Foreclosure Fallout: Robo-Signing deal falls flat

Oppenheim Law,

http://www.linkedin.com/news?viewArticle=&articleID=5567684076652986380&gid=1467337&type=member&item=91028246&articleURL=http%3A%2F%2Fsouthfloridalawblog%2Ecom%2F2012%2F01%2F24%2Fforeclosure-fallout-robo-signing-deal-falls-flat%2F&urlhash=qxrl&goback=%2Egde_1467337_member_91028246

This was shared by Tiffany Arthur in Foreclosure Prevention:  Real Estate Agents, Investors, Bankruptcy Attorneys, Mortgage/Lending Agents @ LinkedIn

Will Obama Target Housing Crisis During State Of The Union? 

Obama and the State of the Union — a Political Jekyll and Hyde?

President Obama is likely to talk about this in tonight’s State of The Union Address, but we’re not going to wait that long.

With details of the proposed $25 billion settlement with the nation’s largest banks over the robo-signing fiasco now out in the public eye thanks to the Associated Press, we feel a large sense of disappointment.

There’s no question that this deal will change the mortgage industry for the better. Some homeowners will even have a much better chance of being able to restructure their loans when facing foreclosure under this deal.

No One’s Getting Their Keys Back

Yet, there are many out there who are going to feel little comfort with this agreement. Here’s what the deal is NOT going to do. It’s not going to put people who’ve lost their homes (again because of deceptive foreclosure practices) back in those houses, or give them any real financial security.

According to the deal, about 750,000 Americans, which by the way is about ½ of the people who are eligible for help under this settlement, may get a check for about $1,800. That’s the equivalent of one of those parting gifts they’d give contestants when they lose on Wheel of Fortune. In other words, it does them very little good.

Now it’s true that about a million current homeowners will supposedly get their loan balances reduced by an average of 20 thousand dollars. That’s great, and something we here at the South Florida Law Blog have been begging for. But when you consider their are about 11 million out there with underwater mortgages, A LOT of people will be no better off.

Banks Still On Easy Street

And here’s the other thing this deal doesn’t do. It doesn’t hold the banks accountable. Why after the mountains and mountains of evidence of wrong-doing, is the government still playing nice-nice with the nation’s lenders?

The funny thing about this settlement, despite the fact that it’s long overdue, it feels rushed. There hasn’t been a full investigation into the banks’ conduct, no discovery, yet here this deal is, as if they are trying to push it through before anyone notices. It’s feels as if they are trying to avoid the investigation in the first place!

Red Flags Already Raised

Several politicians, including Ohio Senator Sherrod Brown, are already raising concerns over a lack of a proper investigation. We should also point out that the attorneys general in New York and California, a state with one of the highest foreclosure rates, have split from the federal government to pursue their own investigations. The ink on this deal isn’t dry and yet it’s already raising red flags.

“Wall Street is again trying to pass the buck,” Brown told the Associated Press, “Instead of criminal prosecutions, we’re talking about something that’s not more than a slap on the wrist.”

The banks have dragged their feet, in order to escape any real punishment. The perception still remains that the banks are too big to be punished, there is nothing in this deal that invalidates that notion. While we agree this deal should be and is about fixing the system, there is a call for retribution from homeowners that this deal simply doesn’t address.

“This is not vengeance against the banks,” Brown told HousingWire about the deal.

But shouldn’t it be?

Tags: Associated Press, barack obama, fallout, foreclosure, foreclosure practices, foreclosures, Harriet Johnson Brackey, large banks, mortgage, mortgage industry, mortgage practice, Oppenheim Law, personal finance, President Obama, Real Estate, robo, settlement, sherrod brown, South Florida Law Blog, wheel of fortune

How To Blackout Your Site (For SOPA/PIPA) Without Hurting SEO

http://searchengineland.com/blackout-your-site-without-hurting-seo-108302

How To Blackout Your Site (For SOPA/PIPA) Without Hurting SEO

Jan 16, 2012 at 2:39pm ET by Matt McGee

Google-Webmaster-SEO-Rep-1304428070A number of websites are (or were) planning to “go black” this week while the U.S. Congress discusses issues related to the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA). The website blackouts are part of a larger social media effort against the bills that our Greg Finn wrote about this morning on Marketing Land.

You may be thinking about joining the website blackout movement, but yikes … what about the SEO implications? How do you take your site offline in protest without messing up your visibility in Google’s search results?

Well, Google’s Pierre Far shared several tips earlier today on Google+ in a post called “Website outages and blackouts the right way.”

In short, the advice is to use a 503 HTTP status code to tell spiders that the website is temporary unavilable. With a 503 status, Google won’t index the content (or lack thereof if you’re blacking out your site) and it won’t consider the site as having duplicate content issues (when all of the pages are blacked out).

But Far adds a couple important caveats to this advice regarding the robots.txt file and what will happen in Webmaster Tools if Google finds your site blacked out. Another Googler, John Mueller, adds additional information in the comments, so you’ll want to read the original Google+ post if you’re thinking about blacking out your website this week for SOPA, or in the future for any other reason.

Of course, also keep in mind that Bing may not handle things the same way if you do blackout your site.

Related Entries

Related Topics: Google: SEO | SEO: Blocking Spiders | SEO: Duplicate Content


About The Author: Matt McGee is Search Engine Land’s Executive News Editor, responsible for overseeing our daily news coverage. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He blogs at Small Business Search Marketing and can be found on Twitter at @MattMcGee and/or on Google Plus. See more articles by Matt McGee

How To Blackout Your Site (For SOPA/PIPA) Without Hurting SEO

Wikipedia Will Go Dark On January 18 To Protest SOPA And PIPA | TechCrunch

 

Wikipedia Will Go Dark On January 18 To Protest SOPA And PIPA

ChrisVelazco

posted 7 hours ago

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Chris Velazco is a mobile enthusiast and writer who studied English and Marketing at Rutgers University. Once upon a time, he was the news intern for MobileCrunch, and in between posts, he worked in wireless sales at Best Buy. After graduating, he returned to the new TechCrunch to as a full-time mobile writer. He counts advertising, running, musical theater,… → Learn More

Wikipedia_SOPA_Blackout_Design

Wikipedia_SOPA_Blackout_Design

Wikipedia’s Jimmy Wales wanted to send a “big message” to the U.S. government regarding the two heinous internet censorship bills currently being considered, and after a brief period of debate the world’s encyclopedia will soon do just that.

The Wikipedia founder announced on Twitter today that starting at midnight on Wednesday, January 18, the English language version of the world’s encyclopedia will go dark for 24 hours in protest of SOPA and PIPA. With their commitment confirmed, Wikipedia will be joining a slew of websites and companies that will suspend their operations for one day in an effort raise awareness around the two bills.

Meant to curb IP theft and piracy, the (imaginatively named) Stop Online Piracy Act and the PROTECT IP Act have raised eyebrows recently due to their decidedly scorched-earth approach to handling suspected offenders. Websites found to offer pirated content, along with the services that they use, could be hidden from US internet users by being delisted on search engines and potentially on DNS servers themselves.

Rather than let users access Wikipedia’s vast stores of English-language information on the 18th, Wales mentioned that the Wikipedia landing page will instead be populated with a letter of protest and a call to action that urges readers to get involved with the issue. It doesn’t appear as though the new landing page has been finalized, but one of the community’s prototypes can be seen above.

The news comes after a lengthy debate as to the particulars of such a grand gesture — whether or not the site should participate at all, which versions of the site would be affected, and how exactly the blackout would go down were all on the table for the community to discuss. Ultimately, the consensus pointed to a full blackout as a the proper way to make their collective displeasure known. There’s no official word on how other parts of the site will handle the event, although Wales has mentioned that the German language version of the site will be displaying a banner in support.

Meanwhile, some of SOPA’s supporters are already reacting to the very public backlash against the bill. Ars Technica reports that Congressman Lamar Smith (R-TX) would be pulling his DNS-blocking provisions from the bill after having consulted with “industry groups across the country.” What’s more, the White House has responded to two petitions about SOPA and PIPA on the official White House blog stating that they will not “support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.”

Wales notes on Twitter that while SOPA has been “crippled,” buts its counterpart in the Senate is still very much alive and very dangerous. Senate Majority Leader Harry Reid recently popped up on Meet The Press claiming his continued support for PIPA even though it “could create some problems.”

Though the event is meant to raise public awareness over two critical pieces of legislation, Wales still took a moment to offer a bit of sage advice for students heading back to school:

Jimmy Wales@jimmy_wales

Student warning! Do your homework early. Wikipedia protesting bad law on Wednesday! #sopa

16 Jan 12

Tags: Wikipedia, sopa, PIPA

Wikipedia Will Go Dark On January 18 To Protest SOPA And PIPA | TechCrunch

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

19 Dec 2011 at 5:09 PM

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now

By Christopher Danzig

The former military intelligence analyst accused of leaking hundreds of thousands of documents to WikiLeaks has spent the last four days in a Maryland military court, undergoing a hearing to determine whether or not his case will proceed to court-martial.

For those new to the party, 24-year-old Bradley Manning is accused of committing the biggest security breach in American history. He has been in detainment for the last 19 months, and he faces a multitude of military charges.

The Article 32 hearings, which began on Friday, are something akin to grand jury proceedings in civilian court. At the end, Investigating Officer Colonel Paul Almanza, an Army Reserve officer and Justice Department prosecutor, will decide recommend whether Manning’s case will proceed to court-martial.

So far, the hearings have been interesting to say the least. Let’s see what’s going on….

Kim Zetter at Wired’s Threat Level is blogging extensively about the hearings (and tweeting some color commentary from court):

Manning, who turned 24 Saturday, is charged with 22 violations of military law and faces possible life imprisonment. Manning, who at the time was an Army intelligence analyst, is accused of abusing his access to classified computer systems to leak diplomatic cables, Iraq and Afghanistan action reports and the so-called Collateral Murder video to WikiLeaks. In chat logs published by Wired, Manning allegedly told Lamo that he leaked the documents as an act of political protest against a corrupt system and the he snuck files out of a shared workroom using rewritable CDs labeled with pop stars names, such as Lady Gaga.

One of the bigger revelations from the hearings is that the government produced chat logs from Manning’s own computer, where the soldier allegedly discussed leaking the cables. The messages had previously been made public, but Julian Assange and other Manning supporters claimed the chat messages could have been fabricated. Because the government found the logs on Manning’s own computer, forgery seems less likely.

The hearings have been understandably tense. Manning has a lot of supporters in the technology community. Although he has spent the last year and a half in custody, many say he is a whistleblower, not a traitor.

Back in April, more than 250 legal scholars signed a letter protesting the way the Justice Department was treating Manning. In the letter, signatories including Harvard Law professor Laurence Tribe protested Manning’s “degrading and inhumane conditions.” The letter called the military’s conduct illegal and unconstitutional.

On Friday, the hearing started with a bang when defense attorneys accused Investigating Officer Colonel Almanza (the equivalent of a judge in the case) of bias, because of his work as a Justice Department prosecutor. The defense unsuccessfully asked Almanza to recuse himself. (Hmm, I wonder where we’ve seen that before?)

Earlier today, retired lieutenant and prominent Don’t Ask Don’t Tell activist Dan Choi told Politico he was wrestled to the ground and handcuffed while trying to attend the hearing.

Zetter reported another dramatic moment on Sunday, which reads like something out of A Few Good Men:

Proceedings in the court this morning continued in a contentious manner between defense attorney Coombs and the proceeding’s equivalent of a judge, Investigating Officer Capt. Paul Almanza. At one point, when the IO tried to stop a line of questioning with a witness, questioning the relevancy. Coombs abruptly walked to the defense table and grabbed a book containing Article 32 procedural rules and brandished it to Almanza.

“I would caution the investigating officer as to case law,” he said, adding that the defense should be given wide latitude in questioning to obtain evidence.

“The IO should not arbitrarily limit cross-examination, ” he said. “I am not going off into the ozone layer about this. . . I should be allowed to ask questions about what this witness saw so I can have this testimony under oath as part of discovery.”

Zetter reports that the defense is trying to show that the Army should have responded better to behavioral problems Manning exhibited early in his enlistment. He should have never been deployed, or he should have lost his security clearance earlier, “both of which would have made it impossible for him to obtain the documents he allegedly leaked to WikiLeaks.”

So which is it? Traitor or courageous hero? Should the government put him in jail and throw away the key, or throw him a parade?

Army Arrested Manning Based on Unconfirmed Chat Logs [Threat Level / Wired]
DADT activist Dan Choi barred from Bradley Manning hearing [Politico]
Request for Recusal Denied in Case Against Manning [Associated Press]


Christopher Danzig is a writer in Oakland, California. He covers legal technology and the West Coast for Above the Law. Follow Chris on Twitter @chrisdanzig or email him at cdanziggmail.com. You can read more of his work at chrisdanzig.com.

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

Technology « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

 

Technology

Stop Online Piracy Act Wants Biglaw Support; Biglaw Says, ‘Aw, Hell No’

By Christopher Danzig

  Unless you drowned yourself     in a bathtub full of eggnog over the holidays, hopefully you are at least superficially aware of the Stop Online Piracy Act.

The House of Representatives is considering the bill, known as SOPA for short, that people fear will destroy the Internet as we know it.

Last week, Elie and I were “debating” the insidiousness of SOPA on Gchat. Our conversation went something like this:

Elie: SOPA is terrible.
Chris: It’s pretty much the worst thing ever.
Elie: It’s f***ing disastrous.

Elie and I aren’t the only ones upset. The Internet has whipped into a tizzy over the act. We mentioned it last week in Non-Sequiturs. And I wrote about it back in November. But the story has kept picking up speed. Reddit has gone mad over the bill. Just before the new year, a bunch of Biglaw firms got mistakenly dragged into the fray.

Keep reading for a primer on SOPA and its sister Senate bill, the Protect IP Act. And see why a bunch of Biglaw firms were unintentionally listed as supporters after the jump.…

double red triangle arrows Continue reading “Stop Online Piracy Act Wants Biglaw Support; Biglaw Says, ‘Aw, Hell No’”

Technology « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

Law School Professionals Want Bill Robinson to Put a Sock in It « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

http://abovethelaw.com/2012/01/law-school-professionals-want-bill-robinson-to-put-a-sock-in-it/

Law School Professionals Want Bill Robinson to Put a Sock in It

By Elie Mystal

William Robinson III (a.k.a. the guy who needs to explain how he afforded his Corvair in the first place).

So earlier this week, the president of the American Bar Association, William Robinson, gave a ridiculous interview to Thomson Reuters News & Insight. You might have heard about it.

Robinson had the grace and the courage to tell law students it was their own fault for the rampant price gouging that happens as a result of the ABA’s ineffective oversight of law schools. It took real strength of character for Robinson to share this anecdote: “When I was going to law school . . . I sold my Corvair to make first-semester tuition and books for $330.” I mean, how many people in Robinson’s position would be so out of touch that they think prospective law students are driving automobiles that can cover a whole semester of tuition at an American law school!

That’s right, future 1Ls, don’t get too used to your Jaguar XKR. Don’t become too attached to your Lexus hybrid. You’ll need to sell your luxury automobile to pay for law school. D’uh!

Sorry, I’m still flabbergasted that the president of the American Bar Association openly admitted to being a complete joke.

When the story broke the other day, I had the good fortune of being in Washington, D.C., at the annual conference of the Association of American Law Schools (AALS). The law school at the University of California – Irvine invited me to speak to law school professionals and deans about how law schools could better use (or avoid) social media.

And let me tell you, law school professionals — the people who have to deal with the perception of general ABA incompetence on a day-to-day basis — were not at all happy with William Robinson’s comments….

I asked about ten public relations or communications professionals about Robinson’s comments. Nobody would go on the record with me. It was kind of funny; nobody would even go on the record to say “no comment.” At least Bill Robinson won’t be dragged through the press by member institutions for his insensitive remarks.

But that doesn’t mean they didn’t have opinions. When I asked people, I heard, “I can’t believe he said that,” or “Great, the ABA makes my job more difficult, AGAIN.” There was disbelief and a bunch of grumbling, especially as the news percolated around the conference in the morning.

But as the day wore on, people had an opportunity to reflect more on Robinson’s statements. Said one PR person for a top 100 law school:

It’s frustrating because he has a point worth making. The information is out there… and law students… everybody in these times, have to take advantage of the information that is out there….

But who was the person that even let him do that interview and say those things?

Frustrating is how a couple of other people described Robinson:

The conversation about the cost of law school and what to do about it has been going on for years. It is… frustrating for Robinson to come in and preach about what is, at best, one part of the problem.

But perhaps the most telling comment was from a person representing a relatively new law school:

At my law school, we are [long spiel about the heroic attempts his law school has made to keep tuition down]. We want people to know what they’re getting into financially, and make smart decisions with loans and debt….

What was your question? Robinson? Yeah, don’t care.

Well played, anonymous sir. Robinson’s comments might have been insensitive, out-of-touch, and incorrect — but who cares? It’s not like any other ABA president has done anything to help control the cost of law school tuition. It’s not like any law school administrator or dean is thinking about the ABA and their new smack-talking president when they present their projected budgets to the presidents of their universities.

Robinson’s words might sting and might make him look like an idiot, but they carry the force and effect of a Jon Huntsman campaign ad.

Let me put it this way: I wanted to talk to people about William Robinson, but nobody wanted to talk to me about him. The law school administrators wanted to talk about what law schools were doing — not the latest dumbass missive from the ABA.

Law School Professionals Want Bill Robinson to Put a Sock in It « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

Constitutional Scholar: White House Entirely Ignoring Article 1, Section 5 | CNSnews.com

http://cnsnews.com/news/article/constitutional-scholar-white-house-entirely-ignoring-article-1-section-5

Constitutional Scholar: White House Entirely Ignoring Article 1, Section 5

By Fred Lucas

January 5, 2012

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Obama

President Barack Obama shakes hands with Richard Cordray before speaking about the economy, Wednesday, Jan. 4, 2012, at Shaker Heights High School in Shaker Heights, Ohio. In a defiant display of executive power, President Barack Obama on Wednesday will buck GOP opposition and name Cordray as the nation’s chief consumer watchdog. Outraged Republican leaders in Congress suggested that courts would determine the appointment was illegal. (AP Photo/Haraz N. Ghanbari)

(CNSNews.com) – John C. Eastman, a professor at Chapman University School of Law who is an expert on the constitutional separation of powers, says that the White House simply ignored the section of the Constitution, which governs when Congress can adjourn, when President Obama claimed to use the “recess” appointment power on Wednesday to name a director to the Consumer Finance Protection Bureau and three members to the National Labor Relations Board.

Eastman says that under the terms of the Constitution Congress was not in recess this week, it was in session.

“They’re ignoring that the recess clause was designed to fill vacancies that occurred during the recess. These did not,” said Eastman. “They are ignoring entirely Section 5, Article 1. The Senate doesn’t have the authority to recess without the House’s approval even if they wanted to. So Carney’s claim that this is just a gimmick completely ignores that the House didn’t authorize them to leave at all.”

Article 1, Section 5, Clause 4 of the Constitution says: “Neither House, during the session of Congress, shall, without the consent of the other, adjourn for more than three days, nor to any other place than that in which the two Houses shall be sitting.”

Because the Republican-controlled House did not allow the Senate to adjourn, neither House was in recess.

Eastman, however, also said that the Senate in the last two decades has given a more expansive meaning to advise and consent than the founders envisioned. The intent, Eastman said, was to provide a check to prevent the president from appointing relatives or other unqualified people to high government posts.

The White House asserts that the so-called “recess appointments” Obama made on Wednesday are constitutional because Congress was out of session for a “sustained period of time.”

“Our assessment is that Congress has been in recess and has made every indication that it will be in recess for a sustained period of time, and that gaveling in and gaveling out for seven seconds does not constitute a recess with regard to the president’s constitutional authority,” White House Press Secretary Jay Carney said Thursday.

“If these gimmicks were all a Senate needed to do to prevent the president from exercising his constitutional authority–any president–then no Senate would, I mean, no president would ever be able to exercise it,” said Carney.

Article 2, Section 2 of the Constitution says that the president “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”

Despite this constitutional language, Obama made his appointments without Senate approval.

Obama named former Ohio Attorney General Richard Cordray as director of the CFPB. He also named to the NLRB, Sharon Block, a deputy assistant in the U.S. Labor Department who once worked with the late Sen. Ted Kennedy; Terence F. Flynn, chief counsel to NLRB Board Member Brian Hayes, a Republican; and Richard Griffin, the general counsel for the International Union of Operating Engineers. Griffin also serves on the board of directors for the AFL-CIO Lawyers Coordinating Committee, a position he has held since 1994.

The constitutional legitimacy of these appointments will be questioned, said Russell Weaver, a professor at the Louis D. Brandeis School of Law at the University of Louisville.

“My guess is the president’s action is illegal,” Weaver told CNSNews.com. “You can be confident there will be a court challenge the first time this newly, allegedly appointed director takes an action where money is involved. I don’t think there is any doubt this will end up in the courts and go on for years. If it’s struck down, it would undermine everything that’s done in the meantime.”

Both the executive and legislative branches–and both parties–have historically exceeded their roles in the appointment process, said Bob Turner, a professor at the University of Virginia School of Law.

“The clear purpose of the recess appointment clause was not to permit the president to undermine the Senate’s constitutional negative if senators go home for the night or take a three-day weekend, but to permit the government to continue functioning when the Senate elects not to do business for an extended period of time,” Turner told CNSNews.com. “The length of that time ought to be established in good faith and reasonableness based upon the totality of the circumstances–what is the vacancy and how urgent is it for the nation to fill the position before the Senate is likely to return to do such business?”

“I would add that this controversy is a consequence of constitutional impropriety on both ends of Pennsylvania Avenue,” Turner said. “Rather than limiting their review to assuring that ‘no unfit person’ be appointed–blocking the appointment of unqualified relatives, college roommates, big financial contributors, and the like–the Senate too often perceives its role as preventing the president from having advisers and subordinates who share his political views.”

Michael Rappaport, a professor at the University of San Diego School of Law, said recess appointments can be problematic. “I don’t think the Constitution gives the authority under its original meaning,” Rappaport told CNSNews.com. “Even under the precedents, it is a dicey question.  Under the current law, it is not clear, although I would argue that the stronger side suggests the president does not have the authority.”

There is a strong argument that the president’s power to make recess appointments was intended to apply only when Congress was out of session, but it’s not entirely settled, said Brian Kalt, a professor at Michigan State University College of Law.

“That still leaves the question of what to do when, as now, the Senate claims that it is staying in session by holding these pro forma meetings every few days. The president can argue that this doesn’t count as being in session, because the Senate isn’t really ready to do any business like voting on a nomination,” Kalt told CNSNews.com. “Alternatively, he can argue that the time between these pro forma meetings constitutes a recess.”

“The bottom line is that nobody knows for sure because it has never really been resolved in court. Presidents have pushed the boundaries on this and while Senates have protested, nobody has stopped a president yet,” Kalt continued. “This time, the president is pushing the boundaries further. It’s hard to get a reviewable case out of these situations. I think that this time we might get one, though.”

Asked if the White House sought legal advice from the Justice Department, Carney was not specific.

“I think I actually can say that we routinely consult with the Department of Justice on a range of legal matters, but we also routinely don’t delve into the specifics of any confidential legal guidance that the president or the White House in general would receive in the course of those consultations,” Carney said. “So, I mean, I think that’s just standard operating procedure.”

Carney also said, “We feel very strongly that the Constitution and the legal case is strongly on our side. But more importantly, this isn’t about process. This isn’t about whether or not Congress is in session. If I could digress for a minute, I think all of you could run up to Capitol Hill and check out the House and Senate and see if you can find a single member of Congress and tell me on this working day across America if Congress is in session.”

Constitutional Scholar: White House Entirely Ignoring Article 1, Section 5 | CNSnews.com

The Shocking Truth About The Crackdown On Occupy | Before It’s News

The Shocking Truth About The Crackdown On Occupy | Before It’s News

The violent police assaults across the US are no coincidence. Occupy has touched the third rail of our political class’s venality

by Naomi Wolf

US citizens of all political persuasions are still reeling from images of unparallelled police brutality in a coordinated crackdown against peaceful OWS protesters in cities across the nation this past week. An elderly woman was pepper-sprayed in the face; the scene of unresisting, supine students at UC Davis being pepper-sprayed by phalanxes of riot police went viral online; images proliferated of young women – targeted seemingly for their gender – screaming, dragged by the hair by police in riot gear; and the pictures of a young man, stunned and bleeding profusely from the head, emerged in the record of the middle-of-the-night clearing of Zuccotti Park.

Oakland, California riot police advance on peaceful Occupy Oakland, November 3, 2011.But just when Americans thought we had the picture – was this crazy police and mayoral overkill, on a municipal level, in many different cities? – the picture darkened. The National Union of Journalists and the Committee to Protect Journalists issued a Freedom of Information Act request to investigate possible federal involvement with law enforcement practices that appeared to target journalists. The New York Times reported that “New York cops have arrested, punched, whacked, shoved to the ground and tossed a barrier at reporters and photographers” covering protests. Reporters were asked by NYPD to raise their hands to prove they had credentials: when many dutifully did so, they were taken, upon threat of arrest, away from the story they were covering, and penned far from the site in which the news was unfolding. Other reporters wearing press passes were arrested and roughed up by cops, after being – falsely – informed by police that “It is illegal to take pictures on the sidewalk.”

In New York, a state supreme court justice and a New York City council member were beaten up; in Berkeley, California, one of our greatest national poets, Robert Hass, was beaten with batons. The picture darkened still further when Wonkette and Washingtonsblog.com reported that the Mayor of Oakland acknowledged that the Department of Homeland Security had participated in an 18-city mayor conference call advising mayors on “how to suppress” Occupy protests.

To Europeans, the enormity of this breach may not be obvious at first. Our system of government prohibits the creation of a federalized police force, and forbids federal or militarized involvement in municipal peacekeeping.

I noticed that right-wing pundits and politicians on the TV shows on which I was appearing were all on-message against OWS. Journalist Chris Hayes reported on a leaked memo that revealed lobbyists vying for an $850,000 contract to smear Occupy. Message coordination of this kind is impossible without a full-court press at the top. This was clearly not simply a case of a freaked-out mayors’, city-by-city municipal overreaction against mess in the parks and cranky campers. As the puzzle pieces fit together, they began to show coordination against OWS at the highest national levels.

Why this massive mobilization against these not-yet-fully-articulated, unarmed, inchoate people? After all, protesters against the war in Iraq, Tea Party rallies and others have all proceeded without this coordinated crackdown. Is it really the camping? As I write, two hundred young people, with sleeping bags, suitcases and even folding chairs, are still camping out all night and day outside of NBC on public sidewalks – under the benevolent eye of an NYPD cop – awaiting Saturday Night Live tickets, so surely the camping is not the issue. I was still deeply puzzled as to why OWS, this hapless, hopeful band, would call out a violent federal response.

That is, until I found out what it was that OWS actually wanted.

The mainstream media was declaring continually “OWS has no message”. Frustrated, I simply asked them. I began soliciting online “What is it you want?” answers from Occupy. In the first 15 minutes, I received 100 answers. These were truly eye-opening.

The No 1 agenda item: get the money out of politics. Most often cited was legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process. No 2: reform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act – the Depression-era law, done away with by President Clinton, that separates investment banks from commercial banks. This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks.

No 3 was the most clarifying: draft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors.

When I saw this list – and especially the last agenda item – the scales fell from my eyes. Of course, these unarmed people would be having the shit kicked out of them.

For the terrible insight to take away from news that the Department of Homeland Security coordinated a violent crackdown is that the DHS does not freelance. The DHS cannot say, on its own initiative, “we are going after these scruffy hippies”. Rather, DHS is answerable up a chain of command: first, to New York Representative Peter King, head of the House homeland security subcommittee, who naturally is influenced by his fellow congressmen and women’s wishes and interests. And the DHS answers directly, above King, to the president (who was conveniently in Australia at the time).

In other words, for the DHS to be on a call with mayors, the logic of its chain of command and accountability implies that congressional overseers, with the blessing of the White House, told the DHS to authorize mayors to order their police forces – pumped up with millions of dollars of hardware and training from the DHS – to make war on peaceful citizens.

But wait: why on earth would Congress advise violent militarized reactions against its own peaceful constituents? The answer is straightforward: in recent years, members of Congress have started entering the system as members of the middle class (or upper middle class) – but they are leaving DC privy to vast personal wealth, as we see from the “scandal” of presidential contender Newt Gingrich’s having been paid $1.8m for a few hours’ “consulting” to special interests. The inflated fees to lawmakers who turn lobbyists are common knowledge, but the notion that congressmen and women are legislating their own companies’ profitsis less widely known – and if the books were to be opened, they would surely reveal corruption on a Wall Street spectrum. Indeed, we do already know that congresspeople are massively profiting from trading on non-public information they have on companies about which they are legislating – a form of insider trading that sent Martha Stewart to jail.

Since Occupy is heavily surveilled and infiltrated, it is likely that the DHS and police informers are aware, before Occupy itself is, what its emerging agenda is going to look like. If legislating away lobbyists’ privileges to earn boundless fees once they are close to the legislative process, reforming the banks so they can’t suck money out of fake derivatives products, and, most critically, opening the books on a system that allowed members of Congress to profit personally – and immensely – from their own legislation, are two beats away from the grasp of an electorally organized Occupy movement … well, you will call out the troops on stopping that advance.

So, when you connect the dots, properly understood, what happened this week is the first battle in a civil war; a civil war in which, for now, only one side is choosing violence. It is a battle in which members of Congress, with the collusion of the American president, sent violent, organized suppression against the people they are supposed to represent. Occupy has touched the third rail: personal congressional profits streams. Even though they are, as yet, unaware of what the implications of their movement are, those threatened by the stirrings of their dreams of reform are not. MORE HERE

The Words of NY Supreme Court Judge Threatened With Arrest

Report:  NYPD Cop Pushes New York Supreme Court Judge Into Wall

By Rob Beschizza @ 6:59 AM Friday, Nov. 18th

“Democracy Now” quotes:

I was there to take down the names of people who were arrested… As I’m standing there, some African-American woman goes up to a police officer and says, ‘I need to get in. My daughter’s there. I want to know if she’s OK.’ And he said, ‘Move on, lady.’ And they kept pushing with their sticks, pushing back. And she was crying. And all of a sudden, out of nowhere, he throws her to the ground and starts hitting her in the head,” says Smith. “I walk over, and I say, ‘Look, cuff her if she’s done something, but you don’t need to do that.’ And he said, ‘Lady, do you want to get arrested?’ And I said, ‘Do you see my hat? I’m here as a legal observer.’ He said, ‘You want to get arrested?’ And he pushed me up against the wall.

http://boingboing.net/2011/11/18/nypd-cop-pushes-new-york-supre.html

Bout Time GA Had a Decent Judge’s Ruling, I was Fixing to Give Up On the Idea!

 

http://stopforeclosurefraud.com/2011/11/14/phillips-vs-u-s-bank-judge-dennis-blackmon-nails-us-bank-in-georgia-on-hamp-wrongful-foreclosure-and-emotional-distress-damages/

 

Nye Lavalle, We Applaud You for Your Efforts to Expose Robo-Judges Signing Robo-Orders!!!

 

Message for My Friends & Colleagues –From: Nye Lavalle

Sent: Friday, October 28, 2011 3:50 PM
Please Read Entire Email

NOTE: to all blogs!!!

     Please post the email to the AGs, I wrote last week that I did not send you. I wrote them in confidence.       

       However, since they have failed to act and respond I think the way to get to them AND GET RESPONSES AND ACTION is to publicly publish all my warnings and my letters so there is a VERY public record of notices and warnings to them.

    They may wish to ignore me again, but I and hopefully each of YOU, won’t let them! So, please read You may also publish and post, separately, my letter attached to FHFA’s OIG.

Dear friends,

I am taking the gloves off, its that time! Attorney General Beau Biden did us all proud and right yesterday, despite the political reality that he faces in a state that hosts as corporations, the banks, Wall St. firms, and system he is attacking. I would ask that each of you kindly read the entirety of this letter and to assist me help each of you and this nation of ours and force the other AGs and elements of our government and the media to be as bold and brave as Beau Biden!

Beau knows MERS! LOL He certainly not only vindicated me and my decade-old fight against MERS and my predictions, but all of us, especially Max, April, Judges Logan and Gordon (would love to interview each now) and let me not forget our favorite jurist, Judge Schack!

Let us not forget the crooked judges too, like Craig Schwall and Louis Levenson in Fulton Co who will be getting their comeuppance next month in both courts of law and public opinion (the media). We need to have media focus on the Judges who get it and the judges we have evidence of corruption on. (including our tapes) This will be one of our new objectives. We also need to expose Robo-Judges™ who issue Robo-Orders™!

We’re starting a new movement in America. Our new movement will complement the Occupy Wall Street and Occupy the Internet movements by assisting those trying to help or most importantly IGNORING TO HELP our nation and states. That is the media who is trying to help and some in government like Beau Biden. The other AGs and regulators that ignore us will be publicly noticed and later publicly embarrassed if they fail to act, since a “record” of notices, warnings, and actions or inactions will be publicly displayed now and for the years to come that anyone can access. We shall begin with Names!!

The name for these new movements shall be Occupy The Government & Occupy The Media! As for the media, we shall and I request that you respect their time and their space.

The first step is that I want each of you to provide me, Lisa, Michael, Matt and everyone of our colleagues and comrades in arms with an email list of ALL media and government contacts you have in two separate email address books for Outlook or AOL. We will then discuss content to send by each of us to these contacts. For the media, we will target great story ideas for each journalist and editor we have befriended and has supported the cause. We will also provide a host of information, facts, and evidence for their investigative needs. The media is not only our friend, but our greatest ally in this movement, next to the Internet!

For government, we will create letters and petitions and forward to them in masse! Also, we will document and forward complaints, and evidence of fraudulent bank behavior. They are either with us, or against us! They get to choose and so do we, by a vote. It’s time to stop picking leaders by social issues, but real life issues. You’re either a bank bitch and for them or you’re not (like Beau).

I want to do to the AGs, all regulators, and politicians, what I did to CEOs and boards years ago, paper them and “put them on notice” to act. Let’s see if they ignore our warnings this time around since doing so, will surely jeopardize their political and/or professional aspirations. As they move up the political food chain, we will have a record of what they were warned of and what they did or didn’t do so that their prior actions can be judged by voters and regulators alike.

I am reminded of Gandhi’s quote “First they ignore you, then they laugh at you, then they fight you, then you win.” We’re now winning, so it’s time to pile in on as the bankster’s lawyers would say. Over the years, I have created a “hit list” and “target list” of enemies and foes and have guarded carefully very personal information about them. While information is power, knowledge of what to do with that information, and the wisdom to know when its right to use, is key. I suggest you each do the same!

Next, I will begin writing more letters and more warnings based on my experience and I will start doing some polling with the help of supporters and sponsors I will seek from law firms. This will accomplish a few goals. First, it will bring national media attention and coverage to the issues and second, media attention, business and leads to the law firms than sponsor my research. My research has traditionally garnered national media attention and the front pages of virtually every newspaper as well as television and radio. It will once more, do so again.

As for Beau Biden, his complaint is a masterpiece and must read and pins the tail on the ASS (sorry, Donkey was way too kind) so to speak in MERS. In effect, he is not only seeking to shut down every MERS foreclosure in DE, but seeking to foreclose on MERS itself! I wonder what ASSet protection MERSCORP and its enablers have in place.

I have previously called the racketeering acts of the servicers the “default servicing enterprise.” However, Beau kept it simple and called it the “foreclosure enterprise.” I agree. From this day forward, when we discuss or refer to this racketeering enterprise, let’s all agree to call it and refer to it as the FORECLOSURE ENTERPRISE! Let’s get that mantra up and explain it for what it is, an enterprise which is key for RICO actions, both state and federal, which is where we will be going next with the evidence we have all uncovered. Make Foreclosure enterprise as widely known and accepted as robo-signing and fraudclosure!

In his complaint and his exhibits, Beau Biden has laid the foundation for attacking MERS and every lender. In every case where MERS is ANYWHERE in the chain (current or prior loans) you must file his complaint and exhibits with the court with a notice for the Court to take “judicial notice” of the complaint. Next, you must also file all of the county recorder lawsuits. Remember, building a record is the most important thing you can do in a case. This is how we will also expose the corrupt judges we have evidence on. An analysis of their record and rulings will assist media and also how we vote them out. We shall approve and disprove of judges and politicians and make our voices known, regardless of party affiliation. We will make them sign pledges and contracts, so we know where stand.

We will get our friends in person, email, and on Facebook, to work with us, petition, send emails, make phone calls and focus attention on issues and those who fight and oppose us. We will gather lists of names too and personal and email addresses for protesters.

Our first petition will be the abolishment of MERS and I am drafting Lisa Epstein to create the first draft using the relief that Beau seeks in his lawsuit to be the first petition of our group. Lisa, please copy me, Jacqs, April, Dan, and Max on it and we’ll get out soon!

Friends, its time! 2012, the Mayans predicted would be the end of the world “as we know it!” I’m reminded of the song “its the end of the world as we know it, its the end of the world as we know it. If we believe and act, we can do it! I know we can and i know we will!

It’s time my friends, time to get immediate attention and use the legal strategy the the banks and foreclosure mills created called “piling on” after football piling on. Let’s get to the media, get to the government, get to judges, and get to the people. Let’s Occupy Government and The Media and take control of the destiny God has given each of us! 2012 is upon us. The Mayans were right, its the end of the world as we know it, and the start of a new world, not new world order, as we desire and want it to be free of banks, political influence, and corruption!

Nye

Foreclosure Hell…

                                                                Important Evidence & Affidavit in Foreclosure Law Firm, Robo-Signing, & MBS Investigation               From Nye Lavalle

Sent: Thu, Oct 20, 2011 1:18 pm                                                                            
From Nye Lavalle

Dear Attorneys General:

Recently, the Office of Inspector General for the Federal Housing Finance Agency released reports about a special counsel investigation by Fannie Mae and that a shareholder had warned and provided Fannie Mae and others as far back as 2003 about robo-signing and foreclosure abuses. This story was picked up by the NY Times’ Gretchen Mogenson and a plethora of other news media. While Gretchen and the FHFA didn’t name me, I was nonetheless ousted since she and many others, including some of you, knew this shareholder was me.

I have been working hard behind the scenes to warn and stop the catastrophic events of the past few years which I first forecast in 1996! I have spent almost $1 million and spent over 40,000 hours since 1994 investigating, researching, and documenting these frauds. I have millions of pages of documents and a history like a bear in the woods who has left a trail all the way up to personally warning and communicating to the CEOs of virtually every bank, servicer, and Wall Street firm of these abuses. I took shares in each of these companies in the late 90s to warn them. Jaime Dimon, William Harrison, Kerry Killinger, Ace Greenberg, and James Cayne are just a few. However, the ratings agencies were warned as well as law firms and accounting firms, especially Deloitte!

As the shareholder that in 2003 warned Fannie Mae and worked with the independent counsel they appointed, Mark Cymrot, of Baker Hostetler in Washington DC, I have a unique perspective as well as set of facts that each of you could never obtain due to the cost and time limitations, that I have accumulated since 1993, almost 20-years!

However, as you will see by the attached letter to FHFA and links to reports and warnings I have authored since the mid-nineties, many were warned, including some of your offices since the mid to late nineties. I am also the individual that first discovered robo-signing and foreclosure fraud in the mid-nineties and authored reports documenting such abuses starting in the mid-nineties, until a “visiting judge” in Dallas, TX gagged me from telling this story.

It wasn’t until 2000, at the National Consumer Law Center conference in Colorado when I released reports on these frauds and abuses. Some of your lawyers were in attendance and were provided two reports. Only Max Gardner, a bankruptcy lawyer from North Carolina, took the reports to heart and began a decade-old fight to expose this corruption.

Robo-signing and foreclosure fraud and the intentional fraudulent filing of lawsuit complaints, advertisements of sale, assignments of mortgage, satisfactions of mortgage, and affidavits, as you will see from my well-documented reports, are not a recent phenomenon or the result of the securitization craze that swept America and the world from the late nineties to mid-2000’s.

They were carefully planned and orchestrated after the RTC debacle in the late 80s wherein a select group of “special servicers,” commonly referred to in the industry as the industry’s “toxic waste dumps,” were created to push these newly developed and even “patented” foreclosure factory processes that the four major special servicers “tested” and then “perfected” for the rest of the industry. These special servicers are known to many of you, but their names were EMC Mortgage, SPS f/k/a Conti-Fairbanks Capital, Ocwen, and Litton Loan.

Through “partnerships” with firms like the Barrett Burke operation in Texas, the LOGs group (Shapiro) out of Illinois, the McCalla Raymer group in Georgia and many others, they created an automated foreclosure machine that threw all caution to the wind when it not only came to ethics, but the law. In a newly expanding “virtual” world, they, along with vendors and third parties such as title insurers Fidelity National and First American created patented and marketable “cradle-to-grave” systems and processes to expand the housing and mortgage markets and cover-up and conceal the known fraud to all of them perpetrated mostly by aggressive loan brokers and occasionally borrowers and factored such losses and circumstances into their system. I can provide each of you with mens rea and scienter to prosecute for frauds.

As they tested these systems and perfected their fraud via such practices as intentionally concealing the real ownership of a promissory note and first foreclosing in the names of servicers who claimed to “own” the notes and then MERS, they really were double and multi-pledging the promissory notes to themselves and others to obtain servicing advances as well as take gain on sale accounting treatments on the notes they originated with no risk to them, since they had already forward sold the notes to our respective mutual, trust, and pension funds.

As you each take your own collective and individual approaches towards your investigations, I would whole-heartedly agree with Attorneys General Scheiderman, Biden, Harris, and others who want to continue this investigation. If you don’t continue and right the wrongs, I will boldly predict that each of you will have blood on your hands. I say this as no threat of any means whatsoever, but as a warning based on my understanding as a social scientist and advocate of the human psyche that for some is weak, but for others is broken. If you look at my forecasts and predictions over the years, I have one heck of a batting average in getting it right. As my former partner, Dr. Roy Stout who was featured in the book Blink, would say, I see things and data that others want to ignore. For the first time in my life, I am scared – – scared, not for me, but for our nation and our nation’s youth and those who might have to endure the consequence of the excesses of my generation.

Today, its mortgages, but when these young students, like an ex-girlfriend who at 22 left school with $150,000 in student debt realize what has occurred, all bets will be off. Today, they are peaceful – – tomorrow, they may be vengeful! The Occupy Wall Street movement is only the start. The American public and world, want to see accountability. They want to see perps walk. They want the intentional bankers, hedge funds, and Wall Street executives who intentionally created and manipulated this world-wide financial debacle prosecuted. If you don’t do it, I fear as the nation and the world’s economy suffers even more, there will be total anarchy in the streets as well as assaults and even “non-political” assassinations against banking CEOs, Wall St executives, and foreclosure lawyers, by para-military right and left wing extremists that were former Army Rangers and Navy Seals who are not only disenchanted with the current situation, but disenfranchised. Living in Savannah, GA last year, I met many Rangers each evening who were angry, very angry for fighting a war that they realized was not for Americans, but for other interests. The discussions I would have in the evenings were illuminating and gave me a great respect for our nation’s military men and women.

However, as they lose more friends, limbs, spouses, their sanity and now their homes, a combustible mixture that is not only flammable, but toxic is spreading. You can see it in the OWS movement and some of the videos. I say these things not to scare you, but to warn you once again and most importantly, to EMPOWER EACH OF YOU, collectively or individually.

You have each been give a god-given opportunity at a vital point in our nation and the world’s history. Each of you, if you do your jobs and ignore the politics, political influence, and lobbying from both banks and the federal government, have a special moment in time to leave a mark. A mark that historians will one day write was the day America and the world decided to be free of political and banking influence and truly helped create a world democracy.

The money now, whether it is $20 billion or $50 billion in the scheme of trillion dollar losses is really not what the people are angry at. They was to see accountability and those who not only created the situation, but manipulated it or ignored it to their personal gain be prosecuted. I hear their voices each day and that’s why I am coming out of the closet, so to speak, despite the threats against my family and I to offer my help and assistance in doing what is right for this nation, our people, and those youths protesting for what they know, that many in our generation simply ignored as they drove their BMWs, put dope up their noses, and lived it up at the expense of their children and grand children.

Now is the time. I can give you the goods on many of these if you want to really follow the patented fraud. Have you all read the patents as yet of all these so-called “processes?” The most human element in the entire automated factory were the actual ignorant robo-signers! In fact, when I discovered and reported on robo-signing, I did so just to give one “minor example of the overall fraudulent scheme that was designed not to defraud borrowers who were only pawns in the “game” as it was called, but our respective pension funds and extraction of our so-called excess wealth.

Think about it, for a moment if you will. Robo-signing is such an elementary fraud, so simple, so stupid, so petty! The real fraud and why the banks want to settle with you so quickly is the securitization and the fact that none of these deals were “true sales,” but the financing of receivables whereby investors were defrauded and multi-pledging of paid off notes occurred to inflate their earnings, stock prices, and bonuses.

How many of you have had your original wet-ink promissory note returned to you canceled and paid in full upon its payoff or refinancing? Ask around the office? Then, check your lien release or satisfaction and see if it was robo-signed? Who is your real lender?

Open the black Pandora’s box of financial alchemy in securitization and you will find the multi-pledging and sale of paid off notes, the same notes, and even “ghost notes” that were created with Photoshop and never even executed by a real live borrower. I will save the death threats, break-ins, arsons, computer hacks, and millions of dollars of vexatious litigation by the banks and its foreclosure lawyers against my family, myself, our trusts, and the select group of advocates who were the first to take the baton from my hand for another day. I will even save the bribery of judicial officers, court reporters, and local judges for another day. All I ask is for each of you to think long and very hard, before letting the banks, their servicers, vendors, and lawyers off the hook.

I’ll come to see any of you and give any of you my deposition as well as access to whatever I possess in terms of evidence. I would also suggest that you ask each bank you are investigating and law firm to preserve all evidence and provide to you everything they have in their possession that contains my name “Nye Lavalle” or “Aneurin Lavalle” or this email address that I have had since the mid-nineties. <mortgagefrauds@aol.com>                                                                                                              I am also more than willing to take polygraph exams, should you find that necessary.  In essence, all I personally want is the real and true story told by a real and true investigation and the subsequent civil and criminal prosecution of those responsible for this nation’s morass.

I pray some, or all of you, will take me up on my offer. Please feel free to call or email me at any time if I can be of assistance to you or any of your collective or respective investigations!

Nye Lavalle

A True Manifest Injustice!

 

FANNIE AND FREDDIE OF                   FORECLOSURE ABUSES

Original Message—–
From: Nye Lavalle                                                                                                             
To: OIGhotline <OIGhotline@fhfa.gov>; DeputyDirector-Enterprises <DeputyDirector-Enterprises@FHFA.gov>; Director <Director@FHFA.gov>; DeputyDirector-FHLBanks <DeputyDirector-FHLBanks@FHFA.gov>;                    GeneralCounsel<GeneralCounsel@FHFA.gov>;                                              Ombudsman <Ombudsman@FHFA.gov>

Sent: Sat, Oct 8, 2011 10:28 pm
Subject: I AM THE FANNIE SHAREHOLDER NAMED IN YOUR OIG REPORTS THAT WARNED FANNIE AND FREDDIE OF FORECLOSURE ABUSES IN 2003 AND AFTER

Gentlemen,

By way of introduction, my name is Nye Lavalle and I am the shareholder/investor, referenced in your recent OIG reports that warned Fannie Mae’s board and CEO of foreclosure and legal abuses almost a decade ago. For over a year, I worked closely with Fannie Mae and Mark Cymrot of Baker Hostetler, who was the independent counsel appointed by Fannie Mae, to investigate allegations contained in my 2004 report. I also warned Freddie Mac and its board as well.

The attached letter will provide you more information and hopefully open a dialogue between us that will help us find solutions for our nation and its citizens as well as hold those responsible, accountable for their actions.

To that end, I stand ready and able to assist you each in your respective duties at FHFA and the OIG for FHFA.

Sincerely,

Nye Lavalle

State sues lawyers

State sues lawyers over mass mortgage lawsuit scam

Carolyn Said, Chronicle Staff Writer

San Francisco ChronicleAugust 19, 2011 04:00 AMCopyright San Francisco Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Friday, August 19, 2011


Maddie McGarvey / The Chronicle

Attorney General Kamala Harris says the defendants “suggested the banks would have to pay, but the only people who paid were” homeowners; the state will seek restitution.


Images

Attorney General Kamala Harris says the defendants "sugge...Photos of evidence used in the case against lawyers and s...Attorney General Kamala Harris (left) and Wayne Bell, chi...View Larger Images


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The state Department of Justice is suing several California lawyers and related companies, saying they bilked desperate homeowners nationwide out of millions of dollars in fees to join questionable mass lawsuits against their mortgage lenders, Attorney General Kamala Harris said Thursday.

“Yesterday we broke up what we believe is a fraud ring that is national in scope,” Harris said at a news conference in San Francisco. “This is just the beginning of holding these wrongdoers accountable.”

The scam, as described by Harris, involved multiple law firms and call-center affiliates who marketed lawsuits against mortgage banks to homeowners in California and at least 16 other states who were facing foreclosure.

The defendants sent out at least 2 million mass mailers that masqueraded as official government documents, and then followed up with phone calls, the Justice Department said.

Victims paid retainers from $3,500 to $10,000, believing that the lawsuits would stop pending foreclosures, reduce or even eliminate their principal balance, reduce their interest rate to as low as 2 percent and give them monetary damages, it said.

Once homeowners paid to join the lawsuits, they rarely met or spoke with their lawyers; some lost their homes soon after paying the up-front fees, the DOJ said.

The scam occurred against the backdrop of the foreclosure crisis, in which millions of people have fallen behind on mortgage payments as their home values plummeted, officials said.

“They took advantage of a growing sentiment out there,” Harris said. “A lot of homeowners have been deeply disappointed. They are resentful, they are angry, and they are hurt. (The defendants) suggested the banks would have to pay, but the only people who paid were these homeowners.”

Harris said the state would seek fines, penalties, damages and restitution in potentially the tens of millions of dollars from the defendants.

The “mass joinder” lawsuits marketed by the defendants are a way for multiple plaintiffs with separate but similar cases to join in a single suit. Unlike class action suits where plaintiffs share a single judgment, the plaintiffs in mass joinder suits can receive individual settlements. Such suits are extremely complex.

The defendants are being charged with false advertising, fraudulent business practices, improper fee splitting, and failure to register as telephonic sellers.

The department is not saying whether the actual complaints in the mass joinder lawsuits have legal merits.

“There may be legitimate causes of action there,” Harris said. “The cases may go forward.”

The State Bar has shut down the practices of the attorney defendants. They are: Kramer & Kaslow, Philip Kramer, Mitchell J. Stein & Associates, Mitchell Stein, Christopher Van Son, Mesa Law Group Corp. and Paul Petersen.

“This is a shocking case of how lawyers violated (clients’) trust,” said Bill Habert, president of the State Bar.

The phone at Kramer & Kaslow now plays a recorded message from a State Bar, explaining the enforcement action.

People who believe they were victims of the scam should visit hud.gov. The case is the first action to come out of the attorney general’s mortgage fraud task force, which Harris said is investigating everything from loan origination to modification.

E-mail Carolyn Said at csaid@sfchronicle.com.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/18/BUD91KP49T.DTL#ixzz1aY2kHtz8

Epic Stakes in Mortgage War

Feds want billions from banks that sold Fannie, Freddie risky securities.
Jenna Greene ContactAll Articles

The National Law Journal

September 27, 2011

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To hear Fannie Mae and Freddie Mac tell it, they were hoodwinked by Wall Street, the unwitting buyers of $200 billion worth of lousy mortgage-backed securities. From the investment banks’ point of view, the two were the most sophisticated investors around and knew exactly what they were getting into.

Ultimately, the Federal Housing Finance Agency’s (FHFA) recent lawsuits against 18 of the world’s largest financial institutions on behalf of Fannie and Freddie may come down to one basic question: disclosure. Did the banks omit or misstate material information about the securities they sold to Fannie and Freddie?

The stakes are high. With Fannie and Freddie’s future existence still tenuous, the suits, filed in New York federal and state courts and federal court in Connecticut, could provide a lifeline — a way to recoup some of the $160 billion the entities have cost taxpayers to date. But critics argue that Fannie and Freddie have no one to blame for their losses but themselves and that the suits themselves could destabilize the economy.

An intense legal fight is taking shape, with the government represented by a team from Quinn Emanuel Urquhart & Sullivan led by Philippe Selendy, a veteran litigator in the residential mortgage-backed securities arena. Counsel retained by the defendants include Brendan Sullivan and David Aufhauser of Williams & Connolly and Brian Pastuszenski of Goodwin Procter for Bank of America Corp.; Jay Kasner, the head of Skadden, Arps, Slate, Meagher & Flom’s securities class action defense group and Skadden partner Scott Musoff for UBS Americas Inc.; and Paul, Weiss, Rifkind, Wharton & Garrison Chairman Brad Karp for Citigroup Inc.

“Clearly this will be a battle of the heavyweights,” said Jacob Frenkel, who heads the securities enforcement practice at Potomac, Md.-based Shulman Rogers Gandal Pordy & Ecker and is not involved in the litigation. “This is one of those bouts where the federal deficit would be reduced by selling tickets to the arguments.”

RISK FACTORS

The FHFA, which became conservator of Fannie and Freddie in 2008 after the $5.3 trillion government-sponsored enterprises faced insolvency, is suing the megabanks under the Securities Act of 1933 for passing off subprime mortgages as AAA-graded investments. The 88-page complaint against Bank of America contains typical allegations. According to the housing agency, BoA misrepresented key data about 23 residential mortgage-based securities it sold for $6 billion to Fannie and Freddie from 2005 to 2007.

For example, the FHFA contends that the percent of properties that were owner-occupied was “materially false and inflated.” Owner occupancy is one risk predictor, since people are more likely to make payments and maintain a home if they live there. One prospectus stated that 4.45% of the underlying properties were not owner-occupied, but the housing agency claims the actual number was more than 15%.

Another risk predictor is the loan-to-value ratio. BoA in another prospectus claimed that none of the ­underlying properties had loans that exceeded the value of the property. The housing agency asserts that in fact 11.13% of the mortgages were for more than the homes were worth. The complaint also alleges that BoA disregarded evidence from third-party due diligence providers showing “a high percentage of defective or at least questionable loans.”

The FHFA said Fannie and Freddie themselves “had no access to borrower loan files,” and therefore had no way to evaluate what they were getting up close. Instead, they “reasonably relied on [Bank of America Securities’] knowledge and their express representations made prior to the closing of the securitizations.”

If Fannie and Freddie had known the true quality of the underlying mortgages, the complaint states again and again, they never would have bought the securities. “Fannie Mae’s and Freddie Mac’s losses have been much greater than they would have been if the mortgage loans had the credit quality represented in the Registrations Statements.”

Bank of America doesn’t see it this way. In a statement, the company called Fannie and Freddie “among the most sophisticated, powerful and ­heavily regulated financial institutions in the U.S. mortgage finance system.” In the past, BoA said, the two have publicly acknowledged “that their losses in the mortgage-backed securities market were due to the unprecedented downturn in housing prices and other economic factors, including sustained high unemployment.

“Also, they claimed to understand the risks inherent in investing in subprime and alt-A securities and, in fact, continued to invest heavily in those securities even after their regulator told Freddie that it did not have the risk management capabilities to do so. Despite this, [Fannie and Freddie] are now seeking to hold other market participants responsible for their losses,” BoA said.

Onlookers also find it hard to believe that Fannie and Freddie had no idea what they were buying. “Fannie and Freddie knew perfectly well how weak the loans were,” said Peter Wallison, who is co-director of the American Enterprise Institute’s program on financial policy studies and served as general counsel of the U.S. Treasury Department from 1981 to 1985. Wallison noted that investment banks put together the pools of mortgages specifically for Fannie and Freddie — “the most sophisticated experts in mortgages and the quality of mortgages. They had to know what was in the pools,” he said.

In a statement released on Sept. 6, four days after the cases were filed, the FHFA acknowledged that the securities were customized for Fannie and Freddie, but said that was irrelevant. “It does not matter how ‘big’ or ‘sophisticated’ a security purchaser is, the seller has a legal responsibility to accurately represent the characteristics of the loans backing the securities being sold.”

USING THE ’33 ACT

The key here is that the suits were filed under the Securities Act of 1933, a little-used statute that’s limited to buyers — like Fannie and Freddie — that purchased an initial securities offering, as opposed to in a secondary market such as a stock exchange.

Unlike more commonly invoked securities fraud laws, the 1933 act does not require a showing of intent to defraud or recklessness, said Peter Henning, a professor at Wayne State University Law School. Nor does the government have to prove that Fannie and Freddie relied on the misleading or omitted information.

What matters is simply whether the securities’ registration statement or prospectus was inaccurate — or, as Section 11 of the act puts it, “contained an untrue statement of a material fact or omitted to state a material fact…necessary to make the statements therein not misleading.”

“It all depends on materiality,” Hen­ning said. If [the government] can show there was a material misstatement, liability is easy to establish after that.”

The banks will “find it tough to win a motion to dismiss,” he said, because courts at the outset tend to take a broad view of whether omitted or misstated facts could be material to a reasonable investor. “That can be difficult to determine without a case going to trial,” Henning said. “There are very few cases in which the court found something is not material,” at least initially.

The remedy is the difference between the securities’ purchase price and its remaining value. As the housing agency noted in its Sept. 6 statement, press reports that it is “seeking nearly $200 billion in damages or recoveries are excessive; such numbers reflect the original amount of such securities purchased, not the losses incurred or the potential recoveries.”

In the BoA complaint, for example, the FHFA said Fannie and Freddie suffered “hundreds of millions of dollars in damages.” The statute allows cases to be brought in state or federal court, and the government is trying its luck in both venues.

The majority of the cases — 13 of them — are in U.S. District Court for the Southern District of New York, where Bank of America, Barclays Bank PLC, Citigroup, Credit Suisse Holdings (USA) Inc., Deutsche Bank A.G., First Horizon National Corp., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co., Nomura Holding America Inc. and Société Génerale S.A. were all sued on Sept. 2. The complaint against UBS was filed there on July 27. (It’s not clear why it came first, but may be due to the statute of limitations.)

Judge Lewis Kaplan last week in an order wrote that the cases “appear to bear substantial similarities.” He asked all counsel to submit a joint report by Oct. 19 “describing the respects in which these cases are similar and the respects in which they differ” and proposing “means by which the cases can be most efficiently and conveniently handled.”

In New York state court, cases were filed against Ally Financial Inc., Countrywide Financial Corp., General Electric Co. and Morgan Stanley. The Royal Bank of Scotland Group PLC is being sued in Connecticut federal court. In addition, a total of 135 individuals who signed the registration statements are named in the suits, though they face no allegations of specific wrongdoing other than signing the forms.

Onlookers believe that one potential weakness in the government’s case is the pending investigation of Fannie and Freddie by the U.S. Securities and Exchange Commission. “On the one hand we have the FHFA looking to recoup losses from the likes of JPMorgan and Goldman Sachs, but then we also have the SEC investigating whether Fannie and Freddie mislead investors about the status of their own books,” said Hugh Totten, a partner at Chicago-based business litigation firm Valorem Law Group, who is not involved in the cases. Totten predicted the SEC matter would soon settle with minimal penalties, but said nonetheless it “weakens Fannie and Freddie’s position that the banks are to blame.”

POLITICALLY POTENT?

But David Reiss, a professor at Brooklyn Law School, said that, although the argument that “it’s hypocritical to claim you were deceived if you deceived people, too” may be good politics for the banks, it may be legally irrelevant. “They’re two different things,” he said.

The housing agency “would be derelict in its duty if it didn’t pursue the claims” against the banks, Reiss said, but he wondered if the argument that the suits could destabilize the banking industry might prove politically potent.

For example, one analyst, Paul Miller of FBR Capital Markets & Co., wrote in a client note that the suits “drain capital from the banking system, and they cause banks to overly tighten credit standards, which pushes potential home buyers onto the sidelines,” according to Bloomberg. Miller wrote the plaintiffs were “acting in their own self-interest as opposed to that of the broader U.S. economy.”

The FHFA was quick to answer its critics: “Some have claimed that these suits will disrupt economic recovery, or endanger the targeted banks, or increase their cost of capital. While everyone is concerned with these important issues, the long-term stability and resilience of the nation’s financial system depends on investors being able to trust that the securities sold in this country adhere to applicable laws.”

Still, David Min, associate director for financial markets policy at the Center for American Progress, noted that there is at least an element of self-interest to the suits. “This is all happening against the backdrop of Fannie and Freddie reform,” he said. “If FHFA is able to recover a lot of money, that may reduce the amount Fannie and Freddie will cost taxpayers, and it strengthens the argument that they should stick around. If they don’t win, it strengthens the camp that wants to get rid of them.”

This article originally appeared in The National Law Journal.

Utah Supreme Court

Pyper v. Bond

http://law.justia.com/cases/utah/supreme-court/2011/20091025-11.html

Docket: 20091025
Opinion Date: July 29, 2011

Judge: Durrant

Areas of Law: Commercial Law, Consumer Law, Trusts & Estates

David Pyper hired attorney Justin Bond to represent him in a probate matter. Bond’s law firm subsequently sued Pyper to obtain payment of the attorney fees. The district court entered a judgment in favor of the law firm for $10,577. To satisfy the judgment, Bond filed a lien against a house owned by Pyper that was worth approximately $125,000. Bond was the only bidder at the sheriff’s sale auctioning Pyper’s home and purchased Pyper’s home for $329. Pyper later communicated his desire to redeem his property to Dale Dorius, another attorney at the firm, but was unable to speak to Bond after several attempts. After the redemption period expired, the deed to Pyper’s home was transferred to Bond. Pyper subsequently filed a petition seeking to set aside the sheriff’s sale of his property. The district court set aside the sheriff’s sale. The court of appeals affirmed. The Supreme Court affirmed, holding the court of appeals did not err in (1) concluding that gross inadequacy of price together with slight circumstances of unfairness may justify setting aside a sheriff’s sale and (2) affirming the district court’s conclusion that Bond and Dorius’s conduct created, at least, slight circumstances of unfairness.

http://j.st/cZN

Holder in Due Course

 

In re SGE Mortgage Funding Corp., 278 BR 653 – Bankr. Court, MD Georgia 2001278 B.R. 653 (2001)

SGE Mortgage Funding Corporation, Plaintiff, v. Accent Mortgage Services, Inc., et al., Defendants.

Bankruptcy No. 99-71191. Adversary No. 00-7013

United States Bankruptcy Court, M.D. Georgia, Valdosta Division.

December 7, 2001.

654*654 Ben F. Easterlin, IV, King & Spalding, Atlanta, GA, Ward Stone, Jr., Stone & Baxter, LLP, Macon, GA, for debtor.

Wesley J. Boyer, Katz, Flatau, Popson & Boyer, LLC, Ed S. Sell, III, Sell & Melton, Macon, GA, William B. Brown, George H. Myshrall, Jr., Heyman & Sizemore, LLC, Kevin B. Buice, Mary Grace Diehl, Linda K. Klein, Davis K. Loftin, Lynwood A. Maddox, Richard B. Maner, C. LeeAnn McCurry, Thomas Rosseland, Gregory G. Schultz, Thomas Paty Stamps, L. Matt Wilson, Atlanta, GA, Richard Farnsworth, Ray S. Smith, III, Tucker, GA, David A. Garland, Albany, GA, Anna S. Gorman, Poyner & Spruill LLP, Charlotte, NC, Joseph B. Gray, Jr., Render M. Heard, Jr., Carter & Richbourg, L.L.P., 655*655 Melinda Banks Phillips, Rob Reinhardt, John S. Sims, Jr., John C. Spurlin, Tifton, GA, Richard A. Greenberg, Tallahassee, FL, Stephen D. Lerner, Gregory A. Ruehlmann, Cincinnati, OH, James R. Marshall, Decatur, GA, William C. McCalley, Moultrie, GA, Fife M. Whiteside, Columbus, GA, for defendants.

Andrew J. Ekonomou, Michael G. Lambros, Boyce, Ekonomou & Atkinson, Atlanta, GA, Ward Stone, Jr., Mark S. Watson, Stone & Baxter, LLP, Macon, GA, for plaintiff.

MEMORANDUM OPINION

JOHN T. LANEY, III, Bankruptcy Judge.

On July 13, 2001, the court held a hearing on the motions for partial summary judgment of First Family Financial Services, Inc., Associates Financial Services of America, Inc., and Associates Home Equity Services, Inc., (collectively, “Associates”), and the Committee of Investors Holding Unsecured Claims (“Committee”). The parties filed briefs, response briefs, affidavits and stipulations of fact. At the conclusion of the hearing, the court took the motions for partial summary judgment under advisement. The court has considered the parties’ briefs, affidavits, stipulations of fact, oral arguments, and the applicable statutory and case law. For reasons that follow, the court will grant in part and deny in part, the Associates’ motion and will deny the Committee’s motion.

FACTS

The prepetition debtor, SGE Mortgage Funding Corporation (“SGE”), was a residential mortgage broker licensed in Georgia. A large portion of SGE’s business involved SGE’s solicitation and origination of loans to potential borrowers desiring to obtain loans secured by real estate. SGE funded its mortgage loan origination business through cash investments made by individual investors. The transactions between SGE and these investors were memorialized in a written contract (“Investor Contract”). (Doc. # 559, Exh. “A”).[1]

Each Investor Contract provided that the investor would loan SGE a certain amount of money. SGE would utilize these funds in its lending business to individual borrowers. In return for the investors’ loan, SGE would pay the investor a monthly amount based on an interest rate designated in the Contract. (Exh. “A” at ¶ 1).

Each Investor Contract also identified a specific borrower and loan which SGE represented that it had made using the investor’s funds. If for some reason, the loan to the borrower did not close, the Contract provided that the funds advanced to SGE by the investor would either be returned to the investor or the funds would be used for some other transaction. Upon closing the loan to the specific borrower identified, the Contract further provided that SGE would “transfer and assign all of its right, title, and interest in and to Borrower’s Note and deed to secure debt to [the] [investor].” (Id. at ¶ 5). This transfer and assignment was to be recorded in the county where the real estate was located. Although the loan documents were to remain the property of SGE, these documents were to serve “as collateral . . . for 656*656 repayment of the debt owed by [SGE] to [the] [investor].” (Id.). Moreover, the Contract required SGE to deliver the original documents to the investor if the investor so requested. Unless the investor requested otherwise, SGE would serve as the servicing agent for the loan that SGE had made to the borrower with the investor’s funds. (Id. at ¶¶ 2-5).

The Associates are consumer lending companies licensed in Georgia. One aspect of the Associates’ business is to make bulk purchases of portfolios of real estate loans from mortgage brokers. All three of the Associates entities engaged in bulk purchases of loans from SGE. First Family Financial Services purchased approximately 230 mortgage loans for which it paid SGE approximately $3.5 million. (Id. at ¶ 23). Associates Financial Services of America purchased approximately 30 mortgage loans from SGE at a purchase price of approximately $1.3 million. (Id. at ¶ 24). Associates Home Equity Services paid SGE approximately $564,000.00 for approximately 26 loans it purchased from SGE. (Id. at ¶ 25). The transactions between these entities and SGE were memorialized into written agreements. (Doc. # 559, Exh. “B”, “C” and “D”). After the Associates purchased the loans from SGE, the Associates assumed all aspects of loan management. (Doc. # 559 at ¶ 19).

However, before SGE sold these loans to the Associates and other bulk purchasers, SGE had been engaged in a classic Ponzi scheme. Upon closing a mortgage loan to an individual borrower, SGE would assign that loan to not only one investor, but numerous investors. Like many Ponzi schemes, SGE used funds obtained from later investors to pay the monthly principal and interest payments due to the earlier investors. SGE drew the Associates into its fraudulent scheme by selling loans to the Associates which SGE had “double-booked” to numerous investors.

On September 27, 1999, an involuntary petition under Chapter 7 of the Bankruptcy Code (“Code”) was commenced against SGE. On December 10, 1999, this case was converted to a Chapter 11 case. On June 28, 2000, SGE as debtor-in-possession, filed this adversary proceeding to determine the validity, priority, and extent of the interest in the loans claimed by the investors and the bulk purchasers. Numerous investors and consumer lending companies such as the Associates were named as defendants.

After several months of discovery, the Committee and the Associates filed motions for partial summary judgment to which several consumer lending companies, investors, and SGE responded. These motions present two issues: (1) whether the Uniform Commercial Code (“UCC”) or the Georgia real estate recording statutes (“recording statutes”) governs the priority of interests in the loan transactions; and (2) whether the Associates are holders in due course of the loans they purchased from SGE.

DISCUSSION

In dealing with motions for summary judgment, Federal Rule of Civil Procedure 56 is made applicable to adversary proceedings in bankruptcy cases by Federal Rule of Bankruptcy Procedure 7056. Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Like a district court, a bankruptcy court must determine that there are no 657*657 issues of material fact and accept all undisputed facts as true in order to find that summary judgment is warranted as a matter of law. Gray v. Manklow (In re Optical Technologies, Inc.), 246 F.3d 1332, 1334 (11th Cir.2001). An issue is “material” if it affects the outcome of the case under the applicable law. Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1496 (11th Cir.1996).

In the typical motion for summary judgment, the court must apply the undisputed facts to the applicable law. However, the first issue before the court requires it to determine which law is the applicable law.

The Committee and the Carlyle/Casko investor entity (“Carlyle/Casko Investors”[2]), argue that the recording statutes, not the UCC, is the applicable law. The Committee contends that the investors and bulk purchasers, such as the Associates, failed to record the assignments of the deeds to secure debt. As a result, these entities have no ownership interest in the loans superior to that of the trustee. Therefore, the Committee and the Carlyle/Casko Investors contend that the loans are property of the estate. The Committee also argues that the Associates’ interests are likewise unperfected. Although the Associates may have purchased the notes of which they have possession, the Committee contends that the Associates failure to record the assignments is fatal to their perfection.

The Associates and SGE argue that the UCC is the applicable law. Although real estate was involved in the transactions between SGE and the investors, the Associates contend that the UCC governs because the transactions entailed the transfer of promissory notes, which are negotiable instruments.[3]

Similar to the Carlyle/Casko Investors, individual investors James and Debra Mills (“Mills”) filed a response to the Associates’ and the Committee’s motions maintaining that the UCC is not the applicable law. The Mills assert that the mortgages assigned to them by SGE were not included in the ones that SGE assigned to the Associates in their bulk purchase. Even if this is not the case, the Mills argue that SGE executed an assignment of the actual security deed to them which they then recorded. Under the applicable recording statutes, the Mills maintain that recording the deed and assignment is sufficient to perfect their interest. The Mills further insist that having possession of the original notes is not necessary to perfect their interest in the collateral.

Under Georgia law, transactions that result in the “creation or transfer of an interest in or lien on real estate . . .” are excluded from Article 9 of the UCC. O.C.G.A. § 11-9-104(h) (1994 & Supp.2000). Therefore, the focal point of the issue before the court is whether the transactions between SGE, the Associates, and the investor entities create or transfer an interest in real estate.

The Associates rely on the case of Chen v. Profit Sharing Plan, 216 Ga.App. 878, 456 S.E.2d 237 (1995). In a case involving 658*658 a transaction similar to the one between SGE and the investor entities, the Georgia court of appeals concluded that the parties’ transaction did not involve a creation or transfer of an interest in real estate. See Chen, 216 Ga.App. at 881, 456 S.E.2d at 241. Therefore, the court held that the UCC was the applicable law. Id.

In Chen, Blankenship granted a security interest in his real property to Chen. This security interest was evidenced by Blankenship’s executing a promissory note and security deed to Chen. Under the terms of the promissory note, Blankenship was to pay Chen 120 monthly installments. Before Chen received the first payment from Blankenship, Chen entered into an agreement with the Profit Sharing Plan (“Plan”). In exchange for a loan from Plan, Chen assigned it the first 60 payments under the Blankenship note. Chen also assigned to Plan the Blankenship note and security deed. In addition to these assignments, Chen executed a document which provided that Plan would be the servicing agent of the Blankenship note. Plan agreed to reassign the note and security deed to Chen after Plan received the 60 payments. Id. at 879, 456 S.E.2d at 239.

Approximately two years after this agreement, Plan made another loan to Chen whereby Chen pledged the Blankenship note and security deed as collateral. Chen executed a transfer and assignment of the note and security deed. Along with the transfer and assignment, Chen also executed an addendum in which Chen agreed to sell the remaining 60 installments to Plan. The addendum contained a default provision allowing Plan to retain the collateral in the event Chen failed to make the payments. After making 18 payments to Plan, Chen defaulted on the second loan and Plan sent a letter to Chen indicating its intent to retain the collateral. Id. at 878-79, 456 S.E.2d at 239.

The central issue in Chen was whether Plan’s letter to Chen was adequate notice under O.C.G.A. § 11-9-505(2). The trial court found that the notice did satisfy the requirements of § 11-9-505(2). Id. at 882, 456 S.E.2d at 241. On appeal, Plan argued that Chen was not entitled to notice under § 11-9-505(2) because pursuant to § 11-9-104(h), the transaction was excluded from Article 9 of the UCC.

Reversing the trial court, the court of appeals rejected Plan’s argument that its transaction with Chen was excluded from Article 9. Id. at 881, 456 S.E.2d at 241. The court concluded that this transaction did not involve the “creation” or “transfer” of an interest in real estate, but instead involved the “pledge of collateral or `lien’ against negotiable instruments.” Id. The court explained that a “pledge creates a lien on the property by the pledgee while legal title remains in the pledgor.” Id. Simply stated, “possession passes, but not title.” Id. As to the transfer and assignment that Chen executed, the court analyzed the documents which were executed and concluded that these acts were done so that Plan could hold the security deed and note as security for the loan. Id. Furthermore, “title to these instruments never vested in Profit . . . [therefore,] [Plan] only acquired a lien against the commercial paper, i.e., the security deed and note.” Id. Accordingly, the court held that Article 9 of the Georgia Commercial Code was applicable to the transaction. Id.

Chen is consistent with the vast majority cases and commentators who have dealt with this issue. See Fogler v. Casa Grande Cotton Finance Co. (In re Allen), 134 B.R. 373 (9th Cir. BAP 1991); Ryan v. Zinker (In re Sprint Mortgage Bankers Corp.), 177 B.R. 4 (E.D.N.Y.1995); First National Bank of Boston v. Larson (In re 659*659 Kennedy Mortgage Company), 17 B.R. 957 (Bankr.D.N.J.1982); Army National Bank v. Equity Developers, Inc., 245 Kan. 3, 774 P.2d 919 (1989); Rodney v. Arizona Bank, 172 Ariz. 221, 836 P.2d 434 (1992); 4 James J. White & Robert S. Summers, Uniform Commercial Code, § 30-7 at 45-49 (4th ed.1995); Jan Z. Krasnowiecki, et al., The Kennedy Mortgage Co. Case: New Light Shed on the Position of Mortgage Warehousing Banks, 56 AM. BANKR. L.J. 325 (1982).

Most of the above authorities base their reasoning on UCC § 9-102(3) and Official Comment 4 to that subsection which makes Article 9 applicable to “realty paper.” See e.g., In re Allen, 134 B.R. at 375; White & Summers, supra, § 30-7 at 45. In pertinent part, Official Comment 4 provides:

[T]he owner of Blackacre borrows $10,000 from his neighbor and secures his note by a mortgage on Blackacre. [Article 9] is not applicable to the creation of the real estate mortgage. However, when the mortgagee in turn pledges this note and mortgage to secure his own obligation to X, [Article 9] is applicable to the security interest thus created in the note.[4]

In following Comment 4 to UCC § 9-102(3), courts generally have concluded that Article 9 governs perfection in a note secured by a real estate mortgage and that no action needs to be taken with regard to the mortgage; it is best “to concentrate on the note.” Allen, 134 B.R. at 375; see also Rodney, 172 Ariz. at 223, 836 P.2d at 436 (holding “that a debt for purchase of real property (and the promissory note that is evidence of that debt) cannot be separated from the mortgage (or deed of trust) securing that debt.”).

However, the analysis does not end there. The court agrees with the commentators that in analyzing this issue, one must recognize that the parties to these types of transactions live in two separate worlds; the “mortgagor’s world” and the “mortgagee’s world.” See Krasnowiecki, supra, at 334. As Krasnowiecki explains:

[A]t one end are the interests of the mortgagor in the land and those who take interests in the land from the mortgagor. At the other, the interests of the mortgagee are evidenced by the note and the mortgage. . . . At the mortgagor’s end, the land can be sold subject to the mortgage (or with assumption of the mortgage), or the mortgagor may pay off the mortgage and secure a satisfaction of record and then either keep the land or sell it. . . . At the mortgagee’s end, the mortgagee . . . may sell the mortgage and note outright to someone else or he may pledge it as a security for [a] loan. . . . ” Krasnowiecki, supra, at 334. White & Summers have adopted Professor Krasnowiecki’s view. See White & Summers, supra, § 30-7 at 46.

The primary case upon which Krasnowiecki bases his position is the case of In re Kennedy Mortgage Company, 17 B.R. at 957. Kennedy’s principal activity involved originating loans to mortgage applicants. In addition to lending its own money to these mortgage applicants, Kennedy loaned funds that it obtained from various lenders. These funds were in the form of “warehousing” lines of credit. One such lender was First National Bank of Boston 660*660 (“FNBB”). In exchange for the warehousing line of credit from FNBB, Kennedy executed assignments of mortgages to FNBB which were delivered to FNBB along with the corresponding promissory notes. FNBB failed to record the assignments. Id. at 958-59.

Because the notes were negotiable instruments which are perfected by possession, the court held that FNBB was perfected by taking possession. Id. at 965. Moreover, the court concluded that FNBB’s failure to record the assignments were not fatal to FNBB’s perfection. Id. The court explained that “FNBB has a perfected lien on the note and the mortgage is only collateral to the note. The mortgage without the debt is of no effect.” Id.

The court in Kennedy also addressed the second sentence of Official Comment 4 to UCC § 9-102(3) which reads, “[t]his Article leaves to other law the question of the effect on rights under the mortgage of delivery or non-delivery of the mortgage or the recording or non-recording of the mortgagee’s interest.” The court explained that the “other law” refers to the real estate recording laws which exist to “establish priorities and rights of individuals who are affected by the chain of title or encumbrances on the real estate.” Id. at 964. In other words, the “other law” protects those in the “mortgagor’s world.” See White & Summers, supra, § 30-7 at 48. The court noted that under New Jersey real estate recording laws, mortgages and assignments of mortgages may be recorded. Kennedy at 964. However, merely because the real estate recording laws provide that assignments may be recorded, “this fact does not affect the validity of an assignment of a mortgage which has not been recorded.” Id.

Adopting the Kennedy approach as well as Krasnowiecki’s analysis, the Kansas supreme court in Army National Bank concluded that the recording statutes were intended to protect the mortgagor and those dealing with the underlying land. 245 Kan. at 15, 774 P.2d at 928.

In Army National Bank, Equibank acquired nine notes which were secured by nine corresponding mortgages on real property. In exchange for a loan from the Bank of Kansas City (“BOKC”), Equibank pledged the nine notes to BOKC and assigned the nine mortgages to BOKC. Because BOKC was a creditor of the mortgagee, not a creditor of the mortgagor, the court held that perfection could be effected only by possession of the notes. Id. at 19, 774 P.2d at 930. If BOKC had been the creditor of the mortgagor, the court noted that BOKC would have been required to record the mortgage in order to have been perfected. Id. The court explained that this approach is consistent with the purposes of the recording acts, which is to protect the interests of the mortgagor. Id.

The court notes the case of Peoples Bank of Polk County v. McDonald (In re Maryville Savings & Loan), 743 F.2d 413 (6th Cir.1984), clarified on reconsideration, 760 F.2d 119 (1985). In this case, Peoples Bank loaned money to Maryville. As collateral for this loan, Maryville assigned a mortgage and note to Peoples Bank. Peoples Bank recorded the assignment, but failed to take possession of the note. The bankruptcy court concluded that Peoples Bank did not perfect its interest. In re Maryville, 27 B.R. 701, 709 (Bankr.E.D.Tenn.1983). The district court, however, reversed the bankruptcy court and held that since the recording was accomplished, this was sufficient for perfection under Tennessee law. In re Maryville, 31 B.R. 597, 599 (E.D.Tenn.1983).

661*661 Affirming in part and reversing in part, the Sixth Circuit split the perfection of the mortgage from the perfection of the note. Maryville, 743 F.2d at 415-16 (6th Cir.1984). The court concluded that Article 9 applied to Peoples Bank’s interest in the promissory notes and, because it failed to take possession of the notes, Peoples Bank’s security interest in the notes was unperfected. Id. at 416-17. The court further concluded, however, that Article 9 did not apply to Peoples Bank’s interest in the mortgage. Therefore, because the assignments were properly recorded, Peoples Bank was perfected as to the mortgage. Id. at 417.

After the court’s ruling, the bankruptcy trustee received funds from “non-foreclosure sources.” In an attempt to clarify how these funds were to be handled, the trustee moved for reconsideration. Maryville, 760 F.2d 119, 120 (6th Cir.1985). In a supplemental opinion, the court found that the funds paid to the trustee were proceeds of the notes. Id. at 121. Because Peoples Bank failed to perfect its interest in the notes, the court held that the trustee must prevail. Id. The court noted that the result “might be to the contrary” if the funds were foreclosure funds stemming from the mortgage, an interest in which Peoples Bank was perfected. Id.

A great deal of the majority line of cases are critical of the result in Maryville. See, e.g., Allen, 134 B.R. at 375 (concluding that the result in Maryville”produces the worst of both worlds. . . .”); Army National Bank, 245 Kan. at 18, 774 P.2d at 929-30 (reasoning that “a mortgage cannot exist separately from the note it secures.”). In Army National Bank, the court explained that splitting the perfection of the note and the mortgage could create a situation whereby two separate parties are simultaneously and respectively perfected in the note and the mortgage. Id. This situation, in turn, may result in the respective parties having a “note absent its security or a mortgage which may be worthless.” Id.

White and Summers also criticize Maryville. See White & Summers, supra, § 30-7 at 49. They propose that splitting the perfection of the note and mortgage would effectively require the mortgagor to pay twice to get free and clear title to his real property. Id.

The court agrees with the reasoning of the majority line of cases and commentators. In applying that reasoning to the facts of this case, the court must first determine whether the transaction occurred in “mortgagor’s world” or the “mortgagee’s world.”

As to the transactions between SGE and the investor entities, the court finds that these transactions occurred in the world of SGE, the “mortgagee’s world.” Similar to the majority line of cases, SGE pledged the mortgages and notes as collateral for SGE’s own obligation to the investors. Although the assignments of the mortgages and the Investor Contract described the property and the individual borrower, the court nevertheless finds that the transaction occurred in SGE’s world.

At oral arguments, however, “Group C”[5] of the individual investors addressed this very point. Given the fact that the Investor Contract identifies a specific borrower and a specific tract of land, Group C argues that each investor intended to fund 662*662 a particular loan, thereby taking an interest in a particular parcel of real property. Furthermore, SGE was to return their money to them if the loan to the individual borrower failed to close. Group C argues that these facts distinguishes them from the majority line of cases.

The court acknowledges that these distinctions do not seem to be addressed by any of the cases. For example, in Chen, the underlying real estate transaction between Chen and Blankenship already had been consummated before Chen pledged the note to Profit. Therefore, unlike the investors’ loan to SGE, Profit’s loan to Chen was not contingent on whether Chen’s loan to Blankenship closed. Likewise in Sprint Mortgage, there was no attempt by the debtor/mortgagee to earmark the specific loans made to the mortgagee to the specific mortgages that the debtor assigned. Group C argues that these factual differences are sufficient to distinguish them from the majority line of cases.

Although these are meritorious distinctions, the court finds that, at all times, the investors’ interest was a money investment interest. The language of the Investor Contract is clear: “[t]he loan documents . . . shall be considered as collateral or security for only for repayment of the debt owed by [SGE] to [the investor].” (Doc. # 559, Exh. “A” at ¶ 5) (emphasis added). At all times, the investors were dealing with SGE and never took an “interest[ ] in the land from the mortgagor.” See Krasnowiecki, supra, at 334. Therefore, the court finds that SGE’s assignment to the investors did not a create or transfer an “interest in or lien on real estate. . . .” O.C.G.A. § 11-9-104(h).

The fact that the assignments were or were not recorded has no bearing on perfection. See Kennedy at 964. The Mills argue, however, that O.C.G.A. § 44-14-60 is specific authority governing the transfer of security deeds. They assert that this code section “fully anticipates that an assignment should be recorded.” (Mills’ Mem. In Opp’n, Doc. # 617). The court agrees with the Mills that § 44-14-60 provides the manner in which the assignment of a security deeds may be recorded. However, as the court in Kennedy recognized, “[t]he fact that [the recording statutes provide that] assignments of mortgages may be recorded does affect the validity of an assignment of a mortgage which has not been recorded.” Kennedy at 964 (emphasis added). The purpose and intent of the recording statutes are to protect those in the “mortgagor’s world.” See, e.g., Army National Bank at 19, 774 P.2d 919. These transactions occurred in the “mortgagee’s world” which is outside the scope which § 44-14-60 is intended to protect. Accordingly, the court rejects the Mills’ argument.

The court finds that Article 9 of the Georgia UCC applies to the transactions between SGE and the investor entities. As a result, the investor entities are perfected only to the extent to which they have possession of promissory notes.

The court notes that because of the fraudulent conduct of the prepetition debtor, very few if any of the investor entities are in possession of the original promissory notes. Therefore, the court realizes that this is an unfortunate result for the investor entities. However, the court must apply the law based on the facts which are presented.

The court finds that Article 9 also applies to the transactions between SGE and the Associates. Like the transactions with investor entities, the transactions between SGE and the Associates occurred in the “mortgagee’s world.” Although the notes were purchased by the Associates 663*663 and not pledged to them like the investors, this distinction is immaterial. In addition to pledging a mortgage and note, transactions within the mortgagee’s world includes “sell[ing] the mortgage and note outright. . . .” See Krasnowiecki, supra, at 334.

The court now turns the issue of whether of the Associates are holders in due course of the promissory notes which they purchased from SGE. Pursuant to O.C.G.A. § 11-3-302:[6]

(1) A holder in due course is a holder who takes the instrument:

(a) For value; and

(b) In good faith; and

(c) Without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person.

O.C.G.A. § 11-3-302(1).

A “[h]older [is defined as] a person who is in possession of a document of title or an instrument. . . .” O.C.G.A. 11-1-201(20).[7] Therefore, to the extent that the Associates are in possession of the notes which they purchased from SGE, the court finds that the Associates are “holders” as defined under Georgia law. The court will now examine the three other requirements under § 11-3-302(1).

A holder takes an instrument for value “[t]o the extent that the agreed consideration has been performed or that he acquires a security interest in or a lien on the instrument otherwise than by legal process. . . .” O.C.G.A. § 11-3-303(a).

A holder must also take the instrument in good faith. O.C.G.A. § 11-3-302(1)(b). Good faith is defined as “honesty in fact in the conduct or transaction concerned.” O.C.G.A. § 11-1-201(19). To constitute bad faith, a purchaser must have acquired the instrument “with actual knowledge of its infirmity or with a belief based on the facts or circumstances as known to [the purchaser] that there was a defense or [the purchaser] must have acted dishonestly.” Citizens & Southern Nat’l Bank v. Johnson, 214 Ga. 229, 231, 104 S.E.2d 123, 126 (1958); Commercial Credit Equipment Corp. v. Reeves, 110 Ga.App. 701, 704, 139 S.E.2d 784, 787 (1964).

Lastly, a holder must take the instrument without notice of default or defense. O.C.G.A. § 11-3-302(1)(c).

A person has “notice” of a fact when:

(a) He has actual notice of it; or

(b) He has received a notice or notification of it; or

(c) From all the facts and circumstances known to him at the time in question he has reason to know that it exists.

O.C.G.A. § 11-1-201(25). See also Hopkins v. Kemp Motor Sales, Inc., 139 Ga.App. 471, 473, 228 S.E.2d 607, 609 (1976) (holding that knowledge of a fact as defined in the UCC is actual knowledge).

In this case, the Associates, the Committee, and several of the investor entities have stipulated that the Associates collectively paid SGE approximately $5.36 million for approximately 306 loans. (Doc. # 559 at ¶¶ 23-25). Therefore, the court finds that the Associates took the notes for value.

664*664 As to good faith and notice, these issues are not quite as clear. Along with their brief in support of their original motion for partial summary judgment, the Associates filed affidavits executed by Michelle A. Bryan, Marilyn D. Britwar, Kathleen A. Timkin, and Kathleen A. Larson. (Doc. # 449, Exhs. “A” & “C”-“E”). Among other things, these affidavits attested to the Associates’ good faith and lack of notice that the notes which they purchased from SGE were subject to other claims.

However, because these affidavits were not originals, but were copies of affidavits submitted in another court action, SGE objected to their being part of the record. On May 17, 2001, the court entered an order sustaining SGE’s objection and disallowing the affidavits. (Doc. # 532). Remarkably, other than these disallowed affidavits, the Associates never filed any supporting documentation attesting to their good faith and lack of notice. Furthermore, in the Committee’s response to the Associates’ original motion, the Committee submitted affidavits executed by Sanford A. Cohn and Kevin B. Buice.[8] (Doc. # 489, Exhs. “A” & “B”). These affidavits attest to a lack of good faith and notice on behalf of the Associates in their purchase of the notes from SGE. Although SGE did not submit any evidence, SGE asserts that issues of material fact exist as to good faith and notice. (Doc. # 604 at pp. 3).

The court agrees with SGE and finds that issues of material fact do exist as to good faith and notice. Under Federal Rule of Civil Procedure 56, the moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact. See Celotex, 477 U.S. at 324, 106 S.Ct. 2548; see also Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991) (holding that the moving party has the burden of establishing its right of summary judgment). In this case, the Associates have failed to carry their burden. Therefore, the court finds that issues of material fact exist as to whether the Associates took the notes which they purchased from SGE in good faith and without notice of default or defense.

The court will render a separate memorandum opinion on SGE’s motion for summary judgment.

CONCLUSION

The UCC is the applicable law to the transactions between the Associates, the investor entities, and SGE. None of these transactions involved the creation of an interest in real estate. Therefore, the court will grant the Associates’ motion for partial summary judgment as to that issue only. Regarding the issue of whether the Associates are holders in due course of the notes which they purchased from SGE, the court finds that issues of material fact exist as to the elements of good faith and notice. The court will deny the Committee’s motion for partial summary judgment.

An order in accordance with this Memorandum Opinion will be entered.

[1] The Associates and the Committee stipulate that Exhibit “A” contains some sample Investor Contracts which do not differ in any material respect from all of the Investor contracts entered into by SGE with each individual investor. (Id. Stipulations of Fact at ¶ 3). Although SGE agrees that all “known” transactions were memorialized into written contracts, SGE avers that there may exist Investor Contracts that do not mirror the language in the sample Investor Contracts. (See Doc. # 605 at ¶ ¶ 3-5).

[2] This entity consists of approximately 100 individual investors who are present and former clients of Carlyle Wealth Planning, Inc. These individuals invested approximately $6,000,000.00 in the Casko Investment Company to fund the lending to individual borrowers. SGE was the “servicing agent” for the Carlyle/Casko investments. (See Doc. # 559, Exh. “A”).

[3] The court notes that Accent Mortgage Services, Inc. (“AMS”), another consumer lending company defendant filed a response to the Committee’s Motion. In their response, AMS adopted the Associates’ brief in full. Therefore, the court’s reference to the Associates encompasses AMS as well.

[4] The court notes that Georgia, unlike many other states, has not adopted the Official Comments to the UCC. However, because O.C.G.A. § 11-9-102(3) was adopted verbatim from UCC § 102(3), due consideration is to be given to the official comments. See Roswell Bank v. Atlanta Utility Works, Inc., 149 Ga.App. 660, 255 S.E.2d 124 (1979); Warren’s Kiddie Shoppe, Inc. v. Casual Slacks, Inc., 120 Ga.App. 578, 171 S.E.2d 643 (1969).

[5] Due to the vast number of individual investors in this adversary proceeding, they have been designated either group “A”, “B”, or “C” in the court docketing system. “Group C” consists of approximately 26 individual investor entities which are represented by the law firm of Sims, Fleming & Spurlin, P.C.

[6] This is the former version of § 11-3-302 as it read prior to July 1, 1996. Because all transactions in question took place prior to July 1, 1996, the pre-1996 version is the applicable law. See Choo Choo Tire Service, Inc. v. Union Planters Nat’l Bank, 231 Ga.App. 346, 498 S.E.2d 799 (1998).

[7] See supra note 6.

[8] The court notes that Affiant Sanford A. Cohn is an investor/claimant in this case and Affiant Kevin B. Buice is an attorney of record for numerous parties in interest. (See Exh. “A” at ¶ 11; Exh. “B” at ¶ 2).

clip_image002

The written notice must clearly and explicitly inform the debtor that the creditor is retaining the collateral in

satisfaction of the indebtedness.clip_image004
– in Patrick v. WIX AUTO CO., INC., 1997 and 3 similar citations

clip_image002[1]

—debtor entitled to recover damages when secured party failed to give notice of its intent to retain collateral in satisfaction of indebtednessclip_image004[1]
– in Enforcing Security Interests in Personal Property in Mississippi and 2 similar citations

clip_image002[2]

—security deed and executed a transfer and assignment of the instruments to the creditor as collateral for a loan, the instruments never vested in the creditor and the transaction was not the creation or transfer of an interest in real estate under former § l1-9-104 (h); thus, where the creditor did not comply with the notice requirement of foremr § 11-9-503 (2), the debtor was …clip_image004[2]
– in Official code of Georgia annotated and 2 similar citations

clip_image002[3]

This procedure protects the debtor’s right to mitigate his loss when the collateral is worth more than the debt.clip_image004[3]
– in Hansford v. Burns, 1999

clip_image002[4]

T] he condition in the `ADDENDUM’providing for full and complete assignment and transfer of the collateral upon default by Chen amounted to nothing more than an unenforceable attempt at predefault waiver of the debtor’s rights under Article 9 of Georgia’s Uniform Commercial Codeclip_image004[4]
– in IN RE CBGB HOLDINGS, LLC, 2010 and one similar citation

clip_image002[5]

Most of the authorities are cited and stand for the undisputed proposition that the debtor’s pre-default consent to strict foreclosure is insufficient to satisfy the statutory requirements under UCC § 9-620 or its predecessor, UCC § 9-505 (2clip_image004[5]
– in IN RE CBGB HOLDINGS, LLC, 2010 and one similar citation

clip_image002[6]

The purpose of requiring written notice of a creditor’s proposal to retain collateral in lieu of the debt and of prohibiting waiver of such notice before default is to provide the debtor with options for reducing his loss when collateral has a value greater than the debt via redemption pursuant to § 11-9-506 or liquidation in a commercially reasonable manner as required by § 11 …clip_image004[6]
– in Official code of Georgia annotated and one similar citation

clip_image002[7]

By contrast, we reversed the trial court’s grant of summary judgment to the creditor investor in Chen not because the creditor’s claim secured by realty was invalid, but because its letter to the debtor did not comply with the UCC’s notice requirements.clip_image004[7]
– in Palmetto Capital Corp. v. Smith, 2007 and one similar citation

Hansford v. Burns, 526 SE 2d 896 – Ga: Court of Appeals 1999526 S.E.2d 896 241 Ga. App. 407 (1999)

HANSFORD v. BURNS et al.

No. A99A1830.

Court of Appeals of Georgia.

December 13, 1999.

897*897 Weinstock & Scavo, Michael Weinstock, Jeffrey P. Yashinsky, Elizabeth M. Jaffe, Mark I. Sanders, Atlanta, for appellant.

Joe M. Harris, Jr., Atlanta, John W. Mrosek, Fayetteville, for appellees.

ELLINGTON, Judge.

Derrick Hansford sued Ronald Gatskie, R & G Services, Inc. and Joan and Ben Burns for various torts and alleged violations of the Commercial Code in connection with a series of secured transactions. The trial court granted the defendants’ motions for summary judgment and denied Hansford’s motion for summary judgment. Hansford appeals. Because we conclude that material questions of fact remain, we reverse.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997).

Viewed in this light, the record shows that on March 31, 1994 Joan Burns sold two dry cleaning businesses to Hansford[1] for $150,000. Hansford paid Burns $50,000 in cash and gave her an installment note for $100,000 secured by the businesses’ assets (“the first Hansford note”). Burns filed UCC-1 financing statements to perfect her security interest in the businesses. As the broker for both Joan Burns and Hansford, Ben Burns earned a commission of $10,000 which Hansford paid in full.

On July 21, 1995, Hansford sold the businesses to Gatskie for $160,000. As the broker for both Hansford and Gatskie, Ben Burns earned a commission of $16,000 which Hansford paid in cash. Gatskie paid Hansford $80,000 in cash and gave Hansford an installment note for $80,000 (“the Gatskie note”). As part of the same transaction, Hansford paid Joan Burns $64,000 which left a principal balance of $8,507.94 on the $100,000 note. Hansford gave Burns an installment note for $8,507.94 (“the second 898*898 Hansford note”) which was secured by an assignment of the $80,000 Gatskie note. In the assignment of the Gatskie note, Gatskie was directed to make payments on his $80,000 debt to Hansford directly to Burns in satisfaction of Hansford’s debt to Burns. Hansford filed UCC-1 financing statements to perfect his security interest in the businesses. Burns never filed UCC-3 forms showing that her security interest in the businesses had terminated. See OCGA § 11-9-404.

As directed, Gatskie made a number of payments to Joan Burns. Gatskie then defaulted on his debt to Hansford, leaving a principal balance of $5,771.59 on the second Hansford note. Hansford did not cure the default. On December 5, 1995, Burns sent Hansford a notice of default on the second Hansford note. On January 17, 1996, Burns filed suit on the second Hansford note, seeking the outstanding principal balance of $5,771.59 plus interest. On May 13, 1996, Hansford filed a petition for personal bankruptcy under Chapter 13 of the Bankruptcy Code. Hansford’s bankruptcy plan was confirmed on June 27, 1996. On July 17, 1996, Burns sent Hansford a notice which stated that he was in default on the second Hansford note and that if the debt were not paid within ten days, she would “commence foreclosure on the Security Agreement, and taking [sic] back the collateral which [was] secured by the UCC Financing Statement.” On September 10, 1996, Burns sent a notice to Hansford and Gatskie which stated that because they were in default on the July 21, 1995 security agreement, “and pursuant to O.C.G.A. Section 11-9-504,” Burns had “exercised her right to retake the collateral” and that unless the collateral were redeemed by September 25, Burns would “proceed to dispose of the collateral at a private sale.”

On September 26, 1996, R & G Services, which was wholly owned by Gatskie, paid Joan Burns $9,855.31.[2] In the “contract for sale of business,” Burns warranted that she had marketable title to the assets of the businesses free and clear of any other indebtedness. R & G Services immediately sold the businesses to Sarah Slaughter for $135,000. As the broker for Gatskie, Ben Burns earned a commission of $7,250. A few weeks later, Joan Burns filed UCC-3 forms “by assignment” to terminate Hansford’s security interest in the businesses.

1. The trial court erred in granting Joan Burns’ motion for summary judgment on Hansford’s claim that she wrongfully failed to terminate her security interest in the businesses.

The first Hansford note was paid in full when Hansford tendered, and Joan Burns accepted, a new note for the balance. Because there was no outstanding secured obligation under the first Hansford note, OCGA § 11-9-404 required Burns to file UCC-3 forms reflecting the termination of her security interest in the collateral (the businesses) within 60 days. There was no evidence before the trial court that Burns filed UCC-3 forms within the time allowed. Therefore Burns was not entitled to judgment as a matter of law on Hansford’s claim for OCGA § 11-9-404 statutory and actual damages.

2. The trial court erred in granting summary judgment to Joan and Ben Burns on Hansford’s claim for damages arising from the private sale of the businesses which were the collateral for the Gatskie note. The trial court concluded that Burns’ foreclosure on the businesses was authorized by OCGA § 11-9-505. Under the procedure of strict foreclosure, a creditor in possession may retain the collateral in satisfaction of the debt. OCGA § 11-9-505(2). To proceed under OCGA § 11-9-505(2), a creditor must give notice to the debtor of its proposal to retain the collateral in satisfaction of the debt. Id. The debtor then has 21 days to object to that proposal. Id. If the debtor objects, then the creditor must dispose of the collateral in compliance with OCGA § 11-9-504, that is, in a commercially reasonable manner. Id. This procedure protects the debtor’s right to mitigate his loss when the collateral is worth more than the debt. Chen v. Profit Sharing 899*899 Plan &c., 216 Ga.App. 878, 880(1), 456 S.E.2d 237 (1995).

In this case, the trial court specifically found that Burns “complied with the notice provisions of OCGA § 11-9-505(2).” Even assuming that the assignment of the Gatskie note gave Burns the authority to foreclose on the businesses, the record does not support the trial court’s finding. Burns never gave Hansford notice that she intended to retain the collateral in satisfaction of the debt. “The written notice required by OCGA § 11-9-505(2) must clearly state the creditor’s proposal to retain the collateral in satisfaction of the debt and must notify the debtor that he has 21 days in which to raise an objection to such a proposal.” (Citations omitted.) Chen, 216 Ga.App. at 880(1), 456 S.E.2d 237.

In this case, the July 17, 1996 notice letter referred to “taking back the collateral” but did not say that retention of the collateral would be in satisfaction of the debt, nor did the letter refer specifically to OCGA § 11-9-505. The September 10, 1996 notice invoked OCGA § 11-9-504 and indicated that Burns had retaken the collateral and intended to sell it at a private sale. Again, the notice did not say that retention of the collateral would be in satisfaction of the debt, nor did it refer specifically to OCGA § 11-9-505. Because Burns has identified no communication which would constitute notice that the collateral would be retained in satisfaction of the debt, she did not act under the authority of OCGA § 11-9-505. Anderson, Uniform Commercial Code, Vol. 9A, § 9-505:37, p. 677. Therefore, Burns never acquired fee simple title to the businesses and could not sell them to Gatskie as she purported to do. MTI Systems Corp. v. Hatziemanuel, 151 A.D.2d 649, 542 N.Y.S.2d 710, 711 (1989) (secured party may become the legal owner of collateral after default only by retaining the collateral in satisfaction of the debt in compliance with UCC § 9-505(2) or by purchasing the collateral at a sale).

Because Burns failed to comply with the strict foreclosure procedure provided by OCGA § 11-9-505, the foreclosure was governed by OCGA § 11-9-504. Chen, 216 Ga.App. at 880(1), 456 S.E.2d 237. Any disposal of collateral under OCGA § 11-9-504 must be commercially reasonable. OCGA § 11-9-504(3). Generally, “the issue of commercial reasonableness is to be decided by the trier of fact.” ITT Terryphone Corp. v. Modems Plus, 171 Ga.App. 710, 713-714(3), 320 S.E.2d 784 (1984). In this case, the secured party (Joan Burns) sold the collateral at a private sale, and within hours the buyer (Gatskie) resold the collateral to a third party for more than 13 times what he paid. There was no evidence before the trial court that Burns solicited more than one buyer. Hansford carried his burden in opposing summary judgment of identifying evidence that the sale of the collateral was not commercially reasonable.

Where a sale of collateral does not comply with OCGA § 11-9-504, the debtor can recover actual damages under OCGA § 11-9-507 for any loss caused by an inadequate sale price. Willis v. Healthdyne, 191 Ga.App. 671, 673(1), 382 S.E.2d 651 (1989). Because Hansford raised a question of fact regarding whether Burns’ disposition of the collateral was commercially reasonable, the trial court erred in granting Burns’ motion for summary judgment on Hansford’s claim for damages from the sale of the collateral.

3. The trial court erred in granting summary judgment to Gatskie and R & G Services on Hansford’s suit on the Gatskie note. The trial court concluded that Hansford failed to properly disclose the existence of the Gatskie note to the bankruptcy court. Applying Byrd v. JRC Towne Lake, 225 Ga. App. 506, 484 S.E.2d 309 (1997), the trial court ruled that because Hansford failed to list the Gatskie note in his Chapter 13 petition, he was judicially estopped from pursuing that claim later.

The record, however, does not support the trial court’s conclusion that as a matter of law Hansford failed to disclose the claim. Before filing his Chapter 13 petition, Hansford transferred the Gatskie note to a corporation, HanJa, Inc. Before Hansford’s Chapter 13 plan was confirmed on June 27, 1996, Hansford filed an amendment to the plan which showed that within one year of filing for bankruptcy Hansford had sold a business for $80,000 cash and a promissory note of $80,000 which was in default. On February 900*900 5, 1998, after Hansford’s Chapter 13 plan was confirmed, but before all payments under the plan were completed, the bankruptcy court conducted a hearing on Hansford’s motion to employ certain counsel. After a discussion about the Gatskie note, the bankruptcy court suggested that the note should be conveyed back to Hansford and any proceeds distributed to Hansford’s creditors. On February 9, 1998, HanJa, Inc. transferred the Gatskie note to Hansford. On February 13, 1998, Hansford filed an amendment to his Chapter 13 petition, adding the Gatskie note to the schedule of debtor’s personal property as an account receivable. All of these events, which were documented in the record before the trial court, occurred before the bankruptcy case was concluded. Therefore, the trial court erred in concluding that Hansford did not disclose his claim under the Gatskie note “in the bankruptcy case” as required by Byrd. “Under such circumstances, it cannot be said as a matter of law that plaintiff intentionally attempted to manipulate and deceive the court system, or that he was attempting to make a mockery of the system through inconsistent pleading.” Johnson v. Trust Co. Bank, 223 Ga.App. 650, 651, 478 S.E.2d 629 (1996). Accordingly, the trial court erred in applying the doctrine of judicial estoppel to bar Hansford’s suit on the Gatskie note.

Judgment reversed.

ANDREWS, P.J., and RUFFIN, J., concur.

[1] Hansford initially bought the businesses with a partner, Vincent Cumberbatch. Cumberbatch later abandoned his share to Hansford, and Hansford took over sole responsibility for the note.

[2] The amount paid represented $5,771.59 principal balance and $484.22 interest on the second Hansford note plus $3,099.50 attorney fees.

Chen v. Profit Sharing Plan of Bohne, 456 SE 2d 237 216 Ga. App. 878 (1995)

CHEN v. PROFIT SHARING PLAN OF Dr. Donald H. BOHNE, DDS, P.A.

No. A94A2018.

Court of Appeals of Georgia.

March 3, 1995.

Reconsideration Denied March 28, 1995.

Certiorari Denied June 1, 1995.

238*238 Ferguson & Saunders, Richard J. Storrs, Steven M. Kushner, Atlanta, for appellant.

David G. Crockett, Atlanta, for appellee.

McMURRAY, Presiding Judge.

Richard Chen brought an action against the Profit Sharing Plan of Dr. Donald H.

239*239 Bohne, DDS, P.A., by and through Dr. Donald H. Bohne, DDS, as its trustee (“the Profit Sharing Plan”), seeking (in relevant part) damages stemming from the Profit Sharing Plan’s alleged conversion of collateral worth substantially more than amounts due on the underlying debt. The facts upon opposing motions for summary judgment reveal the following:

On August 28, 1986, Chen acquired a $95,500 promissory note and security deed from Frances F. Blankenship encumbering Blankenship’s real property. This note bears interest at a rate of ten percent per annum, is based on thirty-year amortization of the loan and calls for a “balloon payment” of the remaining principal balance upon expiration of ten years. Blankenship is thus required to pay 120 consecutive monthly installments in the amount of $838.08.[1] However, before Blankenship’s first payment became due on November 1, 1986, Chen exchanged the first 60 installments due under the loan for $29,132 in cash from the Profit Sharing Plan. He also assigned the Blankenship note and security deed to the Profit Sharing Plan and executed a document entitled, “AGREEMENT,” whereby Chen assigned the Profit Sharing Plan as agent for servicing the Blankenship note and agreed to allow the Profit Sharing Plan to keep all proceeds of any foreclosure sale (regardless of surplus) resulting from default under the Blankenship note. Chen had the right to avoid any such foreclosure by either curing the default or paying the Profit Sharing Plan the “unamortized principal balance as shown on the amortization schedule, plus all advances and costs.”[2] The Profit Sharing Plan agreed to reassign the Blankenship note and security deed to Chen after receipt of the first 60 installments under the Blankenship note.

On August 22, 1988, Chen borrowed $20,000 from the Profit Sharing Plan in exchange for a $20,000 promissory note bearing interest at a rate of 21 percent per annum, providing for monthly interest payments in the amount of $368.38, “with additional payments of principal paid on any due date of interest in amounts of $1,000.00 minimum and $1,000.00 increments,” and requiring payment of the entire loan balance upon expiration of 34 months.[3] Chen pledged the Blankenship note and security deed as collateral for this loan, executing a “TRANSFER AND ASSIGNMENT” of the note and security deed and a document entitled, “ADDENDUM,” whereby Chen agreed to sell the remaining 60 installments under the Blankenship note to the Profit Sharing Plan for $29,132. This “ADDENDUM” also provides that, “[i]n the event [Chen] shall fail to make said payments under the terms and conditions of [the $20,000 promissory] note made this date[,] the assignment of the collateral shall stand and no further duty shall be held between the parties, and the transfer shall be complete in full.”

After 18 installments, Chen stopped making payments under the $20,000 promissory note in July 1990, and the Profit Sharing Plan (allegedly) posted a letter to Chen dated August 6, 1990, providing (in pertinent part) as follows: “[D]ue to [your] default, [the Profit Sharing Plan] claims all rights pursuant to various transfer agreements of promissory note and deed to secure debt from you to [the Profit Sharing Plan] which [the Profit Sharing Plan] already holds an interest. Such note and security deed originally executed by Frances F. Blankenship dated August 29, 1986 shall be subject to private sale at any time after August 20, 1990, which date is ten days subsequent to your presumed receipt of this letter allowing reasonable time 240*240 for delivery of same.” Chen denies receiving any such demand from the Profit Sharing Plan and deposes (in his affidavit) that he “never received any notice from the [Profit Sharing Plan] indicating or stating that the [Profit Sharing Plan] proposed to retain the Collateral in satisfaction of the obligation [under the $20,000 note].”

In an order granting summary judgment in favor of the Profit Sharing Plan, the trial court found (in pertinent part) that the Profit Sharing Plan did not wrongfully convert the Blankenship note and security deed and that the demand letter purportedly transmitted to Chen on August 6, 1990, was sufficient to satisfy the notice requirements of OCGA § 11-9-505(2). This Code subsection allows for retention of collateral (upon default) in satisfaction of an underlying debt, but only upon written notice informing the debtor that he has 21 days in which to object to any such proposed retention of collateral. Although recognizing that the August 6, 1990, letter from the Profit Sharing Plan does not explicitly inform Chen of a proposal to retain the Blankenship note and security deed in satisfaction of the underlying debt, the trial court found the letter sufficient to place Chen on notice of such a proposal because it informed Chen that the Profit Sharing Plan claims “`all rights pursuant to various transfer agreements of promissory note and deed to secure debt …'” and the “Agreement … between the parties … states `(i)n the event [Chen] shall fail to make said payments under the terms and conditions of [the $20,000 promissory] note made this date[,] the assignment of the collateral shall stand and no further duty shall be held between the parties, and the transfer shall be complete in full.'” Chen complains of this ruling on appeal. Held:

1. “OCGA § 11-9-505(2) provides for the only situation in which collateral can be retained by a secured party in satisfaction of a debt. Under that Code section, the secured party has the option of retaining the collateral in satisfaction of the obligation, provided the creditor gives written notice of such proposal if he has not signed a statement after default renouncing or modifying his rights under this subsection.” (Emphasis supplied.) Willis v. Healthdyne, Inc., 191 Ga.App. 671, 673(2), 382 S.E.2d 651. The written notice required by OCGA § 11-9-505(2) must clearly state the creditor’s proposal to retain the collateral in satisfaction of the debt and must notify the debtor that he has 21 days in which to raise an objection to such a proposal. Anderson, Uniform Commercial Code, Volume 9, § 9-505:15, p. 807. See Braswell v. American Nat. Bank, 117 Ga.App. 699, 700, 161 S.E.2d 420. Compare Motor Contract Co. of Atlanta v. Sawyer, 123 Ga.App. 207, 209(3), 180 S.E.2d 282. The purpose of requiring such written notice of a creditor’s proposal to retain collateral in lieu of the debt and of prohibiting waiver of such notice before default (in cases not involving the sale of accounts or chattel paper, OCGA § 11-9-502(2); C C Financial v. Ross, 250 Ga. 832, 833(2), 301 S.E.2d 262) is to provide the debtor with options for reducing his loss when collateral has a value greater than the debt via redemption pursuant to OCGA § 11-9-506 or liquidation in a commercially reasonable manner as required by OCGA § 11-9-504. Stensvad v. Miners etc. Bank of Roundup, 163 Mont. 409, 517 P.2d 715, 717 (1973). Allowing a debtor to reject a secured creditor’s proposal to retain collateral in lieu of debt (after default) not only protects the debtor’s right to mitigate his loss, it protects the creditor from claims of the debtor that the creditor should have disposed of the collateral. Herring Mining Co. v. Roberts Bros. Coal Co., 747 S.W.2d 616, 619 (1988). See Anderson, Uniform Commercial Code, Volume 9, § 9-505:5, p. 800.

In the case sub judice, the letter allegedly posted to Chen on August 6, 1990, neither stated a proposal for the Profit Sharing Plan to retain the collateral in satisfaction of Chen’s debt, nor advised Chen of his right to object to such disposition within 21 days after transmission of the written proposal. Moreover, the condition in the “ADDENDUM” providing for full and complete assignment and transfer of the collateral upon default by Chen amounted to nothing more than an unenforceable attempt at predefault waiver of the debtor’s rights under Article 9 of Georgia’s Uniform Commercial Code. Kellos v. Parker-Sharpe, Inc., 245 241*241 Ga. 130, 132(2), 133, 263 S.E.2d 138; GEMC Fed. Credit Union v. Shoemake, 151 Ga.App. 705(1), 706, 261 S.E.2d 443. Notwithstanding, the Profit Sharing Plan contends Chen was not entitled to notice under OCGA § 11-9-505(2) because OCGA § 11-9-104(h) specifically excludes transactions involving transfers of interests in or liens on real estate from the requirements of Article 9. This argument is without merit.

It is clear that Article 9 does not apply “to the creation or transfer of an interest in or lien on real estate….” OCGA § 11-9-104(h). However, the transaction between Chen and the Profit Sharing Plan does not involve the “creation” or “transfer” of an instrument involving an “interest in” or “lien on” real estate, it involves pledge of collateral or “lien” against negotiable instruments. “`A pledge is a bailment of personal property as a security for some debt or engagement, the property being redeemable on specified terms.’ 68 AmJur2d 876, Secured Transactions, § 50. As succinctly stated in First Nat. Bank v. Hattaway, 172 Ga. 731, 735, 158 S.E. 565 (1931) `a pledge … is property deposited with another as security for the payment of a debt.’ The essential elements of a pledge are: `1) the existence of a debt or obligation and 2) the transfer of property to the pledgee, to be held as security.’ Williams v. Espey, 11 Utah 2d 317, 358 P.2d 903 (1961)…. Regarding a pledge, possession passes, but not title. The pledge creates a lien on the property by the pledgee while legal title remains in the pledgor. Bromley v. Bromley, 106 Ga.App. 606, 608, 127 S.E.2d 836 (1962).” Shedd v. Goldsmith Chevrolet, 178 Ga.App. 554, 557(3), 343 S.E.2d 733.

Although Chen gave the Profit Sharing Plan possession of the Blankenship note and security deed and executed a “TRANSFER AND ASSIGNMENT” of these instruments to the Profit Sharing Plan, the specific language of the “ADDENDUM” executed by the parties reveals that Chen completed these acts to enable the Profit Sharing Plan to “hold the [Blankenship] note and Security Deed … as collateral for said loan….” Thus, while the Profit Sharing Plan had possession of the Blankenship security deed and note at the time of Chen’s default, title to these instruments never vested in the Profit Sharing Plan. The Profit Sharing Plan only acquired a lien against the commercial paper, i.e., the security deed and the note. Consequently, since the transaction in the case sub judice never resulted in the “creation” or “transfer” of an interest in or lien against real property, the Profit Sharing Plan was not exempt from complying with any notice provision required under Article 9 of Georgia’s Uniform Commercial Code.

The trial court erred in finding that the letter allegedly posted to Chen on August 6, 1990, complied with the notice requirements of OCGA § 11-9-505(2) and in granting summary judgment in favor of the Profit Sharing Plan. Chen is entitled to recover either damages for conversion of the collateral after default or damages prescribed by OCGA § 11-9-507(1). UIV Corp. v. Oswald, 139 Ga.App. 697, 700, 229 S.E.2d 512. See Anderson, Uniform Commercial Code, Volume 9, § 9-505:29, p. 813. Compare Willis v. Healthdyne, Inc., 191 Ga.App. 671, 382 S.E.2d 651, supra, where the debtor suffered no damage as a result of failure to provide notice pursuant to OCGA § 11-9-505(2); and Barney v. Morris, 168 Ga.App. 426, 309 S.E.2d 420, where the jury rejected the debtor’s claim for loss of profits because of a lack of notice of repossession of the collateral.

2. In light of our holding in Division 1 of this opinion, it is unnecessary to address Chen’s remaining enumeration of error.

Judgment reversed.

POPE, P.J., and SMITH, J., concur.

[1] This ten-year balloon loan has an expected yield of $91,915.54. The principal balance of the loan after ten years is expected to be $86,845.81.

[2] This agreement provides an effective annual yield of more than twenty-four percent for the Profit Sharing Plan and is based on five-year amortization of a debt with an original principal balance equal to the amount the Profit Sharing Plan paid Chen for the first five years of the Blankenship loan, i.e., $29,132.

[3] According to a ledger sheet attached to the affidavit of Donald H. Bohne, DDS, the $368.38 monthly payments prescribed by this note cover only half of the monthly interest accruals on the 21 percent loan. Based on Bohne’s figures, $32,521.52 would be the amount due on the $20,000 loan upon successful completion of all 34 payments prescribed by this promissory note.

 

 

Wall Street protest enters fourth day

Wall Street protest enters fourth day.

Peter Foley / EPA

New York police try to direct protesters marching on Wall Street Tuesday.

A protest called “Occupy Wall Street” entered its fourth day Tuesday as a loosely organized group of activists converged on lower Manhattan and clashed with police.

The protest began Saturday when several thousand people gathered in front of the New York Stock Exchange holding signs saying “We must end corporate tyranny and corruption” and “Debt is slavery.” By Tuesday, the crowd had dwindled to several hundred.

New York police have made a handful of arrests — two on Saturday when protesters tried to enter a Bank of America office and six more on Monday. At least four on Monday were held for wearing masks, which is illegal for groups of two or more, police said. A video posted on YouTube Monday appears to show police arresting at least one protester.

“The elite corporate power have hijacked democracy,” Alexander Penley, an international lawyer from New York, told Reuters. “The economic depression we are experiencing today has something to do with how Wall Street is run.”

Demonstrators have displayed other signs including “Commodity inflation causes starvation” and “I can’t afford a lobbyist.”

The idea for the protest apparently originated with a Vancouver-based magazine called Adbusters, which describes itself as “a not-for-profit, reader-supported, 120,000-circulation magazine concerned about the erosion of our physical and cultural environments by commercial forces.”

In a July 13 blog post, the magazine called on readers to emulate the “Arab Spring” uprisings that began in Tahrir Square in Cairo in January. The magazine called on readers to “flood into lower Manhattan, set up tents, kitchens, peaceful barricades and occupy Wall Street for a few months.” The purpose of the protest, according to the post, is to end “the influence money has over our representatives in Washington.”

“It’s time for DEMOCRACY NOT CORPORATOCRACY,” the post proclaimed. “We’re doomed without it.”

On Tuesday, police maintained a heavy presence in the Financial District, partitioning off areas of the sidewalk and slowing pedestrian traffic in a neighborhood that typically attracts heavy tourist traffic.

The demonstrators have vowed to stay for months.

Check out some great photos of the protest here.

All we need to do, is have the people that have been wrongfully foreclosed upon during this foreclosure hell plaguing the country, join in the protests, and the crowd would be big enough to make one hell of a statement!

Wall Street protest enters fourth day

Wall Street protest enters fourth day.

Peter Foley / EPA

New York police try to direct protesters marching on Wall Street Tuesday.

A protest called “Occupy Wall Street” entered its fourth day Tuesday as a loosely organized group of activists converged on lower Manhattan and clashed with police.

The protest began Saturday when several thousand people gathered in front of the New York Stock Exchange holding signs saying “We must end corporate tyranny and corruption” and “Debt is slavery.” By Tuesday, the crowd had dwindled to several hundred.

New York police have made a handful of arrests — two on Saturday when protesters tried to enter a Bank of America office and six more on Monday. At least four on Monday were held for wearing masks, which is illegal for groups of two or more, police said. A video posted on YouTube Monday appears to show police arresting at least one protester.

“The elite corporate power have hijacked democracy,” Alexander Penley, an international lawyer from New York, told Reuters. “The economic depression we are experiencing today has something to do with how Wall Street is run.”

Demonstrators have displayed other signs including “Commodity inflation causes starvation” and “I can’t afford a lobbyist.”

The idea for the protest apparently originated with a Vancouver-based magazine called Adbusters, which describes itself as “a not-for-profit, reader-supported, 120,000-circulation magazine concerned about the erosion of our physical and cultural environments by commercial forces.”

In a July 13 blog post, the magazine called on readers to emulate the “Arab Spring” uprisings that began in Tahrir Square in Cairo in January. The magazine called on readers to “flood into lower Manhattan, set up tents, kitchens, peaceful barricades and occupy Wall Street for a few months.” The purpose of the protest, according to the post, is to end “the influence money has over our representatives in Washington.”

“It’s time for DEMOCRACY NOT CORPORATOCRACY,” the post proclaimed. “We’re doomed without it.”

On Tuesday, police maintained a heavy presence in the Financial District, partitioning off areas of the sidewalk and slowing pedestrian traffic in a neighborhood that typically attracts heavy tourist traffic.

The demonstrators have vowed to stay for months.

Check out some great photos of the protest here.

All we need to do, is have the people that have been wrongfully foreclosed upon during this foreclosure hell plaguing the country, join in the protests, and the crowd would be big enough to make one hell of a statement!

http://www.atlawblog.com/2011/04/former-dekalb-court-clerk-sues-successor/

Former DeKalb court clerk sues successor

9:16 am, April 20th, 2011

Former DeKalb County Superior Court Clerk Linda Carter has sued the woman who now holds that title, Debra DeBerry, alleging that DeBerry tricked her into resigning from the job.

Carter sued DeBerry in her official capacity and individually, and seeks unspecified damages. Carter also sued Gov. Nathan Deal, seeking a writ of mandamus to remove DeBerry from office and to compel official recognition of Carter’s “status as the rightful elected Clerk.” The complaint alleges that Deal accepted the letter of resignation without knowing it was “null and void.”

Carter is represented by A. Lee Parks and James E. Radford Jr. of Parks, Chesin & Walbert. The suit, filed in DeKalb Superior Court, does not list counsel for DeBerry.

DeBerry’s chief deputy clerk, Rick Setser, who also serves as her public information officer, said the county attorney had advised both him and DeBerry not to comment.

“It’s unfortunate,” he said. “I’ve spoken to Ms. DeBerry, and she is eager to clear her name.”

Parks, in an earlier conversation with the Daily Report, said Carter suffers from Alzheimer’s disease and would not have left willingly, as she was two years shy of vesting in her pension and medical benefits. The complaint alleges that on the afternoon of March 24, Deputy Clerk Lisa Oakley—who is not a defendant in the suit—“acting on instructions from DeBerry” and with knowledge that “Carter was suffering from a temporary episode of dementia,” asked her to sign a letter of resignation.

“The letter was presented to Carter as a routine business document … its contents were obscured from Carter’s view.  Oakley, acting on DeBerry’s instructions, did not inform Carter that she was being asked to sign a letter of resignation. … Oakley, acting on DeBerry’s instructions, and knowing that Carter did not know or understand the document’s content … indicated some urgency in having Carter sign the document.”

Oakley was not immediately available for comment.

The complaint alleges that on the evening that Carter signed her resignation letter, her husband, John Carter, came to pick her up from work and Oakley escorted her to the car. Oakley told Carter’s husband that “DeBerry had ordered that Oakley have Carter sign a letter of resignation.”

Also, allegedly on DeBerry’s instructions, Oakley said that Chief Judge Mark Anthony Scott “had ordered the Sheriff of DeKalb County, Georgia, to forcibly remove Carter from office.”

Scott said he did not even learn about Carter’s resignation until after it had been tendered and that he neither attempted to remove Carter from office nor ordered the sheriff to do so. He said he did not even have that authority.  “I read those allegations. I do not know where they come from,” he said.

According to the complaint, when Carter’s husband called Setser, the chief deputy clerk, to discuss the circumstances of the resignation, Setser allegedly said he and DeBerry jointly created the letter and agreed to have Carter sign it “to avoid media inquiries into Carter’s medical condition.”

The case, Carter v. DeBerry, 11cv4584, has been assigned to DeKalb Superior Judge Daniel R. Coursey Jr.

Georgia Power Company What a Rip-Off!

You know, no matter what we do to get our bill down, they jack it right back up.  Then, I suddenly realize that they tax us, not only on the electricity, but tax us on:  Environmental Compliance Cost – the penalties they are charged for violating the EPA $7.71 added for that cost; Nuclear Construction Cost Recovery – for a nuclear reactor wow, let’s save the world and go green $4.52 add for that; Municipal Franchise Fee (what the hell is that?) $1.64.

So, these assholes add $13.87 to our bill, and AFTER they add that, then they calculate the tax for  a whopping $153.70 for our bill!

Does anyone else have a problem with this?  I thought sales tax was for what is sold to you, hell, I didn’t buy any of those add ons!  Good Ole Georgia Power Service Commission lets them SOBs charge for anything and everything!  I am mad as hell!

GA Supreme Court: Security Deeds That Lack of Attestation in GA

Recorded Security Deed which lacks attestations does not provide constructive notice to subsequent bona fide purchasers
Posted on April 8, 2011 by Fletcher Jim

In US Bank Nat’l Ass’n v. Gordon, Case No. S10Q1564 (Ga. march 25, 2011), the Georgia Supreme Court answered in the negative the following certified question from the United States District Court for the North District of Georgia: The question is whether the 1995 Amendment to OCGA § 44-14-33 (See Ga. L. 1995, p. 1076, § 1) means that, in the absence of fraud, a security deed that is actually filed and recorded, and accurately indexed, on the appropriate county land records provides constructive notice to subsequent bona fide purchasers, where the security deed contains the grantor’s signature but lacks both an official and unofficial attestation (i.e., lacks attestation by a notary public and also an unofficial witness).

The Supreme Court reasoned that, under OC.G.A. § 44-14-33, “to admit a security deed to record, the deed must be attested by or acknowledged before an officer, such as a notary public, and, in the case of real property, by a second witness”, and that a” deed that shows on its face that it was “not properly attested or acknowledged, as required by statute, is ineligible for recording.”

The Court then approved the Bankruptcy Court’s holding:
under the 1995 Amendment, a security deed with a facially defective attestation would not provide constructive notice, while a security deed with a facially proper but latently defective attestation would provide constructive notice.

The absence of attestations at all being a facial (not latent) defect, the mere fact of recording does not give constructive notice to a purchaser because a contrary rule would “shift to the subsequent bona fide purchaser and everyone else the burden of determining [possibly decades after the fact] the genuineness of the grantor’s signature and therefore the cost of investigating and perhaps litigating whether or not an unattested deed was in fact signed by the grantor.”

The full text of the decision is as follows:

Case: US Bank Nat’l Ass’n v. Gordon
Court: Georgia Supreme Court
 Case No: S10Q1564
Date: March 25, 2011

Text: NAHMIAS, Justice.

The Honorable Supreme Court met pursuant to adjournment.

The following order was passed:

It appearing that the enclosed opinion decides a second-term appeal, which must be concluded by the end of the April term on April 14, 2011, it is ordered that a motion for reconsideration, if any, must be filed and received in the Clerk’s office by 4:30 p.m. on Monday, March 28, 2011.

The United States District Court for the North District of Georgia has certified a question to this Court regarding the 1995 Amendment to OCGA § 44-14-33. See Ga. L. 1995, p. 1076, § 1. The question is whether the 1995 Amendment means that, in the absence of fraud, a security deed that is actually filed and recorded, and accurately indexed, on the appropriate county land records provides constructive notice to subsequent bona fide purchasers, where the security deed contains the grantor’s signature but lacks both an official and unofficial attestation (i.e., lacks attestation by a notary public and also an unofficial witness).
For the reasons that follow, we answer the certified question in the negative.

1. In October 2005, Bertha Hagler refinanced her residence through the predecessor-in-interest to U.S. Bank National Association (U.S. Bank) and granted the predecessor a first and a second security deed to her residence. The security deeds were recorded with the Clerk of the Fulton County Superior Court in November 2005, but the first security deed was not attested or acknowledged by an official or unofficial witness. According to the district court’s certification order:
Gordon, the Chapter 7 Trustee in Hagler’s bankruptcy case, sought to avoid or set aside the valid, but unattested, first security deed to the residence through the “strong-arm” power of Section 544 (a) (3) of the Bankruptcy Code. See 11 U.S.C. § 544 (a) (3). Gordon argued that under the proper interpretation of § 44-14-33 of the Georgia Code, a security deed that is not attested by an official and unofficial witness cannot provide constructive notice to a subsequent purchaser even if it is recorded. U.S. Bank argued, in opposition, that a 1995 amendment to § 44-14-33 changed the law to enable an unattested security deed to provide constructive notice. Gordon argued in response that the 1995 amendment served only to recognize constructive notice from a security deed with a “latently” defective attestation, meaning an irregular attestation that appears regular on its face; a deed with a “patently” defective attestation, meaning an attestation that is obviously defective on its face, would not provide constructive notice.
 The bankruptcy court ruled in Gordon’s favor, concluding that, under the 1995 Amendment, a security deed with a facially defective attestation would not provide constructive notice, while a security deed with a facially proper but latently defective attestation would provide constructive notice. See Gordon v. U.S. Bank Natl. Assn. (In re Hagler) , 429 BR 42, 47-53 (Bankr. N.D. Ga. 2009). Concluding that the issue involved an unclear question of Georgia law and that no Georgia court had addressed the issue after the 1995 Amendment, the district court certified the question to this Court. We conclude that the bankruptcy court properly resolved the issue.
 2. OCGA § 44-14-61 provides that “[i]n order to admit deeds to secure debt . . . to record, they shall be attested or proved in the manner prescribed by law for mortgages.” OCGA § 44-14-33 provides the law for attesting mortgages:
 In order to admit a mortgage to record, it must be attested by or acknowledged before an officer as prescribed for the attestation or acknowledgment of deeds of bargain and sale; and, in the case of real property, a mortgage must also be attested or acknowledged by one additional witness. In the absence of fraud, if a mortgage is duly filed, recorded, and indexed on the appropriate county land records, such recordation shall be deemed constructive notice to subsequent bona fide purchasers.
The second sentence of this Code section was added by the 1995 Amendment.
 3. We first address Gordon’s contention that the 1995 Amendment does not apply at all to security deeds. He contends that only the first sentence of § 44-14-33, which expressly deals with attestation, is applicable to security deeds through § 44-14-61 and that, because the 1995 Amendment addresses constructive notice, it does not apply to security deeds. We disagree. The General Assembly chose to enact the 1995 Amendment not as a freestanding Code provision but as an addition to a Code provision clearly referenced by § 44-14-61. Moreover, “[t]he objects of a mortgage and security deed . . . under the provisions of the Code are identical —security for a debt. While recognizing the technical difference between a mortgage and security deed hereinbefore pointed out, this court has treated deeds to secure debts . . . as equitable mortgages.” Merchants & Mechanics’ Bank v. Beard , 162 Ga. 446, 449 (134 SE 107) (1926). The General Assembly is presumed to have been aware of the existing state of the law when it enacted the 1995 Amendment, see Fair v. State , 288 Ga. 244, 252 (702 SE2d 420) (2010), so the placement of the amendment makes complete sense. Indeed, no reason has been suggested why the General Assembly would want the same type of recording to provide constructive notice for mortgages but not for security deeds. Accordingly, we conclude that the 1995 Amendment is applicable to security deeds.

4. Turning back to the certified question, we note that the “recordation” that is deemed to provide constructive notice to subsequent purchasers clearly refers back to “duly filed, recorded, and indexed” deeds. U.S. Bank argues that a “duly filed, recorded, and indexed” deed is simply one that is in fact filed, recorded, and indexed, even if unattested by an officer or a witness. We disagree.

Particular words of statutes are not interpreted in isolation; instead, courts must construe a statute to give ” ‘”sensible and intelligent effect” to all of its provisions,’ ” Footstar, Inc. v. Liberty Mut. Ins. Co. , 281 Ga. 448, 450 (637 SE2d 692) (2006) (citation omitted), and “must consider the statute in relation to other statutes of which it is part.” State v. Bowen , 274 Ga. 1, 3 (547 SE2d 286) (2001). In particular, “statutes ‘in pari materia,’ i.e., statutes relating to the same subject matter, must be construed together.” Willis v. City of Atlanta , 285 Ga. 775, 776 (684 SE2d 271) (2009).

Construing the 1995 Amendment in harmony with other recording statutes and longstanding case law, we must reject U.S. Bank’s definition of “duly filed, recorded, and indexed.” Its definition ignores the first sentence of § 44-14-33, which provides that to admit a security deed to record, the deed must be attested by or acknowledged before an officer, such as a notary public, and, in the case of real property, by a second witness. See OCGA § 44-2-15 (listing the “officers” who are authorized to attest a mortgage or deed). Other statutes governing deeds and mortgages similarly preclude recording and constructive notice if certain requirements are not satisfied. See OCGA § 44-2-14 (“Before any deed to realty or personalty or any mortgage, bond for title, or other recordable instrument executed in this state may be recorded, it must be attested or acknowledged as provided by law.”); OCGA § 44-14-61 (“In order to admit deeds to secure debt or bills of sale to record, they shall be attested or proved in the manner prescribed by law for mortgages”). Indeed, U.S. Banks’ construction of the 1995 Amendment contradicts OCGA § 44-14-39, which provides that “[a] mortgage which is recorded . . . without due attestation . . . shall not be held to be notice to subsequent bona fide purchasers.”

Thus, the first sentence of § 44-14-33 and the statutory recording scheme indicate that the word “duly” in the second sentence of § 44-14-33 should be understood to mean that a security deed is “duly filed, recorded, and indexed” only if the clerk responsible for recording determines, from the face of the document, that it is in the proper form for recording, meaning that it is attested or acknowledged by a proper officer and (in the case of real property) an additional witness. This construction of the 1995 Amendment is also consistent with this Court’s longstanding case law, which holds that a security deed which appears on its face to be properly attested should be admitted to record, see Thomas v. Hudson , 190 Ga. 622, 626 (10 SE2d 396) (1940); Glover v. Cox , 137 Ga. 684, 691-694 (73 SE 1068) (1912), but that a deed that shows on its face that it was “not properly attested or acknowledged, as required by statute, is ineligible for recording.” Higdon v. Gates , 238 Ga. 105, 107 (231 SE2d 345) (1976).

We note that at the time the 1995 Amendment was considered and enacted, the appellate courts of this State had “never squarely considered” whether a security deed with a facially valid attestation could provide constructive notice where the attestation contained a latent defect, like the officer or witness not observing the grantor signing the deed. Leeds Bldg. Prods. v. Sears Mortg. Corp ., 267 Ga. 300, 301 (477 SE2d 565) (1996). The timing of the amendment suggests that the General Assembly was attempting to fill this gap in our law as the Leeds litigation worked its way through the trial court and the Court of Appeals before our decision in 1996. See Gordon , 429 BR at 50. We ultimately decided in Leeds that, “in the absence of fraud, a deed which, on its face, complies with all statutory requirements is entitled to be recorded, and once accepted and filed with the clerk of court for record, provides constructive notice to the world of its existence.” 267 Ga. at 302. We noted that Higdon remained good law, because in that case the deed was facially invalid, did “not entitle [the deed] to record,” and “did not constitute constructive notice to subsequent purchasers.” Leeds , 267 Ga. at 302. Because we reached the same result as under the 1995 Amendment, we did not have to consider whether the amendment should be applied retroactively to that case. See id. at 300 n.1.

Our interpretation of the 1995 Amendment also is supported by commentators that have considered the issue. See Frank S. Alexander, Georgia Real Estate Finance and Foreclosure Law, § 8-10, p. 138 (4th ed. 2004) (stating that “[a] security deed that is defective as to attestation, but without facial defects, provides constructive notice to subsequent bona fide purchasers”); Daniel F. Hinkel, 2 Pindar’s Georgia Real Estate Law and Procedure, § 20-18 (6th ed. 2011) (without mentioning deeds with facial defects, explaining that the 1995 Amendment to § 44-14-33 and Leeds “provide that in the absence of fraud a deed or mortgage, which on its face does not reveal any defect in the acknowledgment of the instrument and complies with all statutory requirements, is entitled to be recorded, and once accepted and filed with the clerk of the superior court for record, provides constructive notice to subsequent bona fide purchasers”); T. Daniel Brannan & William J. Sheppard, Real Estate , 49 Mercer L. Rev. 257, 263 (Fall 1997) (without mentioning deeds with facial defects, stating that the 1995 Amendment to § 44-14-33 resolves “the issue that was before the court in [Leeds ]“). As noted by the bankruptcy court, if Hinkel and the law review authors thought that the 1995 Amendment altered longstanding law with regard to deeds containing facial defects as to attestation, they surely would have said so. See Gordon , 429 BR at 52-53.

Finally, it should be recognized that U.S. Bank’s interpretation of the 1995 Amendment to § 44-14-33 “would relieve lenders of any obligation to present properly attested security deeds” and “would tell clerks that the directive to admit only attested deeds is merely a suggestion, not a duty,” and this would risk an increase in fraud because deeds no longer would require an attestation by a public officer who is sworn to verify certain information on the deeds before they are recorded and deemed to put all subsequent purchasers on notice. Gordon , 429 BR at 51-52. Moreover, while “it costs nothing and requires no special expertise or effort for a closing attorney, or a lender, or a title insurance company to examine the signature page of a deed for missing signatures before it is filed,” U.S. Bank’s construction would “shift to the subsequent bona fide purchaser and everyone else the burden of determining [possibly decades after the fact] the genuineness of the grantor’s signature and therefore the cost of investigating and perhaps litigating whether or not an unattested deed was in fact signed by the grantor.” Id. at 52.

For these reasons, we answer the certified question in the negative.

Certified question answered. All the Justices concur.

Trial Judge:

Attorneys: John B. Vitale and Lewis E. Hassett (Morris, Manning & Martin LLP), Atlanta, for appellant. Neil C. Gordon and Michael F. Holbein (Arnall Golden Gregory LLP), Atlanta, for appellee. Amicus Appellant: Edward D. Burch Jr. (Smith, Gambrell & Russell LLP), William H. Dodson II (Dodson, Feldman & Dorough LLP) and Craig K. Pendergrast (Taylor English Duma LLP), Atlanta.

About Fletcher Jim
 Jim Fletcher is a Georgia attorney whose real estate litigation practice includes the representation of parties regarding residential and commercial foreclosures. You may contact Jim at (404) 461-9771.
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Big Banks Save Billions As Homeowners Suffer, Internal Federal Report By CFPB Finds | National Association of Consumer Advocates

Big Banks Save Billions As Homeowners Suffer, Internal Federal Report By CFPB Finds | National Association of Consumer Advocates.

Release Date: 

March 28, 2011

Source: Shahien Nasiripour, The Huffington Post

NEW YORK — The nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007 by taking shortcuts in processing troubled borrowers’ home loans, according to a confidential presentation prepared for state attorneys general by the nascent consumer bureau inside the Treasury Department.

 That estimate suggests large banks have reaped tremendous benefits from under-serving distressed homeowners, a complaint frequent enough among borrowers that federal regulators have begun to acknowledge the industry’s fundamental shortcomings.

 The dollar figure also provides a basis for regulators’ internal discussions regarding how best to penalize Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial in a settlement of wide-ranging allegations of wrongful and occasionally illegal foreclosures. People involved in the talks say some regulators want to levy a $5 billion penalty on the five firms, while others seek as much as $30 billion, with most of the money going toward reducing troubled homeowners’ mortgage payments and lowering loan balances for underwater borrowers, those who owe more on their home than it’s worth.

 Even the highest of those figures, however, pales in comparison to the likely cost of reducing mortgage principal for the three million homeowners some federal agencies hope to reach. Lowering loan balances for that many underwater borrowers who owe less than $1.15 for every dollar their home is worth would cost as much as $135 billion, according to the internal presentation, dated Feb. 14, obtained by The Huffington Post.

 But perhaps most important to some lawmakers in Washington, the mere existence of the report suggests a much deeper link between the Bureau of Consumer Financial Protection, led by Harvard professor Elizabeth Warren, and the 50 state attorneys general who are leading the nationwide probe into the five firms’ improper foreclosure practices, a development sure to anger Republicans in Congress and a banking industry intent on diminishing the fledgling CFPB’s legitimacy by questioning its authority to act before it’s officially launched in July.

 Earlier this month, Warren told the House Financial Services Committee, under intense questioning, that her agency has provided limited assistance to the various state and federal agencies involved in the industry probes. At one point, she was asked whether she made any recommendations regarding proposed penalties. She replied that her agency has only provided “advice.”

 A representative of the consumer agency declined to comment on the presentation, citing the law enforcement nature of the federal investigation into the mortgage industry’s leading firms.

The seven-page presentation begins by stating that a deal to settle claims of improper foreclosures “provides the potential for broad reform.”

 In it, the consumer agency outlines possibilities offered by the settlement — a minimum number of mortgage modifications, a boost to the housing market — and how it could reform the industry going forward so that investors in home loans and the borrowers who owe them would be able to resolve situations in which borrowers fall behind on their payments without the complications of a large mortgage company acting in its own interest.

 The presentation also details how much certain firms likely saved in lieu of making the necessary loan-processing adjustments as delinquencies and foreclosures rose. Bank of America, for example, has saved more than $6 billion since 2007 by not upgrading its procedures or hiring more workers, according to the report. Wells Fargo saved about as much, with JPMorgan close behind. Citigroup and Ally bring the total saved to nearly $25 billion.

The presentation adds that the under-investment far exceeds the proposed $5 billion penalty that has been on the table. People familiar with the matter say the Office of the Comptroller of the Currency wants to fine the industry less than $5 billion.

 The alleged shortchanging of homeowners has prolonged the housing market’s woes, experts say, because distressed homeowners who are prime candidates to have their payments reduced aren’t getting loan modifications and lenders are taking up to two years to seize borrowers’ homes.

 The average borrower in foreclosure has been delinquent for 537 days before actually being evicted, up from 319 days in January 2009, according to Lender Processing Services, a data provider.

 The prolonged housing pain has manifested itself in various ways.

 Purchases of new U.S. homes dropped last month to the slowest pace on record, according to the Commerce Department. Prices declined to the lowest level since 2003, according to the National Association of Realtors. About 6.9 million homeowners were either delinquent or in foreclosure proceedings through February, according to LPS.

 A penalty of about $25 billion — based on mortgage servicing costs avoided — would have “little effect” on the five firms’ capital levels, according to the presentation, since the five banks collectively hold about $500 billion in tangible common equity, the highest form of capital. Those numbers notwithstanding, banks and Republicans in Congress have complained that such a large penalty would have a disproportionate impact on bank balance sheets, hurting their ability to lend or pay dividends to investors.

 The presentation adds that given the extent of negative equity — underwater homeowners owe $751 billion more than their homes are worth, according to data provider CoreLogic — “we have gravitated towards settlement solutions that enable asset liquidity and cast a wide net.” The solution is an emphasis on reducing mortgage debt and enabling short sales, thus allowing borrowers to refinance into more affordable loans or to sell their homes and move on.

Top Federal Reserve officials and other economists have pointed to the large numbers of underwater homeowners as being one of the reasons behind high unemployment, as underwater homeowners are unable to move to where the jobs are. More than 23 percent of homeowners with a mortgage are underwater, according to CoreLogic.

The proposed settlement, as envisioned by the consumer agency, could reduce loan balances for up to three million homeowners. If mortgage firms targeted their efforts at reducing mortgage debt for three million homeowners who owe as much as their homes are worth or have less than 5 percent equity, the total cost would be $41.8 billion, according to estimates cited in the presentation.

 If firms lowered total mortgage debt for three million homeowners who are underwater by as much as 15 percent and brought them to 5 percent equity, that would cost more than $135 billion, according to the presentation. That would include reducing second mortgages and home equity lines of credit.

 In its presentation, the consumer agency said the new program, titled “Principal Reduction Mandate,” could be “meaningfully additive to HAMP” — the Home Affordable Modification Program, the Obama administration’s primary mortgage modification effort.

 The CFPB estimates that there are about 12 million U.S. homeowners underwater, most of whom are not delinquent, according to its presentation. Of those, nine million would be eligible for this new principal-reduction scheme born from the foreclosure deal. The new initiative would then “mandate” three million permanent modifications.

News of the level of the consumer agency’s involvement in the state investigation would likely be welcomed by consumer and homeowner advocates, who have long complained of the lack of attention paid to distressed borrowers by federal bank regulators like the OCC and the Federal Reserve.

But Republicans will pounce on the news, creating yet another distraction for a fledgling bureau that was the centerpiece of the Obama administration’s efforts to reform the financial industry in the wake of the worst economic crisis since the Great Depression.

Meanwhile, the banking industry will likely celebrate government infighting as attention is diverted away from allegations of bank wrongdoing and towards the level of involvement of Elizabeth Warren, a fierce consumer advocate and the principal original proponent of an agency solely dedicated to protecting borrowers from abusive lenders.

Warren is standing up the agency on an interim basis. It formally launches in July, at which point it will need a Senate-confirmed director in order to carry out its full authority. One of those areas will be how mortgage firms process home loans for distressed borrowers.

A spokeswoman for JPMorgan Chase declined to comment. Spokespeople for the other four banks were not immediately available for comment.

Read the presentation attached.

The Beginning of the End?

Is this the beginning of the end for Lender Processing Services, LPS?
From the ruling.

IN RE:
 RON WILSON, SR.
 LARHONDA WILSON

The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.

The hearing on the Motion for Sanctions provides yet another piece to in the puzzle of loan administration. In Jones v. Wells Fargo, this Court discovered that a highly automated software package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages. In In re Stewart, additional information was acquired regarding postpetition administration under the same program, revealing errors in the methodology for fees and costs posted to a debtor’s account. In re Fitch, delved into the administration of escrow accounts for insurance and taxes. In this case, the process utilized for default affidavits has been examined. Although it has been four (4) years since Jones, serious problems persist in mortgage loan administration. But for the dogged determination of the UST’s office and debtors’ counsel, these issues would not come to light and countless debtors would suffer. For their efforts this Court is indebted.

For the reasons assigned above, the Motion for Sanctions is granted as to liability of LPS. The Court will conduct an evidentiary hearing on sanctions to be imposed.

New Orleans, Louisiana, April 6, 2011.

Hon. Elizabeth W. Magner

U.S. Bankruptcy Judge

From Nye Lavalle

I reduced the banking industry’s scams and abuses into three primary areas or categories OVER 12 YEARS AGO!!!!. The three (3) major issues I have informed you all of are as follows:

#1 BANKS CAN’T COUNT and the amounts they claim are owed for payoff, principal balance, escrow, payments due etc… can NEVER be trusted or accepted without a complete audit of the servicing history from origination to specific date (i.e. acceleration, payoff, foreclosure, bankruptcy etc…) I have informed all of you that the “computer systems” used can’t compute and once a so-called “mistake” is made (i.e. programmed financial engineering scheme) the system can’t go back and adjust the system and amortize the loan correctly. Affiants, as I have said over and over again in countless affidavits and reports, simply take numbers off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of the amount and how those amounts were arrived at. With my scripted depo questions, time-and-time again, affiants never audit or simply conduct a “sample check” of the entire “servicing history” from origination to present date, to ascertain any errors, miscalculations, misapplications, wrongful charges, etc… The lawyers (foreclosure mills) prepare the affidavits and check the payments. As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”

#2 BANKS CAN’T ACCOUNT for the chain of title and ownership of the note and who has authority to foreclose, accelerate, modify, approve assumptions etc… In other words, they can’t account for the actual note holder and how such status was established and if the note has been pledged, sold to others, hypothecated, traded, transferred etc… Affiants, as I have said over and over again in countless affidavits and reports, simply take the information off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of note ownership and they have not reviewed the PSA, necessary assignments, wet ink original notes, indorsements, authorities for the indoresements, checks and wire transmittals, collateral and custodial records and other evidence that the actual holder took possession, control, and ownership of the note. They simply take the information from the last public recording and go with that ignoring all the intermediary assignments. This has been going on for decades now. Again, the lawyers (foreclosure mills) prepare the affidavits and check the title history and often charge a fee for the “title search” that isn’t worth the paper it is written on. As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”

#3 WHEN CAUGHT WITH THEIR HAND IN THE COOKIE JAR (i.e. cooking the books jar) the banks and their lawyers will fabricate evidence, documents, provide perjured testimony, create false affidavits, destroy documents and claim its a gummy bear jar, not a cookie jar. In essence, NOTHING, ABSOLUTELY NOTHING A BANK, LENDER, SERVICER, OR THEIR LAWYERS place in pleadings, affidavits, summary judgment motions, assignments, indorsements, deposition testimony etc… CAN NEVER BE ACCEPTED AS TRUE OR AS FACT without a complete forensic review, audit, and examination of all wet ink docs, records, financial accountings etc… that PROVE EACH AND EVERY ALLEGATION AND FACT IN A PLEADING, AFFIDAVIT, OR TESTIMONY.

The bottom-line here is that lawyers must QUESTION EVERYTHING AND CHALLENGE EVERYTHING. If not, you may be mal-practicing knowing everything you know now. Money MUST be spent in depositions to make them prove up their cases (they can’t) and e-discovery is and will be critical since they will continue to fabricate evidence and testimony.

Deutsche Bank Sold Mortgage-Linked ‘Pigs’ as Market Buckled

Deutsche Bank Sold Mortgage-Linked ‘Pigs’ as Market Buckled, Lawmakers Say
 By Bob Ivry, Jody Shenn and Michael J. Moore – Apr 13, 2011 8:42 PM ET Bloomberg Opinion
 Bob Ivry, Jody Shenn and Michael J. Moore

The Frankfurt-based firm sold $700 million of the instruments, which lost most of their value within 17 months. Photographer: Hannelore Foerster/Bloomberg

Deutsche Bank underwrote 47 CDOs with a combined value of $32 billion from 2004 to 2008, according to the Permanent Subcommittee on Investigations. Photographer: Hannelore Foerster/Bloomberg
Deutsche Bank AG (DBK), whose bets against subprime mortgages helped it weather the financial crisis, pressed to sell a $1.1 billion collateralized debt obligation to clients in 2007 as the co-head of its CDO team foresaw a market slump, a U.S. Senate panel found.

“Keep your fingers crossed but I think we will price this just before the market falls off a cliff,” Michael Lamont, the group’s co-head, said in a Feb. 8, 2007, e-mail about Deutsche Bank’s Gemstone CDO VII Ltd., according to a report released yesterday by the Permanent Subcommittee on Investigations. The Frankfurt-based firm sold $700 million of the instruments, which lost most of their value within 17 months.

The bi-partisan panel, led by Michigan Democrat Carl Levin, placed Germany’s biggest bank in a spotlight alongside Goldman Sachs Group Inc. (GS), saying that the firms’ creation and sales of mortgage-backed investments “illustrate a variety of troubling and sometimes abusive practices.” The “case study” also focuses on Greg Lippmann, Deutsche Bank’s then-top CDO trader, who led its bets against subprime home loans and described some Gemstone VII collateral as “pigs” and “crap.”

“The bank sold poor quality assets from its own inventory to the CDO,” according to the report. Then “the bank aggressively marketed the CDO securities to clients despite the negative views of its most senior CDO trader, falling values, and the deteriorating market.”

Internal Disagreements
 CDOs package assets such as mortgage bonds and buyout loans into new securities with varying risks.

Lamont, who now works at New York-based hedge fund Seer Capital Management LP, declined to comment. So did Lippmann, 42, who left Deutsche Bank last year to start LibreMax Capital LLC, an investment firm based in New York.

While Lippmann’s trades yielded a $1.5 billion total return, the bank’s other executives long disagreed with his assessments. The firm’s New York-based residential mortgage- backed securities group and one of its London hedge funds amassed home-loan positions that reached a market value of more than $25 billion in 2007, the panel said. The company, led by Chief Executive Officer Josef Ackermann, 63, lost almost $4.5 billion on the mortgage-related investments that year after Lippmann’s gains.

“There were divergent views within the bank about the U.S. housing market,” Michele Allison, a spokeswoman for the company, said in an e-mailed statement. “Moreover, the bank’s views were fully communicated to the market through research reports, industry events, trading-desk commentary and press coverage.”

Biggest Trading Gain
Lippmann, whose bets against the housing market were also described in Michael Lewis’s “The Big Short,” had repeatedly tried to warn co-workers and clients in 2006 and 2007 about the poor quality of the mortgage securities underlying many CDOs, according to the report. The return on his bets against mortgages “was the largest profit obtained from a single position in Deutsche Bank history,” he told the subcommittee.

Disagreements among executives were common in firms across Wall Street as the mortgage market began to unravel, said Edward J. Grebeck, chief executive officer of Tempus Advisors, a debt- consulting firm in Stamford, Connecticut.

“I’m surprised the subcommittee’s report is focused only on Deutsche Bank and Goldman,” he said. “You could investigate any bank that put together structured products and look for conflicts.”

Hearings
Levin and Senator Tom Coburn of Oklahoma, the panel’s top Republican, held public hearings on the financial crisis last year, examining regulatory failures, the collapse of Washington Mutual Inc., the role of credit-rating firms in fueling bets on high-risk debt and the business practices of New York-based Goldman Sachs and rival investment banks.

Deutsche Bank underwrote 47 CDOs with a combined value of $32 billion from 2004 to 2008, according to the subcommittee. It made $4.7 million in fees from Gemstone VII, the report said.

The panel faulted the bank throughout Gemstone VII’s creation and sale. Nearly a third of the mortgages backing the CDOs were originated by three subprime lenders — New Century Financial Corp., Fremont General Corp. and Washington Mutual Inc.’s Long Beach mortgage unit — known for the poor performance of their loans, the report said.

While Deutsche Bank had “the right to reject” securities that were slated for Gemstone VII, Lippmann allowed bonds he viewed as toxic to be included, according to the report. He told the panel his responsibility was only to ensure that bonds bought by the CDO were priced accurately based on current market values, and an e-mail from him showed he sought to reduce the valuation of one.

Demand for Debt
About $27 million of the CDO’s assets came from the bank’s own inventory, including one bond that Lippmann referred to by asking another trader in an instant message, “DOESNT THIS DEAL BLOW,” according to the report.

“The way the politicians use these e-mails is to hang them out as evidence that misconduct occurred, but there is in fact a market for low-quality credit paper,” said Roy Smith, a finance professor at New York University’s Stern School of Business in Manhattan. “There has been for years, and the market is very legitimate.”

After assets set aside for Gemstone VII dropped in value, Abhayad Kamat, a member of the CDO group assembling the vehicle, told a Deutsche Bank sales team to use valuations from the CDO manager, Dallas-based HBK Capital Management, rather than from the bank’s traders, the report found. HBK’s values were 1.1 percent higher.

‘Significant Vintage Risk’
 When a member of the sales group asked about the decision, Kamat responded in an e-mail that the values “we got from Jordan are too low,” referring to Jordan Milman, then a trader on Lippmann’s team, according to the report. He emphasized that the salespeople should identify HBK as the source of the valuations, the report said.

Kamat didn’t return telephone messages seeking comment.

The Senate panel said that Lamont’s group prepared an internal report listing risks to the bank from the deal that cited the 88 percent concentration of the CDO’s portfolio in 2005 and 2006 residential bonds without highlighting the “significant vintage risk” in disclosures to investors.

‘A Lot Bumpier’
 “E-mails reviewed by the subcommittee show that CDO personnel at Deutsche Bank were well aware of the worsening CDO market and were rushing to sell Gemstone 7 before the market collapsed,” the report found. In a message on Feb. 20, 2007, the day before Gemstone VII was priced, Lippmann told Lamont that the CDO market was “going to get a lot bumpier very soon.”

Lamont, in his earlier e-mail that month about keeping “fingers crossed,” suggested turmoil may also present a buying opportunity. A plunge, “as usual will likely find you well- positioned to acquire new risk at a good price,” he wrote in the message to HBK’s collateral manager, who had authority to move assets in and out of the CDO. “We are all focused on pricing as soon as possible.”

Deutsche Bank failed to sell $400 million of the CDO’s slices. Buyers included M&T Bank Corp. (MTB), based in Buffalo, New York, and Charlotte, North Carolina-based Wachovia Corp., Frankfurt-based Commerzbank AG (CBK) and Standard Chartered Plc (STAN), based in London, according to the report. They lost “all or most of their investments,” the subcommittee said. Wachovia is now part of San Francisco-based Wells Fargo & Co. (WFC)

To contact the reporters on this story: Bob Ivry in New York at bivry@bloomberg.net; Jody Shenn in New York at jshenn@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net.

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net; David Scheer at dscheer@bloomberg.net; Gary Putka at +1-617-210-4625 or gputka@bloomberg.net.

CORRUPTION WITHIN DOUGLAS COUNTY GEORGIA

Corruption within Douglas County Georgia, check out this site! If you know of anyone that can assist this man, I have talked with him, he is for real!

 http://georgiacorruption.blogspot.com/search?updated-min=2011-01-01T00%3A00%3A00-05%3A00&updated-max=2012-01-01T00%3A00%3A00-05%3A00&max-results=2

 

Court: Busted Securitization Prevents Foreclosure

On March 30, an Alabama judge issued a short, conclusory order that stopped foreclosure on the home of a beleaguered family, and also prevents the same bank in the case from trying to foreclose against that couple, ever again. This may not seem like big news — but upon review of the underlying documents, the extraordinarily important nature of the decision and the case becomes obvious.

No Securitization, No Foreclosure

The couple involved, the Horaces, took out a predatory mortgage with Encore Credit Corp in November, 2005. Apparently Encore sold their loan to EMC Mortgage Corp, who then tried to securitize it in a Bear Stearns deal. If the securitization had been done properly, in February 2006 the trust created to hold the loans would have acquired the Horace loan. Once the Horaces defaulted, as they did in 2007, the trustee would have been able to foreclose on the Horaces.

And that’s why this case is so big: the judge found the securitization of the Horace loan wasn’t done properly, so the trustee — LaSalle National Bank Association, now part of Bank of America (BAC) — couldn’t foreclose. In making that decision, the judge is the first to really address the issue, head-on: If a screwed-up securitization process meant a loan never got securitized, can a bank foreclose under the state versions of the Uniform Commercial Code anyway? This judge says no, finding that since the securitization was busted, the trust didn’t have the right to foreclose, period.

Since the judge’s order doesn’t explain, how should people understand his decision? Luckily, the underlying documents make the judge’s decision obvious.

No Endorsements

The key contract creating the securitization is called a “Pooling and Servicing Agreement” (pooling as in creating a pool of mortgages, and servicing as in servicing those mortgages.) The PSA for the deal involving the Horace mortgage is here and has very specific requirements about how the trust can acquire loans. One of the easiest requirements to check is the way the loan’s promissory note is supposed to be endorsed — just look at the note.

Sponsored Links

According to Section 2.01 of the PSA, the note should have been endorsed from Encore to EMC to a Bear Stearns entity. At that point, Bear could either endorse the note specifically to the trustee, or endorse it “in blank.” But the note produced was simply endorsed in blank by Encore. As a result, the trust never got the Horace loan, explained securitization expert Tom Adams in his affidavit.

But wait, argued the bank, it doesn’t matter if if the trust owns the loan — it just has to be a “holder” under the Alabama version of the UCC (Uniform Commercial Code), and the trust is a holder. The problem with that argument is securitization trusts aren’t allowed to simply take property willy-nilly. In fact, to preserve their special tax status, they are forbidden from taking property after their cut-off dates, which in this case was February 28, 2006. As a result, if the trust doesn’t own the loan according to the PSA it can’t receive the proceeds of the foreclosure or the title to the home, even if it’s allowed to foreclose as a holder.

Holder Status Can’t Solve Standing Problem

Allowing a trust to foreclose based on holder status when it doesn’t own the loan would seem to create yet another type of clouded title issue. I mean, it’s absurd to say the trust foreclosed and took title as a matter of the UCC, but to also have it be true that the trust can’t take title as a matter of its own formational documents. And what would happen to the proceeds of the foreclosure sale? That’s why people making this type of argument keep pointing out that the UCC allows people to contract around it and PSAs are properly viewed as such a contracting around agreement.

I’m sure the bank’s side will claim the judge was wrong, that he disagreed with another recent Alabama case that’s been heavily covered, US Bank vs. Congress. And there is a superficial if flat disagreement: In this case, the judge said the Horaces were beneficiaries of the PSA and so could raise the issue of the loan’s ownership; in Congress the judge said the homeowners weren’t party to the PSA and so couldn’t raise the issue.

But as Adam Levitin explained, the Congress decision was procedurally weird, and as a result the PSA argument wasn’t about standing, as it was in Horace and generally would be in foreclosure cases (as opposed to eviction cases, like Congress). And what did happen to the Congress proceeds? How solid is that securitization trust’s tax status now anyway?

In short, in the only case I can find that has ruled squarely on the issue, a busted securitization prevents foreclosure by the trust that thinks it owns the loan. Yes, it’s just one case, and an Alabama trial level one at that. But it’s still significant.

Homeowners Right to Raise Securitization Issue

As far as right-to-raise-the-ownership issue, I think the Horace judge was just being “belt and suspenders” in finding the homeowners were beneficiaries of the PSA. Why do homeowners have to be beneficiaries of the PSA to raise the issue of the trust’s ownership of their loans? The homeowners aren’t trying to enforce the agreement, they’re simply trying to show the foreclosing trust doesn’t have standing. Standing is a threshold issue to any litigation and the homeowners axiomatically have the right to raise it.

As Nick Wooten, the Horaces’ attorney, said:

“This is just one example of hundreds I have seen where servicers were trying to force through a foreclosure in the name of a trust that clearly had no interest in the underlying loan according to the terms of the pooling and servicing agreement. This conduct is a fraud on the borrower, a fraud on the investors and a fraud on the court. Thankfully Judge Johnson recognized the utter failure of the securitization transaction and would not overlook the fact that the trust had no interest in this loan.”All that remains for the Horaces, a couple with a special needs child and whose default was triggered not only by the predatory nature of the loan, but also by Mrs. Horace’s temporary illness and Mr. Horace’s loss of overtime, is to ask a jury to compensate them for the mental anguish caused by the wrongful foreclosure.

Perhaps BofA will just want to cut a check now, rather than wait for that verdict. (As of publication BofA had not returned a request for comment.)

No one is suggesting the Horaces get a free house; they still owe their debt, and whomever they owe it to has the right to foreclose on it. Wooten explained to me that the depositor –in this case, the Bear Stearns entity –i s probably that party. Moreover if the Horaces wanted to sell and move, they’d have to quiet title and would be wise to escrow the mortgage pay off amount, if that amount can be figured out. But for now the Horaces get some real peace, even if a larger mess remains.

Much Bigger Than A Single Foreclosure

The Horaces aren’t the only ones affected by the issues in this case.

Homeowners everywhere that are being foreclosed on by securitization trusts — many, many people — can start making these arguments. And if their loan’s PSA is like the Horaces, they should win. At least, Wooten hopes so:

“Judge Johnson stopped a fraud in progress. I am hopeful that other courts will consider more seriously the very serious issues that are easily obscured in the flood of foreclosures that are overwhelming our Courts and reject the systemic and ongoing fraud that is being perpetrated by the mortgage servicers. Until Courts actively push back against the massive documentary fraud being shoveled at them by mortgage servicers this fraudulent conduct will not end.”The issues stretch past homeowners to investors, too.

Investors in this particular mortgage-backed security, take note: What are the odds that the Horace note is the only one that wasn’t properly endorsed? I’d say nil, and not just because evidence in other cases, such as Kemp from New Jersey, suggests the practice was common. This securitization deal was done by Bear Stearns, which other litigation reveals was far from careful with its securitizations. So the original investors in this deal should speed dial their lawyers.

And investors in bubble-vintage mortgage backed securities, the ones that went from AAA gold to junk overnight, might want to call their attorneys too; this deal was in 2006, and in the securitization frenzy that followed processes can only have gotten worse.

Some investors are already suing, but the cases are at very early stages. Nonetheless, as cases like the Horaces’ come to light, the odds seem to tilt in investors’ favor — meaning they seem increasingly likely to ultimately succeed in forcing banks to buy back securities or pay damages for securities fraud connected with their sale. And that makes the Bank Bailout II scenario detailed by the Congressional Oversight Panel more possible.

The final, very striking feature of this case is what didn’t happen: No piece of paper covered in the proper endorsements –an allonge — magically appeared at the eleventh hour. The magical appearance of endorsements, whether on notes or on allonges, has been a hallmark of foreclosures done in the robosigning era. And investors, as you pursue your suits based on busted securitizations, that’s something to watch out for.

My, but the banks made a mess when they forced the fee-machine of mortgage securitizations into overdrive. The consequences are still unfolding, but one consequence just might be a whole lot of properties that securitization trusts can’t foreclose on.

See full article from DailyFinance: http://srph.it/eR4pO8

DeKalb County Probate Court, the Most Corrupt in the Country

Court Employee Keeps Job Despite Arrest Record
Judge’s Office Says It Knew Of Employee’s Legal History

WSB-TV
Posted: 6:27 pm EST November 9, 2010
Updated: 6:44 pm EST November 9, 2010

DEKALB COUNTY, Ga. — Channel 2 Action News has learned that a DeKalb County Probate Court employee has been arrested at least four times, but she remains on the job.

According to DeKalb County policy, an employee could be terminated for that, but probate employees are exempt from the policy.

Channel 2 Action News investigative reporter Jodie Fleischer went through records and learned that Jewel Margene Hendrix has been arrested twice for stealing and twice for drugs — yet she continues to work inside the DeKalb County courthouse.

Fleischer also tracked down the judge who oversees that division to ask her why Hendrix is still on the job as a probate technician.

The probate office handles things like wills, execution of estates and guardianships.

Fleischer found that Hendrix has been arrested at least four times. The first was in Gwinnett County in 2008 when she was picked up at a Target store for shoplifting. Court records show the solicitor dropped the charges in March of 2009 after Hendrix completed a pre-trial diversion program.

The solicitor told Channel 2 that she never knew Hendrix was re-arrested just five days earlier in DeKalb County. Hendrix pleaded guilty to shoplifting from a Macy’s store. She entered DeKalb County drug court.

Then earlier this year, she was arrested twice for violating the drug court contract by using drugs.

Fleischer went to the courthouse to try to ask Hendrix and her boss, Judge Jeryl Rosh, about the arrests. Neither was available.

Late Tuesday afternoon, the judge’s office issued a statement, which read in part: “We are aware that she (Hendrix) was involved in a legal situation. As such, she was put on administrative leave without pay. Subsequently, the matter was diverted to a rehabilitation program, she is being monitored closely, and her performance thus far is satisfactory.”

The judge has not returned Fleischer’s calls, so it was not known whether she knows about the two arrests this year for violating the drug court program.

A voice mail message and a sign in the office both said that Hendrix was at work Tuesday; however, she did not return calls, either.

GA Court of Appeals Does It Again!

The Appeal, maticulously written, referenced the Transcript fantastically. Waited, and waited, and waited.

Finally a Ruling.

The Court claimed there was no transcript, that the record was not referenced, that the enumeration of errors were without merit.

Say what???

The transcript fees had been paid, an extra copy of the transcript had been sent with the Brief, just in case… What the hell???

ONLY A “SECURED CREDITOR” May Conduct A Non-Judicial Foreclosure In Georgia (via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge)

This is a really good article. I read it several weeks ago on Mr. Wood’s blog, he has some really good stuff there for GA.
Interesting read, and incorporating it into what is getting filed against foreclosures…

ONLY A "SECURED CREDITOR" May Conduct A Non-Judicial Foreclosure In Georgia Friends & Colleagues, One of the MAJOR attack strategies we have lawyers executing in the state of Georgia is that ONLY A "SECURED" CREDITOR may advertise and conduct a "non-judicial" foreclosure.  You will see not only our logic, but one of the lending industry's top lawyers who used to be partners and of counsel to the Shapiro group in Georgia AGREE WITH ME AND IN HIS WORDS, SAYS ONE DAY MERS IS GOING TO HAVE A BIG SURPRISE IN THE GA SUPREM … Read More

via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

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