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1 Robert R. Hager, NV State Bar No. 1482


Treva J. Hearne, NV State Bar No. 4450
2 HAGER & HEARNE
245 E. Liberty - Suite 110
3 Reno, Nevada 89501
Tel: (775) 329-5811
4 Fax: (775) 329-5819
Email: rhager@hagerhearnelaw.com
thearne@hagerhearnelaw.com
5 office@hagerhearnelaw.com
6 Counsel for Plaintiffs
7
UNITED STATES DISTRICT COURT
8
DISTRICT OF NEVADA
9
10 JOSEPH GREEN, DAVID A. BARRON and
(775) 329-5800, FAX (775) 329-5819

MARCELLA A. BARRON, JOHN S. Case No.: 3:09-cv-00374-ECR-GWF


11 BENSON, MANUEL C. CASTILLO, SR.,
245 E. Liberty St., Ste 110

OSCAR G. CORTEZ, KRISZTINA


HAGER & HEARNE

DOMBOVARI, THOMAS G. FILIATREAU [PROPOSED] FIRST AMENDED


Reno, NV 89501

12
and VICKI S. FILIATREAU, GUSTAVO CLASS ACTION COMPLAINT
13 GARCIA, CARLEEN HARMON, ROBB C. AND JURY DEMAND
KELLEY, TIMOTHY L KING and CAROL A.
14 KING, MARGARITA LARKINS and JOHN 1. Wrongful Foreclosure
E. LARKINS, GABRIEL LARKINS, JOSE
15 LOPEZ, DAVID A. MAHLIN and SANDRA 2. Unjust Enrichment
C. MAHLIN, DENISE A. MENDOZA and
GUILLERMO A. MENDOZA, JR.,
16 DOUGLAS B. MOORE, DOUG MOREAU, 3. Conspiracy to Commit
DALE W. PETERSON and JERI S. Wrongful Foreclosure by
17 PETERSON, NANCY QUINTERO-OROZCO Creation, Operation, and Use
and JAIME ZAMORANO, BRET E. RIGGS, of the MERS System
18 STEVEN A. STAPLETON and SHENDALE
R. STAPLETON, and, individually and on 4. Conspiracy to Commit Fraud
19 behalf of a class of similarly situated by Creation, Operation and Use
individuals,
20 of the MERS System
Plaintiffs,
21 vs. 5. Injunctive Relief

22 COUNTRYWIDE HOME LOANS, INC., a 6. Declaratory Relief


New York corporation; MERSCORP, INC., a
23 Virginia corporation; MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
24 INC., a subsidiary of MERSCORP, Inc., a
Delaware corporation; RECONTRUST
COMPANY, LITTON LOAN SERVICING,
25 AURORA LOAN SERVICES, CR TITLE
SERVICES, INC., HOUSEKEY FINANCIAL
CORPORATION, QUALITY LOAN SERVICE
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1 CORPORATION, NATIONAL DEFAULT


SERVICING CORPORATION, AMERICAN
2 HOME MORTGAGE SERVICING, INC.,
FIDELITY NATIONAL TITLE INSURANCE
3 COMPANY, MIDFIRST BANK, NDEX
WEST, LLC., MIDLAND MORTGAGE CO.,
4 THE BANK OF NEW YORK MELLON, CR
TITLE SERVICES, INC., FEDERAL HOME
LOAN MORTGAGE CORPORATION, a
5 Virginia corporation; FEDERAL NATIONAL
MORTGAGE ASSOCIATION, a District of
6 Columbia corporation; GMAC MORTGAGE,
L.L.C., a Delaware corporation; NATIONAL
7 CITY MORTGAGE, a foreign company and a
division of NATIONAL CITY BANK, a
8 subsidiary of National City Corporation;
NATIONAL CITY CORPORATION, a
9 Delaware corporation and a subsidiary of
PNC Financial Services, Inc.; PNC
10 FINANCIAL SERVICES, INC., a
(775) 329-5800, FAX (775) 329-5819

Pennsylvania corporation; J.P. MORGAN


11 CHASE BANK, N.A., a New York
245 E. Liberty St., Ste 110

corporation; CITIMORTGAGE, INC., a New


HAGER & HEARNE

York corporation; HSBC MORTGAGE


Reno, NV 89501

12
CORPORATION, U.S.A., a Delaware
corporation; AIG UNITED GUARANTY
13 CORPORATION, a foreign corporation;
WELLS FARGO BANK, N.A., a California
14 corporation, dba WELLS FARGO HOME
EQUITY and dba WELLS FARGO HOME
15 MORTGAGE, a division of WELLS FARGO
BANK, N.A., a California corporation; BANK
16 OF AMERICA, N.A., a Delaware corporation,
and GE MONEY BANK, an Ohio
17 corporation;

18
Plaintiff KRISZTINA DOMBOVARI, individually and on behalf of a class of
19
similarly situated individuals whose homes have been foreclosed upon and purchased by
20
the defendant banks with the Defendant banks retaining the homes (hereinafter “bank
21
22 REO Plaintiffs”); and Plaintiffs JOSEPH GREEN, DAVID A. BARRON and MARCELLA A.

23 BARRON, JOHN S. BENSON, MANUEL C. CASTILLO, SR., THOMAS G. FILIATREAU

24 and VICKI S. FILIATREAU, OSCAR G. CORTEZ, CARLEEN HARMON, ROBB C.

25 KELLEY, TIMOTHY L KING and CAROL A. KING, MARGARITA LARKINS and JOHN E.

LARKINS, GABRIEL LARKINS, JOSE LOPEZ, DAVID A. MAHLIN and SANDRA C.


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1 MAHLIN, DENISE A. MENDOZA and GUILLERMO A. MENDOZA, JR., DOUGLAS B.

2 MOORE, DOUG MOREAU, DALE W. PETERSON and JERI S. PETERSON, BRET E.


3 RIGGS, STEVEN A. STAPLETON and SHENDALE R. STAPLETON, and JAIME
4 ZAMORANO and NANCY QUINTERO-OROZCO, individually and on behalf of a class of
5
similarly situated individuals who seek a temporary restraining order and preliminary
6
injunction against imminent foreclosure sales of their homes against Defendants,
7
through their counsel, HAGER & HEARNE, allege as follows:
8
STATEMENT OF THE CASE
9
This case arises because the Plaintiffs were the victims of unlawful and wrongful
10
(775) 329-5800, FAX (775) 329-5819

foreclosures and/or an underlying conspiracy to commit fraud that resulted in


11
245 E. Liberty St., Ste 110
HAGER & HEARNE

foreclosures by the Defendants on the Plaintiffs’ homes or, the Defendants are threatening
Reno, NV 89501

12
13 in the near future to foreclose on the homes of the Plaintiffs. These foreclosures were, and

14 are, based upon a deed of trust and a note in each mortgage each of which are no longer

15 held by the same entity or party and are based upon deeds of trust that were flawed at the

16 date of origination of the loan because the Mortgage Electronic Registration Service

17 (MERS) was named as the beneficiary or nominee of the lender on the deeds of trust and
18 because the naming of MERS as the beneficiary was done for the purpose of harming the
19 borrower. The beneficiaries were never intended to be the lenders and now the servicer
20
bank Defendants declared the default on these loans even though the true beneficiaries
21
have not declared a default and have no further interest in the notes and, finally, the
22
obligations reflected by the notes executed by Plaintiffs allegedly secured by the MERS
23
deeds of trust have been satisfied with the result that there exists no obligation on which
24
to base any foreclosure on the properties owned by the Plaintiffs and the members of the
25
class. Defendants have attempted to foreclose and have actually foreclosed when they do

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1 not have a lawful right to foreclose.

2 The bank REO Plaintiffs have been subjected to unlawful and wrongful foreclosure
3 of their residential properties and bring this action for emergency injunctive relief,
4 damages and other claims for relief in order to enjoin the Defendants who purport to have
5
acquired title at foreclosure sales on MERS and MERS member Deeds of Trust. Plaintiffs
6
who have been subjected to foreclosure seek damages for the known unlawful foreclosures
7
by Defendants on those fraudulent Deeds of Trust and on obligations that have been
8
satisfied prior to the foreclosure actions by Defendants complained of herein. Other than
9
the REO Plaintiffs, the remainder of the Plaintiffs are at imminent risk of losing their
10
(775) 329-5800, FAX (775) 329-5819

homes because either (1) one or more of the Defendants has served upon those Plaintiffs a
11
245 E. Liberty St., Ste 110
HAGER & HEARNE

notice of default and election to sell the Plaintiffs’ properties or (2) the Plaintiffs are
Reno, NV 89501

12
13 alleged by one or more Defendants to be in default and subject to foreclosure and loss of

14 their homes, and those Plaintiffs hereby seek emergency injunctive relief and damages.

15 Plaintiffs bring this action on behalf of themselves and all other persons similarly situated

16 whose homes have been fraudulently and/or unlawfully foreclosed upon by Defendants

17 on MERS and MERS Deeds of Trust and/or on obligations that were satisfied, each such
18 foreclosure having been commenced and advanced in furtherance of the conspiracy
19 pursuant to which every Defendant herein aided and abetted, and/or participated with
20
and/or conspired with the other named Defendants in the wrongful course of conduct or
21
otherwise caused the damages and injuries claimed herein and are responsible in some
22
manner for the acts, occurrences and events alleged in this Complaint.
23
//
24
//
25

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1 JURISDICTION

2 1. This Court has jurisdiction pursuant to 28 U.S.C. § 1332 based on diversity


3 of citizenship, as Plaintiffs are residents of the State of Nevada; upon information and
4 belief, each and every Defendant is a foreign corporation; and because this matter is a
5
class action with claims having a value in excess of $5,000,000.00.
6
2. This Court has pendent jurisdiction over Plaintiffs’ state law claims pursuant
7
to 28 U.S.C. § 1367.
8
3. Venue over this matter is appropriate in this Court pursuant to 28 U.S.C. §
9
1391(b). The acts complained of occurred, in substantial part, in the State of Nevada, the
10
(775) 329-5800, FAX (775) 329-5819

properties subject to this action are situated in the State of Nevada in the Northern
11
245 E. Liberty St., Ste 110
HAGER & HEARNE

Division and, at all relevant times, material hereto, the Defendants are or were doing
Reno, NV 89501

12
13 business in Nevada.

14 Parties and Standing

15
16 4. Plaintiff, JOSEPH GREEN, is a resident of Washoe County, Nevada.

17 5. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s


18 primary residence in Washoe County, Nevada with the legal description of:
19 LOT 5-58 OF THE FOOTHILLS AT WINGFIELD VILLAGE 5, ACCORDING TO
20 THE MAP THEREOF, FILED IN THE OFFICE OF THE COUNTRY RECORDER
OF WASHOE COUNTY, STATE OF NEVADA, ON SEPTEMBER 29, 2005, AS FILE
21 NO. 3284464, TRACT MAP NO. 4549.

22 APN: 526-371-01
Plaintiff’s primary residence as described above is commonly referred to and
23
24 located at 4321 Black Hills Drive, Sparks, Nevada, 89436.

25 7. Plaintiffs, DAVID A. BARRON and MARCELLA A. BARRON, are residents

of Lyon County, Nevada.


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1 8. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’

2 primary residence in Lyon County with the legal description of:


3
LOT 257 AS SHOWN ON THE OFFICIAL MAP OF DAYTON VALLEY COUNTRY
4 CLUB UNIT 6b, RECORDED IN THE OFFICIAL RECORDS OF LYON COUNTY,
NEVADA ON SEPTEMBER 19, 2002 AS DOCUMENT NO. 282826.
5 APN: 19-881-32
6 Plaintiffs’ primary residence described above is commonly referred to and

7 located at 326 Torrey Pines Drive, Dayton, Nevada 89403.


8 9. Plaintiff JOHN S. BENSON is a resident of Douglas County, Nevada.
9 10. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
10
primary residence in Douglas County, Nevada with the legal description of:
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

LOT 11, BLOCK A, OF LAKEWOOD KNOLLS ANNEX, ACCORDING TO THE MAP


HAGER & HEARNE

THEREOF, FILED FOR RECORD IN THE OFFICE OF THE COUNTY RECORDER


Reno, NV 89501

12
OF DOUGLAS COUNTY, NEVADA, ON MAY 12, 1959, AS DOCUMENT NO.
13 14378.

14 APN: 07-261-010

15 Plaintiff’s primary residence as described above is commonly referred to and

16 located at 298 Chimney Rock Road, Stateline, Nevada, 89449

17 11. Plaintiff MANUEL C. CASTILLO, Sr., is a resident of Washoe


18
County, Nevada.
19
12. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
20
primary residence in Washoe County with the legal description of:
21
22 LOT 95, IN BLOCK A, OF SPRING VALLEY ESTATES UNIT NO. 4, ACCORDING
TO THE MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER
23 OF WASHOE COUNTY, STATE OF NEVADA, ON JUNE 14, 1979, AND
AMENDED JULY 10, 1980, UNDER FILE NO. 681789, AND AS TRACT MAP NO.
24 1941.
25 APN: 162-044-01

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1 Plaintiff’s primary residence as described above is commonly referred to and

2 located at 12590 Stillwater Way, Reno, Nevada 89511.


3
13. At all times relevant and material hereto, Plaintiff maintained a second
4
residential property in Washoe County with the legal description of:
5
LOT 41 OF EL RANCHO BUENA VISTA UNIT NO. 2, ACCORDING TO THE MAP
6
THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF WASHOE
7 COUNTY, STATE OF NEVADA, ON MA4 14, 1974, AS TRACT MAP NO. 1473.
APN: 021-172-13
8
Plaintiff’s residential property as described above is commonly referred to and
9
located at 2911 Randolph Court, Reno, Nevada 89502.
10
(775) 329-5800, FAX (775) 329-5819

14. Plaintiff KRISZTINA DOMBOVARI is a resident of Washoe


11
245 E. Liberty St., Ste 110
HAGER & HEARNE

County, Nevada.
Reno, NV 89501

12
13 15. At all times relevant and material hereto, Plaintiff maintained a residential
14 property in Washoe County with the legal description of:
15
LOT 21 IN BLOCK 14 OF HEPPNER SUBDIVISION NO. 4,
16 ACCORDING TO THE MAP THEREOF, FILED IN THE OFFICE OF
THE COUNTY RECORDER OF WASHOE COUNTY, STATE OF
17 NEVADA, ON OCTOBER 16, 1958, TRACT MAP NO. 601.
18 APN: 080-394-10
Plaintiff’s residential property as described above is commonly
19
referred to and located at 11675 Fir Drive, Reno, Nevada 89506.
20
21 16. At all times relevant and material hereto, Plaintiff maintained a second
22 residential property in Washoe County with the legal description of:
23
LOT 141 IN BLOCK D AS SHOWN ON THE MAP OF SILVER LAKE
24 SUBDIVISION NO. I-B, IN THE OFFICE OF THE COUNTY RECORDER OF
WASHOE COUNTY, STATE OF NEVADA, ON UNDER FILE NO. 509016,
25 OFFICIAL RECORDS, AS TRACT MAP NO. 1712. AND AMENDED BY
CERTIFICATE OF AMENDMENT, RECORDED APRIL 12, 1978, IN BOOK 1224,
PAGE DOCUMENT NO. 525290, OFFICIAL RECORDS.
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1 APN: 554-057-08
Plaintiff’s residential property as described above is commonly referred to and
2
3 located at 6580 Fern Drive, Reno, Nevada 89506.

4 17. Plaintiffs, THOMAS G. FILIATREAU and VICKI S. FILIATREAU, are


5 residents of Storey County, Nevada.
6
18. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’
7
primary resident in Storey County, Nevada with the legal description of:
8
9 LOT 418, AS SHOWN ON THAT CERTAIN DIVISION OF LAND MAP
RECORDED AUGUST 1, 1978, AS DOCUMENT NO. 42452, OFFICIAL RECORDS
10 OF STOREY COUNTY, STATE OF NEVADA, AND AS SHOWN UPPON THAT
(775) 329-5800, FAX (775) 329-5819

CERTAIN RECORD OF SURVEY MAP RECORDED ON OCTOBER 24, 1978, AS


11 DOCUMENT NO. 42925, OFFICIAL RECORDS OF STOREY COUNTY, NEVADA,
245 E. Liberty St., Ste 110
HAGER & HEARNE

COMMONLY REFERRED TO AS HIGHLAND RANCHES.


Reno, NV 89501

12
APN: 003-371-08
13
14 Plaintiffs’ primary residence as described above is commonly referred to and

15 located at 4180 Frying Pan Road, Reno, Nevada 89521.

16
19. Plaintiff, OSCAR G. CORTEZ, is a resident of Washoe County, Nevada.
17
20. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
18
primary residence in Washoe County with the legal description of:
19
20 LOT 47 BLOCK B AS SET FORTH ON THE MAP OF NORTHSIDE VILLAGE
SUBDIVISION, FILED FOR RECORD IN THE OFFICE OF THE COUNTY
21 RECORDER OF WASHOE COUNTY, NEVADA, ON AUGUST 2, 1996, AS FILE
NO. 2018055, OFFICIAL RECORDS.
22
APN: 502-052-18
23 Plaintiff’s primary residence described above is commonly referred to
24 and located at 1376 Lynx Street, Reno, Nevada 89506.
25
21. Plaintiff, CARLEEN HARMON, is a resident of Washoe County, Nevada.

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1 22. At all times relevant and material hereto, Plaintiff had maintained her

2 residence in Washoe County, Nevada with the legal description of:


3 LOT 15-99 OF THE FOOTHILLS AT WINGFILED VILLAGE 15B, ACCORDING TO
THE MAP THEREOF, IN THE OFFICE OF THE COUNTY RECORDER OF
4 WASHOE COUNTY, STATE OF NEVADA, ON APRIL 13, 2005, AS FILE NO.
3197697, TRACT MAP NO. 4466.
5
6 APN No. 526-222-22

7 Plaintiff’s primary residence as described above is commonly referred


8 to and located at 3687 Allegrini Drive, Sparks, Nevada 89436.
9
23. Plaintiff ROBB C. KELLEY is a resident of Washoe County, Nevada.
10
24. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

primary residence in Washoe County, Nevada with the legal description of:
HAGER & HEARNE

Reno, NV 89501

12
LOT 1103, OF ARROWCREEK UNIT 11, ACCORDING TO THE MAP THEREOF
13 NO. 3691, FILED IN THE OFFICE OF THE COUNTY RECORDER OF WASHOE
COUNTY, STATE OF NEVADA, ON MAY 21, 1999 AS DOCUMENT NO. 2342871,
14 OF OFFICIAL RECORDS.
15 APN: 152-215-03
16 Plaintiff’s primary residence as described above is commonly referred

17 to and located at 490 Tularosa Court, Reno, Nevada 89511.

18 25. Plaintiffs TIMOTHY L. KING and CAROL A. KING are residents of Douglas
19 County, Nevada.
20 26. At all times relevant and material hereto, Plaintiffs maintained a primary
21
residence in Douglas County, Nevada with the legal description of:
22
LOT 39 OF THE GARNERVILLE RANCHOS #5 SUBDIVISON, ACCORDING TO
23 THE MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF
DOUGLAS COUNTY, STATE OF NEVADA, ON SEPTEMBER 27, 1985, AS MAP
24 NO: 66512.

25 APN NO. 1220-22-210-016

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1 Plaintiffs’ primary residence as described above is commonly

2 referred to and located at 738 Lassen Way, Gardnerville, Nevada 89460.


3
27. Plaintiffs MARGARITA LARKINS and JOHN E. LARKINS and GABRIEL
4
LARKINS are residents of Washoe County, Nevada.
5
28. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’
6
7 primary residence in Washoe County with the legal description of:

8 LOT 9 IN BLOCK 1 AS SHOWN ON THE AMENDED MAP OF EVAN’S N.E.


ADDITION, ACCORDING TO THE MAP THEREOF; FILED IN THE OFFICE OF
9 THE COUNTY RECORDER OF WASHOE COUNTY, STATE OF NEVADA, ON
JUNE 26, 1906, AS FILE NO. 1121, AND AS TRACT MAP 23.
10
(775) 329-5800, FAX (775) 329-5819

APN: 007-231-05
11
245 E. Liberty St., Ste 110

Plaintiffs’ primary residence described above is commonly referred to and located


HAGER & HEARNE

Reno, NV 89501

12
at 330 East 7th Street, Reno, Nevada 89512.
13
29. Plaintiff GABRIEL LARKINS is a resident of Washoe County,
14
Nevada.
15
16 30. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
17 brother’s primary residence in Washoe County with the legal description of:
18
LOT 12 IN BLOCK 2OF HUYCK SUBDIVISION , SPARKS, NEVADA, ACCORDING
19 TO THE MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF WASHOE COUNTY, STATE OF NEVADA, ON MAY 31, 1946, AS FILE NO.
20 141809, AND, AS TRACT NO. 300.

21 APN: 033-165-19
Plaintiff’s brother’s primary residence described above is commonly referred to
22
and located at 421 G Street, Sparks, Nevada 89431.
23
24 31. Plaintiff JOSE LOPEZ is a resident of Washoe County, Nevada.

25

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1 32. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s

2 primary residence in Washoe County with the legal description of:


3
LOT 9 IN BLOCK 39 OF SUBDIVISION OF LOTS 6 AND 7 OF THE PRATER
4 ADDITION TO SPARKS, WASHOE COUNTY, NEVADA, ACCORDING TO THE
OFFICIAL MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY
5 RECORDER OF WASHOE COUNTY, STATE OF NEVADA, ON APRIL 24, 1923.
APN: 031-360-15
6
Plaintiff’s primary residence described above is commonly referred to and located
7
at 642 15th Street, Sparks, Nevada 89431.
8
9 33. Plaintiffs, DAVID A. MAHLIN and SANDRA C. MAHLIN, are residents of

10 Washoe County, Nevada.


(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

34. At all times relevant and material hereto, Plaintiffs maintained Plaintiff’s
HAGER & HEARNE

Reno, NV 89501

12
primary resident in Washoe County with the legal description of:
13
LOT 303 OF TRIPLE CROWN SUBDIVISION UNIT 3, ACCORDING TO THE MAP
14 THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF WASHOE
COUNTY, STATE OF NEVADA, ON FEBRURARY 16, 1996, AS FILE NO. 1969019,
15
TRACT MAP NO. 3215 AND AMENDED BY CERTIFICATE OF AMENDMENT
16 RECORDERED ON OCTOBER 25, 1996 IN BOOK 4705, PAGE 925 AS
DOCUMENT NO. 2042545 OF OFFICIAL RECORDS.
17 APN: 516-121-03
18
Plaintiff’s primary residence as described above is commonly referred to and
19
located at 4976 Lorenzo Court, Sparks, Nevada 89436.
20
35. Plaintiffs DENISE A. MENDOZA and GUILLERMO A. MENDOZA, JR. are
21
22 residents of Washoe County, Nevada.

23 36. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’
24 primary residence in Washoe County with the legal description of:
25
LOT 8, IN BLOCK H, OF SPRING CREEK SUBDIVISION-UNIT 2H, AS SHOWN
ON THE OFFICIAL MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY
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1 RECORDER OF WASHOE COUNTY, STATE OF NEVADA, ON OCTOBER 7, 1994,


AS FILE NO. 1839681, AND TRACT MAP N0. 3087.
2
APN: 083-871-20.
3 Plaintiffs’ primary residence described above is commonly referred to and located
4 at 10 Sage Creek Court, Sparks, Nevada 89436.
5
37. Plaintiff DOUGLAS B. MOORE is a resident of Washoe County, Nevada.
6
7 38. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s

8 primary residence in Washoe County with the legal description of:

9 LOT 5 IN BLOCK G OF SIERRA VIEW SUBDIVISION, WASHOE COUNTY,


NEVADA, ACCORDING TO THE MAP THEREOF, FILED IN THE OFFICE OF
10 THE COUNTY RECORDER OF WASHOE COUNTY, STATE OF NEVADA, ON
(775) 329-5800, FAX (775) 329-5819

DECEMBER 30, 1947, AS DOCUMENT NO, 159202, AND AS TRACT MAP NO.
11
245 E. Liberty St., Ste 110

402.
HAGER & HEARNE

Reno, NV 89501

12 APN: 010-134-07
13 Plaintiff’s primary residence described above is commonly referred to and located

14 at 655 Georgia Place, Reno, Nevada 89509-1234.

15 39. Plaintiff DOUG MOREAU is a resident of Washoe County Nevada.


16
40. At all times relevant and material hereto, Plaintiff was a resident of both
17
properties in Washoe County in that he and his business partner used both homes for a
18
residence with legal descriptions of:
19
LOT 55 OF HARBOUR COVE SUBDIVISION, ACCORDING TO THE MAP
20
THEREOF NO. 3960, FILED IN THE OFFICE OF THE COUNTY RECORDER OF
21 WASHOE COUNTY, STATE OF NEVADA ON JUNE 08, 2001 AS DOCUMENT
NO. 2562095 OF OFFICIAL RECORDS.
22 APN: 037-341-05

23 Plaintiff’s residence as described above is commonly referred to and located at 1117


24
Harbour Cove Court, Sparks, Nevada 89434.
25
LOT 42 OF HARBOUR COVE SUBDIVISION, ACCORDING TO THE MAP
THEREOF NO. 3960, FILES IN THE OFFICE OF THE COUNTY RECORDER OF
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1 WASHOE COUNTY, STATE OF NEVADA, ON JUNE 08, 2001 AS DOCUMENT


NO. 2562095 OF OFFICIAL RECORDS.
2
APN: 037-341-18
3
4 Plaintiff’s residence as described above is commonly referred to and located at 1169

5 Harbour Cove Court, Sparks, Nevada 89434.

6 41. Plaintiffs, DALE W. PETERSON and JERI S. PETERSON, are residents of

7 Douglas County, Nevada.


8 42. At all times relevant and material hereto, Plaintiffs had a primary residence in
9 Douglas County, Nevada with the legal description of:
10
LOT 91 OF THE GARNERVILLE RANCHOS #5 SUBDIVISION ACCORDING TO
(775) 329-5800, FAX (775) 329-5819

11 THE MAP THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF


245 E. Liberty St., Ste 110

DOUGLAS COUNTY, STATE OF NEVADA, ON JUNE 3, 1998, AS MAP NO:


HAGER & HEARNE

50056.
Reno, NV 89501

12
13 APN NO. 1220-22-110-142
Plaintiff’s primary residence as described above is commonly referred
14
15 to and located at 1426 Shasta Drive, Gardnerville, Nevada, 89460.

16 43. Plaintiff, BRET E. RIGGS, is a resident of Washoe County, Nevada.


17
44. At all times relevant and material hereto, Plaintiff maintained Plaintiff’s
18
primary residence in Washoe County with the legal description of:
19
20 LOT 108 OF DOUBLE DIMOND RANCH VILLAGE 29A, A PLANNED UNIT
DEVELOPMENT, ACCORDING TO THE MAP THEREOF NO. 4132, FILED IN THE
21 OFFICE OF THE COUNTY RECORDER OF WASHOE COUNTY, STATE OF NEVADA,
ON OCTOBER 29, 2002 AS DOCUMENT NO. 2754544 OF OFFICIAL RECORDS.
22 APN: 161-134-36
23 Plaintiff’s primary residence as described above is commonly referred to and

24 located at 9579 Mammoth Court, Reno, Nevada 89521.

25

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1 45. Plaintiffs STEVEN A. STAPLETON and SHANDALE R. STAPLETON are

2 residents of Lyon County, Nevada.


3
46. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’
4
primary residence in Lyon County with the legal description of:
5
LOT 42 AS SHOWN ON THE FINAL MAP OF COUNTRY RANCH II
6
SUBDIVISION, RECORDED IN THE OFFICIAL RECORDS OF LYON COUNTY,
7 NEVADA, ON APRIL 23, 2004, AS DOCUMENT NO. 319040.
APN: 022-102-01
8
Plaintiffs’ primary residence described above is commonly referred to and located
9
at 1241 Red Rock Road, Fernley, Nevada 89408.
10
(775) 329-5800, FAX (775) 329-5819

47. Plaintiffs JAIME ZAMORANO and NANCY QUINTERO-OROZCO are


11
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HAGER & HEARNE

residents of Washoe County, Nevada.


Reno, NV 89501

12
13 48. At all times relevant and material hereto, Plaintiffs maintained Plaintiffs’
14 primary residence in Washoe County with the legal description of:
15
LOT 210 OF PEEK PARCEL UNIT 1, PHASE 3, ACCORDING TO THE MAP
16 THEREOF, FILED IN THE OFFICE OF THE COUNTY RECORDER OF WASHOE
COUNTY, STATE OF NEVADA, ON AUGUST 3, 2004 AS FILE NO. 3078053,
17 TRACT MAP 4371.
18 APN: 080-841-06
Plaintiffs’ primary residence described above is commonly referred to and located
19
at 7772 Tulear Street, Reno, Nevada 89506.
20
21 49. Defendant CITIMORTGAGE, INC., was a New York corporation doing
22 business in Nevada and, at all times material hereto, was a member in the MERS system
23 described herein and a principal shareholder of MERS.
24
50. Defendant MERSCORP, INC. was a Virginia corporation and doing business
25
in the State of Nevada through its division or subsidiary, Defendant MERS, Inc., a

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1 Delaware corporation. Upon information and belief, MERSCORP, INC., was a director of

2 MERS, INC. Defendants MERSCORP, INC., and MERS, Inc. are hereinafter collectively
3 referred to as “MERS.
4
51. Defendant UNITED GUARANTY CORPORATION (“AIG”) was a foreign
5
corporation and, at all times material hereto, a creator, originator, and shareholder of
6
MERS and/or a member of the MERS system described herein. Upon information and
7
belief United Guaranty Corporation has, through its agents and employees, a chartered
8
seat on the MERS board of directors.
9
10 52. Defendant AMERICAN HOME MORTGAGE SERVICING, INC., aka
(775) 329-5800, FAX (775) 329-5819

11 AMERICAN SERVICING COMPANY, is a foreign corporation.


245 E. Liberty St., Ste 110
HAGER & HEARNE

Reno, NV 89501

12
53. Defendant AURORA LOAN SERVICES, LLC dba AURORA HOME LOANS
13
dba AURORA HOME MORTGAGE is a foreign corporation.
14
15 54. Defendant BANK OF AMERICA, N.A. was a foreign corporation doing

16 business in Nevada, and is a successor in interest to Countrywide Home Loans, Inc.

17 and/or acquired Countrywide Home Loans, Inc., and its affiliates and subsidiaries, for the

18 purpose of funding and/or managing the ongoing business activities of Countrywide

19 Home Loans, Inc. Upon information and belief BANK OF AMERICA also does business
20 as LASALLE BANK which is wholly owned by BANK OF AMERICA. Upon information
21 and belief, Defendant Bank of America, N.A., at all times material hereto, was a member
22
of the MERS system described herein.
23
55. Defendant J.P. MORGAN CHASE BANK, N.A. was a New York corporation
24
doing business in Nevada and, at all times material hereto, was a member in the MERS
25
system described herein. Upon information and belief, J.P. Morgan Chase Bank, N.A.,

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1 through its division, affiliate or subsidiary, Chase Home Mortgage Corporation of the

2 Southeast, was a creator, originator, and member in MERS, and through its employees or
3 agents employed by its affiliate, J.P. Morgan Chase Co., has a chartered seat on the MERS
4 board of directors.
5
56. Defendant COUNTRYWIDE HOME LOANS, INC. (“Countrywide”) was a
6
New York corporation authorized to do business in and doing business in Nevada and at
7
all times material hereto was a member of the MERS system described herein and a
8
creator, originator and principal shareholder in MERS and is now wholly owned by Bank
9
10 of America.
(775) 329-5800, FAX (775) 329-5819

11 57. Defendant CR TITLE SERVICES, CO. is a foreign corporation.


245 E. Liberty St., Ste 110
HAGER & HEARNE

Reno, NV 89501

12
58. Defendant FEDERAL HOME LOAN MORTGAGE ASSOCIATION
13
(hereinafter referred to as “Freddie Mac”) is a Virginia corporation doing business in
14
Nevada, and is a creator, originator, and principle shareholder in MERS. Upon
15
information and belief, Freddie Mac has, through its agents and employees, a chartered
16
seat on the MERS board of directors.
17
18 59. Defendant FEDERAL NATIONAL MORTGAGE ASSOCIATION (hereinafter

19 referred to as “Fannie Mae”) is a District of Columbia corporation doing business in


20 Nevada and, at all times material hereto, is, a creator, originator, and shareholder of
21 MERS and a member of the MERS system described herein. Upon information and
22
belief, Defendant Fannie Mae has, through its agents and employees, a chartered seat on
23
the MERS board of directors.
24
60. Defendant QUALITY LOAN SERVICE CORP. is a foreign corporation
25
registered to do business in the State of Nevada.

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1 61. Defendant GE MONEY BANK was an Ohio corporation and was a member

2 of the MERS system described herein.


3
62. Defendant GMAC MORTGAGE, L.L.C. was a Delaware corporation doing
4
business in Nevada and, at all times material hereto, was a member of the MERS system
5
described herein. Upon information and belief, Defendant GMAC Mortgage, L.L.C.,
6
through its affiliate or subsidiary, GMAC Residential Funding Corp., was a creator,
7
originator, and shareholder in MERS, and through its employees or agents employed by
8
its division, affiliate or subsidiary, GMAC Residential Holding Corp., has a chartered seat
9
10 on the MERS board of directors.
(775) 329-5800, FAX (775) 329-5819

11 63. Defendant HSBC MORTGAGE CORPORATION, U.S.A. was a Delaware


245 E. Liberty St., Ste 110
HAGER & HEARNE

Reno, NV 89501

12 corporation and, at all times material hereto, was a member of the MERS system
13
described herein. Upon information and belief, HSBC Mortgage Corporation, through its
14
affiliate or subsidiary HSBC Finance Corp., was a creator, originator, and principal
15
shareholder of MERS.
16
64. Defendant MIDLAND MORTGAGE is a foreign corporation with offices in
17
18 Oklahoma City.

19 65. Defendant NATIONAL CITY MORTGAGE, a division of National City Bank,


20 was a foreign company doing business in Nevada, and, at all times material hereto was a
21 member of the MERS system described herein. Upon information and belief, Defendant
22
National City Mortgage, through its agents and employees, has a chartered seat on the
23
MERS board of directors.
24
66. Defendant NATIONAL CITY CORPORATION (hereinafter “National City
25
Corp.”) is a Delaware corporation wholly owned by PNC pursuant to a merger

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1 consummated in or around December 31, 2008, and is or was a member of the MERS

2 system described herein.


3
67. Defendant NATIONAL CITY BANK (hereinafter “National City Bank”) is an
4
Ohio corporation wholly owned by PNC pursuant to a merger consummated in or around
5
December 31, 2008, and is or was a member of the MERS system described herein.
6
7 68. Defendant NATIONAL DEFAULT SERVICING is a foreign corporation.

8 69. Defendant PNC FINANCIAL SERVICES GROUP, INC., (hereinafter “PNC”)


9 is a Pennsylvania corporation and the parent company of National City Corporation, Inc.
10
pursuant to a merger consummated in or around December 31, 2008. Upon information
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

and belief, PNC is or was a member of the MERS system described herein.
HAGER & HEARNE

Reno, NV 89501

12
70. Defendant RECONTRUST COMPANY is a foreign corporation not
13
registered to do business in the State of Nevada, but is the company that forecloses for
14
15 Countrywide Home Loans, Inc.

16 71. Defendant BANK OF NEW YORK MELLON doing business as BANK OF


17 NEW YORK is a foreign corporation.
18
72. Defendant WELLS FARGO BANK, N.A. was a California corporation.
19
20 73. Defendant WELLS FARGO BANK, N.A. was a California corporation doing

21 business in Nevada as Wells Fargo Home Equity and as Wells Fargo Home Mortgage, a

22 Division of Wells Fargo Bank, N.A., and, at all times material hereto, was a member of the

23 MERS system described herein and a creator, originator, and shareholder of MERS.

24
74. Defendant HOUSEKEY FINANCIAL CORPORATION was a foreign
25
corporation.

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1 75. Defendant FIDELITY NATIONAL TITLE INSURANCE COMPANY was a

2 foreign corporation.
3
76. Defendant MIDFIRST BANK was a foreign corporation.
4
77. Defendant NDEX WEST, L.L.C., was a foreign corporation.
5
6 78. Defendants Countrywide Home Loans, Inc., and Bank of America, N.A.

7 acted as lenders in the transactions referred to herein and are hereinafter referred to
8 collectively as “Lenders” or “Lender defendants.”
9 79. Defendants J.P. Morgan Chase, Wells Fargo Bank, N.A., Bank of America,
10
HSBC Mortgage Corporation, U.S.A., GMAC Mortgage, L.L.C., PNC Financial Services
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

Group, Inc., National City Corporation, National City Mortgage, National City Bank,
HAGER & HEARNE

Reno, NV 89501

12
Countrywide Home Loans, Inc., CitiMortgage, Housekey Financial Corporation, Midfirst
13
Bank, NDEX West, LLC, and GE Money Bank acted as Securitizers of the loans made by
14
Lenders named herein and are hereinafter referred to as “Securitizers” or “Securitizer
15
defendants.”
16
80. Defendants Aurora Loan Services, LLC, dba Aurora Home Loans dba Aurora
17
18 Home Mortgage, Bank of America, Bank of America, Central Mortgage Company, J.P.

19 Morgan Chase, NA dba Chase Home Finance, LLC, dba Chase Mortgage, CitiMortgage,

20 Inc., Countrywide Home Loans, Inc., GMAC Mortgage, L.L.C., Midland Mortgage, Wells

21 Fargo Bank, N.A. dba America’s Servicing Company, and acted as Servicers of the loans

22 made to Plaintiffs by Lenders and are hereinafter referred to as “Servicers” or “Servicer


23 defendants.”
24
81. Defendants C.R. Title Services, Inc., National Default Servicing Corporation,
25
Quality Loan Service Corp., and ReconTrust Company, and upon information and belief

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1 Fidelity National Title Insurance Company acted as foreclosing entities or trustees against

2 the residential property of the Plaintiffs and are hereinafter referred to as “Foreclosers.”
3 GENERAL ALLEGATIONS
4
82. In the United States, home purchases are typically financed by mortgages or
5
loans that are secured by a deed of trust and a note which, when executed on behalf of the
6
same entity and held by the same entity as a “note and deed of trust,” entitle the holder of
7
the note and deed of trust to foreclose on the property of the borrower if the borrower is in
8
default without legal excuse or recourse.
9
10 83. A reported 3 million foreclosures occurred in the U.S. in 2008. Foreclosures
(775) 329-5800, FAX (775) 329-5819

11 to date during calendar year 2009 are at a higher rate than that which occurred during
245 E. Liberty St., Ste 110
HAGER & HEARNE

2008, with 1 in 16 homes in the State of Nevada going into foreclosure during the first six
Reno, NV 89501

12
13 months of 2009.

14 84. From 2003 through 2008, the Defendants entered into mortgages with deeds
15 of trust and notes that were separated after the execution of the mortgage, the note was
16 sold to an investor who literally and actually provided the funds for the loan given to the
17
borrower. Prior to or immediately after the contract was signed by the borrower, the note
18
was funded by a party other than the originator or servicer of the loan.
19
85. Plaintiffs separately executed deeds of trust naming MERS as the beneficiary
20
and/or nominee of the beneficiary/lender.
21
86. Plaintiffs also separately executed notes payable to Lenders as alleged
22
herein. None of the notes contained any reference to MERS.
23
24 87. The notes and the deeds of trust require that payment be made to the Lender,

25 not to MERS.

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1 88. The notes executed by Plaintiffs were separated from the deeds of trust after

2 the execution by Plaintiffs of those documents, with the note being transferred to
3 investors whose money had funded the loan taken out by the Plaintiff/borrower.
4 89. The Servicer defendants herein furnished none of the funding for the loans
5
but were merely transfer agents for money from the investors to loans taken by the
6
borrowers. Simultaneously with or immediately after the loan was taken out by the
7
borrower, the obligation reflected by the note was satisfied by monies provided by the
8
investor who then obtained ownership of and right to payment under the terms of the
9
note. These investors are the only parties to whom an obligation arose after the loans
10
(775) 329-5800, FAX (775) 329-5819

were securitized, and are the only proper parties to later declare a default and to have a
11
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right to direct a sale if the Plaintiffs did not make payments as required under the terms of
Reno, NV 89501

12
13 the note.

14 90. The Mortgage Electronic Registration Service was created by the Defendants

15 identified herein as co-conspirators in relation to the MERS system with the specific

16 intent that MERS, Inc. or MERSCORP, Inc. or MERS (referred to collectively herein as

17 “MERS”) would be named the beneficiary and/or as the nominee of the lender on the
18 deeds of trust which Plaintiffs were induced into signing. However, MERS was not a
19 nominee for the lender because the lender was an investor who had provided the funds for
20
the loan. This fact was known to MERS and the purported lender and the subsequent
21
assignee of any and all rights purported to have been assigned by MERS at the time the
22
note and deed of trust were signed by the Plaintiffs and at the time of each and every such
23
later purported assignment by MERS of any interest in the note and deed of trust.
24
91. The foreclosures complained of herein were initiated against Plaintiffs by
25
parties who have and had no standing to commence or maintain any foreclosure

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1 proceeding, both by the express language of the deeds of trust which required that the

2 beneficiary/party owed the obligation declare the default and direct the sale, and by the
3 laws governing the commencement and advancement of foreclosure proceedings which
4 require the true beneficiary to declare such default and direct such sale.
5
92. When the Borrower/Plaintiffs did not pay the payments agreed in the “Note,”
6
the unknown party caused a trustee to notice the obligor of the default and intent to sell
7
under Nevada law. Plaintiffs, however present in the case at bar, and similar to challenges
8
in other cases that: “MERS does not have standing merely because it is the alleged
9
beneficiary under the Deed of Trust. It is not a beneficiary and, in any event, the mere
10
(775) 329-5800, FAX (775) 329-5819

fact that an entity is a named beneficiary of a Deed of Trust is insufficient to enforce the
11
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obligation. As noted in the causes of action noticed herein, the Deed of Trust attempts to
Reno, NV 89501

12
13 name MERS as both a beneficiary and a nominee. The document first says this: MERS is

14 a separate corporation that is acting solely as a nominee for Lender and Lender’s

15 successors and assigns. MERS is the beneficiary under this Security Instrument. And

16 later is says this: The beneficiary of this Security Instrument is MERS (solely as nominee

17 for Lender and Lenders successors and assigns) and the successors and assigns of MERS.
18 Yet, as noted above: “MERS Terms and Conditions:” MERS shall serve as mortgagee of
19 record with respect to all such mortgage loan solely as a nominee, in an administrative
20
capacity, for the beneficial owner or owners thereof from time to time. MERS shall have
21
no rights whatsoever to any payments made on account of such mortgage loans, to any
22
servicing rights related to such mortgage loans, or to any mortgaged properties securing
23
such mortgage loans. MERS agrees not to assert any rights (other than rights specified in
24
the Governing Documents) with respect to such mortgage loans or mortgaged properties.
25
References herein to “mortgage(s)” and “mortgagee of record” shall include deed(s) of

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1 trust and beneficiary under a Deed of Trust and any other form of security instrument

2 under applicable State law.


3 93. Defendants’ use of MERS, created the method to defraud the Home
4 Purchaser because MERS was not the holder of the Note and MERS was not a transferee
5
in possession who was entitled to the rights of a holder or had authority under State law to
6
act for the holder.
7
94. The servicers of the loans, named as Servicer defendants herein, were
8
strangers to the purported loan transactions and which parties were and are unknown to
9
Plaintiffs and, moreover, did not fund the Plaintiffs’ loans and are not owed any of the
10
(775) 329-5800, FAX (775) 329-5819

funds to be repaid by Plaintiffs, and do not stand to suffer any loss should they be
11
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enjoined from foreclosing on the Plaintiffs’ homes or from selling the alleged REO’s at
Reno, NV 89501

12
13 issue herein.

14 95. The foreclosures named as Forecloser Defendants herein, on Plaintiffs’ homes

15 complained of herein were initiated by Forecloser Defendants, who had and have no

16 lawful right to initiate, advance or maintain any foreclosure action against the Plaintiffs or

17 their homes.
18 96. All Defendants knew or should have known that prior to the time that the
19 loans were taken out by Plaintiffs at issue herein, the loans which named MERS on the
20
deeds of trust were securitized or intended to be securitized prior to the preparation of the
21
notes and deeds of trust reflecting each such loan.
22
97. Defendants also knew or should have known that the scheme employed by all
23
Defendants involved in the origination, aggregation and securitization of mortgage-
24
backed loans originated from 2003 through 2008 and secured by real property in the
25
United States included financial incentives which were designed to result in the loans

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1 being written on terms which were likely or certain to result in foreclosure, and that the

2 scheme described herein included financial incentives designed to motivate appraisers,


3 mortgage brokers, lenders, aggregator banks and securitizing banks to steer borrowers
4 into loans they could not afford and could not repay so that the loans would go into
5
default and the Defendants involved in servicing, aggregating and securitizing those loans
6
could make yet more profits from default, foreclosure and selling the properties at or after
7
foreclosure.
8
98. The financial incentives mentioned in the previous paragraphs included
9
without limitation the hiring only of appraisers who were financially incentivized to
10
(775) 329-5800, FAX (775) 329-5819

appraise properties at a value that would justify the loan requested, the payment to
11
245 E. Liberty St., Ste 110
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mortgage brokers of higher fees for sub-prime and sub-sub-prime loans than for prime
Reno, NV 89501

12
13 loans and the use of novel and unprecedented underwriting criteria such as stated income

14 and 100% or more financing of the purchase price, and the purchase of loans from

15 lenders by aggregators and servicers of loans at more than face value if the loans were

16 sub-prime or sub-sub-prime and in particular if such loans also included an adjustable

17 interest rate and/or a pre-payment penalty.


18 99. All Defendants who originated, serviced, aggregated and/or securitized the
19 Plaintiffs’ loans knew or should have known at the time of those actions by Defendants
20
that the financial incentives described in the previous paragraph herein were not
21
disclosed to the investor or to the Plaintiffs/borrowers, and that the Defendants who
22
originated, serviced, aggregated and/or securitized the Plaintiffs’ loans also purchased
23
credit default swaps which were essentially bets that the Plaintiffs’ loans would fail,
24
resulting in multiple payments to those Defendants of the face amount of the loan, and
25
knew or should have known that fact was also concealed from the investors and Plaintiffs

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1 who were instead intentionally misled by Defendants to believe that the Plaintiffs

2 qualified for the loans under residential loan underwriting standards previously used in
3 the industry.
4 100. All Defendants who originated, serviced, aggregated and/or securitized the
5
Plaintiffs’ loans knew or should have known at the time of those actions by Defendants
6
that the more likely or certain the loan was to fail, the more likely that failure was to cause
7
the entire mortgage-backed security pool which included Plaintiffs’ loan to fail, and the
8
more profitable those events would be to Defendants.
9
101. Under the securities and federal banking laws, rules and regulations, the
10
(775) 329-5800, FAX (775) 329-5819

investors and the borrowers were entitled to information regarding all of the profits,
11
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payments, kick-backs, fees and insurance and credit default swaps related to the
Reno, NV 89501

12
13 transaction which included the investors providing the funds loaned to the borrower, and

14 the concealment of those facts by all the Defendants who originated, serviced, aggregated

15 and/or securitized the Plaintiffs’ loans was an intentional misrepresentation and/or

16 intentional material omission of fact by those Defendants for the purpose of using the

17 borrowers’ signatures on notes and deeds of trust to defraud the investors, the borrowers,
18 the insurers of loans, the issuers of credit default swaps and eventually the government
19 whom those Defendants, upon information and belief, falsely told that the Defendants
20
were in dire need of trillions of dollars in federal funds due to “toxic assets” being
21
allegedly on the books of Defendants.
22
102. The Defendants named as conspirators herein never owned any of the
23
Plaintiffs’ loans or the loans of others similarly situated naming MERS as beneficiary, and
24
the representations from September 2008, to the present, by the Bank Defendants to the
25
government that those Defendants were in dire need of government bailout funds from

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1 the Department of Treasury and the Federal Reserve due to defaults on mortgage loans

2 were intentional falsehoods designed to defraud the government and the American
3 taxpayers.
4 103. All Defendants participated in a conspiracy to cause Plaintiffs to enter into
5
instruments that would result in the foreclosure of their homes and to initiate foreclosure
6
on Plaintiffs’ homes without the lawful right to do so or to commence and advance
7
foreclosures against Plaintiffs with knowledge that the Plaintiffs had been deceived by
8
having not been informed that the loans they took out were designed and intended to
9
result in foreclosure and consequently more profits to the Defendants. As a proximate
10
(775) 329-5800, FAX (775) 329-5819

and direct result, Defendants have been unjustly enriched by the payments of the
11
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HAGER & HEARNE

Plaintiffs on the notes and by the profits earned by Defendants from the declaration of
Reno, NV 89501

12
13 default, the commencement and advancement of foreclosure, and/or the foreclosure sale

14 of Plaintiffs’ properties.

15 104. The lenders and investors in mortgage-backed securities, the Defendants

16 Lenders and Securitizers previously named herein, have obtained bailout money from the

17 United States Treasury and the Federal Reserve in the amount of trillions of dollars for
18 the stated purpose of compensating the lenders and investors for losses sustained due to
19 the alleged default in on residential mortgage loans including those of Plaintiffs.
20
105. The lenders as referred to above and investors in mortgage-backed
21
securities, including, have used those funds to repay credit default swaps, to repay
22
investors who funded Plaintiffs’ loans and/or to settle the lawsuits of those investors
23
against the securitizing banks for fraud, including those Defendants previously named as
24
securitizers and servicers, with such use of those funds having extinguished the obligation
25

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1 reflected by the notes, the right to collect on the notes, and the right to initiate

2 foreclosures on Plaintiffs’ homes.


3 106. Each and every Plaintiff has a deed of trust that states that the beneficiary
4 and/or beneficiary as the nominee of the lender is MERS, and each and every Plaintiff has
5
been or is likely to be declared in default by a party not entitled to declare the default.
6
107. The entities that are giving notice that they will foreclose on the homes of the
7
Plaintiffs are not MERS and are not the lenders that originated the deeds of trust and are
8
not the parties that funded the loans of the Plaintiffs.
9
Facts as to the Plaintiffs whose residential properties are now Bank REO’s
10
(775) 329-5800, FAX (775) 329-5819

108. Plaintiff, KRISZTINA DOMBOVARI, has a deed of trust that state that the
11
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HAGER & HEARNE

beneficiary or/ beneficiary as the nominee of the lender is MERS.


Reno, NV 89501

12
13 a. Krisztina Dombovari executed a Deed of Trust dated November 12,
14 2003 in the amount of $88,000.00 related to the residential property at 6580 Fern
15 Drive, Reno, Nevada, which listed Sierra Pacific Mortgage Company, Inc. as Lender
16 and MERS as the beneficiary.
17 b. Krisztina Dombovari also executed a Deed of Trust dated July 26,
18 2005 in the amount of $208,000.00 related to the residential property at 11675
19 Fir Drive, Reno, Nevada, which listed Market Street Mortgage Corporation as
20 Lender and MERS as the beneficiary. The Deed of Trust was supplemented by an
21 adjustable rate rider providing for an initial interest rate of 6.8750%, set to adjust
22 on August 1, 2010 by adding 2.25% to the Current Index every sixth month
23 thereafter.
24
25 (Facts as to all other Plaintiffs) JOSEPH GREEN, DAVID A. BARRON and

MARCELLA A. BARRON, JOHN S. BENSON, MANUEL C. CASTILLO, SR.,

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1 OSCAR G. CORTEZ, THOMAS G. FILIATREAU and VICKI S. FILLIATREAU,

2 GUSTAVO GARCIA, CARLEEN HARMON, ROBB C. KELLEY, TIMOTHY L.


3 KING and CAROL A. KING, MARGARITA LARKINS and JOHN E. LARKINS,
4 GABRIEL LARKINS, JOSE LOPEZ, DAVID A. MAHLIN and SANDRA C.
5
MAHLIN, DENISE A MENDOZA and GUILLERMO A. MENDOZA, JR.,
6
DOUGLAS B. MOORE, DOUG MOREAU, DALE W. PETERSON and JERI S.
7
PETERSON, NANCY QUINTERO-OROZCO and JIME ZAMORANO, BRET E.
8
RIGGS, STEVEN A. STAPLETON and SHENDALE R. STAPLETON.)
9
109. The Plaintiffs named just above have deeds of trust with MERS named as
10
(775) 329-5800, FAX (775) 329-5819

the beneficiary or the nominee for the lender as follows:


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12 a. David A. Barron and Marcella A. Barron executed a Deed of Trust


13 dated August 29, 2003 in the amount of $209,859.00 related to the Barron
14 residence at 329 Torrey Pines Drive, Dayton, Nevada which listed GMAC Mortgage
15 Corporation as Lender and which listed MERS as the beneficiary. On June 16,
16 2009, MERS assigned its purported beneficial interest in the deed of trust to
17 Midfirst Bank by recording an Assignment of Deed of Trust with the Lyon County
18 Recorder. Subsequently, Midfirst Bank designated NDEx West, LLC as trustee by
19 recording a Substitution of Trustee with the Lyon County Recorder on July 7,
20 2009.
21 b. Manuel Castillo executed a Deed of Trust dated May 17, 2006 in the
22 amount of $324,000.00 related to the residential property at 2911 Randolph Court,
23 Reno, Nevada, which listed Lime Financial Services, Ltd. as Lender and MERS as
24 the beneficiary. The Deed of Trust was supplemented by an adjustable rate rider in
25 which the interest rate would change on June 1, 2008 and increase by an addition

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1
of 6.5% percentage points to the Current Index every sixth month thereafter. The
2
note was also supplemented with a balloon rider.
3
c. Manuel Castillo executed a Deed of Trust dated May 23, 2006 in the
4
amount of $440,000.00 related to the Castillo residence at 12590 Stillwater Way,
5
Reno, Nevada, which listed Mortgage Lenders Network USA, Inc. as Lender and
6
MERS as the beneficiary. The Deed of Trust was supplemented by an adjustable
7
rate balloon rider over a 30-year term with an initial interest rate of 8.75%, set to
8
change on June 1, 2008 and increase every sixth month thereafter by an additional
9
6.25% to the Current Index.
10
d. Gustavo Garcia, Jr. executed a Deed of Trust dated December 14,
(775) 329-5800, FAX (775) 329-5819

11
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2005 in the amount of $167,475.00 related to the Garcia residence at 1941 Citron
HAGER & HEARNE

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12
Street, Reno, Nevada which listed community Lending, Incorporated as Lender
13
and MERS as the beneficiary.
14
e. Kristal Gonzalez and Oscar Cortez executed a Deed of Trust dated
15
February 25, 2003 in the amount of $100,000.00 related to the residence at 1376
16
Lynx Street, Reno, Nevada which listed SecurityNational Mortgage Company as
17
Lender and which listed MERS as the beneficiary. Ms. Gonzalez and Mr. Cortez
18
also executed a second Deed of Trust dated February 25, 2003 in the amount of
19
$18,700.00 listing SecurityNational Mortgage Company as Lender and listing
20
MERS as the beneficiary. The deeds of trust were entered to secure loans to
21
purchase the Gonzalez/Cortez residence described herein.
22
f. Margarita Larkins, John E. Larkins, and Gabrial Larkins executed a
23
Deed of Trust dated October 26, 2006 in the amount of $229,000.000 related to
24
the Larkins residence at 330 East 7th Street, Reno, Nevada which listed First
25
Magnus Financial Corporation as Lender and MERS as the beneficiary.

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1
g. Gabriel Larkins also executed a Deed of Trust dated July 15, 2005 in
2
the amount of 183,960.00 related to the Larkins residence at 421 G Street, Sparks,
3
Nevada, which listed Ownit Mortgage Solutions, Inc. as Lender and MERS as the
4
beneficiary. Mr. Larkins also executed a second Deed of Trust dated July 15, 2005
5
in the amount of $45,990.00 listing Ownit Mortgage Solutions, Inc. as Lender and
6
MERS as the beneficiary. The deeds of trust were entered to secure loans to
7
purchase the Larkins residence described herein.
8
h. Jose Lopez executed a Deed of Trust dated September 29, 2005 in the
9
amount of $147,000.00 related to the Lopez residence at 642 15th Street, Sparks,
10
Nevada, which listed American Home Mortgage Acceptance, Inc. as Lender and
(775) 329-5800, FAX (775) 329-5819

11
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MERS as the beneficiary.


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12
i. Denise A. Mendoza and Guillermo A. Mendoza, Jr. executed a Deed
13
of Trust dated January 5, 2006 in the amount of $264,968.00 related to the
14
Mendoza residence at 10 Sage Creek Court, Sparks, Nevada, which listed New
15
Freedom Mortgage Corporation as Lender and MERS as the beneficiary.
16
j. Douglas B. Moore executed a Deed of Trust dated July 25, 2007 in
17
the amount of $244,500.00 related to the Moore residence at 655 Georgia Place,
18
Reno, Nevada, which listed Countrywide Bank, FSB as Lender and MERS as the
19
beneficiary.
20
k. Steven A. Stapleton and Shandale R. Stapleton executed a Deed of
21
Trust dated October 27, 2005 in the amount of $356,500.00 related to the
22
Stapleton residence at 1241 Red Rock Road, Fernley, Nevada, which listed MILA,
23
Inc. as Lender and MERS as the beneficiary.
24
l. Jaime Zamorano and Nancy Quintero-Orozco executed a Deed of
25
Trust dated July 8, 2005 in the amount of $211,612.00 related to the

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Zamorano/Quintero-Orozco residence at 7772 Tulear Street, Reno, Nevada, which
2
listed Accredited Home Lenders, Inc. as Lender and MERS as the beneficiary. The
3
Deed of Trust was supplemented by an interest only adjustable rate rider with an
4
initial interest rated of 6.990%. Mr. Zamorano and Ms. Quintero-Orozco also
5
executed a second Deed of Trust in the amount of $52,903.00 listing Accredited
6
Home Lenders, Inc. as Lender and MERS as the beneficiary. The deeds of trust
7
were entered to secure loans the purchase the Zamorano/Quintero-Orozco
8
residence described herein.
9
m. NDEx West, L.L.C. issued a Notice of Breach and Election to Sell
10
Under Deed of Trust against the Barron residence on May 6, 2009, which was
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

recorded with the Lyon County Recorder on May 6, 2009. The Notice indicates
HAGER & HEARNE

Reno, NV 89501

12
that if the default is not cured by June 10, 2009, the property may thereafter be
13
sold.
14
n. National Default Servicing Corporation issued a Notice of Default and
15
Election to Sell Under Deed of Trust against the Plaintiff Castillo’s residential
16
property on October 10, 2007, which was recorded with the Washoe County
17
Recorder also on October 10, 2007. Subsequently, National Default Servicing
18
Corporation recorded a Notice of Trustee’s Sale on Plaintiff Castillo’s residential
19
property on June 25, 2009, which indicates that the property is scheduled to be
20
sold on July 15, 2009.
21
o. National Default Servicing Corporation, as Agent for America’s
22
Servicing Company, issued a Notice of Default and Election to Sell Under Deed of
23
Trust against the Castillo residence on January 28, 2008, which was also recorded
24
with the Washoe County Recorder on January 28, 2008. The Notice indicates that
25

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1
if the default is not cured within three months from the date on which the Notice
2
was recorded, a sale date will be set.
3
p. National Default Servicing Corporation recorded a Notice of Trustee’s
4
Sale on April 23, 2009 against Plaintiff Dombovari’s residential property at 6580
5
Fern Drive, Reno, Nevada, with the Washoe County Recorder which indicated that
6
the property was scheduled to be sold on May 20, 2009. On June 3, 2009, a
7
Trustee’s Deed Upon Sale was recorded with the Washoe County Recorder, in
8
which National Default Servicing Corporation conveyed Plaintiff Dombovari’s
9
residential property to Federal National Mortgage Association, or Fannie Mae.
10
q. Quality Loan Service Corp. issued a Notice of Breach and Default and
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

of Election to Cause Sale of Real Property Under Deed of Trust against Plaintiff
HAGER & HEARNE

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12
Dombovari’s residential property at 11675 Fir Drive, Reno, Nevada, on September
13
11, 2008, which was recorded with the Washoe County Recorder on September 15,
14
2008. The Notice indicated that if the default was not cured by October 16, 2008,
15
the property may thereafter be sold. On May 8, 2009, a Trustee’s Deed Upon Sale
16
was recorded with the Washoe County Recorder, in which Quality Loan Service
17
Corporation convey Plaintiff Dombovari’s residential property to the Bank of New
18
York Mellon formerly known as the Bank of New York as Successor’s
19
r. Recontrust Company, N.A. recorded a Notice of Trustee’s Sale on the
20
Garcia residence on January 10, 2008, which indicated that the property was
21
scheduled to be sold on February 20, 2008. On March 25, 2008, a Trustee’s Deed
22
Upon Sale was recorded with the Washoe County Recorder, in which Recontrust
23
Company, in its purported capacity as Trustee, conveyed the Garcia property to
24
Countrywide Home Loans, Inc.on March 11, 2005.
25

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1
s. Recontrust Company, N.A. recorded a Notice of Trustee’s Sale on the
2
Gonzalez/Cortez residence on July 7, 2009, which indicates the property is
3
scheduled to be sold on July 22, 2009.
4
t. National Default Servicing Corporation, as Agent for Wells Fargo
5
Bank, N.A., f/k/a Wells Fargo Home Mortgage, Inc., f/k/a/ Norwest Mortgage,
6
Inc., recorded a Notice of Default and Election to Sell Under Deed of Trust against
7
the Larkins residence on June 30, 2009. The Notice indicates that if the default is
8
not cured within three months from the date on which the Notice was recorded, a
9
sale date will be set.
10
u. National Default Servicing Corporation recorded a Notice of Trustee’s
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

Sale with the Washoe County Recorder on Plaintiff Gabriel Larkins’s residential
HAGER & HEARNE

Reno, NV 89501

12
property on May 6, 2009, which indicates that the home was scheduled to be sold
13
on May 27, 2009.
14
v. Fidelity National Title Insurance Company issued a Notice of Breach
15
and Default and of Election to Cause Sale of Real Property Under Deed of Trust
16
against the Lopez residence on June 29, 2009, which was recorded with the
17
Washoe County Recorder on June 30, 2009. The Notice indicates that if the
18
default is not cured by August 4, 2009, the property may thereafter be sold.
19
x. NDEx West, L.L.C issued a Notice of Breach and Election to Sell
20
Under Deed of Trust against the Mendoza residence on June 11, 2009, which was
21
also recorded with the Washoe County Recorder on June 11, 2009. The Notice
22
indicated that if the default is not cured by July 16, 2009, the property may
23
thereafter be sold.
24
y. Reconstruct Company, N.A. issued a Notice of Default and Election to
25
Sell Under Deed of Trust against the Moore residence on February 10, 2009, which

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1
was recorded with the Washoe County Recorder also on February 10, 2009.
2
Subsequently, Reconstruct Company, N.A. recorded a Notices of Trustee’s Sale on
3
the Moore residence on May 14, 2009, which indicates that the property was
4
scheduled to be sold on June 3, 2009. The sale was continued to July 15, 2009.
5
z. National Default Servicing Corporation issued a Notice of Default and
6
Election to Sell Under Deed of Trust against the Stapleton residence on June 5,
7
2009, which was recorded with the Lyon County Recorder also on June 5, 2009.
8
The Notice indicates that if the default is not cured within three months from the
9
date on which the Notice was recorded, a sale date will be set.
10
aa. Housekey Financial Corporation issued a Notice of Breach and
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

Default and of Election to Sell Under Deed of Trust against the


HAGER & HEARNE

Reno, NV 89501

12
Zamorano/Quintero-Orozco residence on January 28, 2009, which was recorded
13
with the Washoe County Recorder also on January 28, 2009. Subsequently,
14
Housekey Financial Corporation recorded a Notice of Trustee’s Sale on the
15
Zamorano/Quintero-Orozco residence on April 30, 2009 with the Washoe County
16
Recorder, which indicates that the property was scheduled to be sold on May 19,
17
2009.
18
19
20 FIRST CLAIM FOR RELIEF
21 (Wrongful Foreclosure)
22 (As to Defendants servicers and foreclosers)
23
110. Plaintiffs incorporate each and every paragraph of this Complaint as if fully
24
set forth in this claim.
25

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1 111. An assignment of an obligation under a mortgage, the note, operates as an

2 assignment of the mortgage.


3 112. The assignment of the obligations or notes of the Plaintiffs to the investors by
4 way of mortgage backed securities resulted in a co-mingling of the notes and no interest in
5
the note or deed of trust was retained by the lender or by MERS as beneficiary or nominee
6
of the lender.
7
113. The obligations of the Plaintiffs on which the Defendants have declared a
8
default were discharged when the investors in the mortgage backed securities claims were
9
paid as a result of over-collateralization of the obligations and/or credit default swaps
10
(775) 329-5800, FAX (775) 329-5819

and/or federal bailout funds and other monies paid to the investors who owned the notes
11
245 E. Liberty St., Ste 110
HAGER & HEARNE

and obligations and/or to the Defendants or bank holding companies who disbursed the
Reno, NV 89501

12
13 monies in such fashion as to extinguish the obligations of Plaintiffs to repay the monies

14 they borrowed which are at issue herein.

15 114. Neither the investors in the mortgage backed securities nor any other entity

16 or person who had a right to payment from the borrowers or was a beneficiary under the

17 deeds of trust ever declared a default of the notes executed by Plaintiffs.


18 115. No true beneficiary under the deed of trust ever declared a default under the
19 note and deed of trust.
20
116. No true and no beneficiary under the deed of trust ever directed a sale of any
21
of the properties owned by Plaintiffs in which MERS is named as beneficiary or nominee
22
of the beneficiary/lender at issue in this action.
23
117. The servicers of the notes have no contract with the Plaintiffs, no investment
24
in the mortgage backed securities, and no right to declare a default on the note and the
25
allegations by the servicers including the Defendants herein in the notices of default and

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1 election to sell the Plaintiffs’ properties. Therefore, any statement that “the beneficiary

2 has declared a default and directed that the property be sold” is not true, and the
3 Defendant servicers who have made that false representation knew or should have known
4 at the time each and every such notice was executed, mailed and recorded that those
5
allegations were false.
6
118. Foreclosure against the properties of the Plaintiffs cannot commence without
7
a written declaration of default and direction to the trustee to sell the property made by
8
the persons or entities to whom the obligation under the notes are owed.
9
119. After the debts on the notes were discharged to the investors, the assignments
10
(775) 329-5800, FAX (775) 329-5819

of the deeds of trust and notes, the designations of substitute trustees and substitute
11
245 E. Liberty St., Ste 110
HAGER & HEARNE

beneficiaries, the declarations of default and directions to sell the properties, the notices
Reno, NV 89501

12
13 of default and election to sell, the notices of sale and the foreclosure sales were nullities

14 and transferred nothing to the entities now seeking to foreclose on the Plaintiffs’

15 properties or claiming to own the Plaintiffs’ properties as bank REO’s.

16 120. No person or entity with any legal right to declare a default and direct a sale

17 on any of the Plaintiffs’ notes and/or deeds of trust naming MERS as beneficiary or
18 nominee of the beneficiary/lender ever declared a default and directed a sale of any such
19 property of Plaintiffs herein.
20
121. As a direct and proximate result of the unlawful and wrongful
21
commencement and advancement of foreclosure proceedings by Defendants complained
22
of herein, the Plaintiffs who have been subjected to such actions by Defendants have
23
suffered damages, including, without limitation, economic damages, severe and disabling
24
psychological and physical pain and suffering, humiliation, embarrassment, damage to
25
credit and other damages as alleged herein.

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1 122. Plaintiffs have been required to retain counsel and expend costs to prosecute

2 this claim for relief.


3 SECOND CLAIM FOR RELIEF
4
(Unjust Enrichment)
5
(As to Defendants Securitizers and Servicers)
6
7 123. Plaintiffs incorporate each and every paragraph of this Complaint as if fully
8
set forth in this claim.
9
124. Defendants’ deceptive scheme as alleged herein unjustly enriched
10
(775) 329-5800, FAX (775) 329-5819

Defendants, and each of them, to the detriment of Plaintiffs, and similarly situated class
11
245 E. Liberty St., Ste 110

members, by causing Defendants, and each of them, to receive monetary payments from
HAGER & HEARNE

Reno, NV 89501

12
Plaintiffs and the class members and money to which Defendants were not entitled
13
because the Defendants did not fund the loans of the Plaintiffs.
14
125. Specifically, Plaintiffs and class members have been injured in the property
15
16 and right to peaceful enjoyment of their primary residence in a variety of ways, including

17 but not limited to: All borrowers who were targeted for and lured into the mortgages sold

18 by Defendants were handicapped in understanding the terms of those loans. This

19 constituted a misrepresentation that caused Plaintiffs to make their monthly payments

20 from the cash that represented the equity in their home to the Defendants. Moreover,
21 upon information and belief, the variety of additional and separate payments charged for
22 services and other items tangential to the loan were prohibitive. The result is that
23
Plaintiffs, and each class member, assumed financial burdens that they would not
24
otherwise have assumed, and paid Defendants funds to which the Defendants were not
25
entitled nor owed.

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1 126. The loans made to Plaintiffs and to each class member were then

2 repackaged, reassigned, and/or resold, each with a margin of profit for the assignee/buyer
3 that would not otherwise have existed had Plaintiffs and all other members of the class
4 not been deceived by the original terms of the loan and/or the lack of disclosures as
5
alleged herein. Likewise Plaintiffs would not have continued to make payments on the
6
loans if the Defendants had properly disclosed the discharge of the obligations on the
7
notes to the investors.
8
127. Plaintiffs and each class member have paid or continue to pay an inflated
9
interest rate that, upon information and belief, would not have been agreed to but for the
10
(775) 329-5800, FAX (775) 329-5819

failure to understand the documents and otherwise disclose the true terms and costs of
11
245 E. Liberty St., Ste 110
HAGER & HEARNE

the loans, tangential services, and out-of-pocket costs.


Reno, NV 89501

12
13 128. Upon information and belief, Defendants, and each of them, retained and

14 continue to retain these ongoing and escalating profits to the detriment of Plaintiffs and

15 each class member, contrary to the fundamental principals of fairness, justice, and good

16 conscience.

17 129. Upon information and belief, all payments made to the Defendants
18 servicing the Plaintiffs’ mortgages are not due to the Defendants who are or were making
19 demands for collection.
20
130. The Defendants who have serviced the loans of the Plaintiffs did not fund
21
the loans, did not loan any money to the Plaintiffs, and are not holders in due course of
22
the notes of the Plaintiffs and have no lawful right to foreclose upon Plaintiffs’ homes if
23
Plaintiffs do not make the payments according to the notes that were executed by
24
Plaintiffs at the time the loans were received.
25

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1 131. Upon information and belief, all sums advanced to Plaintiffs for loans by

2 investors have been repaid, settled, satisfied or otherwise are no longer outstanding.
3 132. Plaintiffs have no contract with the Defendants and Defendants hold no
4 contract rights that constitute an obligation from the Plaintiffs.
5
133. Accordingly, Defendants, and each of them, should be ordered to return all
6
funds obtained as a result of their deceptive scheme to Plaintiffs and class members.
7
THIRD CLAIM FOR RELIEF
8
(Conspiracy to Commit Wrongful Foreclosure by Creation, Operation,
9
and Use of the MERS System)
10
(775) 329-5800, FAX (775) 329-5819

11 (As to Defendants MERSCORP, Inc., MERS, Inc., Freddie Mac, Fannie Mae,
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GMAC Mortgage, L.L.C., National City Mortgage, J.P. Morgan Chase Bank,
Reno, NV 89501

12
13 N.A., CitiMortgage, Inc., Countrywide Home Loans, Inc., HSBC Mortgage

14 Corporation, U.S.A., Wells Fargo Bank, N.A., GE Money Bank, Bank of

15 America, N.A., United Guaranty Corporation, PNC Financial Services Group,

16 Inc., National City Corporation, and National City Bank)

17
134. Plaintiffs incorporate by this reference each and every paragraph of this
18
Complaint as if set forth fully herein.
19
20 135. Upon information and belief, Defendants MERSCORP, Inc., MERS, Inc.,

21 Freddie Mac, Fannie Mae, GMAC Mortgage, L.L.C., J.P. Morgan Chase Bank, N.A.,

22 CitiMortgage, Inc., Countrywide Home Loans, Inc., HSBC Mortgage Corporation, Wells

23 Fargo Bank, N.A., GE Money Bank, Bank of America, N.A., United Guaranty Corporation,

24 PNC Financial Services Group, Inc., National City Corporation, National City Bank,
25 (hereinafter in this Third Claim for Relief collectively referred to for purposes of this

Third Claim as the “Defendant conspirators”), and each of them, did knowingly and
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1 willfully conspire and agree among themselves to engage in a conspiracy to promote,

2 encourage, facilitate and actively engage in wrongful foreclosures perpetrated on Plaintiffs


3 as alleged herein and the actions of the Defendant conspirators were taken as part of the
4 business policies and practices of each Defendant conspirator in participating in the
5
MERS system.
6
136. The MERS system was known by Defendant conspirators as being used by
7
the Defendant co-conspirators named in the First Claim for relief to facilitate the wrongful
8
foreclosures complained of herein.
9
137. Specifically, the MERS system was designed to remove the need for
10
(775) 329-5800, FAX (775) 329-5819

recordation of transfers of deeds of trust as alleged herein. This component of the design
11
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of the MERS System facilitated the wrongful foreclosures complained of herein by making
Reno, NV 89501

12
13 it easier to transfer the purported beneficial interest in a deed of trust and to appoint a

14 trustee for the purpose of foreclosing on a property, despite the fact that the deed of trust

15 no longer provided security for a note as a result of the note having been separated from

16 the deed of trust as alleged herein.

17 138. The MERS system does not track the transfer of the note.
18 139. The MERS system does not track the identity of the holder of the note.
19 140. Upon information and belief, the Defendant conspirators are or have been
20
creators and/or directors of MERSCORP, Inc., MERS, Inc. and/or members of the MERS
21
system, and, as to Defendant conspirators, Freddie Mac, Fannie Mae, GMAC Mortgage,
22
L.L.C., National City Mortgage, and J.P. Morgan Chase Bank, N.A., have, through their
23
employees and agents, served as members of the Board of Directors of MERSCORP, Inc.
24
and/or MERS, Inc., and participated in the design and coordination of the MERS system
25
described in this complaint.

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1 141. Defendants’ participation as shareholders, directors, operators, or members

2 of MERSCORP, Inc. and/or MERS, Inc. are as follows:


3 a. Defendants J.P. Morgan Chase Bank, CitiMortgage, Inc.,
4 Countrywide Home Loans, Inc., Fannie Mae, Freddie Mac, United Guaranty Corporation,
5
and Wells Fargo Bank, N.A. are each Shareholders of MERSCORP, Inc.
6
b. MERSCORP, Inc. is the operating company that owns and operates
7
the MERS System described herein, and is the parent company of Mortgage Electronic
8
Registration Systems, Inc. (“MERS, Inc.”).
9
c. Defendants Freddie Mac, MERSCORP, Inc., National City Mortgage,
10
(775) 329-5800, FAX (775) 329-5819

Fannie MAE, and United Guaranty Corporation are directors of MERS, Inc. and/or
11
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MERSCORP, Inc.
Reno, NV 89501

12
13 d. Defendants Freddie Mac, Fannie Mae, GMAC Mortgage, L.L.C.,

14 National City Mortgage, National City Bank, and its division, National City Corporation,

15 PNC Financial Services Group, J.P. Morgan Chase Bank, N.A., CitiMortgage, Inc.,

16 Countrywide Home Loans, Inc., HSBC Mortgage Corporation, U.S.A., GE Money Bank,

17 Bank of America, N.A., LaSalle Bank, N.A., Wells Fargo Bank, N.A., United Guaranty
18 Corporation, are Members of MERS, Inc.
19 142. Whenever this Complaint refers to any corporation's act, deed, or transaction,
20
it means that such corporation engaged in the act, deed, or transaction by or through its
21
members, officers, directors, agents, employees, or other representatives while they
22
actively were engaged in the creation, management, direction, control, or transaction of
23
its business or affairs.
24
FOURTH CLAIM FOR RELIEF
25

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1
(Conspiracy to Commit Fraud by Creation, Operation and Use of the MERS
2
System)
3
(As to Defendants MERSCORP, Inc., MERS, Inc., Freddie Mac, Fannie Mae,
4
GMAC Mortgage, L.L.C., National City Mortgage, J.P. Morgan Chase Bank,
5
N.A., CitiMortgage, Inc., Countrywide Home Loans, Inc., HSBC Mortgage
6
Corporation, U.S.A., Wells Fargo Bank, N.A., GE Money Bank, Bank of
7
America, N.A., United Guaranty Corporation, PNC Financial Services Group,
8
Inc., National City Corporation, National City Bank)
9
10 143. Plaintiffs incorporate by this reference each and every paragraph of this
(775) 329-5800, FAX (775) 329-5819

11 Complaint as if set forth fully herein.


245 E. Liberty St., Ste 110
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Reno, NV 89501

12 144. Upon information and belief, Defendants MERSCORP, Inc., MERS, Inc.,
13 Freddie Mac, Fannie Mae, GMAC Mortgage, L.L.C., J.P. Morgan Chase Bank, N.A.,
14
CitiMortgage, Inc., Countrywide Home Loans, Inc., HSBC Mortgage Corporation, Wells
15
Fargo Bank, N.A., GE Money Bank, Bank of America, N.A., United Guaranty Corporation,
16
PNC Financial Services Group, Inc., National City Corporation, National City Bank,
17
(hereinafter in this Fourth Claim for Relief collectively referred to for purposes of this
18
Fourth Claim as the “Defendant conspirators”), and each of them, did knowingly and
19
willfully conspire and agree among themselves to engage in a conspiracy to promote,
20
encourage, facilitate and actively engage in predatory lending practices perpetrated on
21
22 Plaintiffs whereby loans were made Plaintiffs using underwriting guidelines that

23 disregarded the Plaintiffs’ ability to repay the loan and which were inconsistent with

24 underwriting guidelines previously considered as standard in the industry and the actions

25 of the Defendant conspirators were taken as part of the business policies and practices of

each Defendant conspirator in participating in the MERS system.


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1 145. The Defendant co-conspirators knew or should have known that the MERS

2 system would be used to facilitate the origination and sale of loans such as the ones made
3 to Plaintiffs herein.
4 146. All Plaintiffs were given loans pursuant to decreased underwriting guidelines
5
which were created between 2004 and 2008 by, or created between 2004 and 2008 by
6
others and implemented by, the Defendants named as originators, and which
7
underwriting guidelines were inconsistent with underwriting guidelines previously
8
considered as standard in the industry and which previous underwriting guidelines
9
included consideration of factors which included, but were not limited to, the borrower’s
10
(775) 329-5800, FAX (775) 329-5819

capacity to repay the loan, the borrower’s credit rating, and the value of the collateral
11
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securing the loan.


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12
13 147. All Plaintiffs were advised by the lenders who were acting for the lenders,

14 servicers and sercuritizers on each loan, defined herein, that Plaintiffs were qualified for

15 the loans described herein, although such representations were known to those

16 Defendants to be false, or were made without intentional or reckless disregard to the truth

17 or falsity of the representations.


18 148. The Defendants described in the preceding paragraph intended that the
19 Plaintiffs would rely on the representations related to their qualification on the loans.
20
149. All Plaintiffs reasonably relied and had a right to so rely on the
21
representations of Defendants that they were qualified to take out the loans, evidenced by
22
their execution of the notes and deeds of trust described herein. Plaintiffs were damaged
23
by such misrepresentations and reliance on same as alleged herein.
24
25

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1 150. The Defendant servicers made representations to Plaintiffs as to the

2 amounts of payments due under the loans, including that the payments were due, and the
3 amounts of the payments due, and the due dates.
4 151. The Defendant servicers knew or should have known that such representations
5
were false because the note had been discharged through the securitization process or
6
through the note holder’s receipt of monies from third-party sources as alleged herein.
7
Defendants knew or should have known that the representations were material, as
8
Plaintiffs would not have paid money to the Defendant servicers without Defendant
9
servicers having made the representation.
10
(775) 329-5800, FAX (775) 329-5819

152. The Defendant servicers intended that the Plaintiffs rely on the
11
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representations in seeking payment from Plaintiffs.


Reno, NV 89501

12
13 153. Plaintiffs did rely on such representations in making payments to the

14 servicers, and the servicers, and any party for whom the servicer was collecting funds was

15 unjustly enriched as alleged herein.

16 154. Plaintiffs were damaged by the representations by the payment of money to

17 the Defendant servicers and as alleged herein.


18 155. All Plaintiffs were given loans that the Defendant Lenders knew or should have
19 known were designed to result in foreclosure, which resulted in the declaration of default
20
and the foreclosure of the loans as alleged herein.
21
156. The purpose of giving the loans to Plaintiffs described herein was to fuel the
22
demand for mortgage-backed securities generated between 2004 and 2008.
23
157. As alleged below, the MERS system facilitated securitization and transfer of
24
loans.
25

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1 158. Upon information and belief, the Defendant conspirators are or have been

2 shareholders in MERSCORP, Inc., MERS, Inc. and/or members of the MERS system, and,
3 as to Defendant conspirators, Freddie Mac, Fannie Mae, GMAC Mortgage, L.L.C.,
4 National City Mortgage, and J.P. Morgan Chase Bank, N.A., have, through their
5
employees and agents, served as members of the Board of Directors of MERSCORP, Inc.
6
and/or MERS, Inc., and participated in the design and coordination of the MERS system
7
described in this complaint.
8
159. Defendants’ participation as shareholders, directors, operators, or members
9
of MERSCORP, Inc. and/or MERS, Inc. are as follows:
10
(775) 329-5800, FAX (775) 329-5819

a. Defendants J.P. Morgan Chase Bank, CitiMortgage, Inc.,


11
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Countrywide Home Loans, Inc., Fannie Mae, Freddie Mac, AIG United Guaranty
Reno, NV 89501

12
13 Corporation, and Wells Fargo Bank, N.A. are each Shareholders of MERSCORP, Inc.

14 b. MERSCORP, Inc. is the operating company that owns and operates

15 the MERS System described herein, and is the parent company of Mortgage Electronic

16 Registration Systems, Inc. (“MERS, Inc.”).

17 c. Defendants Freddie Mac, MERSCORP, Inc., National City Mortgage,


18 Fannie MAE, and AIG United Guaranty Corporation are directors of MERS, Inc. and/or
19 MERSCORP, Inc.
20
d. Defendants Freddie Mac, Fannie Mae, GMAC Mortgage, L.L.C.,
21
National City Mortgage, National City Bank, and its division, National City Corporation,
22
PNC Financial Services Group, J.P. Morgan Chase Bank, N.A., CitiMortgage, Inc.,
23
Countrywide Home Loans, Inc., HSBC Mortgage Corporation, U.S.A., GE Money Bank,
24
Bank of America, N.A., Wells Fargo Bank, N.A., N.A., AIG United Guaranty Corporation,
25
Members of MERS, Inc.

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1 160. Whenever this Complaint refers to any corporation's act, deed, or

2 transaction, it means that such corporation engaged in the act, deed, or transaction by or
3 through its members, officers, directors, agents, employees, or other representatives while
4 they actively were engaged in the management, direction, control, or transaction of its
5
business or affairs.
6
161. Beginning at a time unknown to the Plaintiffs, prior to 2004, and continuing
7
through at least the present, the Defendant co-conspirators engaged in a conspiracy to
8
unlawfully deprive borrower-homeowners of their interest in property in numerous states
9
through issuing predatory loans as described herein, and through securitization and
10
(775) 329-5800, FAX (775) 329-5819

subsequent processes described herein.


11
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162. MERS, Inc. and/or MERSCORP, Inc. arranged for bilateral and multilateral
Reno, NV 89501

12
13 meetings, bilateral and multilateral teleconferences, and bilateral internet

14 communications with potential Shareholders, actual Shareholders, candidates for

15 Membership, and Members.

16 163. Upon information and belief, the Defendant conspirators have conspired

17 among themselves and with other unknown parties to:


18 a. develop a system of earning profits from the origination and
19 securitization of residential loans without regard for the rights of Plaintiffs, and others
20
similarly situated, by engaging in predatory and deceptive residential lending practices as
21
alleged in this complaint above; and
22
b. in furtherance of the system referred to immediately above, the
23
Defendant conspirators intentionally created, managed, operated and controlled the
24
Defendants MERSCORP, Inc. and MERS, Inc. for the specific purpose of MERS, Inc.
25
being designated as a sham “beneficiary” in the original deeds of trust securing those

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1 loans, including the loan made to Plaintiffs and other similarly situated individuals by

2 Countrywide Home Loans, Inc. National City Bank; and


3 c. Defendant conspirators intentionally created, managed, operated and
4 controlled the MERS system with the unlawful intent and for the unlawful purpose of
5
making it difficult or impossible for Plaintiffs and other victims of such industry-wide
6
predatory policies and practices to identify and hold responsible the persons and entities
7
responsible for the unlawful actions of Defendant Countrywide Home Loans, Inc., MERS,
8
Inc., National City Bank and their co-conspirators.
9
164. Upon information and belief, Defendant conspirators, through creation of the
10
(775) 329-5800, FAX (775) 329-5819

MERS system alleged herein, adopted and implemented residential lending underwriting
11
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guidelines for use in Arizona and in other states which:


Reno, NV 89501

12
13 a. were intended to, and did, generate unprecedented profits for the

14 Defendant conspirators and their co-conspirators at the expense of Plaintiffs and other

15 persons who were fraudulently induced by the Defendant conspirators and their co-

16 conspirators into taking out residential loans that were known by the Defendant

17 conspirators and their co-conspirators, at the time the loans were originated, and
18 b. were likely to result in foreclosure on those loans and loss by
19 Plaintiffs and other borrowers of their homes, with reckless disregard and intentional
20
indifference by the Defendant conspirators and their co-conspirators of the likelihood of
21
such foreclosure.
22
165. Removing real estate transaction records from the public record maintained
23
by the county clerks prevents oversight of real estate transactions by the public and by
24
public officials.
25

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1 166. MERSCORP, Inc. informed its co-conspirators that using the MERS system

2 would remove transaction records from the public record.


3 167. MERSCORP, Inc. and/or MERS, Inc. have publicly stated the following:
4 a. “MERS eliminates the need to prepare and record assignments when
5
trading residential and commercial mortgage loans.”
6
b. “With the recording of the security instrument(s), MERS becomes the
7
mortgagee in the county land records and no assignments are required during a
8
subsequent sale and transfer of the loan between MERS members.”
9
c. “There is no dependency on the corporate name you use on closing
10
(775) 329-5800, FAX (775) 329-5819

documents and the corresponding corporate name on the MERS System because the
11
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MERS System is not the legal system of record of ownership of mortgage loans.”
Reno, NV 89501

12
13 168. Upon information and belief, the MERS system was created for the unlawful

14 purpose of hiding and insulating the brokers and originators of predatory toxic loans from

15 accountability and liability by creating an entity which simultaneously informed all

16 lenders who originated loans that named MERS as the beneficiary of the following:

17 a. MERS would never own or acquire any actual beneficial interest in


18 any loan in which it was named as beneficiary under the deed of trust, and that
19 b. MERS could be named as beneficiary for purposes of public notice
20
and notice to the borrower and would act in that capacity if so designated by the lender
21
who originated the loan.
22
169. Upon information and belief, the intent and purpose of the Defendant
23
conspirators and their co-conspirators in the creation, management, operation and
24
control of MERS was, without limitation, to make it impossible for the borrowers, their
25
attorneys, the courts, the government, and anyone other than the Defendant conspirators

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1 who created and controlled MERS to identify the actual beneficial owner of any particular

2 loan or the property which was the collateral securing that loan until such time, if any,
3 that foreclosure action was initiated. As a result, Plaintiffs, and other similarly situated
4 individuals, were deprived of the right to attempt to modify their toxic loans, as the true
5
identity of the actual beneficial owner was intentionally hidden from Plaintiffs and other
6
similarly situated individuals.
7
170. MERSCORP, Inc.’s marketing materials also promise Members with
8
assistance with foreclosures. MERSCORP, Inc. and/or MERS, Inc. have publicly stated:
9
“MERS has assembled a Foreclosure Manual to provide a state-by-state guideline for our
10
(775) 329-5800, FAX (775) 329-5819

Members to follow when foreclosing a mortgage loan in the name of MERS.”


11
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171. Upon information and belief, the Defendant conspirators’ actions in creating
Reno, NV 89501

12
13 the MERS system, which was dependent on fraudulent and deceptive practices that

14 included, but were not limited to, making loans to consumers such as Plaintiffs in created

15 a system to unlawfully deprive Plaintiffs of their interest in their Residences when the

16 Defendants know that the obligations on the notes have been extinguished.

17 172. MERSCORP, Inc. and/or MERS, Inc. offered Members increased profit.
18 MERSCORP, Inc. has publicly stated:
19 a. “The MERS web site enables you to target directly your MERS®
20
Ready products and services to MERS members.”
21
b. “Commercial originators and issuers save hundreds to thousands
22
of dollars (in the case of cross-collateralized loans) in preparing and recording
23
assignments. Where the originator has not recorded a MERS as Original Mortgagee
24
(MOM) security instrument, the issuer saves the costs of assigning to the Trust by having
25
the originator assign to MERS.” (Emphasis added).

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1 c. “It will reduce risk and generate more profits for lenders because the

2 Notes registered on it will be in electronic format. It shortens the timeframe


3 between the closing and the securitization of the loan, enabling the Note to
4 move instantly, creating faster funding.” (Emphasis added).
5
173. MERSCORP, Inc.’s rules and by-laws, to which MERS Members agree,
6
require the following:
7
8 BY COMPLETING, SIGNING, AND SUBMITTING THIS

9 APPLICATION, THE APPLICANT IS AGREEING TO BE A MERS

10 MEMBER. THE APPLICANT HEREBY AGREES TO PAY ALL


(775) 329-5800, FAX (775) 329-5819

11 FEES AND EXPENSES SET FORTH IN THE MERS


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HAGER & HEARNE

RESIDENTIAL FEE SCHEDULE, WHICH MAY CHANGE FROM


Reno, NV 89501

12
13 TIME TO TIME; ABIDE BY ALL EXISTING MERS RULES AND

14 PROCEDURES, WHICH ARE INCORPORATED HEREIN BY

15 REFERENCE AND MAY BE AMENDED FROM TIME TO TIME;

16 AND COMPLY WITH THE TERMS AND CONDITIONS SET

17 FORTH IN THE ATTACHED ADDENDUM ENTITLED TERMS

18 AND CONDITIONS.

19 (Emphasis in original).

20
174. The MERSCORP, Inc. rules and by-laws, to which MERS Members agree,
21
cannot be carried out lawfully because they require the following:
22
23 1. MERS, which shall include MERSCORP, Inc. and Mortgage

24 Electronic Registration Systems, Inc., and the Member shall abide

25 by these Terms and Conditions, the Rules and Procedures (collectively,

the “Governing Documents”), copies of which will be supplied upon

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1
request. The Governing Documents shall be a part of the terms and
2
conditions of every transaction that the Member may make or have with
3
MERS or the MERS® System either directly or through a third party. The
4
Member shall be bound by any amendment to any of the Governing
5
Documents. 2. The Member, at its own expense, shall promptly,
6
or as soon as practicable, cause MERS to appear in the
7
appropriate public records as the mortgagee of record with
8
respect to each mortgage loan that the Member registers on the
9
MERS® System. MERS shall serve as mortgagee of record with
10
respect to all such mortgage loans solely as a nominee, in an
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

administrative capacity, for the beneficial owner or owners thereof from


HAGER & HEARNE

Reno, NV 89501

12
time to time. MERS shall have no rights whatsoever to any
13
payments made on account of such mortgage loans, to any servicing rights
14
related to such mortgage loans, or to any mortgaged properties securing
15
such mortgage loans. MERS agrees not to assert any rights (other
16
than rights specified in the Governing Documents) with respect to such
17
mortgage loans or mortgaged properties. References herein to
18
“mortgage(s)” and “mortgagee of record” shall include deed(s) of trust
19
and beneficiary under a deed of trust and any other form of security
20
instrument under applicable state law. *** 6. MERS and the Member
21
agree that: (i) the MERS® System is not a vehicle for creating or
22
transferring beneficial interests in mortgage loans, (ii) transfers
23
of servicing interests reflected on the MERS® System are subject to the
24
consent of the beneficial owner of the mortgage loans, and (iii)
25
membership in MERS or use of the MERS® System shall not modify or

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1
supersede any agreement between or among the Members having
2
interests in mortgage loans registered on the MERS® System.”
3
(Emphasis added).
4
5 175. The times, dates, and locations of the various meetings and communications

6 among and between the conspirators are solely within the knowledge of the conspirators
7 and have not been made public by MERS or its co-conspirators.
8 176. In addition to the allegations made related to the shareholder, director, and
9
creator conspirators, the MERS system conspiracy consisted of:
10
a. The Lender conspirators who agreed to procure loans by means of
(775) 329-5800, FAX (775) 329-5819

11
245 E. Liberty St., Ste 110

violation of state and Federal lending laws, as further described in the


HAGER & HEARNE

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12
previous claims for relief.
13
b. The Lender, Securitizer and Servicer conspirators who agreed to use
14
the MERS system unlawfully and in violation of state and Federal laws to
15
deceive homeowners and securities purchasers by misleading them to believe that
16
17 the conspirators had legal authority to foreclose when in fact, the conspirators do

18 not have legal authority to foreclose on loans which were made part of the MERS

19 system, as further described in the previous claims for relief.

20 c. The Securitizer conspirators who were aware of these violations of

21 law during procurement and agreed to purchase the loans knowing that the law
22 had been violated.
23 d. The Securitizer conspirators who, upon information and belief,
24
packaged and sold loans knowing that such loans were based on deeds of trust that
25
had been split from the notes, and based on loans that had been sold as part of the

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1 securitization process before the loans were finalized with the borrowers.

2 Thereafter, the purported interest in the obligation, the note as evidence of the
3 obligation, and the security interest for the obligation were transferred multiple
4 times without recording the change in ownership of an interest in real property in
5
the appropriate county records. This was accomplished by the creation of the
6
private parallel record keeping service known as the MERS system, whereby
7
MERS, Inc. is named in the deed of trust which is supposed to be the security for
8
the underlying loan obligation. MERS is named as the nominee of the lender, but
9
not as the holder of the note or the actual lender. Rather, MERS is named as
10
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beneficiary for the purpose of deceiving the borrower and the clerk’s office where
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the deed of trust is recorded.


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12
13 e. A securitization process that was based on loans that were made

14 based on residential loan underwriting guidelines that were designed to generate

15 as many loans as possible to fuel the securitization process to feed the demand for

16 mortgage-backed securities, the faulty and toxic nature of which loans was hidden

17 by the MERS system. As a result of MERS being named the beneficiary, and
18 through the processes described herein, the note and deed of trust are "split."
19 When the note is split from the deed of trust, then the note becomes unsecured and
20
a person holding only the note lacks the power to foreclose and a person holding
21
only a deed of trust suffers no default because only the holder of the note is entitled
22
to payment on it. The monetary effect of utilizing the MERS system, in addition to
23
the allegations set forth otherwise herein, was to hide profits and fees that were not
24
disclosed to the borrower or to the investor in the note, which, in some cases, upon
25
information and belief, were in excess of the principal value stated on the note.

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1 f. The Securitizer conspirators who violated state and Federal securities

2 laws through their descriptions of the financial derivatives created by the


3 conspiracy.
4 g. The Lender conspirators who agreed to supply loans to the
5
Securitizers despite knowledge that the Securitizers would sell them in violation of
6
the law.
7
h. The Servicer conspirators who agreed to unlawfully foreclose on
8
loans despite the separation of the loan from the deed of trust which made the
9
foreclosure unlawful because the debt was no longer secured.
10
(775) 329-5800, FAX (775) 329-5819

177. All of the conspirators agreed to the participation of the other conspirators in
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their individual roles in the conspiracy. The loan files of each of the loans disclose the
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12
13 legal violations and document that the Lenders agreed to purchase loans from third party

14 originators and to sell them to the Securitizers. The Securitizers agreed to purchase the

15 loans and pool them with full knowledge of the contents of the loan files. The Servicers

16 agreed to foreclose with full knowledge of the loan file for each loan.

17 178. All of the conspirators continued to agree to the conspiracy over the course of
18 thousands of transactions.
19 179. Defendants Fannie Mae, J.P. Morgan Chase Bank, N.A., GMAC Mortgage,
20
L.L.C., and National City Mortgage acted as Creators of the conspiracy. They created
21
MERS to hide their own unlawful activity as well as the activities of the co-conspirators.
22
180. Defendants Countrywide Home Loans, Inc., and Bank of America, N.A. acted
23
as Lenders in the conspiracy.
24
181. Defendants J.P. Morgan Chase, Wells Fargo Bank, N.A., Bank of America,
25
HSBC Mortgage Corporation, U.S.A., GMAC Mortgage, L.L.C., PNC Financial Services

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1 Group, Inc., National City Corporation, National City Mortgage, National City Bank,

2 Countrywide Home Loans, Inc., CitiMortgage and GE Money Bank acted as Securitizers in
3 the conspiracy.
4 182. Defendants Countrywide Home Loans, Inc., Bank of America, Wells Fargo
5
Bank, N.A., GMAC Mortgage, L.L.C., CitiMortgage, Inc., National City Mortgage, and
6
HSBC Mortgage Corporation, U.S.A., J.P. Morgan Chase acted as Servicers in the
7
conspiracy.
8
183. For the purpose of forming and effectuating this conspiracy, Defendants and
9
co-conspirators did the following things, among others:
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a. The Defendants acting as Lenders described above systematically and


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repeatedly violated Federal and state lending laws in order to originate mortgages, as
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12
13 described in the previous claims for relief;

14 b. The Defendants acting as Securitizers knowingly and by agreement

15 purchased the unlawfully obtained mortgages from the Lenders;

16 c. The Defendants acting as Lenders, Securitizers and Servicers utilized

17 and benefited from the MERS system as a means of preventing detection by law
18 enforcement or by the public and as a means of unlawful foreclosure to the detriment of
19 homeowners;
20
d. The Defendants acting as Lenders and Securitizers, with knowledge
21
and agreement of the co-conspirators, utilized the MERS system in such a manner as to
22
split the promissory note from the mortgage or deed of trust and thereby destroy the note
23
holders’ security, nevertheless proceeding with unlawful foreclosure actions to the
24
detriment of homeowners;
25

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1 e. All Defendants named herein as co-conspirators profited from their

2 respective roles in originating loans, selling them, and pooling their MERS registered
3 home loans together in large bundles which were sold and turned into financial derivative
4 instruments;
5
f. The mortgage securitization process became known in financial
6
industry parlance as “slicing and dicing.” The slicing and dicing results in a pool of
7
mortgages which have lost their individual characteristics but which have a high value to
8
those who create them;
9
g. The Defendants acting as Securitizers named herein purchased
10
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mortgages from the Defendants acting as Lenders named herein for securitization;
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h. The Defendants named as Securitizers herein sold the securitized and


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12
13 pooled mortgages as asset backed financial derivatives with affirmative claims that

14 Defendants were unaware of any legal issues which would affect the value of the assets

15 backing the securities, which was untrue, as Defendants actually knew or should have

16 known that the mortgages were unlawfully obtained and subject to rescission, and knew

17 or should have known that the mortgages and promissory notes had been split and
18 therefore the note holder no longer had the right to foreclose, assuming that it ever did;
19 i. The Defendants described herein as Servicers unlawfully foreclosed
20
on homeowners’ properties. The Servicers misrepresented that they had the legal right to
21
foreclose, when, in fact, they did not. The Servicers’ foreclosures wrongfully deprived
22
homeowners of property;
23
j. All Defendants named as MERS members agreed to promote MERS,
24
an ostensibly lawful business, and to utilize MERS in an unlawful manner to deprive
25
Plaintiffs and those similarly situated of property.

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1 184. The securitization process took distinct loans, deeds of trust, and mortgages,

2 and pooled them together in such a manner that they lost their unique identity.
3 Hundreds of such financial derivative instruments were created by the co-conspirator
4 Defendants. The co-conspirators all profited from their respective roles in the process,
5
including, but not limited to, the following pooling agreements:
6
a. Defendant and co-conspirator Wells Fargo Bank, N.A. is the master
7
servicer of the HSI Asset Loan Obligation Trust 2007-2. Approximately 18% of the
8
mortgages in that loan pool were originated by Defendant Countrywide Home Loans, Inc.
9
Approximately 26% of the mortgages in that pool originated from HSBC Mortgage
10
(775) 329-5800, FAX (775) 329-5819

Corporation (USA). HSBC Mortgage Corporation (USA) profited from packaging its
11
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loans together with those of Defendant and co-conspirator Countrywide Home Loans, Inc.
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12
13 b. The HSI Asset Loan Obligation Trust 2006-2, was sponsored and

14 sold by HSBC Bank. Countrywide Home Loans, Inc. originated 13% of the loans in this

15 instrument. HSBC Mortgage Corporation (USA) originated 15% of the loans in this

16 instrument. HSBC Mortgage Corporation (USA) is one of the servicers of this financial

17 derivative instrument.
18 c. The Banc of America Funding 2007-4 Trust was sponsored by
19 Defendant and co-conspirator Bank of America, N.A. The Master Servicer of this financial
20
derivative instrument is Defendant and co-conspirator Wells Fargo Bank, N.A. GMAC
21
Mortgage, L.L.C. is also among the servicers. The originators of the loans pooled in this
22
instrument include Defendants and co-conspirators GMAC Mortgage, L.L.C.,
23
Countrywide Home Loans, Inc., Wells Fargo Bank, N.A., Bank of America, N.A., National
24
City Mortgage Co.
25

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1 d. The Banc of America Funding 2007-7 Trust was sponsored by

2 Defendant and co-conspirator Bank of America, N.A. The Master Servicer of this financial
3 derivative instrument is Defendant and co-conspirator Wells Fargo Bank, N.A. GMAC
4 Mortgage, L.L.C. is also among the servicers. The originators of the loans pooled in this
5
instrument include Defendants and co-conspirators GMAC Mortgage, L.L.C.,
6
Countrywide Home Loans, Inc., Wells Fargo Bank, N.A., Bank of America, N.A., National
7
City Mortgage Co. The Banc of America Funding 2007-7 Trust hired Defendants and co-
8
conspirators Bank of America, N.A., CitiMortgage, Inc., GMAC Mortgage, LLC, and
9
National City Mortgage Co. as servicers.
10
(775) 329-5800, FAX (775) 329-5819

e. Defendant Merrill Lynch & Company, Inc., profited by selling its


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customers the Merrill Lynch Mortgage Investors Trust Series MLCC 2006-3. Merrill
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12
13 Lynch Credit Corporation and Wells Fargo Bank, N.A. originated the mortgage loans in

14 that derivative instrument. Wells Fargo Bank, N.A. is one of the servicers.

15 f. National City Mortgage Corporation is an originator and servicer of

16 loans in the GSAA Home Equity Trust Series 2007-8. Wells Fargo Bank, N.A. is also a

17 servicer. In the prospectus, National City Mortgage is described as a division of National


18 City Bank.
19 g. In the Merrill Lynch Mortgage Investors Trust, Series 2007-SD1,
20
Defendant and Co-conspirator First Franklin sold significant amounts of loans.
21
Defendant and co-conspirator LaSalle Bank, N.A., was hired as the trustee.
22
h. In the First Franklin Mortgage Loan Trust 2006-FF11, Defendant
23
“First Franklin, a division of National City Bank (formerly, National City Bank of
24
Indiana),” originated almost all of the loans and sold them to be pooled. Defendant Wells
25
Fargo Bank, N.A. was hired as the master servicer.

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1 i. In the Structured Adjustable Rate Mortgage Loan Trust Mortgage

2 Pass-Through Certificates, Series 2007-6, Defendant GE Money Bank was one of the
3 major underwriters of the loans which were pooled. Defendant and Co-conspirator U.S.
4 Bank, N.A. was also an originator of loans in the pool. U.S. Bank, N.A. is also a servicer.
5
LaSalle Bank National Association, U.S. Bank National Association and Wells Fargo Bank,
6
N.A. were hired as custodians of the trust.
7
j. Defendant and co-conspirator Wells Fargo Bank, N.A. is the master
8
servicer of the HSI Asset Loan Obligation Trust 2007-2. 18% of the mortgages in that
9
loan pool were originated by Defendant Countrywide Home Loans, Inc. 26% of the
10
(775) 329-5800, FAX (775) 329-5819

mortgages in that pool originated from HSBC Mortgage Corporation (USA). HSBC
11
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Mortgage Corporation (USA) profited from packaging its loans together with those of
Reno, NV 89501

12
13 Defendant and co-conspirator Countrywide Home Loans, Inc.

14 k. In the J.P. Morgan Alternative Loan Trust 2007-A2, J.P. Morgan

15 Chase Bank was an originator of loans which were pooled. JPMorgan Chase Bank,

16 National Association is one of the servicers of the mortgage pool. Wells Fargo Bank, N.A.

17 is the master servicer. U.S. Bank National Association is the trustee. Countrywide Home
18 Loans, Inc. sold loans to the trust. JPMorgan Chase Bank is one of the servicers.
19 185. Upon information and belief, Plaintiffs’ loans were securitized, “sliced and
20
diced” and pooled into mortgage pools such as the ones described herein as part of the
21
conspiracy related to the creation and operation of the MERS system, and Defendants,
22
and each of them, profited from same and are liable for their acts and the acts of their co-
23
conspirators in creating the MERS system, including, but not limited to, the use of MERS-
24
approved and created documents to establish the loans (including, but not limited to, the
25
form of deed of trust), and in participating in the securitization process described herein.

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1 186. Upon information and belief, Defendant conspirators utilized funds received

2 as part of the Troubled Asset Relief Program (TARP) and (TALF) and Federal Reserve
3 payouts to further the conspiracy to defraud Plaintiffs, and others similarly situated, to
4 deprive them of their money, to deprive them of their property, to unlawfully foreclose on
5
loans made to putative class members, to pay investors in the mortgage-backed securities
6
which were comprised of the loans made to Plaintiffs and others similarly situated, to pay
7
credit default swaps and to pay bonuses to employees and officers of the Defendant
8
conspirators based on their devising the subprime mortgage-backed products which were
9
securitized by loans of the type issued to Plaintiffs and others similarly situated, and
10
(775) 329-5800, FAX (775) 329-5819

collateralizing and selling such products in the United States and abroad.
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187. As a result of Defendant conspirators’ conspiracy described herein, Plaintiffs


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12
13 have suffered injuries which include mental anguish, emotional distress, embarrassment,

14 humiliation, loss of reputation and a decreased credit rating which has, or will, impair

15 Plaintiffs’ ability to obtain credit at a more favorable rate than before the decrease in

16 credit rating, the loss or anticipated loss of their Residences and other financial losses

17 according to proof, and Plaintiffs have incurred attorneys’ fees and costs in this matter.
18 188. Defendant conspirators’ actions were wanton, willful and reckless, and justify
19 an award of punitive damages against Defendant conspirators, and each of them.
20
FIFTH CLAIM FOR RELIEF
21 (Injunctive Relief)

22 189. Plaintiffs incorporate each and every paragraph of this Complaint as if fully

23 set forth in this claim.

24 190. The home of Plaintiff KRISZTINA DOMBOVARI (bank REO) has been sold
25 and is being held by the banks and their co-conspirators unlawfully.

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1 191. Plaintiffs have been issued a Notice of Default or have been scheduled for a

2 Trustee’s Sale or are subject to notices of default pursuant to the Defendants’


3 interpretation of their alleged rights to foreclose of the terms of their notes which
4 manifests the impending loss of all Plaintiffs’ homes.
5
192. Each and every Plaintiff has no adequate remedy at law to stop these
6
unlawful foreclosures and evictions without this Court’s intervention.
7
193. Plaintiffs will suffer irreparable harm from the loss of their homes and
8
Defendants will suffer nothing because no payments are owed to them on account of the
9
notes and mortgages and any foreclosure pursued by them will be and is and has been
10
(775) 329-5800, FAX (775) 329-5819

unlawful.
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SIXTH CLAIM FOR RELIEF


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12
13 (Declaratory Relief)

14 194. Plaintiffs incorporate each and every paragraph of this Complaint as if fully

15 set forth in this claim.

16 195. Defendants have either proceeded with foreclosures against Plaintiffs or

17 threatened foreclosures against Plaintiffs for which Defendants are not owed any
18 payments, have no lawful right to foreclose and have unlawfully deprived or attempted to
19 deprive Plaintiffs of their homes and further have failed to notify the Plaintiffs of the
20
discharge of their obligations on the notes associated with their mortgages.
21
196. Plaintiffs seek a declaratory judgment against Defendants stating that
22
Defendants have violated Plaintiffs’ rights and none of the Defendants are the proper
23
parties to foreclose upon the Plaintiffs’ properties or persons’ similarly situated who have
24
MERS named as the beneficiary on their deeds of trust.
25

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1 197. Plaintiffs have been required to retain counsel in this matter to protect

2 Plaintiffs’ rights and have incurred attorneys’ fees and costs in this matter.
3 CLASS ACTION ALLEGATIONS AND
4
REQUEST FOR CLASS CERTIFICATION
5
6
198. Plaintiffs incorporate each and every paragraph of this Complaint as if fully
7
set forth in this claim.
8
Class Definition
9
199. Plaintiffs, pursuant to Fed. R. Civ. P. 23(a), (b)(2-3), bring this action for
10
(775) 329-5800, FAX (775) 329-5819

themselves and on behalf of a class of persons similarly situated under the provisions of
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Federal and State law regarding plaintiff class actions.


Reno, NV 89501

12
13 200. The class is composed of the named Plaintiffs and all others who are victims
14 of the Defendants herein who originated, funded, serviced, securitized, sold, transferred,
15
insured, or guaranteed residential real estate loans in the United States from 2004 to
16
2008, and/or whose loans were serviced, securitized, sold, insured or guaranteed by
17
Defendants and who have not been informed by the Defendants that a discharge of the
18
note occurred, between October 2004 and present, and this class of persons was damaged
19
or is faced with risk of damage by the origination, servicing, sale, transfer, foreclosure,
20
sale, and/or acquisition of these loans. Excluded from the class are the Defendants,
21
including any parent, subsidiary, affiliate or controlled person of the Defendants and their
22
23 officers, directors, agents or employees, any judge or judicial officer assigned to this

24 matter, and members of the immediate families of any excluded persons.

25

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1 Numerosity

2 201. Upon information and belief, Plaintiffs estimate that the class comprises
3 not less than 125 individual members and the class is so numerous that joinder of all
4 members is impracticable. The members of the class can be identified and located using

5 information contained in the Defendants’ mortgage lending records.

6 Common Questions of Law and/or Fact

7 202. There are common questions of law and/or fact common to the class,

8 including whether the Defendants are the proper parties to foreclose on the residential

properties of these Plaintiffs as alleged herein, whether any such violations constituted a
9
conspiracy to commit fraud or wrongful foreclosure and/or whether Defendant’s conduct
10
(775) 329-5800, FAX (775) 329-5819

resulted in unjust enrichment to them and to the detriment of the members of the class.
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Also common to the class is the issue of whether the named Defendants acted as
Reno, NV 89501

12
conspirators in committing fraud in creating, operating and using the MERS system as
13
alleged in the Conspiracy to Commit Fraud in the creation, operation and use of the
14
MERS System Claim for Relief set forth above and whether the Defendants failed to give
15
notice of the discharge of the obligations under the notes to the borrowers who are
16
members of this class, so that these borrowers knew that no further obligations existed.
17 Typicality
18 203. Plaintiffs’ claims are typical of those of the members of the class. Plaintiffs
19 and the class members were subjected to the same kind of unlawful conduct and the
20 claims of Plaintiffs and the class members are based on the same legal theories.
21 Fair and Adequate Representation of Class

22 204. Plaintiffs will fairly and adequately protect the interests of the class Plaintiffs

23 represent. Plaintiffs’ interests do not conflict with the interests of the class, and Plaintiffs

24 intend on prosecuting this action vigorously.

25 205. Plaintiffs have retained experienced counsel qualified in class litigation and

counsel and is competent to assert the interests of the class.

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1
Rule 23(b) Requirements
2 206. The unlawful acts of Defendants, as alleged herein, constitute a course of
3 conduct common to Plaintiffs and each class member. Prosecution of separate actions by
4 individual class members would create a risk of inconsistent or varying adjudications
5 which would establish incompatible standards of conduct for Defendants and/or
6 substantially impair or impede the ability of the individual class members to protect their

7 interests.

8 207. Injunctive and/or declaratory relief to the class is appropriate because, upon

9 information and belief, Defendants, and each of them, have acted or refused to act on

10 grounds generally applicable to the class.


(775) 329-5800, FAX (775) 329-5819

11 208. Questions of law and/or fact common to the class members, including the
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issues identified above, predominate over questions affecting only individual class
Reno, NV 89501

12
members, and a class action is superior to other available methods for fair and efficient
13
adjudication of the controversy. Class action treatment will allow a large number of
14
similarly situated individuals to simultaneously pursue their common claims in a single
15
forum in an efficient manner, without unnecessary duplication of effort and expense that
16
would be required if numerous individual actions were pursued.
17
WHEREFORE, Plaintiffs pray this court enter an order providing relief as follows:
18
1. For an award of damages against Defendants, and each of them, on the
19
Plaintiffs’ state law claims, whether general, special or punitive as alleged above, in an
20 amount to be shown at trial;
21 2. For an award of attorneys’ fees and costs as provided by law;
22 3. For an order of restitution on behalf of Plaintiff and class members;
23 4. For a temporary restraining order and preliminary and permanent
24 injunction on behalf of those Plaintiffs that have sought a separate motion for temporary

25 restraining order, and MERS, in addition to each and every of their respective officers,

agents, employees, servants, and attorneys, and those persons in active concert or

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1
participation with any of them or each of them, as specifically alleged above from
2 transferring any interest in the subject properties, from proceeding with any foreclosure
3 action as to any of the Plaintiffs’ residences and/or proceeding with any collection action
4 against the Plaintiffs, and from transferring any interest and/or proceeding with
5 foreclosure actions against the residences of similarly situated class members;
6 5. For a declaratory judgment holding that Plaintiffs’ rights were violated as

7 alleged above;

8 6. That Plaintiffs have and recover from the Defendants pre-judgment interest as

9 may be determined by statute and rule;

10 7. That this action be certified as a Plaintiffs’ class action;


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11 8. Pursuant to Federal Rules of Civil Procedure, Rule 38, Plaintiffs demand a trial
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by jury on all issues of fact in this action; and


Reno, NV 89501

12
9. That this Court grant such other and further relief as it deems just and proper.
13
DATED: September 24, 2009 HAGER & HEARNE
14
15
/s/ Treva J. Hearne, Esq.
16 Robert R. Hager, Esq.
SBN: 1482
17 Treva J. Hearne, Esq.
SBN: 4450
18 245 E. Liberty St., Ste. 110
Reno, NV 89501
19 Tele: (775) 329-5800
Attorneys for Plaintiffs
20
21
22 DEMAND FOR JURY TRIAL
23
24 Pursuant to Fed. R. Civ. P. 38(b), Plaintiffs hereby demand a trial
by jury to the fullest extent permitted by law.
25

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DATED: September 24, 2009 HAGER & HEARNE
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/s/ Treva J. Hearne
4 Robert R. Hager
Treva J. Hearne
5 Attorneys for Plaintiffs

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(775) 329-5800, FAX (775) 329-5819

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245 E. Liberty St., Ste 110
HAGER & HEARNE

Reno, NV 89501

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First Amended Complaint/Green etal v. Citi etal-66