PLAINTIFFS’ CONSOLIDATED AMENDED MASTER COMPLAINT REGARDING CLAIMS RELATED TO THE FORMATION AND...

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William A. Nebeker, AZ State Bar No. 004919 Valerie R. Edwards, AZ State Bar No. 017217 KOELLER NEBEKER CARLSON & HALUCK, L.L.P. 3200 North Central Avenue, Suite 2300 Phoenix, AZ 85012 Tel: (602) 256-0000Fax: (602) 256-2488

William A. Nebeker, CA State Bar No. 72079 Sharon A. Huerta, CA State Bar No. 186998 KOELLER NEBEKER CARLSON & HALUCK, L.L.P. 225 Broadway, Suite 2100 San Diego, CA 92101 Tel: (619) 233-1600Fax: (619) 236-0527

Robert R. Hager, NV State Bar No. 1482 Treva J. Hearne, NV State Bar No. 4450, CA State Bar No. 159542 HAGER & HEARNE 245 E. Liberty - Suite 110 Reno, Nevada 89501 Tel: (775) 329-5811Fax: (775) 329-5819Counsel for Plaintiffs

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

IN RE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS)LITIGATION

THIS DOCUMENT RELATES TO:

Robinson v. GE Money BankNo. CV 09-227-TUC-JATVargas v. Countrywide Home Loans, Inc. No. CV 09-02616-PHX-JAT Goodwin v. Executive Trustee Services, Inc.No. CV 10-0079-PHX-JAT Lopez v. Executive Trustee Service, Inc. No. CV 10-0078-PHX-JAT Dalton v. CitiMortgage No. CV 10-0081-PHX-JAT Green v. Countrywide Home Loans, Inc. No. CV 10-0080-PHX-JAT

And Member Cases Listed in Doc. 1413

)))))))))))))))))))))))))

Case No.: 2:09md-02119 JAT

PLAINTIFFS CONSOLIDATEDAMENDED MASTER COMPLAINT REGARDING CLAIMS RELATED TO THE FORMATION AND OPERATION OF THE MERS SYSTEM

1. Violation of A.R.S. 33-420(False Documents)

2. Wrongful Foreclosure3. Violation of N.R.S. 107.0804. Violation of O.R.S. 86.7355. Aiding and Abetting Wrongful

Foreclosure6. Aiding and Abetting Predatory

Lending7. Unjust Enrichment8. Slander of Title9. Violation of O.R.S. 646.60710. Violation of S.C. Code Ann.

39-5-1011. Declaratory Relief12. Injunctive Relief

)

121009_1.DOC1

Case 2:09-md-02119-JAT Document 1424 Filed 06/04/11 Page 1 of 64

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Plaintiffs, by and through counsel of record, pursuant to this courts order filed

May 6, 2011 (Doc. 1413), for their consolidated amended complaint, allege as follows:

JURISDICTION

1. This court has jurisdiction pursuant to 28 U.S.C. 1332 based on diversity

of citizenship, as:

a. Plaintiffs are residents of the States of Arizona, California, Nevada,

Oregon and South Carolina;

b. Defendants AHMSI Default Services, Inc.; Americas Servicing

Company; Americas Wholesale Lender; Aurora Loan Services, L.L.C.; Aztec

Foreclosure Corporation; BAC Home Loans Servicing, L.P.; Bank of America, N.A.; The

Bank of New York Mellon; California Reconveyance Company; Cal-Western

Reconveyance Corporation; Central Mortgage Company; CitiMortgage, Inc.;

Countrywide Bank; Countrywide Home Loans, Inc.; CR Title Services, Inc.; Deutsche

Bank National Trust Company; Executive Trustee Services, L.L.C.; Federal Home Loan

Mortgage Corporation; Federal National Mortgage Association; Fidelity National Title

Insurance Company; First American LoanStar Trustee Services, L.L.C.; First Horizon

Home Loan Corporation; GE Money Bank; GMAC Mortgage, L.L.C.; Home Capital

Funding; Housekey Financial Corporation; HSBC Bank, U.S.A., N.A.; HSBC Mortgage

Corporation (U.S.A.); IB Property Holdings, L.L.C.; J.P. Morgan Chase Bank, N.A.;

LaSalle Bank, N.A.; Litton Loan Servicing, L.P.; LSI Title Company of Oregon, L.L.C.;

MortgageIt, Inc.; MTC Financial, Inc. dba Trustee Corps.; MTDS, Inc.; National City

Mortgage; National Default Servicing Corporation; NDEX West, L.L.C.; Old Republic

Default Management Services; Quality Loan Service Corporation; Recontrust Company,

N.A.; Seaside Trustee, Inc.; T. D. Service Company; U.S. Bank National Association;

UTLS Default Services; Wells Fargo Bank, N.A.; Western Progressive L.L.C.; and WMC

Mortgage Corporation are all foreign corporations domiciled in states other than Arizona,

Nevada or California;

c. MERSCORP, Inc. is a Delaware corporation, and its subsidiary,

121009_1.DOC2


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Defendant Mortgage Electronic Registration Systems, Inc. is a Delaware corporation; and

d. Because this matter is a class action with over 100 members with

claims having a value in excess of $5,000,000.00.

2. This Court has pendent jurisdiction over Plaintiffs state law claims pursuant

to 28 U.S.C. 1367.

3. Venue over this matter is appropriate in this Court pursuant to 28 U.S.C.

1391(b). The acts giving rise to Plaintiffs and the Class Members claims occurred, in

substantial part, in the States of Arizona, California, Nevada, Oregon and South Carolina,

the properties subject to this action are situated in the States of Arizona, California,

Nevada, Oregon, and South Carolina; the owners of the property reside in Arizona,

California, Nevada, Oregon, and South Carolina; and, at all relevant times material hereto,

the Defendants are or were doing business in Arizona, California, Nevada, Oregon and/or

South Carolina; and the named Plaintiffs claims related to the formation and operation of

the MERS system were consolidated and transferred to this court pursuant to an order of

the Judicial Panel on Multidistrict Litigation filed December 7, 2009 (Doc. 1).

Parties and Standing

4. Plaintiffs and Plaintiffs property descriptions are listed in Exhibit 1, which

is attached hereto and incorporated herein by this reference.

5. Defendants are described in Exhibit 2, which is attached hereto and

incorporated herein by this reference.

GENERAL ALLEGATIONS

6. Plaintiffs, and others similarly situated, borrowed money to purchase or to

refinance property in Arizona, California, Nevada, Oregon and/or South Carolina. As part

of the loan transaction, each Plaintiff, and others similarly situated, executed a Note as

evidence of the debt owed to the lender and executed a Deed of Trust as security for

repayment of the Note. The description of each Plaintiffs Deed of Trust, and facts related

to certain Plaintiffs loan transactions, are set forth in Exhibit 3, which is attached hereto

and incorporated herein by this reference. The Deeds of Trust name MERS as

121009_1.DOC3


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beneficiary solely as nominee for the Lender as set forth in Exhibit 3 attached hereto.

GENERAL ALLEGATIONS(As to the MERS System)

7. The MERS system, as it now is widely used today in the United States, is an

electronic registry that purportedly attempts track ownership of and servicing rights in

home loans. After their origination, the notes for the home loans are packaged and sold as

securities by being transferred or assigned into various mortgage-backed security pools

outside of the MERS system. The deeds of trust, which were originally designed as

security for the notes repayment, are split apart from their notes and then retained by

MERS in that MERS is named as the beneficiary under the deeds of trust in the capacity

as nominee for the original Lender named on the note and the deed of trust.

8. Upon information and belief, Defendants either participated in the creation

of MERS, are contributing shareholders and/or directors of MERS, Inc., are members of

MERS; routinely utilize the MERS system, and/or act as trustees for members of MERS

or entities affiliated with the MERS system.

9. Upon their origination, Plaintiffs loans were placed into the MERS system,

as reflected in their deeds of trust designating MERS as the beneficiary and the purported

nominee for the Lender.

10. Upon information and belief, at a precise date presently unknown to

Plaintiffs, Plaintiffs notes, which were originally secured by their respective deeds of

trust, became unsecured because the notes were separated from their deeds of trust

through the process of the notes being securitized, transferred and/or assigned to

mortgage-backed security pools, the interest in which was later sold to various investors,

who had no interest in, or relationship to, the deeds of trust, rendering the obligation under

the notes unsecured.

11. Notwithstanding the fact that the underlying obligations, which were

originally secured by deeds of trust on the houses owned by Plaintiffs, were transferred

and sold to third parties, thereby destroying the secured nature of the obligations,

121009_1.DOC4


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Defendants named in the claims herein continue to attempt to enforce the terms of said

obligations evidenced by the notes through the use of the deeds of trust as if they are still

securing the interest in the notes, which have been transferred, assigned, and sold to others

and are no longer secured.

12. Defendants named in the claims herein, as either MERS members or entities

that routinely use the MERS system, participated in and/or are cognizant of the practice

by which the actual beneficial interest in loans (i.e., the right to payment evidenced by the

note) is separated from the deeds of trust and is transferred outside of the MERS system

and placed in mortgage-backed security pools and sold to investors.

13. Upon information and belief, by virtue of this systematic practice of

transferring, assigning, and selling the notes, the interest in which is divided into parts and

packaged in different mortgage-backed securities, Defendants, and each of them, have no

knowledge as to the true owner(s) of the debts, to whom Plaintiffs may owe the money.

The debt has been satisfied by sale to a third-party and its payment, as described herein,

leaving no obligation owed to Defendants. However, Defendants, and each of them,

willfully ignore the rights of the true owners of the debt by trying to enforce the terms of

invalid deeds of trust through attempted foreclosures, despite knowledge that the debt has

been satisfied as described herein and is unsecured, leaving no obligation owed to

Defendants.

14. Even if the true owner(s) of Plaintiffs notes were readily identifiable

through the MERS system, by virtue of splitting and separating the deeds of trust from the

promissory notes, the deeds of trust are without force and the debt obligations become

unsecured.

15. MERSCORP, Inc. has publicly stated:

a. The MERS web site enables you to target directly your MERS

Ready products and services to MERS members.

b. Commercial originators and issuers save hundreds to thousands of

dollars (in the case of cross-collateralized loans) in preparing and recording assignments.

121009_1.DOC5


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Where the originator has not recorded a MERS as Original Mortgagee (MOM) security

instrument, the issuer saves the costs of assigning to the Trust by having the originator

assign to MERS. (Emphasis added.)

c. It will reduce risk and generate more profits for lenders because the

Notes registered on it will be in electronic format. It shortens the timeframe between the

closing and the securitization of the loan, enabling the Note to move instantly, creating

faster funding. (Emphasis added.)

16. MERSCORP, Inc.s rules and by-laws, to which MERS Members agree,

require the following:

BY COMPLETING, SIGNING, AND SUBMITTING THISAPPLICATION, THE APPLICANT IS AGREEING TO BE A MERS MEMBER. THE APPLICANT HEREBY AGREES TO PAY ALL FEES AND EXPENSES SET FORTH IN THE MERS RESIDENTIAL FEE SCHEDULE, WHICH MAY CHANGE FROM TIME TO TIME; ABIDE BY ALL EXISTING MERS RULES AND PROCEDURES, WHICHARE INCORPORATED HEREIN BY REFERENCE AND MAY BE AMENDED FROM TIME TO TIME; AND COMPLY WITH THE TERMS AND CONDITIONS SET FORTH IN THE ATTACHED ADDENDUM ENTITLED TERMS AND CONDITIONS.

(Emphasis in original.)

17. The MERSCORP, Inc. rules and by-laws, to which MERS Members agree,

cannot be carried out lawfully because they require the following:

1. MERS, which shall include MERSCORP, Inc. and Mortgage

Electronic Registration Systems, Inc., and the Member shall abide by these Terms

and Conditions, the Rules and Procedures (collectively, the Governing

Documents), copies of which will be supplied upon request. The Governing

Documents shall be a part of the terms and conditions of every transaction that the

Member may make or have with MERS or the MERS System either directly or

through a third party. The Member shall be bound by any amendment to any of the

Governing Documents.

2. The Member, at its own expense, shall promptly, or as soon as

121009_1.DOC6


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practicable, cause MERS to appear in the appropriate public records as the

mortgagee of record with respect to each mortgage loan that the Member

registers on the MERS System. MERS shall serve as mortgagee of record with

respect to all such mortgage loans solely as a nominee, in an administrative

capacity, for the beneficial owner or owners thereof from time to time. MERS

shall have no rights whatsoever to any payments made on account of such

mortgage loans, to any servicing rights related to such mortgage loans, or to any

mortgaged properties securing such mortgage loans. MERS agrees not to assert

any rights (other than rights specified in the Governing Documents) with respect

to such mortgage loans or mortgaged properties. References herein to

mortgage(s) and mortgagee of record shall include deed(s) of trust and

beneficiary under a deed of trust and any other form of security instrument under

applicable state law.

***

6. MERS and the Member agree that: (i) the MERS System is not a

vehicle for creating or transferring beneficial interests in mortgage loans, (ii)

transfers of servicing interests reflected on the MERS System are subject to the

consent of the beneficial owner of the mortgage loans, and (iii) membership in

MERS or use of the MERS System shall not modify or supersede any agreement

between or among the Members having interests in mortgage loans registered on

the MERS System.

(Emphasis added.)

FIRST CLAIM FOR RELIEF

Violation of A.R.S. 33-420 (False Documents)

(As to Americas Servicing Co., Aurora Loan Services, L.L.C., Bank of America dba BAC Home Loans Servicing, L.P.,

The Bank of New York Mellon, Central Mortgage Company, MERS, Inc., QualityLoan Service Corporation, Recontrust Company, N.A.,

and U.S. Bank National Association)18. Plaintiffs incorporate by this reference each and every paragraph of this

121009_1.DOC7


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Complaint as if fully set forth in this claim.

19. A.R.S. 33-420(A) provides that a person purporting to claim an interest

in, or a lien or encumbrance against, real property, who causes a document asserting such

claim to be recorded in the office of the county recorder, knowing or having reason to

know that the document is forged, groundless, contains a material misstatement or false

claim or is otherwise invalid is liable to the owner . . . of the real property for the sum of

not less than five thousand dollars, or for treble the actual damages caused by the

recording, whichever is greater, and reasonable attorney fees and costs of the action.

20. A.R.S. 33-420(B) provides that the owner of the property may bring an

action to clear title as to the real property as provided for in the rules of procedure for

special actions, and such action may be brought based on the ground that the lien is

forged, groundless, contains a material misstatement or false claim or is otherwise

invalid. As indicated more particularly below, the documents giving rise to this claim

are forged, groundless, contain material misstatements as to the identity of the party

named in the document or are otherwise invalid.

21. A.R.S. 33-420(D) provides that [a] document purporting to create an

interest in, or a lien or encumbrance against, real property not authorized by statute,

judgment or other specific legal authority is presumed to be groundless and invalid.

Thomas and Laurie Bilyea

22. On or about November 15, 2006, Defendant MERS, Inc. and/or nonparty

Downey Savings & Loan Association caused to be recorded a Corporate Assignment of

Deed of Trust related to the Bilyea property whereby Defendant Downey Savings & Loan

Association attempted to assign the deed of trust on the Bilyea property, together with all

interest secured thereby . . . to Mortgage Electronic Registration Systems, Inc., as

nominee for Central Mortgage Company.1 Said document was purportedly signed by

Crystal Moore, as Vice President for Downey Savings & Loan Association.

23. On or about October 13, 2009, Defendant MERS, Inc. caused to be recorded

8

1 See Corporate Assignment of Deed of Trust attached as Exhibit 33, incorporated herein by this reference.

121009_1.DOC


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an Assignment of Mortgage related to the Bilyea property whereby Defendant MERS

attempted to assign the mortgage on the Bilyea property, to Central Mortgage

Company.2 Said document was purportedly signed by Tonya L. Hill, acting as an

assistant secretary for MERS.

24. The document referred to in the immediately preceding paragraph was false

because MERS purported to transfer all its beneficial interest in the deed of trust

referenced in the documents to Central Mortgage Company; however, MERS had no

beneficial interest because it was named in the original deed of trust in the capacity solely

as nominee for Lender, and because it had no interest in the underlying Note or in any

proceeds from the underlying Note. Further, upon information and belief, the assignment

was robosigned in that it was notarized in blank prior to being signed on behalf of

MERS, and the party that is represented to have signed the document, Tonya L. Hill, did

not sign the document and/or did not have the authority to sign the document and/or did

not have knowledge of the representations contained in the document.

25. On or about September 3, 2009, Defendant Central Mortgage Company

caused to be recorded a Substitution of Trustee related to the Bilyea property whereby

Defendant Central Mortgage Company attempted to substitute Michael A. Bosco, Jr. as a

Successor Trustee under the Bilyea Deed of Trust.3 Said document was purportedly

signed by Janice Davis, acting as a vice president for Central Mortgage Company.


because it was made based on an invalid assignment of the deed of trust to Central

Mortgage Company, and Central Mortgage Company did not have the requisite authority

to appoint a successor trustee. Further, upon information and belief, the substitution of

trustee was robosigned in that it was notarized in blank prior to being signed on behalf

of Central Mortgage Company, and the party that is represented to have signed the

document, Janice Davis, did not sign the document.

27. Defendant Central Mortgage Company authorized or directed the recording2 See Assignment of Mortgage attached as Exhibit 34, incorporated herein by this reference.

9121009_1.DOC

3 See Substitution of Trustee attached as Exhibit 35, incorporated herein by this reference.


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of a Notice of Trustees Sale, dated September 10, 2009, against the Bilyea property

whereby Michael A. Bosco, acting as trustee, noticed the sale of the Bilyea property for

December 10, 2009.4 This document listed the current beneficiary as Central Mortgage

Company.


because it does not list the true beneficiary under the deed of trust because it is part of a

chain of documents that was based on an invalid assignment of the beneficial interest in

the deed of trust for the Bilyea property as described above. Further, upon information

and belief, the notice of trustees sale was robosigned in that it was notarized in blank

prior to being signed on behalf of Michael A. Bosco, and the party that is represented to

have signed the document, Michael A. Bosco, did not sign the document, and the party

that did sign the document had no personal knowledge of any of the facts set forth in the

notice.

29. On or about January 11, 2010, Defendants MERS and/or Central Mortgage

Company caused to be recorded an Assignment of Deed of Trust whereby MERS,

representing itself as the holder of the Bilyea deed of trust, assigned the Bilyea deed of

trust together with the note(s) and obligations therein described and the money due and

to become due thereon with interest to Central Mortgage Company.5 This document was

purportedly signed by Lou Ann Howard in the capacity as a Vice President of MERS.

30. The document described in the immediately preceding paragraph was false

because it was based on an invalid assignment of the beneficial interest in the Bilyea deed

of trust as described herein, and because MERS purported to assign the note secured by

the deed of trust, when it had no interest in the note, or the proceeds of the note, and no

possession of the note, as the note had been transferred to a mortgage backed security pool

as described in Exhibit 3. Further, upon information and belief, the assignment was

robosigned in that it was notarized in blank prior to being signed on behalf of Lou Ann

4 See Notice of Trustees Sale attached as Exhibit 36, incorporated herein by this reference.

10

5 See Assignment of Deed of Trust dated January 11, 2010 attached hereto as Exhibit 37, incorporated herein by this reference.

121009_1.DOC


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Howard, and the party that is represented to have signed the document, Lou Ann Howard,

did not sign the document, was not a vice president of MERS, and the party that did sign

the document had no personal knowledge of any of the facts set forth in the notice.

Nicholas DeBaggis

31. Defendants MERS, Inc. and/or U.S. Bank National Association caused to be

recorded a Corporate Assignment of Deed of Trust related to the DeBaggis property

whereby Defendant MERS, Inc. attempted to assign all beneficial interest in the deed of

trust on the DeBaggis property, together with the note or notes therein described . . . the

money due and to become due thereon with interest, and all rights accrued or to accrue

under said Deed of Trust.6 Said document was purportedly signed by Jennifer Hamlin

acting as an assistant secretary for MERS, Inc. Upon information and belief, Jennifer

Hamlin did not have authority to sign the document in the capacity as an assistant

secretary for MERS, Inc. because she was not employed by MERS, Inc. and/or because

she was not an officer of the MERS member on whose behalf the document was signed.

Further, Jennifer Hamlin lacked any knowledge of any of the representations contained in

the document.



referenced in the documents to U.S. Bank National Association, as Trustee for

WFMBS2007-007 by its Attorney in fact Wells Fargo Bank, N.A., successor by merger to

Wells Fargo Home Mortgage Inc.; however, MERS had no beneficial interest because it

was named in the original deed of trust in the capacity solely as nominee for Lender, and

because it had no interest in the underlying Note or in any proceeds from the underlying

Note. Further, upon information and belief, the assignment was robosigned in that it

was notarized in blank prior to being signed on behalf of MERS, and the party that is

represented to have signed the document, Jennifer Hamlin, did not sign the document

and/or did not have the authority to sign the document and/or did not have knowledge of

11121009_1.DOC

6 See Corporate Assignment of Deed of Trust attached as Exhibit 6.


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the representations contained in the document.

33. Defendant U.S. Bank National Association, acting as Trustee for

WFMBS2007-007 by its Attorney in fact Wells Fargo Bank, N.A., successor by merger to

Wells Fargo Home Mortgage Inc., based on the assignment referred to above, caused to

be recorded a Substitution of Trustee, which was purportedly notarized on February 6,

2009, whereby Michael A. Bosco, Jr. was substituted as trustee under the deed of trust

related to the DeBaggis property.7 This document was false because it was made based on

an invalid assignment of the deed of trust to U.S. Bank National Association, and U.S.

Bank National Association did not have the requisite authority to appoint a successor

trustee. Further, upon information and belief, the substitution of trustee was robosigned

in that it was notarized in blank prior to being signed on behalf of U.S. Bank National

Association, and the party that is represented to have signed the document, Mark S.

Bosco, did not sign the document.

34. Defendant U.S. Bank National Association authorized or directed the

recording of a Notice of Trustees Sale Arizona, dated February 6, 2009, against the

DeBaggis property whereby Michael A. Bosco, Jr., acting as trustee, noticed the sale of

the DeBaggis property for May 8, 2009.8 This document listed the current beneficiary as

U.S. Bank National Association, as Trustee for WFMBS 2007-007.



chain of documents that was based on an invalid assignment of the beneficial interest in

the deed of trust for the DeBaggis property as described above. Further, upon information

and belief, the notice of trustees sale was robosigned in that it was notarized in blank

prior to being signed on behalf of Michael A. Bosco, Jr., and the party that is represented

to have signed the document, Michael A. Bosco, did not sign the document, and the party

that did sign the document had no personal knowledge of any of the facts set forth in the

notice.7 See Substitution of Trustee attached as Exhibit 7.

12121009_1.DOC

8 See Notice of Trustees Sale attached as Exhibit 8.


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Edel Napoles Molina and Maria E. Hernandez

36. Defendants MERS caused to be recorded a Substitution of Trustee, which

was purportedly notarized on April 3, 2009, whereby Executive Trustee Services, LLC

was substituted as trustee under the deed of trust related to the Molina-Hernandez

property.9 This document was false because it was made based on an invalid designation

of beneficiary and MERS did not have the requisite authority to appoint a successor


in that it was notarized in blank prior to being signed on behalf of MERS and the party

that is represented to have signed the document, Cindy Sandoval, did not sign the

document.

37. Defendant MERS authorized or directed the recording of a Notice of

Trustees Sale Arizona, dated April 3, 2009, against the Molina-Hernandez property

whereby Executive Trustee Services, LLC, acting as trustee, noticed the sale of the

Molina Hernandez property for July 10, 2009.10 This document listed the current

beneficiary as Mortgage Electronic Systems, Inc.


because it does not list the true beneficiary under the deed of trust because it listed MERS

as holding the sole beneficial interest in the deed of trust for the Molina-Hernandez

property as described above. Further, upon information and belief, the notice of trustees

sale was robosigned in that it was notarized in blank prior to being signed on behalf of

Marvell L. Carmouche, Limited Signing Officer, and the party that is represented to have

signed the document, Marvell L. Carmouche, did not sign the document, and the party that

did sign the document had no personal knowledge of any of the facts set forth in the

notice.

David Rinehimer and Ugeth Rinehimer

39. On or about November 24, 2008, Defendants MERS, Inc. and/or Aurora

Loan Services, LLC. caused to be recorded a Corporate Assignment of Deed of Trust 9 See Substitution of Trustee attached as Exhibit 38, incorporated herein by this reference.

13121009_1.DOC



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related to the David Rinehimer and Ugeth Rinehimer property whereby Defendant MERS,

Inc. attempted to assign the deed of trust on the David Rinehimer and Ugeth Rinehimer

property, together with the note . . . together with all moneys now owing or that may

hereafter become due or owing in respect thereof.11 Said document was purportedly

signed by Joann Rein acting as a Vice President for MERS, Inc. Upon information and

belief, Joann Rein did not have authority to sign the document in the capacity as a Vice

President for MERS, Inc. because she was not employed by MERS, Inc. and/or because

she was not an officer of the MERS member on whose behalf the document was signed.

Further, Joann Rein lacked any knowledge of any of the representations contained in the

document.



referenced in the documents, and the Rinehimer note, to Aurora Loan Services, LLC;

however, MERS had no beneficial interest because it was named in the original deed of

trust in the capacity solely as nominee for Lender, and because it had no interest in the

underlying Note or in any proceeds from the underlying Note. Further, upon information

and belief, the assignment was robosigned in that it was notarized in blank prior to

being signed on behalf of MERS, and the party that is represented to have signed the

document, Joann Rein, did not sign the document and/or did not have the authority to sign

the document and/or did not have knowledge of the representations contained in the

document.

41. On or about November 18, 2008, Defendant MERS caused to be recorded a

Notice of Substitution of Trustee, which was purportedly notarized on November 18,

2008, whereby Cal-Western Reconveyance Corporation was substituted as trustee under

the deed of trust related to the Rinehimer property.12 This document was false because it

was made based on a pending invalid assignment of the deed of trust to Aurora Loan 11 See Corporate Assignment of Deed of Trust attached as Exhibit 40, incorporated herein by this reference.

14

12 See Notice of Substitution of Trustee attached as Exhibit 41, incorporated herein by thisreference.

121009_1.DOC


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Services, LLC signed six days later on November 24, 2008 (described above), and neither

MERS or Aurora Loan Services, LLC had the requisite authority to appoint a successor


in that it was notarized in blank prior to being signed on behalf of MERS, and the party

that is represented to have signed the document, Joe Krasovic, did not sign the document

and/or did not have the authority to sign the document as an assistant secretary of

MERS.

42. Defendants MERS and/or Aurora Loan Services, LLC authorized or

directed the recording of a Notice of Trustees Sale Arizona, dated November 18, 2008,

against the Rinehimer property whereby Cal-Western Reconveyance Corporation, acting

as trustee, noticed the sale of the Rinehimer property for February 23, 2009.13 This

document listed the current beneficiary as Mortgage Electronic Registration Systems,

Inc. This document was signed by Joe Krasovic in the capacity as an AVP for Cal-

Western Reconveyance Corporation.


because it does not list the true beneficiary under the deed of trust. Further, upon

information and belief, the notice of trustees sale was robosigned in that it was

notarized in blank prior to being signed on behalf of Joe Krasovic, and the party that is

represented to have signed the document, Joe Krasovic, did not sign the document, and

the party that did sign the document had no personal knowledge of any of the facts set

forth in the notice.

Jonathan Robinson and Sally Robinson-Burke

44. Defendants MERS, Inc. and/or U.S. Bank National Association caused to be

recorded an Assignment of Deed of Trust related to the Robinson property whereby

Defendant MERS, Inc. purported to assign all beneficial interest in the deed of trust on

the Robinson property, together with the note or notes therein described . . . the money

due and to become due thereon with interest, and all rights accrued or to accrue under said

15121009_1.DOC



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Deed of Trust. Said document was purportedly signed by Jennifer Hamlin acting as an

assistant secretary for MERS, Inc. Upon information and belief, Jennifer Hamlin did not

have authority to sign the document in the capacity as an assistant secretary for MERS,

Inc. because she was not employed by MERS, Inc. and/or because she was not an officer

of the MERS member on whose behalf the document was signed.14 Further, Jennifer

Hamlin lacked any knowledge of any of the representations contained in the document.



referenced in the documents to U.S. Bank National Association, as Trustee for the

Structured Asset Securities Corporation, Series 2006-GEL3 c/o ASC, when MERS had no

beneficial interest because it was named in the original deed of trust in the capacity solely

as nominee for Lender, and because it had no interest in the underlying Note or in any

proceeds from the underlying Note. Further, upon information and belief, the assignment

was robosigned in that it was notarized in blank prior to being signed on behalf of

MERS, and the party that is represented to have signed the document, Jennifer Hamlin,

did not sign the document and/or did not have the authority to sign the document and/or

did not have knowledge of the representations contained in the document.

46. Defendant U.S. Bank National Association, acting as Trustee for the

Structured Asset Securities Corporation, Series 2006-GEL3 by Wells Fargo Bank, N.A.,

as attorney in fact, based on the assignment referred to above, caused to be recorded a

Substitution of Trustee dated February 15, 2008, whereby Michael A. Bosco, Jr. was

substituted as trustee under the deed of trust related to the Robinson property. This

document was false because it was made based on an invalid assignment of the deed of

trust to U.S. Bank National Association, and U.S. Bank National Association did not have

the requisite authority to appoint a successor trustee. Further, upon information and

belief, the substitution of trustee was robosigned in that it was notarized in blank prior

to being signed on behalf of U.S. Bank National Association, and the party that is 14 Assignment of Deed of Trust attached as Exhibit 21, incorporated herein by this reference.

121009_1.DOC16


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represented to have signed the document, Mark S. Bosco, did not sign the document.15

47. Defendant Americas Servicing Company and/or Defendant Wells Fargo

Bank caused to be recorded on January 18, 2009 a Notice of Substitution of Trustee dated

December 3, 2008 related to the Robinson property that listed Americas Servicing

Company as the beneficiary, but wherein Wells Fargo Bank, N.A., Attorney in Fact for

US Bank National Association, as Trustee for the Structured Asset Securities Corporation,

Series 2006 GEL3 was referred to as the undersigned beneficiary.16 This document

was false because it was made, upon information and belief, based on an invalid

assignment of the deed of trust and/or because it listed Americas Servicing Company as

the beneficiary, which was untrue. Further, upon information and belief, the notice of

trustees sale was robosigned in that it notarized in blank prior to being signed or

notarized non-contemporaneously with the execution of the signature purported to be

acknowledged and/or the person who was represented to have signed the document, China

Brown, was not the party who signed it and/or did not have the authority to sign the

document on behalf of Wells Fargo Bank as a Vice President of Loan Documentation.

48. Defendant Americas Servicing Company caused to be recorded a Notice of

Trustees Sale dated December 3, 2008 related to the Robinson property that listed

Americas Servicing Company as the beneficiary.17 This document was false because it

was made, upon information and belief, based on an invalid assignment of the deed of

trust and/or because it listed Americas Servicing Company as the beneficiary, which was

untrue. Further, upon information and belief, the notice of trustees sale was robosigned

in that it notarized in blank prior to being signed or notarized non-contemporaneously

with the execution of the signature purported to be acknowledged based on the signer

being represented to be Wendy Randall of First American Title Insurance Company in

Texas, and the notary, Stephanie Ong, was located in California.

15 See Substitution of Trustee attached as Exhibit 22, incorporated herein by this reference. 16 See Notice of Substitution of Trustee dated December 3, 2008 attached as Exhibit 23, and incorporated herein by this reference.

17

17 See Notice of Trustees Sale dated December 3, 2008 attached as Exhibit 24, and incorporatedherein by this reference.

121009_1.DOC


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49. Defendant Americas Servicing Company caused to be recorded a Notice of

Trustees Sale dated December 30, 2008 related to the Robinson property that listed

Americas Servicing Company as the beneficiary.18 This document was false because it

was made, upon information and belief, based on an invalid assignment of the deed of

trust and/or because it listed Americas Servicing Company as the beneficiary, which was

untrue. Further, upon information and belief, the notice of trustees sale was robosigned

in that it notarized in blank prior to being signed or notarized non-contemporaneously

with the execution of the signature purported to be acknowledged based on the signer

being represented to be Hank Duong of First American Title Insurance Company in

Texas, and the notary, Megan Tortora, was located in California.

Rosa Silvas

50. Defendants Recontrust Company, and/or MERS, and/or The Bank of New

York Mellon caused to be recorded the following documents related to the Silvas

property:a. A Corporation Assignment of Deed of Trust Arizona dated

November 30, 2009 whereby Mortgage Electronic Registration Systems, Inc. purported

to assign all beneficial interest in the deed of trust executed by Rosa A. Silvas as

trustor to The Bank of New York Mellon fka The Bank of New York as succssor to JP

Morgan Chase Bank, N.A. as Trustee of SAMI II 2006-AR3 together with the note or

notes therein described . . . the money due and to become due thereon with interest, and

all rights accrued or to accrue under said deed of trust/mortgage.19

b. A Substitution of Trustee Arizona dated December 3, 2009 (but

recorded on December 1, 2009) whereby The Bank of New York Mellon fka The Bank

of New York as successor to JP Morgan Chase Bank, N.A. as Trustee of SAMI II 2006-

18 See Notice of Trustees Sale dated December 30, 2008 attached as Exhibit 25, incorporatedherein by this reference.

121009_1.DOC18


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AR3, acting as undersigned beneficiary, appointed Recontrust Company, N.A. as a

successor trustee under the Silvas deed of trust.20 This document was not signed and it

was not notarized, and Plaintiff disputes its validity.

c. A Notice of Trustees Sale Arizona dated December 3, 2009 (but

recorded on December 1, 2009) whereby Recontrust Company, N.A., acting as trustee,

noticed the sale of the Silvas property for March 8, 2010.21 This document listed the

current beneficiary as Bank of New York. This document was not notarized, but bears

a signature on behalf of Recontrust Company, N.A. by David B. [illegible], and Plaintiff

disputes its validity

d. A Statement of Breach or Non Performance and Election to Sell

Under Deed of Trust Arizona dated December 3, 2009 was issued by Beneficiary/Agent

BAC Home Loans Servicing, L.P. (which company is an affiliate or subsidiary of

Defendant Bank of America) and bears a signature that appears the same as the

signature on the Notice of Trustees Sale referred to in the immediately preceding

subparagraph.22

e. A Statement of Breach or Non Performance and Election to Sell

Under Deed of Trust Arizona dated March 12, 2010 was issued by Beneficiary/Agent

19 See Corporation Assignment of Deed of Trust attached as Exhibit 26, incorporated herein by this reference.20 See Substitution of Trustee Arizona attached as Exhibit 27, incorporated herein by this reference.21 See Notice of Trustees Sale Arizona attached as Exhibit 28, incorporated herein by this reference.

19121009_1.DOC

22 See Statement of Breach of Non Performance and Election to Sell Under Deed of Trust Arizona attached as Exhibit 29, incorporated herein by this reference.


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BAC Home Loans Servicing, L.P and bears a signature by Darla Sprales.23

f. A Notice of Trustees Sale Arizona was recorded on March 9, 2010

(but was dated March 12, 2010) whereby Recontrust Company, N.A., as Trustee, noticed

the sale of the Silvas property for June 16, 2010. This document lists the current

beneficiary as Bank of New York and was purportedly signed by Darla Sprales, but is

not notarized, and Plaintiff disputes its validity.24

51. The documents referred to in the immediately preceding paragraph were

false because:

a. Mortgage Electronic Registration Systems, Inc. purported to assign

all beneficial interest in the deed of trust executed by Rosa A. Silvas together with the

note or notes therein described . . . the money due and to become due thereon with

interest, and all rights accrued or to accrue under said deed of trust/mortgage, but

MERS had no beneficial interest in the deed of trust because MERS was listed on the

deed of trust solely in the capacity as nominee for the Lender, which was Americas

Wholesale Lender, and because MERS, by virtue of the Deed of Trust and its own

membership agreement, disclaims all beneficial interest in the security, any proceeds

from the note, and/or in the note itself.

23 See Statement of Breach of Non Performance and Election to Sell Under Deed of Trust Arizona attached as Exhibit 30, incorporated herein by this reference. This document appears to bear a stamped signature, as opposed to an actual signature, and, upon information and belief, was robosigned in that it was stamped by a party other than Darla Sprales, and the party stampingthe document did not have knowledge of the representations contained in the document. Ms. Sprales authority to sign this document on behalf of the purported beneficiary, BAC HomeLoans Servicing, L.P. is disputed.

20121009_1.DOC

24 See Notice of Trustees Sale Arizona attached as Exhibit 31, incorporated herein by this reference. This document appears to bear a stamped signature, as opposed to an actual signature, and, upon information and belief, was robosigned in that it was stamped by a party other than Darla Sprales, and the party stamping the document did not have knowledge of the representations contained in the document. Ms. Sprales authority to sign this document on behalf of the trustee, Recontrust, N.A., is disputed.


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b. The Notices of Trustee sale do not list the true beneficiary under the

deed of trust, and actually contradict the previous (invalid) assignment by virtue of

listing BAC Home Loans as the beneficiary.

c. Further, upon information and belief, the assignment was

robosigned in that it was notarized in blank prior to being signed on behalf of MERS,

and the party that is represented to have signed the document, Christina Balandran, did

not sign the document, and/or did not have the authority to sign the document, and/or did

not have knowledge of the representations contained in the document.

Milan Stejic

52. Defendants MERS, Inc. and/or Quality Loan Service Corporation (QLS)

caused to be recorded a Substitution of Trustee related to the Stejic property whereby

Defendant MERS, Inc. attempted to substitute QLS as the trustee on the Stejic property.25

Said document was purportedly signed by Jim Montes acting as Vice-President for

MERS, Inc. Montes did not have authority to sign the document in the capacity as a vice-

president for MERS, Inc. because he was not employed by MERS, Inc. or even by a true

beneficiary under the Stejic deed of trust, but instead was employed by QLS, and because

he was not an officer of either MERS, QLS, or Aurora, and none of these parties had a

legal interest in the Stejic Deed of Trust. Further, Montes lacked any knowledge of any of

the representations contained in the document.


because MERS, acting through a QLS employee, purported to substitute the trustee for the

deed of trust referenced in the documents to QLS; however, MERS was not the Lender,

121009_1.DOC21


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and was named in the original deed of trust in the capacity solely as nominee for Lender,

and because it had no interest in the underlying Note or in any proceeds from the

underlying Note. The Deed of Trust for the Stejic property, to be strictly construed in

favor of the borrower, specifically stated that only the Lender could substitute the

trustee, accelerate the debt, or direct the power of sale. Further, upon information and

belief, the assignment was robosigned in that it was notarized in blank prior to being

signedor notarized non-contemporaneously with the execution of the signature it was

purporting to acknowledge--- on behalf of MERS, and the party that is represented to have

signed the document, Jim Montes, did not sign the document and/or did not have the

authority to sign the document and/or did not have knowledge of the representations

contained in the document. The substitution was notarized in California by Sharina L.

Guzman, not contemporaneously with the Montes signature. On the same dayJanuary

27, 2009-- that QLS recorded the Notice and Sale and Substitution of Trustee signed by

Jim Montes for MERS upon the Stejic property, Jim Montes purportedly signed and

recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa

County Recorders Office. For an inconclusive example, on January 27, 2009, Jim

Montes purportedly signed on behalf of Mortgage Electronic Registration Systems, Inc. as

nominee for:

CTW Financial Services IncIndymac Federal Bank FSB

First Magnus Financial Corporation

Homefield Financial, Inc

SCME Mortgage Bankers, Inc.

Americash

22121009_1.DOC

25 See Substitution of Trustee attached as Exhibit 43, incorporated herein by this reference.


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New York Mortgage CompanyIndymac Federal Bank FSB

MorgtgageIT Indymac Federal Bank FSB. 26

Many of these were originating lenders who were out of business by January 27, 2009.

Many of the signatures appear visibly different than one another. At no time did Jim

Montes work for MERS or any of these entities; he worked for QLS.

54. Defendant MERS authorized or directed the recording of a Notice of

Trustees Sale Arizona, dated January 27, 2009, against the Stejic property whereby QLS,

acting as trustee, noticed the sale of the Stejic property for April 28, 2009.27 This

document listed the current beneficiary as Mortgage Electronic Registration Systems,

Inc. c/o Aurora Loan Services.



chain of documents that was based on an invalid designation and identification of the

beneficial interest in the deed of trust for the Stejic property as described above. Further,

upon information and belief, the notice of trustees sale was robosigned, for all of the

reasons mentioned above in paragraph 53, and the party that is represented to have signed

the document, Jim Montes, did not sign the document, and the party that did sign the

document had no personal knowledge of any of the facts set forth in the notice. Like the

Notice of Sale, this document was also notarized non-contemporaneously by some

purporting to be Sharina L. Guzman in San Diego County, California.

56. On or about December 10, 2009, Quality Loan Service Corporation, with

the knowledge of and/or at the direction of Defendant Aurora Loan Services, LLC, caused

to be recorded a Trustees Deed Upon Sale related to the Stejic residence showing that the

property had been conveyed to Defendant Aurora Loan Services LLC. The Trustees

26 These examples are publicly recorded at the Maricopa County Recorders Office as 20090067856 (re SCME Mortgage Bankers, Inc.), 20090067852 (re Americash), 20090067848 (re Homefield Financial), 20090067841 (re First Magnus), 20090067366 (re The New York Mortgage Company), 20090067364 ( re CTW Financial Services), 20090067362 (re MortgageIt), and copies are attached as Exhibits 44 through 50, incorporated herein by this reference.

23121009_1.DOC



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Deed was signed by Karla Sanchez, a robosigner employee of QLS. In the span of three

months, Sanchez signed and recorded over one hundred Trustees Deeds Upon Sale in the

Maricopa County Recorders Office, and in many of them, the signatures appear very

different.28 In addition, the Trustees Deed avows that The Grantee Herein IS the

Foreclosing Beneficiary and that the Foreclosing Beneficiary paid $1,275,574.22 at the

sale. Both of these assertions are false. Aurora claims to be the bidding beneficiary

although the sale was directed by claimed beneficiary MERS itself. Moreover, Aurora did

not pay this money at the sale, nor does it accurately reflect the amount of the unpaid

debt together with costs. Moreover, the document was false because Karla Sanchez

lacked any personal knowledge of the facts set forth in the deed, the facts were not

accurate, and Michelle Nguyen did not contemporaneously acknowledge the signature as

avowed.

57. Finally, the information was false because it ignored the securitization that

allegedly occurred in 2007. By this time, the securitization trust was closed. By the

specific terms of the Pooling and Servicing Agreement and name alone, a 2007 REMIC

Trust must be funded within 90 days of closing. Therefore, it was factually impossible

under the principles of securitization and the Trust Pooling and Servicing Agreement to

transfer a defaulted note out of a closed REMIC Trust into which it had not even been

accurately conveyed. 58. The Trustees Deed Upon Sale is a legal fiction and demonstrates all of the

Defendants have engaged in deceptive behavior in order to be unjustly enriched.

59. The documents described herein were recorded at the offices of Maricopa

County Recorder (as to Bilyea, DeBaggis, Molina-Hernandez, Rinehimer, and Stejic) the

Pima County Recorder (as to Robinson), and the Santa Cruz County Recorder (as to

24

28 E.g. Compare Recorded Documents # 20091134442 (Stejic Trustees Deed), attached as Exhibit 52, incorporated herein by this reference, with Trustees Deeds Upon Sale recorded under Maricopa County Recorders Document Numbers 20100296061, 20100394735, 20100370570, and 20100436390, copies of which are attached as Exhibits 53 through 56, incorporated herein by this reference.

121009_1.DOC


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Silvas) by Defendants named above in this claim for relief, who knew or had reason to

know, that the documents were robosigned (or forged), contained false claims, or were

otherwise invalid based on MERSs status as making the assignments as beneficiary

when it had no beneficial interest in the deed of trust subject to the assignment, it was not

the Lender, it was not the party to whom the money was owed, and it had no interest in

the note secured by the deed of trust, and therefore constitute a violation of A.R.S. 33-

420(A).

60. Plaintiffs did not learn, or have reason to know, that the documents listed in

this claim for relief were false, until within one year of the filing of this Consolidated

Amended Complaint, after consulting with counsel and investigation based on publicity in

the news media that occurred on or about October 3, 2010, related to robosigners who

signed numerous mortgage foreclosure documents on behalf of national lenders.29

61. As a result of the recording of the documents listed in this claim for relief,

Plaintiffs Bilyea, DeBaggis, Molina-Hernandez, Rinehimer, Robinson, Silvas, and Stejic,

and others similarly situated, were damaged by the clouding of their title to their property

and were damaged as a result of incurring attorneys fees and costs in connection with

bringing this action.

SECOND CLAIM FOR RELIEF

Wrongful Foreclosure

(As to Defendants Americas Servicing Company, Aurora Loan Services, L.L.C., Central Mortgage Company, Citimortgage, Inc., Countrywide Home Loans, Inc.,

Recontrust, N.A., Litton Loan Servicing, L.P., LSI Title Company of Oregon, L.L.C., Wells Fargo, U.S. Bank National Association, and MERS, Inc.) 62. Plaintiffs incorporate by this reference each and every paragraph of this

25121009_1.DOC

29 See exhibits 2 through 22 to Motion for Leave to File Amended Complaint filed January 13, 2011 (Doc. 1229), incorporated herein by this reference.


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Complaint as if fully set forth in this claim.

63. In addition to the factual allegations set forth in first claim for relief above,

the specific facts supporting the claims of Plaintiffs Bilyea, DeBaggis, Molina-Hernandez,

Rinehimer, Robinson, Silvas, and Stejic, who are Arizona residents, for wrongful

foreclosure are contained in Exhibit 3 at paragraphs 17-21 (Bilyea), 45 (DeBaggis), 212-

214 (Molina-Hernandez), 245 (Rinehimer), 248-314 (Robinson), 326-389 (Silvas), and

396-404 (Stejic),30 respectively, incorporated herein by this reference.

64. The specific facts supporting the claim of Plaintiff Villalva, a California

resident, for wrongful foreclosure are contained in Exhibit 3 at paragraphs 449-476,


65. The specific facts supporting the claims of Plaintiffs Leon and Rodriguez,

who are Oregon residents, for wrongful foreclosure are contained in Exhibit 3 at

paragraphs 157-165, incorporated herein by this reference.

66. The specific facts supporting the claims of Plaintiffs Freeman and Youmans,

who are South Carolina residents, are contained in Exhibit 3 at paragraphs 87-90

(Freeman) and 483-486 (Youmans), incorporated herein by this reference.

67. Plaintiffs claims, and those of others similarly situated, for wrongful

foreclosure are based on the fact that the deeds of trust which were intended to be security

for their notes are no longer security for the notes, making the notes not subject to

collection as a secured debt, and the properties not subject to foreclosure proceedings as

alleged in more detail below, as well as the fact that the party seeking to foreclose is not

the holder of the note, has no interest in the note, and was not a proper assignee of the

deed of trust, as alleged herein.

68. Each Plaintiffs deed of trust defines Lender as a party other than MERS.

69. Each Plaintiffs deed of trust states that the deed of trust is a Security

26121009_1.DOC

30 The Substitution of Trustee and Assignment of Deed of Trust, Notice of Default and Election to Sell Under Deed of Trust, and Notice of Rescission of Declaration of Default related to the Villalva property are attached as Exhibits 10, 11, and 12, respectively.


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Instrument. (See, e.g., Silvas Deed of Trust, paragraph A.)31

70. Each Plaintiffs deed of trust states that

MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as nominee for Lender and Lenders successors and assigns. MERS is the beneficiary under this Security Instrument. (See, e.g., Silvas Deed of Trust, paragraph E.)

71. Each Plaintiffs deed of trust states that the Loan is the debt evidenced by

the Note, plus interest, any prepayment charges and late charges due under the Note, and

all sums due under the deed of trust, plus interest. (See, e.g., Silvas Deed of Trust,

paragraph H.)

72. Each Plaintiffs deed of trust states:

This Security Instrument secures to Lender (i) the repayment of the Loan, . . . (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note.

(See, e.g., Silvas Deed of Trust, pp. 2-3 (Transfer of Rights in the Property) (emphasis added).)

73. Each Plaintiffs deed of trust provides that:

Lender shall give notice to Borrower prior to acceleration . . .The notice shall specify:

(a) the default;(b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given

to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified

in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property.

The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument . . . and may invoke the power of sale . . ..

If Lender invokes the power of sale, Lender shall give written notice to Trustee of the occurrence of an event of default and of Lenders election to cause the Property to be sold.

(See, e.g., Silvas Deed of Trust, paragraph 22.)

74. Each Plaintiffs deed of trust also provides:

27

31 The Silvas Deed of Trust referred to throughout this claim is attached as Exhibit 32 and incorporated by this reference.

121009_1.DOC


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Substitute Trustee. Lender may . . . appoint a successor trustee to any Trustee appointed hereunder.

(See, e.g., Silvas Deed of Trust, paragraph 24.)

75. Upon information and belief, each Plaintiffs note was to be secured by a

deed of trust; however, each Plaintiffs note was sold by each Plaintiffs Lender and/or

assigned to a party other than MERS without an attendant assignment of the deed of trust

originally designed to secure the repayment of the note.

76. MERS was never a party to the Note, is not named anywhere in the Note,

never possessed the Note or any rights to collect the proceeds due under the Note, and

never was the agent of the holder of the Note following closing for each Plaintiffs loan

described herein, and for the loans of other similarly situated.

77. MERS was not the Lender and never had any right to repayment of the

Loan.

78. MERS never held a valid interest in the Deed of Trust.

79. MERS was never a valid true beneficiary on the Deed of Trust because it

never had a right to repayment of the note which was to be secured by the Deed of Trust.

80. MERS does not satisfy the definition of beneficiary under A.R.S. 33-

801 as the person named or otherwise designated in a trust deed as the person for whose

benefit a trust deed is given, or the persons successor in interest.

81. MERS held its interest in the Deed of Trust separately from the Note.

82. The Restatement (Third) of Property: Mortgages 5.4(a) states:

A transfer of an obligation secured by a mortgage [the note] also transfers the mortgage [the deed of trust] unless the parties to the transfer agree otherwise.

83. The Lenders named in Exhibit 3 related to the Bilyea, DeBaggis, Freeman,

Leon-Rodriguez, Molina-Hernandez, Rinehimer, Robinson, Silvas, Stejic, Villalva, and

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Youmans deeds of trust32 were MERS members, or agents of MERS members, at all times

relevant hereto.

84. The Lenders named in this claim for relief attempted to agree that the

beneficial interest in the deed of trust was to be placed with MERS. Any party to whom

the Plaintiffs notes were sold as part of a sale to a mortgage backed security pool agreed

that the deed of trust was to remain with MERS as a part of the pooling and servicing

agreement.33

85. As a result of these agreements, the Plaintiffs notes were transferred and

sold without the transfer or assignment of the deed of trust, rendering the notes unsecured,

and not subject to foreclosure by any purported beneficiary in the deed of trust.

86. Further, because MERS never has an interest in the note, never holds the

note, and is not entitled to any payments due under the note, and is not an agent for the

holder of the note, it has no power to assign any beneficial interest in the note. Any

purported assignment by MERS of a beneficial interest in a note or a deed of trust

originally securing a note is void as a matter of law because MERS never had an, and has

no, interest to assign.

87. Regardless of any default or nonpayment of amounts due under the Notes,

the Notes are not subject to payment from the proceeds of any trustees sale under the

deed of trust because the Notes are no longer secured by the deed of trust as a result of the

splitting of the Notes from the deed of trust by retention of the interest in the deed of trust

apart from the Notes and/or a later assignment of the deed of trust after the Notes were

transferred.

88. The parties purchasing the right to payment under the Notes have been32 Downey Savings and Loan Association for Bilyea (Ex. 3, 17); Americas Brokers Conduit for DeBaggis (Ex. 3, 45); Sovereign Homes, Ltd. for Freeman (Ex. 3, 87); MeritageMortgage for Molina-Hernandez (Ex. 3, 212); Ownit Mortgage Solutions for Leon-Rodriguez (Ex. 3, 157); Federal Savings Bank for Rinehimer (Ex. 3, 245); WMCMortgage Corp. for Robinson (Ex. 3, 248), Americas Wholesale Lender for Silvas (Ex. 3, 326); Shelter Mortgage for Stejic (Ex. 3, 396); Home Capital Funding for Villalva (Exhibit 3, 449); and Advanced Financial Services for Youmans (Ex. 3, 483).

29121009_1.DOC

33See, e.g., excerpt of Securities and Exchange Commission Form 8-K Relating [to] the Pooling and Servicing Agreement for Structured Asset Mortgage Investments II, Inc. dated April 28, 2006, attached as Exhibit 9, Section 2.01.


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repaid through third-party payments received from credit default swap payments and/or

credit enhancements, discharging Plaintiffs obligations under the notes. A.R.S.

47-3602(A), Cal. Com. Code 3602(a), and N.R.S. 104.3602 provide that payments

made by or on behalf of a party obliged to pay the note to a party entitled to enforce it

discharges the obligation of the debtor.

89. The Defendant MERS Members named in this claim for relief wrongfully

foreclosed on the Bilyea, DeBaggis, Freeman, Leon-Rodriguez, Molina-Hernandez,

Rinehimer, Robinson, Silvas, Stejic, Villalva, and Youmans properties, and the properties

of others similarly situated, because:

a. the Notes were, as alleged herein, rendered unsecured and not subject

to foreclosure and/or

b. the documents on which the foreclosures were based were invalid

because the Corporation Assignment of Deed of Trust was executed by MERS under false

pretenses, i.e., MERS purported to transfer all interest in the Deed of Trust and the Note,

when MERS never had any interest in the Note, and any subsequent appointment of a

successor trustee by MERS and any notice of trustees sale issued by any successor trustee

appointed by MERS were invalid and/or

c. no party holding a note subject to foreclosure authorized MERS to

appoint a successor trustee or to commence foreclosure proceedings.

90. The Defendant MERS Members engaged in a pattern and practice of

wrongful foreclosure evidenced by the wrongful foreclosure on Plaintiffs Bilyea,

DeBaggis, Freeman, Leon-Rodriguez, Molina-Hernandez, Rinehimer, Robinson, Silvas,

Stejic, Villalva, and Youmans34 and on the wrongful foreclosure of similarly situated class

3034 The specific facts as to each named Plaintiffs foreclosure are listed in the attached Exhibit 3,

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members properties, whose properties were encumbered by a deed of trust that named

MERS as the beneficiary as nominee for the Lender named on the deed of trust. Said

class members include, but are not limited to, the named Plaintiffs who own property in

Arizona, California, Nevada, Oregon and South Carolina as listed in Exhibit 1, and which

properties were foreclosed upon as described in Exhibits 3, 4 and 5, which exhibits are

incorporated herein by this reference, and all others similarly situated in the states that

allow non-judicial foreclosures as listed on Exhibit 17 hereto, which is incorporated

herein by this reference.

91. As to Plaintiffs Freeman and Youmans in particular, Defendant MERS

caused Countrywide to attempt the wrongful foreclosure on Youmans property and it

caused Defendant Citimortgage to falsely foreclose on Plaintiff Freemans property.

92. Also as to Plaintiffs Freeman and Youmans, Defendant MERS took

affirmative action to cause Countrywide to commit the wrongful attempted foreclosure of

Youmans property and it caused and Citimortgage to wrongfully foreclosure on

Freemans property. Specifically, Defendants MERS, Countrywide, and Citimortgage

took the following actions which detrimentally affected the fairness of the Plaintiffs

foreclosure proceedings:

a. Through its business model, Defendant MERS falsely communicated

to Countrywide and Citimortgage, directly or indirectly, that Defendant Mortgage

Electronic Registration Systems, Inc. had the lawful ability to transfer Countrywide,

Citimortgage, and others the legal rights to foreclose on Plaintiffs property in the State of


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South Carolina;

b. Falsely communicated to the courts that Countrywide was the owner

and the note which was the subject matter of the Countrywide Foreclosure;

c. Falsely communicated to the courts, directly or indirectly, that

Citimortgage was the owner and the note which was the subject matter of the

Citimortgage Foreclosure;

d. Attempted to foreclosure on Youmans real property even though it

knew or should have known that Countrywide was not the real party in interest to the

foreclosure proceedings; and attempted foreclosure on the Freeman Property even though

it knew or should have known that Citimortgage was not the real party in interest to the

foreclosure proceedings;

e. Failed to give Youmans the statutory notice required when the note

was allegedly assigned; and

f. Concealed the true owners of the note and mortgage involved in the

Countrywide and Citimortgage Foreclosures.

93. As a direct and proximate result of the wrongful foreclosure as complained

above, Plaintiff Youmans suffered damages, not all inclusive, in the form of

embarrassment, stress, humiliation, loss of sleep, damage to his credit rating, and was

required to pay Countrywide a substantial sum of money in order to prevent his home

from being foreclosed upon, all in an amount to be proved at trial, but in no event less that

$100,000.00.

94. As a direct and proximate result of the wrongful foreclosure as complained

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above, Plaintiff Freeman suffered damages, not all inclusive, in the form of

embarrassment, stress, humiliation, loss of sleep, damage to his credit rating, all in an

amount to be proved at trial, but in no event less that $600,000.00.

95. Defendant MERS has caused thousands of wrongful foreclosures throughout

the state of South Carolina for the same or similar reasons alleged in this Claim for Relief.

Moreover, hundreds of foreclosures are pending before the Courts of South Carolina that

were cause by Defendant MERS and said pending foreclosures are also wrongful. The

wrongful actions committed by MERS against the South Carolina Class members are

identical to the wrongful foreclosure committed against the Plaintiffs Freeman and

Youmans.

96. Plaintiffs Bilyea, DeBaggis, Leon-Rodriguez, Molina-Hernandez,

Rinehimer, Robinson, Silvas, Stejic, and Villalva have also, as a direct and proximate

result of the wrongful foreclosures complained of herein, incurred attorneys fees and

costs in bringing this action, and have sustained other damages, including, but not limited

to, loss of money and property, stress, embarrassment, humiliation, and damage to

reputation and credit ratings.

THIRD CLAIM FOR RELIEF

Violation of N.R.S. 107.080

(As to Plaintiffs Aguilar, Duncan, Granados, Sandefur, and Van Blaircom AgainstCAL-WESTERN RECONVEYANCE CORP.; Plaintiffs Anderson, Hembree, Huck, Pierce, and Parece Against MTC FINANCIAL, INC. DBA TRUSTEE

CORPS; Plaintiffs Ellifritz Against MTDS, INC.; Plaintiffs Anderson, Apolinar, Benson, Boyd, Casas, Castillo, Dombovari, Flagg, Green, Hembree, Horton, Jones, Larkins, McHenry and Wallace, McKay, Monahan and Moreno, Newton, Riger, Sedlmayr, Stapleton, Stehman, Stinnett, Thurston, Tulip, and Whalen Against

NATIONAL DEFAULT SERVICING CORP.; Plaintiff Branca Against POWER DEFAULT SERVICES F/K/A/ AHMSI DEFAULT SERVICES, INC; Plaintiffs

Cheney Against SEASIDE TRUSTEE, INC.; Plaintiffs Beekhof, Blake and McKinney, Brenes and Apolinar-Lopez, Burke, Coslow, Dahl, Dintchev,

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Dombovari, Fitzgerald, Funk, Gabel, Habon, Harmon, Hembree, King, Moreau, Peterson, Rawlings, Riger, Antonio Servidio, and Vo Against QUALITY LOAN SERVICE CORP.; Plaintiffs Cousins, Mausert, and Antonio Servidio Against

CALIFORNIA RECONVEYANCE CORPORATION (aka CaliforniaReconveyance Company); Plaintiffs Dahl, Fillatreau, and Roberts Against CR

TITLE SERVICES, INC.; Plaintiffs Bell, Diaz and Sullivan Against WESTERN PROGRESSIVE, L.L.C.; Plaintiffs Evenson Against COUNTRYWIDE HOME

LOANS, INC.; Plaintiff Feemster Against FIRST AMERICAN LOANSTAR TRUSTEE SERVICES; Plaintiffs Frankoski, Josefa Lopez, Penny, Sanchez,Antonio Servidio, and Ubhoff Against EXECUTIVE TRUSTEE SERVICES,

L.L.C.; Plaintiffs Gannon and Mendoza Against AHMSI DEFAULT SERVICES,INC.; Plaintiffs Ballengee and Goodwin Against AZTEC FORECLOSURE

CORPORATION AND HSBC BANK, U.S.A.; Plaintiffs Gillespie and Hammitt Against TRUSTEE CORPS; Plaintiffs Jose Lopez and Swikla Against FIDELITYNATIONAL TITLE INSURANCE COMPANY; Plaintiffs Barron and Mendoza

Against NDEX WEST, L.LC.; Plaintiff Graves Against COUNTRYWIDE HOME LOANS, INC. ; Plaintiffs Gray against T.D. SERVICE COMPANY; Plaintiff

McArtor Against OLD REPUBLIC DEFAULT MANAGEMENT SERVICES;Plaintiffs Aufiero, Beauchemin, Burson, Dahl, Epps, Garcia, Gonzalez and Cortez, Gutierrez, Hearne, Hembree, Hutler, Johnson, Kelley, Kluttz, Leonard, Jennifer Lopez, Kwok, Mahlin, McKeon, Mull, Nelson, Newton, Peternell, Pizzuto, Quilici, Rees, Rudlin, Saldana, Sandborn, Anotonio Servidio, Thompson, Tovar and Vega

Against RECONTRUST; Plaintiff Sandefur Against UTLS DEFAULT SERVICES, L.L.C.; Plaintiffs Zamorano and Quintero-Orozco Against Housekey Financial

Corporation; as to all Plaintiffs against MERS, Inc.) 97. Plaintiffs incorporate each and every paragraph of this Complaint as if fully

set forth in this claim.

98. Pursuant to N.R.S. 107.080, Nevadas nonjudicial foreclosure statute, a

power of sale upon default on a note secured by a deed of trust is held by only the

beneficiary, the successor in interest to the beneficiary, or the trustee.

99. As to each Plaintiff making a claim for violation of N.R.S. 107.080, the

parties issuing the notice of default and/or issuing a notice of trustees sale on the property

were not the proper parties to do so because none of the parties were the beneficiary, the

successor in interest to the beneficiary, or the trustee appointed by the lender.

100. Any successor trustee appointed by MERS was not a proper party to

commence a foreclosure under N.R.S. 107.080 because it is not a trustee appointed by

the lender. MERS is not the lender as defined in the deed of trust or in practice.

101. The specific facts as to each plaintiff claiming a violation of N.R.S.

107.080 are contained in Exhibit 4 hereto, which is incorporated herein by this

reference.

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102. As set forth in detail in Exhibit 4 as to each plaintiff making a claim for

violation of N.R.S. 107.080, the party who noticed the sale was not the beneficiary

(MERS). Rather, the party was a stranger to the transaction with no beneficial interest in

the deed of trust or the note.

103. As alleged herein, each deed of trust at issued named MERS as the

beneficiary on the deed of trust solely in the capacity as nominee for the Lender.

104. MERS holds no beneficial interest in any deed of trust because it has no

interest in the underlying note, or any proceeds from the note, or the property itself.

105. As alleged herein, each of the named plaintiffs notes was transferred

without the deed of trust outside the MERS system. Such transfer rendered each

Plaintiffs note unsecured and not subject to a foreclosure sale as alleged in the Second

Claim for Relief.

106. At or following an alleged default, the beneficial interest in the deed of trust

(which MERS disclaims) was transferred by MERS to a party who was not the holder of

the note and had no authority from the holder of the note to either declare the default or

initiate the foreclosure. Nonetheless, foreclosure occurred and, as to Plaintiffs Anderson,

Andrews, Apolinar, Arevalo, Beekhof, Branca, Burson, Cheney, Dombovari, Frankoski,

Gabel, Goodwin, Granados, Hembree, Johnson, Jennifer Lopez, McArtor, McHenry and

Wallace, Mendoza, Polanski, Antonio Servidio, and Tulip, as alleged in detail in Exhibit

4, the property was sold to a part

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