FORECLOSURE DEFENSE CASES INVOLVING DEUTSCHE BANK

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March 26, 2010

March 26, 2010

Some time ago, we published an article about the actions of Deutsche Bank in a case in New York where the ever-venerable and no-nonsense Judge Arthur M. Schack denied Deutsche Bank’s Motion for Summary Judgment, finding that a purported assignment from MERS to Deutsche Bank was defective and that Deutsche Bank, with an invalid assignment of the mortgage and note from MERS, lacked standing to foreclose. The more intriguing portion of the decision in the matter of Ronaldo Campbell v. Deutsche Bank, Case No. 31764-07 (Supreme Court of New York, King’s County) concerned Deutsche Bank’s purchase of a known toxic loan.

Judge Schack wanted to know why, 142 days after the borrower was claimed to be in default, MERS would assign a known toxic loan to Deutsche Bank (as “Trustee” of a securitized mortgage loan trust), and ordered a satisfactory explanation, by sworn Affidavit from an officer of the securitized trust, as to why Deutsche Bank would purchase from MERS, as alleged “nominee” for the original lender, the nonperforming loan. We have not seen any evidence that anyone ever complied with Judge Schack’s request.

History does repeat itself. Just today, we had an inquiry from a borrower in Miami, Florida who is being sued by Deutsche Bank as Trustee of a securitized mortgage loan trust where MERS assigned the loan to Deutsche Bank 120 days after the loan was declared to be in default. The loan was assigned to Deutsche Bank on March 1, 2010, and the lawsuit filed 16 days later on St. Patrick’s Day (March 17)! This is clear and concrete evidence that Deutsche Bank is actively permitting transfer of toxic loans into a securitized trust and then foreclosing.

We suspect that we know why Deutsche Bank is doing this. Deutsche Bank wants to take advantage of the insurances and credit enhancements inside of the trust (such as excess interest reserves, overcollateralization reserves, NIMS or other insurance policies which were written by among others…guess who…AIG!) which cover losses on the mortgage loans and so that Deutsche Bank can turn what they claim to be a liability into a two-triered asset, as we previously discussed in another article on this website.

Deutsche Bank is playing the numbers game. Assuming even for the sake of a hypothetical that of the 10 million new foreclosure which will be filed starting April 1, 2010, if Deutsche Bank files 1milllion (10%) of them, how many borrowers will actually challenge the foreclosure? Less than one per cent? Less than 1/2 or 1/4 of one percent? Probably less, which means that when Deutsche Bank counts the beans, a few “rotten” beans in the pile (those being the foreclosures which are challenged or beaten) will be regarded as nothing more than a small and insignificant “cost of doing business” when viewed against the millions of foreclosures which will be railroaded through unchallenged.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com