Defendant, DOUGLAS SCHWARTZ AND TAMMY SCHWARTZ, files its response and additional answer to plaintiffs U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR STRUCTURED ASSET SECURITIES CORPORATION (SASCO) 2007-BNC1, Mortgage Pass-through Certificates, Series 2007-bnc1 motion for summary judgment and to tax attorneys fees.
1. Plaintiff alleged that they had standing as plaintiff in hearing to dismiss case based on being the true holder and beneficiary of the Mortgage and the note based on affidavit testimony by attorney Emily Lang. When in fact in the days following the hearing file a motion to substitute another plaintiff on this case. It is defendant’s opinion that Florida default law group was not completely honest with this court in their affidavit testimony. 2. Plaintiff also submitted to the court an affidavit from Chase Home Finance llc. Stating in their own words that they are only a servicer on the loan that the plaintiff alleges to own and hold, and that they have only personal knowledge, and have only reviewed a file which is hearsay at best. 3. In their own sworn SEC document filings This Mortgage was pooled with other John Does (1-1000) and sold on the open market, making the true Owners of this Mortgage and Note truly unknown and mixed with a pool of beneficiaries. See Exhibit A 4. Affidavits are often submitted to prove default that are conclusory and insufficient. Manufacturers & Traders Trust Co. v. Medina, 01 C 768, 2001 WL(NNN) NNN-NNNN(N.D.Ill., Dec. 5, 2001); Cole Taylor Bank v. Corrigan, 230 Ill.App.3d 122, 595 N.E.2d 177, 181 (2d Dist. 1992). Computer-generated bank records or testimony based thereon are often offered without proper foundation, or are summarized without being introduced. Manufacturers & Traders Trust Co. v. Medina, supra, 01 C 768, 2001 WL(NNN) NNN-NNNN(N.D.Ill., Dec. 5, 2001); FDIC v. Carabetta, 55 Conn.App. 369, 739 A.2d 301 (1999). Testimony, whether live or in the form of an affidavit, to the effect that the witness has reviewed a loan file and that the loan file shows that the debtor is in default is hearsay and incompetent; rather, the records must be introduced after a proper foundation is provided. New England Savings Bank v. Bedford Realty Corp., 238 Conn. 745, 680 A.2d 301, 308-09 (1996), later opinion, 246 Conn. 594, 717 A.2d 713 (1998); Cole Taylor Bank v. Corrigan, supra, 230 Ill.App.3d 122, 595 N.E.2d 177, 181 (2d Dist. 1992). It is the business records that constitute the evidence, not the testimony of the witness referring to them. In re A.B., 308 Ill.App. 3d 227, 719 N.E.2d 348 (2d Dist. 1999). Nor is such an affidavit made sufficient by omitting the fact that it is based on a review of loan records, if it appears that the affiant did not personally receive or observe the reception of all of the borrowers payments. Hawaii Community Federal Credit Union v. Keka, 94 Haw. 213, 11 P.3d 1, 10 (2000). If the underlying records are voluminous, a person who has extracted the necessary information may testify to that fact, but the underlying records must be made available to the court and opposing party. In re deLarco, 313 Ill.App.3d 107, 728 N.E.2d 1278 (2d Dist. 2000). 5. By the very nature of the way they “pooled” these notes, the note lost its individual identity under the express terms of the pooling and services. What that means is that the revenue from the note was made part of a larger promise to pay, under which the payments under one note could be effectively applied to another note where the payment was not made. This was even more expressly provided when the pool was assigned in different parts to the Special Purpose Vehicles, that issued certificates to investors in which the investors thought they were buying triple AAA cash equivalent securities backed by mortgages and notes that were, according to the sellers of the certificates negotiable. But a negotiable note is ONLY a note where there is an unconditional promise to pay. The pooling with the aggregator, the placement of parts of the pool into tranches (divisions) of the SPV (corporation that issued the certificates of mortgage backed securities). In this case the obligation was created by the funding of the loan. The source of the loan was an undisclosed party. That party was calling the shots, including the terms of the note that it needed to justify the presale (selling forward, which means selling what you don’t have “yet”) of the asset backed securities. With the pooling agreement at the aggregator (loan wholesaler) level combined with the re-pooling at the SPV level the note was converted from an unconditional promise to pay to a conditional promise to pay — i.e., if you didn’t pay your note, it is quite possible that a third party could and in fact did pay part or all of the payments or the principal of your note. The presence of insurance, credit default swaps, bailouts from the U.S. Treasury and Federal Reserve indicate that the only party who could possibly claim to be holder in due course has been paid in part or in full. I am therefore left with two extremely high probabilities to the point of being, in my opinion, virtually certain: (1) BNC MORTGAGE INC. was paid in full contemproaneously with my loan closing and (2) the note was negotiated despite the fact that it was non-negotiable. This leaves BNC MORTGAGE INC on my closing documents in the position of (a) having been paid in full and probably not even taking the loan on its balance sheet and (b) lacking an argument that it “negotiated” (Sold) the note to a third party. If the note was not sold and the lender received payment in full, neither the obligation nor the security (mortgage) exists by operation of law entitling defendants to file a lawsuit to quiet title my property. 6. For any claiming that the defendants are seeking a windfall — that isn’t true. The homeowner admits to signing a note but is merely saying that the party claiming rights to foreclose, and any party acting in furtherance of that claim is acting ultra vires (without authority, right, or justification). To do otherwise would cause the unjust enrichment of a party seeking to obtain ownership of property despite the fact that the party seeking foreclosure has already been paid in full, plus fees. Which is the windfall — a homeowner who got hoodwinked by deceptive and predatory lending practices or a thief who already got paid and now wants the property too? 7. Defendants believe there was Fraud in the Factum since securitizations were involved. The Defendants filings with the Securities and Exchange Commission (SEC) shows interconnected and affiliated parties that aided and abetted a pattern of fraud by the originating lender and, thus, trust cannot acquire the rights of a holder-in-due-course per U.C.C.§ 3-203 (b). (England v. MG Investments, Inc., 93 F. Supp. 2d 718 (S.D. W.Va 2000)). 8. For example, a federal district Court held that the Wall Street underwriters (Lehman Bros.) for a predatory lender could be liable to injured consumers on an aiding and abetting theory where consumer allege that the underwriter knew of the lender's fraud and provided substantial assistance to the lender's scheme (Aiello v. Chisik, 2002 U.S. Dist. Lexis 5858 (C.D. Cal. Jan. 10, 2002) 9. Defendants believe that the powers afforded to the plaintiffs as trustees or services per the trustees service agreement do not give any authority to prosecute this case and do not give any justification to tax attorney’s fees on a frivolous case. See exhibit B (Demurer) 10. Exhibits submitted suggest that a trial is needed before any judgement can be awarded to alleged plaintiffs.
WHEREFORE, Defendants reaffirm their original answer and respectfully XXXXX XXXXX court enter an order denying the motion for summary judgment and an order to deny attorneys’ fees until a trial can be heard and determination of the right of the plaintiff to have valid standing. Defendants request a trial by jury on the facts contained in answer and submitted discovery items.
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