fare 4 ek FILED 1st JUDICIAL DISTRICT COURT yer! ‘Santa Fe County STATE OF NEW MEXICO N (A See 1111212018 4:40 PM COUNTY OF SANTA FE «x ge? ‘STEPHEN T. PACHECO FIRST JUDICIAL DISTRICT wv ges 7 e CLERK OF THE COURT ° : Francine Lobato No. D-101-CV-2016-00249 U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS TRUSTEE FOR THE RMAC TRUST, SERIES 2016-CTT, Plaintiff, vs. MARK F. COBLE, Defendant. PLAINTIFF’S REPLY TO DEFENDANT'S RESPONSE TO MOTION FOR SUMMARY: « JUDGMENT E Plaintiff U.S. Bank National Association, Not In Its Individual Capacity, But Solely:As Trustee For The RMAC Trust, Series 2016-CTT (“U.S. Bank as Trustee” or “Plaintifi”), by and” through its counsel Houser & Allison, APC (Solomon S. Krotzer, Esq. and Lindsay K. Griffel, Esq.) hereby submits its Reply to Defendants Response to Motion for Summary Judgment. MOTION FOR SUMMARY JUDGMENT STANDARD Please note that “[w]hen disputed facts do not support reasonable inferences, they cannot setve as a basis for denying summary judgment.” Romero v. Philip Morris, Inc., 2010-NMSC- 035,410. Further, once a party makes a prima facie showing — ice. evidence as sufficient to raise a presumption of fact or establish the fact in question ~ the burden shifts to the non-movant to demonstrate the existence of specific evidentiary facts which would require a trial on the merits, Id. Page 1 of 10THERE ARE NO ISSUES OF MATERIAL FACT CONCERNING “STANDING” As evidenced by Defendant Coble’s Response, the sole issue that is in dispute is “standing.” Notably, Defendant Coble does not dispute that: he took out the subject loan, he promised to make monthly payments, he defaulted and stopped making those payments, or any other requisite elements of foreclosure. Thus, assuming this Court determines that no genuine issue of material fact exists as to the “standing” issue, Plaintiff's motion for summary judgment must be granted. Varga v. Ferrell, 2014-NMCA-005, § 19 (material facts that are not properly disputed are deemed admitted)! Defendant Coble tries to muddle the issue of “standing” by referring to immaterial and irrelevant “facts” most of which occurred long before this foreclosure was even filed, However, the only material issue is whether the original Plaintiff (Nationstar Mortgage, LLC or “Nationstar”) had standing when this action was filed on Januaty 30, 2016. Deutsche Bank National Trust Company v. Johnston, 2016-NMSC-013, §f 20-27 (standing must be established “as of the date of filing suit in mortgage foreclosure cases”). Further, since this case involves a promissory note with a blank indorsement (as opposed to a special indorsement) the only material fact is whether Plaintiff had physical possession of the note when this action was filed, NMSA § 55-3-201(b): NMSA § 55-3-301; Bank of New York v. Romero, 2014-NMSC-007, {fj 20-28 (explaining difference between proving standing where note has special indorsement versus proving standing when note has blank indorsement). ! Defendant Coble cannot dispute as a factual matier that Nationstar was in physical possession of the original note in this case. Not only was the original note attached to he " Defendant Cable disputes facts unrelated to standing, but notes inthe Response tat the reason the facts are disputed is because the facts are “contingent upon plaintiff establishing its right to enforce the Note.” Response, p. 5. Page 2 of 10Complaint itself, Nationstar’s counsel filed a “Certification of Possession of Original Note” on January 30, 2016. In addition, Nationstar’s counsel filed a second “Affidavit Regarding Possession of Original Note” on August 15, 2016. As further evidence, Nationstar testified and produced business records confirming that the original “wet ink” promissory note was received by Nationstar on or around March 1, 2012, and a few days later on March 9, 2012 the instruments were reviewed and “standing” was “verified.” Finally, the original note was mailed to counsel as evidenced by the Baile Letter dated January 28, 20133 In stark contrast to the mountains of evidence produced by Plaintiff through several separate affidavits, Defendant Coble has failed to produce any evidence of his own controverting the custodial history above. The August 31, 2016 letter from Rushmore does not ereate a material issue of fact as to possession or custodial history. ‘Rushmore correctly ‘notes in the August 31, 2016 letter that by that time the owner of the loan had Trustee and the servicer was Rushmore. The August 31, 20 Note” with a special indorsement ftom Cationtar Morena LLC (the ériginal/plaintiff and holder) to US Bank as (Cas DP asservicen Trustee. This letter does not in any’ way create an issue of material fact regarding whether: (1) 6-tetfer presents an Nationstar had standing to foreclose when this action ‘was filed; and/or (2) US Bank as ‘Trustee currently has standing. If anything, it supports that Nationstar Mortgage, LLC had standing before US Bank as ‘Trustee had standing. — Defendant Coble argues that since Rushmore attached a copy of an older version of the promissory note to the August 31, 2016 letter, it somehow creates an issue of fact concerning standing. That is incorrect. While it is true that Rushmore attached an older copy of the promissory: 2 See Affidavit of Nationstar, filed on September 14, 2018, $f] 11-12. 3 See Affidavit of Nationstar, filed on September 14, 2018, §4 14. Page 3 of 10 ottnote to the August 31, 2016 letter (this is evident from the fact that the blank indorsement is not present on the note attached to the August 31, 2016 Rushmore letter), nothing in the letter says the promissory note was the most recent version of the promissory note, Indeed, this makes sense, since Nationstar had mailed the original note to Nationstar’s counsel in 2013 and therefore Rushmore was not in possession of the original note when the August 31, 2016 letter was sent, In summary, Plaintiff has gone above and beyond to prove “standing” and therefore met its burden. Since Defendant Coble fails to present any admissible controverting evidence, there are no triable issues of fact as to “standing” and summary judgment is appropriate on this issue, FREDDIE MAC ARGUMENTS ARE IRRELEVANT AND MISLEADING In order to cause confusion, Defendant Coble makes several interrelated arguments stemming from the fact that this loan was a Freddie Mac loan, However, there is no secret or dispute that during the time Nationstar serviced this loan, Freddie Mac owned this loan,* Freddie Not Nsm ‘Qu ed |) Says sag AtCaat eS Mac loans ate generally enforced by loan servicers and that is the case here.’ For example, Chapter Ta 9301 of the Freddie Mac Guide states: “Freddie Mac requires the Servicer to manage ihe foreclosure process to acquire clear and marketable title to the property in a cost-effective, expeditious and efficient manner.”* In fact, the servicer does not even need Freddie Mac's approval to file a foreclosure except in certain circumstances.” Importantly, the Freddie Mac Guide requires the foreclosure to be prosecuted in the servicer's name except in very limited circumstances and automatically grants constructive possession of the loan documents so that the 4 See Affidavit of Nationstar, filed on September 14, 2018, {9 22-23. <— 5 See Affidavit of Nationstar, filed on September 14, 2018, § 23. © See Section 9301.1 Freddie Mac Single-Family Seller/Servicer Guide (http://www. freddiemac. convsinglefamily/pdf/guide.pdf). 7 See Section 9301.8 Freddie Mac Single-Family Seller/Servicer Guide (http://www. freddiemac.conysinglefamily/pdf/guide.pdf), Page 4 of 10 (Line?) Wire e NOservicer can foreclose.* Thus, Defendant Coble’s Freddie Mac arguments are red-herrings designed to confuse and mislead. Defendant Coble’s root argument seems to be that only Freddie Mac or Nationstar (not both) could have standing to foreclose. However, this argument conflates the issue of standing (ie. right to enforce under the UCC) with the issue of Freddie Mac ownership. As explained in the preceding paragraph, Freddie Mac loans are set up so that the servicer forecloses even while Freddie Mac maintains ownership of the loan, Borrowers in other cases have tried to conflate these two issues without success. For example, the case of Jn re Butler held that the loan servicer had standing to foreclose a Freddie Mac loan, noting that the Freddie Mac Guide® specifically gave the loan servicer authority to foreclose and automatically granted constructive possession of the Joan documents to the loan servicer. 512 B.R. 643 (Bankr. W.D. Wash. 2014). Defendant Coble also seems to argue that because the loan transferred to Freddie Mac at some point after the origination, the indorsement placed on the note by the original lender i invalid. One strange consequence of this argument seems to be that the original lender still has “standing” to foreclose (although Defendant Coble disputed the original lender’s right to foreclose in a prior foreclosure). ‘This argument is both legally flawed and unsupported by any evidence Wwhaisoever. ‘The blank indorsement is undated. /There is no evidence on the record to support that the indorsement was placed on the note affer the loan was sold to Freddie Mac. Further, Defendant Mate od NSM ComAaiwt US. wote W FHA eomAaeT ie (C ve. Frwancial Pivistw Nv § Section 9301.12 states: “The Servicer must instruct the foreclosure counsel to. process the foreclosure in the Servicer’s name ....” (http://www freddiemac.com/singlefamily/pdf/euide.pdf); Section 8107.2 Freddie + ‘Mac Single-Family Seller/Servicer Guide (http://wow.freddiemac.com/singlefamily/pdf/guide.pdf) states “If constructive possession is appropriate for the Legal Action, the Seller/Servicer shall automatically, immediately. and conclusively be deemed to be in constructive possession of the Note ....” LAW? Jo— ° The Freddie Mac Guide is publicly available. Affidavit of Nationstar, | 22. The hyperlink set forth in Nationstar’s affidavit is no longer available, so this hyperlink is hereby provided: http://www. fteddiemac.com/singlefamily/pdf/guide.pdf. Page 5 of 10Coble does not present any legal authority which would render this “disputed fact” material in the first place. The original lender and Freddie Mac entered into a transaction to sell this loan, and the details concerning this transaction are not material facts in this case to the issue of whether ‘Nationstar had standing when this action was filed since it is undisputed that Nationstar serviced this loan on behalf of Freddie Mac. yer son os “oe” oN on Finally, Defendant Coble seems to argue that when the loan wayold to Freddie Mac isa N° material fact but when the loan was sold to Freddie Mac is irrelevant. Nationstar had physical possession of the original note since 2012 as established by the uncontroverted evidence." This action was filed in 2016. The note had a blank indorsement from the original lender. Moreover, Nationstar’s affidavit states “during the time that Nationstar serviced the Loan, Nationstar serviced the loan on behalf of Freddie Mac.”"' Therefore, the record establishes that the Freddie Mac ‘ownership timeline mirrors the servicing timeline of Nationstar, and Nationstar began servicing this loan effective July 16, 2011.7 Given that all of these dates are long before 2016, they are irrelevant to the issue of whether Nationstar had standing in 2016. : In summary, this was a Freddie Mac loan. Consistent with the Freddie Mac Guide, ‘Nationstar prosecuted this foreclosure in its name and was the person entitled to enforce the note. ‘These Freddie Mac issues do not create any issues of material fact that require a trial and therefore do not preclude summary judgment. PRIOR FORECLOSURE BY ORIGINAL LENDER SUPPORTS STANDING Defendant Coble asks this Court to take judicial notice of D-101-CV-2012-01369, which was a prior foreclosure concerning this loan initiated by the original lender First Horizon Home 20 See Affidavit of Nationstar, 11 1 See Affidavit of Nationstar, § 22. ” See Affidavit of Nationstar, 9. Page 6 of 10 ye we xvery, hareve (eat ste ( me aud &o ee . ¢ Bank, National Association (“First Horizon”). First, this Loans, A Division Of First Te prior foreclosure is|ietevant}o there is no need for this Court to take judicial notice. It was dismissed without prejudice. Second, nothing in the First Horizon foreclosure controverts any ‘material facts in this foreclosure. Ifanything, the First Horizon foreclosure reinforces the material facts in this action, On August 13, 2014, Plaintiff filed a motion to dismiss in the First Horizon — SERMCING ONLy ~—fLoT QuuersrP foreclosure explaining that “anioanfas transferred from the original named Plaintiff to Nationstar TRANS eed rs mis leading Mortgage, LLC.” This is entirely consistent with Nationstar having standing in this action. Itis also worth pointing out that Defendant Coble made inconsistent arguments in the First Horizon foreclosure. For example, in his Response Defendant Coble argues that First Horizon “never lost its status as a holder” but in the Fist Horizon foreclosure Defendant Coble challenged First Horizons right to foreclose. These positions directly contradict one another and demonstra‘e Defendant Coble’s willingness to use any argument — whether the argument has merit or not — to avoid foreclosure. DISCOVERY IS COMPLETE AND DISCOVERY DISPUTES ARE DISINGENUOUS Defendant claims that discovery is ongoing, but that is incorrect. This case has ‘been pending since 2016, and as mentioned above there was another foreclosure filed in 2012. Thus, Defendant Coble has had six years to conduct discovery. There are no’ outstanding written discovery requests and there are no pending depositions. As explained in Plaintifi’s Response to Motion to Show Cause and Request for Sanctions,'° Plaintiff has produced all documients in its possession concerning this loan, Notwithstanding everything produced, Defendant Coble continues to claim he needs to see more documents but Defendant Coble has failed to explain what has allegedly not been disclosed and how the purportedly withheld documents would change the 3 Filed September 24, 2018. Page 7 of 10outcome of this case. The truth is that Defendant Coble has delayed foreclosure for years through various stall tactics, and the recent discovery argument is just another such tactic. However, using discovery for such purposes is improper. Notably, Defendant's counsel failed to make good faith efforts to resolve the purported discovery disputes. Over the span of almost one year, the only efforts Defendant’s counsel made to resolve the alleged discovery disputes consisted of two letters and one email, which undersigned puplcate counsel promptly responded to. As evidenced by the sheer volume off documents produced in this 2 Really ! simple foreclosure, the “discovery” disputes are disingenuous. Defendant Cobieinom that thee ho are no documents that can help their case, but they hope that they can continue to delay foreclosure. ~ Even to the extent (without admitting) some of the outrageous document demands have not, been met, courts are required to limit discovery when the discovery sought is “unreasonably cumulative and duplicative,” and when “the burden or expense of the proposed discovery outweighs its likely benefit taking into account the needs of the case, the amount in controversy ... and the importance of the issues at stake in the litigation.” NMRA, Rule 1-026. Heré, while it is unclear exactly what Defendant Coble is looking for, based on the arguments presented in Defendant Coble’s Response it is possible that what Defendant Coble is seeking are documents that exceed the scope of discovery given the issues in tis case. For example, Defendant Coble i not entitled to every document in existence showing the transaction between Freddie Mae and the original lender because the material fact ~ i.e. that this loan was sold to Freddie Mac — is not in dispute. Renewed Nec plus pages ° qs 40h Qveicates vF & 10% Page 8 of 10‘US BANK AS TRUSTEE ALLONGE ISSUES ARE NOT RELEVANT AND MISLEADING The evidence proves that after this action was filed, this loan was transferred to US Bank Br whem? as Trustee’ and the loan servicer changed to Rushmore.'* In fact, a letter was even sent to Defendant Coble informing him that “the Loan was sold to the New Creditor” and listing US Bank as Trustee.'* Finally, undersigned counsel (who has only appeared as counsel for US Bank as Trustee, not Nationstar) has been in physical possession of the original “wet ink” note that has a special indorsement to US Bank as Trustee since January 9, 2018." All of this conclusively proves that US Bank as Trustee now has standing to foreclose. Defendant Coble asserts that because the Allonge to US Bank as Trustee was not attached as an exhibit to the motion to substitute counsel, that somehow proves that US Bank as Trustee does not have standing. However, even assuming the Allonge is somehow defective (it is not) that would just mean the note is still bearer paper, in which case US Bank as Trustee has standing by virtue of undersigned counsel's possession. Otherwise, if the special indorsement is not defective, US Bank as Trustee has standing by virtue of the special indorsement. PLAINTIFF NOT REQUIRED TO RESPOND TO AFFIDAVIT OF SPECIFIC NEGATIVE AVERMENT, Defendant Coble attached as an exhibit to his Answer an “Affidavit of Specific Negative, Averment.” Defendant Coble claims that anything not specifically disputed in this document is automatically admitted. However, this argument is legally flawed because Rule 1-008(D) only applies to a pleading “to which a responsive pleading is required.” Defendant Coble’s Answer. was not a pleading that Plaintiff was required to respond to. Xx eee add 4 See Affidavit of US Bank as Trustee, $f 19-20. N (a yO 15 See Affidavit of US Bank as Trustee, ff 19 (Exhibit L). é 'S See Declaration of Solomon S. Krotzer, { 3. D hespo”® Page 9 of 10 ae) @ Mss oo ——CONCLUSION For the reasons stated above, U.8. Bank as Trustee is entitled to summary judgment in its favor and against the Defendants on its Complaint for Foreclosure. HOUSER & ALLISON, APC By 4/ Solomon 8. Krotzer jolomon S. Krotzer Houser & Allison, APC 20 First Plaza, Suite 303 Albuquerque, NM 87102 Tel (949) 679-1111 skrotzer’@houser-law.com CERTIFICATE OF Thereby certify that on November 12, 2018, a true copy of the foregoing Reply was served via the Courts e-filing system, email, and US First Class Mail to the following parties: VICE Gamer Law Firm N. Ana Garner 1000 Cordova Place, #644 ‘Santa Fe, New Mexico 87505 gamnerlaw@yahoo.com Attomey for Defendant By: 4/Solomon S, Krotzer Solomon S. Krotzer, Esq Page 10 of 10