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ROBERT D. PLASENCIA In Pro Per 0000 Any Road Any Town,
California 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-000
Plaintiff in Pro Per
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Parties
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN BERNARDINOROBERT D.
PLASENCIA, an individual, ) CASE NO. ) Plaintiff, ) COMPLAINT AND
vs. ) DEMAND FOR JURY TRIAL ) GREENPOINT MORTGAGE FUNDING, INC., a
New) York corporation; AURORA LOAN SERVICES, LLC, ) a Delaware
limited liability company; QUALITY ) LOAN SERVICE CORPORATION, a
California ) corporation; MARIN CONVEYANCING ) CORPORATION, a
California corporation; LSI TITLE ) AGENCY, INC., an Illinois
corporation; MORTGAGE ) ELECTRONIC REGISTRATION SYSTEMS, INC. )
(MERS), a Delaware corporation; ALL PERSONS ) KNOWN OR UNKNOWN
CLAIMING AN ) INTEREST IN7747 STRATHMORE ROAD, ) HIGHLAND,
CALIFORNIA 92346; and DOES 1-100, ) ) Defendants. ) ) ) ) ) ) ) ) )
)
1.
Plaintiff, Robert D. Plasencia, at all relevant times has been
an adult resident of San
Bernardino County, California. - 1-
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2.
Defendant Greenpoint Mortgage Funding, Inc., is a New York
corporation, with its
principal place of business in McLean, Virginia. Greenpoint is
identified the Lender, in the deed of trust that is the subject of
this litigation.
3.
Defendant Aurora Loan Services, LLC is a Delaware limited
liability company, with
its principal place of business in Littleton, Colorado, and
offices in Scotsbluff, Nebraska. Aurora is the purported servicer
of the loan that is the subject of this litigation.
4.
Defendant Mortgage Electronic Registration Systems, Inc. (MERS)
is a Delaware
corporation, with its principal place of business in Reston,
Virginia. MERS at all relevant times in this complaint was
conducting business, in San Bernardino, California, including
operating a database and assigning mortgages (specifically
including an attempt to assign the subject mortgage herein), in
violation of California Corporations Code section 191(d). MERS is
identified as the Beneficiary in the deed of trust that is the
subject of this litigation, acting in the capacity as nominee, or
in other words, acting as nominal beneficiary of the lenders and
its successors and assigns.
5.
Quality Loan Service Corporation is a California corporation,
with its principal place
of business in San Diego, California. Quality Loan offers
trustee services, including with respect to non-judicial
foreclosures, and is conducting the foreclosure proceedings against
the property that is the subject of this litigation. Quality Loan
issued and requested recordation of the default and the trustees
sale notices that are the subject of this litigation. It also
requested recordation of the trustee substitution that is the
subject of this litigation.
6.
Defendant Marin Conveyancing Corporation is a California
corporation, with offices
in California. It also offers trustee services and is identified
the trustee in the deed of trust that is the subject of this
litigation.
7.
Defendant LSI Title Company, Inc., is an Illinois corporation,
with its principal place
of business in Coraopolis, Pennsylvania. It has never been
registered in California to conduct business - 2-
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as a foreign for-profit corporation or registered to conduct
business in California in any other capacity..LSI provides
appraisal, title and closing services to first mortgage and home
equity lenders as well as to mortgage servicers and investors. LSI,
as the agent for the trustee, signed the default notice that is the
subject of this litigation.
8.
Defendants All Persons Known or Unknown Claiming an Interest in
7747 Strathmore
Road, Highland, California 92346 are named in this lawsuit, as
required, under California law, for purposes of quiet title.
9.
Defendants DOES 1 through 50 are believed to be the current
beneficiaries of the deed
of trust, if the lien has not been extinguished by operation of
law. Plaintiff does not know the true names, capacities, or basis
for liability of defendants sued as DOES 1 through 10, the
beneficiaries. Each fictitiously named defendant is in some manner
liable to plaintiff, and claims some right, title, or interest in
the property that is the subject of this litigation. 10. Plaintiff
does not know the true names, capacities, or basis for liability of
defendants sued as DOES 51 through 100. Each such fictitiously
named defendant is in some manner liable to plaintiff, and claims
some right, title, or interest in the property that is the subject
of this litigation. 11. At all times relevant to this complaint,
each of the defendants was the agent or employee of each of the
remaining defendants, and was acting within the course and scope of
such agency or employment. Facts Common to All Allegations
12.
Not all homeowners who owe money on their mortgages and against
whom defaults
have been recorded are deadbeats. And, plaintiff here,
Plasencia, is not seeking to get a house free of charge.
13.
Plasencia got a loan from Greenpoint Mortgage in May 2007.
Plasencia secured the
loan with a deed of trust on the property located at 7747
Strathmore Road, in Highland, California - 3-
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(DOT). Attached hereto, marked exhibit A, is a true and correct
copy of the DOT, filed May 10, 2007. That property is the subject
of this litigation. Attached to the DOT (as exhibit A) is a true
and correct legal description of the property (APN
#1201-371-60-0-000) (property or subject property).
14. In the mortgage loan transaction, plaintiff was required to
pay excessive fees,expenses, and costs which exceeded more than 10%
of the amount financed.
15. In the transaction, defendants were required to make the
following disclosures toplaintiff by no later than three (3) days
prior to said closing:You are not required to complete this
agreement merely because you have received these disclosures or
have signed a loan application. If you obtain this loan, the lender
will have a mortgage on your home. You could lose your home and any
money you have put into it, and if you do not meet your obligation
under the loan.
16. In the loan transaction, defendants accepted charges for the
rendering of real estateservices which were in fact charges for
other than services actually performed.
17. In the loan transaction, defendants failed to include and
disclose certain charges in thefinance charge shown on the TILA
statement, which charges were imposed on plaintiff incident to the
extension of credit to plaintiff (fees charged on the MBS scheme),
and were required to be disclosed pursuant to 15 USC 1605 and
Regulation Z 226.4, thus resulting in an improper disclosure of
financial charges, in violation of 15 USC 1601 et seq., Regulation
Z 226.18(d). Such undisclosed charges included some identified on
the settlement statement listing the amount financed which is
different from the sum listed in the original note.
18.
The DOT is a four-party DOT. Greenpoint Mortgage is identified
as the lender,
Plasencia as the trustor, California Reconveyancing as the
trustee, and MERS as the nominal beneficiary for Greenpoint and
Greenpoints successors and assigns.
- 4.
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19.
At the time of the DOT, Plasencia believed that because
Greenpoint Mortgage was
identified as the lender in the DOT, that it was Greenpoint
Mortgage who was lending him the money, and that his relationship
with Greenpoint was that of lender/borrower. In truth, Greenpoint
Mortgage, the lender, on the DOT, is a correspondent lender, and
never itself loaned money to Plasencia.
20.
The DOT provides that the Plasencia loan may be sold in the
future. The DOT also
provides that the servicer of the loan may be assigned in the
future .In 2007, at the time of the DOT, Greenpoint Mortgage
transferred the Plasencia loan into a mortgage backed security
trust.
21.
Under the rules and regulations governing MERS and its members,
MERS, as
nominee, is only authorized to act for the lenders and its
successors and assigns if the lender or successors and assigns are
also members of MERS. The trust (the name of which is unknown) into
which the Plasencia loan was placed at the time of the DOT has
never been a MERS member.
22.
Thus, once the Plasencia loan was transferred into the trust,
MERS lost its nominee
status; or in other words, its authority to act as the nominee
for the original lender, and its successors and assigns, was
extinguished.
23.
Still, in January 2011, MERS, as nominee, transferred the
subject DOT to Aurora,
under a corporate assignment. Attached hereto, marked exhibit B,
is a true and correct copy of the assignment. The assignment shows
that Jan Walsh signed the assignment. But, Jan Walsh was not
authorized by the trust to execute the assignment. Jan Walsh is a
robo signer, for MERS, employed by Aurora. Thus, the assignment
shows self-dealing, and the corporate seal, on the assignment is
nothing but a sham and a pretext to execute and file with the
County Recorder false and misleading documents. The assignment
purports to assign not only the DOT, but also the money due and to
become due thereon with interest, and all rights accrued or to
accrue under the DOT.
- 5.
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24.
In February 2011, Aurora, claiming to be the beneficiary (in the
true sense of the
word and not a straw, like MERS), executed a trustee
substitution. Attached hereto, marked exhibit C, is a true and
correct copy of the trustee substitution. But because Aurora was
not the beneficiary at the time (the trust was the beneficiary), it
could not execute the trustee substitution. Thus, the trustee
substitution is a fraud. The certificateholders of the trust are
the beneficiary, and under California law, all the beneficiaries
must execute the trustee substitution. The trust also did not give
authority to Aurora to execute the trustee substitution. Further,
even if Aurora had authority to execute the trustee substitution,
Auroras signature on the document, by Cheryl Marchant, is a
forgery. The true signature of Ms. Marchant is shown, collectively,
on the documents attached hereto, marked exhibit D.
25. Plasencia, in or about 2010, became unable to maintain the
mortgage payments on theproperty, and in February 2011, a default
notice was recorded against the property. Attached hereto, marked
exhibit E, is a true and correct copy of the default notice. The
default notice identifies Aurora as the beneficiary. But Aurora was
not the beneficiary at the time of the default notice; because, as
stated above, MERS didnt have the authority to execute the
corporate assignment in January 2011 inasmuch as the DOT had been
transferred into a trust, in or about 2005, that never was a MERS
member. The default notice doesnt otherwise identify the true
beneficiary.
26. California Civil Code section 2923.5 states, in relevant
part, that a mortgagee,beneficiary, or authorized agent shall
contact the borrower in person or by telephone in order to assess
the borrower's financial situation and explore options for the
borrower to avoid foreclosure. During the initial contact, the
mortgagee, beneficiary, or authorized agent shall advise the
borrower that he or she has the right to request a subsequent
meeting and, if requested, the mortgagee, beneficiary, or
authorized agent shall schedule the meeting to occur within 14
days. The assessment of the borrower's financial situation and
discussion of options may occur during the first contact, or at the
subsequent meeting scheduled for that purpose. In either case, the
borrower shall be provided the toll-free - 6-
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telephone number made available by the United States Department
of Housing and Urban Development (HUD) to find a HUD-certified
housing counseling agency. Any meeting may occur telephonically.
27. Aurora, itself, never initiated personal contact with
Plasencia, or otherwise initiated contact by telephone with
Plasencia, as required under 2923.5.
28.
The default notice was filed by Quality Loan as trustee, under a
trustee substitution
executed by the servicer of the loan, Aurora. But, because the
trustee substitution was not executed by the beneficiary and
because the assignment was not executed by the beneficiary, neither
of those documents are valid, which makes the default notice also
null and void. 29. Further, even if the default notice were valid,
still the default notice shows the
signature by LSI Title, it agent. LSI Title has never been
registered in California to conduct business. Thus, the default
notice has not been filed or executed by either the beneficiary,
the trustee, or their authorized agents. Thus, the foreclosure
falls on its face from the time it was initiated.
30.
In or about July 2011, Quality Loan, as trustee, executed and
filed a trustees sale
notice. Attached hereto, marked exhibit F, is a true and correct
copy of the trustees sale notice. Because Quality Loan was not the
trustee at the time of the trustees sale notice, inasmuch as the
beneficiary of the Plasencia loan had not executed and filed a
trustee substitution, Quality Loan had no authority under the DOT
to file the trustees sale notice.
31.
Attached to the trustees sale notice is a document titled
Beneficiary Declaration of
Compliance with (Or Exception From) Civil Code Section 2923.5
and Authorizing of Agent for Notice of Default. That declaration
includes a line to identify the beneficiary and a line to identify
the loan servicer. The loan servicer is identified as Aurora, but
the beneficiary is identified as [Name of current beneficiary], or
put another way, Aurora left it blank. Still, Aurora claims it was
the beneficiary at that
- 7.
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time, under an assignment of a deed of trust. Why then, didnt
Aurora identity itself as the beneficiary? Answer: Because it
wasnt. If it was, it would have said so.
32.
Aurora claims to be both the owner and holder of the debt and
DOT. But at most,
Aurora is the loan servicer only of the Plasencia loan. Further,
the true owner (the trust) already received a default mitigation
payment from a third party that paid off the Plasencia loan.
33. The DOT here is a four-party instrument among Plasencia as
Borrower, GreenpointMortgage as Lender, Marin Reconveyancing as
trustee, and MERS as Beneficiary. The Lender's rights under the
terms of the DOT regarding the Loan are pervasive. The Lender is
entitled to: (i) receive all payments under the Note, (ii) control
enforcement of the DOT under its terms; and (iii) conduct a
nonjudicial foreclosure. Also, under the terms of the DOT, the
Lender is secured the right to: (i) the repayment of the Loan, and
all renewals, extensions and modifications of the Note; and (ii)
the performance of Borrower's covenants and agreements under this
Security Instrument and the Note. In addition, under the covenants,
in the DOT, executed between the Lender and plaintiff, the Lender
is granted exclusive authority to: (i) accelerate repayment, (ii)
give notice to Borrower prior to acceleration, (iii) invoke the
power of sale through written notice to the Trustee in the event of
default, and (iv) appoint successor trustees.1
34. Under the terms of the DOT itself, MERS has none of these
rights. MERS is not evenmentioned in the note. Under the terms of
the DOT, MERS is not given any INDEPENDENT authority to enforce the
DOT: Borrower understands and agrees that MERS holds only legal
title to the interests granted by Borrower in this Security
Instrument, but, if necessary to comply with law or custom, MERS
(as nominee for Lender and Lenders successors and assigns) has the
right: to exercise any or all of those interest, including, but not
limited to, the right to foreclose and sell the Property; and to
take any action required of Lender including, but not limited to,
releasing and canceling this Security Instrument.
1
DOT, at pp. 2, 11 & 12.
- 8.
PLASENCIA v. GREENPOINT MORTGAGE, etc.
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35. Thus, MERS status as beneficiary under the very terms of the
DOT itself is onlynominal. Further, the right given to MERS, as
nominee for Lender and Lenders successors and assigns, to foreclose
and sell the Property, again, under the very terms of the DOT
itself is only triggered when its necessary to comply with law or
custom to do so. Specifically, while the borrowers acknowledge in
the DOT that MERS can exercise the Lender's rights only as
necessary to comply with law or custom, this acknowledgment is not
accompanied by any actual allocation of authority for MERS to
conduct a non-judicial foreclosure on the Property. And, this
necessary-tocomply-with-law-or-custom authority is nowhere else
allocated in any other document in the record. Further, the
circumstances or situations under which necessary to comply with
law or accustom bestows upon MERS the right to assign the DOT
and/or foreclose and sell the Property is not indicated, described
or otherwise provided in the DOT. Thus, under the very terms of the
DOT itself, MERS status as the nominal beneficiary of the DOT
doesnt convey any right to assign the interests of the DOT or to
enforce the loan. Cease and Desist Orders; Government Findings
36.
Defendant MERS is the subject of a cease and desist order, which
is attached hereto
and incorporated herein by reference as exhibit G. A joint
federal interagency investigation was conducted by the United
States of America Department of the Treasury Comptroller of the
Currency, the Board of Governors of the Federal Reserve System, The
Federal Deposit Insurance Corporation, the Office of Thrift
Supervision and the Federal Housing Finance Agency (the Agencies).2
The Agencies investigation identified certain deficiencies and
unsafe or unsound practices by MERS and MERSCORP that present
financial, operational, compliance, legal and reputational risks to
MERSCORP and MERS, and to the participating
In the matter of: Merscorp, Inc., and the Mortgage Electronic
Registration Systems, Inc., Office of the Comptroller of the
Currency, Cease and Desist, Order Number DC11-040, (2011). -
9PLASENCIA v. GREENPOINT MORTGAGE, etc. COMPLAINT
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members.3 The unsafe or unsound practices pertain to MERSs
tracking and registering residential mortgage ownership and
servicing, acting as mortgagee of record in the capacity of nominee
for lenders, and initiating foreclosure actions.4 The wrongful acts
identified in the MERS consent order include initiating
foreclosures that resulted in unacceptable legal risks due to lack
of compliance with the applicable laws.5 MERS identified
deficiencies correspond to the wrongdoing alleged in this
complaint.
37.
Aurora is also the subject of a consent order, issued in or
about April 2011, by the
Office of Thrift Management. Attached hereto, marked exhibit H,
is a true and correct copy of the order. The agency made specific
findings that Aurora initiated non-judicial foreclosures without
always confirming that documentation of ownership was in order at
the appropriate time, including confirming that the promissory note
and mortgage document were properly endorsed or assigned, and, if
necessary, in the possession of the appropriate party. The federal
agency also made specific findings that Aurora filed or caused to
be filed in local land records offices, numerous mortgage-related
documents that were not properly notarized, including those not
signed or affirmed in the presence of a notary; and further failed
to have adequate internal controls, policies, and procedures,
compliance risk management, internal audit, training and oversight
of the foreclosure process, including sufficient oversight of
outside counsel and other third-party providers handling
foreclosure-related services with respect to their servicing
portfolio. Auroras identified deficiencies correspond to the
wrongdoing alleged in this complaint. MERS Tracking System Is Not A
Legal Chain of Title
38.
MERS was never entitled to payment from plaintiff under the
subject note and DOT.
MERS is a database document tracking service used to
fraudulently convey title. The MERS recorded documents in the chain
of title confirm that plaintiffs loan was securitized. The MERS3 4
5
Id. at p.2 Id.
Id.
- 10.
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scheme was developed to attempt to circumvent the recording fees
that are inherent to the California laws regarding assignments of
mortgages. Therefore, compliance with 2923.5 is impossible, and the
declaration on the default notice is fraudulent. MERS Cannot
Legally Assign a Promissory Note or Deed of Trust
39. Civil Code 2924, et seq. is exhaustive, and a nominee is
never included as anacceptable form of "authorized agent," in a
judicial or non-judicial foreclosure. Under established California
law a nominee is a "non-authorized" form of agent, which fails to
comply with California Civil Code 2924 through 2924k. n addition to
MERS inherent lack of authority, MERS is not a party to the note.
The word 'nominee' in its commonly accepted meaning connotes the
delegation of authority to the nominee in a representative or
nominal capacity only, and does not connote the transfer or
assignment to the nominee of any property in or ownership of the
rights of the person nominating him.6 A nominee inherently lacks
the right to enforce or assign the note or real property ownership
rights, because no property or ownership rights are assigned or
transferred to the nominee.7 Defendants Use Robo-Signers To Create
And Record Fraudulent, Void Documents
40.
It is a highly publicized fact that banks and MERS use
robo-signers on documents
filed with the county recorders offices. Thus, a servicers
assertion that the homeowner is delinquent is not conclusive
evidence, especially if the assertion is in a robosigned affidavit.
Here, not only is the document robo-signed [by an individual whose
signature is nevertheless illegible], but also signed by a company
that has never been registered in California to conduct business.
The affiant also lacks personal knowledge of the facts alleged in
the default notice. Many servicers, like Aurora, employ
professional affiants, some of whom appear to have no other duties
than to sign affidavits. These employees cannot possibly have
personal knowledge of the facts in their affidavits. Other Chain of
Title Problems6
Born v. Koop (1962) 200 Cal.App.2d 519, 527-528 (citing Cisco v.
Van Lew, 60 Cal.App.2d 575, 583-584). 7 Id. at p.527-528 -
11PLASENCIA v. GREENPOINT MORTGAGE, etc. COMPLAINT
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41.
The chain of title is broken. The true creditor(s), the one(s)
who holds the rights to the
obligation on plaintiffs note are absent from the chain of
title.
42. At the time of the various default notices, the recorded
interests also contradict theassertion that Quality Loan was the
foreclosing beneficiary. The chain of recordation is as follows:
DATE Recorded: [Attached as Exhibit A] 05/10/07 Borrower/Trustor:
Plasencia Recorded: 01/19/2011 CORPORATE ASSIGNMENT OF DEED OF
TRUST [Attached as Exhibit B] Trustee: Marin Conveyancing Assignor:
MERS as nominee for Greepoint, its successors and assigns Assignee:
Aurora Signer MERS as nominee for Greenpoint its successors and
assigns Beneficiary: MERS DOCUMENT DEED OF TRUST PARTIES Lender:
Greenpoint Mortgage
Recorded: 02/11/2011
SUBSTITUTION OF TRUSTEE [Attached as Exhibit C]
Signature: Jan Walsh, Vice President Present Beneficiary: Aurora
Original Trustee: Marin Reconveyancing
New Trustee Quality Loan Signer: Aurora
Recorded: 02/11/2011
NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST
[Attached as Exhibit E]
Signature: Cheryl Marchant, Vice President Beneficiary: Aurora
Trustee: Quality Loan Signer: Signature: Quality Loan by LSI Title
Agency, Inc., its agent Illegible
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Recorded: 7/15/2011
NOTICE OF TRUSTEES SALE [Attached as Exhibit F]
Trustee:
Quality Loan
Signer: Quality Loan Signature: Erica Paul, as authorized
agent
43.
The February 11, 2011,NOD is rife with defects upon which
defendants base their
claims. California Civil Code 2924c requires that the NOD
provide the name and contact information of the beneficiary or
mortgagee for borrowers to find out the amount they must pay, or to
arrange for payment to stop the foreclosure. Here, the NOD states
that the borrower should contact Aurora in care of Quality Loan,
but both are strangers to the transaction. Aurora is not now and
never has been the beneficiary, despite the assignment of the DOT
on record with the County Recorders office. Because that is so, the
trustee substitution purporting to substitute Quality Loan for
Marin Reconveyancing, the original trustee, is also void. Further,
Greenpoint never recorded an assignment of the DOT conveying it to
Quality Loan.
44.
The NOD also contains the declaration of Quality Loan purporting
to be pursuant
to Cal. Civ. Code section 2923.5, citing that it received a
written declaration of default from the original beneficial
interest holder under the DOT. Prior to the signing of the NOD, no
valid substitution of trustee was recorded naming Quality Loan as
the authorized trustee. Thus, Quality Loan (an unknown entity and a
stranger to the transaction) cannot possibly comply with section
2923.5 because, as of the date of signing the NOD, the original
trustee, Marin Reconveyancing was the authorized trustee, not
Quality Loan..
45.
The California Civil Code allows that a trustee may be
substituted from the original
trustee, but only in strict compliance with the requirements of
2934(a)(2)A through D. In this case none of these steps was taken.
Quality Loan is conducting the foreclosure proceedings under a
purported trustee substitution. But, nothing was recorded in the
County Recorders office to show compliance with the Code
requirements. The original trustee, Marin Reconveyancing, was
purportedly - 13-
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replaced by Quality Loan. Thus, any trustee substitution
substituting Quality Loan for the original trustee would have had
to be executed by the beneficiary. The mortgage-backed security
trust (name unknown) was the true beneficiary. Aurora may have been
the servicer of the Plasencia loan, but thats it. It did not own or
hold the Plasencia note, and had no right to execute a trustee
substitution. As such, the trustee substitution is no good, and
Quality Loan is acting ultra vires, in violation of California law
and in violation of the terms of the DOT giving power of sale to
the trustee. Thus, any action taken by Quality Loan, including most
importantly, conducting any foreclosure sale is ultra vires and
void. The trustee substitution and any documents issued by Quality
Loan, at anytime, including the default notice and trustees deed
upon sale should be stricken from the official records, and the
documents expunged.
46.
In contradiction of the recorded chain of title documents is the
fact that multiple
entities are claiming ownership of plaintiffs mortgage loans,
but, on information and belief, none of the claimants is the actual
beneficial interest holder or has the authority to foreclose on
plaintiffs mortgage loans. Plaintiffs loan was transferred into a
mortgage-backed securities trust (MBST). Securitization Issues
47.
Plaintiffs loan was securitized. The following is the Wall
Street Journals summary of
the securitization process (the Summary):
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48.
The above summary is a simplification of the complex
securitization process
pertaining to residential mortgage loans. The Investment Banks
create REMIC trusts into which future residential mortgage loans
are pooled. Not shown on the summary is that Investment Banks
obtain the Warehouse Funds by pre-selling shares/certificates of
the future pool of residential mortgages.
49. 50.
Plaintiffs mortgage loan was pooled into a hidden MBST. Because
Investment Banks also re-sell the interests in the loans on a
continuing
basis, through the mechanism of securitization, a borrowers loan
may be evidenced only on a balance sheet which cannot be
discovered. This creates the nefarious and dangerous credence that
the note may be exercised by another party at a time in the future
without borrowers ever knowing who, if anyone, truly owns the
beneficial interest in plaintiffs note. Non-Disclosures and
Misrepresentations By Defendants - 15-
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51. In the instant case, Greenpoint Mortgage, the mortgage
broker was the strawlender. The straw lender neither loaned
plaintiff any funds nor actually owned a beneficial interest in
plaintiffs mortgage loan, but was substituted as the lender of
record in the note and deed of trust/mortgage. The straw lender,
along with the title company, Marin Reconveyancing, was aware of
this material fact and intentionally omitted it from the required
disclosures.
52. The money to fund the plaintiffs mortgage loan came from the
WarehouseLender. This fact was not disclosed to plaintiff at the
escrow closing. Regardless of which Warehouse Lender funded
plaintiffs mortgage loan, the loan was funded by selling shares in
plaintiffs loan, and plaintiff would never know the identity of the
beneficiary with which he could negotiate modifications of his
mortgage loan.
53. Also not disclosed to plaintiff was that Greenpoint Mortgage
acted merely as a StrawLender for the purpose of obtaining
plaintiffs signature on loan documents. When plaintiff signed the
promissory note and DOT, he was unknowingly converting his property
into an alleged asset of a trust, while his credit and signature
were used to sell securities, the profits of which were to be used
to fund the predatory loan (unbeknownst to plaintiff, the loan
papers were processed with an inflated appraisal and inflated
income), without his consent or knowledge of the terms and
conditions of the contract.
54. Defendant Quality Loan represents itself as a "trustee, and
is actually not a commonlaw trustee, rather, a special corporate
trustee with limited ministerial duties. These rights, duties and
obligations do not include any remedial actions as they relate to
the assets of the REMIC trust. The servicers, like Quality Loan and
Aurora, are merely administrative entities, under limited power of
attorney, who collect the mortgage payments and escrow funds. The
servicer has no greater power than its principal, the trustee, and
lacks the authority to bring any action on behalf of the REMIC
trust. 55. The trust participants have executed trust agreements,
under oath, with the Security - 16-
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Exchange Commission ("SEC"), and the Internal Revenue Service
("IRS"), as mortgage asset "passthrough" entities wherein they can
never own or manage the mortgage loan assets in the REMIC Trust.
This allows them to qualify as a Tax Free Real Estate Mortgage
Investment Conduit ("REMIC") rather than an ordinary Real Estate
Investment Trust ("REIT"). As long as the trust is a qualified
REMIC, no income tax will be charged to the beneficial certificate
holders.
56. Importantly, the trustee or custodian, must have the
mortgages recorded in theinvestors name as the beneficiaries of the
trust within 90 days of the closing date (IRS Rule 860D (a)(4)), as
defined within the REMIC trust agreement. Every mortgage in the
trust should have been publicly recorded in San Bernardino County,
where the property is located with a mortgage in the name of this
trust, which would have had to been recorded in this case in 2004.
No such recording exists in the San Bernardino County records.
57. The subject promissory note was never conveyed pursuant to
the trust mandates andthe mortgage was never conveyed or recorded
pursuant to the proper chain of custody and assignment within the
trust agreement(s).
58. In this scenario, even if the foreclosing entity produces a
copy of a note, or even analleged original, the mortgage loan was
not conveyed into the trust under the requirements of the
prospectus for the trust or the REMIC requirements of the IRS. Mere
possession of an instrument does not confer the status of a person
entitled to enforce the instrument.
59. Consequentially, the required trust assets, or any part
thereof (mortgage note orsecurity interest), was not legally
transferred to the trust to allow the trust to ever be considered a
"holder" of the mortgage loans. Neither the trust nor Aurora or
Quality Loan, as servicers, would ever be entitled to bring a
foreclosure or declaratory action; and the trust will never have
standing or be a real party in interest before this Court.
- 17.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
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60.
While the note and DOT may be extinguished or lost, the true
owner(s) of the
obligation, if any, are the certificate holders, not the
defendants who are foreclosing on the DOT. Further, the DOT has
never been transferred from Greenpoint Mortgage to the foreclosing
entity, Quality Loan or to Aurora. The DOT was transferred to an
unknown entity (or other unnamed entities), at the time of its
execution, the parties claiming a right or beneficial interest in
the DOT have no legitimate claims, as more fully explored
below.
61.
The foreclosure in the instant case is based upon a DOT that was
flawed at the date of
origination of the loan. The money to fund plaintiffs loan came
from investors. Because Greenpoint Mortgage acted merely as a
broker for the purpose of obtaining plaintiffs signatures on loan
documents, Greenpoint Mortgage was merely a servicer of the loan.
It was never the lender, or put another way it was not the
institutional entity that made the money available to plaintiff, as
plaintiff believed at the time of origination of the loan. Thus,
Greenpoint never was the owner of the beneficial interest in the
DOT or the obligation purportedly secured thereby.
62.
Further, the foreclosing entity, Quality Loan, who initiated the
foreclosure, is a third
party with no pecuniary interest in the mortgage loan. Quality
Loan entity lacks standing and the capacity to foreclose. The
entity has no firsthand knowledge of the loan, no authority to
testify or authority to file affidavits as to the validity of the
loan documents or the existence of the loan. The foreclosing entity
and its agents regularly commit perjury in relation to their
testimony.
63. The true originators of plaintiffs loan immediately and
simultaneously securitized(allegedly) the note through the means of
conversion of an Article III negotiable Instrument (U.C.C.) into
Article IX (U.C.C.), non-negotiable paper.
64. Further, the obligation reflected by the note has been
satisfied in whole or in partbecause the investors who furnish the
funding for the Plasencia loan have been paid to the degree that
the debt has been extinguished; and thus there exists no obligation
upon which to base the foreclosure - 18-
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on the subject property.
65. As such defendants have and continue to cloud the title when
they do not have lawfulrights to foreclose, and are not
holders-in-due-course of the note. 66. During the time that
plaintiffs loan was in default, the servicer, Aurora, or other
parties, took it upon themselves, with no knowledge or consent of
plaintiff, to continue to pay the true owners of the Plasencia
loan, and have paid off the Plasencia loan.
67. As such, the only party who may have rights against
Plasencia may be the servicer,Aurora, or other parties, who paid
off Plasencias loan for Plasencia. That right is at most an
inchoate right to indemnification (unsecured) that can only be
exercised by Aurora (or other third parties) filing a lawsuit
against Plasencia.
68. Other parties who may also be entitled to collect on the
unsecured debt would be theholder-in-due-course and beneficial
owner(s) of the original promissory notes (the original lender of
record), if the asset is still booked as an asset and has not been
sold and de-recognized as an asset under FASB Those unknown parties
have not come forward in this case. 69. During the time that
Plasencias loan was being paid off by Aurora, or other parties,
Plasencia was never informed by the new owners of his loan that
they were the new owners of his loan, as required under a 2009
federal law. Separate Failure to Resolve Prior to Sale
70.
The 2923.5 declaration is false, because defendants failed to
work with plaintiff to
provide him any meaningful alternatives to foreclosure, and
failed to make the initial telephone or inperson contact with
plaintiff, as required under 2923.5. The purported lender/servicer
failed, refused and/or neglected to work with plaintiff in any
reasonable way to avoid foreclosure during the time of his
financial difficulties; and further failed, refused and/or
neglected to disclose to plaintiff what options were available to
plaintiff to avoid foreclosure and the loss of the potential loss
of his property. As a - 19-
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result, plaintiff was not provided with the specialized
assistance and default loan servicing that the lender/servicer was
obligated to provide that comported with plaintiffs ability to pay
and that served to assist plaintiff in his efforts to avoid the
default and the acceleration of the subject mortgage debt and
foreclosure. Aurora failed, refused and/or neglected to evaluate
the particular circumstances surrounding plaintiffs claimed
default; failed to evaluate plaintiff or the subject property;
failed to determine plaintiffs capacity to pay the monthly payment
or a modified payment amount; and failed to determine the extent of
plaintiffs interest in keeping the subject property. Thus, the
2923.5 declaration is false.
71.
As the NOD is non-compliant with California law, it is therefore
invalid, should be
stricken from the official records, and the document FIRST CAUSE
OF ACTION Violation of California Financial Code Section 50505
(Against All Defendants and DOES)
72.
Plaintiff re-alleges and incorporates by reference all
paragraphs above as though
fully set forth herein.
73.
California Financial Code section 50505, states as follows: Any
person who
violates any provision of any of the following federal acts or
regulations violates this division: (a) The federal Real Estate
Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et
seq.). (b) The federal Truth in Lending Act, as amended (15 U.S.C.
Sec. 1601 et seq.). (c) The federal Home Ownership Equity
Protection Act (15 U.S.C. Sec. 1639). (d) Any regulation
promulgated under any of the federal acts in subdivision (a), (b),
or (c).
74.
Plaintiff signed a promissory note and DOT. He unknowingly
converting their property
into an alleged asset of a mortgage-backed security investment,
(MBS), while his credit and signature was used to sell securities
without his consent or knowledge of the terms and conditions of the
loan - 20-
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contract. Plaintiff was never informed of the nature of the
scheme. He was deliberately induced into signing a negotiable
instrument which was never intended as such, but intended as
collateral for a mortgage-backed security investment. The fact that
this loan was meant to fund a mortgage-backed security investment
was a "material disclosure" which was deliberately and
intentionally undisclosed.
75.
In 1994, Congress enacted the Home Ownership Equity Protection
Act, (HOEPA) which
is codified at 15 USC 1639 et. seq.,with the intention of
protecting homeowners from predatory lending practices targeted at
vulnerable consumers. HOEPA requires lenders to make certain
disclosures and prohibits certain terms from being included in home
loans. In the event of noncompliance, HOEPA imposes civil liability
for precision and statutory and actual damages.
76. 77.
Plaintiff is a "consumer" and each defendant is a "creditor" as
defined by HOEPA. Pursuant to HOEPA and specifically 15 USC 1639
(A.) (1), each defendant is required
to make certain disclosures to plaintiffs, which are to be made
conspicuously and in writing no later than three (3) days prior to
the closing. 78. not limited to: A. Failing to make the foregoing
disclosures in the conspicuous fashion; B. Engaging in a pattern
and practice of extending credit to plaintiff without regard to her
ability to pay and violation of 15 USC 1639. Defendants violated
HOEPA by numerous acts and material omissions, including but
79.
By virtue of the defendants multiple violations of HOEPA,
plaintiff has legal right to
rescind the consumer credit transaction that is the subject of
this action pursuant to 15 USC1635. This complaint is to be
construed, for these purposes, as formal and public notice of
plaintiffs notice and rescission of the mortgage and note.
80.
Defendants further violated HOEPA by failing to make an
additional disclosure,
including but not limited to, plaintiffs not receiving the
required disclosure of the right to rescind the transaction.
Defendants failed to provide accurate TILA disclosures and
understated the amount being financed. 81. Defendants did not
inform plaintiff at the time defendant gained ownership of the loan
- 21-
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
that it became the new owner of the loan. As such, defendants
violated TILA.
82.
Defendants violated California Financial Code section 50505,
because they violated
HOEPA. Defendants violated California Financial Code section
50505, because they violated TILA.
83.
As a direct consequence of, and in connection with, plaintiffs
legal and lawful exercise
of his right of rescission, the true owner" is required, within
twenty (20) days of the notice of rescission, to: A. B. C.
transaction. Desist from making any claims for finance charges in
the transaction; Return all monies paid by plaintiff in connection
with the transaction to plaintiff; Satisfy all security interests,
including mortgages, which were required in the
84.
Upon the true "lenders" full performance of its obligations
under HOEPA, plaintiff will
tender all sums to which the true lender is entitled.
85.
Based on defendants HOEPA violations, and based on defendants
TILA violations,
each of the defendants is liable to the plaintiff under
California law, under Financial Code section 50505.
86. As mortgage lenders, defendants are also subject to the
provisions of the Real EstateSettlement Procedures Act (RESPA), 12
USC 2601 et. seq.
87. In violation of 12 USC 2607 and in connection with the
mortgage loan to plaintiff,defendants accepted charges for the
rendering of real estate services which were in fact charges for
other than services actually performed.
88. As a result of the defendants violations of RESPA, they are
liable to plaintiff in anamount equal to three (3) times the amount
of charges paid by plaintiff for "settlement services," pursuant to
12 USC 2607 (d) (2).
89. By calculating the annual percentage rate ("APR") based upon
improperly calculatedand disclosed amounts, defendants are in
violation of 15 USC 1601 et seq., Regulation Z 226.18 (c), 18(d),
and 22.D - 22-
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PLASENCIA v. GREENPOINT MORTGAGE, etc.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
93. 94.
90. Defendants failure to provide the required disclosures
provides plaintiff with the rightto rescind the transaction, and
plaintiff, through this public complaint which is intended to be
construed for purposes of this claim as a formal notice of
rescission, hereby elect to rescind the transaction.
91. Defendants are in violation of California Financial Code
section 50505, becausedefendants violated RESPA.
92. Plaintiffs first learned of the actions of Defendants,
including their failure to discloseand the fraud committed upon
them in November 2011. Any applicable statute of limitations should
run from this date. Plaintiff could not have learned of these
violations at the time the loan was obtained by looking at his loan
documents and escrow closing statements as the true facts of the
lender and the securitization of his note and deed of trust and the
fees attached thereto, which were undisclosed to him, were not
apparent from the face of the loan documents, nor deed of trust.
SECOND CAUSE OF ACTION Wrongful Foreclosure (As to All Defendants
and DOES) Plaintiff reaffirms and re-alleges the above paragraphs
as if set forth fully herein. Defendants are foreclosing upon
plaintiffs property when defendants are not the
holders of the note and deed of trust and are not operating
under a valid power from the current holders of the note and deed
of trust. 95. Defendants do not have the right to proceed with the
foreclosure. 96. The burden of proving an assignment falls upon the
party asserting rights thereunder. In an action by an assignee to
enforce an assigned right the evidence must not only be sufficient
to establish the fact of assignment when that fact is in issue, but
the measure of sufficiency requires that the evidence of assignment
be clear and positive to protect an obligor from any further claim
by the primary oblige. - 23-
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PLASENCIA v. GREENPOINT MORTGAGE, etc.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
97. Defendants lack proof that they have the right to proceed
with foreclosure.98. Under the California Commercial Code, a
negotiable instrument, such as a promissory note secured by a
mortgage, may only be enforced by the holder or a person with the
rights of a holder. (Com. Code 3-301.) For instruments payable to
an identified person, such as a lender, a holder is generally
recognized as the payee or one to whom the negotiable instrument
has been negotiated. This requires transfer of possession and
endorsement by the prior holder. (Com. Code 3201.) Unless the
parties otherwise provide, the mortgage follows the note. (Civ.
Code 2936.) 99. In California, the assignment of a note generally
carries with it an assignment of the mortgage (Civ. Code 2936), it
is still required in California that the holder of the note, or a
person operating with authority from that holder, be the
foreclosing party and that the mortgage not have been assigned away
from that note.
100.
The originators of plaintiffs note no longer own the note they
originated and
there is just no way of knowing who now owns the plaintiffs
mortgage because the foreclosing defendants do not know who owns
the mortgage. Indeed, the defendant does not know where it is that
they obtained their alleged rights to collect money from plaintiff
or to foreclose on his property.
101.
Once separated from the note, the trust deed is unenforceable
and of no legal
value. The DOT here was separated from the note.
102.
For negotiable instruments payable to an identified person, such
as a lender, a
holder is generally recognized as the payee or one to whom the
negotiable instrument has been negotiated. This requires transfer
of possession and endorsement by the prior holder. (Com. Code
3201.) Unless the parties otherwise provide, the mortgage follows
the note. (Civ. Code 2936; see also Carpenter v. Longan, 83 U.S.
271, 275 (1872).)
- 24.
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24
103.
Civil Code section 2936 provides: the assignment of a debt
secured by
mortgage carries with it the security. defendants have no
evidence that they own the note or have any power from the rightful
owners to enforce it 104. There is compelling evidence that
defendants are violating TILA and the Patriot
Act by failing to provide required information as to the owners
of the notes and deeds of trust and the sources of funds used to
provide their mortgages and/or acquire their mortgages.
105.
Foreclosure is wrongful for each of the following reasons,
independent of any
of the other following reasons: (1) because plaintiffs mortgage
was obtained through concealment and/or misrepresentation; (2)
because defendants do not own the note and do not have a power of
attorney with respect to the note; (3) because the note and deed of
trust have become separated; (4) because defendants do not own the
deed of trust and do not have a power of attorney with respect to
the deed of trust; (5) because defendants cannot surmount their
burden of demonstrating they own the note or have a power of
attorney with respect thereto; and (6) because defendants cannot
surmount their burden of demonstrating they own the deed of trust
or have a power of attorney with respect thereto.
106.
Plaintiff brings this cause of action against all parties who
have an apparent hand in
the wrongful acts as set forth. Furthermore, their participation
seems to be a joint effort to hold each accountable for the actions
of the rest. 107. California Civil Code Section 2924 mandates that
a non-judicial trustees sale
SHALL NOT TAKE PLACE unless it is done on behalf of the
beneficiary of a deed of trust securing a note and certain
technical procedures are met. 108. California Civil Code Section
2924(g) allows the obligee on the note required by
Section 2924 to make a credit bid at a foreclosure sale, thereby
taking title without actually paying any money whatsoever for the
trustee to convey title to the property. - 25-
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PLASENCIA v. GREENPOINT MORTGAGE, etc.
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24
109.
Defendants in this case have a duty to plaintiff to follow the
laws, including the non-
judicial foreclosure statutes.
110.
Defendants were not the beneficiaries of the mortgage at the
time of the default notice.
Defendants are acting as a trustee of REMIC loan pool trusts
pursuant to pooling and servicing agreements (PSA). The PSAs under
which defendants purport to be acting are a public record kept by
the Securities and Exchange Commission, whose website EDGAR.com
contains the provisions of the PSAs.
111.
Because the note was separate from the DOT and transferred to
the loan pool, then
under Civil Code Section 2936, the right, title and interest to
the DOT followed the note on that date, and any subsequent
purported assignment is a lie, its declaration a fraud, and its
true legal effect null notwithstanding recordation. Any beneficiary
was divested of interest upon the transfer of the note under
California law and lacked power to assign any interest. Thus any
attempt to foreclose on the subject property is null and void under
California law.
112.
As a result of the illegal foreclosure that is taking place,
plaintiff has now been
required to fight the foreclosure sale, and is being deprived
peaceful ownership of the property. 113. the foregoing defects.
Foreclosure is proceeding after plaintiff put defendants on notice
as to each of
114.
Based upon the assertion (express or implied) that they did not
have to prove
they hold the note or deed of trust and do not have to prove
they have a power of attorney with respect to the note and deed of
trust, defendants are proceeding to foreclosure sale.
115.
Defendants thereby are acting outrageously and persistently with
actual malice in
performing the acts alleged in this cause of action.
Accordingly, plaintiff is entitled to exemplary and punitive
damages in a sum according to proof and to such other relief as is
set forth below. - 26-
.
PLASENCIA v. GREENPOINT MORTGAGE, etc.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
116.
Due to defendants actions, plaintiff has been damaged, both
financially and is being
deprived of peaceful ownership of the property, which is a
unique asset to him. Plaintiff is entitled to damages for these
harms, and a permanent injunction against defendants, to prevent
the foreclosure proceeding. 117. Further, as stated in more detail
above, defendants violated Civil Code section2923.5
because they failed to initiate contact in person or by
telephone with plaintiff to assess plaintiffs financial situation
and discuss options to avoid foreclosure, prior to filing the
default notice. SECOND CAUSE OF ACTION Quiet Title (As to All
Defendants and DOES)
118. 119.
Plaintiff reaffirms and re-alleges all paragraphs above as if
set forth fully herein. Plaintiff has sent or has caused to be sent
notice of their intent to rescind the subject
loan transaction, but only sent those notices to the entities
that have been disclosed. Hence, without this action, neither the
rescission nor the reconveyance to which plaintiff is entitled to
file gives plaintiff full and clear title to the subject
property.
120.
The real party in interest on the lender's side may be the owner
of the asset-backed
securities issued by the servicing and pooling vendor, the
insurer through some claim of equitable interests, or the federal
government through the United States Department of the Treasury or
the Federal Reserve. The security is a securitized bond deriving
its value from the underlying mortgages, of which the subject
mortgage is one. Thus, plaintiff is entitled to quiet title against
defendants, clearing title of the purported subject mortgage
encumbrance.
121.
On information and belief, each of the defendants claim an
interest in the subject
property adverse to plaintiffs interest. Defendants adversely
affected plaintiffs title at the time of the - 27-
.
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24
recording of the false notices of default. However, defendants
claims are without any right whatsoever, and said defendants have
no legal or equitable rights, claim, or interest in the subject
property.
122.
Further, n1ot in all instances is a borrower required to tender
the full amount of the
loan in a quiet title cause of action.1 The tender rule was set
forth in Arnolds Management Corp. v. Eischen.2 It is based on the
notion that one who seeks to set aside the foreclosure sale must
first comply with any requirements they are obligated to first.
123.
First, if plaintiff had the money to tender to the lender
(whoever that might be), he
wouldnt need a loan in the first place. Also, if plaintiff could
get a loan through another lender, he could use that money to
tender. But, once plaintiff was unable to make his payments, his
credit was such that he could no longer obtain additional
financing.
124.
Tender is not a hard and fast rule. A party may avoid having to
tender the entire
amount of the loan by showing that because the lender or the
trustee lacked the authority to foreclose, the sale was void, or in
other words, the trustees sale was a complete nullity with no force
or effect (as opposed to one which may be set aside). Here, Aurora
claims that it is the entity entitled to initiate foreclosure
proceedings when it is not.
125.
Further, plaintiff need not tender the full amount when the
dispute is as to the debt
itself. Here, as stated above, plaintiff asserts, in the
alternative, that at most, one possible party with any rights
against him may be Aurora (and other third parties) who paid off
his loan for Plasencia. Those parties may have, at most, an
inchoate right to indemnification (unsecured), which can only be
perfected by the filing of a lawsuit against plaintiff. That hasnt
been done. 126. Thus plaintiffs quiet title attacks the validity of
the debt itself, and as such he should
not be required to tender title. Further, many of the factual
allegations are based on fraud in the1
Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424; see also Dimock
v. Emerald Properties (2000) 81 Cal.App.4th 868, 876-878 [when new
trustee has been substituted, subsequent sale by former trustee is
void, not merely voidable, and no tender needed to set aside
sale].)22
1
(1984) 158 Cal.App.3d 575,579-580. - 28COMPLAINT
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PLASENCIA v. GREENPOINT MORTGAGE, etc.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
foreclosure process, including that the trustee has no power of
sale, because Aurora was not the beneficiary at the time the
trustee substitution was executed. 127. In point of fact, even if
Aurora was the beneficiary at the time of the trustee
substitution, Auroras signature by Cheryl Marchant is a forged
signature. That signature is not that of Cheryl Marchant. Thus, the
trustee is proceeding under a forged document. Forgery cannot form
the basis of a non-judicial foreclosure, under California law
(neither can a judicial foreclosure for that matter)..
128. 129.
Plaintiff is not required to tender under these circumstances.
Thus, plaintiff seeks a declaration that the title to the subject
property is vested in
plaintiff alone and that the defendants herein, and each of
them, be declared to have no estate, right, title or interest in
the subject property; and that said defendants, and each of them,
be forever enjoined from asserting any estate, right, title or
interest in the subject property adverse to that of plaintiff.
THIRD CAUSE OF ACTION Rescission Mistake Void Agreement (Against
All Defendants and DOES)
130.
Plaintiff re-alleges and incorporates by reference all
paragraphs of this
complaint as though fully set forth herein. 131. The Restatement
(Second) of Contract, 17 states that the formation of a
contract requires a bargain in which there is a manifestation of
mutual assent. . . American Law Institute, Restatement (Second) of
Contracts, 17(1). 232. 132. The bargain between the parties is
`often referred to as the meeting of the
minds. See, e.g., American Law Institute, Restatement (Second)
of Contracts, 17, comment 2. 233.
133.
A lack of meeting of the minds, a mistake as to fact, can
justify a rescission of
the contract. A mutual mistake, whether of fact or law, which
affects an essential element of the - 29-
.
PLASENCIA v. GREENPOINT MORTGAGE, etc.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
contract and is harmful to one of the parties, is subject to
rescission by the party harmed. Guthrie v. Times-Mirror Co.,
51Cal.App.3d 879 (1975). 234. 134. The mistake or missing of the
minds does not have to be mutual. A single party
mistaken justifies the voiding or rescinding of the contract
when the mistake is known to the nonmistaken party. 135. The
Restatement (Second) of Contracts, 153 states: Where a mistake of
one
party at the time a contract was made as to a basic assumption
on which he made the contract has a material effect on the agreed
exchange of performances that is adverse to him, the contract is
voidable by him if he does not bear the risk of the mistake under
the rule stated in 154 , and a. The effect of the mistake is such
that enforcement of the contract would be unconscionable, or b. The
other party had reason to know of the mistake or his fault caused
the mistake.
136.
The plaintiff in this action executed his loan documents based
on the mistaken
belief that he would remain in a borrower/lender
relationship.
137.
The lender, Greenpoint Mortgage, on the other hand, knew there
would be no
borrower/lender relationship.
138.
Because of this mistake, the plaintiffs benefit from his loan
agreement is far
less than he thought he would receive. Instead of a lender who
had full authority to deal with plaintiffs contractual relationship
and the economic value to the lender, plaintiff received a
relationship with a party who lacked the full authority of the
lender and lacked the economic incentive to modify the loan rather
than foreclose. 139. The mistake was not a future contingency, but
a reality present at the contract
formation: the defendants knew the securitization of the conduit
loan would occur with certainty and they knew no borrower/lender
relationship was contemplated or planned as a result of the
loan.
- 30.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
24
140.
It would be unconscionable for the defendants, having withheld
material
information regarding the loans from plaintiff, to still receive
the benefits of the loan.
141.
The defendants knew that the plaintiff did not understand that
the securitization
of the loan would destroy the lender/borrower relationship.
Plaintiff was giving the right to nonjudicial foreclosure to an
unnamed undisclosed third party, who was known to defendants at the
time of the signing of the DOT.
142.
Based on the material mistake in the formation of the contracts,
plaintiff is
therefore, entitled to an order by this Court rescinding the
loan and/or declaring the loan void, invalid, and
unenforceable.
143.
In addition, plaintiff requests restitution and damages in an
amount in excess of
$75,000, the specific amount to be determined at trial. FOURTH
CAUSE OF ACTION Invasion of Constitutional Right to Privacy
(Against All Defendants and DOES)
144.
Plaintiff re-alleges and incorporates by reference all
paragraphs of this
complaint as though fully set forth herein. 145. The guarantee
of privacy granted to each Californian is a special and unique
right embedded in the very first clause of the California
Constitution. Article I, 1 of the California Constitution, which
provides: All people are by nature free and independent and have
inalienable rights. Among these are enjoying and defending life and
liberty, acquiring, possessing, and protecting property, and
pursuing and obtaining safety, happiness, and privacy. (Emphasis
added) 146. The unauthorized disclosure of private information
(confidential, nonpublic
personal information, including such information as social
security numbers, dates of birth, - 31-
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property values, bank and credit card account numbers, and other
personal information) is a fundamental violation of the inalienable
right to privacy afforded all Californians.
147.information.
Plaintiff has a constitutionally protected privacy interest and
right in his private
148.
Plaintiff provided private information to the defendants as a
requirement for
obtaining a mortgage. Plaintiff had a reasonable expectation
that the defendants would preserve the privacy of plaintiffs
private information.
149.
Defendants directly and through their agents violated plaintiffs
privacy rights
by disclosing his private information without his knowledge,
authorization or consent to potential buyers of mortgage-backed
security investments. This unauthorized disclosure of private
information is intrusive into the most private reaches of
plaintiffs life, and does not include information that is of a
legitimate public concern. Possession of personal confidential
information allows criminals to breed identities, that is, to
obtain other forms of identification that may further enhance their
ability to misuse anothers identity. Social security numbers are
among the most sought after and valuable items of personal
information to an identity thief. 150. The average victim of
unauthorized use of wrongfully disclosed personal
confidential information spends approximately 600 hours and
$1,400 repairing his or her credit once violated. Victims of
identity theft also often suffer further financial loss from the
denial of credit or utility services, increased difficulty in
securing employment and housing, and higher insurance and credit
rates. In some cases, an identity theft victim may even have a
criminal record develop in his or her name. Further costs include
lost wages or vacation time, diminished work performance, increased
medical problems, and impact on family and friends.
- 32.
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151.
It is often the case that a victim will not discover that his or
her private
information has been stolen and misused until long after an
identity theft has taken place, and then only when the person is
denied credit or discovers that his bank account has been
emptied.
152.
The California Constitution (Art. I, 1) is self-executing and
confers a right of
action beyond the scope of the mere common law tort. See, e.g.,
Burt v. Orange (2004) 120 Cal.App.4th 273. 153. Fundamental to
privacy is the ability to control circulation of personal
information. The proliferation of business records over which
individuals have no control limits their ability to control their
personal lives. Personal privacy is threatened by the
information-gathering capabilities and activities of private
business-and never more then when a financial institution that
requires personal information to permit a consumer to buy a house
and obtain it with the assertion and promise it will be safeguarded
fails to safeguard that information. 154. On information and
belief, defendants began running credit checks on their
borrowers to determine who was experiencing financial
difficulties. These credit checks were outsourced, meaning that
private data and other information was sent off-site. The goal was
to develop information that could be used to further defendants
fraud involving the sale of collateralized securities and also to
improperly provide information to those who already had purchased
such collateralized securities in order to give defendants a
tactical advantage. 155. Defendants unlawfully disclosed the
private and confidential information of
plaintiff. On information and belief, third parties unlawfully
used the private information acquired from defendants, thereby
further damaging plaintiff.
- 33.
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156.
By reason of the conduct alleged herein, defendants violated
plaintiffs
constitutional right of privacy and plaintiff has suffered
special damages in an amount according to proof at trial.
157.
Further, as a proximate and foreseeable result of defendants
intentional
disclosure of plaintiffs private information, plaintiff has
suffered general damages- including pain and suffering and
emotional distress- in an amount according to proof at trial.
158.
Defendants conduct is willful, outrageous and pervasive,
involving hundreds
of thousands of California citizens. Not only did defendants
abuse private information, willfully fail to maintain the security
of the private information, and then disclose it to third parties
without permission, but they took no material steps to retrieve the
private information and concealed the extent of the violations.
159.
Without limiting the damages as described elsewhere in this
complaint,
plaintiffs damages as a result of the foregoing also include
direct losses associated with identity theft and the losses
associated with reduced credit scores, including, among others,
unavailability of credit, increased costs of credit, reduced
availability of goods and services tied to credit ratings,
increased costs of those service, as well as fees and costs,
including, without limitations, attorneys fees and costs.
160.
Defendants acted with actual malice by disclosing plaintiffs
private
information, failing to cure the same, and concealing the
magnitude of the problem.
161.
Plaintiff is entitled to exemplary and punitive damages in a sum
according to
proof and such further relief as is set forth below. FIFTH CAUSE
OF ACTION Unjust Enrichment (As to All Defendants and DOES) -
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162. 163.
Plaintiff reaffirms and re-allege the above paragraphs as if set
forth fully herein. Defendants had implied contracts with plaintiff
to ensure that plaintiff understood all
fees which would be paid to the defendants to obtain credit on
plaintiffs behalf and not to charge any fees that were not related
to the settlement of the loan and without full disclosure to
plaintiff.
164.
Defendants cannot, in good conscience and equity, retain the
benefits from their
actions of charging a higher interest rate, fees, rebates,
kickbacks, profits (including, but not limited to, from the resale
of mortgages and notes using plaintiffs identity, credit score and
reputation without consent, right, justification or excuse as part
of an illegal enterprise scheme) and gains and yield spread premium
fees ("YSP") unrelated to the settlement services provided at
closing. 165. Defendants have also been additionally enriched to
the receipt of payment from third
parties, including but not limited to, investors, insurers, the
United States Department of the Treasury, the United States Federal
Reserve, the FDIC and other banks.
166.
Plaintiff is entitled to restitution from the defendants in the
form of actual damages,
exemplary damages, and attorneys fees. SIXTH CAUSE OF ACTION
Breach of Security Instrument (As to All Defendants and DOES)
167. 168.
Plaintiff reaffirms and re-alleges the above paragraphs as if
set forth fully herein. The DOT is the document which allows a
non-judicial foreclosure to proceed and
gives power of sale to the duly appointed trustee. Per the DOT,
only the lender can invoke the foreclosure. Per the DOT, the lender
may appoint a trustee. Here, the substitution of trustee in this
case is void, due to fraud, and was not executed in compliance with
California Civil Code2934(a). The substitution of trustee was
invalid also because it was not executed by the lender, per
requirement of the DOT. The duly appointed trustee under the DOT as
of the recording of the most recent NOD was the - 35-
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originally named trustee, Marin Reconveyancing. Quality Loan was
never effectively substituted as trustee. The trustee substitution
was also not executed in accordance with California law, because
all the beneficiary, the certificateholders of the trust into which
the Plasencia loan was placed did not execute the trustee
substitution.
169.
The notice of acceleration and notice to cure given to the
borrowers shall be deemed to
satisfy the notice and opportunity to take corrective action
provisions. When there is an agreement between the beneficiary and
trustor, such as the condition precedent expressed in the DOT, a
foreclosure cannot take place before the condition is satisfied. If
the beneficiary fails to carry out its obligation, a subsequent
foreclosure is invalid. Defendants have not complied with any
express provisions of the DOT, have speciously trespassed upon the
DOT and plaintiffs property, and the foreclosure proceedings must
be rendered void under California Civil Code 3513. Anyone may waive
the advantage of a law intended solely for their benefit. But a law
established for a public reason cannot be contravened by a private
agreement. California Civil Code 3514. One must so use their own
rights as not to infringe upon the rights of another. All the acts
of defendants as described in this complaint are a breach of the
security instrument, the DOT. SEVENTH CAUSE OF ACTION Fraudulent
Misrepresentation (As to All Defendants and DOES)
170.herein.
Plaintiff reaffirms and realleges the paragraphs above as if set
forth fully
171.
Defendants knowingly and intentionally concealed material
information from
plaintiff which is required by federal and state statutes and
regulations to be disclosed to the plaintiff both before and after
closing.
172..
Defendants also materially misrepresented material information
to the plaintiff - 36COMPLAINT
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with full knowledge of defendants that their affirmative
representations were false, fraudulent, and misrepresented the
truth at the time said representations were made. Specifically,
defendants disguised the mortgage transaction to create the
appearance of the lenders being a properly chartered and registered
financial institution, authorized to do business and to enter into
the subject transaction and was the one lending the money to
plaintiff, when in fact the real party in interest was not
disclosed to plaintiff, and neither were the various fees, rebates,
refunds, kickbacks, profits and gains of the various parties who
participated in this unlawful MBS scheme. 173. Said real party in
interest, i.e. the source of funding for the loan and the
person
to whom the note was transmitted or eventually assigned" was
neither a financial institution nor an entity or person authorized,
chartered or register to do business in the state, nor to act as
banking, lending or other financial institution anywhere else.
174.
As such, this fraudulent scheme (which was in actuality a plan
to trick the
plaintiff into signing what would become a negotiable security
used to sell unregulated securities under fraudulent and changed
terms from the original notes) was in fact a sham to use plaintiffs
interest in the real property to collect interest and other fees,
in excess of the legal rate. Defendants also failed to disclose
that those in the chain of title did not hold the beneficial
interest in plaintiffs note and deed of trust and that the
foreclosing entities and the alleged assigned beneficiary of the
note and deed of trust never had the rights to receive plaintiffs
payments on their mortgage. Defendants also failed to disclose at
the time of the default notice and trustees sale notice the
identity of the true beneficiary of the DOT and note so that
plaintiff could negotiate with the true beneficiary to save his
home.
175.
Under the circumstances, the material omissions of material
misrepresentations
of the defendants were malicious.
176.
Plaintiff, not being an investment banker, securities dealer,
mortgage lender, or - 37-
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mortgage broker, reasonably relied upon the representations of
the defendants in agreeing to execute the mortgage loan
documents.
177.
Had Plaintiffs known of the falsity of defendants
representations, plaintiff
would not have entered into the transaction.
178.
As a direct and proximate cause of defendants material omissions
and material
misrepresentations, plaintiff has suffered damages, all
according to proof at trial.
179.
Plaintiff first learned of the actions of defendants, including
their failure to
disclose and the fraud committed upon him in November 2011. Any
applicable statute of limitations should run from this date.
Plaintiff could not have learned of these violations at the time
the loan was obtained by looking at his loan documents and escrow
closing statements as the true facts of the lender and the
securitization of his note and deed of trust and the fees attached
thereto, which were undisclosed to him, were not apparent from the
face of the loan documents or deed of trust. EIGHTH CAUSE OF ACTION
Breach of Fiduciary Duty (As to All Defendants and DOES)
180.herein.
Plaintiff reaffirms and realleges the paragraphs above as if set
forth fully
181.
Defendants, by their actions and contracting to provide mortgage
loan services
and a loan program to plaintiffs, which was not only to be best
suited to the plaintiff, given his income and expenses, but by
which plaintiff would also be able to satisfy his obligations
without risk of losing his home, were "fiduciaries" in which
plaintiffs reposed trust and confidence, especially given that
plaintiff was not and is not an investment banker, securities
dealer, mortgage lender or mortgage broker.
182..
Defendants breached their fiduciary duties to plaintiff by
fraudulently inducing - 38COMPLAINT
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plaintiff to enter into a mortgage transaction which was
contrary to plaintiffs stated intentions; contrary to plaintiffs
interest; and contrary to plaintiffs preservation of his home.
Further, defendants, who were not the real party in interest,
lacking standing to foreclose, stated to plaintiffs that they were
entitled to receive the mortgage payments from plaintiff, and filed
a false notice of default and wrongfully are seeking to sell
plaintiffs property.
183.
As a direct and proximate result of the defendants breaches of
their fiduciary
duties, plaintiff has suffered damages.
184.
Under the totality of the circumstances, the defendants actions
were willful,
wanton, intentional, and with a callous and reckless disregard
for the rights of the plaintiff, justifying an award of not only
actual compensatory damages, but also exemplary punitive damages to
serve as a deterrent not only as to future conduct of the named
defendants herein, but also to other persons or entities with
similar inclination.
185.
Plaintiff first learned of the actions of defendants, including
their failure to
disclose and the fraud committed upon him in November 2011. Any
applicable statute of limitations should run from this date.
Plaintiff could not have learned of these violations at the time
the loan was obtained by looking at his loan documents and escrow
closing statements as the true facts of the lender and the
securitization of his note and deed of trust and the fees attached
thereto, which were undisclosed to him, and were not apparent from
the face of the loan documents or deed of trust. NINTH CAUSE OF
ACTION Civil Conspiracy (As to All Defendants and DOES)
186.herein.
Plaintiff reaffirms and realleges the paragraphs above as if set
forth fully
187..
In connection with the application for and the consummation of
the mortgage - 39COMPLAINT
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loan the subject of this action, defendants agreed, between and
among themselves, to engage in actions in a course of conduct
designed to further an illegal act or accomplish a legal act by an
unlawful means, and to commit one or more overt acts in furtherance
of the conspiracy to defraud the plaintiff, including but not
limited to, the commencement of foreclosure. Specifically, the
defendants disguised the mortgage transaction to create the
appearance of the lenders being a properly chartered and registered
financial institution that was actually lending money to plaintiff,
and authorized to do business and to enter into the subject
transaction, when in fact the real party in interest was not
disclosed to plaintiff, and neither were the various fees, rebates,
refunds, kickbacks, profits and gains of the various parties who
participated in this unlawful scheme. 188. Said real party in
interest, i.e. the source of funding for the loan and the
person
to whom the note was transmitted or eventually assigned" was
neither a financial institution nor an entity or person authorized,
chartered or register to do business in the state, nor to act as
banking, lending or other financial institution anywhere else.
189.
As such, this fraudulent scheme (which was in actuality a plan
to trick the
plaintiff into signing what would become a negotiable security
used to sell unregulated securities under fraudulent and changed
terms from the original notes) was in fact a sham to use plaintiffs
interest in the real property to collect interest in excess of the
legal rate.
190.
Defendants agreed between and among themselves to engage in the
conspiracy
to defraud for the common purpose of accruing economic gains for
themselves at the expense of and detriment to plaintiff.
191.
The acts of the defendants were committed intentionally,
willfully, wantonly,
and with reckless disregard for the rights of plaintiff.
192.
As a direct and proximate result of the actions of the
defendants in combination
resulting in fraud and breaches of fiduciary duties, plaintiff
has suffered damages, all according to - 40-
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proof at trial.
193.
Plaintiff first learned of the actions of defendants, including
their failure to
disclose and the fraud committed upon him in November 2011. Any
applicable statute of limitations should run from this date.
Plaintiff could not have learned of these violations at the time
the loan was obtained by looking at his loan documents and escrow
closing statements as the true facts of the lender and the
securitization of his note and deed of trust and the fees attached
thereto, which were undisclosed to him, and were not apparent from
the face of the loan documents or deed of trust. TENTH CAUSE OF
ACTION Usury and Fraud (As to All Defendants and DOES)
194.herein.
Plaintiff reaffirms and realleges the paragraphs above as if set
forth fully
195.
The subject loan, consisting of the note and DOT, were
structured so as to
create the appearance of a higher value of real property than
the actual fair market value.
196.
Defendants disguised the transaction to create the appearance of
the lenders
being a properly chartered and registered financial institution
that was actually lending the money to plaintiff; created the
appearance that the lender was authorized to do business and to
enter into the subject transaction, when in fact the real party in
interest was not disclosed to plaintiff, and neither were the
various fees, rebates, refunds, kickbacks, profits and gains of the
various parties who participated in this unlawful scheme. 197. Said
real party in interest, i.e. the source of funding for the loan and
the person
to whom the note was transmitted or eventually assigned" was
neither a financial institution nor an entity or person authorized,
chartered or register to do business in the state, nor to act as
banking, lending or other financial institution anywhere else. -
41-
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198.
As such, this fraudulent scheme (which was in actuality a plan
to trick the
plaintiff into signing what would become a negotiable security
used to sell unregulated securities under fraudulent and changed
terms from the original notes) was in fact a sham to use plaintiffs
interest in the real property to collect interest in excess of the
legal rate. 199. The transaction of all the loan of money was
pursuant to a written agreement,
and as such, subject to the rate limitation set forth under
state and federal law. The "formula break" a reference to end these
laws was exceeded by a factor in excess of 10 contrary to the
applicable law.
200.
Under applicable law, plaintiff is also entitled and demands a
permanent
injunction be entered against the defendants: A. Preventing them
from taking any action or making any report in furtherance of
collection on this alleged debt which was usurious; B. Requiring
the records custodian of the county in which the alleged mortgage
and other
instruments are recorded to remove same from the record; and C.
Allowing the filing of said order in the office of the clerk of the
property records where
the subject property, "loan transaction" and any other documents
relating to this transaction are located. 201. Plaintiff first
learned of the actions of defendants, including their failure
to
disclose and the fraud committed upon him in November 2011. Any
applicable statute of limitations should run from this date.
Plaintiff could not have learned of these violations at the time
the loan was obtained by looking at his loan documents and escrow
closing statements as the true facts of the lender and the
securitization of his note and deed of trust and the fees attached
thereto, which were undisclosed to him, and were not apparent from
the face of the loan documents or deed of trust. PRAYER FOR RELIEF
WHEREFORE, plaintiff prays for judgment against defendants and each
of them - 42-
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as follows:
1.
For an order compelling said defendants, and each of them, to
transfer or release legal
title and any alleged encumbrances thereon, and possession of
the subject property to the plaintiff herein;
2.
For a declaration and determination that plaintiff is the
rightful holder of title to the
subject property and that defendant herein, and each of them, be
declared to have no estate, right, title or interest in the subject
property;
3.
For a judgment forever enjoining said defendants, and each of
them, from claiming
any estate, right, title or interest in the subject
property;
4.
For a declaration that the foreclosure which was instituted be
deemed and declared
illegal and void, and that the foreclosure sale be deemed
void;
5.
For attorneys fees according to the governing contract or by
statute or otherwise
reasonable attorneys fees; 6. 7. 8. 9. For actual, compensatory
and puniti