JOHN T. GRENIE CHARGED WITH INDIRECT CRIMINAL CONTEMPT

8/9/2019 JOHN T. GRENIE CHARGED WITH INDIRECT CRIMINAL CONTEMPT

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Steven N. Taieb, Esq.Attorney at LawBY /s/ Steven N. Taieb, Esq.Steven N. Taieb,

1155 Rt. 73, Suite 11Mt. Laurel, NJ 08054(856) 235-4994

UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF NEW JERSEY

HONORABLE JUDITH H. WIZMUR____________________________________________________________________________In Re: : CASE NO: 08-18700

JOHN KEMP : CHAPTER 13Plaintiff-Debtor(s)

: ADVERSARY NO:Vs.

: COMPLAINT TO DETERMINE VALIDITY OFCOUNTRYWIDES LIEN AND TO EXPUNGE

: PROOF OF CLAIMCOUNTRYWIDE :

____________________________________________________________________________

John Kemp, residing at 120 Chestnut St., Audubon, NJ states:

1. This complaint is a court proceeding pursuant to federal rule, Bankruptcy procedure7001 and 28 USC section 157(b)(2)(A).

2. Venue of this complaint is proper in the district of New Jersey pursuant to 28 USC1409(a).

3. On 6/10/08 Countrywide filed a claim for $211,202.41 with arrears of $4056.69. Acopy is attached hereto as Exhibit A.

4. Countrywide has failed to provide original loan documentation to show they are thetrue mortgagee on 1316 Kings Highway, Haddon Heights, NJ 08035.

5. The property at 1315 Kings Highway, Haddon Heights, NJ was purchased on May 31,2006 by the debtor.

6. Countrywide has failed to provide the original loan documentation to show that theyhave a proper mortgage on said property pursuant to NJSA 46:9-9.

7. Without proper documentation Countrywides claim must be expunged since there isno proof to establish its lien.

WHEREFORE, Plaintiff demands judgment:

A. Expunging Countrywides proof of claim and determining that Countrywide hasfailed to establish a valid lien on 1316 Kings Highway, Haddon Heights, NJ.

B. Such other relief as is just and proper.

Dated: October 10, 2008 /s/ Steven N. Taieb, Esq.STEVEN N. TAIEB

Attorney for Plaintiff

Case 08-02448-JHW Doc 1 Filed 10/16/08 Entered 10/16/08 11:03:22 Desc MainDocument Page 1 of 1USCA Case #14-5265 Document #1535317 Filed: 02/01/2015 Page 1 of 2

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Case 08-02448-JHW Doc 1-1 Filed 10/16/08 Entered 10/16/08 11:03:22 DescExhibit Page 1 of 1USCA Case #14-5265 Document #1535317 Filed: 02/01/2015 Page 2 of 2

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IN THE UNITED STATES BANKRUPTCY COURTDISTRICT OF NEW JERSEY

IN RE: ) Bankruptcy No. 08-18700))

)

JOHN T. KEMP, ) )

Debtor. )---------------------------------) )JOHN T. KEMP, ) Adversary No. 08-02448 ) Plaintiff, ) ) vs. ) )COUNTRYWIDE HOME LOANS, INC., ) Camden, New Jersey ) August 11, 2009 Defendant. ) 10:24 a.m. )---------------------------------)

TRANSCRIPT OF HEARINGBEFORE THE HONORABLE JUDITH H. WIZMUR

UNITED STATES BANKRUPTCY JUDGE

APPEARANCES:

For the Plaintiff: BRUCE LEVITT, ESQUIRELEVITT & SLAFKES, PC

76 South Orange Avenue, Suite 305 South Orange, New Jersey, 07079

Cherry Hill, New Jersey 08003

For the Defendant: HAROLD KAPLAN, ESQUIREFRENKEL, LAMBERT, WEISS, WEISMAN& GORDON, LLP80 Main Street, Suite 460West Orange, New Jersey 07052

Audio Operator: NORMA SADER


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2

Transcribed by: DIANA DOMAN TRANSCRIBING SERVICESP.O. Box 129Gibbsboro, New Jersey 08026-0129Phone: (856) 435-7172Fax: (856) 435-7124E-mail: [email protected]

Proceedings recorded by electronic sound recording, transcriptproduced by transcription service.


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3

LINDA DeMARTINI, DEFENSE WITNESS, SWORN1

THE COURT: Please have a seat. Your full name,2

first and last, and spell your last name, please.3

THE WITNESS: My name is Linda DeMartini. The last4

name is spelled D-E capital M-A-R-T-I-N-I.5

DIRECT EXAMINATION6

BY MR. KAPLAN:7

Q Okay, Ms. DeMartini, would you -- who are you employed by?8

A I am employed by Bank of America Home Loans, formally9

known as Countrywide Home Loans.10

Q Okay. And how long have you been employed there?11

A A total of almost ten years.12

Q And what is your position there?13

A I am an operational team leader for the Litigation14

Management Department currently. Ive been there just about a15

year.16

Q Are you familiar with the documents relating to Mr. Kemps17

mortgage loan?18

A Yes, I am.19

Q Okay. Now who, based upon your knowledge of the loan20

documents, whos presently the owner, holder, transferee of21

the note?22

A Well, the owner as in the investor, that would be Bank of23

New York, and we -- we are the servicer, Bank of America Home24

Loan, Servicing, LP, formally known as Countrywide Home Loan25


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4DeMartini - Cross

Servicing, LP.1

Q Okay.2

MR. KAPLAN: Id like this marked as I guess D-1.3

Okay, may I approach the witness, Your Honor?4

THE COURT: Yes.5

BY MR. KAPLAN:6

Q Could you tell the Court what that document is?7

A Thats the allonge to the promissory note.8

Q And is that the original?9

A Yes, this is.10

Q And it references -- what -- could you -- and who signed11

that document?12

A Sharon Mason.13

Q And whats Ms. Masons position with Country --14

A She is Vice President. Shes actually part of our15

Bankruptcy Risk Litigation Management Department. Shes16

actually my bosss boss.17

Q Okay. And youre familiar with Ms. Masons signature?18

A Yes, I know it very well.19

Q And thats Ms. Masons signature?20

A Definitely.21

Q And the allonge is -- the purpose of the allonge?22

A It shows the transfer to Bank of New York as the trustee.23

Q Okay. So it -- its your testimony that Bank of New York24

is trustee as the holder or the investor of that loan?25


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5DeMartini - Cross

A Yes, thats correct.1

MR. KAPLAN: Your Honor, essentially she has2

testified to the document. I really dont have any other3

questions that --4

THE COURT: Well, lets cross.5

CROSS-EXAMINATION6

BY MR. LEVITT:7

Q Ms. DeMartini, you said youre familiar with the loan8

documents?9

A Hm-hmm.10

Q What do they consist of?11

A Well, weve got the notice there, the mortgage is there.12

In our system we have any of the documents -- settlement13

statement, title policy, every single document that would have14

been signed at the time that the loan was taken out.15

Q When was the first time that you saw those documents?16

A A few weeks ago.17

Q Were you at all involved in the preparation of the proof18

of claim?19

A No, I was not involved in the proof of claim. That would20

have been before it got to the Litigation Department.21

Q When was the first time that you saw the allonge to the22

promissory note?23

A Approximately two weeks ago.24

Q And how was it that you came to see the allonge to the25


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6DeMartini - Cross

promissory note?1

A Well, in my role as a supervisor in the department I have2

litigation specialists who work for me. When cases are coming3

up, I review their cases as a regular matter of course so Id4

be reviewing the documents with that. When this date came up5

as far as having this hearing today and it became known to me6

that I was most likely going to be the one traveling here to7

be a part of it, I made sure that I got involved in every8

aspect of the case.9

Q When was this allonge prepared?10

A This allonge would have been prepared by my specialists.11

I dont have the exact date committed to memory, but this12

would have been done within the last couple of months most13

likely.14

Q So one of your employees prepared the allonge?15

A One of my employees would have taken -- would have gotten16

the allonge and we would have been the ones that obtained the17

signature from Sharon, yes.18

Q So it was just recently signed?19

A Fairly recently signed, yes.20

Q Signed essentially in contemplation or in the course of21

this litigation, correct?22

A Most likely.23

Q And it was prepared in your office?24

A It would have been -- whether it was originally prepared25


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8DeMartini - Cross

have originated it, we are the ones that have always serviced1

it.2

Q Today who is the owner of the loan?3

A Bank of New York.4

Q Bank of New York?5

A As -- as the trustee for the certificate holder CWABS,6

Asset-Backed Securities series number --7

Q And who is in possession of the note?8

A Who is in possession of the note? We have the note in our9

origination file.10

Q So -- so Bank of New York as trustee does not hold the11

note, is that correct, or is not in possession of the note?12

A The original note to my knowledge is in the origination13

file.14

Q Where is the -- do you have it here today?15

A No, I dont have it with me here today.16

Q So you dont have the note?17

A Its in our office.18

Q So its in your office, its not with this trust that owns19

the -- thats supposedly holds the -- or is the owner of this20

note, is that correct?21

A Thats correct.22

Q And your testimony is that this allonge was never23

submitted to -- it was never in the possession of Bank of New24

York as trustee for the certificate holder, is that correct?25


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9DeMartini - Cross

MR. KAPLAN: Your Honor, I object. Countrywide or1

Bank of America is the servicer. They possess and hold all2

the documents.3

THE COURT: Dont give me an argument, thats not an4

objection to the question. I dont mean to be -- to cut your5

off, but youre welcome to make that argument bottom line, but6

thats a perfectly proper question.7

BY MR. LEVITT:8

Q And this allonge, its a stand-alone document, correct?9

Its not attached to anything, is that correct?10

A Im not sure Im understanding your question.11

Q Was there anything -- when you brought the original thats12

in front of you, did you remove it? Was it stapled to13

something else?14

A No, it wouldnt have necessarily been stapled to something15

else. There would have probably been other documents showing16

the -- you know, we would have shown her the note. We would17

have reviewed all of that before.18

Q And where are all the documents that you showed her?19

A Well, I have copies of -- I have a copy of the note, I20

have a copy of the deed with me here today.21

Q And those --22

A Theyre signed copies.23

Q Can you show me exactly the documents that you showed her24

when you had her sign this allonge?25


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10DeMartini - Cross

A Theyre probably right -- well, they would be in that1

clump there. Thats mostly the Pooling and Servicing2

Agreement, the larger one.3

Q This one?4

A Yeah. Theres the note in there, theres the deed and the5

mortgage and you sign it.6

Q You just --7

MR. KAPLAN: May I provide this --8

MR. LEVITT: -- Im sorry.9

MR. KAPLAN: -- provide this note?10

MR. LEVITT: Yeah, go ahead.11

THE WITNESS: Because this was provided to me by my12

specialist to -- to bring along so that I have the documents13

here for you today.14

BY MR. LEVITT:15

Q Let me ask you this. Did you show those documents to --16

is it Sharon Mason?17

A Did I personally show the documents? Whoever brought her18

-- and to be honest with you, I dont know if it was me or my19

specialist, Dee, who brought them to her -- whoever brought20

them to her would have had them with them, yes, whichever of21

the two of us.22

Q Who brought them to her?23

A Generally speaking, it would have been me, but I dont24

recall bringing this particular one to her so I believe it was25


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11DeMartini - Cross

Dee.1

Q So you dont recall bringing it, you dont recall -- and2

you dont know what documents were shown to her, is that3

correct?4

A No, I know what documents were shown to her because5

theyre right here and they -- and theyre all together.6

Q Did you bring those documents to Sharon Mason? Did you7

personally?8

A Not to my knowledge, no.9

Q Do you know specifically who brought those documents to10

Ms. Mason?11

A My specialist, Dee.12

Q And you saw her bring the documents to Ms. Mason?13

A Did I physically stand over her --14

Q Yes.15

A -- and witness it? No.16

Q Okay. Is the original note in that stack of documents?17

A An imaged copy of the signed note is in here.18

Q Is --19

A The absolute original, no, it is not.20

Q And again, my question before was was this attached to the21

note? This allonge, was it attached physically, with a22

staple, with a piece of glue -- was it attached?23

A With a staple? No, because then it would have a hole in24

it. But it would have been brought along with it. We would25


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12DeMartini - Cross

have shown it to her.1

Q But again, now again getting back to my other question, so2

this is a stand-alone document, it wasnt attached to3

anything?4

A Okay, then yes.5

Q Okay. And can you take a look at the -- what you believe6

to be the good copy of the note that you have?7

A Okay.8

Q Do you mind separating it from the rest of the papers?9

A Sure, Ill take it apart.10

(Pause in proceedings)11

A Okay, and your question?12

MR. LEVITT: Your Honor, may I approach the witness?13

THE COURT: Sure.14

BY MR. LEVITT:15

Q Not the mortgage, the note --16

A Yeah, Ive got all kinds of stuff.17

MR. LEVITT: Your Honor, if you could excuse us one18

second. There seems to be a discrepancy between what the19

witness has and what my office was provided.20

THE COURT: Certainly.21

MR. KAPLAN: Judge --22

THE COURT: And while you look at that, let me see23

whats going on with the other case. Youre welcome to take a24

few minutes.25


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13DeMartini - Redirect

(The Court hears another matter)1

MR. LEVITT: Your Honor, with counsels permission,2

since we have stipulated, Id like to provide a copy to Your3

Honor.4

THE COURT: All right. Is this a copy that we can5

mark?6

MR. LEVITT: Its an exact copy and we can mark that7

as joint Exhibit 1, I believe.8

THE COURT: J-1, interest only adjustable rate note.9

BY MR. LEVITT:10

Q Now, that document is the note that was contained in your11

file?12

A Yes.13

Q And theres no endorsement on the last page of that note,14

is there?15

A No --16

Q Theres --17

A -- theres no signature.18

Q Is there room on the bottom if somebody wanted to put Pay19

To The Order Of? Would there be room on the bottom?20

A Well, Im sure you could find a way to fit it in.21

Q Okay.22

MR. LEVITT: I have no further questions of this23

witness, Your Honor.24

THE COURT: All right.25


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MR. KAPLAN: Cross-examine, Your Honor?1

THE COURT: Please, please.2

REDIRECT EXAMINATION3

BY MR. KAPLAN:4

Q Ms. DeMartini, is it generally the custom to -- for your5

investor to hold the documents?6

A No. They would stay with us as the servicer.7

Q And are documents ever transferred to the investor?8

A If we service-release them they would be transferred to9

whomever were service-releasing them to.10

Q So I believe you testified Countrywide was the originator11

of this loan?12

A Yes.13

Q So Countrywide had possession of the documents from the14

outset?15

A Yes.16

Q And subsequent l y di d Count r ywi de t r ansf er t hese document s17

by ass i gnment or an al l onge?18

A Yes.19

Q And - -20

A Wel l , t r ansf er r ed t he r i ght s, yes, t r ansf er r ed t he21

ownershi p, not t he physi cal document s.22

Q So t he physi cal document s were r etai ned wi t hi n t he23

corporate ent i t y Count r ywi de or Bank of Amer i ca?24

A Cor r ect .25


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15DeMartini - Recross

Q Okay. And woul d you say t hat t hi s i s st andard oper at i ng1

pr ocedur e i n the mor t gage banki ng busi ness?2

A Yes. I t woul d be normal - - t he normal cour se of busi ness3

as t he r eason t hat we are t he servi cer , as we r e t he ones t hat4

ar e doi ng al l t he ser vi ci ng, and t hat woul d i ncl ude r et ai ni ng5

t he documents.6

Q Now, you were asked about whet her or not t he not e coul d be7

- - was endor sed at t he bot t om. I s i t gener al l y t he pr act i ce8

t o endor se t he act ual not e or t o use an al l onge?9

A I t s - - I ve never seen an act ual not e t hat has an10

endor sement on t he bot t om.11

Q So woul d you say i t s normal - -12

A I t s gener al l y mor e - -13

Q - - t o have an al l onge?14

A Yeah, i t woul d be more nor mal t o have an al l onge.15

Q Okay. And once t he al l onge was si gned, what woul d16

gener al l y happen to t he al l onge?17

A Wel l , i t woul d al so be i maged and i t woul d be r ecor ded and18

i t woul d be put i n our syst em and i t woul d be kept as a normal19

cour se. I n a si t uat i on l i ke t hi s, we f or war ded i t ont o t he20

at t or neys because of t he case but - -21

Q Okay. And i f i t had not been f orwarded t o t he at t orneys,22

what woul d have happened t o t he al l onge?23

A I t woul d have ended up i n t he f i l e wi t h ever ythi ng el se.24

Q And t he note at t ached t o i t ?25


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A Yes.1

Q Thank you.2

MR. KAPLAN: I have no f ur t her quest i ons, Your3

Honor .4

MR. LEVI TT: J ust br i ef l y, Your Honor .5

RECROSS- EXAMI NATI ON6

BY MR. LEVI TT:7

Q Ms. DeMar t i ni , you t est i f i ed t hat t hi s al l onge was j ust8

pr epared a coupl e of weeks ago, corr ect ?9

A Yeah, a shor t t i me ago, yes.10

Q And wasn t i t prepared because counsel cal l ed up and sai d11

we need and al l onge?12

A Yes.13

Q So i t wasn t your nor mal cour se t o have an al l onge i n t hi s14

si t uat i on, cor r ect ?15

A Wel l - -16

Q When was t hi s l oan made?17

A Thi s l oan was t aken out I bel i eve i n 2006 - - yes.18

Q So between 2006 and 2009 when you got a phone cal l f r om19

counsel t hat sai d we ve got a pr obl em, pr epare an al l onge,20

t her e was no al l onge, cor r ect ?21

A Ther e wasn t an al l onge pr i or t o t hat , no. Thi s l oan,22

l i ke I sai d, i t was al ways - - t hi s was a l oan t hat we23

or i gi nated t hat has al ways been wi t hi n t he company t hat yes,24

i t was sol d t o - - as Bank of New Yor k as t he t r ust ee and25


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secur i t i zed, but t her e wasn t a need f or an al l onge pr i or t o1

t hi s case.2

Q Because t her e was no l i t i gat i on pendi ng, cor r ect ?3

A Wel l , because t her e was no l i t i gat i on - -4

Q Thank you.5

A - - and because t her e was nothi ng t o - - t o get i n t he way6

of t he f act of t he nor mal cour se of - - of t he way t hat t hi s7

l oan s bei ng execut ed and bei ng - -8

Q That s f i ne.9

A - - bei ng ser vi ced.10

Q Thank you.11

MR. LEVI TT: That s i t , Your Honor .12

MR. KAPLAN: One mor e quest i on, Your Honor .13

REDI RECT EXAMI NATI ON14

BY MR. KAPLAN:15

Q Was i t t he i nt ent i on of Count r ywi de t o assi gn bot h i t s16

r i ght s i n t he mort gage and t he note t o Bank of - - t o Bank of17

New Yor k as t r ust ee?18

A Yes.19

THE COURT: Say t hat agai n?20

BY MR. KAPLAN:21

Q Was i t t he i nt ent i on of Count r ywi de t o assi gn i t s r i ght s22

i n bot h t he not e and t he mor t gage t o Bank of New Yor k?23

MR. LEVI TT: I m goi ng t o obj ect t o t he quest i on,24

Your Honor . I m not sure t hi s wi t ness i s competent t o answer25


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18DeMartini - By the Court

t hat quest i on based upon t he f oundat i on l ai d.1

THE COURT: I agree.2

MR. KAPLAN: Wel l , Your Honor , t hey - - t o t he ext ent3

t hat t her e wasn t a physi cal document at some - - at t he t i me,4

t hey r emedi at ed t hat by si gni ng t he al l onge and f aci l i t at i ng5

t hei r i nt ent i ons.6

THE COURT: Wel l , t hat s cer t ai nl y a val i d ar gument ,7

but i t s not - - i t st i l l doesn t answer t he quest i on of8

whether Ms. DeMar t i ni can speak f or Count r ywi de i n t erms of9

t hei r i nt ent i n doi ng anyt hi ng.10

MR. KAPLAN: Wel l , i t s evi dence t hat i t was t hei r11

i nt ent t o assi gn t he mor t gage.12

THE COURT: I t ver y wel l may be, and we l l l eave i t13

at t hat .14

MR. KAPLAN: Okay.15

THE COURT: Obj ect i on sust ai ned. Let me ask you a16

coupl e of quest i ons.17

EXAMI NATI ON18

BY THE COURT:19

Q There was an unexecut ed al l onge t o Amer i ca s Whol esal e20

Lender t hat was f i l ed wi t h t he pr oof of cl ai m. I s t hat i n21

your f i l e as wel l , t hat - -22

A Yeah. I have t he - - t he unsi gned copy i n t her e.23

Q And i t i s unsi gned?24

A The ol d one? Yeah, t hat s t he - - t he copy I have, i t25


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l ooks l i ke i t s unsi gned, yeah.1

Q So i s i t t he nor mal pr act i ce of Count r ywi de not t o si gn2

al l onges i n t he nor mal cour se?3

A I can t answer t o why t hat one was unsi gned and t hat was4

i n t her e. When a l oan goes i nt o bankr upt cy, our Bankr upt cy5

Depart ment i s t he one t hat woul d be t he ones actual l y6

pr epar i ng and f i l i ng t he pr oof of cl ai m. Our group get s7

i nvol ved when t hi ngs t ur n t o l i t i gat ed mat t er s - -8

Q But I m not - -9

A - - and so t hat s why I can t speak t o what t hey do i n10

t hei r - - i n t hei r nor mal cour se of act i on. I haven t seen an11

unsi gned one bef ore.12

Q Wel l , I m not t al ki ng about t he pr ocess of f i l i ng a pr oof13

of cl ai m. I m t al ki ng about t he cust omar y busi ness pr act i ce14

of Count r ywi de when a l oan i s t r ansf er r ed, when owner shi p i s15

t r ansf er r ed, when i n t hi s case the mort gage assi gnment16

occur r ed on March 24t h, 2008, corr ect ?17

A Yes.18

Q And woul d t hat have been t he dat e t hat t he owner shi p of19

t he not e and mor t gage were sought t o be t r ansf er r ed t o Bank of20

New Yor k as t r ust ee?21

A That woul d have been t he day t hey got t he owner shi p, yes.22

Q So t he quest i on i s whet her you know whet her i t s nor mal23

pr act i ce f or Count r ywi de t o execut e an al l onge at t he t i me24

t hat t hat t r ansf er t akes pl ace.25


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A I don t bel i eve t hat t hey r e al ways execut ed exact l y when1

t he t r ansf er t akes pl ace. I bel i eve t hat i t of t en t i mes2

happens t hat i t happens af t er t he f act .3

Q And does i t al ways happen?4

A I can speak t hat i t al ways happens, no.5

Q So t her e s no r out i ne t hat r equi r es i nt er nal l y, t o your6

knowl edge, t hat t he al l onge be execut ed i n connect i on wi t h t he7

t r ansf er of owner shi p?8

A No, I don t t hi nk t hat t her e i s a nor m i n t hat r espect9

because i n a normal cour se of act i on and f or - - and normal i s10

ki nd of a hard word anyway - - but - -11

Q A nor mal busi ness pr act i ce, an or di nary - -12

A - - but as a nor mal busi ness pr act i ce wi t h a nor mal l oan,13

of t en t i mes t her e r eal l y i sn t a need f or i t unl ess t he l oan14

i s goi ng t o cont i nual l y t o be sol d, and si nce t hi s l oan was - -15

yes, i t was t r ansf er r ed t o Bank of New York as t r ust ee as i t16

was secur i t i zed, but i t wasn t t hat another mort gage company17

had t he l oan and t hen we bought i t f r om t hem. Li ke I18

ment i oned, t hi s was al ways done by Count r ywi de and we19

secur i t i zed i t and we - - you know, we sol d i t t o t hem - -20

Q Thi s was done - -21

A - - and so - -22

Q - - I m not aski ng whet her i t was necessar y, I am aski ng23

whet her t her e was an ordi nary busi ness pr act i ce t o si gn an24

al l onge and t he answer i s no, t her e was not?25


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A I don t bel i eve so.1

Q Count r ywi de, t he same ent i t y as t he or i gi nat or of t he2

l oan, ser vi ced t he l oan f r om t he out set or was i t a di f f er ent3

aspect of t he company?4

A No. I t woul d have al ways been t he same. Even t hough Bank5

of Amer i ca has t aken over Count r ywi de so t o speak and we ar e6

now whol l y owned by Bank of Amer i ca, al l of t he Count r ywi de7

l oans are st i l l bei ng ser vi ced and t he Bank of Amer i ca - -8

pr i or Bank of Amer i ca l oans, t hey r e al l st i l l bei ng ser vi ced9

and done separat el y. Thi s has al ways been by Count r ywi de.10

Q Okay. Put t i ng asi de t he t akeover by Bank of Amer i ca, t hi s11

l oan was gi ven on May 31st , 2006, cor r ect ?12

A Yes.13

Q And when t he l oan was gi ven, af t er t he l oan was gi ven,14

Count r ywi de Home Loans, I nc. r et ai ned t he ser vi ci ng on t he - -15

A Yes, t hat s cor r ect.16

Q And as of March 24t h, 2008, t hat cont i nued t o be t he case,17

i s that r i ght ?18

A That s cor r ect .19

Q And t her e was a Pool i ng and Ser vi ci ng Agreement bet ween20

Count r ywi de and - -21

A Bank of New Yor k.22

Q - - Bank of New Yor k - -23

A Yes.24

Q - - r egar di ng t he cont i nued ser vi ci ng of t he l oan, i s t hat25


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22Levitt - Argument

r i ght ?1

A That s cor r ect .2

Q And t o your knowl edge - - I t hi nk you mi ght have t he3

servi ci ng ar r angement - -4

A Yes, I br ought a copy of i t .5

Q - - wi t h you, t o your knowl edge, i s t her e any pr ovi si on6

t hat i n t he ser vi ci ng of t hi s l oan t hat Count r ywi de act s as7

t he agent f or Bank of New Yor k i n t erms of possessi on of8

or i gi nal document s i ncl udi ng t he not e i n connect i on wi t h t hi s9

t r ansact i on?10

A I have t he Pool i ng and Ser vi ci ng Agr eement ther e. I t s11

over 200 pages l ong. I l l be ver y honest ; I di d not r ead t he12

ent i r e Pool i ng and Ser vi ci ng Agr eement . I do know t hat i t i s13

our nor mal cour se of act i on wi t h t he l oans t hat we servi ce14

t hat we ar e t he ones t hat r et ai n t he - - t hat we r et ai n t hose15

document s.16

Q Coul d such a cl ause be i ncl uded i n t hat , and i f t her e wer e17

such a cl ause, woul d t hat - - what woul d be t he ef f ect of t hat ?18

Shoul d I l ook f or t hat cl ause? Shoul d I ask you t o l ook f or19

t hat cl ause, or i s i t a f r ui t l ess ent er pr i se?20

MR. LEVI TT: Your Honor , I t hi nk - - and I have i t21

al so and i t i s a ver y t hi ck document , Your Honor - - t her e ar e22

ot her pr ovi si ons i n t hi s document t hat I t hi nk woul d be - -23

even i f t her e was somet hi ng i n t her e t hat says t hey coul d24

r et ai n document s, t her e s other pr ovi si ons i n t hi s document25


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23Levitt - Argument

whi ch woul d be cont r adi ct or y because t her e s pr ovi si ons i n t he1

Pool i ng and Servi ci ng Agr eement t hat say t hat document s have2

t o be del i ver ed t o an i nt ermedi ary between Bank of Amer i ca and3

Bank of New Yor k, t he - -4

THE COURT: Wel l , shoul dn t I consi der al l of t hat ?5

I n ot her wor ds, your - - one of your key poi nt s i s t he not e was6

not pr oper l y t r ansf er r ed because possessi on of t he or i gi nal7

note was not gi ven t o the new owner , i s t hat r i ght ?8

MR. LEVI TT: Par t i al l y, Your Honor .9

THE COURT: Okay.10

MR. LEVI TT: But agai n, I m not - -11

THE COURT: What s t he - -12

MR. LEVI TT: - - but I m not r ai si ng - -13

THE COURT: What par t of i t i s - -14

MR. LEVI TT: - - but I m not - - I m not def endi ng15

t hi s. The pr oof s t hat have been submi t t ed t o t he Cour t ar e16

t hat t her e s a pi ece of paper t hat t hey r e cal l i ng an al l onge17

t hat was pr epar ed i n t he cour se of t hi s l i t i gat i on t hat18

t hey r e r el yi ng on as an endorsement .19

THE COURT: You r e r i ght .20

MR. LEVI TT: I haven t - -21

THE COURT: You r e r i ght , but - -22

MR. LEVI TT: But I haven t hear d - -23

THE COURT: - - I m aski ng t he quest i on, and maybe i t24

shoul d have been asked ot her wi se, but i f t her e i s such a25


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24Levitt - Argument

pr ovi si on i n t he servi ci ng agr eement about t he r et ent i on of1

possessi on as agent f or t he owner - -2

MR. LEVI TT: And i f - - i f - -3

THE COURT: - - what par t of your ar gument i s i t ? I n4

other words, you say possessi on of t he document i s par t of t he5

argument . What el se i s a par t of t he argument ?6

MR. LEVI TT: No, but possessi on - - you have t o have7

possessi on of t he document but i n addi t i on t o possessi on, you8

ei t her have t o have an endor sement , or you have t o have proof9

t hat t hese document s wer e act ual l y t r ansf er r ed t o t he ul t i mat e10

owner , even i f t he agent f or t he owner i s hol di ng t hem. But11

t her e st i l l has t o be pr oof t hat i t was del i ver ed f r om A t o B12

t o C but none of t hose pr oof s have been submi t t ed and i t s not13

my burden, Your Honor .14

I f counsel want s t o say al l r i ght , f or get t he hol der15

ar gument , I l ost on hol der but her e s my case that t hi s not e16

was t r ansf er r ed f r om A t o B t o C, her e s t he del i ver y r ecei pt s17

and yeah, i t may be si t t i ng i n somebody s vaul t i n Cal i f or ni a18

and not wi t h t hi s t r ust , f i ne. But I haven t hear d t hose19

pr oof s and I don t t hi nk t he Pool i ng and Ser vi ci ng Agr eement20

gi ves us t hat , Your Honor . We need t o see t he del i ver y21

r ecei pt s, we need t o show t he chai n and t her e s not hi ng bef ore22

t he Cour t .23

THE COURT: Under st ood. Mr . Kapl an, i s t here24

anyt hi ng i n t hose document s i n t he Pool i ng and Ser vi ci ng25


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25Levitt - Argument

cont r act t hat woul d - -1

MR. KAPLAN: That s a good quest i on, Your Honor ,2

but , you know - -3

THE COURT: Don t you t hi nk you - -4

MR. KAPLAN: - - and I bel i eve t he wi t ness s5

exper i ence i s t hat document s are not physi cal l y t r ansf er r ed6

f r om par t y t o par t y t o par t y.7

THE COURT: But i t s not exper i ence t hat we r e8

t al ki ng about , i t s UCC r equi r ement s.9

MR. KAPLAN: I underst and.10

THE COURT: I s Mr . Levi t t r i ght when he says t hat11

some ki nd of del i ver y of possessi on i s r equi r ed i n or der t o12

qual i f y as a t r ansf er ee, not a hol der ? I t hi nk we ve pr et t y13

wel l est abl i shed t hat t he af f i xi ng t hat i s r equi r ed f or hol der14

i n due cour se st at us as not appar ent i n t hi s case, has not15

been est abl i shed, but i f you est abl i sh under UCC r equi r ement s16

t hat t her e i s a pr oper t r ansf er , t her e may st i l l be17

oppor t uni t y t o enf or ce t he obl i gat i on.18

MR. KAPLAN: Ri ght . Your Honor , I under st and but , I19

mean, t her e s no way I m goi ng t o ar gue t hat t her e was a20

physi cal t r ansf er . Count r ywi de was t he ser vi cer , t he21

or i gi nat or . They had t he document s - -22

THE COURT: Ri ght , t here was no - -23

MR. KAPLAN: - - t hey physi cal l y si gned t he necessary24

document s r equi r ed t o document t hei r ownershi p i nt er est s bei ng25


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26Kaplan - Argument

t r ansf er r ed t o t he t r ust - -1

THE COURT: That s t he i ssue. I n ot her wor ds,2

I m - -3

MR. KAPLAN: - - but t hey di dn t physi cal l y del i ver4

i t .5

THE COURT: - - I m r ai si ng t he possi bi l i t y t hat t he6

Pool i ng and Ser vi ci ng Agr eement mi ght cont ai n pr ovi si ons t hat7

woul d serve t o of f er Count r ywi de an out , meani ng I m not - -8

you know, her e to advocate Count r ywi de s cause, but I am her e9

t o get t o the - - as cl ose as I can t o what shoul d happen her e.10

MR. LEVI TT: Your Honor , I l l answer t he quest i on11

because I di d see i n t he i ndex - - and i f Your Honor woul d l i ke12

I can hand up t he Pool i ng and Ser vi ci ng Agr eement . Thi s i s13

t he Pool i ng and Servi ci ng Agr eement t hat was pr ovi ded by t he14

def endant and I l l cal l your at t ent i on t o Sect i on 8- 13.15

THE COURT: Thank you.16

MR. KAPLAN: What page i s he on?17

MR. LEVI TT: I t s 150.18

THE COURT: 8. 13, Access t o r ecor ds of t he t r ust ee.19

The t r ust ee shal l af f or d t he sel l er s, t he deposi t or , t he20

mast er ser vi cer , t he NI M I nsur er and each cer t i f i cat e owner21

upon r easonabl e not i ce dur i ng normal busi ness hour s access t o22

al l r ecor ds mai nt ai ned by t he t r ust ee - -23

MR. LEVI TT: That t el l s me t he t r ust ee has t he24

r ecor ds, Your Honor . That s as cl ose as I can get . But I l l25


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27Kaplan - Argument

l et you f i ni sh.1

THE COURT: Wel l , yes, t hat doesn t seem t o get at2

i t . I f t her e i s no aut hor i t y i n t hi s document f or Count r ywi de3

t o act as t he agent f or t he t r ust ee i n mai nt ai ni ng t he4

or i gi nal document s, t hen we f ace squarel y the quest i on of5

whet her l ack of possessi on by t he owner , t he r et ent i on of6

possessi on by the ser vi cer , vi ol at es t he t r ansf er ee st at us of7

t he owner , or whet her t he servi cer who f i l ed t he pr oof of8

cl ai m can st and by t hat st at us t o succeed agai nst t hi s9

chal l enge.10

MR. KAPLAN: Wel l , Your Honor , t he servi cer has11

aut hor i t y t o act i n ser vi ci ng t he l oan, i ncl udi ng f i l i ng a12

pr oof of cl ai m under t he Pool i ng and Ser vi ci ng Agr eement . I n13

addi t i on, I bel i eve t her e s a power or at t or ney that Bank of14

New Yor k has pr ovi ded t o Count r ywi de t o act on t hei r behal f t o15

admi ni st er - -16

THE COURT: Wel l , where i s t hat ?17

MR. KAPLAN: I d be happy t o pr ovi de t hat t o Your18

Honor . Okay, we can mark t hat as Def endant s Exhi bi t 2.19

THE COURT: Di d we mar k t hi s copy of t he ser vi ci ng20

agr eement as Def endant s Exhi bi t 3?21

MR. KAPLAN: That s f i ne, Your Honor .22

THE COURT: And di d we al l ow you a chance t o l ook at23

t hi s document t o ascer t ai n what i n i t mi ght be hel pf ul t o24

you - -25


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28Kaplan - Argument

MR. KAPLAN: Your Honor , t her e s - -1

THE COURT: - - r at her t han j ust l eavi ng i t t o me t o2

peruse?3

MR. KAPLAN: Wel l , t hat s f i ne, Your Honor , we l l be4

happy t o go t hr ough and submi t t o Your Honor r ef erences t o t he5

var i ous pr ovi si ons i n t he document .6

THE COURT: Okay, l et s t ake a l ook, D- 2, power of7

at t or ney si gned by t he t r ust ee. Under t he Pool i ng and8

Ser vi ci ng Agr eement s - - const i t ut i ng and appoi nt i ng9

Count r ywi de Home Loan Ser vi ci ng, LP f ul l power of subst i t ut i on10

and r e- subst i t ut i on f or t he l i mi t ed pur pose of execut i ng and11

r ecordi ng any and al l document s necessary t o ef f ect a12

f or ecl osur e of a mor t gage l oan, t he di sposi t i on of an REO13

pr opert y, an assumpt i on agr eement or modi f i cat i on agr eement t o14

suppl ement - - or suppl ement t o t he mor t gage not e, mor t gage or15

deed of t r ust and a reconveyance, deed of r econveyance or16

r el ease or sat i sf act i on of mor t gage or such i nst r ument17

r el easi ng t he l i en of a mor t gage i n connect i on wi t h t he18

t r ansact i ons cont empl at ed i n t hose cer t ai n Pool i ng and19

Ser vi ci ng Agreement s, by and among the under si gned, et20

cet er a.21

The under si gned al so gr ant s - - f ul l power and22

aut hor i t y t o do and per f or m each and ever y act and thi ng23

r equi si t e and necessary t o be done i n and about t he pr emi ses24

as f ul l y t o al l i nt ent s and pur poses as mi ght or coul d be done25


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29Kaplan - Argument

i n per son t o ef f ect i t ems one, t wo and t hr ee above, her eby1

r at i f yi ng and conf i r mi ng al l t hat sai d at t or neys i n f act and2

agent s or any of t hem or t hei r subst i t ut es may l awf ul l y do or3

cause t o be done by vi r t ue her eof . 4

Wel l , t her e s a quest i on mar k - - does t hi s power of5

at t or ney aut hor i ze t he agent / ser vi cer t o hol d t he or i gi nal6

document s i n subst i t ut i on f or and sat i sf act i on of t he7

r equi r ement s of t he UCC. I mean, t hat s a quest i on mark.8

MR. KAPLAN: I under st and. I under st and, Your9

Honor . But , I mean, Your Honor s pr obabl y f ami l i ar , mor t gage10

l ender s and ser vi cer s don t nor mal l y t r ansf er document s back11

and f or t h i n or der t o ef f ect uat e physi cal t r ansf er . They12

ut i l i ze agent s or ser vi cer s t o execut e document s and ret ai n13

t he document s and t hey don t send them acr oss t he count r y by14

messenger s or Feder al Expr ess t o go t o di f f er ent vaul t s t o be15

mai nt ai ned because - -16

THE COURT: And t hat s f i ne. That s - -17

MR. KAPLAN: And t hat s st andard - -18

THE COURT: I mean, I m not accept i ng your t est i mony19

as an exper t - -20

MR. KAPLAN: Yeah, I know, I know.21

THE COURT: - - t o t hat ef f ect - -22

MR. KAPLAN: But I t hi nk i t s r easonabl e - -23

THE COURT: - - but I m accept i ng i t and i t may ver y24

wel l be r easonabl e. I s i t per mi ssi bl e under t he Code.25


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30Kaplan - Argument

MR. KAPLAN: I underst and, okay.1

THE COURT: That s al l I m aski ng.2

MR. KAPLAN: Al l I m sayi ng i s I bel i eve t hat i t s a3

st andard busi ness pr act i ce amongst t he mor t gage banki ng4

i ndust r y and ser vi ci ng i ndust r y not t o physi cal l y move5

document s f r om part y to part y unl ess t her e i s a change of6

ser vi ci ng, i n whi ch case t he physi cal f i l es t hen must be sent7

t o the new ser vi cer , not necessari l y t he new i nvest or , hol der8

or - - you know, r ecorded owner of an assi gnment of mor t gage,9

et cet er a, but t he new ser vi cer .10

THE COURT: Wel l , i t cer t ai nl y makes sense and11

pr esumabl y t he Pool i ng and Ser vi ci ng Agr eement wi l l cl ar i f y12

t hat t her e i s agency st at us f or t hat pur pose and we woul d t r y13

t o under st and whet her t hat woul d be suf f i ci ent f or UCC14

pur poses. What el se shoul d I be l ooki ng at , counsel ? We r e15

t al ki ng f i r st about possessi on. What el se ar e we t al ki ng16

about ? Al l r i ght , l et me ask one quest i on bef or e I f or get . I17

t ake i t t hat t he al l onge t hat we ve l ooked at , t he new18

al l onge, has not been r ecorded?19

MR. KAPLAN: Wel l , normal l y you woul d not r ecor d a20

not e, Your Honor . The not e passes f r om par t y t o par t y. I t s21

l i ke a check - -22

THE COURT: Ri ght .23

MR. KAPLAN: - - i t doesn t get r ecor ded i n t he24

Count y Cl er k s Of f i ce gener al l y - -25


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31Kaplan - Argument

THE COURT: That s f i ne.1

MR. KAPLAN: - - so i t woul d normal l y be pl aced i n2

or i gi nal - - wi t h al l t he or i gi nal document s and essent i al l y3

at t ached t o t he not e.4

THE COURT: Under st ood. Okay, what el se shoul d I be5

l ooki ng at ?6

MR. LEVI TT: Your Honor , i f Your Honor does want t o7

f ocus on t he Pool i ng and Ser vi ci ng Agr eement , t her e ar e ot her8

pr ovi si ons i n the Pool i ng and Ser vi ci ng Agr eement t hat Your9

Honor mi ght want t o l ook at , speci f i cal l y - - and i f I coul d10

j ust grab my copy - -11

THE COURT: Of cour se. I s t hi s your copy?12

MR. LEVI TT: Yes, i t i s. Actual l y, I have - - I have13

excer pt s - - copi es of excer pt s, Your Honor , and I l l - -14

actual l y I l l hand up t he or i gi nal t o you so - -15

MR. KAPLAN: I woul d al so argue, Your Honor , i n t hat16

- - as I sai d, I bel i eve i t s st andar d oper at i ng pr ocedur e f or17

ser vi cer s, especi al l y when t hey wer e t he or i gi nat or of t he18

document s and when t hey sel l t hem or secur i t i ze t hem and19

r emai n t he servi cer , t o execut e t he document s t hat are20

r equi r ed f or t r ansf er , but t hat t her e s not a physi cal21

t r ansf er . And i f you r e goi ng t o det er mi ne - -22

THE COURT: Mr . Kapl an, you r e t est i f yi ng about t he23

or di nar y - -24

MR. KAPLAN: My wi t ness I t hi nk can t est i f y t o t hat25


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33Colloquy

shape or f or m t est i f yi ng but I can advi se t he Cour t t hat I1

spent many hour s t r yi ng t o f i nd t hi s Pool i ng and Ser vi ci ng2

Agreement on t he SEC websi t e wher e t hey have t o be f i l ed and I3

coul d not f i nd i t , so the onl y copy of t he Pool i ng and4

Ser vi ci ng Agr eement t hat I have i s t hi s unsi gned copy pr ovi ded5

by counsel f or t he def endant whi ch I have t o accept as a val i d6

document .7

But I can t el l Your Honor , t he SEC websi t e i s wher e8

- - wher e you can f i nd t hem; I can t f i nd i t . I can f i nd a l ot9

of ot her s i n a si mi l ar name but wi t h di f f er ent number s. I10

can t f i nd t hi s one.11

THE COURT: I s t here r ef er ence i n t hi s document t hat12

I have i n my hand t o t hi s part i cul ar mort gage?13

THE WI TNESS: I don t have i t i n f r ont of me.14

THE COURT: Ther e ar e al l ki nds of exhi bi t s - -15

THE WI TNESS: I t s - -16

THE COURT: - - t hat have numbers but don t have17

subst ance.18

( Pause i n pr oceedi ngs)19

THE COURT: Have you l ooked at t hat , counsel ?20

MR. LEVI TT: Excuse me, Your Honor ?21

THE COURT: Have you l ooked at whether t here i s22

r ef er ence t o t hi s par t i cul ar mor t gage?23

MR. LEVI TT: No, Your Honor . Your Honor , i t wasn t24

agai n my exper i ence - - because I ve been readi ng a l ot of25


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34Colloquy

t hese l at el y - - my exper i ence i s t her e s a schedul e t hat s1

annexed. Ver y of t en I m f i ndi ng t hat t hey don t i ncl ude t he2

schedul e i n t he f i l i ng wi t h SEC I guess f or pr i vacy pur poses3

and you r e di r ect ed t o whi chever l aw f i r m i s t he f i r m t hat4

f i l ed t he document s wi t h t he SEC, but I wasn t even pr ovi ded5

t he schedul e as par t of t hi s submi ssi on.6

And agai n, I went ont o the SEC websi t e l ooki ng f or7

i t and coul dn t f i nd i t . I wi l l al so poi nt out t o Your Honor8

t hat t he copy that I was pr ovi ded and t he copy that s i n f r ont9

of Your Honor on t he f i r st page r ef er ences a dr af t . I t says10

Si dl ey - - I guess Si dl ey and Aust i n was t he l aw f i r m, i t was11

t hei r draf t dat ed 06/ 27/ 06. I don t bel i eve, agai n because12

t hi s i s l abel ed dr af t , t hi s may not be t he oper at i ve document13

but i t i s t he onl y document t hat I was provi ded by t he14

def endant .15

MR. KAPLAN: I underst and, Your Honor , and I wasn t16

i nvol ved i n t r ansmi t t i ng t he document but I am awar e t hat i t17

does say t hat .18

THE COURT: Wel l , I t hi nk you need t o get i nvol ved19

and - -20

MR. KAPLAN: I di d - - I di d ask speci f i cal l y f or a21

document t hat was si gned and essent i al l y was f i nal .22

THE COURT: Essent i al l y?23

MR. KAPLAN: Wel l , i t was a f i nal document - -24

si gned, f i nal document , not as al l eged, a dr af t .25


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35Colloquy

THE COURT: And you di dn t get i t ?1

MR. KAPLAN: And I have not , no.2

THE COURT: So we don t know what t hi s i s, nor do we3

know whet her i t appl i es to t hi s par t i cul ar si t uat i on. The4

onl y cl ue we have i s t hat i t s bet ween Count r ywi de and t he5

Bank of New Yor k t r ust ee and t hat i t r el ates t o Asset - Backed6

Cer t i f i cat e Ser i es 2006/ 8 - -7

MR. KAPLAN: Ri ght .8

THE COURT: - - whi ch suggest s t hat i t mi ght be t he9

same pool , but we don t know whet her i t was execut ed. We have10

quest i ons r ai sed because i t s not on t he SEC websi t e and we11

don t have a speci f i c l i st i ng of t hi s par t i cul ar mor t gage, and12

I t ake i t t hat addi t i onal t i me wi l l not hel p you?13

MR. KAPLAN: Wel l , I don t have physi cal access. I t14

woul d be up t o Count r ywi de or Bank of Amer i ca - -15

THE COURT: Wel l , you as counsel f or Count r ywi de - -16

MR. KAPLAN: Wel l , Your Honor , I woul d cer t ai nl y17

r equest addi t i onal t i me t o al l ow Count r ywi de, t he def endant ,18

t o pr ocur e t he document s, pr ovi de t hem t o counsel and Your19

Honor , as wel l as f or us t o synopsi ze t he i nf or mat i on20

cont ai ned i n t her e per t ai ni ng t o possessi on and r et ent i on of21

document s.22

THE COURT: Wel l , you know, t hi s i s a ser i ous23

consequence - - t hi s meani ng t he rel i ef sought by t he24

pl ai nt i f f . I f t her e ar e substant i al gaps i n my abi l i t y t o25


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36Colloquy

f ol l ow t he st r eam, t hen t he pl ai nt i f f wi l l be successf ul . I1

woul d of f er t hat oppor t uni t y t o Count r ywi de.2

I f t hey can t come up wi t h a si gned l egi t i mat e3

ver i f i ed copy of i t - - and i t can be i n t he f i r st i nst ance t he4

f i nal execut ed document wi t h some t i e- i n t o t hi s mort gage - -5

somebody has an exhi bi t t hat woul d, you know, l i st t hi s6

mor t gage t heor et i cal l y - - and i f t hey don t , t hat s a pr obl em7

- - wi t h a cer t i f i cat i on f r om a qual i f i ed Count r ywi de8

r epr esent at i ve t hat t hi s i s what i t pur por t s t o be.9

I f t her e ar e f ur t her quest i ons, we can t ake f ur t her10

t est i mony, ei t her i n Cour t or by t el ephone conf er ence cal l . I11

hat e t o make you come back f r om Cal i f or ni a, al t hough - - and12

i t s not ver y ni ce t hi s t i me of year i n New J er sey, I wi l l13

gr ant you t hat , but we can, you know, t r y t o keep goi ng i n14

t er ms of get t i ng i t .15

Ther e i s a l i mi t and t here i s a bur den, I f ul l y16

agr ee wi t h you, counsel . I m pushi ng t he envel ope t o see17

wher e we get t o i n t er ms of l i ni ng t hese t hi ngs up or not .18

That s what I m ai mi ng f or because I f r ankl y don t want t o19

gr ant r el i ef i f t her e i s somet hi ng f or i nst ance i n t hese20

document s and i f t he f i nal dr af t has been execut ed and so21

f or t h t hat shoul d gui de r esol ut i on of t hi s deci si on. I t has22

maj or i mpl i cat i ons potent i al l y. I mean, you know, my wr i t t en23

deci si on may be i gnored but i t may be a basi s f or other such24

rel i ef and I d l i ke t o get i t r i ght i f I can so - -25


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38Colloquy

was af f i xed i n t he way t hat t he Thi r d Ci r cui t i magi ned was1

necessary - - not i magi ned but pr ocl ai med was necessary.2

Your asser t i on woul d be t hat t he al l onge t hat was3

execut ed t wo weeks ago shoul d not be consi der ed as an4

appr opr i at e t r ansf er because i t was post - pet i t i on, i t was i n5

t he l i t i gat i on, i t wasn t ef f ecti ve as of t he dat e of t he6

pr oof of cl ai m or bet t er yet , as of t he dat e of t he f i l i ng of7

t he pet i t i on and t hat t her ef or e, i t i s i nval i d.8

MR. LEVI TT: Cor r ect , Your Honor .9

THE COURT: And t hat i s a ver y l egi t i mat e and10

i mpor t ant i ssue and I woul d appr eci at e Mr . Kapl an deal i ng wi t h11

t hat .12

MR. LEVI TT: And so get t i ng t o t he ot her por t i on,13

Your Honor , t he onl y - - and i t has not hi ng t o do wi t h hol der14

i n due cour se, we r e not r ai si ng t he f r aud i ssue, we r e not15

r ai si ng t hose i ssues. The i ssue i s does t hi s credi t or have16

t he r i ght t o enf or ce t he not e. So wi t h r egar d t o t he al l onge,17

l ucki l y I have a Thi r d Ci r cui t deci si on t hat makes i t easy.18

Wi t h r egar d t o the ot her , t her e s onl y one ot her way t o19

enf or ce and t hat s t o t ake t he r i ght s of t he t r ansf er ee - -20

t r ansf er or under t he Thi r d Ci r cui t deci si on and under 3- 203.21

And agai n t her e, Your Honor , i f my posi t i on i s t he22

t r ust has t o be i n possessi on of t he not e and t he t r ust has t o23

pr ove t hat i t t ook possessi on and i f we r e goi ng t o deal wi t h24

t he Pool i ng and Ser vi ci ng Agr eement - - and, Your Honor , one of25


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t he reasons why I wasn t movi ng i t i nt o evi dence was because1

t o me i t wasn t compet ent evi dence at t hi s poi nt , agai n, i t2

wasn t my bur den, but i f counsel i s goi ng t o f i nd t he3

l egi t i mat e document t hat s r ecor ded wi t h t he SEC, wel l t hat s4

goi ng t o be t he Bi bl e, Your Honor , and t hat s goi ng t o say5

t hat t hi s not e had t o be del i ver ed.6

Whet her i t ul t i mat el y ended up wi t h t he t r ust - -7

wi t h t he ser vi cer , t he Pool i ng and Ser vi ci ng Agr eement , i f8

i t s at al l cl ose t o t hi s dr af t or l i ke ever y ot her Pool i ng9

and Ser vi ci ng Agr eement I ve r ead, i t s goi ng t o say i t woul d10

have had t o be physi cal l y t r ansf er r ed f i r st f r om Count r ywi de11

was t he or i gi nat or t o t he deposi t or , and t hen f r om t he12

deposi t or ul t i mat el y t o t he t r ust .13

The physi cal documents accor di ng t o t he Pool i ng and14

Ser vi ci ng have t o be t r ansf er r ed and i n t hi s document you r e15

goi ng t o see i t had t o be endorsed. We r e not goi ng t o have16

t hat her e. So i f t hey can pr ove t hat t hese document s wer e17

physi cal l y t r ansf er r ed, meani ng t her e s del i ver y r ecei pt s18

showi ng t hey wer e physi cal l y t r ansf er r ed f r om A t o B, f r om B19

t o C, and i f C deci ded t o l et i t s agent hol d t hem, I t hi nk,20

Your Honor - -21

THE COURT: Wel l , t here s no quest i on on t hi s r ecor d22

and, you know, I m r eady t o accept i t as f act t hat t hese23

or i gi nal document s never moved. I mean, t hat was the24

t est i mony.25


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MR. LEVI TT: And i f t hat s t he case, Your Honor , I1

t hi nk we r e done because unl ess t he document s were physi cal l y2

t r ansf er r ed, t he t r ust ul t i mat el y coul d deci de t o l et i t s3

agent - - you know, Count r ywi de her e, despi t e t he wi t ness s4

bel i ef s and asser t i ons, Count r ywi de her e i s wear i ng t wo5

di f f er ent hat s, i t s wear i ng t he hat as Count r ywi de Home6

Mort gage, t he one t hat or i gi nated t hese mort gages, packaged7

t hem and got r i d of t hem as qui ckl y as t hey possi bl y coul d,8

t hat s hat number one, and t hen as anot her way t o make money,9

t hey r e a ser vi cer .10

THE COURT: Ri ght .11

MR. LEVI TT: So i t s t wo di f f er ent - - f r om al l12

pr act i cal pur poses and i n f act I t hi nk t he Pool i ng and13

Ser vi ci ng Agr eement wi l l show, i t s t wo separ at e and di st i nct14

l egal ent i t i es, bot h Count r ywi de ent i t i es, now Bank of Amer i ca15

ent i t i es. So i f A, whi ch i s Count r ywi de t he or i gi nat or , ended16

up secur i t i zi ng and sel l i ng t hi s l oan t hey woul d have had t o17

have f ol l owed t he t erms of t he Pool i ng and Servi ci ng Agr eement18

t o get i t i nt o t he hands of t he t r ust and t hen D, whi ch i s19

Count r ywi de t he servi cer , coul d have got t en possessi on. And20

even i f i t meant - - even i f t hey st ayed i n t he same vaul t but21

i f i t meant t hat t her e was a del i ver y recei pt f r om A t o D or A22

t o B t o C t o D, t hat s what t hey have t o pr ove.23

And because t hey r e sayi ng t hat , now maybe t hey do24

have those del i ver y r ecei pt s and i f t hey want t o pr oduce them,25


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t hat s gr eat , but i f t hat document never moved f r om t hat saf e,1

f i rst of al l t hey re i n vi ol at i on of t hei r Pool i ng and2

Ser vi ci ng Agr eement , t hey r e i n vi ol at i on of t he UCC - - we r e3

done.4

THE COURT: I f t hey r e i n vi ol at i on of t he UCC, I m5

agr eei ng wi t h you. I f t hey r e i n vi ol at i on of t he Pool i ng and6

Servi ci ng Agr eement , I wonder how a debt or can avai l7

t hemsel ves of enf or cement of t he pool i ng and ser vi ci ng - -8

MR. LEVI TT: Thi r d- par t y benef i ci ar y.9

THE COURT: I m sor r y?10

MR. LEVI TT: They r e t he t hi r d- par t y benef i ci ar y of11

t hi s cont r act .12

THE COURT: Benef i ci ar y i n t er ms of where t he13

document s are - - t hat s a t ough one.14

MR. LEVI TT: I n t er ms of - - and somet i mes i t s15

t hi r d- part y det r i ment t oo because we have al l t hese pr obl ems16

of t he way t hese ser vi cer s act , but t he r eal i t y i s, Your17

Honor - -18

THE COURT: I t s a whol e ot her st or y.19

MR. LEVI TT: - - we r e r ef er enced, agai n, t hey r e20

goi ng to pr oduce t he document , we r e goi ng t o be ref erenced as21

one of t he l oans t hat ar e subj ect t o t hi s Pool i ng and22

Ser vi ci ng Agr eement .23

THE COURT: Yes, but t he movi ng ar ound of t he24

document s ar e not f or t he benef i t of t he t hi r d- par t y25


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42Colloquy

benef i ci ary. You can make t he argument t hat t hey are because1

t hey act upon t he UCC pr ot ect i ons of knowi ng who s hol di ng2

what . That s not an unr easonabl e ar gument and I m t hi nki ng i t3

out as we go, but here s what I need, counsel . Because your4

submi ssi on di dn t f ocus, I woul d - - because you di dn t have5

the - -6

MR. LEVI TT: I - -7

THE COURT: - - t he f act ual basi s - -8

MR. LEVI TT: Cor r ect .9

THE COURT: - - now you do, I woul d appr eci at e your10

honi ng i n on your argument s. They are t o - - we ve el i mi nated11

t he af f i xi ng as we ve sai d, but I m i nt er est ed i n t he12

possessi on el ement . At t he same t i me t hat I al l ow t he13

def endant t o ampl i f y upon t hei r argument by f ut ur e submi ssi on,14

not onl y of a document t hat i s a f i nal ver si on i f you have i t15

and can get i t and can cer t i f y that t hat s what i t i s and a16

f ocus on what pr ovi si ons i n t hat document I shoul d - - on bot h17

si des pay at t ent i on t o - - obvi ousl y, when you get i t you18

pr ovi de i t t o counsel as wel l , i n addi t i on t o any ar gument19

t hat you woul d f ocus me on.20

So i t s hal f - baked. We ve made some pr ogr ess.21

We ve under st ood cer t ai n f actual pr edi cat es t hat t he document s22

r emai ned where t hey were, t hat t he al l onge was cr eat ed t wo23

weeks ago and t hose are i mpor t ant f act s t o f i t i nt o t he24

equat i on.25


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Di d you have a comment , si r ?1

MR. KAPLAN: Yeah, I m j ust - - I m j ust a l i t t l e - -2

and bel i eve me, I under st and wher e Your Honor i s headi ng. I m3

not - - I know I m not goi ng t o change Your Honor s mi nd, but4

I m a l i t t l e t r oubl ed by t he f act t hat we r e accept i ng a5

r epr esent at i on her e. And t hi s wi t ness i s i n t he Li t i gat i on6

Depar t ment , t hi s wi t ness i s not t he per son t hat was7

r esponsi bl e f or t he Pool i ng and Ser vi ci ng Agr eement or how8

t hese document s ar e deal t wi t h.9

I t hi nk at t he ver y l east , even i f we don t have10

l i ve test i mony, we need t o have somet hi ng f r om someone who can11

say t hey r e cust odi an of r ecor ds t hat t r ul y t r acks t hi s.12

We r e accept i ng a r epr esent at i on - -13

THE COURT: Whi ch r epresent at i on?14

MR. KAPLAN: The r epr esent at i on t hat t hey st ayed i n15

t he same vaul t and t hey never moved. We don t know t hat , Your16

Honor . We r e - - t hi s i s - -17

THE COURT: But l et s exami ne - -18

MR. KAPLAN: - - and a l ot of t hat i s counsel s19

r epr esent at i on.20

THE COURT: - - Ms. DeMar t i ni i n t er ms of her21

knowl edge of t hat f act .22

EXAMI NATI ON23

BY THE COURT:24

Q You ve t est i f i ed t hat t hese document s, t he or i gi nal s, t he25


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f i l es - -1

A Have r emai ned wi t h Count r ywi de.2

Q - - st ayed wi t h - - now, ar e t her e t wo di f f er ent ent i t i es?3

Thi s not e was enter ed i nt o wi t h Count r ywi de Home Loans, I nc.4

A Yes.5

Q I s t hat t he same as Count r ywi de Home Loan Ser vi ci ng, LP?6

A Count r ywi de Home Loan Ser vi ci ng, LP i s t he - - i s our7

ser vi ce - - i s t he por t i on of t he busi ness t hat does t he8

ser vi ci ng of t he l oan so t hey ar e sl i ght l y di f f er ent i n t hat9

t hey wer e both part of t he - - what was f ormer l y Count r ywi de10

Fi nanci al Cor por at i on. Count r ywi de Ser vi ci ng Home Loans, LP11

was t he ser vi ci ng por t i on of t hat busi ness. They woul d - - and12

Count r ywi de Home Loans woul d have been the ones t hat13

or i gi nat ed t he l oan.14

Q Wel l , l et s t al k f i r st about your exper i ence wi t h t he15

company. You sai d t hat you st ar t ed about t en years ago?16

A Yes.17

Q And wi t h whi ch company, t he ser vi cer or t he - -18

A I ve al ways been i nvol ved wi t h servi ci ng.19

Q I n t he ser vi ci ng.20

A Yes.21

Q And what wer e your posi t i ons wi t h ser vi ci ng?22

A Oh, I ve had a l ot of posi t i ons wi t h ser vi ci ng. I ve been23

a cust omer servi ce r epr esent at i ve, I ve been a super vi sor ,24

I ve been a t r ai ner , I ve been a t r ai ni ng devel oper , I ve25


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i nt er nal l y as bet ween t he or i gi nat or and t he ser vi cer as soon1

as t he l oan i s gi ven?2

A Wel l , af t er t he l oan s or i gi nat ed, t hen i t s goi ng t o what3

we woul d have cal l ed boar ded our syst em. I woul d be f ami l i ar4

wi t h i t f r om t he t i me t hat i t boar ded on - -5

Q What does t hat mean?6

A Boar ded i s when i t woul d get put i nt o t he comput er syst em.7

That woul d be when t he documents ar e al l i maged and t hen8

st ored. That al l happens when t he l oan comes on board or9

becomes a par t of our servi ci ng. What happens t o i t pr i or t o10

t hat as f ar as t he or i gi nat i on pr ocess i nasmuch as t he11

under wr i t i ng or any of t hat , t hat I m not as f ami l i ar wi t h,12

no.13

Q When t he f i l e i s - - when t he l oan i s boar ded, who does14

that?15

A Let me f i nd t he best way t o descr i be t hat . Wel l , t he16

document s t hemsel ves, we have a Document s Depar t ment t hat17

woul d be i n charge of i magi ng and t hen t hey woul d be t he ones18

t hat woul d be st or i ng t he or i gi nal document s. We have a19

system--20

Q I s t hat wi t hi n your ser vi ci ng company?21

A That woul d be under our ser vi ci ng company, yes.22

Q Have you ever deal t i n t hat depar t ment - - t he Document s23

Depar t ment ?24

A I have not physi cal l y wor ked i n t hat depar t ment . I ve25


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been i n t hat bui l di ng, I - - but f or me t o speci f i cal l y be t he1

one doi ng t hat , no, I haven t .2

Q Have you had occasi on t o go t her e t o l ook f or a document3

l et s say or - -4

A I ve had occasi on t o speak t o peopl e - - t he document s - -5

some of t hem ar e st or ed - - t hey r e st or ed t her e and then we6

al so have ot her st or age f aci l i t i es. These par t i cul ar7

document s ar e i n our bui l di ng because I l ooked these ones up,8

but - -9

Q What do you mean, you ve l ooked t hese up - - t hese ones up?10

A Wel l , when we went t o or der t he or i gi nat i ons f i l e we11

l ooked - - l ooked f or t he - - t he document s. The document s had12

been pr evi ousl y r equest ed by our Forecl osure Depar t ment and so13

t hat s wher e t hey r e l ocat ed r i ght now. The physi cal14

document s ar e i n t he For ecl osur e Depar t ment .15

Q The or i gi nal physi cal document s?16

A Yeah.17

Q So i s i t your cust om t o r equest or i gi nal document s - -18

A The - -19

Q - - f r om t hi s depart ment when t he Li t i gat i on Depar t ment20

needs t hem?21

A I f t hey r e r equest ed by counsel , i f t hey r e r equest ed f or22

var i ous t hi ngs wi t h whet her i t s wi t hi n a f or ecl osur e or a23

bankr upt cy. But i f t her e s somet hi ng t hat comes up wher e24

we r e bei ng asked t o pr ove somethi ng, t hen i t s becomi ng more25


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cust omar y l at el y.1

I t never used t o be t o wher e t he or i gi nal s wer e ever2

r equest ed but l at el y more and more of t he t i me of day of3

t hi ngs around t he count r y, we ar e bei ng asked t o physi cal l y4

pr oduce t he or i gi nal s mor e f r equent l y.5

Q And you woul d di r ect t hose i nqui r i es t o t he Document6

Depar t ment?7

A Yes, Document Request . I t s our DMS syst em, i t s our8

Document Request .9

Q And so t o your knowl edge, t he or i gi nal document s, t he10

or i gi nat i on document s, t he notes and t he mort gages are11

mai nt ai ned i n t hat f aci l i t y?12

A Yes.13

Q To your knowl edge, ar e t hey ever moved except f or14

i nqui r i es f r om counsel ? Ar e t hey ever moved t o f ol l ow t he15

t r ansf er of owner shi p?16

A I can t say t hat t hey r e never moved because, I mean, wi t h17

t hi s many mi l l i ons of l oans as we have I woul dn t pr esume to18

say t hat , but i t i s not cust omar y f or t hem t o move.19

Q Do you have per sonal knowl edge of under what ci r cumst ances20

t hey woul d move or whet her and t o what extent t hey r e ever21

moved?22

A Not - - not speci f i cal l y t o what I woul d be comf or t abl e23

t est i f yi ng t o, no.24

Q Okay. I n t er ms of t hi s par t i cul ar t r ansact i on, f r om your25


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exper i ence of r equest i ng t hese or i gi nal document s, wer e you1

abl e to est abl i sh t hat t hese wer e not moved?2

A We wer e abl e t o est abl i sh t hat t hey r e i n our - - what we3

cal l t he 400 Bui l di ng whi ch i s t he bui l di ng t hat we r e - -4

wher e we r e at and we wer e abl e to est abl i sh t hat t hat s wher e5

t hey r e l ocat ed and t hat s - - we wer e st i l l i n t he pr ocess of6

t r yi ng t o physi cal l y get t hem t o br i ng t hem her e t oday but i t7

j ust - - I wasn t abl e t o obt ai n t hem i n t i me.8

Q And your i nf ormat i on i s t hat t hey may be at t he9

For ecl osur e Depart ment , but are you cer t ai n t hat t hey wer en t10

moved out of t he ser vi ci ng company?11

A We had Federal Express t r acki ng. Even when we move12

somet hi ng i nt er nal l y l i ke t hat a l ot of t i mes i t wi l l go Fed13

Ex so t hat we have t hat t r acki ng so that s how I know t hat14

t hey went t here because I have t he t r acki ng number - -15

Q I see.16

A - - so t hat s how I know t hat t hey r e t her e, and I don t17

have any r ecei pt or any t r acki ng that t hey ve ever moved18

beyond t hat .19

Q Underst ood.20

THE COURT: Di d I gener at e addi t i onal quest i ons?21

MR. KAPLAN: No, Your Honor .22

MR. LEVI TT: No, Your Honor .23

THE COURT: Al l r i ght . Ar e t here any ot her24

quest i ons f or Ms. DeMar t i ni ?25


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50

MR. LEVI TT: No, Your Honor .1

THE COURT: Thank you, Ms. DeMar t i ni . You may st ep2

down.3

( Wi t ness excused)4

5

* * *6

7

8

C E R T I F I C A T I O N

I, Diane Gallagher, court approved transcriber,

certify that the foregoing is a correct transcript from the

official electronic sound recording of the proceedings in the

above-entitled matter.

/s/Diane Gallagher November 22, 2010

DIANE GALLAGHER

DIANA DOMAN TRANSCRIBING


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Case 08 02448 JHW Doc 25 Filed 11 16 10 Entered 11 17 10 09:29:50 Desc Main

Document Page 3 of 22 .

On

June 11,2008,

the defendant herein,

Countrywide Home Loans, Inc.

(hereinafter Countrywide ),

identifying

itself

as

the servicer for the Bank of

New York, filed a

secured proof of

claim

in

the

amount

of

$211,202.41,

including $40,569.69 in arrears,

noting

the property at 1316 Kings

Highway

as

the

collateral for

the

claim.

2

The debtor filed this adversary complaint on

October 16,2008 against Countrywide, seeking

to expunge

its proof of claim.

3

The debtor asserts that the Bank of New York cannot enforce the underlying

obligation.

and maintained the second

Countrywide mortgage

arrears

at $6,000. A second

modified

plan was

filed

on

April 15,

2010

and

is

currently scheduled

for

confirmation on December 8,2010. The latest

modified

plan does

not

list

Countrywide

as

a creditor

to

be treated under the plan.

2 Although the debtor

listed

two mortgages held by Countrywide

against

1316 Kings

Highway

in

his

schedules, Countrywide only flied one proof

of

claim

regarding one

mortgage

and note.

3 In 2008, Countrywide

Financial

Corporation, the umbrella

organization for Countrywide Home Loans,

Inc.,

was

purchased by the

Bank of

America Corporation. Effective April

27, 2009,

Countrywide Home Loans, Inc.

changed its

name

to BAC Home Loan Servicing, L.P.

( BAC

Servicing ). Motion

to Dismiss, Van Beveren Certif.

at

1. On July 1, 2010, a

Transfer

of Claim for

Security

was filed on the debtor's claim register, transferring the claim

from

Countrywide Home Loans, Inc., servicer for Bank

of

New York

to

BAC Home

Loan Servicing, LP . In this opinion, I will continue to refer

to

the defendant as

Countrywide.


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F CTS

In

his

complaint,

the

debtor

does

not

dispute

that

he

signed

the

original

mortgage

documents

in

question. The note and mortgage were executed by

the debtor on May 31, 2006.

The

note, designated as an Interest Only

Adjustable

Rate Note ,

listed

the lender as Countrywide

Home Loans,

Inc.

No

indorsement appeared

on the

note. Accompanying

the

note was an unsigned

Allonge to Note dated the

same

day, May 31,

2006,

in favor of America's

Wholesale Lender , directing

that

the

debtor

Pay to the Order of

Countrywide

Home Loans, Inc., d b a America's Wholesale Lender.,,4

The

mortgage, in the

amount

of

$167,000,

listed the lender

as

America's

Wholesale Lender . Mortgage Electronic Registration Systems, Inc., or MERS ,

is

named as

the

mortgagee ,

and

is authorized to

act

solely

as the

nominee

for the lender and the

lender's

successors

and assigns. The

mortgage

references the promissory

note

signed by the borrower

on

the

same

date.

The

mortgage was recorded

in

the Camden County Clerk's Office

on

July 13, 2006.

Shortly after the execution by the debtor of the note and mortgage, the

4 The record does not reflect whether the unsigned allonge was

physically

affixed

to the note.


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instruments executed by the debtor were apparently pooled with other similar

instruments

and

sold as

a

package

to the

Bank

of New York

as

Trustee. On

June

28, 2006,

a Pooling

and

Servicing

Agreement

( PSA

or the

Agreement )

was executed by CWABS, Inc. as the depositor, with Countrywide Home Loans,

Inc., Park Monaco, Inc. and Park Sienna, LLC as the sellers,

Countrywide

Home Loans Servicing

LP

( Countrywide Servicing )

as the master

servicer,

and

the Bank of New York as the

Trustee.

Pursuant

to

the Agreement, the

depositor

was directed

to transfer

the Trust Fund, consisting of specified

mortgage loans and their

proceeds,

including the

debtor's loan, to

the Bank of

New York as

Trustee,

in return for certificates referred

to

as Asset-backed

Certificates, Series 2006-8.

The

sellers sold, transferred

or assigned

to the

depositor all

the

right, title and

interest

of such Seller in and to the applicable

Initial Mortgage Loans, including all interest and

principal

received and

receivable

by

such

Seller. PSA

2.01(a)

at

52.

In

tum,

the

depositor

immediately transferred all right title

and interest

in the Initial Mortgage

Loans, including the debtor's loan, to the Trustee, for the benefit of the

certificate holders. Id.

The Agreement expressly provided

that in connection with

the

transfer

of

each loan, the depositor

was

to deliver

the

original Mortgage Note, endorsed

by

manual

or facsimile signature in

blank

in the following form: 'Pay to the order

-5-


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of without recourse',

with

all intervening endorsements that show

JOHN T. GRENIE CHARGED WITH INDIRECT CRIMINAL CONTEMPT

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