Glaski v BOA - Glaski's phyrric and short-lived foreclosure defense victory - revised

Glaski v BOA

See the excerpts from unpublished Glaski v BOA opinion by the California 5th District Appellate Court below. Pursuant to borrower Glaski's complaint of robo-signing and wrongful trustee's foreclosure and sale, and demand for quiet title and cancellation of the foreclosure and sale, the trial court dismissed the Glaski's complaint that the assignment of the note to the securitization trust had no validity because it occurred after the closing date of the trust, and so BOA had no standing to foreclose.  The appeals court overturned and remanded it because the assignment had no validity under New York law and the assignment occurred after the closing date.

MY OPINION 

The appeals court ruling is an anomaly, and it will not stand if BOA pursues it to the Supreme Court.

As I see it, transfer of beneficial interest in a mortgage note never goes to a trust.  It only goes to a trustee.  The holder in due course can transfer it by indorsing it in blank or by assignment. 

The borrower never became a party to the PSA, and nothing in the securitization injures the borrower.  The mortgage mandates that the borrower must forfeit the house for defaulting on the loan, and the public trustee and courts constitutionally must enforce that provision. 

Since the trustee personally owns beneficial interest in the note, any PSA or REMIC violation may affect the validity of the trust or prevent entry of the note into the trust's asset base, but it does not undo the assignment to the trustee or indorsement in blank. 

The Supreme Court will uphold the Glaski trial court judgment if it hears the case..  Whining about assignment after the closing date is a bogus argument because the TRUSTEE OWNS BENEFICIAL INTEREST IN THE NOTE, regardless of whether or not the trust operates as planned by the PSA.

New York law can declare the assignment to the Trustee invalid for the purposes and use of the trust, but not for the purposes of mere assignment of beneficial interest to some lawful entity.  Normally a bank has become the "trustee" under the PSA, so the note's beneficial interest becomes the property of the bank in its personal capacity, even though, owing to tardiness, not in the trustee capacity.  And that gives the bank the right to enforce the note regardless of whether it received the note in violation of the PSA or past the trust's closing date.

To grasp the issue in the light of common sense, imagine an indorsement in blank.  Physical possession of such an indorsed note constitutes ownership of beneficial interest and the power to enforce the instrument.This remains true whether or not the possessor has trustee status, functions as a bank which enjoys other rights to buy and sell beneficial interest in notes in its personal capacity, functions as a lawful man or woman, functions as a thief, functions as someone who won the note in a bet, or functions as someone who found in lying in a ditch.  Article III of the UCC covers all those types of lawful enforcers of the note, and no court has authority to undermine it.

The Glaski trial court rightly dismissed the nonsensical complaint from the borrower.  The appeals court opined erroneously AND controversially (a good reason for not publishing its opinion).  If the Supreme Court gets the case, the Supreme Court will validate the trial court's ruling.  Meanwhile, no telling what surprises the trial court will come up with in remand. 

I predict a short life for Glaski's phyrric victory.  I consider the proceedings in trial and Appeal court a farce in contrast to what it could become.  First of all, BOA can correct the paperwork deficiencies and re-foreclose and take the house as it should have to begin with.  Second, the borrower, Glaski, probably did not get his mortgage comprehensively examined for torts, breaches, and errors that would have given him causes of action in breach of contract or tort claims against the lender WAMU (and the banks that inherited its liabilities and assets).  Glaski might actually negotiate a favorable settlement by grieving to the servicer about those causes of action and demanding correction.  In that way he could have avoided the expense in time and money of the litigation he will ultimately lose along with his house.

Sure, he might outlast the bank in his present contest, but I doubt it.

To grasp the concept of properly beating foreclosure, realize that statistically the foreclosing bank ALWAYS gets the house, with good reason:  the mortgagor BREACHED the mortgage note, and must forfeit the collateral.  State constitutions mandate that no law shall impair the obligations of contract.  For example:

http://www.leginfo.ca.gov/.const/.article_1
CALIFORNIA CONSTITUTION ARTICLE 1 DECLARATION OF RIGHTS
SEC. 9. A bill of attainder, ex post facto law, or law impairing the obligation of contracts may not be passed.

Therefore, one best beats foreclosure by NOT FIGHTING THE FORECLOSURE BATTLE.

Instead, one should get the mortgage examined, and FIGHT THE MORTGAGE BATTLE instead, based on the causes of action found, or walk from the house with knowledge the the foreclosure is righteous, regardless of robosigning, improper assignment, etc, WILL ALWAYS PREVAIL, and the foreclosure sale will go through to completion.

See the above Section 9 in the proper light.  "obligation of contracts" refers only to VALID contracts.  That means the parties must have the capacity to contract, the contract must have a conscionable, it must include offer, acceptance, and consideration, it must not operate as a function or consequence of fraud or fraudulent inducement, the parties must have the ability to perform the contractual obligations, the contract must not require illegal acts or operate in violation of law.  As to enforcement, the enforcer must have the right and power to enforce it under applicable laws and terms of the agreement.  If the contract is a negotiable instrument, the UCC Article III and possibly VIII control enforcement and other features of the instrument.

Other Opinions

Don't just take my word for it.  Other opinions in California and elsewhere fly in the face of the Glaski reversal, and that leaves other courts free to take either position.  Some examples follow:

1. Ca: Almutarreb v. Bank of New York Trust Co., N.A., 2012 WL 4371410, *2 (N.D. Cal. Sept. 24, 2012) ("holding that "because Plaintiffs were not parties to the PSA, they lack standing to challenge the validity of the securitization process, including whether the loan transfer occurred outside of the temporal bounds prescribed by the PSA.");

2. Lane v. Vitek Real Estate Industries Group, 713 F.Supp.2d 1092, (E.D.Cal. 2010) ("The argument that parties lose interest in a loan when it is assigned to a trust pool has also been rejected by numerous district courts.");

3. Sami v. Wells Fargo Bank, 2012 WL 967051, at *5-6 (N.D. Cal. 2012) (rejecting claim "that Wells Fargo failed to transfer or assign the note or Deed of Trust to the Securitized Trust by the 'closing date,' and that therefore, 'under the PSA, any alleged assignment beyond the specified closing date' is void" because the plaintiff lacked standing)
   

4. Fourth District Court of Appeal in Jenkins v. JP Morgan Chase Bank, 216 Cal.App.4th 497 (2013), reached opined opposite to Glaski: “As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, Jenkins lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transactions.”
   

Furthermore, well-settled California law generally precludes a non-party to a contract from challenging its validity or the validity of actions pursuant to it.  This and the unpublished nature of the opinion (as ordered by the 5th District) means one should interpret the Glaski opinion as anomalous, rather than relying on it as precedent.

See the Light of a Comprehensive Mortgage Examination

So the proper strategy for a mortgagor to beat foreclosure lies in proving that some combination of torts, breaches, and errors underlie the contract, making it either void or voidable.  Then the borrower needn't worry about enforcement, for government must NOT enforce a void, invalid, or voidable contract.

So, we have two possible battles in the mortgage world:

1. Mortgagor (borrower) Always Wins: 
   

• Battle the Mortgage based on torts, breaches, errors by the lender or lender's agents

2. Mortgagee (lender/bank) Always Wins

• Battle the Foreclosure based on breach by borrower. 

By "always wins" I mean "statistically always," meaning exceptions, as in Glaski, have almost the rarity of chicken teeth or frog hair.

Furthermore, when a mortgagor or mortgagor's attorney writes a grievance letter to the servicer detailing torts, breaches, and errors revealed in the mortgage examination report, they usually reach a settlement accord fairly quickly. That reduces the stress on and expense to the borrower dramatically, and often results in a cram-down of the loan balance to the present value of the house and refinance at favorable fixed interest for 30 years.  Mortgagors can often afford such payments.

And if the mortgagor must sue to get satisfaction from the lender for injuries and damages, the mortgagor will usually win compensatory damages and legal costs and fees from the bank.  Sometimes the mortgagor will win punitive damages, occasionally in the millions of dollars.

Seen in this light, Glaski's 4-year foreclosure battle against BOA becomes utterly stupid, for any student of foreclosure battles knows that Glaski will ultimate lose unless the bank just gives up.  His victory will probably have a short life.  And it is at this point only hopeful, and Phyrric, at that, becuase of the cost to Glaski and family in terms of stress, worry, money, time, and other resources.

Statistically, the ONLY way to prevent foreclosure lies in procuring a comprehensive, professional mortgage examination, followed by a settlement demand or lawsuit based on the causes of action revealed in the exam report.

How to Get Your Mortgage Professionally Examined for Causes of Action

If you need such an examination, providing you actually WANT to beat the bank, call me at 727 669 5511.  I'll explain everything to you FREE, and introduce you to America's most competent mortgage examiner, a man with over 35 years' experience in examining legal documents and formulating winning litigation strategies.

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Bob Hurt         Blog 1 2 3   f  t   2460 Persian Drive #70 Clearwater, FL 33763 Email; Call: (727) 669-5511 Law Studies: Donate   Subscribe Learn to Litigate with Jurisdictionary

 

Court Opinion

http://victoryoverchase.blogspot.com/2013/08/ground-breaking-case-in-california.html

Glaski v. Bank of America was decided in the California Supreme Court, Court  on July 30, 2013. The case was referred back to the lower court for further action.  The Court reversed the judgment for dismissal.

This decision as of now is not to be published in the official reports.  Interested parties have only 20 days to petition the Court for publication of this ground breaker for Californians seeking justice, particularly those suffering at the hands of Washington Mutual Bank FA, JP Morgan Chase Bank NA, and their minions which include Deborah Brignac, California Reconveyance Company. and Bank of America.

2013 California Rules of Court

Rule 8.1120. Requesting publication of unpublished opinions

(a) Request

(1)Any person may request that an unpublished opinion be ordered published.

(2)The request must be made by a letter to the court that rendered the opinion, concisely stating the person's interest and the reason why the opinion meets a standard for publication.

(3)The request must be delivered to the rendering court within 20 days after the opinion is filed.

(4)The request must be served on all parties.

(b) Action by rendering court

(1)If the rendering court does not or cannot grant the request before the decision is final in that court, it must forward the request to the Supreme Court with a copy of its opinion, its recommendation for disposition, and a brief statement of its reasons. The rendering court must forward these materials within 15 days after the decision is final in that court.

(2)The rendering court must also send a copy of its recommendation and reasons to all parties and any person who requested publication.

(c) Action by Supreme Court

The Supreme Court may order the opinion published or deny the request. The court must send notice of its action to the rendering court, all parties, and any person who requested publication.

(d) Effect of Supreme Court order to publish

A Supreme Court order to publish is not an expression of the court's opinion of the correctness of the result of the decision or of any law stated in the opinion.

Rule 8.1120 renumbered effective January 1, 2007; repealed and adopted as rule 978 effective January 1, 2005.

  

Glasky v. Bank of America

                                          INTRODUCTION

 Before Washington Mutual Bank, FA (WaMu) was seized by federal banking 

regulators in 2008, it made many residential real estate loans and used those loans as 

collateral for mortgage-backed securities.1

 Many of the loans went into default, which led to nonjudicial foreclosure proceedings. 

Some of the foreclosures generated lawsuits,  which raised a wide variety of claims. 

The allegations that the instant case shares with some of the other lawsuits are that 

(1) documents related to the foreclosure contained forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true owner of the loan because its chain of ownership had been broken by a defective transfer of the loan to the securitized trustestablished for the mortgage-backed securities. Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective. 

In this appeal, the borrower contends the trial court erred by sustaining 

defendants’ demurrer as to all of his causes of action attacking the nonjudicial 

foreclosure. We conclude that, although the borrower’s allegations are somewhat 

confusing and may contain contradictions, heclosure claim under the lenient standards applied to demurrers. We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date. Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement. 

H. Causes of Action Stated

Based on the foregoing, we conclude that Glaski’s fourth cause of action has stated a claim for wrongful foreclosure. It follows that Glaski also has stated claims for quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of instruments (eighth cause of action), and unfair business practices under Business and Professions Code section 17200 (ninth cause of action).

We therefore reverse the judgment of dismissal and remand for further proceedings.