYS2d

968 (1972, 4th Dept.) (finding the authority of a trustee to whom a mortgage had been

delivered under a trust indenture was subject to any limitations imposed by the trust

instrument, and every act in contravention of the trust was void.) See Knight v. Knight,

589 N.Y.S.2d 195, 197 (App.Div. 1992) (suggesting that a "void assignment" cannot be

ratified); See also National Surety Co. v. Manhattan Mortgage Co., 185 App.Div. 733,

736-737, 174 N.Y.S.9, affd. 230 N.Y. 545, 130 N.E. 887; Boskowitz v. Held, 15 App.Div.

306, 310-311, 44 N.Y.S. 136, affd. 153 N.Y. 666, 48 N.E. 1104. (holding that the

conveyance made in contravention of the trust, the transaction is void).

IN RE SANDRI, Bankr. Court, ND California 2013 This is a case out of the United States District Court, Northern California. Judge

Montali (who also sits on the Bankruptcy Appellate Panel) rendered this ruling in

November of 2013, after Glaski. The Court first looked at the borrowers right to challenge

a void Assignment and agreed, based on state law, that Sandri could challenge an

Assignment on the basis that it was void. Where Montali departed from the Glaski ruling

was whether the Assignment was void.

First, Montali relied on the following cases in making his analysis:

29

Patel v. Mortgage Electronic Registration Systems, Inc., 2013 WL

4029277 (N.D. Cal. Aug. 6, 2013) ("[T]he securitization process did not break

the chain of title; MERs [sic] does have authority to assign the DOT . . .; Plaintiffs

have failed to plead breach of the DOT and do not have standing to assert a breach

of any PSA; and the robo-signing allegations have not been properly pled.")

(emphasis added). (COMMENT: here it appears Patel argued the effect of

securitization; not that the REMIC failed to acquire the loan).

Aniel v. GMAC Mortg., LLC, 2012 WL 5389706 at *4 (N.D. Cal. Nov. 2,

2012) (plaintiffs lacked standing to challenge assignment of deed of trust based

on noncompliance with pooling and service agreements) (COMMENT: The ruling

is unclear if Aniel was factually stating the transfer as void but one would think the

argument should have been the assignment was void as a matter of law; not

voidable as a matter of equity and it is unclear if that argument was made. This

is also a concern with Ganesan below).

Ganesan v. GMAC Mortgage, LLC, 2012 WL 4901440 at *4 (N.D. Cal.

Oct. 15, 2012) (citing cases) ("[T]o the extent Plaintiff bases her claim on the

theory that Defendants allegedly failed to comply with the terms of a Pooling and

Servicing Agreement, the Court notes that she lacks standing to do so because she

is neither a party to, nor a third party beneficiary of, that agreement.")

Gilbert v. Chase Home Fin., LLC, 2013 WL 2318890 at *3 (E.D. Cal.

May 28, 2013) (listing numerous federal district cases holding that borrowers

lack standing to challenge their liability under a note and security instrument by

alleging that the assignment of such instruments did not comply with a PSA)

(COMMENT: This ruling appears to be one in which Gilbert may have been

arguing the effect of the securitization rather than the acquisition never took

place).

For starters, ALL of these are district courts (trial) - a California Court Appellate Ruling

has more authority than lower district court rulings; and all of the above cases were

30

decided pre - Glaski. Remember, stare decisis. But to justify his rationale, he then

looks to California Appellate Rulings:

Siliga v. Mortgage Electronic Registrations Systems, Inc., 219 Cal.

App. 4th 75, 161 Cal. Rptr. 3d 500 (Cal. App. 2d Cir. 2013) (decided on

August 27, 2013) (borrowers lacked standing to complain about loan servicer's

and assignee's alleged lack of authority to foreclose on deed of trust where

borrowers were in default under the note, absent evidence that the original lender

would have refrained from foreclosure) (COMMENT: I have to admit this

argument from the courts escapes my logic. It appears the Court is saying doesnt

matter who forecloses stranger or not, the borrower is in default so the

foreclosure can go forward?);

Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 156

Cal. Rptr. 3d 912 (Cal. App. 4th Dist. 2013)(borrower does not have the

right to bring a preemptive judicial action to determine defendants' standing to

foreclose; foreclosing party need not have beneficial interest in promissory note

and deed of trust) (COMMENT: We know that Jenkins did not argue that the

REMIC Trust had failed to acquire it by operation of law; Jenkins argued failure

to comply with the governing documents this is a key difference between Glaski

and Jenkins see above);

Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 272, 129

Cal. Rptr. 3d 467 (1st Dist. 2011) (to recover on wrongful foreclosure claim,

borrower must demonstrate that the alleged imperfection in the foreclosure

process was prejudicial; no prejudice exists where borrower was in default and

the assignment of the loan did not interfere with the borrower's ability to pay).

(COMMENT: Prejudice must be alleged!)

Once again relying on pre- Glaski rulings, it appears that Montali is reviewing the

claim of the Assignment being voidable as a "technicality" rather than void as a matter of

law and the basis of fraud. Only the proven mortgagee may maintain a foreclosure action.

The requirement that a foreclosure action be brought only by the actual mortgagee is at the

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heart of the issues with foreclosure irregularities. If the homeowner or the court challenges

the claim of the party bringing a foreclosure action that it is the mortgagee (and was when

the foreclosure was filed), then evidentiary issues arise as to whether the party bringing the

foreclosure can in fact prove that it is the mortgagee. The issues involved are highly complex

areas of law, but despite the complexity of these issues, they should not be dismissed as mere

technicalities. Rather, they are legal requirements that must be observed both as part of due

process and as part of the contractual bargain made between borrowers and lenders13. And

this is where I think Montali gets it wrong.

The Court relies on the fact the borrower is not denying she is in default; again, since the

homeowner will lose the house anyway, therefore anybody can steal the house? That is the

logic being propounded here.

Under these circumstances, she cannot show that the assignment of the note or DOT after

the effective date of the PSA interfered with her ability to pay or that the original lender

would not have foreclosed. She therefore cannot show prejudice from the purportedly

defective assignments.

Wrong! What the Court is not looking at (and perhaps because the borrower did not

allege it), if the real creditor WAS involved, there would be an effort to resolve the issues

surrounding the loan to get it back to a performing loan. Foreclosure is NOT the way of a

true creditor; it is the way of Walls Street thugs and the banks that collect on their behalf.

Not only that, this idiocy flies in the face of basic California law. (See below.)

Yvanova v. New Century Mortgage, et al. April 2014 Oh my. I am not sure what fascinates me more about this opinion the fact that it

drives home the point of how a pro se can hurt all of us by not understanding the basic

rules of civil procedure and law; or that the Court actually relies on lower federal district

court rulings to support its decision not to follow Glaski. This case is just simply wrong,

13 Restatement (Third) of Prop. (Mortgages) 5.4(c) (1997).

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wrong, wrong. Not because it is not right in the reasoning, but because now the Banks

will use this in arguing against Glaski.

On page 8, the Court confirms the Glaski court finding that a borrower may

challenge a nonjudicial foreclosure based on allegations that one or more transfers in

the chain of title of a trust deed is void. She is correct. Point 1 of Glaski is once

again confirmed.

Point 2 what makes the assignment void is where once again, the Court refuses

to follow Glaski noncompliance with the terms of a pooling and servicing agreement

would render an assignment void. Citing to three lower federal rulings (so much for

stare Decisis!) the Court pointedly follows Jenkins (which never investigated the

assignment as void) and it appears that the borrower failed to allege the assignment

was void as a matter of law.

As a quick side note, because I see this time and time again, many pro ses appear to

misinterpret the rulings that state that pro se rulings are not to be held to the same

standard as that of an attorney. Being held to the same standard is NOT the same as

being responsible for following basic rules of civil procedure and law. The analogy that

comes to mind of that of a high school baseball team and a professional baseball team;

while the standards of performance for the high school team are lower than those of a

professional ball team, BOTH teams follow the SAME RULES and PROCEDURES for

playing the game.

C. Alleging Prejudice

One of the challenges in the Bank's argument is whether the homeowner /borrower

alleges prejudice. In fact, the Courts continue to make statements similar to the

following:

"The validity of the assignment does not affect whether the borrower owes its obligations, but only to whom the borrower is obligated"

In other words, it appears the Courts are saying that the borrower is in default, and

would lose their house anyways. Who conducts the foreclosure does not change the fact

that the homeowner was subject to the foreclosure. Put another way, this would be like

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your falling behind on your car payment; a thief steals your car and you sue the thief to

recover your car. The thief's defense, and court's reasoning to allow the thief to keep your

car is..." you were behind in your payments and would have lost the car anyways so how

were you prejudice?? "

Identifying the true lender, the true "creditor" entitled to the borrower's payments is

not only one of simple Article III standing; different REMIC Trusts have different

incentives and ability to settle issues. PSA terms, liquidity, capital requirements, credit

risk exposure, and compensation differ between servicers/trustees and portfolio lenders.

If the loans weren't properly transferred via the securitization, then they are still held in

portfolio by someone. This means borrowers have a strong interest in litigating against

the real party in interest. The parties, who may be foreclosing for the wrong entity, may

have more incentive to foreclose than to work towards having a performing loan. (Such

as pretending one party owns it because they really dont know who owns it.)

The other issue is if the entity that the banks are foreclosing for is the wrong entity,

who have they been sending the payments to? If, however, the maker pays someone other

than a person entitled to enforceeven if that person physically possesses the note the

maker signedthe payment generally has no effect on the obligations under the note. The

maker still owes the money to the person entitled to enforce, Miller & Harrell, supra,

6.03[6][b][ii], and, at best, has only an action in restitution to recover the mistaken

payment. See UCC 3418(b). In re Veal (B.A.P. 9th Cir. 2011) 450 B.R. 897, 910.

Borrowers are prejudiced and harmed in many different ways. Arguing the clouding

of title is a particular harm; as is the potential for duplicative claims. Whether other

claims have been made against the borrower is NOT the issue; the potential of duplicative

claims should be enough to argue harm; both California and Federal law are clear a

borrower should only have to pay one satisfaction and therefore, clear and positive

evidence of the "creditors" claim must be without question.

So when you consider what the prejudice is from a void assignment, it would be

entirely appropriate to question the servicer's interest as being in direct conflict with both

the borrower and real creditors goal of a performing loan; and that any payments made

to date to the wrong entity leaves the borrower open to potential future claims and

potential is harm. "the trustor must pay the debt . . . according to its terms to protect the

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property from loss by foreclosure." (4 Miller & Starr, Cal. Real Estate, supra, Deeds of

Trust and Mortgages, 10:71, pp. 216-217, fn. omitted.)

IV. DELAWARE VERSUS NEW YORK LAW -Would the Glaski Decision have been different?

CHAPTER 38. TREATMENT OF DELAWARE

STATUTORY TRUSTS as referenced by the banks attorneys

falls under Chapter 12 Decedents Estates and Fiduciary Relations - Fiduciary

Relations as does CHAPTER 35. TRUSTS - Subchapter III. General

Provisions. Chapter 35. which incorporates Statutory Trusts states in 3536:

Every direct or indirect assignment, or act having the effect of an

assignment, whether voluntary or involuntary, by a beneficiary of a trust of

the beneficiarys interest in the trust or the trust property or the income or

other distribution therefrom that is unassignable by the terms of the

instrument that creates or defines the trust is void. [emphasis added]

Instrument as used here refers to governing instrument as used in 3801 which is

the PSA.

V. FOLLOW THE LEADER Glaski is a gem. Not only was Glaski clear and to the point in his

pleading; the Court did a through and well-reasoned investigation

into the VOID aspect of the assignment. So follow Glaski, not blindly but intelligently

and respectfully. Keep in mind that a late transfer into a REMIC Trust is not the only

reason why an assignment may be found void. Other Assignments we have looked at

which could be subject to an argument of being VOID include:

MERS Role

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When MERS is involved in the Deed of Trust ("DOT") the DOT is a four party

instrument with the Borrower, the Lender, the trustee, and MERS as beneficiary as

nominee of the Lender. The Lender's rights regarding the Loan are pervasive. The Lender

is entitled to receive all payments under the Note, to control enforcement of the DOT

under its terms, and only the Lender is entitled to conduct a nonjudicial foreclosure.14

MERS has none of these rights under the DOT and is not even mentioned in the Note.

MERS is not given any independent authority to enforce the DOT under its terms, and

its status as beneficiary under the DOT is only "nominal." While the borrower

acknowledged in the DOT that MERS can exercise the Lender's rights as "necessary to

comply with law or custom, 15 this acknowledgement is not accompanied by any actual

allocation of authority to non-judicially foreclose on the Property, nor is such authority

allocated in any other document in the record. See also, e.g., LaSalle Bank Nat'l Ass'n v.

Lamy, No. 030049/2005, 2006 NY Slip Op 51534U, slip op. 2 (N.Y. Sup. Ct.

2006); MERS v. Saunders, 2 A.3d 289, 295 (Me. 2010) ("MERS' only right is to record

the mortgage. Its designation as the `mortgagee of record' in the document does not

change or expand that right...."). Defendants' authority to foreclose cannot, therefore, be

derived from MERS because MERS never held such authority. Shannon v. General

Petroleum Corp., 47 Cal. App. 2d 651, 661 (1941) (assignment can only carry rights

owned by the assignor.)

14 Under the DOT, the Lender is secured the right to: "(i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note." In addition, under the covenants executed between the Lender and Plaintiff, the Lender is granted exclusive authority to accelerate repayment, "give notice to Borrower prior to acceleration," "invoke the power of sale" through written notice to the Trustee in the event of default, and appoint successor trustees. Find this section in your DOT and quote its location here. 15 The DOT provides, "Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee of Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing or cancelling this Security Instrument." Find this section in your DOT and quote its location here (emphasis added).

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Assignments from Mortgage Electronic Registration Systems, Inc. (MERS) as Nominee for a bankrupt entity (or a bankrupt entity that has a liquidating trustee)

By statute, Calif. Civil Code 2356, the "agency relationship" between the bankruptcy

entity and MERS is terminated.

2356. (a) Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated by any of the following: (1) Its revocation by the principal. (2) The death of the principal. (3) The incapacity of the principal to contract. (b) Notwithstanding subdivision (a), any bona fide transaction entered into with an agent by any person acting without actual knowledge of the revocation, death, or incapacity shall be binding upon the principal, his or her heirs, devisees, legatees, and other successors in interest. (c) Nothing in this section shall affect the provisions of Section 1216. (d) With respect to a proxy given by a person to another person relating to the exercise of voting rights, to the extent the provisions of this section conflict with or contravene any other provisions of the statutes of California pertaining to the proxy, the latter provisions shall prevail.

In the case of New Century Mortgage Company (and Homes123), the bankruptcy

court signed an order approving the rejection (termination) of executory contracts on

April 2 2007; MERS was notified on March 19, 2008 the contract was being terminated

(repudiated). The order took effect ten days later on March 29, 2008. So it can be argued

that the agency relationship was terminated both by statue ( 2356) and by notice.

When a bankruptcy is involved, the issues become even more problematic for MERS,

especially if the bankrupt company was liquated. For example, Deutsche relies on

Assignments, via MERS for New Century Mortgage and Homes123 (part of New Century)

that are dated after April 2, 2007. The Assignment of Deed of Trust Deutsche relies on

for its alleged interest, is void for several reasons, including the fact that NCMC had no

assets to transfer after August 1, 2008.

August 1, 2008 is the effective date of the New Century Liquidating Trust in joint

bankruptcy. In re New Century TRS Holdings, Inc. v. New Century Liquidating Trust,

407 B.R. 576 (2009) at 585 all assets of NCMC and NC Capital were distributed to the

Liquidating Trustee. Deutsche, a major creditor in the In re New Century TRS Holdings,

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Inc. Case No. 07-10416 (KJC) is aware that all assets were transferred to the Liquidating