Ibanez Opposition to U.S. Bank's Motion to Vacate Judgment

8/7/2019 Ibanez Opposition to U.S. Bank's Motion to Vacate Judgment

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HAMPDEN, ss

COMMONWEALTH OF MASSACHUSETTSTHE TRIAL COURTLAND COURT DEPARTMENT

CASE NO. 08 MISC 384283 KCL oto


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U.S. Bank moved to vacate this Court's judgment, and a hearing was held on that Motionon April 27, 2009. "Pursuant to that hearing, the Court entered a Docket Order which, inter alia,authorized the filing of only the following -- each of which must be properly authenticated": 1

(1) the documents which created the securitized trust and governits operations, (2) the documents identifying the "blocks ofmortgages sold into that trust," which purportedly include themortgage at issue in this case, (3) the "collateral file" for themortgage as it existed at the time the foreclosure sale wasnoticed and conducted, which was represented to include theoriginal note, the original (or a copy) of the mortgage,endorsements or assignments "in blank," "other documents," andperhaps a timely assignment in recordable form, (4) the masterservicing ~eement, showing the relationship between the trustand the loan servicer (which apparently was the entity instructingand supervising the attorneys who noticed and conducted theforeclosure), (5) the power of attorney under which the loanservicer acted in this instance, along with its recordinginformation, and (6) the powers of attorney or certificates ofincumbency, which purportedly evidence the authority of theparticular individuals who acted on behalf of the loan servicer inthis instance, along with their recording information. The courthas concerns about the apparent practice of assignments "inblank," what plaintiff means by that term, the legal sufficiency ofsuch a practice in the context of mortgage assignments and G.L.c.244, Section 14, and the possibility that names may have beenplaced on those documents post-notice and post-sale. Accordingly,all documents reflecting or purporting to reflect an assignment ofthe promissory note or mortgage must be produced in the form -they existed at the time the foreclosure sale was noticed andconducted, along with an affidavit from a witness with directpersonalknowledge so attesting. That witness must also beavailable for examination at an evidentiary hearing if the courtso directs.

As of today, U.S. Bank has failed to produce any of the documents "which created thesecuritized trust"; indeed no document has been produced which evidences that such a Trustexists. U.S. Bank, has failed to produce a single document" .. .identifying the blocks ofmortgages sold into that trust"; even though the Private Placement Memorandum ("PPM") filed

April 27, 2009 Docket Entry, emphasis in original.

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expressly represents that "Each Mortgage Loan held by" U.S. Bank would be identified. SeeSection III B, infra. Moreover, the Trustee has failed to produce the "master servicingagreement" or any other materials authorizing" ... the instructing and supervising the attorneyswho noticed and conducted the foreclosure"; instead, the Trustee produced a "bailee letter" datedMay 11,2009 authorizing a "Foreclosure Start Date 0/04-09-07". Exhibit A, p.l. Further, U.S.Bank has provided no Affiant documenting the authenticity or integrity of the "collateral file" asof the date of the foreclosure notices and sale, or any other relevant date, for that matter.

Finally, as the Court's Memorandum of Decision and Docket Order illustrate, the failureshere are not merely technical ones; they go to the heart of the Registry of Deeds recordingprocess which is charged with ensuring the integrity of record ownership of land. That is,although the entity seeking to validate the foreclosure of the Ibanez loan has presented adocument of no legal authority identified only as a "Private Placement Memorandum", thesecuritization and sale of these loan packages itself depends upon accurate conveyancing andrecord-keeping, and upon closing and recording practices which credibly establish the title tosecuritized real estate assets, according to the conveyancing and real property jurisprudence ofeach jurisdiction in which the assets are located. Months after this action was begun, the Trusteehas woefully failed to demonstrate even the hint of good title to the mortgage loan given to theDefendant.

It is axiomatic that a party moving to Vacate a Judgement of the Court has the burden of

proving that the Judgment is based on clearly erroneous factual findings or an error in the legalstandard applied. Parrell v. Keenan, 389 Mass. 809,815 (1983); New England Allbank v.Rouleau, 28 Mass. App. 135, 142 (l989)_ Here, the Trustee's burden was, indisputably, that ofproving that the Trustee was the mortgagee on the date the Trustee advertised and conducted the

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foreclosure sale, and itself purchased the Ibanez mortgage. In light of the egregious failures ofproof evidenced by the Plaintiffs filings, and decisional precedent set forth below, the Courtshould deny the Motion of U.S. Bank to vacate this Court's Judgment.

I. STATEMENT OFFACTSA. Origination of Defendant's Mortgage Loan

Defendant Antonio Ibanez's mortgage loan was originated by Rose Mortgage, Inc.("Rose") on December 1, 2005 by the execution of an Adjustable Rate Note (the "Note") andmortgage (the "Mortgage"; and together with the Note, the "Mortgage Loan"). The Note wasmade payable to Rose, which was identified as the "Lender" in the Note. Likewise, Rose wasidentified as the "Lender" and "Mortgagee" under the terms of the Mortgage. The Mortgage wassecured by Defendant's property located at 20 Crosby Street in Springfield, MA.

On December 8,2005, Ralph Vitiello, Chief Executive Officer of Rose purportedlyassigned the Mortgage to Option One Mortgage Corporation ("Option One"), which assignment(the "Rose-Option One Assignment") was recorded with the Hampden County Registry of Deeds(the "Registry") on June 7, 2006. According to the terms of the assignment, Option One wasassigned "all beneficial ownership under that certain Mortgage dated December 1, 2005 executedby Antonio Ibanez" as of December 8, 2005.

On January 23,2006, "Katherine Burns", an Assistant Secretary of Option One, executeda purported assignment of the Mortgage (the "Option One Blank Assignment"). Through thispurported assignment, Option One, as "holder of a real estate mortgage from: Antonio Ibanez... assigns said mortgage and the Note ... to: ". This purported assignment failsto identify an assignee or any further identifying information relating to the Mortgage necessaryto identify the mortgage the instrument purports to assign.

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._",.,..r:.. notices identified U.S. Bank as "the present holder" of the Mortgage. Finally, onS ' : ~OO7 (the "Foreclosure Sale Date"), Plaintiff sold the Property to itself at a foreclosure,~

a u c t i o n for $94,350, which was $16,437.27 less than the amount of Defendant's outstanding

On September 2, 2008, approximately fourteen months after the foreclosure sale of the~roperty, American Home Mortgage Servicing, Inc. ("American Home") assigned the Mortgageto U.S. Bank, which assignment (the "Post-Foreclosure Assignment") was recorded with theRegistry on September 9,2008. American Home did not "back date" the effective date of thePost-Foreclosure Assignment.C. Plaintiff's Complaint to Quiet Title, Memorandum and Order of the Court, and

Plaintiff's Motion toVacate.On September 16, 2008, Plaintiff filed a complaint with the Court pursuant to G.L.

c. 240, 6 to "remove a cloud from the title" of the property. On January 20,2009, Plaintifffiled a Motion for Entry of Default Judgment. After oral argument on February 11, 2009 andsupplemental briefing by Plaintiff, the Court entered its Memorandum and Order on PlaintiffsMotions for Entry of Default Judgment on March 26, 2009 (the "Order"). In its Order, the Courtfound that U.S. Bank had not been assigned the Mortgage at the time the foreclosure notice waspublished or at the time the foreclosure sale took place. Order at 2. The Court ruled, amon~ otherthings, that the foreclosure of Defendant's Mortgage was invalid because the foreclosure noticesfailed to name the actual mortgage holder at the time of publication or sale as required by G.L. c.244, 14. Id.

On April 6, 2009, Plaintiff filed its Motion to Vacate Judgment ("Motion to Vacate")with the Court, which is currently pending. At the hearing on Plaintiff's Motion to Vacate,

1,2005"; although we know that the Allonge which was included in the closing documents was, presumably,

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,i

I/, Plaintiffs counsel represented to the Court that "documents may exist which may show a pre-notice, pre-sale assignment sufficient under G.L. c. 244, 14." See Notice of Docket Entry,dated April 21, 2009. Based upon this representation, Plaintiff was given leave to submit, (1)the documents which created and governed the securitized trust and govern its operations thatallegedly owned Defendant's Mortgage Loan, (2) the documents that identified the "blocks ofmortgages sold into that trust, which purportedly include the mortgage at issue in this case," (3)the "collateral file" for the mortgage as it existed at the time of the foreclosure sale was noticedand conducted, which was represented to include the original note, the original (or copy) of themortgage, endorsements or assignments "in blank", (4) the master servicing agreement, (5) thepower of attorney under which the loan servicer acted; (6) the powers of attorney whichpurportedly evidence the authority of the particular individuals who acted on behalf of the loanservicer. rd.

D. Plaintiff's Third Supplemental Memorandum of Law and supportingdocumentation.

On June 8, 2009, Plaintiff submitted its Third Supplemental Memorandum of Law inSupport of Motion for Entry of Default Judgment ("Third Mem."), the affidavits of MichelleHalyard (the "Halyard Affidavit"), Robert Salazar (the "Salazar Affidavit")" and Walter H. Porr,

... Jr. (the "Porr Affidavit"), and additional supporting documentation (the "June 8th sub~issioIl")'The June 8th submission contained:

1. The Adjustable Rate Note, together with the Allonge to Notecreated at the time the loan originated: absent, of course, alteration of these files after the closing.4 According to the Haylard Affidavit, Ms. Haylard identifies herself as a "Foreclosure Support Manager" ofAmerican Home. Haylard Affidavit at ~ 1. In her affidavit, Ms. Haylard states that "[o]n May 4, 2009, I receivedthe original Ibanez Loan Collateral file from Robert Salazar." Id. at ~ 5. In his affidavit, Mr. Salazar indentifieshimself as a "Loan Sales Specialist Il/Sr. Collateral Administration Specialist" for American Home. SalazarAffidavit at ~ 2. Mr. Salazar states that he contacted Wells Fargo on Apri128, 2009 to obtain "the original collateralfile for the Antonio Ibanez loan," which file he received from Wells Fargo on May 4,2009. Salazar Affidavit at~ 4,5. None of these Affidavits makes any representation as to the integrity or existence of any records as of thedate of the foreclosure sale.

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(Rose Mortgage, Inc., to Option One Mortgage Corporation),both of which were executed on December 1, 2005, and theAllonge to Note (Investor) (Option One Mortgage Corporationto" ") executed on January 20,2006.

2. The Mortgage, Adjustable Rate Rider and 1-4 Family Riderwhich were executed on December 1, 2005, and recorded onDecember 2,2005, and subsequently returned by the Registry.

3. A certified copy of the Mortgage, Adjustable Rate Rider and 1-4 Family Rider.

4. The Rose-Option One Assignment.5. A certified copy of the Rose-Option One Assignment.6. The Option One Blank Assignment.7. The Lender's Policy of Title Insurance.8. A facsimile copy of the Lender's Policy of Title Insurance

Commitment.9. The Bailee Letter dated May 11, 2009.See Third Mem., at 3-4.

Plaintiff also submitted a copy of the Private Placement Memorandum (the "PPM") for theStructured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-2Trust, "copies of all foreclosure documents recorded with the Registry of Deeds," and a"Consent by Directs and Assistant Secretary to Recital And Resolutions of Option One MortgageCompany." Id.

Thus, to Defendant's knowledge, of the documents the Plaintiff was given leave by theCourt to submit inorder to show "pre-notice, pre-sale assignment sufficient under G.L. c. 244, 14", the Plaintiffs submission did not include the following: (1) the Trust Agreement thatcreated the securitized trust and governs its operations; (2) any schedule "identifying the blocksof mortgages sold into that trust"; (3) the master servicing agreement; (4) the power of attorney

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under which the loan servicer acted in this instance; and (5) any powers of attorney orauthorizing corporate resolutions evidencing the authority of Sheryn Cervantes to act asAssistant Secretary of Option One to execute an Allonge to Note, or Linda Green, as VicePresident, and Jessica Obde, as Asst. Vice President, for American Home to assign the Mortgagefrom American Home to U.S. Bank.

II. THE COURT CORRECTLY HELD THAT U.S. BANK'SRETROACTIVE, UNRECORDED AND UNRECORDABLE"TITLE" DOCUMENTS FAILED TO ESTABLISH A LEGALINTEREST WHICH ENABLED U.S.BANK TO CONDUCT A

VALID FORECLOSURE SALE

In its decision of March 26,2009, this Court held the following:To allow a foreclosing party, without any interest in the mortgage at the time of the sale(recorded or unrecorded), to conduct the sale in these circumstances, bid and then acquiregood title by later assignment is completely contrary to G.L. c. 244, 14's intent andcommands.

Notwithstanding the multiple legal theories advanced by the Plaintiff memoranda in support ofits motion for summary judgment, and its further Memorandum in support of its motion to vacatethis Court's judgment, the Court's above-quoted holding is unambiguously correct. A party maynot foreclose pursuant to the power of sale contained in a mortgage contract without firstobtaining the mortgagee's contractual rights by written, valid assignment.

A. In Massachusetts, a Mortgagee's Power of Sale Arises Solely from theContractual Provisions of the Mortgage.

G.L c. 244, 14 specifies the process to which a party must adhere to foreclose pursuantto the statutory power of sale. However, a party's right, if any, to sell a mortgaged property at aforeclosure auction pursuant to a power of sale is conferred by a particular mortgagor upon aparticular mortgagee by the mortgage contract. Mortgagees conduct the vast majority offoreclosures in Massachusetts pursuant to the statutory power of sale, codified as a "short form"

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at G.L. c. 183, 21. In order for a mortgagee to exercise the statutory power of sale, it must beexplicitly incorporated as a term in the mortgage contract between the mortgagor and mortgagee.Norton v. Joseph, 2009 WL 58896 at *3, Docket No. 374733 (CWT) (Mass. Land. Ct. Jan. 12,2009) ("The statutory power is not applied by default in the event of its omission; failure toinvoke the power in some way results in no such power."). Ifincorporated, the statutory powerof sale authorizes a mortgagee "upon any default" to "sell the mortgaged premises ... by publicauction on or near the premises ... " G.L. c. 183, 21.5 Where, and only where there isauthority to foreclose pursuant to a contractual power of sale does G.L. c.244 14 set outadditional statutory protections which supplement the statutory power of sale, and which must bestrictly followed for a foreclosure sale to be valid. Bottomly v. Kabachnick, 13 Mass. App. 480,484 (1982); McGreevey v. Charlestown Five Cent Savings Bank, 294 Mass. 480, 484 (1936).

B. A Retroactive Assignment of a Power of Sale is Invalid, and Providesno Authority for a Previous Foreclosure Proceeding.Under the default common law rule, a party may freely assign its contract rights. If a

party other than the original mortgagee seeks to foreclose pursuant to the statutory power of sale,that party must have obtained an assignment of the mortgage. See M.G.L ch. 83, 21 ("[TJhemortgagee or his executors, administrators, successors or assigns may sell the mortgagedpremises '" ")( emphasis added). While a mortgagee may assign to another party its rights in amortgage contract, including the contractual right to foreclose, such an assignment is itself acontract for the sale of interest in land and subject to the statute of frauds. G.L. c. 259, 1(4).Accordingly, under well-settled Massachusetts law, the assignment of a mortgagee's contractrights must be in writing. Only the written, executed assignment of a mortgage contact caneffectively transfer ownership of that mortgage. See Warden v. Adams, 15 Mass 233 (1818)

5 The statutory short form provides only the content for a term of a contract between a particular mortgagor and a

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("No interest passes by a mere delivery of a mortgage deed, without an assignment in writinga n d by deed. "). Moreover, to satisfy the statute of frauds, an assignment must "must containthe terms of the contract agreed upon - the parties, the locus (if an interest in real estate isdealt with), in some circumstances the price, and it must be signed by the party to becharged or by some one authorized to sign on his behalf." Cousbelis v. Alexander, 315 Mass.729, 730 (1944) (quoting Des Brisay v. Foss, 264 Mass. 102, 109 (1928)).

A mortgagee cannot foreclose on a particular property before it has obtained the contractright to foreclose on that property by a written, executed assignment. See,~, In Re Schwartz("[T]he assignment [Deutsche Bank] provided to the Court was not signed until after theforeclosure sale. Acquiring the mortgage after the entry and foreclosure sale does not satisfy theMassachusetts statute."). Numerous courts have rejected supposedly "retroactive" assignments,in which a purported mortgagee attempts to justify an invalid foreclosure it conducted priorobtaining the right to foreclose by written, valid assignment. See,'~, Countrywide HomeLoans, Inc. v. Taylor, 17 Misc.3d 595 (N.Y. Sup. Ct., September 20, 2007) ("Language in thepurported assignment to Countrywide states that the '[a]ssignment shall be deemed effective asof August 1, 2006.' Such attempt at retroactivity, however, is insufficient to establishCountrywide's ownership interest at the time the action was commenced. Indeed, foreclosure of amortgage may not be brought by one who has notitle to it ... "); Deutsche Bank Trust Co.Americas v. Peabody, 866 N.Y.S.2d 91 (N.Y. Sup. Ct., June 26, 2008) ("The crucial issue then iswhether the written assignment, dated after the commencement of the action but stated to beeffective on a date before the commencement, was effective to give plaintiff the requisite interestin the mortgage and thus standing to commence an action to foreclose it. Recently, finding suchpost-commencement dated assignments ineffective, several trial level courts have said "no" .");

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c. In Massachusetts, a Mere Holder of a Note Gains Neither Equitablenor Legal Authority to Foreclose.While the Plaintiff seemingly acknowledges that a party must obtain an assignment of the

mortgage contract prior to conducting a foreclosure sale, it also advances the theory that an"equitable holder" - a party who is not the beneficiary of a written assignment of the mortgage- may nevertheless conduct a valid foreclosure sale. An "equitable holder," according to thePlaintiff, holds the promissory note secured by the mortgage contract, but has not obtained anassignment of the mortgage contract itself. Doonan Graves & Longoria LLC ("Longoria") andthe Real Estate Bar Association for Massachusetts ("REBA") make similar arguments in theirBrief of Amicus Curie [sic] and Statement of Interest, respectively, asserting that the mortgagecontract "follows" the promissory note.

Notably absent from the four briefs of the Plaintiff and the brief of Longoria is a singlecase in which any Court permitted a party to conduct a Massachusetts foreclosure sale withoutfirst obtaining a written assignment of the mortgage contract. The Plaintiff and Longoria citemultiple cases for the proposition that the owner of a promissory note is "entitled" to anassignment of the mortgage contract which secures it, but they do not cite any case that holdsthat the owner of a promissory note automatically becomes the assignee or holder of a mortgagewithout a valid, written assignment. See, s t . . & , Barnes v. Boardman, 149 Mass. 106, 114 (1889)("In some jurisdictions it is held that the mere transfer of the debt without any assignment oreven mention of the mortgage, carries the mortgage with it, so as to enable the assignee to asserthis title inan action at law. This doctrine has not prevailed in Massachusetts, and the

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tendency of the decisions here has been that in such case the mortgagee would hold the legal titlein trust for the purchaser of the debt, and that the latter might obtain a conveyance by a bill inequity.") (citations omitted); Com. v. Reading Sav. Bank, 137 Mass. 431 (1883) (correctingexecution of an existing written assignment); Com. v. Globe Inv. Co., 168 Mass. 80 (1897)(resolving rights of competing creditors to assets of insolvent corporation where no foreclosurewas at issue). None of the cases cited by the Plaintiff and Longoria even contain the phrase"equitable holder," because, quite simply, Massachusetts law recognizes no such concept.

To the contrary, Massachusetts is clear that the last assignee of a mortgage contract is the

holder of that mortgage - even if only a holder of in trust. See Barnes, 149 Mass. at 114 ("[I]nsuch case the mortgagee would hold the legal title in trust for the purchaser of the debt, and thatthe latter might obtain a conveyance by a bill in equity."). Promissory notes are negotiableinstruments which can only negotiated by a process specified in the Uniform Commercial Code.See G.L. c. 106, 3-104 et seq. In Massachusetts, promissory notes do not contain the statutorypower of sale. The owner of a promissory note may be entitled to obtain an assignment of themortgage contract that secures it, but the mere negotiation of a note does not, underMassachusetts law, assign the mortgage contract or provide the statutory Power of Sale; indeed,even the most casual reading of the contract - the Note - Plaintiff claims to hold shows thatother than "late charges' and "acceleration", the holder of the Note lacks any contractualforeclosure authority: and it is axiomatic that the power of sale is a contractual one.

In short, the owner of a promissory note who is not also the assignee of the mortgagee'scontract rights has no authority to conduct a foreclosure sale pursuant to the mortgagecontract.Despite the Plaintiffs many attempts to avoid it, this Court's central holding in itsMarch 26, 2009 decision is correct and inescapable. Absent a written assignment of the

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mortgage contract that satisfies the statute of frauds executed prior to the advertising and sale ofthe home at foreclosure, a party has no right to conduct a foreclosure pursuant to the statutorypower of sale.

III. NONE OF THE FILINGS ACCOMPANYING THE TRUSTEE'STHIRD SUPPLEMENTAL MEMORANDUN CURE THEABSENCE OF VALID TITLE AT THE TIME OF THEFORECLOSURE ADVERTISEMENT AND SALE.

A. U.S. Bank was not the holder of the Mortgage at the time theforeclosure notices were published and at the time of the foreclosure

auction was conducted.Although Plaintiff has now had the opportunity to submit to the Court all the documents

in its possession, custody or control that "may exist which may show a pre-notice, pre-saleassignment sufficient under G.L. c. 244, 14", the plain fact remains that Plaintiff was notassigned the Mortgage until September 2, 2008. There is nothing in Plaintiffs June 8thsubmission to contradict this simple fact. In fact, Plaintiffs submissions clearly demonstratesthat (1) Rose assigned the Mortgage to Option One on December 8,2005, and (2) no subsequentassignment of the Mortgage occurred until American Home executed the Post-ForeclosureAssignment on September 2, 2008. Therefore, on the Foreclosure Notice Dates and theForeclosure Sale Date, Option One was, and remained, the mortgagee and holder ofDefendant's Mortgage.

1. An "Assignment in Blank" is legally inoperative underMassachusetts Law.

In one futile attempt to get around this clear fact, Plaintiff has submitted the Option OneBlank Assignment, which was purportedly executed "in blank' on January 23,2006, andpurportedly in the custody of Wells Fargo on May 4,2009. This assignment, however, doesnothing to support Plaintiff s allegation that it was the holder of, or had been assigned,

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Defendant's Mortgage pre-notice, pre-foreclosure, because this assignment "in blank", by itsvery nature, fails to identify an assignee. Massachusetts common law has long held that aconveyance in land, in which a blank had been left for the name of the grantee, is inoperative asa conveyance so long as the blank: remained unfilled. See Macurda v. Fuller, 225 Mass. 341, 344(1916); Phelps v. Sullivan, 140 Mass. 36, 36-37 (1885); Bums v. Lynde, 6 Allen 305, 311(1863). Even if the Plaintiff s name had been later added to the assignment by parol authority ofOption One, the assignee's name creates a substantial part of the instrument itself, and thereforeredelivery of the assignment after the blanks were filled would have been necessary. See Bums,

at 310. Plaintiff submits no evidence in the June 8th submission that redelivery occurred, mostimportantly the empty spaces remained blank:; no assignee was ever named in this Assignenmt.

The Option One Blank Assignment is equally invalid on the grounds that as a contract, itlacked the required two or more parties, Option One being the only contracting party mentioned.See Eastman v. Wright, 6 Pick. 316, 321 (1828); see also Situation Mgmt. Sys. v. Malouf, Inc.,430 Mass. 875, 878 (2000) (the mutual assent of two or more persons to be bound by anexchange of promises is the basis of a contract): It is a first principle of contract law that onecannot contract with his or herself. Eastman, at 321. Plaintiff inadvertently acknowledges thisfundamental characteristic of an assignment, when Plaintiff states "an agreement/contract whichassigns a mortgage from Party A to Party B may satisfy the statute of frauds without being inrecordable form ... ,,6 Third Mem., at 10. But, here there is no "Party B," and Plaintiff points to no

legal authority that an assignment is valid when there is no Party B.7

6 See infra fn. 13 regarding the requirement under the Trust Agreement for the assignment to be in recordable form.7 Only the written, executed assignment of a mortgage contact can effectively transfer ownership of that mortgage.See Warden v. Adams, 15 Mass 233 (1818) ("No interest passes by a mere delivery of a mortgage deed, without anassignment in writing and by deed."). To satisfy the statute of frauds, an assignment must "must contain the termsof the contract agreed upon - the parties, the locus (if an interest in real estate is dealt with), in some

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Furthermore, Plaintiff glosses over the deficiencies in this purported assignment bydiscussing various statutory provisions with respect to recording of instruments. Third Mem., at10. In doing so, Plaintiff refers to the statutory provisions that indicate that when an instrumentconveying title is lacking certain requirements, the instrument may be valid, even if it may not bein recordable form, Id. There are no statutory provisions, however, that provide that aninstrument without any grantee or assignee would be valid under any circumstances.

2. The Undated and Conflicting Allonges Produced by the Plaintiff do notEven Establish that the Plaintiff Validly Possessed the Note at the Time of

the Foreclosure Sale.

Inanother unavailing attempt to bolster its allegation that it held Defendant's Mortgage,Plaintiff has also submitted to the Court a copy of the Note and two aUonges. In informaldiscovery, the Plaintiff also produced to counsel the Loan Closing File, as of the date of theclosing. That file includes yet a third allonge - apparently existing as of the closing - whichitself casts doubt on the integrity of the chain of possession of the Note. The first allonge, whichhas no indication of the date of its execution, was made payable to "Option One MortgageCorporation, A California Corporation (Without Recourse)" and was executed by Ralph Vitiello,CEO of Rose. The second allonge is made payable in blank, and is executed by SherynCervantes as Assistant Secretary of Option One. Although there is a date in the footer of theallonge of "January 20,2006", it is unclear if this date is meant to identify the date of itsexecution. According to the affidavits submitted in support of the Third Memorandum. the _Note

and these two allonges were provided to Plaintiffs counsel by American Home on May 13,2009. Porr Affidavit at 12. Inaddition, Halyard and Salazar's affidavits indicate that Wells

circumstances the price, and it must be signed by the party to be charged or by some one authorized to signon his behalf." Cousbelis v. Alexander, 315 Mass. 729, 730 (1944) (quoting Des Brisay v. Foss, 264 Mass. 102,109 (1928)). Option One's "inblank" assignment fails.

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physically attached to the instruments in any way ... patently fail to comply with the explicitCode prerequisite.") The requirement that an allonge be affixed to the note helps meet the dualpolicy objectives of preventing fraud and preserving the chain of title to an instrument.Southwestern Resolution Corp. v. Watson, 964 S.W.2d 262,264 (Tex. Comm'ri App.1997),citing Adams v. Madison Realty &Development, Inc., 853 F.2d 163, 167 (3d Cir. 1988). In thisinstance, these objectives are defeated by significant uncertainty surrounding how, when, or evenwhether any of these three the allonges were ever physically attached to the note. Notably,despite the Court's request for an Affidavit verifying the physical state of these documents

as of the date of the foreclosure sale, no Affiant has "spoken" as to the attachment of any ofthe allonges on that date: or on any other date, for that matter. It is impossible to knowbased on the various un-affixed and undated allonges who was the holder of the Note at the timeof the publication and sale of the foreclosure on the Ibanez property. And, of course, inMassachusetts at least, the Note -lacking any Power of Sale-provides no authority toforeclose, and otherwise does not convey with it "mortgagee' status. 9

(3). The Post-Foreclosure Assignment "confirmed" Nothing.Not only does the Post-Foreclosure Assignment dated September 8, 2008 demonstrate

that Plaintiffwas not the holder of the Mortgage prior to that date, but this assignment wasincapable of conferring any for several additional reasons. First, if the Option One BlankAssignment was valid, as Plaintiff argues, then Plaintiff would have been the holder of the

mortgage as of that date, and there would have been no need for the Post-ForeclosureAssignment. As Plaintiff describes, however, as it was cleaning up the paperwork from the

9 A copy of the "Certified" Note, with the "affixed" (or adjacent) allonge, is included in the Exhibits to theAffidavit of Paul R. Collier, Ill. The only "sanctions" for non-payment provided in the Note are "Late Charges" andacceleration requiring payment of the full balance remaining on the Loan. This "Contract" carries no other authority,and, where the document is unambiguous, none can be jurisprudentially added.

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foreclosure of Defendant's property, it was clear that the Option One Blank Assignment wasincomplete, and therefore invalid, so Plaintiffs counsel prepared the Post-ForeclosureAssignment as a "Confirmatory" assignment to be completed in its stead. Third Mem., at 11-12.Unfortunately, several fatal flaws invalidate the later assignment as well.

The Post-Foreclosure Assignment was executed by American Home, and not OptionOne, which the evidence shows had been the mortgagee since the delivery of the Rose-OptionOne Assignment dated December 5,2005. There is no indication in Plaintiffs June 8thsubmission as to how American Home came in to possession of the Mortgage, other than the

conclusory statement that American Home was the "successor in interest" to Option One.Without an assignment from Option One to American Home, or without some other evidence ofthe transfer of Option One's interest in the Mortgage to American Home, Plaintiff has producedno evidence that American Home had any authority to assign Defendant's Mortgage. Oninformation and belief, American Home acquired substantially all of the assets of Option Onepursuant to a Purchase Agreement dated as of March 17,2008 (the "Purchase Agreement"). 10The Purchase Agreement indicates that Option One would assign certain assets to AmericanHome upon the closing of the Purchase Agreement. American Home has produced no evidenceto indicate that Defendant's mortgage was one of the assets assigned to American Home. It isalso important to note that the transaction contemplated by the Purchase Agreement was not astatutory merger, through which American Home would have become the owner of all of Option

One's assets by operation oflaw. Rather, the Purchase Agreement provides that Option One

1 0 Purchase Agreement dated as of March 17, 2008, is by and among Option One, the entities listed on Exhibit Athereto, AH Mortgage Acquisition Co., Inc., and, for the limited purpose set forth in Section 4.05 thereof, H&RBlock, Inc. The Purchase Agreement is available on the U.S. Securities and Exchange Commission's website at thefollowing URL: http://tr.imJpvgw.

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vvo u1 d execute an Assignment and Bill of Sale transferring certain assets. Purchase Agreement, 1.05(c). Plaintiff has produced no evidence ofthis Assignment and Bill of Sale that mayindicate that American Home had any right to assign the Mortgage to Plaintiff.

And, in what can only be described as Charlie Chaplin-esque , the Plaintiff claims thatthe 2006-2 Pass-Through Trust owned the mortgage as of the closing date (December 28, 2006),lending greater doubt to the trustee's more recent claim that the mortgage was assigned toAmerican Home two years later. Third Mem., p. 8, ~3. And, were that not enough to extinguishthe later Assignment by Option One, equally fatal to this assignment is that the Foreclosure Saleextinguished Defendant's Mortgage on July 5,2007; thus, as of September 2,2008, there was ofcourse nothing for either American Home or Option One to assign.

B. Plaintiff has submitted no documents that create or govern the trust, andno documents evidencing that Defendant's Mortgage Loan was everacquired by the Trust.(1) The Trustee's Failure to produce Trust Documents Required by thePrivate Placement Memorandum and Necessary to prove the Trust'sOwnership is Fatal to the Trustee's Motion.

Realizing that the Mortgage, Note, assignments and allonges were insufficient to provePlaintiffs contention that it owned Defendant's Mortgage Loan on the Foreclosure Notice Datesor the Foreclosure Sales Date, Plaintiff also offered to provide the Court with the documents thatcreated and governed the: relevant trust, and that evidenced the Defendant's Mortgage.Loan wasacquired by that trust. Pia intiff has submitted no such documents.

Like all securitized trusts, Structured Asset Securities Corporation Mortgage Loan Trust2006-2 (the "Trust", or "Issuing Entity") had to have been created by a trust agreement. Plaintiffhas submitted no trust agreement. Inplace of a trust agreement, Plaintiffhas submitted a Private

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I/Bcement Memorandum (the "PPM") for the Trust. I I The PPM, however, does not create orgovern the Trust. The PPM expressly indicates that the Trust "will be a common law trustformed under the laws of the State of New York. The Issuing Entity will be created under theTrust Agreement ... "

Inaddition, and even more troubling, Plaintiff has not submitted a single documentidentifying "the blocks of mortgages sold into the Trust", or held by the Trust: despite theexpress requirements of the Private Placement Memorandum filed with the Court:

Each Mortgage Loan (held by the Trust) will be identified in aschedule appearing as an exhibit to the Trust Agreement whichwill specify with respect to each Mortgage Loan, among otherthings, the original principal balance and the Scheduled PrincipalBalance as of close of business on the cut-off date, the MortgageRate, the Scheduled Payment, the Maturity date ... whether theMortgage Loan is covered by a primary mortgage insurance policyand the Applicable Prepayment Premium provisions, if any.

Exhibit B to Third Mem., at 119 (emphasis added). That is, as of today, not a single documenthas been filed that evidences that Defendant's Mortgage Loan was ever sold into the Trust. Infact, the Loan Schedule for the Trust, submitted to the Court by a Third-Party, reveals that themortgage in question is conspicuously absent. See Affidavits of Max Weinstein andThomas A. Tarter, and Affidavit of Marie McConnell, previously filed.

(2) The PPM does not demonstrate that Structured Asset Securities CorporationMortgage Pass-Through Certificates, Series 2006-Z ever acquired or owned -

Defendant's Mortgage Loan.Plaintiff attempts to get around its failure to submit the Trust Agreement by relying upon

selective excerpts from the PPM. Even setting aside the question of the legal significance of the

11 Exhibit B to the PPM refers to the "Trust Agreement dated as of December 1, 2006, among Structured AssetSecurities Corporation, as Depositor, Aurora Loan Services LLC, as Master Servicer, Wells Fargo, N.A. asSecurities Administrator, Clayton Fixed Income Services Inc., as Credit Risk Manager, and U.S. Bank NationalAssociation, as Trustee ... " but the Trust Agreement itself is never provided by the Plaintiff.

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ppM, the selected excerpts from the PPM that Plaintiff has cited to the Court do not demonstratethat any specific loan - much less Defendant's Mortgage Loan -- was ever acquired by thePlaintiff, as trustee of the 2006-2 Pass-Through Trust.

(a) The PPM does not provide any evidence that Plaintiff ever acquiredDefendant's Mortgage Loan.The PPM states that the "Mortgage Loans will be acquired by the Depositor, Structured

Asset Securities Corporation from the Seller [Lehman Brothers] and the Depositor will, in turn,convey such Mortgage Loans to the Trust Fund [Structured Asset Securities CorporationMortgage Pass-Through Certificates, Series 2006-2]". PPM, at 66; Third Mem., at 5. Althoughthe PPM does note that 46.28% of the Mortgage Loans in the Trust ''were acquired by the Sellerfrom Option One Mortgage Corporation," Plaintiff has submitted no evidence to the Court thatLehman, the Seller, ever acquired Defendant's Mortgage Loan from Option One. AlsoNoticeably absent from Plaintiffs June 8th submission is any proof that the Depositor everacquired Defendant's Mortgage Loan from Lehman Brothers, or (even more significantly) thatthe Trust ever acquired Defendant's Mortgage Loan from the Depositor (or any other entity, forthat matter). In fact, Plaintiff did not submit a single sales agreement or contract that evenreferences Defendant's Mortgage Loan despite the fact that the PPM requires that "each transferof the Mortgage Loans from the Seller to the Depositor and from the Depositor to the Trusteewill intended to be a sale of the Mortgage Loans and will be reflected as such inthe Sale andAssignment Agreement and the Trust Agreement, respectively." PPM, at 120. Plaintiff providesno evidence that a true sale of the mortgage loan took place from the Seller to the Depositor tothe Trustee.

The only evidence that the mortgage was transferred to the Trust is the Post-ForeclosureAssignment, which is invalid not only for the reasons described above, but also because neither

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nor the "Depositor" are evidenced to have ever held the Mortgage, and thewas not the entity that assigned the Mortgage to the Trustee in accordance with the

Based on the description of the Trust Agreement in the PPM (because the TrustAgreement was never disclosed), there is no indication that the U.S. Bank, as trustee of the Trust,had the authority to accept assets from any party other than the "Depositor." If this is the case,the acceptance of the Mortgage by U.S. Bank pursuant to the Post-Foreclosure Assignmentwould have been ultra vires and void. Est. Powers &Trusts 7-2.4 (providing that under NewYork law, acts by a trustee in contravention of an express trust are void)Y

(b). The allegation that Wells Fargo was in possession of the "OriginalLoan Collateral File" on May 4, 2009 does not demonstrate thatPlaintiff ever acquired Defendant's Mortgage Loan.Based on the documents and affidavits that Plaintiff has submitted, the Court could only

conclude that Wells Fargo was in possession of Defendant's Mortgage Loan file on of May 4,2009.13 From the record, the limited affidavit support provided by the Plaintiff, the Plaintiffsfailure to provide any proof that the Defendant's mortgage was ever conveyed to the Trust, andthe listing of the Trust's assets, and REO and foreclosure loans, it is wholly unlikely that thePlaintiff is now or has ever been the holder of the Loan. Although the collateral file given to theCourt contains the original note and endorsements, Plaintiff s submission fails to authenticate

12 According to the PPM, the Trust is a REMIC; under the IRS tax code which prohibits certain transactions,including the transfer of an asset into the Trust after the closing date, ifthe Defendant's loan was transferred afterthe closing date, it would be Subject to alOO% tax rate .. PPM, at 154. '" , "13 The contents of the collateral file are not in accordance with the rules under the Trust Agreement as summarizedin the PPM. Specifically, the PPM indicates that "the original mortgage note endorsed without recourse to theTrustee or in blank" as well as "an original assignment of the mortgage to the Trustee or in blank in recordableform" must be delivered to the Custodian. PPM, at 199. Under Massachusetts law, a recordable instrument musthave a residence and address of mortgagee or assignee, MGL c. 183, s 6C, and street address MGL c. 183, s 6B andidentification of the land at issue. MGL c. 183, s 6A. The assignment in blank fails to comply with these statutes, istherefore unrecordable, and not in compliance with the Trust Agreement, according to the PPM.

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tfJst V.S. Bank ever purchased the Note, much less that the 2006-Z Pass-Through Trust was theholder of the note and mortgage at the time of the foreclosure. 14

IV. NEITHER REBA'S TITLE STANDARD 58NOR ITS DOOMSDAY SCENARIO ALTERSTHE STATUTORY COMMAND THAT ONLYMORTGAGEES MAY FORECLOSEBY SALE UNDER G.L. c.244 SECTION 14

Inthe blunt words of title doctrine " . .. (U.S. Bank) could not convey what (it) did notown." Powers v. Orr, 10 Land Court Reporter 137 (February 15, 2002). As U.S. Bank was not"mortgagee", it could not convey the mortgaged premises even to itself: much less to a publicbidder needing clear, conveyable title. That is, neither a note holder nor efuture mortgageassignee holds a mortgage; consequently, as this Court, and others, recognize, even has U.S.Bank been a note holder or a future mortgagee, it could not conduct a foreclosure sale and sellthe Ibanez property:Delivery and seisin of a deed of land to which the grantor has no title does not effect a disseisin.

Cornwall v. Forger, 27 Mass. App. 336,341 (1989). And, despite the vigorous advocacy ofREBA's Title Standard 58,15 a voluntary private association's statement of sound practiceprovides no basis to judicially amend the legislature's judgment that mortgagees - and only

1 4 Infact, the PPM informs investors that "the terms of any custodial agreement under which those services areprovided by Wells Fargo are customary of the mortgage-backed securitization industry and provide for the delivery,receipt, review and safekeeping of mortgage loan files." PPM, at 119. Therefore, ifa custodian agreement wasexecuted, it would have required that the Custodian review the Mortgage File within a specified period of theclosing date and deliver to the Seller and the Trustee a certification that the original note and mortgage are in thefile. See e.g. Larace PSA, Exhibits F-I "Form of Trustee's Initial Certification" & F-2 "Form of Receipt ofMortgage Note." No such certifications or receipts were proffered by the Plaintiff to demonstrate that theIbanez Original Note was in the file.IS Or, as the Land Court held in rejecting an effort to determine title on the basis of a REBA Title Standard:

Inany event, the court rejects the ... argument which cornflates astandard of professional responsibility with the law ...

Sullivan v. Leonard, 13 Land Court Reporter 482,484 (September I, 2005; Piper,J.).

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J lfo rt ga ge es - may foreclose by sale. Cornwall, id at (Mass. Conveyancers Assoc. TitleStandard is a "rule of thumb"; while "revision of established law ... is, however, a taskproperly within the province of the legislature").

V. FROM THE RECORD TAKEN AS A WHOLE, THE TRUSTEE'SFAILURES TO COMPLY WITH CONVEYANCING LAW, ITSFAILURES TO EITHER MAINTAIN OR TO PROVIDE THE

RECORDS REQUIRED BY ITS OWN PPM, ITS PROVISION OFALTERED AND/OR UNDATED RECORDS, AND THE ABSENCEOF THE IBANEZ MORTGAGE FROM THE TRUST'S OWNBLOOMBERG REPORTING MERITS DENIAL OF THE

TRUSTEE'S MOTION TO VACATE JUDGMENT.Despite the Court's clear suggestion, U.S. Bank, Trustee has provided no Affiant

documenting the authenticity or integrity of the "collateral file" as of the date of the foreclosurenotices and sale. From the records actually provided, however, a comparison of the MortgageAssignments produced in "informal discovery" with those filed with the Court establishesconclusively that someone in the "chain of custody" altered Mortgage Assignments after theiroriginal execution and notarization. 16 That is, the "Rose Mortgage Assignment" to Option One

was altered after execution and notarization by at least handwritten additions, changes inaddresses, and identification of the assignee.

Similar flaws impeach the integrity of the "Allonges" the Trustee claims bring the Noteinto the Trust. Specifically, the Trustee's "Collateral File" contains not only the adulteratedMortgage Assignment, but an "Allonge to Note" endorsed to "Option One MortgageCorporation" by Ralph Vitiello, "Chief Executive Officer", succeeded by a Notarization that on

16 Exhibit 1A attached, is clearly the "Assignment of Mortgage", as executed by Ralph Vitiello, ChiefExecutive Officer of Rose Mortgage, Inc. stamped "Certified to be a True and Accurate copy of the Original", andproduced by Trustee counsel to Ibanez counsel. Compare to the "Assignment of Mortgage", at p. 29 of the Trustee'sExhibit A. The return address "Rose Mortgage, Inc." has been "whited out", and replaced with an address forOption One in California. Book, page and dates have been handwritten into the document, and Option Ones stampadded to the assignment line. Both have the same notarized endorsement and the same date ("12/08/05"), butneither has a corporate seal or a notarized seal. [Exhibit 1, 1B attached] These two documents alone demonstratethe willingness of the parties to alter documents - even after execution and notarization, without disclosure.

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;'1tl/05 Ralph Vitiello ... Executive Vice President of Rose Mortgage, Inc. "executed thisI I VU

illstrUIllent".17 However, in the Loan Origination File - presumably the actual loan documents_ appears an "Allonge to Note", on an identical from, handwritten, endorsed "Pay to the order of___ [blank], WITHOUT RECOURSE", which is executed by "Michael Pettrucelli, VicePresident", and is, at least in the Origination file from the closing, "appended" by file clamps toan Adjustable Rate Note identified as "Certified to be a True Copy." Collier Affidavit, Exhibit3. Similarly, the Trustee's dispute that proof of title "in recordable form' is not required is notonly contrary to the law, but it borders on irony: as the Trustee's own Private Placement

Memorandum expressly requires that every Mortgage Assignment of a Loan to be held inthis Trust be "in recordable form." PPM at 199.

Similarly, and despite the explicit requirements of the Private Placement Memorandumoffered by the Trustee to support its claims and the court's requests, the trustee has neverprovided any identification of the Mortgage Loans purportedly held in the 2006-Z Pass-ThroughTrust. The Trustee's failure to affirmatively meet its burden to prove ownership of the Ibanezloan becomes even more incredible upon research of the international reporting sourcesidentifying the Trust' a actual assets. That is, the sale of these loan packages itself depends oninvestors and prospective investors having access to financial information for the "StructuredAsset Securities Corporation Mortgage Pass - Through Certificates, Series 2006-Z." Whilepublicly-traded securitization assets are registered with the Securities and ExchangeCommission, privately traded securitization assets are identified in filings available through

17 A copy of the "Collateral" file of Rose Mortgage is attached as Allonge 2b, and the Loan cLOSING FileAllonge is 2a, to the Affidavit of Paul R. Collier, III.

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.......L~O Professional Service. 18 Through Bloomberg, two separate searches have examinedassets held in the Series 2006-Z Pass- Through. 19Neither of these Series 2006-Z filings

.identified any Mortgage Loan owned by the Trust in the Ibanez loan amount; neither 2006-ZPass-Through filing search showed such a mortgage, in Massachusetts, in foreclosure. Indeed,while these filings purport to identify Trust assets, neither 2006-Z filing provides any evidencethat the Ibanez loan is now, or ever has been, owned by the Trust. And the Private PlacementMemorandum's express requirement of "identified" Mortgage loans speaks loudly in this silence.

CONCLUSION

U.S. Bank, Trustee has utterly failed to establish that the 2006-Z Pass-Through Trust wasthe mortgagee of the Ibanez property on the dates that the Trustee advertised and sold theproperty to itself. Absent mortgagee authority, the foreclosure sale was invalid. The Trustee'sMotion to Vacate this Court's Judgement should be denied.

Respectfully Submitted,

~PlUiRCOllier, III, EsqBBO 092040Attorney At Law675 Massachusetts Ave., lih FloorCambridge, MA 02139617-441-3300, Ext. 202Max Weinstein, BBO# 600982WilmerHale Legal Services Centerof Harvard Law School122 Boylston StreetJamaica Plain, MA 02130(617) 522-3003

18 See Affidavit of Thomas A. Tarter, filed herewith, to the effect that Bloomberg data compilations areroutinely relied upon by the public, and by those engaged in fmancial and banking service sectors for their activities.19 See Affidavit of Max Weinstein, attached hereto, and Affidavit of Marie McConnell, previously submitted.

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Eloise P. LawrenceBBO #655764David DineenBBO # 661242Greater Boston Legal Services197 Friend StreetBoston, MA 02114(617) 603-1647

Dated: June 29, 2009

Ibanez Opposition to U.S. Bank's Motion to Vacate Judgment

Documents

Transcript of Ibanez Opposition to U.S. Bank's Motion to Vacate Judgment