WRIGHT DECISION: CA FED CT ALLOWS CLAIMS FOR Failure to Contact, Wrongful Foreclosure, Quiet Title, Unjust Enrichment, Declaratory and Injunctive Relief

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A LESSON IN PLEADING

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Editor’s Comment: The lesson in this decision is that a well-plead complaint will get over the goal line. A badly worded complaint, after a couple tries may be dismissed with prejudice even if you could have drafted a better claim. The Court would have allowed a claim for fraud if Plaintiff (homeowner) had been more specific as to who said what, where, when and how it resulted in damage.

JPM ACQUISITION OF WAMU DOES NOT TRANSFER THE MORTGAGE, NOTE OR OBLIGATION

The other thing in this decision worthy of comment is that if you plead properly, you prevent JPM from saying they own the loan just by virtue of their WAMU acquisition. Drilling down in discovery you will discover that they did not acquire the loans, that they paid a fraction of of the total assets now claimed, and that the idea that they could sell the loans into pool AND still claim ownership of the obligation is just plain stupid and unacceptable.

I would add that the allegation by them (and well written by you in your complaint for Clients) that the loans were sold into the secondary market for securitization and sale to investors (a) defeats the usual allegation that WAMU loans are not securitized and (b) that discovery is required as to the money trail which will show that the transfers were not accompanied by payment. Nor were they accompanied by documentation and delivery of documents as required by the REMIC statute and the PSA.

The fact that the money trail will show that the loan was treated as though it was securitized shows that the obligation left the table and went to Wall Street. But the security instrument remained on the title registry in the name of WAMU. The homeowner was on the right track here in pleading that the note did not properly express a  meeting of the minds but should have had more specificity, which means that you need more knowledge about securitization — or you need to get a COMBO report and attach it as part of your position, summarizing the key points in your complaint.

Following the money trail will probably lead to the conclusion that the loan was not in default as to the creditor who was still getting paid despite the homeowner’s cessation of payments. It may also lead to the conclusion that the obligation was reduced or eliminated by bailout, insurance or other credit enhancements. For that you need to drill down to the loan level accounting report that our team produces or get it on your own.

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, JP Morgan, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WAMU, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |