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Law Strategist Proves Glaski Panel & Charles Cox Wrong
19 October 2013 by Bob Hurt. Distribute freely.
Last week DeadlyClear.com published the comments and letter from California paralegal Charles Cox to the California Supreme Court asking it to publish the Glaski opinion which banks don’t want published. In Glaski, the CA 5th District Court overturned a foreclosure because the plaintiff lacked standing because the Depositor indorsed the note in blank to the Trustee of AFTER the closing date of the trust in violation of the Pooling and Servicing agreement. The court claimed the assignment lacked validity under New York trust law, apparently ignoring the PSA’s establishment under Delaware trust law. Banks want the opinion depublished because it could motivate lower courts to halt foreclosures because of violations of the PSA under trust law in other states. See the Court’s Glaski opinion here:
http://www.courts.ca.gov/opinions/documents/F064556.PDF
I have argued that the Plaintiff had these practical choices:
- appeal the obviously bad decision, or
- correct the standing problem and redo the foreclosure.
I figure choice 2 would cost less, but the appeal would do the legal community more good by using the California Supreme Court to clear up this nonsense. Either way, Glaski gets to keep the house a while longer, eventually losing it to foreclosure sale. I wrote to Glaski, suggesting Glaski get the mortgage examined comprehensively by a competent professional so as to find proof that the lender cheated Glaski from the beginning. I received no reply to my letter. Clearly, Glaski has drunk the Kool-Aid of useless foreclosure-defenses and securitization-audits that merely postpone the inevitable.
I present below the text from DeadlyClear including Charles Cox’s letter, and follow it with a commentary by premier litigation strategist Storm Bradford which proves the nonsense of Cox’s position.
Why Charles Cox Agrees with the Glaski Panel
http://deadlyclear.wordpress.com/2013/10/10/high-priced-attorneys-dont-necessarily-buy-truth/
The GLASKI opinion has made the Wall Street banking industry crazy. There was an outcry for publication of this case as it allowed homeowners to challenge fabricated assignments. The Court agreed to publish the opinion.
The securitization case was briefed and argued as a New York law trust case when in fact it was actually a Delaware trust. While the outcome may have likely been the same, the Court’s opinion was based upon New York Trust Law. Thereafter, the banks (that it appears failed to raise these issues during or after the hearings) wanted the opinion to be de-certified for publication. Apparently, no one realized that the WaMu Mortgage Pass-Through Certificates Series 2005-AR17 Trust was a Delaware trust. Frankly, it is hard to believe that anybody even bothered to read the PSA. As a seasoned researcher, right after you verify the Closing Date, the next stop is usually Article II – Conveyances of Mortgages and then you go to Governing Law. The first full paragraph of Section 2.01. Creation of the Trust reads:
C’mon guys – Delaware Trustee is mentioned 4 times in one paragraph. Nevertheless, the point that the Court was making was that challenge to the assignment by the homeowner should be permitted and even though New York Trust Law was used in the decision, had Delaware trust law been on the table the Court may have reached the same conclusion as Delaware trust law appears even more stringent. What is amazing is that the banks attorneys tried to use correspondence to re-argue the case and made some disingenuous statements in order to ultimately request depublication of Glaski v. Bank of America, N.A. The depublication rules allow for any person to argue why an opinion should not be published. While the banks hired their flashy high-priced attorneys to make their depublication requests, it has caused several excellent letters to be written in support of maintaining the publication that the public originally requested to be published. Michael T. Pines’ letter can be found on Stopforeclosurefraud.com Letter to CA Supreme Court from Michael T. Pines in Response and Opposition to the Requests to Depublish Glaski v. Bank of America N.A. Opinion. ”I am writing in opposition to the request by Deutsche Bank National Trust Company’s request to depublish in the above matter. I will only address one issue – the wrongful conduct of counsel seeking depublication,” writes Pines and continues, “A problem with the securitization of loans, is that the banks and their attorneys, that were, and are, involved in securitization serve no one but their own interests. They have violated countless laws. There are of course countless government and private cases pending regarding such. There are government actions, including criminal investigations against foreclosure law firms.” Charles Cox, a California Contract Paralegal penned another brilliant letter to the Court [Click HERE for PDF version]: October 11, 2013 Chief Justice Tani G. Cantil-Sakauye Re: Glaski v. Bank of America, National Association et al. CORRECTED RESPONSE AND OPPOSITION TO REQUEST FORDEPUBLICATION Dear Justices of the Supreme Court: Pursuant to California Rules of Court (“CRC”), Rule 8.1125(b) et seq., the undersigned STATEMENT OF INTEREST AND INTRODUCTION The undersigned’s interest in this response to the depublication request, relates to clients served in the undersigned’s practice as a California Bus & Prof. Code qualified paralegal which consists of working on these types of cases with attorneys on a regular basis. We represent many clients who will be affected by this currently citable appellate court Opinion with some cases having already cited Glaski as applicable authority. The clarity the appellate court provided in its well-reasoned Opinion was qualified for THE DEPUBLICATION REQUEST PROCESS IS NOT A FORUM TO RE-TRY THECASE A DEPUBLICATION REQUEST SHOULD ONLY BE UTILIZED TO CONFIRMTHAT THE APPELLATE COURT’S OPINION MET THE STANDARD FORPUBLICATION1 The depublication process should not be used as a forum to re-try the case. Supreme The appellate court had no choice but to assume the purported “Trust” was formed under New York Trust Laws because Plaintiff claimed it was and the defendants failed to refute or object to this stated fact in the instant case. The law under which the trust was purportedly formed does not change the general concept the appellate court established, that assets are prohibited from entering a trust after the trust closing-date. This is in order to mitigate tax liability and the potential of losing the trust’s tax exempt status by utilizing the restrictive requirements required to maintain limited liability for the trust as a pass through entity. Regardless of whether or not organized under New York Trust Laws, it was still a Real “Every direct or indirect assignment, or act having the effect of an assignment,whether voluntary or involuntary, by a beneficiary of a trust of the beneficiary’s interest in the trust or the trust property or the income or other distribution therefrom that is unassignable by the terms of the instrument that creates or defines the trust is void.”5 Statements in the requests for depublication that Delaware Statutes provide no The appellate justices’ Opinion was sound, applicable and well-reasoned. Defendants’ Petition for Rehearing was rightfully denied and the numerous requests for publication were properly considered and the case was certified for publication. THE APPELLATE COURT’S OPINION MET THE STANDARDS The appellate court’s Opinion met the standard for certification and publication as (1) Establishes a new rule of law; The undersigned contends the appellate court’s well-reasoned Opinion was published on the grounds of sub-sections 2, 3, 5, 6, and 8 referenced above and more specifically related to Sections III. sub-sections A-H and Section IV. sub-section B of the appellate court’s Opinion. 6 Section III.A. The appellate court’s Opinion clarifies securitization issues related to the lack of transfer of the deed of trust into securitized trusts after the closing date, which was deemed not acceptable due to the controlling “pooling and servicing agreement” and statutory requirements applicable to REMIC trusts, which is further clarified in FN 12 of the opinion? This meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8). GLASKI WAS CORRECTLY DECIDED Whether Glaski was a party or third-party beneficiary to the purported securitized trust agreement or Pooling and Servicing Agreement (“PSA”) is irrelevant. The PSA itself did NOT allow transfer into the purported trust AFTER the closing-date whether the borrower invokes standing to challenge assignment into the trust or not. The same holds true whether or not the borrower was a party or third-party beneficiary of the PSA. The appellate court ruled that such a transfer after the closing-date was not allowed as it would violate the purpose of the securitized trust as a REMIC as further addressed herein. Professor Adam Levitin 10 of Georgetown Law School states the following, regarding the view (as expressed in the requests for depublication) that a homeowner has no standing to challenge assignments into a trust because of not being a party to the PSA:
CONCLUSION The arguments proffered supporting depublication are nothing more than meritless For the foregoing reasons and on behalf of clients and persons this case affects, the undersigned respectfully request this Honorable Court NOT depublish the above referenced appellate court Opinion due to the importance that the continued ability to cite this well reasoned Opinion has provided and will continue to provide in the future. Sincerely, [Charles Cox
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Why the Glaski Panel Was DEAD Wrong
October 12, 2013 by Storm Bradford
Even assuming, as Glaski insisted, that New York law governs interpretation of the PSA, which it did not because the PSA was under Delaware law, and further assuming that the transfer of Glaskis’ loan to the Trust violated the terms of the PSA, that after-the-deadline transactions would merely be voidable at the election of one or more of the parties—not void as Glaski and the illiterates would have everyone believe. Consequently, Glaski, was not a party to the PSA, and did not have standing to challenge it. This concurs with time-honored principles of contract law. A void contract is “invalid or unlawful from its inception” and therefore cannot be enforced. 17A C.J.S. Contracts § 169. Thus, a mortgagor who was not a party to an assignment between mortgagees may nevertheless challenge the enforcement of a void assignment. A voidable contract, on the other hand, “is one where one or more of the parties have the power, by the manifestation of an election to do so, to avoid the legal relations created by the contract.” Id. Therefore, only one who was a party to a voidable contract has standing to challenge it. It is true that New York Estate Powers & Trusts Law § 7-2.4 states: “every act in contravention of the Trust is void.” New York case law, however, makes clear “that section 7-2.4 is not applied literally in New York.”Bank of Am. Nat’l Ass’n v. Bassman FBT, LLC, 366 Ill. Dec. 936, 981 N.E.2d 1 (Ill. App. Ct. 2012). Instead, New York courts have held that a beneficiary can ratify a trustee’s ultra vires act. See, e.g., Mooney v. Madden, 597 N.Y.S.2d 775 (N.Y. App. 1993) (holding that trustee may bind trust to an otherwise invalid act or agreement that is outside scope of trustee’s power when beneficiary or beneficiaries consent or ratify trustee’s ultra vires act or agreement); Matter of Estate of Janes, 630 N.Y.S.2d 472, 477 (Sur. 1995), aff’d as modified sub nom. Matter of Janes, 643 N.Y.S.2d 972 (N.Y. App. Div. 1996), aff’d sub nom. Matter of Estate of Janes, 90 N.Y.2d 41 (N.Y. 1997)(acknowledging that a beneficiary may ratify a trustee’s ultra vires act if “the ratification was done with knowledge of material facts”); Leasing Serv. Corp. v. Vita Italian Restaurant, 566 N.Y.S.2d 796, 797-98 (N.Y. App. Div. 1991) (“It is hornbook law that a contract entered into by . . . an unauthorized agent, corporate officer, trustee or other person purporting to act in a representative capacity . . . is voidable.”); Hine v. Huntington, 103 N.Y.S. 535, 540 (1907) (“We have before this called attention to the fact that the cestui que trust is at perfect liberty to elect to approve an unauthorized investment and enjoy its profits, or to reject it at his option.”); 106 N.Y. Jur. 2d Trusts § 431 (“[T]rustee may bind trust to an otherwise invalid act or agreement which is outside the scope of the trustee’s power when beneficiary consents to or ratifies the trustee’s ultra vires act or agreement.”);see also In re Levy, 893 N.Y.S.2d 142, 144 (N.Y. App. Div. 2010) (explaining that “[t]he essence of ratification ‘is that the beneficiary unequivocally declares that he does not regard the act in question as a breach of trust but rather elects to treat it as a lawful transaction under the trust’”) (quoting Bogert, Law of Trusts and Trustees § 942). If an act may be ratified, it is voidable rather than void. See Hacket v. Hackett, 950 N.Y.S.2d 608, 2012 WL 669525, at *20 (N.Y. Sup. Ct. Feb. 21, 2012) (“A void contract cannot be ratified; it binds no one and is a nullity. However, an agreement that is merely voidable by one party leaves both parties at liberty to ratify the transaction and insist upon its performance.”) (quoting 27 Williston on Contracts § 70:13 [4th ed.]) (internal quotation marks omitted); 17 C.J.S. Contracts § 4 (noting that “a void contract . . . is no contract whatsoever” and “cannot be validated by ratification”) (emphasis added); id. (“A contract that is merely voidable is capable of being confirmed or ratified by the party having the right to avoid it . . . .”). These cases above make it obvious that, under New York law, a trustee’s unauthorized transactions may be ratified; such transactions, voidable—not void. That being the case, if the trustee of the securitized trust can’t, on its own, decide to accept these late-delivered notes, then it’s clear the beneficiaries can. They can ratify or waive anything they want. Common sense dictates that they can either, accept the notes/mortgages even though they were delivered late, giving the trust power to enforce, but theoretically putting the trust’s tax-exempt REMIC status at risk; or not allowing the trustee to accept the notes/mortgages, keeping their REMIC status alive, but denying themselves the income from the notes/mortgages they bought. Common sense would also dictate that if there are enormous numbers of late-delivered notes/mortgages, does anyone really believe that the holders of these notes/mortgages would rather lose the tax benefits by virtue of it becoming a taxable event, which is highly unlikely because the IRS has failed to take any action so far, or lose the income from the notes/mortgages. Anyone who got out of the third grade can figure this one out. |
Ideal Strategy for Glaski and ALL Mortgagors
I take this position: if you borrow money to buy a house on a valid mortgage deal, pay it back timely in accordance with your agreements or give up the house. Don’t fight the foreclosure because you will lose and you might suffer Post Traumatic Brain Injury as a result. But, if the mortgage lacks validity because the lender or lender’s agents cheated you, do your best to hammer the lender into a concession that leaves you with the house and compensation. To that end, I propose the following strategy:
- Get a comprehensive mortgage examination by a competent professional who has knowledge of all the related areas of law AND consummate litigation skill. Then,
- If no causes of action (reasons to sue) exist, walk from the house as you should, with a short-sale or deed-in-lieu-of-foreclosure deal to salvage as much as you can of your credit rating.
- Use the discovered causes of action to force a settlement for money or cram-down (reduced balance) refinance, or sue for compensatory and punitive damages and legal fees and costs.
- Do not EVER accept a loan modification, for all are just scams to increase your debt, increase the likelihood of foreclosure, and deprive you of the right to sue over prior predatory lending injuries.
If you obtained a home mortgage loan in the past 10 to 15 years, you might have numerous causes of action underlying the mortgage. In that case you should demand settlement or sue, whether or not you face foreclosure. I can review your situation and introduce you to America’s premier mortgage fraud examiner if circumstances warrant it.
For full details in a FREE discussion with me, call Bob Hurt at 727 669 5511 now.
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 |