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THE BLANK ENDORSEMENT ON THE NOTE DOES NOT COMPLY WITH THE PSA 2. Plaintiff even recites a portion of Section 2.01 of the PSA in its Response.

Plaintiff emphasizes Section 2.01(i), which describes the language of the endorsement. Defendant, however, did not attack the language of the endorsement but who performed the endorsing. Section 2.01, prior to the portion emphasized by Plaintiff's Response, provides the Depositor Novastar Mortgage Funding Corporation (emphasis added) "does hereby transfer, assign, set over, and otherwise convey in trust to the Trustee...all right, title and interest of the Depositor" in and to each identified Mortgage Loan. The endorsement described in Section 2.01(i) must be from the Depositor. However, there is no endorsement from Novastar Mortgage Funding Corporation to the Trust or blank. Instead the undated, not notarized endorsement is directly from the original lender, Novastar Mortgage, Inc., to the Trust. As Defendants argued in their Motion, there are no provisions for direct deposit from the original lender to the trust. Plaintiff's Response does not point to any provisions in the PSA which provide for such a transfer. If the Note was not transferred to the Trust according to the Trust's terms, then the transfer never happened and the Trust cannot be the holder of the Note. A trust does not have free will. A trust cannot act contrary to its own governing documents. If the transfer did not take place according to the Trust's own terms, the transfer is void. NY CLS EPTL § 7-2.4; Wells Fargo Bank, N.A. v. Farmer, 2008 NY Slip Op 51133U, 6 (N.Y. Sup. Ct. 2008). 3. Plaintiff argues that an assignment under Illinois common law requires no

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UNITED STATES DISTRICT COURT For the Northern District of Illinois Eastern Division DEUSTCHE BANK NATIONAL TRUST COMPANY as Trustee Plaintiff V. KRISTEN & HOWARD BODZIANOWSKI Defendant No. 01 Cv 1950

Honorable Rebecca Pallmeyer Magistrate Judge Cox

DEFENDANT'S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF STANDING

Defendants Kristen Bodszianowski and Howard Bodzianowski by and through their attorneys Woerthwein & Miller reply in support of their motion to dismiss the foreclosure complaint brought by Deutsche Bank National Trust Company as Trustee pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of standing as follows: Defendants brought their Motion to Dismiss attacking standing based on the premise that the Plaintiff could not be the assignee and owner of the Note and the Mortgage under the governing documents creating the Plaintiff Trust. Plaintiff has not contested that it was created pursuant to the Purchase and Sale Agreement ("PSA"), available at http://www.secinfo.com/dl4D5a.v66Nn.c.htm# I stPage) relevant portions of which were attached to Defendant's Motion. Plaintiff has argued: 1) the endorsement on the Note attached to the Complaint complies with the PSA; and 2) that Defendants lack standing to contest the validity of the assignment

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particular language, just a manifestation of intent, citing Community Bank v. Carter, 283 Ill. App. 3d 505 (Ill. App. Ct. 1st Dist. 1996). Of course, in this case, the assignment is not governed by Illinois common law, but the law of New York (PSA, 12.05). Plaintiff then goes on to argue that mere possession is sufficient under the UCC to enforce the note. Both propositions would be true in a typical UCC transaction involving negotiable instruments where the holder needs simply to show up with possession of a note endorsed in blank. However, the UCC (§ 810 ILCS 5/1-302 in Illinois), permits parties to agree to a more exacting method of transferring the notes to the trust, and in this case the parties did so. The PSA in Section 2.01 sets forth a specific method of transferring this Note to this Trust that goes beyond what is required by the UCC or common law. Plaintiff failed to comply with those provisions. 4. Plaintiff makes no response to the argument that it also does not possess the

mortgage. Here, the Mortgage is not assigned to the Trustee until five years after the closing date of the Trust. In creating a securitization trust, both the notes and mortgages need to be properly transferred to a trust that will pay for them by issuing securities to investors. The PSA is for a secured loan; the Trust cannot take the loans without their mortgages nor the mortgages without their loans. The trust gets the whole loan or nothing because it can only take the kind of property the PSA says it can, the way the PSA says it can. That was not done with either the Note or the Mortgage. DEFENDANTS HAVE STANDING TO RAISE THE ISSUE OF STANDING 5. Plaintiff argues that Defendants as alleged debtors lack standing to question the

assignment of the debt. However, all of Plaintiff's cases and illustrations concern debtors who

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were questioning assignments based on the assignments negative effect on third parties. In this case, Defendants have their own interest in enforcing standing. Breaches of the PSA are evidence that the loan was not transferred to the Trust. The PSA is being invoked because it is the document that purports to transfer the Note and Mortgage to the Trust. Adherence to the PSA determines whether there was a transfer effected or not because under New York (and Illinois) trust law, a transfer not in compliance with a trust's documents is void. If there isn't a valid transfer, there's no standing. This is simply a factual question--does the Trust own the loan or not? If not, then the Trust lacks standing to foreclosure. 6. A. Standing is important to the Defendants for at least three reasons: First, when a Trust is the one seeking foreclosure, not the original lender, the

holder-in-due course rule prevents the Defendants from asserting certain defenses to foreclosure and counterclaims based on wrongdoing at origination. This means Defendants can lose their homes even if their loans were procured through most types of fraud. The holder-in-due course rule also hamstrings Defendants' ability to pursue affirmative predatory lending claims against Trusts. Finally, TILA imposes limitations on the kind of claims that can be brought against most assignees. 15 U.S.C. § 1641(a). Jackson v. S. Holland Dodge , 197 Ill. 2d 39, 50; 755 N.E.2d 462 (Ill. 2001), for instance, held lack of assignee liability under TILA was a defense to an Illinois consumer fraud claim. The securitized trusts are not only set up to be bankruptcy remote, but to be remote from the retail fraud that was feeding mortgages into the securitization process. B. Second, the Defendants have a real interest in dealing with the right plaintiff

because different plaintiffs have different incentives and ability to settle. Trustees have very different incentives and ability to settle than banks that hold loans in portfolio. PSA terms,

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Michigan court applying New York trust law recently reached the same decision being urged by Defendants upon this court, and a copy of that decision is attached hereto as Exhibit 1. WHEREFORE, the Court should dismiss this action with prejudice on the ground that the plaintiff, Deutsche Bank National Trust Company as Trustee as aforesaid, lacks standing to sue. Respectfully submitted, By: /s/Theodore A. Woerthwein One of the Attorneys for the Defendants

Theodore Woerthwein Woerthwein & Miller 225 West Washington Street Suite 2200 Chicago, Illinois 60606
(312) 654-0001

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liquidity, capital requirements, credit risk exposure, and compensation differ between services/trustees and portfolio lenders. C. Defendants have the right to be litigating with the real party in interest.

Defendants have a vested interest in determining that the one and only entity entitled to foreclose gets the property. Plaintiff is correct that it is the only one presently trying to collect. However, if the loan wasn't properly securitized, then the depositor or seller or their trustees in bankruptcy could claim the loan as its property. If the loans weren't properly transferred via the securitization, then they are still held in portfolio by someone. A future trustee could try to claw this loan back into the Bank's estate. Therefore Defendants have real legal interests at stake in litigating against the right party. 7. Plaintiff's cases are not on point. In In Byczek v. Boelter Cos., 230 F. Supp. 2d

843 (N.D. Ill. 2002), the defendant was arguing the assignment was invalid based on a conflict of interest between the assignee and the assignor's creditors. The Court ruled that only the creditors could make that argument. Similarly, in Plaintiff's older case of Blackford v. Westchester F. Ins. Co., 101 F. 90 (8th Cir. Indian Terr. 1900), a debtor was arguing an assignment was invalid because it was voidable by creditors. As argued above, in this matter Defendants raise the standing argument in support of their own interests, not someone else's. Plaintiff's quotation from Corpus Juris Secondum is also premised upon what interest the debtor may have in questioning the assignment. In this case, the alleged debtors are arguing on behalf of their own interest. 8. Plaintiff mentions that it relies upon decisions from Michigan and Illinois. The

Trust is governed by New York law and Plaintiff never mentions New York law. However, a

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UNITED STATES DISTRICT COURT For the Northern District of Illinois Eastern Division DEUSTCHE BANK NATIONAL TRUST COMPANY as Trustee Plaintiff V. KRISTEN & HOWARD BODZIANOWSKI Defendant No. 1:11-cv-01950

Honorable Rebecca Pallmeyer Magistrate Judge Cox

NOTICE OF FILING TO: Counsel on the attached Certificate of Service PLEASE TAKE NOTICE that on this 4th day of October, 2011, the undersigned counsel filed with the Clerk of the United States District Court for the Northern District of Illinois, Eastern Division, Defendants Kristen Bodszianowski and Howard Bodzianowski Motion to Dismiss, a copy of which is hereby served upon you.

Dated: October 4, 2011

Respectfully submitted, By: /s/Theodore A. Woerthwein One of the Attorneys for the Defendants

Theodore A. Woerthwein Woerthwein & Miller 225 West Washington Street Suite 2200 Chicago, Illinois 60606 (312) 654-0001

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CERTIFICATE OF SERVICE

I, Theodore A. Woerthwein, an attorney, certify that on October 4, 2011, I caused a copy of the foregoing Defendants Kristen Bodszianowski and Howard Bodzianowski Motion to Dismiss to be served upon the persons listed below by the specified method. By electronic transmission using the Court's electronic case filing system: James Nick Pappas pappas@bcclegal.com

/s/Theodore A. Woerthwein

Case: 1:1 1-cv-01950 Document #: 20-1 Filed: 10/04/11 Page 1 of 7 PagelD #:97
M

STATE OF MICHIGAN WASHTENAW COUNTY TRIAL COURT JAMES HENDRICKS, et al., Plaintiffs, V. US BANK NATIONAL ASSOCIATION AS SUCCESSOR TRUSTEE TO BANK OF AMERICA, et al., Defendants. James Fraser (P57297) Attorney for Plaintiffs W. Jeffrey Barnes Co-Counsel for Plaintiffs, Pro Hac Vice William G. Asimakis, Jr. (P46155) Matthew R. Rechtien (P71271) Attorneys for Defendants Case No. 10-849-CH Hon. Archie C. Brown

OPINION AND ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT'S MOTION FOR SUMMARY DISPOSITION AND GRANTING PLAINTIFF'S MOTION FOR SUMMARY DISPOSITION

Held in Ann Arbor, Michigan on June 6, 2011 After review of the pleadings and argument in Court by counsel for the parties, and review of supplemental pleadings filed by the Plaintiff, the Court grants the Plaintiffs' Motion and denies the Defendants' Motion for the reasons set forth below. Plaintiffs executed an Adjustable Rate Note and Mortgage on October 30, 2006 in favor of Defendant First Franklin, as Lender, and to Mortgage Electronic Recording Systems, Inc. ("MERS"),as Mortgagee, as to their real property commonly known as 5888 Par View Drive, Ypsilanti Township, Michigan. On or about December 15, 2009, Plaintiffs received a letter from counsel representing Home Loan Services, Inc ("HLS"), claiming to be the servicer of the loan, and that the mortgage loan was in default as of September 1, 2009.

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On or about December 22, 2009, in response to a letter sent by Plaintiffs, First Franklin sent a letter to Plaintiffs saying that Plaintiffs inquiry had been received and they would receive an answer shortly. On or about December 30, 2009 Plaintiffs received a letter from counsel representing First Franklin Loan Services of Pittsburgh, Pennsylvania, claiming to be the servicer of the loan, information inconsistent with the earlier December 15, 2009 letter from HLS. First Franklin Loan Services claimed that it assigned, through an assignment document, the mortgage loan to Defendant, U.S. Bank, N.A ("USB"). The assignment document stated that MERS assigned the Mortgage and Promissory Note to USB on October 30, 2006, however, it was recorded with the Register of Deeds on December 30, 2009. Subsequently on January 21, 2010, counsel for HLS wrote another letter to Plaintiffs again claiming to be the servicer of the loan. USB proceeded to foreclose on the Plaintiffs' property, and USB purchased the property at the Sheriff's sale on February 1, 2010. The Court in Residential Funding Co., LLC. V Gerald Saurman, NW. 2d, 2011 PE, 1516819, Mich.App., April 21, 2011 (NO. 290248, 291443)("RFC") was decided by a 2-1 majority and is binding precedent on this Court at this point in time.
MERS

The RFC Court explained that MERS was developed as a mechanism to provide for the faster and lower cost buying and selling of mortgage debt. By operating through MERS, these financial entities could buy and sell loans without having to record a mortgage transfer for each transaction because the named mortgagee would never change; it would always be MERS even though the loans were changing hands. MERS would purportedly track the mortgage sales internally so as to know for which entity it was holding the mortgage at any given time and, if foreclosure was necessary, after foreclosing on the property, would quit claim the property to whatever lender owned the loan at the time of foreclosure. As described by the Court of Appeals of New York, in MERSCORP, Inc v. Romaine. 8 NY3d 90, 96; 861 N.E.2d 81(2006): In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system. The initial MERS mortgage is recorded in the County Clerk's office with "Mortgage Electronic Registration Systems, Inc." named as the lender's nominee or mortgagee of record on 2

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the instrument. During the lifetime of the mortgage, the beneficial ownership interest or servicing rights may be transferred among MERS members (MERS assignments), but these assignments are not publicly recorded; instead they are tracked electronically in MERS's private system. In the MERS system, the mortgagor is notified of transfers of servicing rights pursuant to the Truth in Lending Act, but not necessarily of assignments of the beneficial interest in the mortgage. [Footnotes omitted.] The sole issue in RFC was whether MERS, as mortgagee, but not noteholder, could exercise its contractual right to foreclose by means of advertisement. Foreclosure by advertisement is governed by MCL 600.3204 (1)(d), which provides, in pertinent part: [A] party may foreclose a mortgage by advertisement if all of the following circumstances exist: *** (d) The party foreclosing the mortgage is either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage. The parties in RFC agreed that MERS was neither the owner of the indebtedness, nor the servicing agent of the mortgage. Therefore, MERS lacked the authority to foreclose by advertisement on defendants' properties unless it was "the owner ... of an interest in the indebtedness secured by the mortgage." The question, then, was what being the "owner ... of an interest in the indebtedness secured by the mortgage" requires. In RFC the defendants' indebtedness was solely based upon the notes because defendants owed monies pursuant to the terms of the notes. Consequently, in order for a party to own an interest in the indebtedness, it must have a legal share, title, or right in the note. The court in RFC determined that Plaintiffs' suggestion that an "interest in the mortgage" is sufficient under MCL 600.3204(d)(l) is without merit. This is necessarily so, as the indebtedness, i.e., the note, and the mortgage are two different legal transactions providing two different sets of rights, even though they are typically employed together. A "mortgage" is "[a] conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms." The mortgagee has an interest in the property. The mortgagor covenants, pursuant to the mortgage, that if the money borrowed under the note is not repaid, the mortgagee will retain an interest in the property. Thus, unlike a note, which evidences a debt and represents the obligation to repay, a mortgage represents an interest in real property contingent on the failure of the borrower to repay the lender. The indebtedness, i.e., the note, and the mortgage are two different things. As the Court determined in RFC, this Court finds that MERS did not have the authority to foreclose by advertisement on Plaintiffs' property. Pursuant to the mortgages, Plaintiffs were the mortgagors and MERS was the mortgagee. However, it was the Defendant lenders that lent Plaintiffs money pursuant to the terms of the notes. MERS, as mortgagee, only held an interest in

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the property as security for the note, not an interest in the note itself. MERS could not attempt to enforce the notes nor could it obtain any payment on the loans on its own behalf or on behalf of the lender. Moreover, the mortgage specifically clarified that, although MERS was the mortgagee, MERS held "only legal title to the interest granted" by defendants in the mortgage. Consequently, the interest in the mortgage represented, at most, an interest in Plaintiffs' property. MERS was not referred to in any way in the notes. The record evidence establishes that MERS owned neither the notes, nor an interest, legal share, or right in the notes. The only interest MERS possessed was in the property through the mortgage. Given that the notes and mortgages are separate documents, evidencing separate obligations and interests, MERS' interest in the mortgage did not give it an interest in the debt. The Court in RFC further held that MERS analysis ignores the fact that the statute does not merely require an "interest" in the debt, but rather that the foreclosing party own that interest. As noted above, to own means "to have good legal title; to hold as property; to have a legal or rightful title to." This Court adopts the RFC analysis that none of these terms describes MERS' relationship to the note. Defendants' claim that MERS was a contractual owner of an interest in the notes based on the agreement between MERS and the lenders misstates the interests created by that agreement. Although MERS stood to benefit if the debt was not paid—it stood to become the owner of the property—it received no benefit if the debt was paid. MERS had no right to possess the debt, or the money paid on it. Likewise, it had no right to use or convey the note. Its only "right to possess" was to possess the property if and when foreclosure occurred. Had the lender decided to forgive the debt in the note, MERS would have had no recourse; it could not have sued the lender for some financial loss. Accordingly, it owned no financial interest in the notes. Indeed, it is uncontested that MERS is wholly without legal or rightful title to the debt and that there are no circumstances under which it is entitled to receive any payments on the notes. Finally, Defendants' cannot grant MERS the authority to take action where the statute prohibits it. Regardless of whether Defendants would like MERS to be able to take such action, it can only grant MERS the authority to take actions that our Legislature has statutorily permitted. Where the Legislature has limited the availability to take action to a specified group of individuals, parties cannot grant an entity that falls outside that group the authority to take such actions. Here, the Legislature specifically requires ownership of an interest in the note before permitting foreclosure by advertisement. The contention that the contract between MERS and First Franklin provided MERS with an ownership interest in the note, as the court in RFC held, stretches the concept of legal ownership past the breaking point. The Legislature used the word "owner" because it meant to invoke a legal or equitable right of ownership. Viewed in that context, although MERS owns the mortgage, it owns neither the debt nor an interest in any portion of the debt, and is not a secondary beneficiary of the payment of the debt. Plaintiffs in RFC also argued that MERS had the authority to foreclose by advertisement as the agent or nominee for the Lender, who held the note and an equitable interest in the mortgage. The court in RFC disagreed, holding that it failed under the statute because the statute explicitly requires that, in order to foreclose by advertisement, the foreclosing party must possess an interest in the indebtedness. MCL 600.3204(1)(d). Thus, the Legislature's choice to permit only servicing agents and not all agents to foreclose by advertisement must be given effect. 4

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This case, as in RFC, involves a situation where the noteholder and mortgage holder are separate entities, the general proposition set forth in Davenport v HSBC Bank USA, 275 Mich App 344 (2007) does not apply. There is nothing in Davenport holding that a party that owns only the mortgage and not the note has an ownership interest in the debt. The court in RFC opined that the separation of the note from the mortgage in order to speed the sale of mortgage debt without having to deal with all the "paper work" of mortgage transfers appears to be the sole reason for MERS' existence. The flip side of separating the note from the mortgage is that it can slow the mechanism of foreclosure by requiring judicial action rather than allowing foreclosure by advertisement. To the degree there were expediencies and potential economic benefits in separating the mortgagee from the noteholder so as to speed the sale of mortgage-based debt, those lenders that participated were entitled to reap those benefits. However, it is no less true that, to the degree that this separation created risks and potential costs, those same lenders must be responsible for absorbing the costs.
US BANK

Defendants argue that RFC is not on point because First Franklin pooled and transferred its interest in the Ioan, the Mortgage and Note, into a securitized trust over which USB became the trustee. First Franklin endorsed the Note to the order of First Franklin Financial Corporation, which thereafter endorsed the Note in blank, transferring it to USB and/or USB's agents. Exhibit A to Plaintiffs Brief. Defendants further argue that MERS, as First Franklin's nominee, drafted a recordable Assignment of Mortgage assigning the Mortgage together with the Note and all other obligations secured by said Mortgage to USB, as trustee, dated December 17, 2009. Defendants conclude by stating that on December 30, 2009, the Assignment was recorded in the Washtenaw County Register of Deeds, and therefore, as a result of all of these actions, USB was the record owner of both the Mortgage and the Note in advance of any foreclosure. Plaintiffs, in response, request that this Court declare that USB, successor trustee to the First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Securities, Series 2006-FF1 8 has no interest in the mortgage loan that is the subject matter of this action and cannot foreclose, judicially or otherwise, that loan. Plaintiffs' contend that USB never actually received ownership of the Plaintiffs' mortgage loan because the loan was not ever properly transferred to USB according to the terns of the First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series

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The Court finds that the "Assignment", recorded on December 30, 2009 in the Washtenaw County Register of Deeds, serves to transfer nothing. The alleged conveyance failed to comply with the terms and conditions of the PSA and New York Trust law which governs the PSA. The alleged conveyance stated that MERS assigned the Mortgage and Promissory Note to USB, however, there has been no evidence presented to support the chain of the required assignments and endorsements of the mortgage and note as required by the terms and conditions of the PSA. Other than First Franklin, a division of National City Bank, none of the Defendants owned the indebtedness, owned an interest in the indebtedness secured by the mortgage, or serviced the mortgage. Therefore, the purported transfers, endorsements or assignments are void ab initio or never properly transferred into the Trust. The only Defendant with standing to proceed is First Franklin, the originator and original Lender of the Note and Mortgage. The Court grants summary disposition to Plaintiffs on their request for declaratory and injunctive relief contained in their Complaint finding that Defendants do not have a valid defense to Plaintiffs' claims pursuant to MCR 2.116(C)(9) and there are no genuine issues of material fact pursuant to MCR .2.116(C)(10). The Court declares that the foreclosure sale that occurred on February 11, 2010 concerning Plaintiffs' real property is void ab initio pursuant to MCR 2.116 (C)(8), as Defendant, U.S. Bank, N.A. was not entitled to foreclose on Plaintiffs' property under Michigan's Foreclosure by Advertisement statute, MCL 600.3201, et seq. The Court grants in part and denies in part summary disposition to Defendants. The court denies Defendants Motion to dismiss Plaintiffs Complaint, finding the Complaint states a claim, and is not barred by the Statute of Frauds. The Court grants Defendants' Motion for ajudgment of foreclosure, in favor of First Franklin, on their judicial foreclosure-counterclaim finding that there are no genuine issues of material fact and that Defendant, First Franklin, is entitled to judgment as a matter of law. Defendants request for costs and attorney fees are limited solely to those costs and attorney fees associated with the judicial foreclosure counterclaim. Any request for costs and attorney fees association with the foreclosure by advertisement is denied.

IT IS SO ORDERED.

Honorable Archie C. Brown, Trial Court Judge

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2006-FF18's Pooling and Service Agreement ("PSA"), and the assignments that occurred in this case did not follow the law of trusts in the State of New York to validly transfer the trust to USB. The Court was provided a copy of the PSA at an earlier hearing for its review. The Court finds, upon reviewing the PSA, that the trust was created on December 1, 2006 and had a closing date of December 28, 2006. PSA pages 36-37. The closing date establishes when the trust assets musts be transferred to the trust. Merrill Lynch Mortgage Investors, Inc., is the depositor. PSA p. 38. Pursuant to Section 2.01(A), the depositor has to deliver the mortgage loan to the trustee, in this case USB. Plaintiff contends that there should be an endorsement from First Franklin Financial Corp to Merrill Lynch, and an endorsement from Merrily Lynch to the trustee (originally LaSalle Bank National Association) or, at least an endorsement in blank by Merrill Lynch. The Court finds that there is only an endorsement from First Franklin, a division of National City Bank, to First Franklin Financial Corp, then an endorsement by First Franklin Financial Corp in blank. Plaintiffs' Exhibit B. PSA Sec. 201(A) requires that the Mortgage Note shall include all intervening endorsements showing a complete chain of title. Plaintiffs' Exhibit A. Since the Note never passed to Merrill Lynch the trust could not have validly received it. PSA Sec. 201(E) requires the depositor to deliver originals of any intervening assignments of the Mortgage, with evidence of recording thereon. Plaintiffs' Exhibit A. The record before the Court is that the only assignment of the mortgage that was recorded was the assignment from MERS to USB, as trustee. Plaintiffs' Exhibit C. However, it is clear from the record that the mortgage note was actually transferred from the originator of the loan, First Franklin, a division of National City Bank, to First Franklin Financial Corp. . The Court finds that the transfer of the mortgage note from First Franklin to First Franklin Financial Corp also transferred the underlying mortgage. However, this transfer was never reduced to a mortgage assignment that was recorded with the Washtenaw County Register of Deeds, presumably because MERS purportedly held legal title to the mortgage itself but had nothing to do with this particular transfer. The Court further finds that PSA Sec. 201(E) was not complied with because the transfer from First Franklin to First Franklin Financial Corp. was never recorded. Defendants' failure to strictly comply with the terms of the PSA means that the loan at issue was never properly transferred to the trust. Any transfer of mortgage loans, such as Plaintiffs, was mandated to comply with New York Trust law and the terms and conditions of the PSA governing conveyance of mortgage loans into the Trust. PSA pp 155 and 36. This the Defendants did not do.

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