| Wells Fargo Bank, N.A. v Guy |
| 2008 NY Slip Op 50916(U) [19 Misc 3d 1127(A)] |
| Decided on May 1, 2008 |
| Supreme Court, Kings County |
| Schack, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Wells Fargo Bank,
N.A., AS TRUSTEE FOR FIRST FRANKLIN MORTGAGE LOAN TRUST 2006-FF15,
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-FF15, Plaintiff,
against Wrenford E. Guy, et. al., Defendants. |
Plaintiff's application, upon the default of all defendants, for an order of reference for the
premises located at 434A Lexington Avenue, Brooklyn, New York (Block 1805, Lot 21, County
[*2]of Kings) is denied without prejudice. The "affidavit of merit
and amount due" submitted in support of this application for an order of reference was not
executed by an officer of plaintiff, Plaintiff's application for an order of reference fails to present an "affidavit made by the
party," pursuant to CPLR § 3215 (f). The instant application contains an
"affidavit of merit and amount due" by Bryan Kusich, who states "[t]hat deponent is the Vice
President of HOME LOAN SERVICES, INC., Attorney in Fact for WELLS FARGO BANK,
N.A., Attached to plaintiff's moving papers is a "Limited Power of Attorney," dated January 11,
2006, from WELLS FARGO appointing National City Home Loan Services, Inc. (NCHLS) as its
attorney-in-fact to perform various enumerated services, pursuant to a December 1, 2004 Pooling
and Servicing Agreement "relating to the First Franklin Mortgage Loan Trust 2004-FF11,
Asset-Backed Certificates, Series 2004-FF11." The instant case deals with FIRST FRANKLIN
Mortgage Loan Trust Series 2006-FF15, not Series 2004-FF11, and the submitted "Limited
Power of Attorney" does not authorize Mr. Kusich to act on behalf of WELLS FARGO, as
Trustee for FIRST FRANKLIN Mortgage Loan Trust Series 2006-FF15. Further, even if the
limited power of attorney was for WELLS FARGO to act for the correct FIRST FRANKLIN
mortgage loan trust, the limited power of attorney submitted to the Court is a photocopy, not an
original document. Plaintiff's counsel failed to certify that the power of attorney had been
compared with the original document and found to be a true and complete copy, pursuant to
CPLR § 2105.
Mr. Kusich, the alleged servicing agent, states in his affidavit that he is a Vice President of
[*3]HOME LOAN SERVICES, INC., not NCHLS. Plaintiff
attached to the moving papers a photocopy of a document from the Secretary of State of the State
of Delaware, dated January 3, 2007, stating that "ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF NATIONAL CITY HOME LOAN
SERVICES, INC.', CHANGING ITS NAME FROM NATIONAL CITY HOME LOAN
SERVICES, INC.' TO HOME LOAN SERVICES, INC.', FILED IN THIS OFFICE ON THE
SECOND DAY OF JANUARY, A.D. 2007." Again, Plaintiff's counsel failed to certify that the
photocopies of the Delaware Secretary of State's certification and the certificate of amendment
had been compared with the original documents and found to be true and complete copies,
pursuant to CPLR § 2105.
Leave is granted to the plaintiff to comply with CPLR § 3215 (f) by providing an
"affidavit made by the party," whether by an officer of WELLS FARGO or someone with a valid
power of attorney from WELLS FARGO.
Further, according to the affidavit of Mr. Kusich and the instant complaint,
What do you get when you cross a Mafia don with a bond
salesman? A dealer in collateralized debt obligations (C.D.O.'s) —
someone who makes you an offer you don't understand.
Seriously, it's starting to look as if C.D.O.'s were to this decade's
housing bubble what Enron-style accounting was to the stock bubble of
the 1990s. Both made investors think they were getting a much better
deal than they really were. . . .
Yet the banks making the loans weren't stupid: they passed the
buck to other people. Subprime mortgages and other risky loans were
securities — that is, banks issued bonds backed by home loans, in
effect handing off the risk to the bond buyers.
In principle, securitization should reduce risk: even if a particular
loan goes bad, the loss is spread among many investors, none of whom
[*4] takes a major hit. But with the collapse of the $800
billion market in
bonds backed by subprime mortgages — the price of a basket of these
bonds has lost almost 40 percent of its value since January [2007] —
it's now clear that many investors who bought these securities didn't
realize what they were getting into . . .
Now we're looking at huge losses to investors who thought they
were playing it safe . . .
But apparently not. And the housing bubble, like the stock bubble
before it, is claiming a growing number of innocent victims.
shall file proof of service of the summons and the complaint, or
a summons and notice served pursuant to subdivision (b) of rule
305 or subdivision (a) of rule 316 of this chapter, and proof of
the facts constituting the claim, the default and the amount due
by affidavit made by the party . . . Where a verified complaint has
been served, it may be used as the affidavit of the facts constituting
the claim and the amount due; in such case, an affidavit as to the
default shall be made by the party or the party's attorney. [Emphasis
added].
Further, if plaintiff's counsel submits copies of documents, such as a power of attorney,
counsel must comply with CPLR § 2105, which states that "[w]here a certified copy of a
paper is required by law, an attorney may certify that it has been compared by him with the
original and found to be a true and complete copy." Thus, plaintiff's counsel can certify the
genuineness of a copy of a document. However, in the instant case, the incorrect power of
attorney and the alleged Delaware amendment of the mortgage servicer's name failed to have an
attorney's certification.
Also, the Court requires an explanation from an officer of plaintiff WELLS FARGO as to
why, in the middle of our national subprime mortgage financial crisis, plaintiff WELLS FARGO
purchased from MERS, as nominee of FIRST FRANKLIN, a nonperforming loan. Could it be
that WELLS FARGO and FIRST FRANKLIN desired to assign to the bondholders of plaintiff's
C.D.O. a nonperforming loan in excess of $600,000.00 due, rather than keep it on FIRST
FRANKLIN's books?
Therefore, the instant application for an order of reference is denied without prejudice. The
Court will grant plaintiff WELLS FARGO an order of reference when it submits an affidavit by
either an officer of WELLS FARGO or someone with a valid power of attorney from WELLS
FARGO possessing personal knowledge of the facts, and explains why it took an assignment of a
nonperforming loan.
ORDERED that the application of plaintiff, ORDERED that leave is granted to plaintiff, This constitutes the Decision and Order of the Court.
[*6] ENTER
Defendant
WRENFORD E. GUY borrowed $600,000.00 from FIRST
FRANKLIN on August 21, 2006, to finance the purchase of the premises at 434A
Lexington Avenue. The GUY Note and Mortgage were recorded in the Office of the City
Register of the City of New York on February 23, 2007, at City Register File Number (CRFN)
2006000103745, by MERS, its nominee for the purpose of recording the mortgage. MERS
assigned the mortgage to plaintiff WELLS FARGO, on August 15, 2007, with the assignment
recorded on September 18, 2007, at CRFN 2007000477797.
defendant GUY defaulted in his mortgage loan payments on May 1, 2007. If this is
true, why did WELLS FARGO take the assignment of this nonperforming loan 117 days after the
alleged default of defendant GUY? The complaint alleges that defendant GUY owed, on April 1,
2007, $599,243.52 in principal plus 9.65% interest (an additional $23,289.21 on August 15,
2007, the date of the assignment from MERS to WELLS FARGO). The complaint also asks for
late charges, inspection fees, insurance, escrow advances and attorneys' fees. The court needs to
know if WELLS FARGO performed due diligence in purchasing this nonperforming loan or was
this a device for FIRST FRANKLIN to shift its loss to the bondholders of plaintiff's mortgage
loan trust collateralized debt obligations. Paul Krugman, in his July 2, 2007 New York Times
column, "Just Say AAA," in writing about the subprime mortgage crisis, could have
been alluding to FIRST FRANKLIN in the instant case:
Real
Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a
foreclosure action, upon the default of the defendant or defendant's admission of
mortgage payment arrears, to appoint a referee "to compute the amount due to the plaintiff." In
the instant action, plaintiff's application for an order of reference is a preliminary step to
obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v
Gkanios, 230 AD2d 770 [2d Dept 1996]).
Plaintiff has failed to meet the clear requirements of CPLR §
3215 (f) for a
default judgment.
On any application for judgment by default, the applicant
Plaintiff has failed to submit "proof of the facts" in "an affidavit made by the
party." The "affidavit of merit and amount due" submitted by Bryan Kusich, Vice President of
Home Loan Services, Inc. fails to have a valid power of attorney for that express purpose.
Additionally, if a valid power of attorney is presented to this Court and it refers to pooling and
servicing agreements, the Court needs a properly offered copy of the pooling and servicing
agreements, to determine if the servicing agent may proceed on behalf of plaintiff. (Finnegan
v Sheahan, 269 AD2d 491 [2d Dept 2000]; Hazim v Winter, 234 AD2d 422 [2d Dept
1996]; EMC Mortg. Corp. [*5]v Batista, 15 Misc 3d 1143
(A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d
1201 (A) [Sup Ct, Suffolk County 2006]).
Accordingly, it is
___________________________
HON. ARTHUR M. SCHACKJ. S. C.