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William A. Nebeker, AZ State Bar No. 004919 Valerie R. Edwards, AZ State Bar No. 017217 KOELLER NEBEKER CARLSON & HALUCK, L.L.P. 3200 North Central Avenue, Suite 2300 Phoenix, AZ 85012 Tel: (602) 256-0000Fax: (602) 256-2488
William A. Nebeker, CA State Bar No. 72079 Sharon A. Huerta, CA State Bar No. 186998 KOELLER NEBEKER CARLSON & HALUCK, L.L.P. 225 Broadway, Suite 2100 San Diego, CA 92101 Tel: (619) 233-1600Fax: (619) 236-0527
Robert R. Hager, NV State Bar No. 1482 Treva J. Hearne, NV State Bar No. 4450, CA State Bar No. 159542 HAGER & HEARNE 245 E. Liberty - Suite 110 Reno, Nevada 89501 Tel: (775) 329-5811Fax: (775) 329-5819Counsel for Plaintiffs
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
IN RE MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS)LITIGATION
THIS DOCUMENT RELATES TO:
Robinson v. GE Money BankNo. CV 09-227-TUC-JATVargas v. Countrywide Home Loans, Inc. No. CV 09-02616-PHX-JAT Goodwin v. Executive Trustee Services, Inc.No. CV 10-0079-PHX-JAT Lopez v. Executive Trustee Service, Inc. No. CV 10-0078-PHX-JAT Dalton v. CitiMortgage No. CV 10-0081-PHX-JAT Green v. Countrywide Home Loans, Inc. No. CV 10-0080-PHX-JAT
And Member Cases Listed in Doc. 1413
)))))))))))))))))))))))))
Case No.: 2:09md-02119 JAT
PLAINTIFFS CONSOLIDATEDAMENDED MASTER COMPLAINT REGARDING CLAIMS RELATED TO THE FORMATION AND OPERATION OF THE MERS SYSTEM
1. Violation of A.R.S. 33-420(False Documents)
2. Wrongful Foreclosure3. Violation of N.R.S. 107.0804. Violation of O.R.S. 86.7355. Aiding and Abetting Wrongful
Foreclosure6. Aiding and Abetting Predatory
Lending7. Unjust Enrichment8. Slander of Title9. Violation of O.R.S. 646.60710. Violation of S.C. Code Ann.
39-5-1011. Declaratory Relief12. Injunctive Relief
)
121009_1.DOC1
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Plaintiffs, by and through counsel of record, pursuant to this courts order filed
May 6, 2011 (Doc. 1413), for their consolidated amended complaint, allege as follows:
JURISDICTION
1. This court has jurisdiction pursuant to 28 U.S.C. 1332 based on diversity
of citizenship, as:
a. Plaintiffs are residents of the States of Arizona, California, Nevada,
Oregon and South Carolina;
b. Defendants AHMSI Default Services, Inc.; Americas Servicing
Company; Americas Wholesale Lender; Aurora Loan Services, L.L.C.; Aztec
Foreclosure Corporation; BAC Home Loans Servicing, L.P.; Bank of America, N.A.; The
Bank of New York Mellon; California Reconveyance Company; Cal-Western
Reconveyance Corporation; Central Mortgage Company; CitiMortgage, Inc.;
Countrywide Bank; Countrywide Home Loans, Inc.; CR Title Services, Inc.; Deutsche
Bank National Trust Company; Executive Trustee Services, L.L.C.; Federal Home Loan
Mortgage Corporation; Federal National Mortgage Association; Fidelity National Title
Insurance Company; First American LoanStar Trustee Services, L.L.C.; First Horizon
Home Loan Corporation; GE Money Bank; GMAC Mortgage, L.L.C.; Home Capital
Funding; Housekey Financial Corporation; HSBC Bank, U.S.A., N.A.; HSBC Mortgage
Corporation (U.S.A.); IB Property Holdings, L.L.C.; J.P. Morgan Chase Bank, N.A.;
LaSalle Bank, N.A.; Litton Loan Servicing, L.P.; LSI Title Company of Oregon, L.L.C.;
MortgageIt, Inc.; MTC Financial, Inc. dba Trustee Corps.; MTDS, Inc.; National City
Mortgage; National Default Servicing Corporation; NDEX West, L.L.C.; Old Republic
Default Management Services; Quality Loan Service Corporation; Recontrust Company,
N.A.; Seaside Trustee, Inc.; T. D. Service Company; U.S. Bank National Association;
UTLS Default Services; Wells Fargo Bank, N.A.; Western Progressive L.L.C.; and WMC
Mortgage Corporation are all foreign corporations domiciled in states other than Arizona,
Nevada or California;
c. MERSCORP, Inc. is a Delaware corporation, and its subsidiary,
121009_1.DOC2
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Defendant Mortgage Electronic Registration Systems, Inc. is a Delaware corporation; and
d. Because this matter is a class action with over 100 members with
claims having a value in excess of $5,000,000.00.
2. This Court has pendent jurisdiction over Plaintiffs state law claims pursuant
to 28 U.S.C. 1367.
3. Venue over this matter is appropriate in this Court pursuant to 28 U.S.C.
1391(b). The acts giving rise to Plaintiffs and the Class Members claims occurred, in
substantial part, in the States of Arizona, California, Nevada, Oregon and South Carolina,
the properties subject to this action are situated in the States of Arizona, California,
Nevada, Oregon, and South Carolina; the owners of the property reside in Arizona,
California, Nevada, Oregon, and South Carolina; and, at all relevant times material hereto,
the Defendants are or were doing business in Arizona, California, Nevada, Oregon and/or
South Carolina; and the named Plaintiffs claims related to the formation and operation of
the MERS system were consolidated and transferred to this court pursuant to an order of
the Judicial Panel on Multidistrict Litigation filed December 7, 2009 (Doc. 1).
Parties and Standing
4. Plaintiffs and Plaintiffs property descriptions are listed in Exhibit 1, which
is attached hereto and incorporated herein by this reference.
5. Defendants are described in Exhibit 2, which is attached hereto and
incorporated herein by this reference.
GENERAL ALLEGATIONS
6. Plaintiffs, and others similarly situated, borrowed money to purchase or to
refinance property in Arizona, California, Nevada, Oregon and/or South Carolina. As part
of the loan transaction, each Plaintiff, and others similarly situated, executed a Note as
evidence of the debt owed to the lender and executed a Deed of Trust as security for
repayment of the Note. The description of each Plaintiffs Deed of Trust, and facts related
to certain Plaintiffs loan transactions, are set forth in Exhibit 3, which is attached hereto
and incorporated herein by this reference. The Deeds of Trust name MERS as
121009_1.DOC3
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beneficiary solely as nominee for the Lender as set forth in Exhibit 3 attached hereto.
GENERAL ALLEGATIONS(As to the MERS System)
7. The MERS system, as it now is widely used today in the United States, is an
electronic registry that purportedly attempts track ownership of and servicing rights in
home loans. After their origination, the notes for the home loans are packaged and sold as
securities by being transferred or assigned into various mortgage-backed security pools
outside of the MERS system. The deeds of trust, which were originally designed as
security for the notes repayment, are split apart from their notes and then retained by
MERS in that MERS is named as the beneficiary under the deeds of trust in the capacity
as nominee for the original Lender named on the note and the deed of trust.
8. Upon information and belief, Defendants either participated in the creation
of MERS, are contributing shareholders and/or directors of MERS, Inc., are members of
MERS; routinely utilize the MERS system, and/or act as trustees for members of MERS
or entities affiliated with the MERS system.
9. Upon their origination, Plaintiffs loans were placed into the MERS system,
as reflected in their deeds of trust designating MERS as the beneficiary and the purported
nominee for the Lender.
10. Upon information and belief, at a precise date presently unknown to
Plaintiffs, Plaintiffs notes, which were originally secured by their respective deeds of
trust, became unsecured because the notes were separated from their deeds of trust
through the process of the notes being securitized, transferred and/or assigned to
mortgage-backed security pools, the interest in which was later sold to various investors,
who had no interest in, or relationship to, the deeds of trust, rendering the obligation under
the notes unsecured.
11. Notwithstanding the fact that the underlying obligations, which were
originally secured by deeds of trust on the houses owned by Plaintiffs, were transferred
and sold to third parties, thereby destroying the secured nature of the obligations,
121009_1.DOC4
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Defendants named in the claims herein continue to attempt to enforce the terms of said
obligations evidenced by the notes through the use of the deeds of trust as if they are still
securing the interest in the notes, which have been transferred, assigned, and sold to others
and are no longer secured.
12. Defendants named in the claims herein, as either MERS members or entities
that routinely use the MERS system, participated in and/or are cognizant of the practice
by which the actual beneficial interest in loans (i.e., the right to payment evidenced by the
note) is separated from the deeds of trust and is transferred outside of the MERS system
and placed in mortgage-backed security pools and sold to investors.
13. Upon information and belief, by virtue of this systematic practice of
transferring, assigning, and selling the notes, the interest in which is divided into parts and
packaged in different mortgage-backed securities, Defendants, and each of them, have no
knowledge as to the true owner(s) of the debts, to whom Plaintiffs may owe the money.
The debt has been satisfied by sale to a third-party and its payment, as described herein,
leaving no obligation owed to Defendants. However, Defendants, and each of them,
willfully ignore the rights of the true owners of the debt by trying to enforce the terms of
invalid deeds of trust through attempted foreclosures, despite knowledge that the debt has
been satisfied as described herein and is unsecured, leaving no obligation owed to
Defendants.
14. Even if the true owner(s) of Plaintiffs notes were readily identifiable
through the MERS system, by virtue of splitting and separating the deeds of trust from the
promissory notes, the deeds of trust are without force and the debt obligations become
unsecured.
15. MERSCORP, Inc. has publicly stated:
a. The MERS web site enables you to target directly your MERS
Ready products and services to MERS members.
b. Commercial originators and issuers save hundreds to thousands of
dollars (in the case of cross-collateralized loans) in preparing and recording assignments.
121009_1.DOC5
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Where the originator has not recorded a MERS as Original Mortgagee (MOM) security
instrument, the issuer saves the costs of assigning to the Trust by having the originator
assign to MERS. (Emphasis added.)
c. It will reduce risk and generate more profits for lenders because the
Notes registered on it will be in electronic format. It shortens the timeframe between the
closing and the securitization of the loan, enabling the Note to move instantly, creating
faster funding. (Emphasis added.)
16. MERSCORP, Inc.s rules and by-laws, to which MERS Members agree,
require the following:
BY COMPLETING, SIGNING, AND SUBMITTING THISAPPLICATION, THE APPLICANT IS AGREEING TO BE A MERS MEMBER. THE APPLICANT HEREBY AGREES TO PAY ALL FEES AND EXPENSES SET FORTH IN THE MERS RESIDENTIAL FEE SCHEDULE, WHICH MAY CHANGE FROM TIME TO TIME; ABIDE BY ALL EXISTING MERS RULES AND PROCEDURES, WHICHARE INCORPORATED HEREIN BY REFERENCE AND MAY BE AMENDED FROM TIME TO TIME; AND COMPLY WITH THE TERMS AND CONDITIONS SET FORTH IN THE ATTACHED ADDENDUM ENTITLED TERMS AND CONDITIONS.
(Emphasis in original.)
17. The MERSCORP, Inc. rules and by-laws, to which MERS Members agree,
cannot be carried out lawfully because they require the following:
1. MERS, which shall include MERSCORP, Inc. and Mortgage
Electronic Registration Systems, Inc., and the Member shall abide by these Terms
and Conditions, the Rules and Procedures (collectively, the Governing
Documents), copies of which will be supplied upon request. The Governing
Documents shall be a part of the terms and conditions of every transaction that the
Member may make or have with MERS or the MERS System either directly or
through a third party. The Member shall be bound by any amendment to any of the
Governing Documents.
2. The Member, at its own expense, shall promptly, or as soon as
121009_1.DOC6
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practicable, cause MERS to appear in the appropriate public records as the
mortgagee of record with respect to each mortgage loan that the Member
registers on the MERS System. MERS shall serve as mortgagee of record with
respect to all such mortgage loans solely as a nominee, in an administrative
capacity, for the beneficial owner or owners thereof from time to time. MERS
shall have no rights whatsoever to any payments made on account of such
mortgage loans, to any servicing rights related to such mortgage loans, or to any
mortgaged properties securing such mortgage loans. MERS agrees not to assert
any rights (other than rights specified in the Governing Documents) with respect
to such mortgage loans or mortgaged properties. References herein to
mortgage(s) and mortgagee of record shall include deed(s) of trust and
beneficiary under a deed of trust and any other form of security instrument under
applicable state law.
***
6. MERS and the Member agree that: (i) the MERS System is not a
vehicle for creating or transferring beneficial interests in mortgage loans, (ii)
transfers of servicing interests reflected on the MERS System are subject to the
consent of the beneficial owner of the mortgage loans, and (iii) membership in
MERS or use of the MERS System shall not modify or supersede any agreement
between or among the Members having interests in mortgage loans registered on
the MERS System.
(Emphasis added.)
FIRST CLAIM FOR RELIEF
Violation of A.R.S. 33-420 (False Documents)
(As to Americas Servicing Co., Aurora Loan Services, L.L.C., Bank of America dba BAC Home Loans Servicing, L.P.,
The Bank of New York Mellon, Central Mortgage Company, MERS, Inc., QualityLoan Service Corporation, Recontrust Company, N.A.,
and U.S. Bank National Association)18. Plaintiffs incorporate by this reference each and every paragraph of this
121009_1.DOC7
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Complaint as if fully set forth in this claim.
19. A.R.S. 33-420(A) provides that a person purporting to claim an interest
in, or a lien or encumbrance against, real property, who causes a document asserting such
claim to be recorded in the office of the county recorder, knowing or having reason to
know that the document is forged, groundless, contains a material misstatement or false
claim or is otherwise invalid is liable to the owner . . . of the real property for the sum of
not less than five thousand dollars, or for treble the actual damages caused by the
recording, whichever is greater, and reasonable attorney fees and costs of the action.
20. A.R.S. 33-420(B) provides that the owner of the property may bring an
action to clear title as to the real property as provided for in the rules of procedure for
special actions, and such action may be brought based on the ground that the lien is
forged, groundless, contains a material misstatement or false claim or is otherwise
invalid. As indicated more particularly below, the documents giving rise to this claim
are forged, groundless, contain material misstatements as to the identity of the party
named in the document or are otherwise invalid.
21. A.R.S. 33-420(D) provides that [a] document purporting to create an
interest in, or a lien or encumbrance against, real property not authorized by statute,
judgment or other specific legal authority is presumed to be groundless and invalid.
Thomas and Laurie Bilyea
22. On or about November 15, 2006, Defendant MERS, Inc. and/or nonparty
Downey Savings & Loan Association caused to be recorded a Corporate Assignment of
Deed of Trust related to the Bilyea property whereby Defendant Downey Savings & Loan
Association attempted to assign the deed of trust on the Bilyea property, together with all
interest secured thereby . . . to Mortgage Electronic Registration Systems, Inc., as
nominee for Central Mortgage Company.1 Said document was purportedly signed by
Crystal Moore, as Vice President for Downey Savings & Loan Association.
23. On or about October 13, 2009, Defendant MERS, Inc. caused to be recorded
8
1 See Corporate Assignment of Deed of Trust attached as Exhibit 33, incorporated herein by this reference.
121009_1.DOC
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an Assignment of Mortgage related to the Bilyea property whereby Defendant MERS
attempted to assign the mortgage on the Bilyea property, to Central Mortgage
Company.2 Said document was purportedly signed by Tonya L. Hill, acting as an
assistant secretary for MERS.
24. The document referred to in the immediately preceding paragraph was false
because MERS purported to transfer all its beneficial interest in the deed of trust
referenced in the documents to Central Mortgage Company; however, MERS had no
beneficial interest because it was named in the original deed of trust in the capacity solely
as nominee for Lender, and because it had no interest in the underlying Note or in any
proceeds from the underlying Note. Further, upon information and belief, the assignment
was robosigned in that it was notarized in blank prior to being signed on behalf of
MERS, and the party that is represented to have signed the document, Tonya L. Hill, did
not sign the document and/or did not have the authority to sign the document and/or did
not have knowledge of the representations contained in the document.
25. On or about September 3, 2009, Defendant Central Mortgage Company
caused to be recorded a Substitution of Trustee related to the Bilyea property whereby
Defendant Central Mortgage Company attempted to substitute Michael A. Bosco, Jr. as a
Successor Trustee under the Bilyea Deed of Trust.3 Said document was purportedly
signed by Janice Davis, acting as a vice president for Central Mortgage Company.
26. The document referred to in the immediately preceding paragraph was false
because it was made based on an invalid assignment of the deed of trust to Central
Mortgage Company, and Central Mortgage Company did not have the requisite authority
to appoint a successor trustee. Further, upon information and belief, the substitution of
trustee was robosigned in that it was notarized in blank prior to being signed on behalf
of Central Mortgage Company, and the party that is represented to have signed the
document, Janice Davis, did not sign the document.
27. Defendant Central Mortgage Company authorized or directed the recording2 See Assignment of Mortgage attached as Exhibit 34, incorporated herein by this reference.
9121009_1.DOC
3 See Substitution of Trustee attached as Exhibit 35, incorporated herein by this reference.
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of a Notice of Trustees Sale, dated September 10, 2009, against the Bilyea property
whereby Michael A. Bosco, acting as trustee, noticed the sale of the Bilyea property for
December 10, 2009.4 This document listed the current beneficiary as Central Mortgage
Company.
28. The document referred to in the immediately preceding paragraph was false
because it does not list the true beneficiary under the deed of trust because it is part of a
chain of documents that was based on an invalid assignment of the beneficial interest in
the deed of trust for the Bilyea property as described above. Further, upon information
and belief, the notice of trustees sale was robosigned in that it was notarized in blank
prior to being signed on behalf of Michael A. Bosco, and the party that is represented to
have signed the document, Michael A. Bosco, did not sign the document, and the party
that did sign the document had no personal knowledge of any of the facts set forth in the
notice.
29. On or about January 11, 2010, Defendants MERS and/or Central Mortgage
Company caused to be recorded an Assignment of Deed of Trust whereby MERS,
representing itself as the holder of the Bilyea deed of trust, assigned the Bilyea deed of
trust together with the note(s) and obligations therein described and the money due and
to become due thereon with interest to Central Mortgage Company.5 This document was
purportedly signed by Lou Ann Howard in the capacity as a Vice President of MERS.
30. The document described in the immediately preceding paragraph was false
because it was based on an invalid assignment of the beneficial interest in the Bilyea deed
of trust as described herein, and because MERS purported to assign the note secured by
the deed of trust, when it had no interest in the note, or the proceeds of the note, and no
possession of the note, as the note had been transferred to a mortgage backed security pool
as described in Exhibit 3. Further, upon information and belief, the assignment was
robosigned in that it was notarized in blank prior to being signed on behalf of Lou Ann
4 See Notice of Trustees Sale attached as Exhibit 36, incorporated herein by this reference.
10
5 See Assignment of Deed of Trust dated January 11, 2010 attached hereto as Exhibit 37, incorporated herein by this reference.
121009_1.DOC
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Howard, and the party that is represented to have signed the document, Lou Ann Howard,
did not sign the document, was not a vice president of MERS, and the party that did sign
the document had no personal knowledge of any of the facts set forth in the notice.
Nicholas DeBaggis
31. Defendants MERS, Inc. and/or U.S. Bank National Association caused to be
recorded a Corporate Assignment of Deed of Trust related to the DeBaggis property
whereby Defendant MERS, Inc. attempted to assign all beneficial interest in the deed of
trust on the DeBaggis property, together with the note or notes therein described . . . the
money due and to become due thereon with interest, and all rights accrued or to accrue
under said Deed of Trust.6 Said document was purportedly signed by Jennifer Hamlin
acting as an assistant secretary for MERS, Inc. Upon information and belief, Jennifer
Hamlin did not have authority to sign the document in the capacity as an assistant
secretary for MERS, Inc. because she was not employed by MERS, Inc. and/or because
she was not an officer of the MERS member on whose behalf the document was signed.
Further, Jennifer Hamlin lacked any knowledge of any of the representations contained in
the document.
32. The document referred to in the immediately preceding paragraph was false
because MERS purported to transfer all its beneficial interest in the deed of trust
referenced in the documents to U.S. Bank National Association, as Trustee for
WFMBS2007-007 by its Attorney in fact Wells Fargo Bank, N.A., successor by merger to
Wells Fargo Home Mortgage Inc.; however, MERS had no beneficial interest because it
was named in the original deed of trust in the capacity solely as nominee for Lender, and
because it had no interest in the underlying Note or in any proceeds from the underlying
Note. Further, upon information and belief, the assignment was robosigned in that it
was notarized in blank prior to being signed on behalf of MERS, and the party that is
represented to have signed the document, Jennifer Hamlin, did not sign the document
and/or did not have the authority to sign the document and/or did not have knowledge of
11121009_1.DOC
6 See Corporate Assignment of Deed of Trust attached as Exhibit 6.
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the representations contained in the document.
33. Defendant U.S. Bank National Association, acting as Trustee for
WFMBS2007-007 by its Attorney in fact Wells Fargo Bank, N.A., successor by merger to
Wells Fargo Home Mortgage Inc., based on the assignment referred to above, caused to
be recorded a Substitution of Trustee, which was purportedly notarized on February 6,
2009, whereby Michael A. Bosco, Jr. was substituted as trustee under the deed of trust
related to the DeBaggis property.7 This document was false because it was made based on
an invalid assignment of the deed of trust to U.S. Bank National Association, and U.S.
Bank National Association did not have the requisite authority to appoint a successor
trustee. Further, upon information and belief, the substitution of trustee was robosigned
in that it was notarized in blank prior to being signed on behalf of U.S. Bank National
Association, and the party that is represented to have signed the document, Mark S.
Bosco, did not sign the document.
34. Defendant U.S. Bank National Association authorized or directed the
recording of a Notice of Trustees Sale Arizona, dated February 6, 2009, against the
DeBaggis property whereby Michael A. Bosco, Jr., acting as trustee, noticed the sale of
the DeBaggis property for May 8, 2009.8 This document listed the current beneficiary as
U.S. Bank National Association, as Trustee for WFMBS 2007-007.
35. The document referred to in the immediately preceding paragraph was false
because it does not list the true beneficiary under the deed of trust because it is part of a
chain of documents that was based on an invalid assignment of the beneficial interest in
the deed of trust for the DeBaggis property as described above. Further, upon information
and belief, the notice of trustees sale was robosigned in that it was notarized in blank
prior to being signed on behalf of Michael A. Bosco, Jr., and the party that is represented
to have signed the document, Michael A. Bosco, did not sign the document, and the party
that did sign the document had no personal knowledge of any of the facts set forth in the
notice.7 See Substitution of Trustee attached as Exhibit 7.
12121009_1.DOC
8 See Notice of Trustees Sale attached as Exhibit 8.
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Edel Napoles Molina and Maria E. Hernandez
36. Defendants MERS caused to be recorded a Substitution of Trustee, which
was purportedly notarized on April 3, 2009, whereby Executive Trustee Services, LLC
was substituted as trustee under the deed of trust related to the Molina-Hernandez
property.9 This document was false because it was made based on an invalid designation
of beneficiary and MERS did not have the requisite authority to appoint a successor
trustee. Further, upon information and belief, the substitution of trustee was robosigned
in that it was notarized in blank prior to being signed on behalf of MERS and the party
that is represented to have signed the document, Cindy Sandoval, did not sign the
document.
37. Defendant MERS authorized or directed the recording of a Notice of
Trustees Sale Arizona, dated April 3, 2009, against the Molina-Hernandez property
whereby Executive Trustee Services, LLC, acting as trustee, noticed the sale of the
Molina Hernandez property for July 10, 2009.10 This document listed the current
beneficiary as Mortgage Electronic Systems, Inc.
38. The document referred to in the immediately preceding paragraph was false
because it does not list the true beneficiary under the deed of trust because it listed MERS
as holding the sole beneficial interest in the deed of trust for the Molina-Hernandez
property as described above. Further, upon information and belief, the notice of trustees
sale was robosigned in that it was notarized in blank prior to being signed on behalf of
Marvell L. Carmouche, Limited Signing Officer, and the party that is represented to have
signed the document, Marvell L. Carmouche, did not sign the document, and the party that
did sign the document had no personal knowledge of any of the facts set forth in the
notice.
David Rinehimer and Ugeth Rinehimer
39. On or about November 24, 2008, Defendants MERS, Inc. and/or Aurora
Loan Services, LLC. caused to be recorded a Corporate Assignment of Deed of Trust 9 See Substitution of Trustee attached as Exhibit 38, incorporated herein by this reference.
13121009_1.DOC
10 See Notice of Trustees Sale attached as Exhibit 39, incorporated herein by this reference.
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related to the David Rinehimer and Ugeth Rinehimer property whereby Defendant MERS,
Inc. attempted to assign the deed of trust on the David Rinehimer and Ugeth Rinehimer
property, together with the note . . . together with all moneys now owing or that may
hereafter become due or owing in respect thereof.11 Said document was purportedly
signed by Joann Rein acting as a Vice President for MERS, Inc. Upon information and
belief, Joann Rein did not have authority to sign the document in the capacity as a Vice
President for MERS, Inc. because she was not employed by MERS, Inc. and/or because
she was not an officer of the MERS member on whose behalf the document was signed.
Further, Joann Rein lacked any knowledge of any of the representations contained in the
document.
40. The document referred to in the immediately preceding paragraph was false
because MERS purported to transfer all its beneficial interest in the deed of trust
referenced in the documents, and the Rinehimer note, to Aurora Loan Services, LLC;
however, MERS had no beneficial interest because it was named in the original deed of
trust in the capacity solely as nominee for Lender, and because it had no interest in the
underlying Note or in any proceeds from the underlying Note. Further, upon information
and belief, the assignment was robosigned in that it was notarized in blank prior to
being signed on behalf of MERS, and the party that is represented to have signed the
document, Joann Rein, did not sign the document and/or did not have the authority to sign
the document and/or did not have knowledge of the representations contained in the
document.
41. On or about November 18, 2008, Defendant MERS caused to be recorded a
Notice of Substitution of Trustee, which was purportedly notarized on November 18,
2008, whereby Cal-Western Reconveyance Corporation was substituted as trustee under
the deed of trust related to the Rinehimer property.12 This document was false because it
was made based on a pending invalid assignment of the deed of trust to Aurora Loan 11 See Corporate Assignment of Deed of Trust attached as Exhibit 40, incorporated herein by this reference.
14
12 See Notice of Substitution of Trustee attached as Exhibit 41, incorporated herein by thisreference.
121009_1.DOC
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Services, LLC signed six days later on November 24, 2008 (described above), and neither
MERS or Aurora Loan Services, LLC had the requisite authority to appoint a successor
trustee. Further, upon information and belief, the substitution of trustee was robosigned
in that it was notarized in blank prior to being signed on behalf of MERS, and the party
that is represented to have signed the document, Joe Krasovic, did not sign the document
and/or did not have the authority to sign the document as an assistant secretary of
MERS.
42. Defendants MERS and/or Aurora Loan Services, LLC authorized or
directed the recording of a Notice of Trustees Sale Arizona, dated November 18, 2008,
against the Rinehimer property whereby Cal-Western Reconveyance Corporation, acting
as trustee, noticed the sale of the Rinehimer property for February 23, 2009.13 This
document listed the current beneficiary as Mortgage Electronic Registration Systems,
Inc. This document was signed by Joe Krasovic in the capacity as an AVP for Cal-
Western Reconveyance Corporation.
43. The document referred to in the immediately preceding paragraph was false
because it does not list the true beneficiary under the deed of trust. Further, upon
information and belief, the notice of trustees sale was robosigned in that it was
notarized in blank prior to being signed on behalf of Joe Krasovic, and the party that is
represented to have signed the document, Joe Krasovic, did not sign the document, and
the party that did sign the document had no personal knowledge of any of the facts set
forth in the notice.
Jonathan Robinson and Sally Robinson-Burke
44. Defendants MERS, Inc. and/or U.S. Bank National Association caused to be
recorded an Assignment of Deed of Trust related to the Robinson property whereby
Defendant MERS, Inc. purported to assign all beneficial interest in the deed of trust on
the Robinson property, together with the note or notes therein described . . . the money
due and to become due thereon with interest, and all rights accrued or to accrue under said
15121009_1.DOC
13 See Notice of Trustees Sale attached as Exhibit 42, incorporated herein by this reference.
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Deed of Trust. Said document was purportedly signed by Jennifer Hamlin acting as an
assistant secretary for MERS, Inc. Upon information and belief, Jennifer Hamlin did not
have authority to sign the document in the capacity as an assistant secretary for MERS,
Inc. because she was not employed by MERS, Inc. and/or because she was not an officer
of the MERS member on whose behalf the document was signed.14 Further, Jennifer
Hamlin lacked any knowledge of any of the representations contained in the document.
45. The document referred to in the immediately preceding paragraph was false
because MERS purported to transfer all its beneficial interest in the deed of trust
referenced in the documents to U.S. Bank National Association, as Trustee for the
Structured Asset Securities Corporation, Series 2006-GEL3 c/o ASC, when MERS had no
beneficial interest because it was named in the original deed of trust in the capacity solely
as nominee for Lender, and because it had no interest in the underlying Note or in any
proceeds from the underlying Note. Further, upon information and belief, the assignment
was robosigned in that it was notarized in blank prior to being signed on behalf of
MERS, and the party that is represented to have signed the document, Jennifer Hamlin,
did not sign the document and/or did not have the authority to sign the document and/or
did not have knowledge of the representations contained in the document.
46. Defendant U.S. Bank National Association, acting as Trustee for the
Structured Asset Securities Corporation, Series 2006-GEL3 by Wells Fargo Bank, N.A.,
as attorney in fact, based on the assignment referred to above, caused to be recorded a
Substitution of Trustee dated February 15, 2008, whereby Michael A. Bosco, Jr. was
substituted as trustee under the deed of trust related to the Robinson property. This
document was false because it was made based on an invalid assignment of the deed of
trust to U.S. Bank National Association, and U.S. Bank National Association did not have
the requisite authority to appoint a successor trustee. Further, upon information and
belief, the substitution of trustee was robosigned in that it was notarized in blank prior
to being signed on behalf of U.S. Bank National Association, and the party that is 14 Assignment of Deed of Trust attached as Exhibit 21, incorporated herein by this reference.
121009_1.DOC16
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represented to have signed the document, Mark S. Bosco, did not sign the document.15
47. Defendant Americas Servicing Company and/or Defendant Wells Fargo
Bank caused to be recorded on January 18, 2009 a Notice of Substitution of Trustee dated
December 3, 2008 related to the Robinson property that listed Americas Servicing
Company as the beneficiary, but wherein Wells Fargo Bank, N.A., Attorney in Fact for
US Bank National Association, as Trustee for the Structured Asset Securities Corporation,
Series 2006 GEL3 was referred to as the undersigned beneficiary.16 This document
was false because it was made, upon information and belief, based on an invalid
assignment of the deed of trust and/or because it listed Americas Servicing Company as
the beneficiary, which was untrue. Further, upon information and belief, the notice of
trustees sale was robosigned in that it notarized in blank prior to being signed or
notarized non-contemporaneously with the execution of the signature purported to be
acknowledged and/or the person who was represented to have signed the document, China
Brown, was not the party who signed it and/or did not have the authority to sign the
document on behalf of Wells Fargo Bank as a Vice President of Loan Documentation.
48. Defendant Americas Servicing Company caused to be recorded a Notice of
Trustees Sale dated December 3, 2008 related to the Robinson property that listed
Americas Servicing Company as the beneficiary.17 This document was false because it
was made, upon information and belief, based on an invalid assignment of the deed of
trust and/or because it listed Americas Servicing Company as the beneficiary, which was
untrue. Further, upon information and belief, the notice of trustees sale was robosigned
in that it notarized in blank prior to being signed or notarized non-contemporaneously
with the execution of the signature purported to be acknowledged based on the signer
being represented to be Wendy Randall of First American Title Insurance Company in
Texas, and the notary, Stephanie Ong, was located in California.
15 See Substitution of Trustee attached as Exhibit 22, incorporated herein by this reference. 16 See Notice of Substitution of Trustee dated December 3, 2008 attached as Exhibit 23, and incorporated herein by this reference.
17
17 See Notice of Trustees Sale dated December 3, 2008 attached as Exhibit 24, and incorporatedherein by this reference.
121009_1.DOC
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49. Defendant Americas Servicing Company caused to be recorded a Notice of
Trustees Sale dated December 30, 2008 related to the Robinson property that listed
Americas Servicing Company as the beneficiary.18 This document was false because it
was made, upon information and belief, based on an invalid assignment of the deed of
trust and/or because it listed Americas Servicing Company as the beneficiary, which was
untrue. Further, upon information and belief, the notice of trustees sale was robosigned
in that it notarized in blank prior to being signed or notarized non-contemporaneously
with the execution of the signature purported to be acknowledged based on the signer
being represented to be Hank Duong of First American Title Insurance Company in
Texas, and the notary, Megan Tortora, was located in California.
Rosa Silvas
50. Defendants Recontrust Company, and/or MERS, and/or The Bank of New
York Mellon caused to be recorded the following documents related to the Silvas
property:a. A Corporation Assignment of Deed of Trust Arizona dated
November 30, 2009 whereby Mortgage Electronic Registration Systems, Inc. purported
to assign all beneficial interest in the deed of trust executed by Rosa A. Silvas as
trustor to The Bank of New York Mellon fka The Bank of New York as succssor to JP
Morgan Chase Bank, N.A. as Trustee of SAMI II 2006-AR3 together with the note or
notes therein described . . . the money due and to become due thereon with interest, and
all rights accrued or to accrue under said deed of trust/mortgage.19
b. A Substitution of Trustee Arizona dated December 3, 2009 (but
recorded on December 1, 2009) whereby The Bank of New York Mellon fka The Bank
of New York as successor to JP Morgan Chase Bank, N.A. as Trustee of SAMI II 2006-
18 See Notice of Trustees Sale dated December 30, 2008 attached as Exhibit 25, incorporatedherein by this reference.
121009_1.DOC18
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AR3, acting as undersigned beneficiary, appointed Recontrust Company, N.A. as a
successor trustee under the Silvas deed of trust.20 This document was not signed and it
was not notarized, and Plaintiff disputes its validity.
c. A Notice of Trustees Sale Arizona dated December 3, 2009 (but
recorded on December 1, 2009) whereby Recontrust Company, N.A., acting as trustee,
noticed the sale of the Silvas property for March 8, 2010.21 This document listed the
current beneficiary as Bank of New York. This document was not notarized, but bears
a signature on behalf of Recontrust Company, N.A. by David B. [illegible], and Plaintiff
disputes its validity
d. A Statement of Breach or Non Performance and Election to Sell
Under Deed of Trust Arizona dated December 3, 2009 was issued by Beneficiary/Agent
BAC Home Loans Servicing, L.P. (which company is an affiliate or subsidiary of
Defendant Bank of America) and bears a signature that appears the same as the
signature on the Notice of Trustees Sale referred to in the immediately preceding
subparagraph.22
e. A Statement of Breach or Non Performance and Election to Sell
Under Deed of Trust Arizona dated March 12, 2010 was issued by Beneficiary/Agent
19 See Corporation Assignment of Deed of Trust attached as Exhibit 26, incorporated herein by this reference.20 See Substitution of Trustee Arizona attached as Exhibit 27, incorporated herein by this reference.21 See Notice of Trustees Sale Arizona attached as Exhibit 28, incorporated herein by this reference.
19121009_1.DOC
22 See Statement of Breach of Non Performance and Election to Sell Under Deed of Trust Arizona attached as Exhibit 29, incorporated herein by this reference.
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BAC Home Loans Servicing, L.P and bears a signature by Darla Sprales.23
f. A Notice of Trustees Sale Arizona was recorded on March 9, 2010
(but was dated March 12, 2010) whereby Recontrust Company, N.A., as Trustee, noticed
the sale of the Silvas property for June 16, 2010. This document lists the current
beneficiary as Bank of New York and was purportedly signed by Darla Sprales, but is
not notarized, and Plaintiff disputes its validity.24
51. The documents referred to in the immediately preceding paragraph were
false because:
a. Mortgage Electronic Registration Systems, Inc. purported to assign
all beneficial interest in the deed of trust executed by Rosa A. Silvas together with the
note or notes therein described . . . the money due and to become due thereon with
interest, and all rights accrued or to accrue under said deed of trust/mortgage, but
MERS had no beneficial interest in the deed of trust because MERS was listed on the
deed of trust solely in the capacity as nominee for the Lender, which was Americas
Wholesale Lender, and because MERS, by virtue of the Deed of Trust and its own
membership agreement, disclaims all beneficial interest in the security, any proceeds
from the note, and/or in the note itself.
23 See Statement of Breach of Non Performance and Election to Sell Under Deed of Trust Arizona attached as Exhibit 30, incorporated herein by this reference. This document appears to bear a stamped signature, as opposed to an actual signature, and, upon information and belief, was robosigned in that it was stamped by a party other than Darla Sprales, and the party stampingthe document did not have knowledge of the representations contained in the document. Ms. Sprales authority to sign this document on behalf of the purported beneficiary, BAC HomeLoans Servicing, L.P. is disputed.
20121009_1.DOC
24 See Notice of Trustees Sale Arizona attached as Exhibit 31, incorporated herein by this reference. This document appears to bear a stamped signature, as opposed to an actual signature, and, upon information and belief, was robosigned in that it was stamped by a party other than Darla Sprales, and the party stamping the document did not have knowledge of the representations contained in the document. Ms. Sprales authority to sign this document on behalf of the trustee, Recontrust, N.A., is disputed.
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b. The Notices of Trustee sale do not list the true beneficiary under the
deed of trust, and actually contradict the previous (invalid) assignment by virtue of
listing BAC Home Loans as the beneficiary.
c. Further, upon information and belief, the assignment was
robosigned in that it was notarized in blank prior to being signed on behalf of MERS,
and the party that is represented to have signed the document, Christina Balandran, did
not sign the document, and/or did not have the authority to sign the document, and/or did
not have knowledge of the representations contained in the document.
Milan Stejic
52. Defendants MERS, Inc. and/or Quality Loan Service Corporation (QLS)
caused to be recorded a Substitution of Trustee related to the Stejic property whereby
Defendant MERS, Inc. attempted to substitute QLS as the trustee on the Stejic property.25
Said document was purportedly signed by Jim Montes acting as Vice-President for
MERS, Inc. Montes did not have authority to sign the document in the capacity as a vice-
president for MERS, Inc. because he was not employed by MERS, Inc. or even by a true
beneficiary under the Stejic deed of trust, but instead was employed by QLS, and because
he was not an officer of either MERS, QLS, or Aurora, and none of these parties had a
legal interest in the Stejic Deed of Trust. Further, Montes lacked any knowledge of any of
the representations contained in the document.
53. The document referred to in the immediately preceding paragraph was false
because MERS, acting through a QLS employee, purported to substitute the trustee for the
deed of trust referenced in the documents to QLS; however, MERS was not the Lender,
121009_1.DOC21
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and was named in the original deed of trust in the capacity solely as nominee for Lender,
and because it had no interest in the underlying Note or in any proceeds from the
underlying Note. The Deed of Trust for the Stejic property, to be strictly construed in
favor of the borrower, specifically stated that only the Lender could substitute the
trustee, accelerate the debt, or direct the power of sale. Further, upon information and
belief, the assignment was robosigned in that it was notarized in blank prior to being
signedor notarized non-contemporaneously with the execution of the signature it was
purporting to acknowledge--- on behalf of MERS, and the party that is represented to have
signed the document, Jim Montes, did not sign the document and/or did not have the
authority to sign the document and/or did not have knowledge of the representations
contained in the document. The substitution was notarized in California by Sharina L.
Guzman, not contemporaneously with the Montes signature. On the same dayJanuary
27, 2009-- that QLS recorded the Notice and Sale and Substitution of Trustee signed by
Jim Montes for MERS upon the Stejic property, Jim Montes purportedly signed and
recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa
County Recorders Office. For an inconclusive example, on January 27, 2009, Jim
Montes purportedly signed on behalf of Mortgage Electronic Registration Systems, Inc. as
nominee for:
CTW Financial Services IncIndymac Federal Bank FSB
First Magnus Financial Corporation
Homefield Financial, Inc
SCME Mortgage Bankers, Inc.
Americash
22121009_1.DOC
25 See Substitution of Trustee attached as Exhibit 43, incorporated herein by this reference.
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New York Mortgage CompanyIndymac Federal Bank FSB
MorgtgageIT Indymac Federal Bank FSB. 26
Many of these were originating lenders who were out of business by January 27, 2009.
Many of the signatures appear visibly different than one another. At no time did Jim
Montes work for MERS or any of these entities; he worked for QLS.
54. Defendant MERS authorized or directed the recording of a Notice of
Trustees Sale Arizona, dated January 27, 2009, against the Stejic property whereby QLS,
acting as trustee, noticed the sale of the Stejic property for April 28, 2009.27 This
document listed the current beneficiary as Mortgage Electronic Registration Systems,
Inc. c/o Aurora Loan Services.
55. The document referred to in the immediately preceding paragraph was false
because it does not list the true beneficiary under the deed of trust because it is part of a
chain of documents that was based on an invalid designation and identification of the
beneficial interest in the deed of trust for the Stejic property as described above. Further,
upon information and belief, the notice of trustees sale was robosigned, for all of the
reasons mentioned above in paragraph 53, and the party that is represented to have signed
the document, Jim Montes, did not sign the document, and the party that did sign the
document had no personal knowledge of any of the facts set forth in the notice. Like the
Notice of Sale, this document was also notarized non-contemporaneously by some
purporting to be Sharina L. Guzman in San Diego County, California.
56. On or about December 10, 2009, Quality Loan Service Corporation, with
the knowledge of and/or at the direction of Defendant Aurora Loan Services, LLC, caused
to be recorded a Trustees Deed Upon Sale related to the Stejic residence showing that the
property had been conveyed to Defendant Aurora Loan Services LLC. The Trustees
26 These examples are publicly recorded at the Maricopa County Recorders Office as 20090067856 (re SCME Mortgage Bankers, Inc.), 20090067852 (re Americash), 20090067848 (re Homefield Financial), 20090067841 (re First Magnus), 20090067366 (re The New York Mortgage Company), 20090067364 ( re CTW Financial Services), 20090067362 (re MortgageIt), and copies are attached as Exhibits 44 through 50, incorporated herein by this reference.
23121009_1.DOC
27 See Notice of Trustees Sale attached as Exhibit 51, incorporated herein by this reference.
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Deed was signed by Karla Sanchez, a robosigner employee of QLS. In the span of three
months, Sanchez signed and recorded over one hundred Trustees Deeds Upon Sale in the
Maricopa County Recorders Office, and in many of them, the signatures appear very
different.28 In addition, the Trustees Deed avows that The Grantee Herein IS the
Foreclosing Beneficiary and that the Foreclosing Beneficiary paid $1,275,574.22 at the
sale. Both of these assertions are false. Aurora claims to be the bidding beneficiary
although the sale was directed by claimed beneficiary MERS itself. Moreover, Aurora did
not pay this money at the sale, nor does it accurately reflect the amount of the unpaid
debt together with costs. Moreover, the document was false because Karla Sanchez
lacked any personal knowledge of the facts set forth in the deed, the facts were not
accurate, and Michelle Nguyen did not contemporaneously acknowledge the signature as
avowed.
57. Finally, the information was false because it ignored the securitization that
allegedly occurred in 2007. By this time, the securitization trust was closed. By the
specific terms of the Pooling and Servicing Agreement and name alone, a 2007 REMIC
Trust must be funded within 90 days of closing. Therefore, it was factually impossible
under the principles of securitization and the Trust Pooling and Servicing Agreement to
transfer a defaulted note out of a closed REMIC Trust into which it had not even been
accurately conveyed. 58. The Trustees Deed Upon Sale is a legal fiction and demonstrates all of the
Defendants have engaged in deceptive behavior in order to be unjustly enriched.
59. The documents described herein were recorded at the offices of Maricopa
County Recorder (as to Bilyea, DeBaggis, Molina-Hernandez, Rinehimer, and Stejic) the
Pima County Recorder (as to Robinson), and the Santa Cruz County Recorder (as to
24
28 E.g. Compare Recorded Documents # 20091134442 (Stejic Trustees Deed), attached as Exhibit 52, incorporated herein by this reference, with Trustees Deeds Upon Sale recorded under Maricopa County Recorders Document Numbers 20100296061, 20100394735, 20100370570, and 20100436390, copies of which are attached as Exhibits 53 through 56, incorporated herein by this reference.
121009_1.DOC
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Silvas) by Defendants named above in this claim for relief, who knew or had reason to
know, that the documents were robosigned (or forged), contained false claims, or were
otherwise invalid based on MERSs status as making the assignments as beneficiary
when it had no beneficial interest in the deed of trust subject to the assignment, it was not
the Lender, it was not the party to whom the money was owed, and it had no interest in
the note secured by the deed of trust, and therefore constitute a violation of A.R.S. 33-
420(A).
60. Plaintiffs did not learn, or have reason to know, that the documents listed in
this claim for relief were false, until within one year of the filing of this Consolidated
Amended Complaint, after consulting with counsel and investigation based on publicity in
the news media that occurred on or about October 3, 2010, related to robosigners who
signed numerous mortgage foreclosure documents on behalf of national lenders.29
61. As a result of the recording of the documents listed in this claim for relief,
Plaintiffs Bilyea, DeBaggis, Molina-Hernandez, Rinehimer, Robinson, Silvas, and Stejic,
and others similarly situated, were damaged by the clouding of their title to their property
and were damaged as a result of incurring attorneys fees and costs in connection with
bringing this action.
SECOND CLAIM FOR RELIEF
Wrongful Foreclosure
(As to Defendants Americas Servicing Company, Aurora Loan Services, L.L.C., Central Mortgage Company, Citimortgage, Inc., Countrywide Home Loans, Inc.,
Recontrust, N.A., Litton Loan Servicing, L.P., LSI Title Company of Oregon, L.L.C., Wells Fargo, U.S. Bank National Association, and MERS, Inc.) 62. Plaintiffs incorporate by this reference each and every paragraph of this
25121009_1.DOC
29 See exhibits 2 through 22 to Motion for Leave to File Amended Complaint filed January 13, 2011 (Doc. 1229), incorporated herein by this reference.
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Complaint as if fully set forth in this claim.
63. In addition to the factual allegations set forth in first claim for relief above,
the specific facts supporting the claims of Plaintiffs Bilyea, DeBaggis, Molina-Hernandez,
Rinehimer, Robinson, Silvas, and Stejic, who are Arizona residents, for wrongful
foreclosure are contained in Exhibit 3 at paragraphs 17-21 (Bilyea), 45 (DeBaggis), 212-
214 (Molina-Hernandez), 245 (Rinehimer), 248-314 (Robinson), 326-389 (Silvas), and
396-404 (Stejic),30 respectively, incorporated herein by this reference.
64. The specific facts supporting the claim of Plaintiff Villalva, a California
resident, for wrongful foreclosure are contained in Exhibit 3 at paragraphs 449-476,
incorporated herein by this reference.
65. The specific facts supporting the claims of Plaintiffs Leon and Rodriguez,
who are Oregon residents, for wrongful foreclosure are contained in Exhibit 3 at
paragraphs 157-165, incorporated herein by this reference.
66. The specific facts supporting the claims of Plaintiffs Freeman and Youmans,
who are South Carolina residents, are contained in Exhibit 3 at paragraphs 87-90
(Freeman) and 483-486 (Youmans), incorporated herein by this reference.
67. Plaintiffs claims, and those of others similarly situated, for wrongful
foreclosure are based on the fact that the deeds of trust which were intended to be security
for their notes are no longer security for the notes, making the notes not subject to
collection as a secured debt, and the properties not subject to foreclosure proceedings as
alleged in more detail below, as well as the fact that the party seeking to foreclose is not
the holder of the note, has no interest in the note, and was not a proper assignee of the
deed of trust, as alleged herein.
68. Each Plaintiffs deed of trust defines Lender as a party other than MERS.
69. Each Plaintiffs deed of trust states that the deed of trust is a Security
26121009_1.DOC
30 The Substitution of Trustee and Assignment of Deed of Trust, Notice of Default and Election to Sell Under Deed of Trust, and Notice of Rescission of Declaration of Default related to the Villalva property are attached as Exhibits 10, 11, and 12, respectively.
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Instrument. (See, e.g., Silvas Deed of Trust, paragraph A.)31
70. Each Plaintiffs deed of trust states that
MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as nominee for Lender and Lenders successors and assigns. MERS is the beneficiary under this Security Instrument. (See, e.g., Silvas Deed of Trust, paragraph E.)
71. Each Plaintiffs deed of trust states that the Loan is the debt evidenced by
the Note, plus interest, any prepayment charges and late charges due under the Note, and
all sums due under the deed of trust, plus interest. (See, e.g., Silvas Deed of Trust,
paragraph H.)
72. Each Plaintiffs deed of trust states:
This Security Instrument secures to Lender (i) the repayment of the Loan, . . . (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note.
(See, e.g., Silvas Deed of Trust, pp. 2-3 (Transfer of Rights in the Property) (emphasis added).)
73. Each Plaintiffs deed of trust provides that:
Lender shall give notice to Borrower prior to acceleration . . .The notice shall specify:
(a) the default;(b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given
to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified
in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property.
The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument . . . and may invoke the power of sale . . ..
If Lender invokes the power of sale, Lender shall give written notice to Trustee of the occurrence of an event of default and of Lenders election to cause the Property to be sold.
(See, e.g., Silvas Deed of Trust, paragraph 22.)
74. Each Plaintiffs deed of trust also provides:
27
31 The Silvas Deed of Trust referred to throughout this claim is attached as Exhibit 32 and incorporated by this reference.
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Substitute Trustee. Lender may . . . appoint a successor trustee to any Trustee appointed hereunder.
(See, e.g., Silvas Deed of Trust, paragraph 24.)
75. Upon information and belief, each Plaintiffs note was to be secured by a
deed of trust; however, each Plaintiffs note was sold by each Plaintiffs Lender and/or
assigned to a party other than MERS without an attendant assignment of the deed of trust
originally designed to secure the repayment of the note.
76. MERS was never a party to the Note, is not named anywhere in the Note,
never possessed the Note or any rights to collect the proceeds due under the Note, and
never was the agent of the holder of the Note following closing for each Plaintiffs loan
described herein, and for the loans of other similarly situated.
77. MERS was not the Lender and never had any right to repayment of the
Loan.
78. MERS never held a valid interest in the Deed of Trust.
79. MERS was never a valid true beneficiary on the Deed of Trust because it
never had a right to repayment of the note which was to be secured by the Deed of Trust.
80. MERS does not satisfy the definition of beneficiary under A.R.S. 33-
801 as the person named or otherwise designated in a trust deed as the person for whose
benefit a trust deed is given, or the persons successor in interest.
81. MERS held its interest in the Deed of Trust separately from the Note.
82. The Restatement (Third) of Property: Mortgages 5.4(a) states:
A transfer of an obligation secured by a mortgage [the note] also transfers the mortgage [the deed of trust] unless the parties to the transfer agree otherwise.
83. The Lenders named in Exhibit 3 related to the Bilyea, DeBaggis, Freeman,
Leon-Rodriguez, Molina-Hernandez, Rinehimer, Robinson, Silvas, Stejic, Villalva, and
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Youmans deeds of trust32 were MERS members, or agents of MERS members, at all times
relevant hereto.
84. The Lenders named in this claim for relief attempted to agree that the
beneficial interest in the deed of trust was to be placed with MERS. Any party to whom
the Plaintiffs notes were sold as part of a sale to a mortgage backed security pool agreed
that the deed of trust was to remain with MERS as a part of the pooling and servicing
agreement.33
85. As a result of these agreements, the Plaintiffs notes were transferred and
sold without the transfer or assignment of the deed of trust, rendering the notes unsecured,
and not subject to foreclosure by any purported beneficiary in the deed of trust.
86. Further, because MERS never has an interest in the note, never holds the
note, and is not entitled to any payments due under the note, and is not an agent for the
holder of the note, it has no power to assign any beneficial interest in the note. Any
purported assignment by MERS of a beneficial interest in a note or a deed of trust
originally securing a note is void as a matter of law because MERS never had an, and has
no, interest to assign.
87. Regardless of any default or nonpayment of amounts due under the Notes,
the Notes are not subject to payment from the proceeds of any trustees sale under the
deed of trust because the Notes are no longer secured by the deed of trust as a result of the
splitting of the Notes from the deed of trust by retention of the interest in the deed of trust
apart from the Notes and/or a later assignment of the deed of trust after the Notes were
transferred.
88. The parties purchasing the right to payment under the Notes have been32 Downey Savings and Loan Association for Bilyea (Ex. 3, 17); Americas Brokers Conduit for DeBaggis (Ex. 3, 45); Sovereign Homes, Ltd. for Freeman (Ex. 3, 87); MeritageMortgage for Molina-Hernandez (Ex. 3, 212); Ownit Mortgage Solutions for Leon-Rodriguez (Ex. 3, 157); Federal Savings Bank for Rinehimer (Ex. 3, 245); WMCMortgage Corp. for Robinson (Ex. 3, 248), Americas Wholesale Lender for Silvas (Ex. 3, 326); Shelter Mortgage for Stejic (Ex. 3, 396); Home Capital Funding for Villalva (Exhibit 3, 449); and Advanced Financial Services for Youmans (Ex. 3, 483).
29121009_1.DOC
33See, e.g., excerpt of Securities and Exchange Commission Form 8-K Relating [to] the Pooling and Servicing Agreement for Structured Asset Mortgage Investments II, Inc. dated April 28, 2006, attached as Exhibit 9, Section 2.01.
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repaid through third-party payments received from credit default swap payments and/or
credit enhancements, discharging Plaintiffs obligations under the notes. A.R.S.
47-3602(A), Cal. Com. Code 3602(a), and N.R.S. 104.3602 provide that payments
made by or on behalf of a party obliged to pay the note to a party entitled to enforce it
discharges the obligation of the debtor.
89. The Defendant MERS Members named in this claim for relief wrongfully
foreclosed on the Bilyea, DeBaggis, Freeman, Leon-Rodriguez, Molina-Hernandez,
Rinehimer, Robinson, Silvas, Stejic, Villalva, and Youmans properties, and the properties
of others similarly situated, because:
a. the Notes were, as alleged herein, rendered unsecured and not subject
to foreclosure and/or
b. the documents on which the foreclosures were based were invalid
because the Corporation Assignment of Deed of Trust was executed by MERS under false
pretenses, i.e., MERS purported to transfer all interest in the Deed of Trust and the Note,
when MERS never had any interest in the Note, and any subsequent appointment of a
successor trustee by MERS and any notice of trustees sale issued by any successor trustee
appointed by MERS were invalid and/or
c. no party holding a note subject to foreclosure authorized MERS to
appoint a successor trustee or to commence foreclosure proceedings.
90. The Defendant MERS Members engaged in a pattern and practice of
wrongful foreclosure evidenced by the wrongful foreclosure on Plaintiffs Bilyea,
DeBaggis, Freeman, Leon-Rodriguez, Molina-Hernandez, Rinehimer, Robinson, Silvas,
Stejic, Villalva, and Youmans34 and on the wrongful foreclosure of similarly situated class
3034 The specific facts as to each named Plaintiffs foreclosure are listed in the attached Exhibit 3,
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members properties, whose properties were encumbered by a deed of trust that named
MERS as the beneficiary as nominee for the Lender named on the deed of trust. Said
class members include, but are not limited to, the named Plaintiffs who own property in
Arizona, California, Nevada, Oregon and South Carolina as listed in Exhibit 1, and which
properties were foreclosed upon as described in Exhibits 3, 4 and 5, which exhibits are
incorporated herein by this reference, and all others similarly situated in the states that
allow non-judicial foreclosures as listed on Exhibit 17 hereto, which is incorporated
herein by this reference.
91. As to Plaintiffs Freeman and Youmans in particular, Defendant MERS
caused Countrywide to attempt the wrongful foreclosure on Youmans property and it
caused Defendant Citimortgage to falsely foreclose on Plaintiff Freemans property.
92. Also as to Plaintiffs Freeman and Youmans, Defendant MERS took
affirmative action to cause Countrywide to commit the wrongful attempted foreclosure of
Youmans property and it caused and Citimortgage to wrongfully foreclosure on
Freemans property. Specifically, Defendants MERS, Countrywide, and Citimortgage
took the following actions which detrimentally affected the fairness of the Plaintiffs
foreclosure proceedings:
a. Through its business model, Defendant MERS falsely communicated
to Countrywide and Citimortgage, directly or indirectly, that Defendant Mortgage
Electronic Registration Systems, Inc. had the lawful ability to transfer Countrywide,
Citimortgage, and others the legal rights to foreclose on Plaintiffs property in the State of
incorporated herein by this reference.
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South Carolina;
b. Falsely communicated to the courts that Countrywide was the owner
and the note which was the subject matter of the Countrywide Foreclosure;
c. Falsely communicated to the courts, directly or indirectly, that
Citimortgage was the owner and the note which was the subject matter of the
Citimortgage Foreclosure;
d. Attempted to foreclosure on Youmans real property even though it
knew or should have known that Countrywide was not the real party in interest to the
foreclosure proceedings; and attempted foreclosure on the Freeman Property even though
it knew or should have known that Citimortgage was not the real party in interest to the
foreclosure proceedings;
e. Failed to give Youmans the statutory notice required when the note
was allegedly assigned; and
f. Concealed the true owners of the note and mortgage involved in the
Countrywide and Citimortgage Foreclosures.
93. As a direct and proximate result of the wrongful foreclosure as complained
above, Plaintiff Youmans suffered damages, not all inclusive, in the form of
embarrassment, stress, humiliation, loss of sleep, damage to his credit rating, and was
required to pay Countrywide a substantial sum of money in order to prevent his home
from being foreclosed upon, all in an amount to be proved at trial, but in no event less that
$100,000.00.
94. As a direct and proximate result of the wrongful foreclosure as complained
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above, Plaintiff Freeman suffered damages, not all inclusive, in the form of
embarrassment, stress, humiliation, loss of sleep, damage to his credit rating, all in an
amount to be proved at trial, but in no event less that $600,000.00.
95. Defendant MERS has caused thousands of wrongful foreclosures throughout
the state of South Carolina for the same or similar reasons alleged in this Claim for Relief.
Moreover, hundreds of foreclosures are pending before the Courts of South Carolina that
were cause by Defendant MERS and said pending foreclosures are also wrongful. The
wrongful actions committed by MERS against the South Carolina Class members are
identical to the wrongful foreclosure committed against the Plaintiffs Freeman and
Youmans.
96. Plaintiffs Bilyea, DeBaggis, Leon-Rodriguez, Molina-Hernandez,
Rinehimer, Robinson, Silvas, Stejic, and Villalva have also, as a direct and proximate
result of the wrongful foreclosures complained of herein, incurred attorneys fees and
costs in bringing this action, and have sustained other damages, including, but not limited
to, loss of money and property, stress, embarrassment, humiliation, and damage to
reputation and credit ratings.
THIRD CLAIM FOR RELIEF
Violation of N.R.S. 107.080
(As to Plaintiffs Aguilar, Duncan, Granados, Sandefur, and Van Blaircom AgainstCAL-WESTERN RECONVEYANCE CORP.; Plaintiffs Anderson, Hembree, Huck, Pierce, and Parece Against MTC FINANCIAL, INC. DBA TRUSTEE
CORPS; Plaintiffs Ellifritz Against MTDS, INC.; Plaintiffs Anderson, Apolinar, Benson, Boyd, Casas, Castillo, Dombovari, Flagg, Green, Hembree, Horton, Jones, Larkins, McHenry and Wallace, McKay, Monahan and Moreno, Newton, Riger, Sedlmayr, Stapleton, Stehman, Stinnett, Thurston, Tulip, and Whalen Against
NATIONAL DEFAULT SERVICING CORP.; Plaintiff Branca Against POWER DEFAULT SERVICES F/K/A/ AHMSI DEFAULT SERVICES, INC; Plaintiffs
Cheney Against SEASIDE TRUSTEE, INC.; Plaintiffs Beekhof, Blake and McKinney, Brenes and Apolinar-Lopez, Burke, Coslow, Dahl, Dintchev,
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Dombovari, Fitzgerald, Funk, Gabel, Habon, Harmon, Hembree, King, Moreau, Peterson, Rawlings, Riger, Antonio Servidio, and Vo Against QUALITY LOAN SERVICE CORP.; Plaintiffs Cousins, Mausert, and Antonio Servidio Against
CALIFORNIA RECONVEYANCE CORPORATION (aka CaliforniaReconveyance Company); Plaintiffs Dahl, Fillatreau, and Roberts Against CR
TITLE SERVICES, INC.; Plaintiffs Bell, Diaz and Sullivan Against WESTERN PROGRESSIVE, L.L.C.; Plaintiffs Evenson Against COUNTRYWIDE HOME
LOANS, INC.; Plaintiff Feemster Against FIRST AMERICAN LOANSTAR TRUSTEE SERVICES; Plaintiffs Frankoski, Josefa Lopez, Penny, Sanchez,Antonio Servidio, and Ubhoff Against EXECUTIVE TRUSTEE SERVICES,
L.L.C.; Plaintiffs Gannon and Mendoza Against AHMSI DEFAULT SERVICES,INC.; Plaintiffs Ballengee and Goodwin Against AZTEC FORECLOSURE
CORPORATION AND HSBC BANK, U.S.A.; Plaintiffs Gillespie and Hammitt Against TRUSTEE CORPS; Plaintiffs Jose Lopez and Swikla Against FIDELITYNATIONAL TITLE INSURANCE COMPANY; Plaintiffs Barron and Mendoza
Against NDEX WEST, L.LC.; Plaintiff Graves Against COUNTRYWIDE HOME LOANS, INC. ; Plaintiffs Gray against T.D. SERVICE COMPANY; Plaintiff
McArtor Against OLD REPUBLIC DEFAULT MANAGEMENT SERVICES;Plaintiffs Aufiero, Beauchemin, Burson, Dahl, Epps, Garcia, Gonzalez and Cortez, Gutierrez, Hearne, Hembree, Hutler, Johnson, Kelley, Kluttz, Leonard, Jennifer Lopez, Kwok, Mahlin, McKeon, Mull, Nelson, Newton, Peternell, Pizzuto, Quilici, Rees, Rudlin, Saldana, Sandborn, Anotonio Servidio, Thompson, Tovar and Vega
Against RECONTRUST; Plaintiff Sandefur Against UTLS DEFAULT SERVICES, L.L.C.; Plaintiffs Zamorano and Quintero-Orozco Against Housekey Financial
Corporation; as to all Plaintiffs against MERS, Inc.) 97. Plaintiffs incorporate each and every paragraph of this Complaint as if fully
set forth in this claim.
98. Pursuant to N.R.S. 107.080, Nevadas nonjudicial foreclosure statute, a
power of sale upon default on a note secured by a deed of trust is held by only the
beneficiary, the successor in interest to the beneficiary, or the trustee.
99. As to each Plaintiff making a claim for violation of N.R.S. 107.080, the
parties issuing the notice of default and/or issuing a notice of trustees sale on the property
were not the proper parties to do so because none of the parties were the beneficiary, the
successor in interest to the beneficiary, or the trustee appointed by the lender.
100. Any successor trustee appointed by MERS was not a proper party to
commence a foreclosure under N.R.S. 107.080 because it is not a trustee appointed by
the lender. MERS is not the lender as defined in the deed of trust or in practice.
101. The specific facts as to each plaintiff claiming a violation of N.R.S.
107.080 are contained in Exhibit 4 hereto, which is incorporated herein by this
reference.
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102. As set forth in detail in Exhibit 4 as to each plaintiff making a claim for
violation of N.R.S. 107.080, the party who noticed the sale was not the beneficiary
(MERS). Rather, the party was a stranger to the transaction with no beneficial interest in
the deed of trust or the note.
103. As alleged herein, each deed of trust at issued named MERS as the
beneficiary on the deed of trust solely in the capacity as nominee for the Lender.
104. MERS holds no beneficial interest in any deed of trust because it has no
interest in the underlying note, or any proceeds from the note, or the property itself.
105. As alleged herein, each of the named plaintiffs notes was transferred
without the deed of trust outside the MERS system. Such transfer rendered each
Plaintiffs note unsecured and not subject to a foreclosure sale as alleged in the Second
Claim for Relief.
106. At or following an alleged default, the beneficial interest in the deed of trust
(which MERS disclaims) was transferred by MERS to a party who was not the holder of
the note and had no authority from the holder of the note to either declare the default or
initiate the foreclosure. Nonetheless, foreclosure occurred and, as to Plaintiffs Anderson,
Andrews, Apolinar, Arevalo, Beekhof, Branca, Burson, Cheney, Dombovari, Frankoski,
Gabel, Goodwin, Granados, Hembree, Johnson, Jennifer Lopez, McArtor, McHenry and
Wallace, Mendoza, Polanski, Antonio Servidio, and Tulip, as alleged in detail in Exhibit
4, the property was sold to a part