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The Supreme Court states in black and white that, where a homeowner sends a valid notice of rescission, the TILA "statute does not also require him to sue within three years."  So when CAN a homeowner sue?  Here's the latest from the Eleventh Circuit.

STEVEN W. BERNSTEIN, Plaintiff-Appellant,
v.
WELLS FARGO BANK, N.A.,
WELLS FARGO HOME MORTGAGE,
FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendants-Appellees,
MCCALLA RAYMER, LLC, Defendant.

No. 16-16440

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

July 12, 2017

[I]n the case of any consumer credit transaction . . . in which a security interest . . . is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Bureau, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Bureau, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Bureau, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.

When an obligor exercises his right to rescind under subsection (a), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value.

TIMOTHY BARNES, Plaintiff-Appellant,
v. 
CHASE HOME FINANCE, LLC, a
Delaware corporation; CHASE BANK
USA, N.A., a subsidiary of JP Morgan
Chase & Co., a Delaware corporation;
IBM LENDER BUSINESS PROCESS
SERVICES, INC., a Delaware corporation;
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, Defendants-Appellees.

No. 13-35716

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted: May 10, 2017
August 10, 2017

Do lawyers put too mach emphasis on technical reading of the English language?  Or do they use linguistic technicalities to mislead the public? You decide.

During the infamous split between Johnny Depp and Amber Heard, the lawyers for both sides came out with a crafty and clever press release that read: "Neither party has lied nor made false accusations for financial gain."

The statement does not say "Neither party has lied or made false accusations."  Only that they didn't do so "for financial gain", which opens up the possibility that they did so for other purposes, such as to hurt the other, etc.  So to a lawyer, this immediately raises the question: did either party nonetheless lie or make false statements, but for other purposes, unrelated to financial gain?

What does it have to do with Mnuchin's recent visit to Ft Knox and his subsequent tweet "Glad gold is safe!"?  I am surprised that no one in the media has called Mr. Mnuchin on his statement, similarly to how some press outlets called Johnny and Amber on their crafty statement.  Because Mnuchin doesn't say "gold is there."  He only says "gold is safe."  So it could be "safe" in a whole different place in the U.S., Europe or even China, and not at Ft. Knox, which would mean that some conspiracy theorists are at least partially right in thinking that the gold that used to be at Ft. Knox is no longer there, whether the gold is "safe" or not.  Just saying....

TERESA LAVIS, Plaintiff,
v.
REVERSE MORTGAGE SOLUTIONS, LLC, Defendant.

CIVIL ACTION NO. 5:17-cv-00209

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA BECKLEY DIVISION

June 9, 2017

FACTUAL ALLEGATIONS STANDARD OF REVIEW DISCUSSION

First, the court should identify the applicable statute of limitation for each cause of action. Second, the court (or, if questions of material fact exist, the jury) should identify when the requisite elements of the cause of action occurred. Third, the discovery rule should be applied to determine when the statute of limitation began to run by determining when the plaintiff knew, or by the exercise of reasonable diligence should have known, of the elements of a possible cause of action. Fourth, if the plaintiff is not entitled to the benefit of the discovery rule, then determine whether the defendant fraudulently concealed facts that prevented the plaintiff from discovering or pursuing the cause of action. Whenever a plaintiff is able to show that the defendant fraudulently concealed facts which prevented the plaintiff from discovering or pursuing the potential cause of action, the statute of limitation is tolled. And fifth, the court or the jury should determine if the statute of limitation period was arrested by some other tolling doctrine.

CONCLUSION

A Maryland homeower lost in the bankruptcy and district courts after an unsuccessful challenge to the alleged creditor's right to enforce the mortgage note and the amount allegedly owed under the note. The homeowner then came to us for assistance with the appeal before the Fourth Circuit.

Upon reviewing the case, it became apparent that the homeowner's shotgun/kitchen-sink approach did not serve him well in the lower courts and obscured the strong points of his case.  We therefore undertook to create a focused appeal to make sure that the lower courts' errors are not repeated and not allowed to be obscured by the various theories of the case and to fall through the cracks.

A few weeks ago, the Fourth Circuit issued a partial remand sending the case back to the lower courts and preserving the issues of the enforcement of the mortgage note and the amount that is actually owed on the note in light of the alleged creditor's prior actions and behavior.

This is a practical win for the homeowner, as the homeowner now has another chance to hold the alleged creditor to its burden of proof and to make sure that, even if such "creditor" establishes its right to enforce the note, it cannot collect any amount that has accumulated due to its own wrongful conduct and not through the fault of the homeowner.

There's been an argument floating on the Internet that, because the Servicer makes advances to the Securitization Trust on defaulted loans (where the borrower is not paying), such advances somehow show that there is no default or that the borrower is otherwise not obligated to pay.  This argument doesn't even pass the "smell" test because the same agreement that requires the Servicer to make advances also requires the Servicer to collect on defaulted loans by using foreclosure.  The courts seem to agree.

In re: ANTON ANDREW RIVERA and DENISE ANN RIVERA, Debtors.

ANTON ANDREW RIVERA; DENISE ANN RIVERA, Appellants,
v. 
DEUTSCHE BANK NATIONAL TRUST COMPANY, Appellee.

BAP No. NC-15-1120-KiTaJu

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

Argued and Submitted: July 28, 2016
August 16, 2016

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

THIS NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN MY INTEREST RATE AND MY MONTHLY PAYMENT. MY MONTHLY PAYMENT INCREASES WILL HAVE LIMITS WHICH COULD RESULT IN THE PRINCIPAL AMOUNT I MUST REPAY BEING LARGER THAN THE AMOUNT ORIGINALLY BORROWED, BUT NOT MORE THAN 125% OF THE ORIGINAL AMOUNT (OR $550,000). MY INTEREST RATE CAN NEVER EXCEED THE LIMIT STATED IN THIS NOTE OR ANY RIDER TO THIS NOTE. A BALLOON PAYMENT MAY BE DUE AT MATURITY.

4(G) Changes in My Unpaid Principal Due to Negative Amortization or Accelerated Amortization. Since my payment amount changes less frequently than the interest rate and since the monthly payment is subject to the payment limitations described in Section 4(F), my monthly payment could be less or greater than the amount of the interest portion of the monthly payment that would be sufficient to repay the unpaid Principal I owe at the monthly payment date in full on the maturity date in substantially equal payments. For each month that the monthly payment is less than the interest portion, the Note Holder will subtract the monthly payment from the amount of the interest portion and will ad [sic] the difference to my unpaid Principal, and interest will accrue on the amount of this difference at the current interest rate. For each month that the monthly payment is greater than the interest portion, the Note Holder will apply the excess towards a principal reduction of the Note.

4(H) Limit on My Unpaid Principal; Increased Monthly Payment. My unpaid principal can never exceed a maximum amount equal to 125% of the principal amount originally borrowed. In the event my unpaid Principal would otherwise exceed that 125% limitation, I will begin paying a new minimum monthly payment until the next Payment Change Date notwithstanding the 7 ½% annual payment increase limitation. The new minimum monthly payment will be an amount which would be sufficient to repay my then unpaid Principal in full on the maturity date at my interest rate in effect the month prior to the payment due date in substantially equal payments.

4(I) Required Full Monthly Payment. On the FIFTH anniversary of the due date of the first monthly payment, and on that same day every FIFTH year thereafter, the monthly payment will be adjusted without regard to the payment cap limitation in Section 4(F).

2. Application of Payments or Proceeds. [A]ll payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) any amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note.

. . . .

3. Funds for Escrow Items. Borrower shall pay to Lender on the day the Periodic Payments are due under the Note, until the Note is paid in full, a sum . . . to provide for payment of amounts due for: (a) taxes . . . (c) premiums for any and all insurance required by the Lender . . . These items are called "Escrow Items[.]"

1. reduced interest and escrow (the "Minimum Payment");

2. full monthly interest and escrow;

3. full principal and interest based on the remaining scheduled loan term and escrow; and

4. full principal and interest based on a 15-year amortization and escrow.

II. JURISDICTION III. ISSUES IV. STANDARDS OF REVIEW V. DISCUSSION

The rules of contract interpretation require that Section 2 of the DOT be construed in a manner that allows Plaintiffs to perform their obligation to pay for Escrow Items under Section 3 of the DOT while still enjoying their right to pay only the minimum payment due under the Note. Plaintiffs' interpretation would lead to an absurd result in which no borrower payment could ever be applied to the Escrow Items despite the borrower's promise to pay for those items on a monthly basis throughout the loan term. It would also prevent Defendant from negatively amortizing the loan for unpaid interest until it first applied "all" of the payment it receives to interest due . . . . Additionally, Plaintiffs' interpretation would nonsensically require the lender to advance its own money to pay the Escrow Items, thereby lending the borrower additional sums — at no interest — with no additional security, and for the entire time any interest or principal remain owing and unpaid.

Nothing in this Agreement or in any Certificate, expressed or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder . . . any benefit or any legal or equitable right, remedy or claim under this Agreement.

VI. CONCLUSION

In re JAMES L. MACKLIN, Debtor.

JAMES L. MACKLIN, Plaintiff,
v.
DEUTSCHE BANK NATIONAL TRUST CO., Defendant.

Case No. 10-44610-E-7
Adv. Proc. No. 11-2024
Docket Control No. JLM-1

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF CALIFORNIA

April 8, 2015

HISTORY OF ADVERSARY PROCEEDING AND MACKLIN'S MULTI-COURT PARALLEL LITIGATION

Holly S. Burgess, Esq.2	January 13, 2011 - October 3, 2011
Filed Original Complaint	January 13, 2011
Filed Motion for TRO (TRO Issued)	February 7, 2011
Filed Motion for Preliminary Injunction (Preliminary Injunction Granted)	February 24, 2011
Opposed Motion to Dismiss Original Complaint	March 17, 2011
Filed Motion to Compel Chapter7 Trustee to Abandon Claims against DBNTC	May 10, 2011

Filed First Amended Complaint	June 17, 2011
Opposed Motion to Dismiss First Amended Complaint	September 2, 2011
Opposed Motion to Vacate Preliminary Injunction (Preliminary Injunction dissolved due to Macklin's failure to comply with conditions of injunction)	September 1, 2011
Allan R. Frumkin, Esq.	October 3, 2011 - April 23, 2012
Filed Motion For Re-Argument of Motion to Dismiss First Amended Complaint	October 17, 2011
Prepared Draft Second Amended Complaint	October 17, 2011 (Dckt. 201)
Filed Status Conference Statement	October 24, 2011
Filed Notice of Macklin Discharging Allan R. Frumkin as Attorney	February 21, 2012
Filed Ex Parte Motion to Withdraw as Counsel to Leave Macklin In Propia Persona (Motion denied without prejudice)	March 2, 2012
Filed Noticed Motion For Substitution of Attorney (With Holly S. Burgess, Esq. to be substituted to replace Mr. Frumkin)	March 29, 2012
Holly S. Burgess, Esq.	April 23, 2012 - October 2, 2012
Filed Status Conference Statement	May 16, 2012
Represented Macklin For Court Setting Discovery Scheduling Order, Dispositive Motion Deadline, and Pre-Trial Conference.	June 4, 2012

Opposed DBNTC Motion to Have Reference Withdrawn (Motion denied by District Court)	June 2012
Filed Pleadings Regarding Discovery Disputes	July 30, 2012
Filed Ex Parte Substitution of Attorney (Daniel Hanecak, Esq. to be counsel for Macklin)	August 23, 2012
Filed Noticed Motion to Withdraw as Counsel for Macklin	September 13, 2012
Daniel J. Hanecak, Esq.	October 2, 2012 - February 23, 2015
Filed Motion to Amend Complaint (Motion Denied After Noticed Hearing)	October 4, 2012
Filed Motion For Summary Judgment	February 21, 2013
Opposed DBNTC Request for Summary Judgment	March 14, 2013
Filed Motion to Withdraw as Attorney (Motion Denied)	June 6, 2013
Charles T. Marshall, Esq.	January 22, 2015 - Current
Motion to Reopen Adversary Proceeding	January 22, 2015
Motion For Relief Pursuant to Rule 60(b)	January 22, 2015

REVIEW OF MOTION FOR RELIEF UNDER RULE 60

A. There was no mortgage or deed of trust encumbering the Property at the time thebankruptcy case was filed by Macklin.

B. Under the terms of the Truth in Lending Act ("TILA"), an unidentified "lender" failed to return Macklin's money or file a declaratory action defending the rescission of the loan transaction.

C. The loan transaction was nullified and the debt became void as of the March 3, 2009rescission.

D. Macklin is entitled to recovery of all payment made to the (unidentified) "original lender."

E. Because Macklin assets that the loan transaction was rescinded, DBNTC does not have standing to assert any rights with respect to the note or the asserted rescission of the loan transaction.

F. All orders, judgments and decisions issued by the court are void by operation of law based upon the 2015 Supreme Court decision in Jesinoski.

G. Macklin asserts he is entitled to relief pursuant to Rule 60(b)(1), (4), (5) and (6), and (d).

H. Since DBNTC could not have had any interest in note because Macklin asserts that it was rescinded, DBNTC is not prejudiced by vacating all orders, judgments, and decisions of the court in this Adversary Proceeding.

I. Macklin is prejudiced, as he lost possession of his home.

J. Macklin executed a note and two deeds of trust with Accredited Home Loans, Inc. ("AHL") totaling $632,000.00.

K. Macklin was not provided with the required disclosures at the time of the transaction with AHL and unidentified persons used false information to qualify Macklin for the $632,000.00 loan.

L. On May 3, 2009, Macklin perfected a rescission of the AHL loan transaction under TILA1635(a). An unidentified "lender" received a rescission notice from Macklin and failed to respond with the 21-day period.

M. On March 3, 2009, counsel for the unidentified lender provided an untimely response disputing the notice of rescission.

N. On November 30, 2009, AHL executed what Macklin asserts was a false or forged assignment of the deed of trust to a trust, for which DBNTC is the trustee.

O. As of the November 30, 2009, assignment AHL had no rights or interest to assign in the note and deed of trust because of the rescission by Macklin.

P. On February 16, 2012, the court dismissed all causes

of action in Macklin's First Amended Complaint except that the Ninth Cause of Action for Wrongful Foreclosure, and the Tenth Cause of Action for Quiet Title. The dismissal included the cause of action under TILA.

Q. On October 4, 2012, Macklin sought to amend his complaint to assert TILA claim forrescission. The court denied the amendment based on Ninth Circuit controlling law that Macklin failed to file an action within one-year of the rejection of the notice of rescission.

R. The court granted DBNTC summary judgment on July 2, 2013, on the causes of action for wrongful foreclosure and to quiet title.

S. In Merritt v. Countrywide, the Ninth Circuit determined that pleading a claim for rescissionpursuant to TILA does not require that Macklin plead that tender has been made or is possible by the party seeking to rescind.

T. In Jesinoski, the Supreme Court held that rescission under TILA requires only that the notice be given, altering the common law requirements for rescission.

U. The decisions of the trial court, while consistent with controlling Ninth Circuit law in 2011 and 2012, are not consistent with the subsequent ruling of the Supreme Court in Jesinoskiin 2015 and the Ninth Circuit in Merritt in 2014.

V. The 2015 and 2014 decisions render DBNTC to not have had standing in the 2011 and 2012 litigation by which it asserted to have an interest in the note and deed of trust or to challenge Macklin's assertion that the loan transaction had been rescinded.

REVIEW OF PRIOR ORDERS

A. An order compelling "Defendants" to transfer or release legal title and any encumbrance to, and possession of, the Property.

B. For a declaration and determination that Macklin is the rightful holder of title to the Property, and "Defendants" have no interest in the Property.

C. For a judgment forever enjoining "Defendants" from claiming any interest in the Property.

D. For a declaration that the foreclosure which was instituted be deemed illegal and void, and further foreclosure proceedings be declared void.

Here, however, Macklin admits that DBNTC was not the

creditor in the original transaction that allegedly triggered the statutory disclosure requirements. According to Macklin's FAC, the creditor was either Accredited Home Lenders, Inc. or Centennial Bank of Colorado. Therefore, the court finds that Macklin has not stated a claim against DBNTC, who was not an original party to the original underlying loan transaction.

In Macklin's letter to the loan servicer, however, he demanded to be repaid all of his payments on the loan ($125,713.46), have the promissory note returned by him, and retain the Property free and clear of any liens. This not a rescission, but a demand by Macklin to be paid money, have his note returned to him, and be given property free and clear of the deed of trust.

Section 1641(g) applies to "a mortgage loan ... sold or otherwise transferred or assigned to a third party." Section 1641 (g) was added by an Act of Congress dated May 20, 2009, and therefore may not apply to the mortgage loan transaction at issue here - the transfer of the promissory note into the Trust, not the assignment of the deed of trust or the substitution of trustee.

Though this Notice of Rescission is undated, it had to predate the March 31, 2009 response and demonstrates that as early as March 2009 Macklin was aware of potential TILA and other claims arising out of the loan. Therefore, the motion to dismiss the TILA claim (First Cause of Action) as untimely due to the Statute of Limitations is also granted, without leave to amend.

An action alleging violation of 12 U. S. C. § 2605 must be brought within three years of such violation, and an action alleging violation of 12 U.S.C. § 2607 must be brought within one year of such a violation. The loan transaction at issue here closed in April 2006. Macklin did not file this action until January

13, 2011, almost five years later. Accordingly, the court finds that the cause of action under RESPA is time-barred.

"Section 2605 of RESPA requires a loan servicer to provide disclosure relating to the assignment, sale, or transfer of loan servicing to a potential or actual borrower: (1) at the time of the loan application, and (2) at the time of transfer." Likewise, "[t]he loan servicer also has a duty to respond to a borrowers's inquiry or 'qualified written request.,"⁶⁷Defendant DBNTC alleges without dispute that it is not a loan servicer. Macklin does not allege that DBNTC is a "servicer," instead he makes general, nonspecific allegations that "Defendant and/or its agents" were a servicer. The [First Amended Complaint] goes further to allege that Qualified Written Responses and inquiries were made of others, and attempts to bring in the current Defendant, DBNTC, based upon Macklin's interaction with others or predecessor owners of the Note. Accordingly, Macklin fails to state a claim upon which relief can be granted.

While not clear from the FAC, the court understands the argument to be that servicer was obligated on a contract, to which Macklin is not a party, that if Macklin (or obligors on other notes) defaulted in his payments, the servicer would advance monies to the then current note holders while the default under the note was enforced . . . Thus Macklin argues that even though he has defaulted on his obligation and there have been defaults, the "servicer" making advances on an unrelated contract constitutes a payment for the benefit of Macklin and reduces his obligation on the Note. Though argued, Macklin does not allege the legal or contractual basis for his being the beneficiary of any third-party contract.

What Macklin also fails to allege is that DBNTC knew or had reasonable cause to believe that Macklin's defaults under the Note were false. Just as Macklin alleges, the payments were in default. Merely because there is a disagreement as to an amount due, that does not automatically create a FCRA violation. The FCRA establishes a clear process by which disputes

concerning furnished information are addressed. There is no indication that the process has been employed with respect to this matter.

Macklin admits that he first received a notice of default in December 2008, and did not commence the instant adversary proceeding until January 13, 2011, a month after the statute of limitations expired. No sufficient basis for tolling the statue of limitations as to a claim arising under the FCRA has been alleged or argued. Merely because Macklin chose to ignore information furnished by DBNTC to a consumer reporting agency until he decided to file a lawsuit alleging various claims is not sufficient.

With respect to the alleged misrepresentations, Macklin does not allege that he did not receive what was represented to him at the time of the loan transaction. He sought, and obtained, monies on the terms he negotiated. All of the alleged misrepresentations occurred after he obtained the monies and given the note and deed of trust.

There are no allegations of any reasonable reliance on the alleged misrepresentations to Macklin's detriment.

At least two of the necessary elements of fraud are missing — justifiable reliance on the alleged misrepresentation and damages arising from reliance on the alleged misrepresentation.

What Macklin does not allege or explain is what 'fees' are charged as a loan transaction which are applied to pay the loan (principal and interest). By their very nature, fees are owed in addition to the principal and interest.

Although Macklin alleges that he received less than what he paid for because defendant extracted fees, he does not assert that he suffered an actual injury.

Here, there is a valid loan agreement (express contract) between Macklin and Defendant.⁸⁵

The RICO claim does not attribute specific conduct to individual defendants. The claim also does not specify either the time or the place of the alleged wrongful conduct, except to state that "[a]t all relevant times, Defendants have engaged in a conspiracy, common enterprise, and common course of conduct, the purpose of which is to engage in the violations of law alleged in the complaint." This is insufficient.

In this case, the seventh claim for relief is dismissed because it does not state a claim under any of the three prongs of the UCL. As to the "unlawful" prong, the Complaint does not allege the violation of any other law that would serve as an underlying violation for the UCL. As to the "unfair" prong, the Complaint does not allege any legislatively-declared policy to which allegedly wrongful conduct may be tethered.

The Notice of Default [attached as Exhibit 2 First Amended Complaint, Dckt. 129], however, clearly states that Macklin could bring his account into good standing by paying the past-due amounts no later than five days before the foreclosure sale. The Deed of

Trust contained an acceleration clause, and the Notice of Default was therefore allowed to contain a notice of acceleration.

Because the text of the Notice of Default contradicts Macklin's claim that Defendant did not to inform him of the possibility of acceleration and his right to cure, the Motion is granted and the Eighth Cause of Action is dismissed, without leave to amend.

At this juncture the court notes that many of the

"undisputed facts" asserted by Plaintiff [Macklin] are actually his own personal conclusions of law based upon his review of the undisputed evidence presented by the Parties. Plaintiff's reading of the Assignment of the Deed of Trust and Substitution of Trustee, results in his legal determination that Defendant [DBNTC] had no interest in the Note. Plaintiff shows no basis for having any personal knowledge of what Defendant did or did not do with respect to the Note, Allonge, Assignment of Deed of Trust, and Substitution of Trustee, but only draws conclusions in his declaration from the undisputed documents.

The court has before it requests for summary judgment asserted by both the Plaintiff and Defendant. Neither provides conflicting evidence with respect to a material fact. Rather, both sides argue what conclusions of law should be made from this undisputed universe of evidence presented to the court.

Therefore, the court concludes that [Cal. Civ.] § 2932.5 only applies to mortgages and not to deeds of trust.

However, the undisputed evidence presented to the court is that Defendant holds the Note, with the Allonge transferring the Note to the Defendant. Defendant recorded the Assignment of Deed of Trust and Substitution of Trustee in advance of the substitute trustee conducting the non-judicial foreclosure sale. No evidence has been presented that the Defendant did not have the Note or the right to enforce the Note when the substitute trustee conducted the non-judicial foreclosure sale.

The Plaintiff has come before this court seeking a determination that the Trustee's Deed held by Defendant is invalid. In attacking that deed, the Plaintiff bears the burden of proof that such deed is ineffective or may be avoided. The Trustee's Deed contains the recitals that the requirements of law for mailing, posting, and publication of the notice of sale have been complied with for the December 14, 2009 non-judicial foreclosure sale. Trustee's Deed, Pl.

Ex. D, Dckt. 129 at 15. This constitutes prima facie evidence that all such notices were given in compliance with the statute. Cal. Civ. Code § 2924(c).

The undisputed evidence presented to the court is that Defendant holds the Note, with the Allonge transferring the Note to Defendant.

At best, after two years of discovery Plaintiff presents this court with only his speculation and argument that the transfer must be defective.

Based on the uncontroverted evidence presented, the Plaintiff has not provided the court with any basis for concluding that the Note was not transferred to Defendant, that Defendant did not have the right to substitute the trustee, or that Defendant did not have the right to enforce the deed of trust at the time of the December 2009 non-judicial foreclosure sale.

The absence of any discovery obtained during the two years of this litigation by Plaintiff on the point is deafening in its absence. The Plaintiff offers no evidence to counter the Trustee's Deed. There is no evidence of any material dispute to Defendant asserting ownership of the Property pursuant to the Trustee's Deed.

The court having determined that § 2932.5 does not apply to deeds of trust and that there is no evidence contrary to Defendant having been transferred the Note and being entitled to enforce the Deed of Trust, no basis exists to quiet title to the Property in favor of the Plaintiff exists.

Plaintiff was afforded an opportunity and has opposed Defendant's request for entry of summary judgment based on Plaintiff's Motion. Plaintiff has not provided the court with any evidence disputing the ownership of the Note and right to enforce the Deed of

Trust as of the 2009 substitution of trustee and foreclosure.

The Plaintiff put his best evidence forward, which are copies of the Substitution of Trustee, Assignment of Deed of Trust, the two undated allonges, and the Trustee's Deed. Defendant adds the Note and Deed of Trust, Allonge, additional substitutions of attorneys by prior holders of the Note, the Notice of Default, and the Notice of Sale. It is from this undisputed universe of documents that the Parties assert their competing interests.

Based on the uncontroverted evidence presented to the court, the court finds that Defendant has title to the Property pursuant to the Trustee's Deed.

A. "First and foremost, the Plaintiff brings this Motion for Leave to Amend on the close of discovery in the Adversary Proceeding." The court concluded that after more than two years and discovery closing, Macklin had ample opportunity to amend his complaint and raise additional claims. The court determined that granting such leave at the close of discovery, and in light of the prosecution of the Adversary Proceeding by the various attorneys of Macklin's choosing, allowing such further amendment "[i]s prejudicial to the Defendant and frustrating to the court." Addendum A, p. 5 at A.

B. Allan Frumkin, counsel for Macklin, represented to the court in October 2011 that the First Amended needed to be amended to address the deficiencies which resulted in the court having dismissed Causes of Action 1 through 8. Mr. Frumkin testified that he had advised Macklin of such necessary amendments at that time. Addendum A, p. 5 at B.

C. Though Macklin and his counsel knew they need to amend the complaint and Macklin was aware of such possible amendments and claims as early as October 2011, when represented by Alan R. Frumkin, Macklin and Mr. Frumkin did not seek leave to amend the First Amended Complaint. Addendum A, p. 6 at C.

D. At the September 27, 2012 hearing on the Motion to Substitute Daniel Hanecak, Esq. as new counsel in the place of Holly Burgess, Esq. (Macklin terminating her a second time in this Adversary Proceeding), Mr. Hanecak assured the court he was aware of the discovery and pre-trial conference deadlines in this Adversary Proceeding. Addendum A, pg. 6 at D.

E. After 22 months of prosecution of the Adversary Proceeding and the close of discovery, the attempted amendment occurred too late. Macklin's counsel clearly was aware of (and so testified previously) that possible amendments were desired by Macklin. Macklin and his attorneys did not timely seek leave to amend the First Amended Complaint. Addendum A, p. 6 at E.

F. In denying the Motion, the court concluded,

To allow for Mr. Macklin and his latest counsel to reset all of the litigation at the close of discovery for claims which Mr. Macklin and Mr. Frumkin testified that they were well aware of more than

20 months earlier is an abuse of the judicial process. As is clear from this courts decision on the motion to dismiss the FAC, leave was not given to file a second amended complaint due to the abusive and unclear pleading practices of Mr. Macklin and his counsel. The requirement for filing a motion for leave to amended, with a copy of any proposed second amended complaint, afforded the court with a minimally intrusive opportunity to insure that the pleading practices and deficiencies from the original Complaint and [First Amended Complaint] would not be repeated wasting judicial resources and putting the Defendant to unreasonable and repeated duplicate pleadings. Mr. Macklin and his counsel chose not to take up the court on the opportunity to timely and reasonably seek leave to file a second amended complaint.

Addendum A, p. 6 at F.

G. Macklin failed to show any basis for a failure to verify income as the basis of a TILAviolation. Addendum A, p. 7 at G.

H. Macklin failed to show or plead any basis for an assignee of a note assuming personal liability for TILA violations of the lender. Addendum A, p. 7 at H.

I. The court applied then controlling Ninth Circuit law

in determining whether a claim for rescission was stated, concluding it was not. Addendum A, p. 8 at I.⁸

J. The court also still concluded that what Macklin pleads as a Notice of Rescission was not a notice of rescission. Addendum A, p. 8 at J.⁹

K. Macklin did not plead a claim for a "table-funded loan" and any basis of liability for DBNTC for such a loan. Addendum A, p. 8 at K.

L. Macklin did not plead an unfair business practices claim under California Business and Professionals Code §§ 17200 et seq. Additionally, Macklin failed to plead a basis for DBNTC being liable for the acts of others asserted to be such violations. Addendum A, p. 9 at L.

M. Macklin failed to plead a claim for failure to form a contract, by which the loan money could only be funded from a bank account of AHL. Addendum A, p. 9 at M.

N. Macklin failed to plead grounds by which Mortgage Electronic Registration Systems, Inc. could not serve as a nominee of the lender. Additionally, why the current holder of the note could not enforce the note and deed of trust. Addendum A, p. 10 at N.

O. Macklin failed to plead grounds for which the holder of the note obtaining insurance in the event the borrower defaults absolves Macklin of paying the obligation on the note. Plaintiff failed to plead grounds for how DBNTC, as the asserted holder of the note, was liable for the alleged misconduct of others. Addendum A, p. 11 at O.

P. Macklin failed to address several other legal issues which were identified by the court if Macklin sought leave to amend after the order dismissing the Causes of Action 1 through 8 of the First Amended Complaint. Addendum A, pp. 11-12 at P.

SUBJECT MATTER JURISDICTION EXISTS FOR THIS ADVERSARY PROCEEDING

The [federal] judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;--to all Cases affecting Ambassadors, other public Ministers and Consuls;--to all Cases of admiralty and maritime Jurisdiction;--to Controversies to which the United States shall be a Party;--to Controversies between two or more States;--between a State and Citizens of another State;--between Citizens of different States,--between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

§ 1331. Federal question

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

DBNTC HAS STANDING TO ASSERT AND DEFEND ITS RIGHTS, AND LITIGATE TO JUDGMENT THE ACTION COMMENCED BY MACKLIN

Article III of the Constitution confines federal courts to decisions of "Cases" or "Controversies." Standing to sue or defend is an aspect of the case-or-controversy requirement. (Citations omitted.) To qualify as a party with standing to litigate, a person must show, first and foremost, "an invasion of a legally protected interest" that is "concrete and particularized" and "actual or imminent.' (Citations omitted.)...Standing to defend on appeal in the place of an original defendant, no less than standing to sue, demands that the litigant possess 'a direct state in the outcome.' (Citations omitted.)

FEDERAL RULE OF CIVIL PROCEDURE 60(b) RELIEF

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

We note, however, that these concerns are not intended to allow challenges to the correctness of the judgment itself. See Inryco, Inc. v. Metropolitan Engineering Co. Inc., 708 F.2d 1225, 1230 (7th Cir.), cert. denied, 464 U.S. 937, 104 S. Ct. 347, 78 L. Ed. 2d 313 (1983). A Rule 60(b) motion to vacate should not be treated as a substitute for an appeal.De Filippis v. United States, 567 F.2d 341, 342 (7th Cir. 1977).

THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT DO NOT WARRANT VACATING THE JUDGMENT AND ORDERS IN THIS ADVERSARY PROCEEDING PURSUANT TO RULE 60(b)(6)

Second, our cases have required a movant seeking relief under Rule 60(b)(6) to show "extraordinary circumstances" justifying the reopening of a final judgment. Ackermann v.United States, 340 U.S. 193, 199, 95 L. Ed. 207, 71 S. Ct. 209 (1950); accord, id., at 202,95 L. Ed. 207, 71 S. Ct. 209; Liljeberg, 486 U.S., at 864, 100 L. Ed. 2d 855, 108 S. Ct. 2194; id., at 873, 100 L. Ed. 2d 855, 108 S. Ct. 2194 (Rehnquist, C. J., dissenting) ("This very strict interpretation of Rule 60(b) is essential if the finality of judgments is to be preserved").
...
Petitioner's only ground for reopening the judgment denying his first federal habeas petition is that our decision in Artuz showed the error of the District

Court's statute-of-limitations ruling. We assume for present purposes that the District Court's ruling was incorrect. As we noted above, however, relief under Rule 60(b)(6)--the only subsection petitioner invokes--requires a showing of "extraordinary circumstances." Petitioner contends that Artuz's change in the interpretation of the AEDPA statute of limitations meets this description. We do not agree. The District Court's interpretation was by all appearances correct under the Eleventh Circuit's then-prevailing interpretation of 28 U.S.C. § 2244 (d)(2). It is hardly extraordinary that subsequently, after petitioner's case was no longer pending, this Court arrived at a different interpretation.
...
The change in the law worked by Artuz is all the less extraordinary in petitioner's case, because of his lack of diligence in pursuing review of the statute-of-limitations issue. At the time Artuz was decided, petitioner had abandoned any attempt to seek review of the District Court's decision on this statute-of-limitations issue.
...
This lack of diligence confirms that Artuz is not an extraordinary circumstance justifying relief from the judgment in petitioner's case. Indeed, in one of the cases in which we explained Rule 60(b)(6)'s extraordinary-circumstances requirement, the movant had failed to appeal an adverse ruling by the District Court, whereas another party to the same judgment had appealed and won reversal. Ackermann, 340 U.S., at 195, 95 L. Ed. 207, 71 S. Ct. 209. Some years later, the petitioner sought Rule 60(b) relief, which the District Court denied. We affirmed the denial of Rule 60(b) relief, noting that the movant's decision not to appeal had been free and voluntary, although the favorable ruling in the companion case made it appear mistaken in hindsight. See id., at 198, 95 L. Ed. 207, 71 S. Ct. 209.

A. Did the change in law overrule what was otherwise settled legal precedent and was the trial court ruling correct under the prior law? Gonzales, 545 U.S. at 536. "It is hardly extraordinary that subsequently, after petitioner's case was no longer pending, this Court arrived at a different interpretation [of the law]." Id.

B. Had the party seeking the Rule 60(b)(6) been diligent in pursuing review of the issue for which the relief is now sought? Id. The lack of diligent pursuing an appeal "[c]onfirms that [a subsequent change in the law by the Supreme Court] is not an extraordinary circumstance justifying relief from the judgment . . . ." Id.¹³

C. Would reconsidering the final judgment undo the past, executed effects of the judgment.Ritter v. Smith, 811 F.2d at 1402.

D. The delay between the finality of the judgment and the Rule 60(b)(6) motion. Id. at 1403.

E. The close relationship between the original judgment and the subsequent decision changing the law. Id. at 1402.¹⁴

F. When considering a petition for habeas corpus, there is a serious issue of comity between the state and federal judiciaries. Id. at 1404.

In this case, the lack of clarity in the law at the time of the district court's original decision, the diligence Phelps has exhibited in seeking review of his original claim, the lack of reliance by either party on the finality of the original judgment, the short amount of time between the original judgment becoming final and the initial motion to reconsider, the close relationship between the underlying decision and the now controlling precedent that resolved the preexisting conflict in the law, and the fact that Phelps does not challenge a judgment on the merits of his habeas petition but rather a judgment that has prevented review of those merits all weigh strongly in favor of granting Rule 60(b)(6) relief.

The language leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. It follows that, so long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.

For all these reasons, we hold that plaintiffs can state a claim for rescission under TILAwithout pleading that they have tendered, or that they have the ability to tender, the value of their loan. Only at the summary judgment stage may a court order the statutory sequence altered and require tender before rescission -- and then only on a "case-by-case basis,"Yamamoto, 329 F.3d at 1173, once the creditor has established a potentially viable defense.

THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT ARE NOT A BASIS FOR RELIEF PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 60(b)(4)

Mere error in the entry of a judgment does not render a judgment void for purposes of Rule 60(b)(4). Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 374-78, 60 S. Ct. 317, 318-20, 84 L. Ed. 329 (1940). But where an error of constitutional dimension occurs, a judgment may be vacated as void. One such constitutional error for concluding that a judgment is void for purposes of Rule 60(b)(4) is if the judgment was entered in violation of due process.

As is discussed below, in greater detail, entry of the settlement decree without notice to putative class members violated the due process rights of the class members. Entry of the settlement decree, while not binding on absent individuals, nonetheless did prejudice the rights of these individuals. Therefore, as a matter of due process, notice was required to protect their rights. Because this notice never was delivered the judgment must be vacated as void. Sertic v. Cuyahoga Lake, etc., Carpenters District Council, 459 F.2d 579, 581 (6th Cir. 1972); Sagers v. Yellow

Freight System, Inc., 68 F.R.D. 686 (N.D. Ga.1975).

THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT ARE NOT A BASIS FOR GRANTING RELIEF PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 60(b)(5) RELIEF PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 60(b)(1) IS NOT PROPER, MACKLIN FAILING TO SEEK RELIEF WITHIN ONE YEAR OF THE JUDGMENT THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT DO NOT WARRANT VACATING THE JUDGMENT AND ORDERS IN THIS ADVERSARY PROCEEDING PURSUANT TO RULE 60(d) CONCLUSION UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF CALIFORNIA CIVIL MINUTES Instructions to Clerk of Court Service List - Not Part of Order/Judgment

This Adversary Proceeding has been pending for 21 months. While such a time period may not seem long when compared to California Superior Court cases or even cases pending in the District Court, this is a very old case for bankruptcy courts in this District. The Plaintiff-Debtor has changed counsel in this case multiple times, and for at lease one counsel firing her and then rehiring her when he became dissatisfied with her replacement counsel (Allan R. Frumkin) who apparently told a tale of the virtues of hiring him. That counsel sought to withdraw after losing one motion to file a second amended complaint in this Adversary Proceeding. In requesting to withdraw from representing the Plaintiff-Debtor, Allan R. Frumkin sought to leave the Plaintiff-Debtor unrepresented.
...
At the hearing, Daniel J. Hanecak, the proposed new counsel, confirmed that he has reviewed the file and has knowledge of the deadlines in this case. Further, he confirmed that he has spoken with the Plaintiff-Debtor and with full knowledge of the deadlines and scheduling in this case, is prepared to accept the responsibility of being counsel for the Plaintiff-Debtor. The court also reviewed with Mr. Hanecak the causes of action which remain in this case following the partial granting of the motion to dismiss filed by the Defendant. Order, Dckt. 222.

In Ms. Burgess' declaration in support of the present motion she professionally and tactfully states the basis for the Plaintiff-Debtors desire to once again change counsel. The court paraphrases these grounds as follows. The Plaintiff-Debtor does not believe that Ms. Burgess understands the causes of action he wants to present and does not arguments [sic] the way the Plaintiff-Debtor would if he were the attorney. Because of the differences as to how Ms. Burgess believes that the case should be presented and that of the Plaintiff-Debtor, there has been a strain created on the attorney-client relationship.

We cannot imagine a more sterling example of diligence than Phelps has exhibited. At every stage of this case over the past decade, Phelps has pressed all possible avenues of relief, has been remarkably undeterred by the repeated and often unjustified setbacks he has suffered, and has put forward cogent, compelling, and correct legal arguments, at times doing so without the benefit of professional legal advice. No one should have to work so hard to have the merits of his constitutional claims reviewed by a federal judge.

JAN KALICKI et al., Plaintiffs and Appellants,
v.
E*TRADE BANK, Defendant and Respondent.

D066236

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

September 28, 2015

FACTUAL AND PROCEDURAL BACKGROUND DISCUSSION I. Standard of Review II. Analysis DISPOSITION

JAMES OBER, Appellant,
v.
TOWN OF LAUDERDALE-BY-THE-SEA,
a Florida Municipality, Appellee.

No. 4D14-4597

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

August 24, 2016

Background Analysis

[T]he recording of . . . lis pendens . . . constitutes a bar to the enforcement against the property described in the notice of all interests and liens . . . unrecorded at the time of recording the notice unless the holder of any such unrecorded interest or lien intervenes in such proceedings within 30 days after the recording of the notice. If the holder of any such unrecorded interest or lien does not intervene in the proceedings and if such proceedings are prosecuted to a judicial sale of the property described in the notice, the property shall be forever discharged from all such unrecorded interests and liens. . . .

Conclusion * * *

2016 VT 93

Cenlar FSB
v. 
Joseph L. Malenfant, Jr. and Laurie G. Malenfant

No. 2014-441

Supreme Court of Vermont

May Term, 2015
August 19, 2016

A status conference was held in this case [on October 29, 2010]. Both parties were permitted to call in rather than appearing in person. Defendants Malenfant called; Plaintiff did not. This case has been pending since 2008 and despite repeated conferences [in] which it was reported that modification or forbearance agreements were being discussed, nothing has been resolved.

The court hereby dismisses the case with prejudice for Plaintiff's failure to prosecute by failing to appear at the scheduled conference today.

I. Impact of the Dismissal of the First Action on the Court's Prior Foreclosure Judgment II. Effect of Dismissal of the First Action "With Prejudice"

The promissory note between [the parties] required 240 equal monthly payments of principal and interest. However, the note's acceleration clause provided that "[i]f any default be made in any payment under this Note, and if such default is not made good within thirty (30) days after written notice of same, the entire unpaid principal and accrued interest shall become immediately due and payable without further demand." [The lender's] first cause of action alleged that [borrower] "defaulted on its obligations to the [lender] under the Note" and demanded payment of the entire unpaid principal balance. This suit was an action for the accelerated debt. Once [borrower] triggered the acceleration clause of the note and the entire debt became due, the contract became indivisible. The obligations to pay each installment merged into one obligation to pay the entire balance on the note. The court's dismissal with prejudice of the first action operated as an adjudication on the merits. That judgment bars the complaint in this action which alleges precisely what the complaint in the first action alleged: that [the borrower] defaulted on the note and that [the lender] is entitled to a judgment for the amount due under the note.

"[I]f the plaintiff in a foreclosure action goes to trial and loses on the merits, we do not believe such plaintiff would be barred from filing a subsequent foreclosure action based upon a subsequent default. The adjudication merely bars a second action relitigating the same alleged default. A dismissal with prejudice of the foreclosure action is tantamount to a judgment against the mortgagee. That judgment means that the mortgagee is not entitled to foreclose the mortgage. Such a ruling moots any prayer for a deficiency, since a necessary predicate for a deficiency is an adjudication of foreclosure."

While it is true that a foreclosure action and an acceleration of the balance due based upon the same default may bar a subsequent action on that default, an acceleration and foreclosure predicated upon subsequent and different defaults present a separate and distinct issue. . . . For example, a mortgagor may prevail in a foreclosure action by demonstrating that she was not in default on the payments alleged to be in default, or that the mortgagee had waived reliance on the defaults. In those instances, the mortgagor and mortgagee are simply placed back in the same contractual

relationship with the same continuing obligations. Hence, an adjudication denying acceleration and foreclosure under those circumstances should not bar a subsequent action a year later if the mortgagor ignores her obligations on the mortgage and a valid default can be proven.

This seeming variance from the traditional law of res judicata rests upon a recognition of the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship. For example, we can envision many instances in which the application of the [contrary view] would result in unjust enrichment or other inequitable results. If res judicata prevented a mortgagee from acting on a subsequent default even after an earlier claimed default could not be established, the mortgagor would have no incentive to make future timely payments on the note. The adjudication of the earlier default would essentially insulate [the mortgagor] from future foreclosure actions on the note—merely because [the mortgagor] prevailed in the first action. Clearly, justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because [the mortgagee] failed to prove the earlier alleged default.

III. Impact on Trial Court's Dismissal of the Second Foreclosure Action IV. Impact of Trial Court's Dismissal of the Second Foreclosure Action

The practical downside is that this approach deprives the lender of any repayment of principal or interest on a significant loan, while yielding the borrowers a free, or deeply discounted, house. By insulating the borrowers from any legally enforceable obligation to make future payments to lender, this approach imposes on lender a cost for its procedural default that may be wholly disproportionate to the lender's infraction. In fact, the consequences of such a rule might be to discourage lenders from engaging in the kind of forbearance and negotiation that preceded the trial court's dismissal of the first foreclosure action in this case.

Eight years after the start of America's housing crisis, state courts are increasingly confronting an unanticipated consequence; what happens when a bank brings a foreclosure suit and loses? Well-established legal principles seem to provide a clear answer: the homeowner keeps her house, and res judicata bars any future suit to foreclose on the home. Yet state courts around the country resist this outcome.

. . . .

When addressing faulty foreclosures, courts are afraid to bar future attempts to foreclose—that is, afraid of giving borrowers "free houses." While courts rarely explain the reasoning behind this aversion, it seems to arise from a reflexive belief that such an outcome would be unjust. Courts are therefore quick to sidestep well-established principles of res judicata in favor of ad hoc measures meant to protect banks against the specter of "free houses."

This Comment argues that this approach is misguided; courts should issue final judgments in favor of homeowners in cases where banks fail to prove the elements required for foreclosure. Furthermore, these judgments should have res judicata effect—thus giving homeowners "free houses." This approach has several benefits: it is consistent with longstanding res judicata principles in other forms of civil litigation; it provides a necessary market-correcting incentive to promote greater responsibility among foreclosure litigators, and it alleviates the tremendous costs of successive foreclosure proceedings.

[Lender's] first cause of action alleged that [borrower] "defaulted on its obligations to the Plaintiff under the Note" and demanded payment of the entire unpaid principal balance. This suit was an action for the accelerated debt. Once [lender] triggered the acceleration clause of the note and the entire debt became due, the contract became indivisible. The obligations to pay each installment merged into one obligation to pay the entire balance on the note. The court's dismissal with prejudice of the first action operated "as an adjudication on the merits." That judgment bars the complaint in this action which alleges precisely what the complaint in the first action alleged: that borrower defaulted on the

note and that lender is entitled to a judgment for the amount due under the note.

This seeming variance from the traditional law of res judicata rests upon a recognition of the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship. For example, we can envision many instances in which the application of the Stadler decision would result in unjust enrichment or other inequitable results. If res judicata prevented a mortgagee from acting on a subsequent default even after an earlier claimed default could not be established, the mortgagor would have no incentive to make future timely payments on the note. The adjudication of the earlier default would essentially insulate her from future foreclosure actions on the note—merely because she prevailed in the first action. Clearly, justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because he failed to prove the earlier alleged default.

BARBARA MURPHY BROWN, Appellant,
v. 
THOMAS P. GORMAN, Chapter 13 Trustee, Appellee.

1:15-CV-01265 (LMB/MSN)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

July 7, 2016

I. BACKGROUND II. DISCUSSION III. CONCLUSION

Miami trial court slams HSBC for a fabricated assignment and endorsement, holds a typical mortgage note to be non-negotiable, and dismisses foreclosure for alleged lender's unclean hands.  See judge Butchko's opinion dated May 4, 2016 here.

U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE
PASS-THROUGH CERTIFICATES SERIES 2007-HY6 TRUST, Plaintiff and Respondent,
v.
STEPHANIE NAIFEH, ET AL., Defendants and Appellants.

A142994

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE

July 19, 2016

I. FACTS AND PROCEDURAL HISTORY II. DISCUSSION III. DISPOSITION

WELLS FARGO BANK, N.A., as TRUSTEE OF WAMU MORTGAGE
PASS-THOUGH CERTIFICATES SERVICES 2005-PR4, Appellant,
v. 
HILARY A. WILLIAMSON a/k/a HILLARY A. WILLIAMSON a/k/a
H. WILLIAMSON, et al., Appellee.

No. 4D15-286

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

July 13, 2016

Each of the undersigned specifically represents to lender and to lender's actual or potential agents, brokers, processors, attorneys, insurers, servicers, successors and, assigns and agrees and acknowledges that the information provided in this application is true and correct as of the date set forth opposite my signature. . . .

(1) the borrower did not take part in the original lender's falsification of the loan application;

(2) the original lender overstated the borrower's level of education, included a $200,000 gift and the ownership of real estate that did not exist, and inflated her income to $99,600 on the loan application;

(3) the bank "either knew of this conduct and therefore acquiesced to it, or failed to conduct due diligence which is in and of itself similar conduct."

Of course, the [borrowers] want damages caused by the lender's treachery. The [borrowers] were obviously in a position to know their own income. Signing off on their own fraudulent loan application precludes them from raising this fraud as an affirmative defense.

* * *

There has been an explosion in the Florida District Courts of Appeal (DCAs) of foreclosure reversals. Starting in the later half of 2015, there have been around 5-10 opinions per month reversing the lower court's foreclosure judgments rendered in favor of the bank.  The Appellate Justices have finally noticed that numerous banks file foreclosure actions in the trial court without having any relation to the underlying loan or the property.  And people wondered about the multi-year backlog of foreclosures in the Florida Courts and the necessity to recall retired judges to help out...  The problem would have been far less significant if the decisions listed below had started to come out in 2010 instead of 2016.  Apparently, there is truth in the allegation that courts are sometimes just slow rather than corrupt.  Although, of course, one does not exclude the other... ;-)

Here is a sample (only back to February 2016) of the litany of recent foreclosure reversals for lack of the alleged creditor's sanding at the inception of each suit:

Where a homeowner raises non-frivolous claims regarding title, district court must dismiss the unlawful detainer action for lack of jurisdiction, so that the parties resolve their title dispute in the circuit court:

BRIAN D. PARRISH, ET AL.
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION

Record No. 150454

Supreme Court of Appeals of Virginia

June 16, 2016

I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW II. ANALYSIS III. CONCLUSION

Case law is unclear on the issue of whether the purchaser of property at a trustee's auction is vested with proper title during the period before the sale is later invalidated because it was not properly conducted. However, proper title is irrelevant to a claim of unlawful detainer because, lawful possession of property is the only issue to be determined in a claim for unlawful detainer.

We conclude that by virtue of the trustee's sale [the creditor] had a right to possess the property until the sale was invalidated on January 20, 1995. [Debtor] has not proven that [creditor] unlawfully held the property as against [debtor] because [creditor] rightfully possessed the property.

The trial of an action of trespass may turn upon the question of title, and if either of the parties puts his title in issue, and it is tried and passed upon, the verdict and judgment in that suit will be conclusive evidence in favor of (or against) such title, at least in a subsequent action of trespass.

No judgment in an action brought under the provisions of this article shall bar any action of trespass or ejectment between the same parties, nor shall any such judgment or verdict be conclusive, in any such future action, of the facts therein found.

The general rule concerning the position of a trustee under a deed of trust is that the trustee is a fiduciary for both debtor and creditor and must act impartially between them. Implicit in this rule is the proposition that a trustee must refrain from placing himself in a position where his personal interest conflicts with the interests of those for whom he acts as fiduciary.

Generally, a trustee cannot be both a seller and a buyer at his own auction sale, because the two roles are incompatible. When a trustee buys at his own sale, a constructive fraud exists; the

transaction is voidable; and when attacked, the sale must be set aside. In such a situation, the adequacy of consideration, fairness of the sale, and good motive of the trustee in purchasing are not controlling. A prime reason for making such a sale voidable is the necessity of upholding the fiduciary relationship between the trustee and those for whom he acts.

1st. The lowest and most imperfect degree of title consists in the mere naked possession or actual occupation of the estate, without any apparent right or any shadow or pretence of right to hold or continue such possession. And at all events without such actual possession no title can be completely good. 2d. The next step to a good and perfect title is the right of possession, which may reside in one man while the actual possession is not in himself, but in another. 3d. The mere right of property, the proprietatis, without either the possession, or the right of possession, the mere right is in him, the jus merum, and the estate of the owner is in such cases said to be totally divested, and put to a right. 4th. A complete title to lands, tenements, and hereditaments. For it is an ancient maxim of the law that no title is completely good unless the right of possession be joined with the right of property, which right is then denominated a double right, jus duplicatum, or droit droit. And when, to this double right the actual possession is also united, there is, according to the expression of Fleta, juris et seisinae conjunctio, there and then only is the title completely legal."

FALLON RAHIMA JALLALI, Appellant,
v. 
CHRISTIANA TRUST, a division of WILMINGTON SAVINGS FUND SOCIETY, FSB,
as Trustee for NORMANDY MORTGAGE LOAN TRUST,
SERIES 2013-15, Appellee.

No. 4D14-2369

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

June 8, 2016

"A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose." McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). The plaintiff must prove that it had standing to foreclose when the original complaint was filed. Id.

Virginia's First post-Jesinoski TILA rescission case settles on mutually amicable terms.  No further information is available, as the terms of the settlement are confidential.

OTTONIEL CRUZ and LUZ M. CRUZ, Appellants,
v. 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR IN INTEREST TO WASHINGTON MUTUAL BANK,
FORMERLY KNOWN AS WASHINGTON MUTUAL BANK, F.A., Appellee.

No. 4D14-3799

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

March 23, 2016

Such a plaintiff must prove not only physical possession of the original note but also, if the plaintiff is not the named payee, possession of the original note endorsed in favor of the plaintiff or in blank (which makes it bearer paper). If the foreclosure plaintiff is not the original, named payee, the plaintiff must establish that the note was endorsed (either in favor of the original plaintiff or in blank) before the filing of the complaint in order to prove standing as a holder.

* * *

On February 18, 2016, the Supreme Court of California held that an allegation of void assignment in the chain of title will support an action for wrongful foreclosure.  Straight from the horse's mouth:

"We conclude . . . that because in a nonjudicial foreclosure only the original beneficiary of a deed of trust or its assignee or agent may direct the trustee to sell the property, an allegation that the assignment was void, and not merely voidable at the behest of the parties to the assignment, will support an action for wrongful foreclosure."  

The law is similar in the majority of other states, including Virginia and Florida.  The full opinion is below, with notable portions highlighted in red.

TSVETANA YVANOVA, Plaintiff and Appellant,
v.
NEW CENTURY MORTGAGE CORPORATION et al., Defendants and Respondents.

S218973

SUPREME COURT OF CALIFORNIA

February 18, 2016

FACTUAL AND PROCEDURAL BACKGROUND DISCUSSION CONCLUSION DISPOSITION