MERS & CITIBANK NOT REAL PARTIES

 

If you have a MERS Mortgage you may want to read this MERS court case because it could help you in your efforts to obtain remedy. MERS is the Mortgage Electronic Registration System and if your mortgage loan is in the MERS system there is a really good chance that you have legal standing to sue for Quiet Title (clear and marketable title to your home), Wrongful Foreclosure, or mortgage fraud! FRAUD STOPPERS will conduct a free mortgage fraud analysis and Bloomberg securitization search to help you determine your legal options to gain remedy.

 

UNITED STATES BANKRUPTCY COURT

 

Eastern District of California

 
 

Honorable Ronald H. Sargis

 
   

Bankruptcy Judge

 
   

Sacramento, California

 
 

May 20, 2010 at 10:30 a.m.

 
     
1.       10-21656-E-11 RICKIE  WALKER HEARING  –  OBJECTION
MLA  #3   TO  CLAIMS  OF  CITIBANK,  N.A.
    4-6-10  

 

Local  Rule  3007-1(c)(1)  Motion  –  No  Opposition  Filed.

Proper Notice Provided. The Proof of Service filed on April 6, 2010, states that the Motion and supporting pleadings were served on respondent creditor, other parties in interest, and Office of the United States Trustee.

The court notes that the moving party filed the declaration and exhibits in this matter as one document. This is not the practice in the Bankruptcy Court. “Motions, notices, objections, responses, replies, declarations, affidavits, other documentary evidence, memorandum of points and authorities, other supporting documents, proofs of service, and related pleadings shall be filed as separate documents.” Revised Guidelines for the Preparation of Documents, ¶(3)(a). Counsel is reminded of the court’s expectation that documents filed with this court comply with the Revised Guidelines for the Preparation of Documents in Appendix II of the Local Rules and that attorneys practicing in federal court comply with the Federal Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure.

NOTICE

FAILURE  TO  COMPLY  WITH  THE  GUIDELINES  AND

FILING PLEADINGS WHICH DO NOT COMPLY WITH THE FEDERAL RULES OF CIVIL PROCEDURE SHALL RESULT IN  THE  MOTION  BEING  SUMMARILY  DISMISSED  WITHOUT  PREJUDICE.

Tentative Ruling: This Objection to a Proof of Claim has been set for hearing on the notice required by Local Bankruptcy Rule 3007-1(c)(1). The failure of the Trustee and the respondent creditor to file written opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule 3007-1(c)(1)(I) is considered as consent to the granting of the motion. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995).

The court’s tentative decision is to sustain the Objection to the Proof of Claim and disallow the claim in its entirety with leave for the owner of the promissory note to file a claim by June 18, 2010. Oral argument may be presented by the parties at the scheduled hearing, where the parties shall address the issues identified in this tentative ruling and such other issues as are necessary and appropriate to the court’s resolution of the matter. If the court’s tentative ruling becomes its final ruling, the court will make the following findings of fact and conclusions of law:

The Proof of Claim at issue, listed as claim number 5 on the court’s official claims registry, asserts a $1,320,650.52 secured claim. The Debtor objects to the Claim on the basis that the claimant, Citibank, N.A., did not provided any evidence that Citibank has the authority to bring the claim, as required by Federal Rule of Bankruptcy Procedure 3001(c), rendering the claim facially defective.

The court’s review of the claim shows that the Deed of Trust purports to have been assigned to Citibank, N.A. by Mortgage Electronic Registration Systems, Inc. as nominee for Bayrock Mortgage Corporation on March 5, 2010. (Proof of Claim No. 5 p.36-37, Mar. 19, 2010.) Debtor contends that this does not establish that Citibank is the owner of the underling promissory note since the assignor, Mortgage Electronic Registration Systems, Inc. (“MERS”), had no interest in the note to transfer. Debtors loan was originated by Bayrock Mortgage Corporation and no evidence of the current owner of the promissory note is attached to the proof of claim. It is well established law in the Ninth Circuit that the assignment of a trust deed does not assign the underlying promissory note and right to be paid, and that the security interest is  incident  of  the  debt.  4  WITKIN  SUMMARY  OF  CALIFORNIA  LAW, SECURED  TRANSACTIONS  IN  REAL PROPERTY  §105  (10th  ed).

MERS  AND  CITIBANK  ARE  NOT  THE  REAL  PARTIES  IN  INTEREST

Under California law, to perfect the transfer of mortgage paper as collateral the owner should physically deliver the note to the transferee. Bear v. Golden Plan of California, Inc., 829 F.2d 705, 709 (9th Cir. 1986). Without physical transfer, the sale of the note could be invalid as a fraudulent conveyance, Cal. Civ. Code §3440, or as unperfected, Cal. Com. Code §§9313-9314. See ROGER BERNHARDT,  CALIFORNIA  MORTGAGES  AND  DEEDS  OF  TRUSTS,  AND  FORECLOSURE   LITIGATION   §1.26  (4th ed. 2009). The note here specifically identified the party to whom it was payable, Bayrock Mortgage Corporation, and the note therefore cannot be transferred unless the note is endorsed. See Cal. Com. Code §§3109, 3201, 3203, 3204. The attachments to the claim do not establish that Bayrock Mortgage Corporation endorsed and sold the note to any other party.

TRANSFER  OF  AN  INTEREST  IN  THE  DEED  OF  TRUST  ALONE  IS  VOID

MERS acted only as a “nominee” for Bayrock Mortgage under the Deed of Trust. Since no evidence has been offered that the promissory note has been transferred, MERS could only transfer what ever interest it had in the Deed of Trust. However, the promissory note and the Deed of Trust are inseparable.

“The note and the mortgage are inseparable; the former as essential, the later as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.” Carpenter v. Longan, 83 U.S. 271, 274 (1872); accord Henley v. Hotaling, 41 Cal. 22, 28 (1871); Seidell v. Tuxedo Land Co., 216 Cal. 165, 170 (1932); Cal. Civ. Code §2936. Therefore, if on party receives the note an another receives the deed of trust, the holder of the note prevails regardless of the order in which the interests were transferred. Adler v. Sargent, 109 Cal. 42, 49-50 (1895).

Further, several courts have acknowledged that MERS is not the owner of the underlying note and therefore could not transfer the note, the beneficial interest in the deed of trust, or foreclose upon the property secured by the deed. See In re Foreclosure Cases, 521 F. Supp. 2d 650, 653 (S.D. Oh. 2007); In re Vargas, 396 B.R. 511, 520 (Bankr. C.D. Cal. 2008); Landmark Nat’l Bank v. Kesler, 216 P.3d 158 (Kan. 2009); LaSalle Bank v. Lamy, 824 N.Y.S.2d 769 (N.Y. Sup. Ct. 2006). Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank.

Since MERS did not own the underling note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed with out ownership of the underlying note is void under California law. Therefore Citibank has not established that it is entitled to assert a claim in this case.

MULTIPLE CLAIMS TO THE BENEFICIAL INTEREST IN THE DEED OF TRUST AND OWNERSHIP OF PROMISSORY NOTE SECURED THEREBY

Debtor also points out that four separate entities have claimed beneficial ownership of the deed of trust. (Obj. to Claim 3-5, Apr. 6, 2010.) The true owner of the underling promissory note needs to step forward to settle the cloud that has been created surrounding the relevant parties rights and interests under the trust deed.

DECISION

11 U.S.C. §502(a) provides that a claim supported by a Proof of Claim is allowed unless a party in interest objects. Once an objection has been filed, the court may determine the amount of the claim after a noticed hearing. 11 U.S.C. §502(b). Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case. The objection is sustained and Claim Number 5 on the court’s official register is disallowed in its entirety, with leave for the owner of the promissory note to file a claim in this case by June 18, 2010.

The court disallowing the proof of claim does not alter or modify the trust deed or the fact that someone has an interest in the property which can be subject thereto. The order disallowing the proof of claim shall expressly so provide.

The  court  shall  issue  a  minute  order  consistent  with  this  ruling.

CREDIT REPAIR $19 DOWN

THE CON

The Con

The Con

How to Win in Court in Only 24hrs

Fraud Stoppers How to Win in Court

LegalShield

Identity Protection

EMP PROTECTION

Blog

FRAUD STOPPERS PMA Mortgage Foreclosure Defense Blog

free fraud analysis

Free Documents

FREE LOAN MODIFICATION

Fight Traffic Tickets

Sue the Bank for under $300

Chicago Foreclosure Help

Free Loan Modifications

Mortgage Refinance

Rule of Law Radio

Rule of Law Radio

Process Service

Free Bankruptcy Documents

JOIN FRAUD STOPPERS PMA

Free Fraud Analysis

Free COVID Lawsuit

Mediation Services Requested

Social Media Buttons

VISIT US AT

face book youtubeg+ twitter

Attorney Services Request

American Justice League

AMERICAN JUSTICE LEAGUE

Pro Bono Attorneys

Jooble

Free Foreclosure EBook

FRAUD STOPPERS Foreclosure Traps Pitfalls and Swindles

FRAUD STOPPERS Foreclosure Traps Pitfalls and Swindles

Private Attorney Network

LIST OF FORECLOSURE LAWS BY STATE

Get In Touch

Location

111 W Washington Street,
Chicago, IL 60602

Email

info@fraudstoppers.org

Hours: CST

Mon: 10am - 5pm
Tue: 10am - 5pm
Wed: 10am - 5pm
Thur: 10am - 5pm
Fri: 10am - 5pm
Sat: Closed
Sun: Closed

Send A Message

 

Fraud Stoppers Logo

THIS SITE IS NOT INTENDED TO BE MISCONSTRUED AS LEGAL ADVICE. FRAUD STOPPERS is a Private Members Association PMA. FRAUD STOPPERS PMA is NOT a law firm, non-profit organization, or government agency.  FRAUD STOPPERS PMA does not operate in the public sector. Although this website is visible to the public  FRAUD STOPPERS PMA does not intend for any information contained in this website to be considered as legal advise.

The information about Foreclosure law and other legal information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website contains links to other third-party websites.  Such links are only for the convenience of the reader, user or browser; FRAUD STOPPERS and its members do not recommend or endorse the contents of the third-party sites.

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.  No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.  Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers. This site provides “information” about the law and is only designed to help users safely cope with their own legal needs. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances.

The views expressed at, or through, this site are those of the individual authors writing in their individual capacities only – not those of their respective employers, FRAUD STOPPERS, or committee/task force as a whole.  All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.  The content on this posting is provided “as is;” no representations are made that the content is error-free.

For instant access to an affordable local competent attorney click here

 

Spread the love
  • Yum