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Monday, October 04, 2010 1:11:25 AM
Why "would anyone" question the validity of these mortgages or the foreclosures!!!!
EXCERPT from the original ruling.........reads like an Abbot and Costello routine....
In relevant part, if taken as alleged, the facts in Ibanez and Larace are roughly parallel and can be summarized as follows. [Note 24]
Both Ibanez and Larace involved adjustable-rate, subprime loans for the purchase of residential property in Springfield. [Note 25] In both, the borrower signed a promissory note and gave an immediately-recorded mortgage to the original lender (Rose Mortgage in Ibanez, Option One Mortgage Corporation in Larace). In Ibanez, Rose endorsed the note and properly assigned the mortgage to Option One. [Note 26] In both Ibanez and Larace, Option One then executed an endorsement of the note in blank, making the note “payable to bearer” and “negotiated by transfer alone until specially endorsed.” G.L. c. 106, § 3-205(b). In both, Option One also executed an assignment of the mortgage in blank (i.e., without a specified assignee) (hereafter, the “blank mortgage assignments”). These blank mortgage assignments were never recorded and they were not legally recordable. G.L. c. 183, § 6C (for a mortgage or assignment of a mortgage to be recordable in Massachusetts, the mortgage or assignment must “contain or have endorsed upon it the residence and post office address of the mortgagee or assignee if said mortgagee or assignee is a natural person, or a business address, mail address or post office address of the mortgagee or assignee if the mortgagee or assignee is not a natural person”). Moreover, since the blank mortgage assignments failed to name an assignee, they were ineffective to transfer any interest in the mortgage. [Note 27] Flavin v. Morrissey, 327 Mass. 217 , 219 (1951); Macurda v. Fuller, 225 Mass. 341 , 344-345 (1916); A. Eno & W. Hovey, 28 Mass. Practice: Real Estate Law, § 4.50 at 109 (4th ed. 2004) (hereafter, “Eno & Hovey”) and cases cited therein.
The securitization process then began, with Option One becoming the “Originator” for Lehman Brothers in Ibanez and for Bank of America in Larace.
In Ibanez, Lehman Brothers (as “Sponsor” and “Seller”) purchased the loan from Option One (as the Originator). Lehman then sold it (with hundreds of other loans that originated from Option One and other sources) to its wholly-owned subsidiary, Structured Asset Securities Corporation (the “Depositor”). Structured Asset Securities Corporation subsequently sold the loans to the Structured Asset Securities Corporation Mortgage Loan Trust 2006-Z (with U.S. Bank as trustee) [Note 28] (the “Issuing Entity”), which the grouped them into a “pool” (the “Ibanez pool”) and issued ten classes of certificates (two senior and eight subordinate) with varying rates of return, ranked in order of their payout priority in the event of shortfalls. Lehman purchased the certificates (presumably as the underwriter of the offering) and sold them in an offering to qualified investors.
The loans in the Ibanez pool were administered by five “Servicers,” one of which was Option One (now acting in a different capacity than Originator). [Note 29] Option One is alleged to be the Servicer for the Ibanez loan. [Note 30] These Servicers were supervised by Aurora Loan Services LLC (a wholly-owned Lehman subsidiary) (the “Master Servicer”). The loan documents themselves were kept by “Custodians” — Deutsche Bank, Wells Fargo, or U.S. Bank. [Note 31]
Assuming that events proceeded in the way described, the Ibanez loan thus changed ownership at least four times prior to foreclosure — Rose Mortgage to Option One, Option One to Lehman Brothers, Lehman Brothers to Structured Asset Securities Corporation, and Structured Asset Securities Corporation to Structured Asset Securities Corporation Mortgage Loan Trust 2006-Z (with U.S. Bank as trustee) — without any of this appearing on the public record. Two of those entities (Lehman Brothers and its subsidiary Structured Asset Securities Corporation) are currently in bankruptcy and a third (Option One) has ceased operations. [Note 32] The Ibanez note, Rose’s endorsement of the note to Option One, Option One’s endorsement of the note in blank, Ibanez’s mortgage to Rose, Rose’s assignment of the mortgage to Option One, and Option One’s blank mortgage assignment were all placed into a “collateral file” and, presumably, were passed from hand to hand along the chain of entities just listed, ending with the Custodian. The note (endorsed in blank and thus “bearer paper”) was negotiable by whichever entity possessed it. Since the blank mortgage assignment was ineffective, the mortgage remained with Option One (as Originator).
In Larace, Bank of America (as “Seller”) purchased the loan from Option One (as Originator). Bank of America then sold it (with hundreds of other loans that originated from Option One and other sources) to its wholly-owned subsidiary Asset Backed Funding Corporation (the “Depositor”). Asset Backed Funding Corporation then sold the loans to the ABFC 2005-OPT1 Trust (with Wells Fargo as trustee) [Note 33] (the “Issuing Entity”), which grouped them into a “pool” (the “Larace pool”) and issued fourteen classes of certificates (two super-senior, three senior, and nine subordinate) with varying rates of return, ranked in order of their payout priority in the event of shortfalls. Bank of America Securities LLC (as “Underwriter”) purchased the certificates and sold them in an offering to the public. The loans in the Larace pool were administered by Option One as “Servicer” (again, as in Ibanez, acting in a different capacity than Originator).
Assuming that events proceeded in the way described, the Larace loan thus changed ownership at least three times — Option One to Bank of America, Bank of America to Asset Backed Funding Corporation, and Asset Backed Funding Corporation to ABFC 2005-OPT1 Trust (with Wells Fargo as trustee) — without any of this appearing on the public record. The Larace note to Option One, Option One’s endorsement of the note in blank, Larace’s mortgage to Option One, and Option One’s blank mortgage assignment were all placed into a “collateral file” and, presumably, were passed from hand to hand along the chain of entities just listed, ending with the Custodian. The note (endorsed in blank and thus “bearer paper”) was negotiable by whichever entity possessed it. Since the blank mortgage assignment was ineffective, the mortgage remained with Option One (as Originator).
As noted above, the plaintiffs sold certificates in offerings to investors and, in that connection, issued offering documents. These included the Ibanez Private Placement Memorandum and the Larace Prospectus Supplement. Both contained detailed descriptions of the characteristics of the subprime residential loans that the plaintiffs were acquiring, the “risk factors” involved with those loans, and the documentation that the trusts purportedly would receive to obtain and secure their interests in the loans and lessen those risks. The provisions regarding that documentation are substantially similar.
In Ibanez they stated the following:
The Mortgage Loans will be assigned by the Depositor [Structured Asset Securities Corporation] to the Trustee [U.S. Bank], together with all principal and interest received with respect to such Mortgage Loans on and after the Cut-off Date [December 1, 2006] (other than Scheduled Payments due on that date). . . . Each Mortgage Loan will be identified in a schedule appearing as an exhibit to the Trust Agreement which will specify with respect to each Mortgage Loan, among other things, the original principal balance and the Scheduled Principal Balance as of the close of business on the Cut-off Date, the Mortgage Rate, the Scheduled Payment, the maturity date, the related Servicer and the Custodian of the mortgage file, whether the Mortgage Loan is covered by a primary mortgage insurance policy and the applicable Prepayment Premium provisions, if any.
As to each Mortgage Loan, the following documents are generally required to be delivered to the applicable Custodian on behalf of the Trustee in accordance with the Trust Agreement: (1) the related original mortgage note endorsed without recourse to the Trustee or in blank, (2) the original mortgage with evidence of recording indicated thereon (or, if such original recorded mortgage has not yet been returned by the recording office, a copy thereof certified to be a true and complete copy of such mortgage sent for recording), (3) an original assignment of the mortgage to the Trustee or in blank in recordable form (except as described below), [Note 34] (4) the policies of title insurance issued with respect to each Mortgage Loan and (5) the originals of any assumption, modification, extension or guaranty agreements.
Each transfer of a Mortgage Loan from the Seller [Lehman Brothers Holdings, Inc.] to the Depositor [Structured Asset Securities Corporation] and from the Depositor to the Trustee will be intended to be a sale of that Mortgage Loan and will be reflected as such in the Sale and Assignment Agreement [Note 35] and the Trust Agreement, respectively. . . .
Ibanez Private Placement Memorandum at 119 (emphasis added). Moreover, the Memorandum further states that each Transferor of a mortgage loan (here, Option One) represented and warranted to Lehman “as direct purchaser or assignee” that “the assignment of mortgage [to Lehman] [was] in recordable form and acceptable for recording under the laws of the relevant applicable jurisdiction.” Id. at 120-121. Assignments in recordable form to each successive entity were thus required at every step in the securitization chain.
In Larace they stated the following:
On or about October 31, 2005 . . . the Depositor [Asset Backed Funding Corporation] will transfer to the Trust Fund all of its right, title and interest in and to each Mortgage Loan, the related mortgage notes, mortgages and other related documents (collectively, the “Related Documents”), including all scheduled payments with respect to each such Mortgage Loan due after the Cut-Off Date. . . .
The Pooling and Servicing Agreement will require that, within the time period specified therein, the Seller [Bank of America] will deliver or cause to be delivered to the Trustee on behalf of the Certificateholders (or a custodian, as the Trustee’s agent for such purpose) the mortgage notes endorsed in blank and the Related Documents. In lieu of delivery of original mortgages or mortgage notes, if such original is not available or lost, the Seller may deliver or cause to be delivered true and correct copies thereof, or, with respect to a lost mortgage note, a lost note affidavit executed by the Seller or the originator of such Mortgage Loan.
Unless otherwise required by Fitch or S&P, assignments of the Mortgage Loans to the Trustee (or its nominee) will not be recorded in any jurisdiction, but will be delivered to the Trustee in recordable form, so that they can be recorded in the event recordation is necessary in connection with the servicing of a Mortgage Loan. [Note 36]
Larace Supplemental Prospectus at S-54 (emphasis added). [Note 37]
Despite the requirement in both Ibanez and Larace for an assignment of the mortgage to the trusts in recordable form at the time the loans were transferred to the trusts, no such assignments were made. As the collateral files for both loans reveal, the only mortgage assignments executed prior to the foreclosure sales were the one from Rose Mortgage to Option One (in Ibanez) and the ineffective blank mortgage assignments by Option One (in both Ibanez and Larace). Thus, at the time the foreclosure sales were noticed and conducted, the notes (endorsed in blank without recourse and thus “bearer paper”) were held by the plaintiffs, but the mortgages securing those notes were both still held by Option One (as Originator).
At some point (the record does not indicate when) both the Ibanez and Larace loans became delinquent and a new entity (Fidelity National Foreclosure and Bankruptcy Solutions) (“Fidelity”) became involved. On April 10, 2007, purporting to act on behalf of Option One in Option One’s capacity as the Servicer of the loan, [Note 38] Fidelity sent an email with an attached pdf referral package [Note 39] to the plaintiffs’ counsel (the Ablitt law firm) with instructions to bring a foreclosure action against Mr. Ibanez and his property “in the name of U.S. Bank National Association, as Trustee for the Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z.” Ibanez, Aff. of Walter Porr, Jr. at Exs. A-C (Jan. 30, 2009). On April 18, 2007, again purportedly on behalf of Option One in Option One’s capacity as the Servicer of the loan, [Note 40] Fidelity sent a similar email and pdf referral package to Ablitt with instructions to commence a foreclosure action against the Laraces and their property “in the name of the investor below: Wells Fargo Bank, N.A., as Trustee for ABFC 2005-OPT1 Trust, ABFC Asset-Backed Certificates, Series 2005-OPT1,” with the representation that the Larace mortgage was “currently held” by Wells Fargo. [Note 41] Larace, Aff. of Walter Porr, Jr. at Ex. A (Feb. 2, 2009).
The Ablitt firm then filed a Servicemembers’ Complaint against Mr. Ibanez, naming U.S. Bank as the plaintiff under the representation that U.S. Bank was “the owner (or assignee) and holder of a mortgage with a statutory power of sale given by Antonio Ibanez to Rose Mortgage, Inc.” Complaint to Foreclose Mortgage, Land Court 07 Misc. 345456 (Apr. 17, 2007). As noted above, this was incorrect. Option One was that holder. The Notice of Mortgagee’s Sale of Real Estate, published on June 14, 21, and 28, 2007 for a foreclosure sale on July 5, 2007, stated that U.S. Bank was the “present holder” of the Ibanez mortgage. As noted above, this was incorrect. Option One was that holder. The Ibanez sale was conducted in the name of U.S. Bank, U.S. Bank was the only bidder, and the “foreclosure deed” executed ten months later named U.S. Bank as the grantor pursuant to that sale. [Note 42] Massachusetts Foreclosure Deed By Corporation (May 7, 2008). There was no mention or suggestion in any of these documents that U.S. Bank was proceeding to foreclose the mortgage on behalf of anyone other than itself. An assignment of the Ibanez mortgage to U.S. Bank from American Home Mortgage Servicing, Inc. as the purported “successor in interest to Option One Mortgage Corporation” was not executed until September 2, 2008, fourteen months after the foreclosure sale and over three months after the recording of the foreclosure deed. [Note 43]
The Ablitt firm brought a Servicemembers’ Complaint against the Laraces, naming Wells Fargo as the plaintiff under the representation that Wells Fargo was “the owner (or assignee) and holder of a mortgage with a statutory power of sale given by Mark A. Larace and Tammy L. Larace to Option One Mortgage Corporation.” Complaint to Foreclose Mortgage, Land Court 07 Misc. 346369 (Apr. 27, 2007). As noted above, this was incorrect. Option One was the holder. The Notice of Mortgagee’s Sale of Real Estate, published on June 14, 21, and 28, 2007 for a foreclosure sale on July 5, 2007, stated that Wells Fargo was the “present holder” of the Larace mortgage. As noted above, this was incorrect. Option One was the holder. The Larace sale was conducted in Wells Fargo’s name, Wells Fargo was the only bidder, and the “foreclosure deed” executed ten months later named U.S. Bank as the grantor pursuant to that sale. [Note 44] Massachusetts Foreclosure Deed By Corporation (May 7, 2008). As in Ibanez, there was no mention or suggestion in any of these documents that Wells Fargo was proceeding to foreclose the mortgage on behalf of anyone other than itself. An assignment of the Larace mortgage to Wells Fargo from American Home Mortgage Servicing, Inc. as the purported “successor in interest to Option One Mortgage Corporation” was not executed until September 2, 2008, fourteen months after the foreclosure sale and over three months after the recording of the foreclosure deed. [Note 45]
EXCERPT from the original ruling.........reads like an Abbot and Costello routine....
In relevant part, if taken as alleged, the facts in Ibanez and Larace are roughly parallel and can be summarized as follows. [Note 24]
Both Ibanez and Larace involved adjustable-rate, subprime loans for the purchase of residential property in Springfield. [Note 25] In both, the borrower signed a promissory note and gave an immediately-recorded mortgage to the original lender (Rose Mortgage in Ibanez, Option One Mortgage Corporation in Larace). In Ibanez, Rose endorsed the note and properly assigned the mortgage to Option One. [Note 26] In both Ibanez and Larace, Option One then executed an endorsement of the note in blank, making the note “payable to bearer” and “negotiated by transfer alone until specially endorsed.” G.L. c. 106, § 3-205(b). In both, Option One also executed an assignment of the mortgage in blank (i.e., without a specified assignee) (hereafter, the “blank mortgage assignments”). These blank mortgage assignments were never recorded and they were not legally recordable. G.L. c. 183, § 6C (for a mortgage or assignment of a mortgage to be recordable in Massachusetts, the mortgage or assignment must “contain or have endorsed upon it the residence and post office address of the mortgagee or assignee if said mortgagee or assignee is a natural person, or a business address, mail address or post office address of the mortgagee or assignee if the mortgagee or assignee is not a natural person”). Moreover, since the blank mortgage assignments failed to name an assignee, they were ineffective to transfer any interest in the mortgage. [Note 27] Flavin v. Morrissey, 327 Mass. 217 , 219 (1951); Macurda v. Fuller, 225 Mass. 341 , 344-345 (1916); A. Eno & W. Hovey, 28 Mass. Practice: Real Estate Law, § 4.50 at 109 (4th ed. 2004) (hereafter, “Eno & Hovey”) and cases cited therein.
The securitization process then began, with Option One becoming the “Originator” for Lehman Brothers in Ibanez and for Bank of America in Larace.
In Ibanez, Lehman Brothers (as “Sponsor” and “Seller”) purchased the loan from Option One (as the Originator). Lehman then sold it (with hundreds of other loans that originated from Option One and other sources) to its wholly-owned subsidiary, Structured Asset Securities Corporation (the “Depositor”). Structured Asset Securities Corporation subsequently sold the loans to the Structured Asset Securities Corporation Mortgage Loan Trust 2006-Z (with U.S. Bank as trustee) [Note 28] (the “Issuing Entity”), which the grouped them into a “pool” (the “Ibanez pool”) and issued ten classes of certificates (two senior and eight subordinate) with varying rates of return, ranked in order of their payout priority in the event of shortfalls. Lehman purchased the certificates (presumably as the underwriter of the offering) and sold them in an offering to qualified investors.
The loans in the Ibanez pool were administered by five “Servicers,” one of which was Option One (now acting in a different capacity than Originator). [Note 29] Option One is alleged to be the Servicer for the Ibanez loan. [Note 30] These Servicers were supervised by Aurora Loan Services LLC (a wholly-owned Lehman subsidiary) (the “Master Servicer”). The loan documents themselves were kept by “Custodians” — Deutsche Bank, Wells Fargo, or U.S. Bank. [Note 31]
Assuming that events proceeded in the way described, the Ibanez loan thus changed ownership at least four times prior to foreclosure — Rose Mortgage to Option One, Option One to Lehman Brothers, Lehman Brothers to Structured Asset Securities Corporation, and Structured Asset Securities Corporation to Structured Asset Securities Corporation Mortgage Loan Trust 2006-Z (with U.S. Bank as trustee) — without any of this appearing on the public record. Two of those entities (Lehman Brothers and its subsidiary Structured Asset Securities Corporation) are currently in bankruptcy and a third (Option One) has ceased operations. [Note 32] The Ibanez note, Rose’s endorsement of the note to Option One, Option One’s endorsement of the note in blank, Ibanez’s mortgage to Rose, Rose’s assignment of the mortgage to Option One, and Option One’s blank mortgage assignment were all placed into a “collateral file” and, presumably, were passed from hand to hand along the chain of entities just listed, ending with the Custodian. The note (endorsed in blank and thus “bearer paper”) was negotiable by whichever entity possessed it. Since the blank mortgage assignment was ineffective, the mortgage remained with Option One (as Originator).
In Larace, Bank of America (as “Seller”) purchased the loan from Option One (as Originator). Bank of America then sold it (with hundreds of other loans that originated from Option One and other sources) to its wholly-owned subsidiary Asset Backed Funding Corporation (the “Depositor”). Asset Backed Funding Corporation then sold the loans to the ABFC 2005-OPT1 Trust (with Wells Fargo as trustee) [Note 33] (the “Issuing Entity”), which grouped them into a “pool” (the “Larace pool”) and issued fourteen classes of certificates (two super-senior, three senior, and nine subordinate) with varying rates of return, ranked in order of their payout priority in the event of shortfalls. Bank of America Securities LLC (as “Underwriter”) purchased the certificates and sold them in an offering to the public. The loans in the Larace pool were administered by Option One as “Servicer” (again, as in Ibanez, acting in a different capacity than Originator).
Assuming that events proceeded in the way described, the Larace loan thus changed ownership at least three times — Option One to Bank of America, Bank of America to Asset Backed Funding Corporation, and Asset Backed Funding Corporation to ABFC 2005-OPT1 Trust (with Wells Fargo as trustee) — without any of this appearing on the public record. The Larace note to Option One, Option One’s endorsement of the note in blank, Larace’s mortgage to Option One, and Option One’s blank mortgage assignment were all placed into a “collateral file” and, presumably, were passed from hand to hand along the chain of entities just listed, ending with the Custodian. The note (endorsed in blank and thus “bearer paper”) was negotiable by whichever entity possessed it. Since the blank mortgage assignment was ineffective, the mortgage remained with Option One (as Originator).
As noted above, the plaintiffs sold certificates in offerings to investors and, in that connection, issued offering documents. These included the Ibanez Private Placement Memorandum and the Larace Prospectus Supplement. Both contained detailed descriptions of the characteristics of the subprime residential loans that the plaintiffs were acquiring, the “risk factors” involved with those loans, and the documentation that the trusts purportedly would receive to obtain and secure their interests in the loans and lessen those risks. The provisions regarding that documentation are substantially similar.
In Ibanez they stated the following:
The Mortgage Loans will be assigned by the Depositor [Structured Asset Securities Corporation] to the Trustee [U.S. Bank], together with all principal and interest received with respect to such Mortgage Loans on and after the Cut-off Date [December 1, 2006] (other than Scheduled Payments due on that date). . . . Each Mortgage Loan will be identified in a schedule appearing as an exhibit to the Trust Agreement which will specify with respect to each Mortgage Loan, among other things, the original principal balance and the Scheduled Principal Balance as of the close of business on the Cut-off Date, the Mortgage Rate, the Scheduled Payment, the maturity date, the related Servicer and the Custodian of the mortgage file, whether the Mortgage Loan is covered by a primary mortgage insurance policy and the applicable Prepayment Premium provisions, if any.
As to each Mortgage Loan, the following documents are generally required to be delivered to the applicable Custodian on behalf of the Trustee in accordance with the Trust Agreement: (1) the related original mortgage note endorsed without recourse to the Trustee or in blank, (2) the original mortgage with evidence of recording indicated thereon (or, if such original recorded mortgage has not yet been returned by the recording office, a copy thereof certified to be a true and complete copy of such mortgage sent for recording), (3) an original assignment of the mortgage to the Trustee or in blank in recordable form (except as described below), [Note 34] (4) the policies of title insurance issued with respect to each Mortgage Loan and (5) the originals of any assumption, modification, extension or guaranty agreements.
Each transfer of a Mortgage Loan from the Seller [Lehman Brothers Holdings, Inc.] to the Depositor [Structured Asset Securities Corporation] and from the Depositor to the Trustee will be intended to be a sale of that Mortgage Loan and will be reflected as such in the Sale and Assignment Agreement [Note 35] and the Trust Agreement, respectively. . . .
Ibanez Private Placement Memorandum at 119 (emphasis added). Moreover, the Memorandum further states that each Transferor of a mortgage loan (here, Option One) represented and warranted to Lehman “as direct purchaser or assignee” that “the assignment of mortgage [to Lehman] [was] in recordable form and acceptable for recording under the laws of the relevant applicable jurisdiction.” Id. at 120-121. Assignments in recordable form to each successive entity were thus required at every step in the securitization chain.
In Larace they stated the following:
On or about October 31, 2005 . . . the Depositor [Asset Backed Funding Corporation] will transfer to the Trust Fund all of its right, title and interest in and to each Mortgage Loan, the related mortgage notes, mortgages and other related documents (collectively, the “Related Documents”), including all scheduled payments with respect to each such Mortgage Loan due after the Cut-Off Date. . . .
The Pooling and Servicing Agreement will require that, within the time period specified therein, the Seller [Bank of America] will deliver or cause to be delivered to the Trustee on behalf of the Certificateholders (or a custodian, as the Trustee’s agent for such purpose) the mortgage notes endorsed in blank and the Related Documents. In lieu of delivery of original mortgages or mortgage notes, if such original is not available or lost, the Seller may deliver or cause to be delivered true and correct copies thereof, or, with respect to a lost mortgage note, a lost note affidavit executed by the Seller or the originator of such Mortgage Loan.
Unless otherwise required by Fitch or S&P, assignments of the Mortgage Loans to the Trustee (or its nominee) will not be recorded in any jurisdiction, but will be delivered to the Trustee in recordable form, so that they can be recorded in the event recordation is necessary in connection with the servicing of a Mortgage Loan. [Note 36]
Larace Supplemental Prospectus at S-54 (emphasis added). [Note 37]
Despite the requirement in both Ibanez and Larace for an assignment of the mortgage to the trusts in recordable form at the time the loans were transferred to the trusts, no such assignments were made. As the collateral files for both loans reveal, the only mortgage assignments executed prior to the foreclosure sales were the one from Rose Mortgage to Option One (in Ibanez) and the ineffective blank mortgage assignments by Option One (in both Ibanez and Larace). Thus, at the time the foreclosure sales were noticed and conducted, the notes (endorsed in blank without recourse and thus “bearer paper”) were held by the plaintiffs, but the mortgages securing those notes were both still held by Option One (as Originator).
At some point (the record does not indicate when) both the Ibanez and Larace loans became delinquent and a new entity (Fidelity National Foreclosure and Bankruptcy Solutions) (“Fidelity”) became involved. On April 10, 2007, purporting to act on behalf of Option One in Option One’s capacity as the Servicer of the loan, [Note 38] Fidelity sent an email with an attached pdf referral package [Note 39] to the plaintiffs’ counsel (the Ablitt law firm) with instructions to bring a foreclosure action against Mr. Ibanez and his property “in the name of U.S. Bank National Association, as Trustee for the Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-Z.” Ibanez, Aff. of Walter Porr, Jr. at Exs. A-C (Jan. 30, 2009). On April 18, 2007, again purportedly on behalf of Option One in Option One’s capacity as the Servicer of the loan, [Note 40] Fidelity sent a similar email and pdf referral package to Ablitt with instructions to commence a foreclosure action against the Laraces and their property “in the name of the investor below: Wells Fargo Bank, N.A., as Trustee for ABFC 2005-OPT1 Trust, ABFC Asset-Backed Certificates, Series 2005-OPT1,” with the representation that the Larace mortgage was “currently held” by Wells Fargo. [Note 41] Larace, Aff. of Walter Porr, Jr. at Ex. A (Feb. 2, 2009).
The Ablitt firm then filed a Servicemembers’ Complaint against Mr. Ibanez, naming U.S. Bank as the plaintiff under the representation that U.S. Bank was “the owner (or assignee) and holder of a mortgage with a statutory power of sale given by Antonio Ibanez to Rose Mortgage, Inc.” Complaint to Foreclose Mortgage, Land Court 07 Misc. 345456 (Apr. 17, 2007). As noted above, this was incorrect. Option One was that holder. The Notice of Mortgagee’s Sale of Real Estate, published on June 14, 21, and 28, 2007 for a foreclosure sale on July 5, 2007, stated that U.S. Bank was the “present holder” of the Ibanez mortgage. As noted above, this was incorrect. Option One was that holder. The Ibanez sale was conducted in the name of U.S. Bank, U.S. Bank was the only bidder, and the “foreclosure deed” executed ten months later named U.S. Bank as the grantor pursuant to that sale. [Note 42] Massachusetts Foreclosure Deed By Corporation (May 7, 2008). There was no mention or suggestion in any of these documents that U.S. Bank was proceeding to foreclose the mortgage on behalf of anyone other than itself. An assignment of the Ibanez mortgage to U.S. Bank from American Home Mortgage Servicing, Inc. as the purported “successor in interest to Option One Mortgage Corporation” was not executed until September 2, 2008, fourteen months after the foreclosure sale and over three months after the recording of the foreclosure deed. [Note 43]
The Ablitt firm brought a Servicemembers’ Complaint against the Laraces, naming Wells Fargo as the plaintiff under the representation that Wells Fargo was “the owner (or assignee) and holder of a mortgage with a statutory power of sale given by Mark A. Larace and Tammy L. Larace to Option One Mortgage Corporation.” Complaint to Foreclose Mortgage, Land Court 07 Misc. 346369 (Apr. 27, 2007). As noted above, this was incorrect. Option One was the holder. The Notice of Mortgagee’s Sale of Real Estate, published on June 14, 21, and 28, 2007 for a foreclosure sale on July 5, 2007, stated that Wells Fargo was the “present holder” of the Larace mortgage. As noted above, this was incorrect. Option One was the holder. The Larace sale was conducted in Wells Fargo’s name, Wells Fargo was the only bidder, and the “foreclosure deed” executed ten months later named U.S. Bank as the grantor pursuant to that sale. [Note 44] Massachusetts Foreclosure Deed By Corporation (May 7, 2008). As in Ibanez, there was no mention or suggestion in any of these documents that Wells Fargo was proceeding to foreclose the mortgage on behalf of anyone other than itself. An assignment of the Larace mortgage to Wells Fargo from American Home Mortgage Servicing, Inc. as the purported “successor in interest to Option One Mortgage Corporation” was not executed until September 2, 2008, fourteen months after the foreclosure sale and over three months after the recording of the foreclosure deed. [Note 45]
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