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COURT Hearing Date: June 22, 2012 Hearing Time: 10 A.M. CASE NO: 11-24269 (rdd)
SOUTHERN DISTRICT OF NEW YORK
INRE: Juanita Strassfield
Chapter 7 Debtor _____________________________ x JUDGE: Robert D, Drain
NOTICE OF RESPONSE IN OPPOSITION Please take notice that Wells Fargo Bank, N.A. by its counsel, McCabe, Weisberg & Conway, P.C., will move this Court on the 22nd day of June, 2012, at 10 A.M. or so as soon thereafter as counsel can be heard, at the United States Bankruptcy Court, Southern District of New York, 300 Quarropas Street, White Plains, NY 10601-4140, to deny in its entirety the Debtor's Objection to Wells Fargo Bank NA's Motion to Vacate the Automatic Stay, and to allow the Secured Creditor to amend its Motion for Relief from the Stay, as originally filed with this Court on January 24, 2012, and which is carried as item # 9 on the docket.
Dated: June 12,2012 New Rochelle, New York Yours, etc. By: rllip Mahony. McCabe, Weisberg & Conway, P.C. Attorneys for Secured Creditor 145 Huguenot Street, Suite 499 New Rochelle, NY 10801 Telephone 914-636-8900
To: Juanita Strassfield 11 Shipley Drive Cortlandt Manor, NY 10567 Linda M. TirelIi Law Offices of Linda M. Tirelli One North Lexington Avenue 11th Floor White Plains, NY 10601 Todd S. Cushner Cushner & Garvey, LLP 155 White Plains Road Suite 207 Tarrytown, NY 10591 Jil Mazer-Marino Meyer, Suozzi, English & Klein, P.C. 990 Stewart Avenue Suite 300 P.O. Box 9194 Garden City, NY 11530-9194 United States Trustee 33 Whitehall Street 21st Floor New York, NY 10004
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
INRE: Juanita Strassfield
CASE NO: 11-24269 (rdd)
Chapter 7 Debtor ___________________________ x JUDGE: Robert D, Drain
AFFIRMATION (i) IN OPPOSITION TO DEBTOR'S OBJECTION TO WELLS FARGO BANKNA'S MOTION TO VACATE AUTOMATIC STAY AND (ii) FOR LEAVE TO FILE AMENDED MOTION FOR RELIEF FROM THE AUTOMATIC STAY
Wells Fargo Bank, N.A. (the "Secured Creditor")
by its counsel, McCabe, Weisberg & Conway,
P.C., submits this affirmation (i) in response to debtor's Objection to Wells Fargo Bank NA's Motion to Vacate the Automatic Stay and (ii) for leave to file an amended motion for relief from the automatic stay. PRELIMINARY STATEMENT
On January 24,2012, the Secured Creditor filed its motion for relief from the automatic stay (the "Motion") due to the Debtor's (as such term is defined below) failure to provide regularly scheduled monthly mortgage payments to the Secured Creditor. Specifically, the Debtor failed to make at least twenty-seven (27) monthly payments which at the time of filing the Motion totaled approximately $89,915.01. As of the date offiling the Motion, the Debtor owed the Secured Creditor an amount in
excess of $504,389.68, plus attorneys' fees and costs. On March 5, 2012, the Debtor filed an objection to the Motion (the "Objection") which correctly
pointed out that the investor for this matter is Freddie Mac, and as such, the Motion incorrectly identified the Secured Creditor as the owner and holder of the Note, instead of just the holder. As holder of the
Note, however, the standing of the Secured Party to bring the Motion remains unchanged. The Objection made multiple allegations concerning the standing of the Secured Party and the validity of the assignment of the original mortgage that are clearly contradicted by the case law cited herein. Accordingly, based upon the authorities cited herein, the Secured Creditor respectfully requests that this Court (i) deny the Objection in its entirety and (ii) grant leave to the Secured Creditor to file an amended motion for relief from the automatic stay. In light of the motion practice that has taken place, the Secured Creditor hereby abandons its April 27, 2012 request to withdraw the Motion and rather seeks leave to amend its motion for relief from the automatic stay, in order to properly reflect the standing of the Secured Creditor to that of "holder" of the Note, rather than "owner and holder" of the Note. BACKGROUND 1. On November 18,2011, Debtor Juanita Strassfield (the "Debtor") filed a voluntary chapter 7
petition with this Court, stating in Schedule A that Debtor was the owner of property commonly known as 11 Shipley Drive, Cortland Manor, NY,. 10567 (the "Property"), value for the property of$395,000. 2. On January 24,2012, the Secured Creditor, through its attorneys, filed the Motion, attached hereto as Exhibit A). The Motion asserted that the Secured Creditor was the owner and holder of a Note that Debtor had entered into on March 14,2007, and that such Note was in the original amount of $41 0,000, and that such Note was secured by a Mortgage on the Property (the "Note" and "Mortgage"). 3. The Secured Creditor also asserted in the Motion that the Debtor was delinquent for twentyseven payments, totaling $89,915 dollars in missed mortgage payments, that there was no equity in the property, and the Secured Creditor therefore sought relief under 11 U.S.C. §§ 362(d)(1) and (d)(2). and listing a current
A copy of the Mortgage was included with the Motion as Exhibit A. It showed that the original lender was UBS Mortgage LLC, and it showed that the Debtor appeared before a notary and executed the Mortgage on March 14, 2007.
A copy of the Note was also included with the Motion as Exhibit A. It shows that the Note was also dated March 14,2007. The Note was executed by the Debtor, and contains an endorsement to Wells Fargo Bank, N.A., signed by one Amanda Johnson, Assistant Secretary ofUBS Mortgage LLC.
A copy of an Assignment of the Mortgage was also included with the Motion (the "Assignment"). It shows that the Mortgage was assigned from UBS Mortgage LLC to Wells
Fargo Bank NA on March 14,2007, and the Assignment is signed by an officer ofUBS Mortgage LLC, one "Anthony Patridge, Vp [sic] of loan documentation". Both Mr. Partridge's signature
and the notary statement are dated March 12,2007, which is two days before the day the Note and Mortgage were executed and the Mortgage was assigned. 7. A Westchester County Recording and Endorsement Page was attached to the Mortgage, which shows that the Mortgage was recorded on April 9, 2007 at 09:22 hours. 8. A Westchester County Recording and Endorsement Page was attached to the Assignment, which shows that the Assignment was recorded on April 9, 2007 at 09:22 hours, the same time and date that the Mortgage was recorded. 9. On March 5, 2012, Debtor's counsel filed the Objection, and on March 12,2012 the Chapter 13 Trustee filed ajoinder to the Objection. 10. The Objection makes the following allegations: a. That since Freddie Mac owns the Debtor's loan, therefore the Secured Creditor has misrepresented b. its standing in this Motion.
That since the Assignment was signed and notarized two days before the Note and Mortgage were executed and the Mortgage was assigned, therefore the
Assignment is a fraudulent document and evidence of a Felony in the State of New York. c. That since the terms of the Note indicated a fixed interest-only monthly payment amount of $2,263 .54 through May 2022, at which time the monthly payment would increase to $3,599.78, therefore the Worksheet to the Motion, which indicated a monthly payment of$3,259.12 as owing from November 1,2009 as owing from July 1,
through June 1,2011, and a monthly payment of$3,533.23 2011 through January 1, 2012, is in error. d.
That the Motion must be denied by this Court "in light of the purported false document presented to this Court." ARGUMENT
A. The Secured Creditor is the Holder of the Note and as such has standing as a party in interest to the Motion for Relief
11. As discussed above, both the Note, as evidenced by an endorsement, and the Mortgage, as evidenced by the Assignment, were transferred from the original Mortgagee to the Secured Creditor on or about March 14,2007. 12. On April 12,2007, the Note was sold by the Secured Creditor to Freddie Mac. The Objection correctly points out that the investor for this matter is Freddie Mac, and as such, the Motion incorrectly identified the Secured Creditor as the owner and holder of the Note, instead of just the holder. Accordingly, the undersigned respectfully requests permission of this Court to amend the Motion to reflect the true status of the Secured Creditor. 13. The Objection is incorrect, however, in its assertion that the Secured Creditor is without standing in this matter. The Secured Creditor remains the holder of the Note, and as such it is well held that it has the authority to enforce the terms thereof. See In re Lippold, 457 B.R. at 297 (S.D.N.Y. 2011); In re Mims, 438 B.R. at 56 (S.D.N.Y. 2010); Mortgage Electronic Registration Systems,
Inc. v. Coakley, 41 AD3d 674, 838 NYS2d 622 (NY 2d Dept. 2007); Federal National Mortgage Association v. Youkelsone, 303 AD2d 546 (NY 2d Dept. 2004); First Trust National Assn. v. Meisels, 234AD2d 414,651 NYS2d 121 (NY 2d Dept. 1996). The physical delivery of the Note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the Mortgage passes with the debt as an inseparable incident. LaSalle National Assn. v. Ahearn, 59 AD3d 911,912,875 NYS2d 595 (NY 3d Dept. 2009); Mortgage Electronic Registration
Systems, supra at 674; Flyer v. Sullivan, 284 AD697, 699, 134 NYS2d 521(NY 1st Dept 1954). The indorsed Note is fully negotiable under the Uniform Commercial Code and delivery prior to filing confers standing on the party that holds it. See GECMC 2007-Cl Ditmars Lodging, LLC v. Mohola, 2010 NY slip Op 31790U, 2010 N.Y. Misc. Lexis 3218 (NY 2d Dept May 31, 2011); US Bank, NA. v. Flynn, 2010 Slip Op 20093, 27 Misc. 802, 897 N.Y.S. 2d 5541 AD3rd 674 (2nd Dept. 2007); Deutsche Bank National Trust Company v. Gillio, 881 N.Y.S. 2d 362 (NY Supt Ct Sfflk Cty 2009).
B. The execution Dfthe Assignment on a date two days p'rior to the execution of the Mortgage is not a fraudulent act under NYS Penal lJaw Article 175.35 14. The Objection alleges that because the Assignment is executed and notarized on March 12,2007, two days before the Mortgage, which was dated March 14,2007, the Secured Creditor has committed a violation of New York State Penal Law Article 175.35, "Offering a False Instrument for Filing in the First Degree." The Article reads, with italics added: "A person is guilty of offering a false instrument for filing in the first degree when, knowing that a written instrument contains afalse statement orfalse information, and with intent to defraud the state or any political subdivision, public authority or public benefit corporation of the state, he offers or presents it to a public office, public servant, public authority or public benefit corporation with the knowledge or belief that it will be filed with, registered or recorded in or otherwise become part of the records of such public office, public servant, public authority or public benefit corporation."
15. For the signing by the bank officer of the Assignment on March 12,2007, to constitute a violation ofNYS Penal Law Article 175.15, the bank officer would have had to affix his signature to that document on a date other than March 12,2007. This does not appear to be the case, as the Assignment was not only signed on March 12,2007, but the. signature was also notarized on March 12, 2007. Furthermore, to meet the elements ofNYS Penal Law Article 175.15, the bank officer would not only have had to affix his signature on a date other than March 12,2007, and have it notarized on a date other than March 12,2007, but he would have had to do so with intent to defraud the state. The Objection offers no evidence that the Assignment was not executed on March 12, 2007, that it was not notarized on March 12, 2007, or that the Assignment was not so executed and notarized with the prerequisite intent to defraud the state. 16. Per Bankruptcy Rule 7009, Federal Rule of Civil Procedure 9 applies in adversary proceedings as it relates to allegations of fraud. That Rule states that "in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." In the Objection, Debtor's counsel does meet this standard. Debtor's counsel only points out the obvious: that the assignment is signed two days before the Mortgage Papers. The Objection does not state with particularity how this constitutes a fraud. 17. The New York Real Property Law and the New York Real Property Actions and Proceedings Law appear to be silent on the issue of the content and timing of assignments of real property mortgage. In fact, the New York Supreme Court has explicitly held that no particular words are
necessary to effect an assignment, it is only required that there by a perfected transaction between the assignor and assignee, intended by those parties to vest in the assignee a present right in the things assigned. See Leon v. Martinez, 84 N.Y.2d 83, 88 (N.Y. 1984). Section 418 of the Real Property Law, titled "Assignments of mortgage, lease, or other lien or charge," states only that the holder of a mortgage "in order to transfer the same or any part thereof, shall execute an assignment of the whole or any part thereof' and then, after the assignment is filed, the holder
must complete certain specified administrative requirements. There is no guidance as to the manner or timing of the execution of the assignment.
C. The payment amounts listed on the Motion for Relief Worksheet are correct.
18. The Objection correctly points out that the monthly payment amounts on the list of post-petition missed payments on the Motion for Relief Worksheet rise from $3,259.12, on November 1,2009, to $3,533,23 on July 1,2011. The Objection also correctly points out that the Note called for a fixed monthly payment amount of $2,263 .54, representing an interest-only payment amount which would be fixed through May, 2022. 19. The Objection is incorrect, however, that this rise in monthly payments represents a rise in the fixed monthly interest-only payments called for in the Note. The fixed, monthly interest-only payment amount has not changed throughout the life of the loan. The rise in monthly payments is due to a rise in the escrow payments, as is authorized under Section 3 of the Mortgage, which calls for monthly payments for such escrow items as taxes, insurance and other similar charges. Specifically, a payment history provided to the undersigned, and which is available for review to the Debtor's counsel and Chapter 7 Trustee (should either request a copy in writing), demonstrates that the rise in monthly payments was due to an increase in city taxes, school taxes and an escrow shortage comprised offunds paid out for taxes along with a projection of taxes to be paid out. WHEREFORE, because as set forth in this Response, the Secured Creditor has standing in the
Motion, the Debtor has not shown that any impropriety was committed in the execution of the Assignment, and the post-petition mortgage figures listed on the Worksheet of the Motion are correct, the Secured Creditor respectfully requests that the Debtor's Objection be denied in its entirety; and WHEREFORE, because the Objection does not refute the basic factual allegations or legal
conclusions set forth in the Motion - that the Secured Creditor is entitled to Motion for Relief from the
Stay in relation to the Property under Sections 362(d)(1) and 362(d)(2) of the Bankruptcy Code - the Secured Creditor also respectfully requests that the Court grant it leave to amend the Motion as described above and to set another date for a hearing on the Motion.
Dated: New Rochelle, New York June 12,2012 McCabe, Weisberg, Conway, By: Phillip Mahony, Es Attorney for Secured Creditor 145 Huguenot Street, Suite 499 New Rochelle, NY 10801
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