Complaint

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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 BERNARDINO

ROBERT 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-
PLASENCIA v. GREENPOINT MORTGAGE, etc.
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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 to
plaintiff 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 estate
services 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 the
finance 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.
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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.
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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 the
property, 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
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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, Greenpoint
Mortgage 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 even
mentioned 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.
DOT, at pp. 2, 11 & 12.
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2
35. Thus, MERS status as beneficiary under the very terms of the DOT itself is only
nominal. 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 MERS
3 4 5
Id. at p.2 Id.
Id.
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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 an
acceptable 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 Problems
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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 the
assertion 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 straw
lender. 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 Warehouse
Lender. 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 Straw
Lender 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 common
law 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 the
investors 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 and
the 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 an
alleged 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 or
security 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.
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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 part
because 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 lawful
rights 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 the
holder-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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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 Estate
Settlement 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 an
amount 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 calculated
and 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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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 right
to 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, because
defendants violated RESPA.
92. Plaintiffs first learned of the actions of Defendants, including their failure to disclose
and 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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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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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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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-
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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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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 the
1
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].)
2
2
(1984) 158 Cal.App.3d 575,579-580. - 28COMPLAINT
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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-
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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.
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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.
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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) - 34-
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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
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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-
COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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.
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
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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.
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.
187.
.
In connection with the application for and the consummation of the mortgage - 39COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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.
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-
COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
proof at trial.
193.
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.
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-
COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
198.
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-
COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
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 punitive damages; For costs of suit herein incurred; For applicable statutory fees for statutory violations; For pre-and post-judgment interest
10. For such other further relief as the Court may deem just and proper.
Dated: October 5, 2011.
- 43.
COMPLAINT
1 / 2 3 DEMAND FOR JURY TRIAL 4 Plaintiff demands a jury trial. 5 Dated: October 5, 2011. 6 / 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 - 44.
ROBERT PLASENCIA Plaintiff in Pro Per
ROBERT PLASENCIA Plaintiff in Pro Per
COMPLAINT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
VERTIFICATION AS TO QUIET TITLE CAUSE OF ACTION ONLY I, Robert Plasencia, declare: I am the plaintiff in the captioned action. I have read the foregoing complaint and the allegations with respect to the location of the property and the proper venue for this action for purposes of quiet title; and have read the quiet title cause of action, and the same is true of my own knowledge and belief, except for those matters stated on information and belief, and as to them, I believe they are true. I declare under penalty of perjury under the laws of California that the foregoing is true and correct and that this verification is executed on October ____, 2011, at ____________________, California.
______________________________________ Robert Plasencia
- 45.
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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 Parties SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN BERNARDINO

Bernardino County, California. - 1-

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Defendant Mortgage Electronic Registration Systems, Inc. (MERS) is a Delaware

Defendant Marin Conveyancing Corporation is a California corporation, with offices

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Defendants All Persons Known or Unknown Claiming an Interest in 7747 Strathmore

PLASENCIA v. GREENPOINT MORTGAGE, etc.

The DOT is a four-party DOT. Greenpoint Mortgage is identified as the lender,

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Attached to the trustees sale notice is a document titled Beneficiary Declaration of

PLASENCIA v. GREENPOINT MORTGAGE, etc.

DOT, at pp. 2, 11 & 12.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Id. at p.2 Id.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

obligation on plaintiffs note are absent from the chain of title.

SUBSTITUTION OF TRUSTEE [Attached as Exhibit C]

New Trustee Quality Loan Signer: Aurora

PLASENCIA v. GREENPOINT MORTGAGE, etc.

NOTICE OF TRUSTEES SALE [Attached as Exhibit F]

Signer: Quality Loan Signature: Erica Paul, as authorized agent

PLASENCIA v. GREENPOINT MORTGAGE, etc.

the securitization process (the Summary):

PLASENCIA v. GREENPOINT MORTGAGE, etc.

The above summary is a simplification of the complex securitization process

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

on the subject property.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

As the NOD is non-compliant with California law, it is therefore invalid, should be

Plaintiff re-alleges and incorporates by reference all paragraphs above as though

fully set forth herein.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Defendants further violated HOEPA by failing to make an additional disclosure,

PLASENCIA v. GREENPOINT MORTGAGE, etc.

tender all sums to which the true lender is entitled.

Based on defendants HOEPA violations, and based on defendants TILA violations,

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

value. The DOT here was separated from the note.

For negotiable instruments payable to an identified person, such as a lender, a

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Civil Code section 2936 provides: the assignment of a debt secured by

Foreclosure is wrongful for each of the following reasons, independent of any

PLASENCIA v. GREENPOINT MORTGAGE, etc.

judicial foreclosure statutes.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

PLASENCIA v. GREENPOINT MORTGAGE, etc.

(1984) 158 Cal.App.3d 575,579-580. - 28COMPLAINT

PLASENCIA v. GREENPOINT MORTGAGE, etc.

Plaintiff re-alleges and incorporates by reference all paragraphs of this

A lack of meeting of the minds, a mistake as to fact, can justify a rescission of

PLASENCIA v. GREENPOINT MORTGAGE, etc.

belief that he would remain in a borrower/lender relationship.