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From a Syntactical Fog into an Impassible Swamp — Fed Up Mortgage Foreclosure Judges Find “No Life on MERS”

Nathaniel K. (Nathan) MacPherson and Donald W.(Mac) MacPherson

Conference on Consumer Finance Law Quarterly Report Vol. 65 No. 3 (January 2012): 339-348.

I. Introduction: “Show Me the Note!” Homeowners Win, Adversaries Sanctioned and Censured

“From a syntactical fog into an impassible swamp” — those are the words of Bankruptcy Judge Brandt in the 2009 case of In re Jacobson,[1] holding that the Mortgage Electronic Registration System (MERS) lacked standing to foreclose due to its lack of interest in the subject mortgage loan. As will be demonstrated in this article, and notwithstanding a previous article in this journal entitled MERS Case Law Overview,[2] not only are there legions of homeowners winning cases, the judges are often fed up with what they see time and again in the way of baseless lawsuits, and even attempted fraud, by the lenders or their agents, a.k.a. nominees, and their attorneys.

“Forewarned is forearmed.” By the cases discussed in this article, attorneys representing a mortgagee or the mortgagee’s servicer in the enforcement of home mortgage liens and notes, and their clients, are made aware of the serious sanctions and censures being imposed upon some claimants, and in some cases upon their attorneys and law firms as well.[3] For just two examples, as discussed infra at Parts V. and VIII., the Nevada Supreme Court affirmed en banc a $968,000 punitive damages award against Countrywide,[4] while a New Jersey bankruptcy court fined the mortgagee’s attorneys $125,000 and referred them for discipline to the chief judge.[5] Sanctions and censures have been meted out to other than just “foreclosure mill” attorneys.

By no means should this article be considered a rebuttal of MERS Case Law Overview.[6] First, the reported and unreported cases in this area of the law are “all over the board,” which is probably inevitable given the novelty of some issues and generally routine and unreported, and voluminous, nature of such litigation. Second, your authors give full recognition to the many winning cases of MERS members. And third, not all of the cases discussed here involve MERS members. But, as trial attorneys are want to argue before jurors: “No pancake is so thin that it does not have two sides.” Witness the flip side. If nothing more, the MERS bar and other mortgagee or servicer attorneys should consider the cases discussed here as a “warning shot across the bow” as to both potential problems to be faced, especially in bankruptcy court, and the potential for sanctions and censures against clients and their attorneys and law firms alike.

II. An Age of Androids — “Robo-signers,” “Robo-witnesses,” and “Robo-lawyers”

For a flavor of this issue as presented in the popular media, one need venture no farther than a recent 60 Minutes exposé regarding “Robo-signers”;[7] e.g., one interviewee admitted to being appointed as vice president of five different banks, and making as many as 4,000 signatures per day, at a pay rate of $8 per hour. But 60 Minutes presented merely the tip of the iceberg, with no mention of what your authors will refer to as “Robo-witnesses,” i.e., those bank employees appointed by MERS to give, under penalties of perjury, testimony in aid of, say, a motion to lift the automatic stay in bankruptcy, and “Robo-lawyers,” i.e., lawyers representing MERS and other mortgagees who submit to the court incorrect, even fraudulent, filings. Which brings us back to Jacobson, in which Judge Brandt chastised both the counsel for the mortgagee and the bankruptcy specialist declarant for Swiss bank UBS for the boilerplate, nonsensical declaration filed with the court:

One hopes the declarant is not as unsure of his own identity as this imprecision suggests: is he employed as a bankruptcy specialist by UBS AG only in its capacity as servicing agent for ACT Properties? Or for a successor or assignee of ACT? Or is he a bankruptcy specialist for UBS AG and its successors and/or assigns?…how does declarant know he will be employed by whomever it is, or have access to its records?[8]

Moreover, as will be further demonstrated in this article, even more telling than the frustration and sometimes outrage and blistering harangues from foreclosure judges across the country are the punishments being meted out to the miscreants, ranging from monetary sanctions against the mortgagee’s counsel and the client, including client sanctions as high as a million dollars, to the extraordinary relief being granted, as in orders for: the mortgage being eliminated; keys to the house in the hands of the homeowner; and the lender and its attorney, including any successor law firms, ordered to indemnify the homeowner against any future title challenges. Moreover, as the cases noted below will evidence, there has developed a new “mortgagespeak” among some fed-up foreclosure judges: e.g.,the common use of terms such as: straw man; nominee; street name; securitization conduit; opaque corporate wall; quasi-monopolistic system; federal courts as gatekeepers; lost-note affidavit; deputized employee; certifying officer; bankruptcy-remote entities; take my word for it; and cavalier attitude.

In Landmark,[9] a case in which MERS complained about, inter alia, lack of service and default, the Kansas Supreme Court took considerable time to discuss mortgagespeak, especially the term nominee:

What meaning is this court to attach to MERS’s designation as nominee for [the lender] Millennia? The parties appear to have defined the word in much the same way that the blind men of Indian legend described an elephant – their description depended on which part they were touching at any given time. Counsel for [the successor in interest to the mortgage lender] Sovereign stated to the trial court that MERS holds the mortgage “in street name, if you will, and our client the bank and other banks transfer these mortgages and rely on MERS to provide them with notice of foreclosures and what not.” He later stated that the nominee “is the mortgagee and is holding that mortgage for somebody else.” At another time he declared on the record that the nominee “is more like a trustee or more like a corporation, a trustee that has multiple beneficiaries. Now a nominee’s relationship is not a trust but if you have multiple beneficiaries you don’t serve one of the beneficiaries you serve the trustee of the trust. You serve the agent for the corporation.”[10]

The cases discussed in the remainder of this article illustrate and provide more details as to the consequences of these issues.

III. “Who’s on First?” — Defective Assignments Lead to Dismissal with Prejudice for Wells Fargo

Just by reviewing a single case from New York, Wells Fargo Bank v. Farmer,[11] one can add to the laundry list of mortgagespeak the following terminology: dual assignment process; complete chain of assignments; related warehouse lenders; and limited signing officer.[12] In Farmer, essentially, A assigned to B, which assigned to Wells Fargo, but the court found both assignments defective and therefore ordered them “voided and cancelled.”[13] In effect, Hillary Farmer’s $460,000 debt was cancelled; and the foreclosure action brought by Wells Fargo was dismissed with prejudice for lack of standing. And this was after the court gave the plaintiff (Wells Fargo) a second chance, in which Wells Fargo attempted, three years late, nunc pro tunc corporate appointments of one Burgos who signed, without corporate resolution authority, the assignments on behalf of both companies A and B.[14] Burgos then signed the assignments before a notary in New York, as claimed agent for two companies in California, for which he had no authority.[15] To “add insult to injury,” as the court put it, Wells Fargo claimed that it was trustee of an “asset-backed pass-through certificates” trust, but the trust failed to name a beneficiary.[16] The court found it “axiomatic” that a trust, by definition, must have a beneficiary.[17]

IV. The “Hooker” — the MERS System: “Who are Those Guys?”

In Hooker,[18] decided by the Oregon federal court in May 2011, homeowners who had not made a mortgage payment for almost two years obtained declaratory relief and costs against MERS et al for violations of Oregon law, which the court found requires recordation of all assignments of the trust deed. But, as the judge noted, that was not the only issue of concern to the court in that case and numerous other cases before him. On a single day, no less than two MERS vice presidents and one assistant vice president signed various assignments as well as the notice of default and elections to sell, before the same notary. The court found that this indicated that the “defendant’s document review [was] rushed,” and the judge was “not surprised to learn” that after receipt of the complaint, the securitization trustee determined that some “documents were recorded out-of-order.” But the judge’s criticism of the MERS system was even more pointed:

Considering that the non-judicial foreclosure of one’s home is a particularly harsh event, and given the numerous problems I see in nearly every non-judicial foreclosure case I preside over, a procedure relying on a bank or trustee to self-assess its own authority to foreclose is deeply troubling to me. I recognize that MERS, and its registered bank users, created much of the confusion involved in the foreclosure process. By listing a nominal beneficiary that is clearly described in the trust deed as anything but the actual beneficiary, the MERS system creates confusion as to who has the authority to do what with the trust deed. The MERS system raises serious concerns regarding the appropriateness and validity of foreclosure by advertisement and sale outside of any judicial proceeding….In short, the MERS system allows the lender to shirk its traditional due diligence duties.[19]

Put another way, with MERS involved, who should trust the authority to foreclose, be it judicial or non-judicial? At least with a judicial foreclosure process there is judicial oversight. Presumably the problems are heightened where there is a power-of-sale foreclosure.

Under the MERS system, the Hooker court concluded, the mortgagee of record is not concerned with credit risk; the mortgage risk is converted into immediate income by sale of the mortgage loan to the investor, e.g., through a securitization trust.[20] And the Hooker and Jacobson courts were far more circumspect than dissenting Justice Page in the 2009 Minnesota Supreme Court case of Jackson,[21] in which he wrote, as noted in Hooker: “[I]t is apparent with the benefit of hindsight that the ability of lenders to freely and anonymously transfer notes among themselves facilitated, if not created, the financial banking crisis in which our country currently finds itself.”[22] And this “who’s on first?”, Abbott and Costelloesque scenario is all too reminiscent of the dilemma faced by old west bank robbers Butch Cassidy and the Sundance Kid in the movie of that name. Recall that they were closely tracked and followed through the boulder country of Southwest Utah by a posse led by an expert Indian tracker. Frustrated by their inability to free themselves of the posse, Sundance repeatedly asked the rhetorical question: “Who are those guys?” To escape, the two outlaws resorted to leaving their horses for the raging river a hundred feet below. Now, homeowners no longer ask that question. They know. But like Butch and Sundance, they are jumping — into the foray of state and federal litigation.

On April 21, 2011, in Saurman, the Michigan Court of Appeals affirmed a summary judgment ruling that MERS “may not foreclose by advertisement” in Michigan.[23] That case involved two consolidated cases where MERS initiated non-judicial foreclosure actions against homeowners, via advertisement.[24] In each case the homeowner had obtained a mortgage loan from Homecoming Financial LLC, which was named on the note but not as mortgagee on the mortgage or other security instrument; each of the latter instead named MERS, along with the customary MERS “nominee” language.[25] Under relevant Michigan law, in order to foreclose by advertisement, the foreclosing party must be “either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage.”[26] It was undisputed that MERS was neither the owner of the note nor the servicer, and the court rejected MERS’ assertion “that an ‘interest in the mortgage’ is sufficient under [Michigan law],” noting that a note and a mortgage security interest are “two different legal transactions providing two different sets of rights.”[27] The court found it “obvious that MERS did not have the authority to foreclose by advertisement on defendants’ properties.”[28] The Michigan Court of Appeals was not alone when it used some of MERS own assertions against it, citing MERS v. Nebraska Department of Banking and Finance,[29] and stating: “While MERS seeks to blur the lines between itself and the lenders in this case in order to position itself as a party that may take advantage of the restricted tool of foreclosure by advertisement, it has, in other cases, sought to clearly define those lines in order to avoid the responsibilities that come with being a lender.”[30]

V. From Ohio to Arizona — “Show Me the Note!”

In 2007, federal judges in the Northern and Southern Districts of Ohio, as well as Ohio appellate courts, weighed in on the “show me the note” argument in scores of non-MERS cases. Overwhelmed by the enormity of the problem, the cases were consolidated and captioned In re Foreclosure Actions.[31] There were fourteen cases in the Northern District of Ohio and twenty-seven in the Southern District. Many of the mortgage foreclosure cases were dismissed for failure of the mortgagee or servicer to submit to the court a copy of the assignment of the note and mortgage.[32] The reasoning was: No note, no standing; case dismissed. Judge Boyko of the Northern District stressed that the jurisdictional integrity of a federal court is “priceless.”[33] Judge Rose of the Southern District gave the lenders thirty days to prove up their case with proper documentation, including evidence that the note and mortgage were held by the plaintiff at the time the suit was filed.[34] And speaking of timing, Ohio appellate courts have held, in at least two decisions, something that should be obvious to even the most uninitiated: A plaintiff cannot cure on appeal its defect by way of a failure to submit to the trial court evidence of standing; the plaintiff must be the real party in interest at the time the suit is filed.[35] As trial judges are wont to say, absent such evidence: “Case closed.”

More recently, the Bankruptcy Appellate Panel (BAP) for the Ninth Circuit weighed in on the “show me the note” issue when it ruled that, to have standing in a mortgage foreclosure case, one must have the right to enforce the note.[36] Decided on June 10, 2011, Veal was a consolidation of two appeals from the Arizona bankruptcy court: one an appeal of the bankruptcy court’s decision granting the securitization trustee relief from the automatic stay, and the other of its decision overruling the debtor’s objection to the servicer’s proof of claim.[37] The crux of each appeal, and the issue at the heart of the BAP’s decision, was whether either party – the securitization trustee or the servicer – had standing as a real party in interest. The BAP ruled that neither party did; it first determined that “a plaintiff must assert its own legal rights and may not assert the legal rights of another.”[38] The court conducted an analysis of the UCC as it relates to notes and determined that, to have standing, you must be the “person entitled to enforce” the note.[39] The BAP found that the securitization trustee did not, by reason of the assignment to it of the mortgage, have the necessary connection to the note and thus lacked standing to move for relief from the automatic stay; indeed, some have argued that an assignment of a mortgage, separate from the note, renders the note unsecured and the mortgage “a worthless piece of paper.”[40] Finally, the BAP determined that the servicer had neither proved that the securitization trustee was a “person entitled to enforce” the note nor that it was an authorized agent of the securitization trustee.[41] Thus, the servicer had not proven that it had standing to file a proof of claim.[42] In effect: to have standing, you must be “the person entitled to enforce” the note under UCC section 3-301; and, again, assignment of a mortgage, separate from the note, arguably renders the mortgage, alone, “a worthless piece of paper.”[43]

VI. Foreclosure Employee “Unconstrained by Corporate Protocols” Yields Homeowners $968,000 Punitive Award

Although not MERS-related, the 2008 Nevada Supreme Court case of Thitchener v. Countrywide Home Loans[44] is instructive on the issue of bureaucratic bungling of paperwork, which in that case resulted in the foreclosure and sale of the wrong condominium in Las Vegas while the husband and wife owners were out of town.[45] The jury awarded punitive damages of $2.5 million, which was reduced to $968,000 and affirmed on appeal.[46] The mortgagee, Countrywide, complained of the award on appeal, but the court found that “the jury could have logically concluded that Countrywide consciously disregarded the [homeowners’] rights.”[47] Moreover, despite the trial court’s failure to recognize the proper statutory vicarious corporate liability instruction for punitive damages, the Nevada Supreme Court held that the error did not require reversal because the jury reasonably could have found under the statute that the conduct of Countrywide’s “asset manager” was imputable to the company; the court concluded that “she largely was unconstrained by corporate protocols.”[48] The court also noted that, as a foreclosure specialist, the manager “presumably understood that proceeding in the face of these warning signs [of a potential mix-up as to which condominium unit should be sold] involved an imminent, as opposed to merely a theoretical, risk of harm” to the homeowners.[49]

VII. Sloppiness and Arrogance Leads to Federal Judge’s “Bombast” and Award of $750,000 in Sanctions

Okay, now that we have the reader’s attention, the truth of the matter is that the federal circuit later overturned the award of sanctions.[50] Nonetheless, this case provides interesting and instructive reading for counsel representing mortgagees and homeowners alike. Simply put, the bankruptcy judge was outraged by the “disingenuous, indeed even arrogant” behavior of the mortgagee, where the mortgagee had falsely represented that it was the holder of the note and mortgage although it had sold the note five days after the homeowner’s purchase.[51] Sanctions were awarded under Rule 9011, the court noting that the standard is objective, not subjective, and “intent is irrelevant.”[52] Of interest is the fact that the district court, without opinion, affirmed the bankruptcy judge’s scathing “bombast,”[53] and the huge award for sanctions. The United States Court of Appeals for the First Circuit, though “not unsympathetic to Noseks’s predicament as a debtor seeking to satisfy the terms of her Chapter 13 Plan and stave off foreclosure of her home,” reversed, finding that “the bankruptcy court’s legitimate concerns did not justify the remedy that it invoked.”[54] Still, the resolution and uncertainty of an appeal on such issues probably is an experience best avoided.

VIII. A Pattern of Improper Conduct?

In the Southern District of Texas, Bankruptcy Judge Steen, “quite reasonably” according to fellow Bankruptcy Judge Bohm, “concluded that ‘the improper conduct [] was part of a pattern of activity and that [the lawyer] ha[d] been warned numerous times to correct its deficiencies’”[55] Judge Bohm also commented that this “pattern of activity” was not limited to the Southern District of Texas.[56] On the contrary, he concluded that courts across the country are overflowing with proceedings regarding such opprobrious behavior.[57]

In In re Rivera,[58] a New Jersey bankruptcy court fined the mortgagee’s lawyers $125,500 and referred their conduct to the Chief Judge for lawyer discipline. In Rivera, the court sua sponte raised the issue of lawyer misconduct (what your authors might call “Robo-lawyering”), and ordered the mortgagees and their lawyers to “explain certain anomalies related to the execution of certifications, including a certification which would support stay relief to allow foreclosure to proceed.”[59] The court found that the lawyers had submitted some 250 form certifications containing signatures of a person who had not been employed by the lender or its agents for over one year.[60]

In In re Osborne,[61] a bankruptcy court in Louisiana imposed sanctions of nearly $50,000 jointly and severally against a lender and its lawyers. The sanctions included an award of damages for emotional distress in addition to attorney fees and costs; in another possible example of “Robo-lawyering,” the mortgagee and its lawyers had “obtained stay relief by filing a false affidavit and repeatedly filing false pleadings.”[62]

Similarly, in In re Ulmer,[63] a bankruptcy court in South Carolina imposed sanctions of $34,000 on the mortgagee’s lawyers for submission of improperly-executed affidavits and other documents which were neither reviewed nor signed. In Ulmer, the lawyers apparently were running an improperly-staffed office in South Carolina, where they were not even aware of the receipt of notice of hearing deadlines, repeatedly causing them to miss hearings and even to be defaulted in cases, and as a result of which they submitted to the court false and misleading documents.[64]

IX. “The Law Must be Obeyed and the Rules Must be Followed. But the Laws and Rules Also Apply to [the Banks].”[65]

Across the country in California, Bankruptcy Judge Taylor issued an unpublished opinion finding “that OneWest placed expediency and cost reduction far above its obligation of candor with the Court.”[66] Concluding that there was a lack of “common sense economics” in an apparent preference for foreclosing on underwater loans rather than modifying the payments (and allegedly using misrepresentation and outright fraud to accomplish such foreclosure), Judge Taylor exclaimed: “The Court is left to shake its head in amazement….At trial on this matter, the Court heard testimony that was frankly astonishing.”[67] Judge Taylor also stated: “The Court will not participate in a process where OneWest increases its profits by disobeying the rules of this Court and by providing the Court with erroneous information,” and issued an Order to Show Cause Why OneWest Should Not Be Held In Contempt and/or Sanctioned.[68]

Subsequently faced with a similar issue involving the same bank in the same court, Bankruptcy Judge Mann also issued an Order to Show Cause against OneWest and its attorneys.[69] This case involved a loan supposedly acquired by One West as successor of the failed lender IndyMac, securitized with Deutsche Bank National Trust Company as Trustee and IndyMac (now One West) as servicer.[70] Which raises the question: If the loan was securitized, how did One West acquire it? Does not the securitization vehicle own the note? Your authors’ experience as securitization lawyers indicates that an important aspect of securitization is that the asset – the mortgage loan in this case – is transferred from the lender to a bankruptcy-remote entity (the securitization vehicle), to protect from just the situation that arose here, namely insolvency of the originating lender (here IndyMac). Thus, the asset – the mortgage loan in question – did not belong to One West, but rather to the securitization vehicle (in this case “IndyMac INDX Mortgage Loan Trust 2004-AR5, Mortgage Pass-Through Certificates, Series 2004-AR5”[71]). Why, then, did One West file “a motion asserting OneWest was the holder of the mortgage”?[72] This is the question Judge Mann was asking. And, considering that two judges in the same court were asking the same questions of the same bank, it seems possible that there was, in fact, a “pattern” of “improper conduct.”[73]

X. Judge to Robo-Lawyers: “How Dare You File Something Like This?”

Referring to lost notes and mortgage assignments later being recorded, Florida Circuit Court Judge Lando wrote in her order dismissing with prejudice Central Mortgage Company’s complaint and issuing an order to show cause why the attorneys should not be held in contempt: “This in and of itself is a Fraud upon the Court. However, this pales in comparison to the subsequent outright fraud presented to the Court in order to pursue a foreclosure action against the Defendant and mislead the Court to obtain entry of said Judgment.”[74] Judge Lando later found the lawyers in contempt and grossly negligent and sent the contempt order to the Bar Association, and also sanctioned the lawyers for attorney fees and costs, stating: “What we’re here about is lawyers practicing law correctly. Lawyers reviewing the documents they submit to the Court and make [sic] sure that they are correct before they are submitted. And ‘it’s not my fault,’ and ‘this is a clerical error,’ and ‘the dog ate my homework,’ isn’t going to do….you have a professional responsibility….Your job is to give your clients legal advice and you’re not doing it.”[75] Ruling that the defendant’s debt to the plaintiff was completely discharged, Judge Lando gave the plaintiff’s lawyers a severe warning in open court: “You are acting as a robot for a plaintiff who is not even giving you the information you need to file a proper foreclosure. Now, if you choose to do that, you do that at your peril before this Court.”[76]

Indeed, Justice Cordy, concurring in the now-famous Ibanez case (a landmark 6-0 decision of the Massachusets Supreme Court)[77] wrote: “What is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets….before commencing such an action…the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order.”[78]

And lest one think that this only occurs at “foreclosure mill” law firms, think again. In the Bankruptcy Court for the Central District of California, Judge Bufford issued $21,000 in sanctions against Pite Duncan LLP (Pite)[79] for filing “twenty-one relief from stay motions in bad faith and with the improper purpose of delaying and increasing the costs of litigation.”[80] The court further found that Pite had “knowingly or recklessly filed the motions with no adequate evidentiary support.”[81] How did the court find out about Pite’s unethical behavior? The court found it “suspicious” that “Pite withdrew thirty-eight out of forty-one motions filed with this court.”[82] Why would Pite issue and then withdraw these motions? Because the court had issued an order that the declarants had to appear before the court and testify.[83] “Pite failed to produce a single witness pursuant to such a request. From the failure ever to produce a witness, the court infer[ed] that Pite knew, at the time each such request was made, that the witness would not appear to testify. The court [found] that each such request was made in bad faith.”[84] Those witnesses finally did appear in court to testify — at the Hearing on the Order to Show Cause.[85] At that hearing their testimony proved what the court had suspected — that the witnesses were incompetent to attest to the declarations made in the motions.[86] Sufficient grounds on which to impose sanctions? Pite repeated its folly twice after the hearing, before imposition of the sanctions.[87]

XI. Start Acting Like Lawyers! Or, “Lawyers Who Have Computers for Clients are Fools.”

While it may be fathomable that a global bank that processes tens of thousands of mortgage loans might completely automate its systems, it is neither fathomable nor ethical for a law firm to eliminate the human touch. Indeed, legal services, like medical services, are personal services. Lawyers have a duty to communicate with their clients and keep the same informed,[88] and one cannot communicate with a computer or keep a computer informed. It thus follows that an attorney cannot have a computer for a client.[89] Oddly enough, Bankruptcy Judge Sigmund came across just this scenario when she was informed by an attorney that the computer was being “unresponsive.”[90] Judge Sigmund had this to say: “At this juncture, an attorney must cease processing files and act like a lawyer. That means she must become personally engaged, conferring with the client directly and abandoning her reliance on computer screens as an expression of her client’s will.”[91] Judge Sigmund added: “Regrettably I have found certain practices and procedures employed by [the mortgagee], its agents and attorneys to implicate the integrity of these proceedings…I have also found these same practices and procedures have created an environment where rule 9011 duties have been subordinated to efficiency and cost-savings so as to require sanctions, and sanctions are appropriately imposed.”[92]

XII. “At the End of the Day…You Need to Decide What Kind of Lawyer You’re Going to Be”

The heading above quotes powerful words spoken by Florida Circuit Court Judge Bailey, who continued: “Because at the end of the day, you’re responsible for your client’s compliance with court orders….you swore an oath to follow the Rules of Civil Procedure and to follow the rule of the law….”[93] Minutes later, she: (1) dismissed the mortgagee’s case with prejudice; (2) cancelled the mortgage note pursuant to a final judgment, relieving the defendant of the debt; (3) ordered the mortgagee and its lawyers, and their successors, to indemnify the defendant should anyone ever try to enforce the note; and (4) to pay the defendant’s attorney fees.[94] Judge Bailey had a warning for lawyers:

What this truly, fundamentally is about is about the level of disorganization and the needless consumption of judicial resources…. What I’m trying to give is, for lawyers that handle these cases, a wake-up call to say this is your life, this is your career on the hook and you guys better wake up and smell the coffee….I don’t want apologies. I want performance. I want responsible attorneys who meet the basic standards of knowing what the Sam Hill is going on in their files.[95]

As the cases noted in this article have shown, Judge Bailey is not alone. Across the country, judges at all levels are indignant about contemptuous treatments of the court system by some attorneys for MERS and various mortgagees, including Robo-lawyer attorneys, and are issuing severe sanctions to make their points.

XIII. Counsel for MERS and His Law Firm Sanctioned for Submitting False Evidence Under Penalty of Perjury[96]

In 2008, the bankruptcy court in Los Angles denied MERS’ motion for relief from the automatic stay, for MERS’ attempt to obtain relief for unidentified parties and because “the only evidence supporting the motion is provided by a witness who is incompetent to provide any relevant evidence.”[97] Even more striking is the fact that sanctions were imposed on the law firm, for counsel’s filing “with the court the declaration in which he stated falsely, under penalty of perjury: ‘I have personal knowledge of the matters set forth in this declaration and, if called upon to testify [as he was], I could and would competently testify thereto.’”[98] MERS supported its motion with the declaration and testimony of “a low level clerk whose only function is to compare the financial numbers on his evidentiary declaration with those on a computer screen.”[99] The debtor, an 83-year-old, physically-debilitated, wheel-chair-bound World War II veteran claimed that he did not sign the loan documents, and that his signature was forged. MERS was the beneficiary under the deed of trust “acting solely as a nominee for lender and lender’s successors and assigns.”[100]

The MERS witness testified that he was responsible for processing 500 loan defaults per week in southern California and spent about five minutes on each motion to lift stay, merely making sure that the numbers regarding the loan and the default as listed in the motion were those that appeared on his computer screen.[101] He gave consideration to nothing more.[102] Thus, the case became a primer regarding the federal rules of evidence, including issues such as: the competency of the witness; the business records exception to the hearsay rule; computer records; and authentication. Personal knowledge was the keystone that was lacking here. Moreover, MERS failed to bring to court the note at issue, and made no claim of its possession.[103] As the court noted: “MERS is not in the business of holding promissory notes.”[104] The judge also instructed the attorneys concerning the federal rules of civil procedure, and bankruptcy procedure: MERS joined as parties “its assignees and/or successors in interest,” which were not otherwise identified.[105] The court noted that a complaint requires the names of the parties.

XIV. Nevada Supreme Court Hears Emergency Petition for Writ of Prohibition — MERS Member Citimortgage Claims it can Issue Countless Notices of Non-Judicial Sale, Resulting in Countless Mediations

How can the onslaught of foreclosure suits be curbed, based on a demand to “show me the note” or otherwise; and how can a community protect homeowners filing pro se? One answer: Enact a mandatory mediation statute, as in Nevada, that is mandatory for the homeowners who wish to stay a non-judicial foreclosure.[106] With Nevada among the four “leading” foreclosure states in terms of volume (California, Arizona, and Florida being the others), no doubt the Nevada Supreme Court accepted the Daane case[107] for its public importance. After all, for a court to hear a petition for writ of prohibition is a rarity; here the petitioner is seeking to enjoin the Nevada foreclosure mediation program from proceeding with a second mediation following Daane’s victory in the first one. Under the Nevada mediation procedure, a mortgagee must obtain from the court a certificate, which cannot be issued if within thirty days of receipt of the notice of default the homeowner elects to mediate.[108] The parties must provide documentation, attend the mediation, and negotiate in good faith.[109] Whatever the outcome, the mediator will then issue the certificate; meanwhile, the foreclosure is stayed.[110] If the lender does not follow the procedure, including evidence of authority, the court can impose sanctions, including, inter alia, loan modification.[111]

Despite the many requests of Daane for the mortgagee to produce the note, or other evidence of the real party in interest, neither Bayview Loan Servicing, LLC (the sub-servicer) nor CitiMortgage, Inc. (the master servicer) answered. An assignment by MERS transferred the loan to CitiMortgage, which, through CR Title Services, Inc., issued the notice of default, for which Daane timely requested mediation. For the failure of CitiMortgage to produce the required documents, prove its authority to negotiate, or produce an appraisal or broker’s price opinion, the mediator found that CitiMortgage acted in bad faith. Daane petitioned the court, which held in his favor, and ordered that a certificate not be issued. Thus, the non-judicial foreclosure was stayed, and further judicial review was pending, e.g., an order for loan modification. Not content with this result under Nevada’s new program, CitiMortgage recorded another notice of default and election to sell. Out of an abundance of caution, Daane filed a new mediation request so as to stay the sale, and then filed his emergency petition, for which Nevada’s highest court granted both a stay of the second mediation and an oral argument, heard on April 5, 2011.

Daane’s position on appeal is simple enough: the mortgagee is entitled to “only one bite of the apple.” CitiMortgage attempts two. Or perhaps even more, if not satisfied with the second bite. Put in legalese, this of course means res judicata, collateral estoppel, and issue preclusion. To which CitiMortgage responded by claiming that: (1) Daane’s remedy is with the trial court, not the Supreme Court; (2) the Supreme Court cannot restrain a non-judicial function (here, administration of the program); (3) res judicata applies to litigation, not to a ministerial act; and (4) the statute does not restrict claimants to one mediation if the certificate is not issued on the first try.[112] Although it called Daane’s petition a “meritless conundrum,”[113] CitiMortgage did not state what limit, if any, is placed on the number of non-judicial foreclosures. Perhaps it believes: “’Til the cows come home?”

XV. Summary and Conclusion

Given the millions of home foreclosures underway in this country, a number that appears likely to continue increasing over the next several years, given the continuing state of the mortgage and housing markets,[114] what choice does the desperate, “upside-down” homeowner have but to grasp at some legal straw, namely a procedural defect; e.g.: “show me the note”; or “without note and mortgage together, no standing”; or “assignments not recorded, or if recorded, not recorded in proper order.” These issues do not go to the basic viability of mortgage foreclosure law; for the most part they relate to sloppy operational procedures and lawyering, which apparently provide ample opportunities for defense counsel. Thus, it appears, the litigation on the issues noted here will continue to proliferate. In fact, it is surprising that this foreclosure crisis, properly denoted a “perfect storm,”[115] has not resulted in an even larger litigation tsunami. For homeowners, there is no harm in seeking home mortgage foreclosure relief, especially in bankruptcy. Perhaps the lack of a larger tsunami is due in large part to related factors such as: the even more common “walk away” strategy; changing public opinions regarding the immorality of not paying one’s debts; lack of knowledge and a financial lack of access to the courts; and a bad public perception regarding litigation; i.e., these “show-me-the-note” homeowners who have brought MERS et al to task are akin to the “show me the law,” Wesley Snipesesque tax protestors.

Meanwhile, some homeowner groups, not unlike other protest groups, are literally taking to the streets, and to the courthouse steps, and to the door fronts of the mortgagees. After all, federal loan modification programs have proven a faint hope for millions.[116] “Boots on the ground,” as some call these protests, expecting what, a legislative fix from Congress? Not likely. Or, a state legislative fix? Maybe, in some cases. But there was no such luck recently in Arizona, where such efforts were defeated; Arizona is said to be “cowboy country,” independent of big bankers’ influence. Lots of luck also in, e.g., the Thirteen Original Colonies states, where years of mortgage-related legislation have not stemmed the foreclosure crisis. And meanwhile, there persist the class action and qui tam lawsuits against MERS et al, most if not all going nowhere fast, with the courts mostly choosing to dismiss on procedural grounds rather than try the cases on their merits.[117] And then there is the multibillion dollar lawsuit brought by Deutsche Bank against Bank of America,[118] in which the plaintiff seeks breach of contract damages and indemnification under its claim that the loans sold by defendant were said to be securitized, yet they were not. Meanwhile, the federal criminal investigations of major failures in the mortgage and housing crisis have turned up empty-handed, and are likely to be closed without any charges being filed.[119] None of this offers much, if any, hope for beleagured homeowners.

In the final analysis, then, it is left to the homeowners, MERS, and others, and their attorneys, i.e., “boots in the courtroom,” applying basic common law, statutory, and procedural rules, to “separate the wheat from the chaff” in examination of procedural and other defects which offend vociferous foreclosure judges, in recognition of relatively well-established legal principles. And it is left to the trial and appellate judges to be the final arbiters in describing the resulting “elephant in the room,” as with “the blind men of the Indian legend,”[120] sometimes depending on which part they touch at any given time. After all, in some ways MERS and the “robo-signing” issues are merely part of “the elephant in the room,” being a part of our overall system of laws and judicial procedure. Moreover, the role of MERS is distinct from the “Robo-lawyering” and sloppy practices that are the center of many cases. And meanwhile, attorneys on both sides of the bar on these “hot potato” issues should “right quick” take notice of the sanctions and censures being meted out, to clients and attorneys alike who fail to comply with the law.


A West Point graduate and former Green Beret officer, Donald W. (Mac) MacPherson has over 33 years of trial experience. He is board certified by the Arizona bar as a specialist in both tax law and criminal law, and has tried over 55 criminal tax cases in 25 states. His civil litigation experience includes bankruptcy, RICO suits against banks and others, commercial litigation, including defense and prosecution of fraud claims, and civil rights suits against state and federal agents. In 1987 he developed expertise in tax-motivated bankruptcies and wrote “Secret Exposed: Eliminate Income Tax Debts through Bankruptcy.” He is also author of “Tax Fraud and Evasion: The War Stories,” which details many of his winning trials, and “April 15th: The Most Pernicious Attack upon English Liberties,” which provides a full criminal trial transcript and traces the history of the government’s extraction of tax information from citizens under oath. He frequently contributes articles to legal publications, especially those regarding offshore tax issues, such as Offshore Investment. His previous clients include two governors, three state senators, and a major U.S. airline. Because of his bankruptcy experience, in 2009 he entered the foray of home mortgage securitization and litigation. Mac heads The MacPherson Group, P.C., Phoenix, Arizona.

Nathaniel K. (Nathan) MacPherson is licensed to practice law on two continents and holds degrees in both law and finance. Nathan’s international transactional experience includes representing global banks as well as finance ministries in cross-border lending, securitization, and government bail-outs of failed financial institutions while an associate at the world’s second-largest law firm in its London and Frankfurt offices. Nathan’s civil litigation experience includes representing homeowners in foreclosure defense bankruptcy, individuals and businesses in U.S. Tax Court, German mid-sized and listed companies in commercial disputes in the USA, as well as German plaintiffs with RICO claims against Toyota in the “unintended acceleration” class action lawsuit. Nathan heads the San Diego, California, office of The MacPherson Group, P.C.

Bradley Scott (Scott) MacPherson contributed to this article. He is a member of the Arizona bar and has a Master’s Degree in Mathematics from Purdue University. He has five years of attorney experience in tax controversies, civil and criminal, with The MacPherson Group, P.C., and seven years of experience as a software engineer with Northrop Grumman in Redondo Beach, California.


* This title is indebted to R.K. Arnold, “Yes, there is Life on MERS,” ABA Solo Practitioner Newsletter, Vol. 2, No. 1 (Spring 1998), sometimes said to be the first authoritative explanation of the MERS system. For more information on MERS, see, inter alia: Gerald Korngold, Legal and Policy Choices in the Aftermath of the Subprime and Mortgage Financing Crisis, 60 S.C. L. Rev. 727, 74142 (2009); and Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. Cin. L. Rev. 1359, 1368-1374 (2010).

[1]. 402 B.R. 359 at 369 (Bankr. W.D.Wash., 2009). See also, e.g., In re Weisband, 427 B.R. 13, 20 (Bankr. Ariz. 2010) (GMAC lacked standing to move for relief from the Bankruptcy Code automatic stay (11 U.S.C. § 362) because “the MERS Assignment of The [deed of trust] did not provide GMAC with standing”); In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (consolidation of five cases where banks sought relief from the automatic stay; the court denied all motions for lack of standing; in four of the cases, MERS had purportedly assigned title to the movant; the court ruled that none of the banks had proven possession of the mortgage note); In re Huggins (357 B.R. 180 (Bankr. Mass. 2006) (MERS lacked standing to move for relief from the automatic stay). See also the landmark state Supreme Court cases of, in chronological order: Landmark National Bank v. Kessler, 216 P.3d 158 (Kan., 2009) (MERS not a real party in interest; MERS is not owed any money); MERS v Nebraska Department of Banking and Finance, 704 N.W.2d 784, 270 Neb. 529 (Neb., 2005) (MERS held not to be a mortgage bank and thus not subject to state licensing requirements); MERS v. Southwest Homes, 301 S.W.3d 1, 2009 Ark. 152 (Ark., 2009) (MERS had no standing to come into court); and U.S. Bank National Association v. Ibanez, 458 Mass. 637 (Jan. 7, 2011) (lenders could not foreclose because they could not prove that they were the note holders, through proper assignments of the notes and deeds of trust). But see Sharon McGann Horstkamp, MERS Case Law Overview, 64Consumer Fin. Q. Rep. 459 (2010), and the cases cited therein.


[2]. Horstkamp, supra note 1. It should be noted, however, that the Horstkamp article recognizes the procedural and standing requirements emphasized here. See also infra this text following note 6.


[3]. The terms “mortgage,” “mortgagee” and “lien” are used generically to refer to home mortgage transactions and interests, even though the terminology and underlying legal principles may vary from state to state.


[4]. Countrywide Home Loans v. Thitchener, 124 Nev. Adv. Op. No. 64 (Sept. 11, 2008).


[5]. In re Rivera, 342 B.R. 435 (Bankr. N.J. 2006).


[6]. See supra notes 1 and 2.


[7]. “The next housing shock” by Scott Pelley, 60 Minutes, first aired April 3, 2011, available at;photovideo. See also “Foreclosure ‘Robo-Signers’” by Bill Whitaker, CBS News, first aired September 30, 2010, available at;lst;1.


[8]. Jacobson, 402 B.R. at 368.


[9]. 216 P.3d 158. See supra note 1; Horstkamp, supra note 1, at __.


[10]. Landmark, 216 P.3dat 166-67.


[11]. Wells Fargo Bank, N.A. v. Farmer, 2008 NY Slip Op 51133 (N.Y. Sup. Ct. 2008).


[12]. Id. at 5 & 6.


[13]. Id. at 7.


[14]. Id. at 6.


[15]. Id.


[16]. Id.


[17]. Id.


[18]. Ivan Hooker, et al v. Northwest Trustee Services, Inc., et al, Case No. 10-3111-PA (D. Ore. 2011).


[19]. Id.


[20]. Id. at 14. Of course, this is not unlawful, and the original mortgagee may retain other types of risks and liabilities. Given the losses suffered on mortgage loans and mortgage-backed securities, surely these risks are widely recognized today. See, e.g., Ruth Simon, Nick Timiranos & Dan Fitzpatrick, New Mortgage Plan Floated, Wall Str. J., Oct. 18, 2011, at A1. The current lack of private investment in mortgage-backed securities suggests that this lesson has been well learned.


[21]. Jackson v. Mortgage Electronic Reg. Sys., 770 N.W.2d 487 (Minn. 2009).


[22]. Hooker, supra note 18, quoting Jackson, 770 N.W. 2d at 504.


[23]. Residential Funding Co. LLC v. Saurman, Case No. 290248, 291443 (consolidated), 2011 WL 1516819 (Mich. App. Apr. 21, 2011).


[24]. Id. at 1.


[25]. Id.


[26]. MCL 600.3204(1)(d).


[27]. Saurman, supra note 23, slip op. at 5.


[28]. Id.


[29]. 704 N.W. 2d 784 (Neb. 2005).


[30]. Saurman, supra note 23, slip op. ___ at 10.


[31]. In re Foreclosure Actions, 2007 WL 3232430 (N.D.Ohio) and 2007 WL 4034554 (N.D.Ohio); and In re Foreclosure Actions, 521 F.Supp.2d 650 (S.D.Ohio, 2007).


[32]. See Uniform Commercial Code (UCC) § 3-301 (parties entitled to enforce the instrument). Note that a party entitled to enforce the note is also entitled to enforce the mortgage, with or without an assignment. See UCC § 9-607(b) and cmt. 8; Alvin C. Harrell, Impact of Revised Article 9 on Sales and Security Interest Involving Promissory Notes and Payment Intangibles, 55 Consumer Fin. L. Q. Rep. 144, 147-49 (2001).


[33]. Foreclosure Actions, 2007 WL 3232430 at 3.


[34]. Foreclosure Actions, 521 F.Supp.2d at 654.


[35]. See, e.g., Everhome Mtge. Co. v. Rowland, 2008 Ohio 1282 at 1287 (Ohio App. 2008) (“Lacking the necessary evidence in the trial court record, Everhome attempts to introduce that evidence on appeal.”); and DLJ Mtge. Capital, Inc. v. Parsons, 2008 Ohio 1177 at 82 (Ohio App. 2008) (“The file stamp on the assignment shows that it was recorded on February 22, 2007. But the trial court granted summary judgment on November 22, 2006. Although this assignment appears to establish appellee as the party in interest, there is no evidence of this assignment on the record. In fact, evidence of this assignment could not have existed at the time the court granted summary judgment because it had not yet occurred.”). See also Wells Fargo Bank, Nat’l Ass’n v. Byrd, 897 N.E.2d 722 (Ohio Ct. App. 2008) (the assignment of mortgage must be executed, though not necessarily recorded, prior to the filing of the foreclosure complaint).


[36]. In re Veal, 450 B.R. 897 (BAP 9th Cir. 2011).


[37]. Veal, 450 B.R. 897 at 3.


[38]. Id. at 13. See also supra note 32; discussion below; and UCC §§ 3-301 & 3-305(c).


[39]. Veal, 450 B.R. 897 at 20. See also UCC § 3-301, supra note 32.


[40]. Veal, 450 B.R.897 at 32, quoting Richard R. Powell, 4 Powell on Real Property § 37.27[2] (2000). But see authorities cited supra note 32. Certainly the mortgage alone, without the note, confers no legal rights, as the role of the mortgage is to secure an obligation to pay, and without such an obligation the mortgage has no purpose. Id. See also Merritt v. Bantholick, 36 NY 44 (N.Y. 1867); The South Carolina Bank v. Halter, 293 S.C. 121 (S.C. Ct. App. 1987).


[41]. Veal, ____ at 45.


[42]. Id.


[43]. Id. at 32, quoting Powell, supra note 40. See also supra note 40. But see UCC § 9-607(b) and cmt. 8 (party entitled to enforce the note under id. § 3-301 is also entitled to enforce the mortgage, even without an assignment of mortgage).


[44]. Countrywide Home Loans v. Thitchener, 124 Nev. Adv. Op. No. 64, slip op. at 8 (Sept. 11, 2008).


[45]. Id.


[46]. Id. at 9.


[47]. Id.


[48]. Id. at 8.


[49]. Id. at 7.


[50]. In re Nosek, 544 F. 3d 34 (1st Cir., 2008), reversing the district court’s affirmation, without opinion, of the bankruptcy court Order of March 6, 2007, Case No. 02-46025, United States Bankruptcy Court, District of Massachusetts; and 2010 WL 2350597 (1st Cir., 2010), again reversing the district court’s affirmation of the bankruptcy court, reducing the $750,000 award, including $500,000 in punitive damages, to a mere $5,000.


[51]. In re Nosek, 386 BR 374, at 382 (Bankr.D. Mass. 2008).


[52]. Id.


[53]. Id. at 380.


[54]. Nosek, 544 F. 3d at 49.


[55]. In re Parsley, 384 B.R. 138, at 175 (Bankr. S.D. Tex. 2008), quoting In re Allen, 2007 WL 1747018 at *2, 2007 Bankr. LEXIS 2063 at *9 (Bankr. S.D. Tex. June 18, 2007).


[56]. Parsley, 384 B.R. at 175.


[57]. [need cite] [58]. In re Rivera, 342 B.R. 435 (Bankr. N.J. 2006).


[59]. Id. at 435.


[60]. Id. at 439.


[61]. In re Osborne, 375 B.R. 216 (Bankr. M. D. La. 2007).


[62]. Id. at 220.


[63]. In re Ulmer, 363 B.R. 777 (Bankr. S.C., 2007).


[64]. Id.


[65]. In re Arizmendi, Bk. No. 09-19263-PB13, RS No. CNR-2, slip op. at 17 (Bankr. S.D.Cal. May 26, 2011).


[66]. Id. at 3.


[67]. Id. at 17.


[68]. Id. at 22; In re Arizmendi, Bk. No. 09-19263-PB13, Order to Show Cause re: Misrepresentation (Bankr. S.D.Cal. June 14, 2011).


[69]. In re Carter, Bk. No. 10-10257-MM13, RS No. CJH-001 (Bankr. S.D.Cal. Dec. 14, 2010). See also Minute Order, Docket Number 72 (Bankr. S.D.Cal. May 17, 2011).


[70]. In re Carter, Bk. No. 10-10257-MM13, RS No. CJH-001 at 3.


[71]. Id. at 2.


[72]. Id.


[73]. In re Allen, 2007 WL 1747018 at *2, 2007 Bankr. LEXIS 2063 at *9 (Bankr. S.D. Tex. June 18, 2007).


[74]. Central Mortgage Company v. Eduardo Gonzalez del Real, et al, Case No. 09-4075-CA-01 in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, Order of January 28, 2011, Nos. 10-11.


[75]. Central Mortgage Company, Transcript of Hearing on February 11, 2011, at 7-8.


[76]. Id. at 28.


[77]. U.S. Bank National Assoc v. Ibanez, 941 N.E.2d 40, 458 Mass. 637 (Jan. 7, 2011).


[78]. Id.


[79]. Pite Duncan, LLP, is an AV-Rated business litigation firm representing financial institutions and related entities in California, Alaska, Arizona, Nevada, Idaho, Oregon, Utah, Washington, Hawaii, and Texas with 60 attorneys and over 50 paralegals. Source:


[80]. In re Cabrera-Mejia, 402 B.R. 335 (Bankr. C.D. Cal. 2008).


[81]. Id. at 339.


[82]. Id. at 340.


[83]. Id.


[84]. Id.


[85]. Id. at 341.


[86]. Id.


[87]. Id.


[88]. See, inter alia, California Rules of Professional Conduct, Rule 3-500 (“Communication”).


[89]. See, inter alia, California Rules of Professional Conduct, Rule 3-600 (“Organization as Client”), which rule discusses an organization acting “through its highest authorized officer, employee, body, or constituent overseeing the particular engagement” – all people – and notably not through a computer.


[90]. In re Taylor, 407 B.R. 618 at 623 (Bankr. E.D. Pa. 2009).


[91]. Id. at 638.


[92]. Id. at 622.


[93]. HSBC Bank USA, NA, et al v. Orlando Eslava, et al, Case No. 1-2008-CA-055313 (Circuit Court of the Eleventh Judicial District in and for Miami-Dade County, Florida).


[94]. Id.


[95]. Id.


[96]. See Vargas, infra note 97. Counsel also could have been prosecuted under 18 U.S.C. § 1621, a five year-felony, for giving a false declaration. See also 18 U.S.C. § 152, false oath in bankruptcy proceeding; and id. § 157, bankruptcy fraud, both five-year felonies.


[97]. In re Vargas, order entered October 22, 2008, U.S. Bankruptcy Court for the Central District of California, Case No. LA08-17036SB2008, at 6.


[98]. Id.


[99]. Id. at 1.


[100]. Id. at 2.


[101]. Id.


[102]. Id. at 3.


[103]. Id. at 7.


[104]. Id. See, e.g., Horstkamp, supra note 1.


[105]. Vargas, supra note 97, at 3.


[106]. Nev. Rev. Stat. § 107.086. See also ____.


[107]. William Daane v. The Eighth Judicial District Court of the State of Nevada in and for the County of Clark et al, Case No. 57020, Supreme Court of Nevada.


[108]. Nev. Rev. Stat. § 107.086.


[109]. Id.


[110]. Id. See supra note 106.


[111]. Id.


[112]. Response of CR Title Services, Inc., and CitiMortgage, Inc., of Dec. 6, 2010.


[113]. Id. at 25.


[114]. See major network TV news. Ad nauseum.


[115]. See e.g., Alvin C. Harrell, Commentary: The Subprime Lending Crisis – The Perfect Credit Storm?, 61 Consumer Fin. Q. Rep. 626 (2007).


[116]. See, e.g., Stephen F.J. Ornstein, Matthew S. Yoon & John P. Holahan, Home Affordable Modification Program Update, 64 Consumer Fin. L. Q. Rep. 408 (2010); Simon, Timiraos & Fitzpatrick, supra note 20.


[117]. See, inter alia, State Of Cal. Ex Rel. Barrett R. Bates v. Mortgage Elec. Registration System Inc., Case No. 2:10-cv-0142 9-GEB-CMK (E.D. Cal. 2011) (“Since Plaintiff’s CFCA claims are based upon publicly disclosed information, and Plaintiff is not an original source of the information, the Court is without jurisdiction over Plaintiff’s action…. this action is dismissed with prejudice, and shall be closed.”); Bates v. Mortgage Elec. Registration Sys. Inc., Case No. 3:10-cv-00407-RCJ-VPC (D. Nev. 2011) (“Plaintiffs shall show cause why the action should not be dismissed for failure to state a claim” for lack of federal diversity jurisdiction.); State of Tennessee Ex Rel. Barrett Bates v. Mortgage Elec. Registration Sys. Inc., Case No. MCCHCURE 10-10 (D.Tenn.) (filed under seal on April 28, 2010; pending); Figueroa v. Merscorp. Inc., Case No. 10-61296-CIV (S.D. Fla., 2011) (“The Court thus lacks jurisdiction to hear the claims under the Rooker-Feldman doctrine. Having chosen not to appeal in state court, Plaintiff may not, effectively, appeal his adverse judgment here.” Motion to dismiss granted with prejudice; case closed.).


[118]. Deutsche Bank AG v. Bank of America, N.A., Case No. 1:09-cv-09784-RWS (S.D.N.Y. filed Nov. 25, 2009); motion to dismiss granted in part, denied in part on March 23, 2011; Bank of America’s answer to the amended complaint filed on June 9, 2011.


[119]. See, e.g., Jean Eaglesham, Criminal Mortgage Probes Fizzle Out, Wall Str. J., Aug. 6-7, 2011, at B1.


[120]. Landmark, 216 P.3d at 166-67.

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