The findings in this examination are factual although they are here provided for informational purposes only and are not to be construed as legal advice. The borrower or the reader, as the case may be, was or is advised to consult a competent legal professional in connection with the contents of this report and its proper use.
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FORECLOSURE
Loan History Leading to Foreclosure
1. The loan was granted on August 29, 2007 by Countrywide Bank, FSB. The Mortgage names MERS
as nominee for the lender and mortgagee.
2. On an unknown date, the Fixed Rate Note was endorsed by Countrywide Bank, FSB in favor of
Countrywide Home Loans, Inc.
3. On an unknown date, the Fixed Rate Note was endorsed in blank by Countrywide Home Loans,
Inc.
4. On August 5, 2009, the Mortgage was assigned by MERS to The Bank of New York Mellon,
formerly known as The Bank of New York as Trustee for CHL Mortgage Pass-Through Trust 2007-
18.
5. On July 22, 2011, the Mortgage was assigned by MERS as holder of the Mortgage to The Bank of
New York Mellon, formerly known as The Bank of New York as Trustee for CHL Mortgage Pass-
Through Trust 2007-18.
1. Complaint
On July 16, 2012, a Complaint to Foreclose Mortgage was executed by the attorney for plaintiff
The Bank of New York Mellon, formerly known as The Bank of New York as Trustee for CHL
Mortgage Pass-Through Trust 2007-18. This document names the borrower as one of the
defendants and pertains to the property that was mortgaged to secure the note on subject loan.
It was filed in the Circuit Court in (Name of County Withheld) on July 17, 2012.
1.1. The real party-in-interest in this case is the trust named CHL Mortgage Pass-Through Trust
2007-18 or the holders of the certificates of investment that were issued by (or the
creditors of) CHL Mortgage Pass-Through Trust 2007-18, represented by The Bank of New
York Mellon, formerly known as The Bank of New York as trustee.
1.2.1. “On or about August 29, 2007, a Promissory Note was executed and delivered in favor
of plaintiff or plaintiff’s assignor in the principal amount of $520,000. A true copy of
said Note is attached and labelled Exhibit “A””.
“To secure payment of said note, the original mortgagors, then being the owners of
record, executed and delivered a Mortgage which is attached as “Exhibit B””
(paragraph 2; see The Debt and Security, page 4).
1.2.2. “The above-described note and Mortgage were assigned to the plaintiff. The
assignments are attached as Exhibit “C”” (paragraph 4; see Assignments; Transfer
Transactions, page 8).
1. About the Plaintiff
By naming itself as plaintiff in the complaint, the trust, through its trustee declares that:
1.1. It is operating according to the provisions of its PSA which states that it was established as
a New York common law trust and that its PSA shall be construed and governed in
accordance with the laws of the state of New York.
1.2. Its purpose is to acquire mortgage loans which would be conducted within the period as
would qualify the loans for inclusion into a REMIC. Its cut-off and closing dates were on
September 1, 2007 and September 28, 2007, respectively.
1.3. It is operating according to the provisions of its PSA. This means that the trust has complied
with the procedures pertaining to the transfer and maintenance of the mortgage loan
documents as required in the PSA which compliance is attested by an independent
accountant in the certification that is on file with the SEC under the name of the trust.
Specifically, this compliance includes the PSA requirement for the trustee to certify that
the loans that were acquired by the trust from CWMBS, the depositor, were in the
possession of the trustee as of December 28, 2007 or three months after the trust’s closing
date on September 28, 2007.
2. Bases of the Right to Foreclose
2.1. The Note and the Endorsements
2.1.1. Any reference to the endorsements is conspicuously absent from the Complaint. This
indicates that the endorsements were not yet affixed on the note at the time of the
filing of the Complaint or that plaintiff is relying mainly on the two assignments as a
means by which to assert ownership of the loan and the right to enforce the terms of
the note. As has been stated, the assignments were made to purport to include the
note.
2.1.2. There is no direct correlation between the note endorsed in blank and the plaintiff
named in the Complaint. Mere possession of the note by The Bank New York Mellon
as trustee is not conclusive evidence that the loan is owned by this trust given the
fact that The Bank of New York Mellon is also acting as trustee for numerous other
trusts that were established for purposes similar to that of CHL Mortgage Pass-
Through Trust 2007-18 and the possibility that The Bank of New York Mellon itself
may even own the loan.
1.2. Its purpose is to acquire mortgage loans which would be conducted within the period as
would qualify the loans for inclusion into a REMIC. Its cut-off and closing dates were on
September 1, 2007 and September 28, 2007, respectively.
1.3. It is operating according to the provisions of its PSA. This means that the trust has complied
with the procedures pertaining to the transfer and maintenance of the mortgage loan
documents as required in the PSA which compliance is attested by an independent
accountant in the certification that is on file with the SEC under the name of the trust.
Specifically, this compliance includes the PSA requirement for the trustee to certify that
the loans that were acquired by the trust from CWMBS, the depositor, were in the
possession of the trustee as of December 28, 2007 or three months after the trust’s closing
date on September 28, 2007.
2. Bases of the Right to Foreclose
2.1. The Note and the Endorsements
2.1.1. Any reference to the endorsements is conspicuously absent from the Complaint. This
indicates that the endorsements were not yet affixed on the note at the time of the
filing of the Complaint or that plaintiff is relying mainly on the two assignments as a
means by which to assert ownership of the loan and the right to enforce the terms of
the note. As has been stated, the assignments were made to purport to include the
note.
2.1.2. There is no direct correlation between the note endorsed in blank and the plaintiff
named in the Complaint. Mere possession of the note by The Bank New York Mellon
as trustee is not conclusive evidence that the loan is owned by this trust given the
fact that The Bank of New York Mellon is also acting as trustee for numerous other
trusts that were established for purposes similar to that of CHL Mortgage Pass-
Through Trust 2007-18 and the possibility that The Bank of New York Mellon itself
may even own the loan.
The blank endorsement maybe allowed or prescribed by the PSA, but it cannot
identify the plaintiff as the owner of the note.
2.1.3. Proof of possession of the note at the time the action was initiated, in ordinary
circumstances, would have been enough for the plaintiff to prove the right to
foreclose. In the instant case, however, the trust, having elected to qualify itself as
a REMIC, chose to be bound by a more stringent set of rules. As such, the trust must
acquire its mortgage loans within three months of its closing date and this
acquisition must be manifest in the endorsement.
Any loan acquisition by the trust beyond this period would not qualify the loan for
inclusion into a REMIC and thus, would be void under the New York Estates, Powers
and Trusts Law.
2.2. The Mortgage & the Assignments
2.2.1. MERS, which executed the assignments, was not a party to the note and had no
authority to transfer its ownership. MERS’ assignments do not confer any rights on
the note to the assignee.
2.2.2. The two assignments are not different from each other. The second assignment is a
mere duplication of the first.
Whether it is the first or the second assignment that the plaintiff considers to be the
one document that embodies the conveyance of the loan in its favor, this will prove
and/or it has to be admitted by the plaintiff that:
(a) It did not acquire the loan from CWMBS, Inc., the depositor.
(b) The date of the conveyance could not have been earlier than August 5, 2009
which was almost two years after the trust’s closing date on September 28, 2007. An
undated endorsement cannot contest a dated assignment when it comes to
establishing the date of the conveyance of the loan even if this endorsement is open
to the assumption that it was executed prior to the first assignment.
End of article
2.1.3. Proof of possession of the note at the time the action was initiated, in ordinary
circumstances, would have been enough for the plaintiff to prove the right to
foreclose. In the instant case, however, the trust, having elected to qualify itself as
a REMIC, chose to be bound by a more stringent set of rules. As such, the trust must
acquire its mortgage loans within three months of its closing date and this
acquisition must be manifest in the endorsement.
Any loan acquisition by the trust beyond this period would not qualify the loan for
inclusion into a REMIC and thus, would be void under the New York Estates, Powers
and Trusts Law.
2.2. The Mortgage & the Assignments
2.2.1. MERS, which executed the assignments, was not a party to the note and had no
authority to transfer its ownership. MERS’ assignments do not confer any rights on
the note to the assignee.
2.2.2. The two assignments are not different from each other. The second assignment is a
mere duplication of the first.
Whether it is the first or the second assignment that the plaintiff considers to be the
one document that embodies the conveyance of the loan in its favor, this will prove
and/or it has to be admitted by the plaintiff that:
(a) It did not acquire the loan from CWMBS, Inc., the depositor.
(b) The date of the conveyance could not have been earlier than August 5, 2009
which was almost two years after the trust’s closing date on September 28, 2007. An
undated endorsement cannot contest a dated assignment when it comes to
establishing the date of the conveyance of the loan even if this endorsement is open
to the assumption that it was executed prior to the first assignment.
End of article
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