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8/7/2019 Jeff Brown Amended Complaint 2
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IN THE UNITED STATES DISTRICT COURTEASTERN DISTRICT VIRGINIA
Jeffrey BrownPlaintiff,
v.
HSBC Mortgage Corp. (USA),
Debra Bassett,
Bierman, Geesing, and Ward, LLC,
Jared Slater, and
MERS (Mortgage Electronic
Registration System)
DOEs 1- 50 being parties to be named
later Defendants
))
)))))))))))
)
AMENDED COMPLAINT
Request for Jury Demand
Request for Injunctive Relief
CIVIL CASE NO: 1:10cv1427
AMENDED COMPLAINT
COMES NOW, Plaintiff Jeffrey Brown, Pro Se, [for the present time] and files his
first Amended Complaint against Defendants. Plaintiff wishes to remind this Court
that pursuant to order dated 01/24/2011 Plaintiff has obtained a default judgment
against defendants HSBC and Bassett ; such rights under that default judgment
are not waived nor any rights extended with this Amended Complaint. Plaintiff
further states as follows:
NATURE OF ACTION
This case arises out of Defendants egregious and ongoing and far reaching
fraudulent Schemes for improper use of Plaintiffs identity, fraud in the
inducement, fraud in the Execution, usury, and breaches of contractual and
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fiduciary obligations as Mortgagee or Trustee on the Deed of Trust, Mortgage
Brokers, Loan Originators, Loan Seller, Mortgage Aggregator, Trustee of
Pooled Assets, Trustee or officers of Structured Investment Vehicle,
Investment Banker, Trustee of Special Purpose Vehicle/Issuer of Certificates of
Asset-backed Certificates, Seller of Asset-Backed Certificates (shares or
bonds), Special Servicer and Trustee, respectively, of certain mortgage loans
pooled together in a trust fund.
JURISDICTION AND VENUE
1. This Court has jurisdiction over the subject matter of this action pursuant
to Article III 2, U.S. Constitution, 42 U.S.C. 1983, 1985 and 1986 (failure
to prevent) as conferred by the U.S. Constitution 28 U.S.C. 1331 and 1343
under the 1st, 4th, 5th, 6th, 8th and 14th Amendments. This action involves
Constitutional charges, grounds, questions, and jurisdiction is supplemented
by 28 U.S.C. 1367(a) and challenges the Constitutional violations of state
and federal law, procedure and practice by state and federal officials and
officers of this Court. Further, Plaintiff brings this action under the Real
Estate Settlement Procedures Act, 12 U.S.C 2601, et seq., The Federal
Truth in Lending Act 15 U.S.C. 1601 et seq., Regulation Z, 226.2(11) and
Act 15 U.S.C. 1692, Fair Debt and Collection Practices Act. Plaintiff also
brings this main action through civil RICO statute.
2. This action is brought within the time constraints of 42 U.S.C. 1983 and
particularly under the continuing organization complicity and fraud scope,
central to this Complaint.
3. Plaintiff requests an Administrative Judge to preside over this matter so
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that Plaintiff may exhaust all of his administrative remedies.
4. Venue is proper under of 28 U.S.C. 1391 because the parties are either
residents of the State of Virginia and the United States, or Corporations
under the personal jurisdiction of the State of Virginia.
PARTIES
5. PlaintiffJeffrey Brown is a citizen of the United States and a resident of
Fairfax, Virginia. Plaintiff is a consumer and natural person for the
purpose of this Complaint within the meaning of The Federal Truth in
Lending Act 15 U.S.C. 1601 et seq., Regulation Z, 226.2(11) and Act 15
U.S.C. 1692, Fair Debt and Collection Practices Act.
6. Defendant HSBC Mortgage Corporation (USA)(hereinafter HSBC) is
the nominal lender and originator of the loan. HSBC was, at all material
times hereto, a foreign corporation which was doing business in the State of
Virginia including the servicing of mortgage loans which in this instance,
further constituted the collection of consumer debts subject to the
provisions of the Federal Truth in Lending Act 15 U.S.C. 1602(f) and the Fair
Debt and Collection Practices Act 15 U.S.C. 1692a and is a creditor and
collector as defined.
7. Defendant Bierman, Geesing and Ward, LLC ( hereinafter Bierman &
Geesing) is a Collector as defined under Fair Debt and Collection
Practices Act and is engaged in regular practice and collection of consumer
debts pursuant to 15 U.S.C. 1692. Defendant is thus subject to the
provisions of a collector and creditor as defined by the Federal Truth in
Lending Act 15 U.S.C. 1602(f). Upon information and belief, Howard
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Bierman is a principal in both Beirman & Geesing and Equity Trustees, LLC.
8. Mortgage Electronic Registration System(hereinafter MERS), with
its last known principal place of business at 1818 Library Street, Suite 300,
Reston, VA 20190, is and was, at all times material hereto, a corporation
which was engaged in the business of, inter alia, acting as an alleged
nominee for various mortgage lenders and their servicing agents for
purposes of purporting to assign various rights incident to a mortgage Note
and/or a mortgage to third parties.
9. Debra Bassett is the original trustee listed on Plaintiffs Deed of Trust.
10. Upon information and belief, Jared Slater is employed with Equity Trustee,
LLC, a firm owned by Howard Bierman of the Bierman & Geesing.
11. Plaintiff is ignorant of the true names and capacities of Defendants sued
herein as DOEs 1- 50, inclusive, and therefore brings suit against these
Defendants by such fictitious names. Plaintiff will amend this Complaint to
allege their true names as ascertained.
FACTUAL ALLEGATIONS
12. In late 2009, Plaintiff and his wife performed a routine audit of their
various personal documents and discovered that they had never received a
complete alleged loan package after closing with HSBC, in 2008. More
specifically, a copy of the original loan application, a copy of the Note itself,
rescission documents, and a complete Deed of Trust were either lacking or
missing. In fact, all that Plaintiff received at the so-called closing table
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was a six-page copy of the alleged Note and a five-page copy of the Deed of
Trust. (See Exhibit A DOT received at closing).
13. In 2010, Plaintiff requested all documents related to the alleged loan
package from Defendant HSBC. However, HSBC failed to provide such
documents in violation of RESPA, TILA and U.S.C. Title 18, Part I, Chapter
25, 472, 473, 474, 474A, and 475 and instead, only sent a copy of the
alleged adjustable rate note. HSBC failed to provide any other closing
documentation.
14. Plaintiff noticed that the Note received was different from the copy
already in Plaintiffs possession. This version contained an extra page with
an inverted notary impression and a curiously blank space that appeared to
be redacted. (See Exhibit B Loan Documents received from HSBC).
15. In response to HSBCs lack of a substantive reply, Plaintiff then called
Premier Relationship Manager, Soraya Teymourian to express concern.
Plaintiff followed up the call with a letter to Ms. Teymourian requesting the
opportunity to view the ORIGINAL complete set of alleged loan documents.
(See Exhibit C- January 27, 2010 letter to HSBC Bank).
16. On January 29, 2010, Plaintiff went to the Fairfax County Land Records to
obtain a true and certified copy of the Deed of Trust. (See Exhibit D). Such
document was 19 pages long and in no way resembled the five page Deed
of Trust Plaintiff received at closing. (Compare Exhibit B with Exhibit D).
17. On February 4, 2010, in response to Plaintiffs repeated requests, Plaintiff
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received a phone call from Goli Youchidge from HSBC. She indicated that
she was not sure if the original documents existed, but that she would
attempt to locate them. (See Exhibit E).
18. On February 17, 2010, Plaintiff actually went to an HSBC Bank in Virginia
where he was able to view what was described as original loan
documents. (See Exhibit E). This document did not match the official
copy as sent to Plaintiff via FedEx on January 27, 2010. Further, Plaintiff
disputes that this so called original was not an original at all, as signing of
the document was done in blue ink. The document as provided had a black
signature.
19. As a result of this visit Plaintiff realized that HSBC was not the holder of
the original note as all it could produce for Plaintiffs viewing was a
photocopy alleged to be the original Note. By their own admission and on
several occasions, HSBC no longer held an alleged Note or even a proper
Deed of Trust.
20. On February 17, 2010, Plaintiff Noticed HSBC, Debra Bassett (Trustee),
MERS, and various government agencies with a Qualified Written Request
(QWR) as per TILA and RESPA.[1] (See Exhibit F (containing sub-exhibits)).
21. On February 24, 2010, in response to the QWR, Plaintiff received a letter
from HSBC containing unsubstantiated claims. (See Exhibit G). HSBC
falsely claimed that Plaintiff had received the following:
A copy of the Mortgage Note, (Un-endorsed)
The Deed of Trust,
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(See Exhibit N). With this response on June 25, 2010, HSBC claimed that it
shipped the loan file which contained the original signed loan documents
to the McLean branch. However, as stated above, Plaintiff alleges that the
file viewed at the Mclean branch was not the original signed note.
Therefore, by its own admission, HSBC has admitted that it does not have
the original signed note as it was not able to produce the wet ink signature
for viewing. In essence, HSBC cannot verify Plaintiffs obligation on the note
as they dont have the original note[4].
29. Plaintiff created a good faith account wherein he placed his monthly
payments for the duration of this controversy. On June 12, 2010 Plaintiff
moved this account from HSBC to an account at Bank of America. (See
Exhibit O). Such move was precipitated by a fear that HSBC would empty
this account in a self-help maneuver.
30. After several attempts to validate any debt with HSBC, Plaintiff sent
Stephen Tich Notice of Acquiescence to Plaintiffs claims as caused by
Defendants non-compliance. (See Exhibit P). Such letter contained a
Contract Novation under which the alleged debt is now void, this matter is
closed and the Mortgage Account Number 459779-6 is discharged and
satisfied. (See Id.).
31. In addition to not being able to validate the debt by providing the original
note, Plaintiff also alleges that at the time of closing, Plaintiff thought that
he was signing a Promissory Note in return for a negotiable instrument
obligation. However, the real transaction was that Plaintiff signed a note
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that was converted into a BOND and then sold to various investors
unbeknownst to Plaintiff.[5] The Plaintiff was not a part of the Bond deal,
however, Plaintiffs identity and other personal information was used to
make millions of dollars in profit by the securitization of the note without
Plaintiffs knowledge, consent and permission. Without Plaintiffs signature,
the Bond deal couldnt take place.
32. In essence, the real transaction was as follows: Wells Fargo Asset
Securities Corporation, the depositor hired HSBC Bank USA, National
Association to manage a Trust. In the Pooling and Servicing Agreement
(hereinafter PSA) filed before the SEC as Exhibit 4.1 of the 8K report, the
securitization partners admit that Plaintiffs loan was sold to various parties.
[6]
33. As per the securitization documents filed, the True Sale occurred from
the Depositor, Wells Asset Securities, to the Securities underwriter, Lehman
Brothers Special Financing Inc. and Lehman Brothers Inc. The Trustee,
HSBC Bank USA, National Association in this case was not involved in sale
of the Plaintiffs note, but was simply an administrator.
34. Further, the Trust that allegedly owns Plaintiffs note and purportedly
forms the basis by which a foreclosure was attempted has been dissolved.
Therefore the trust is no more, and as such, HSBC Bank USA, National
Association is no more a trustee of Wells Fargo Mortgage Backed Securities
2008-AR2 Trust. The triggering event that caused the trust to dissolve is the
Credit Default Swaps, AIG Bail out and insurance proceeds. See also f.n.2.
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35. Moreover, neither the original note that Plaintiff allegedly saw on
January 17, 2010, nor any other version or copy of the Plaintiffs note
produced by any Defendants had the proper endorsements and chain of
title included.
36. According to the transfer of ownership of Plaintiffs note as fully described
in the associated securitization documents, there should be at least 8 or
more endorsements showing each transfer on Plaintiffs note. However, the
Plaintiffs note contains none.[7]
37. On August 25, 2010, Plaintiff received a Notice of Intent to Foreclose.
(See Exhibit Q).
38. The nominal lender HSBC Mortgage Corporation sold Plaintiffs loan for
cash to Wells Fargo Bank NA, who sold it to Wells Asset Securities, who in
turn sold it to Lehman brothers Special Financing Inc. for cash.
Nevertheless, on September 8, 2010, Plaintiff received correspondence from
Defendant Bierman & Geesing stating that HSBC Mortgage Corporation is
the secured party on Plaintiffs note that has directed Equity Trustees to
institute a foreclosure. See f.n. 8 & Exhibit R.
39. In this fraudulent and faulty letter Bierman & Geesing falsely refers to
HSBC as the secured party. Had they been in possession of the Deed of
Trust, they would have noted that the beneficiary of the Deed is MERS. (See
Exhibit D). Further, Bierman & Geesing states that Plaintiffs Note is
missing. See Exhibit R.
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40. Pursuant to being threatened with an attempted fraudulent foreclosure
sale by either Bierman & Geesing or Equity Trustees, Plaintiff checked the
Land Records for Fairfax County.
41. As of October 12, 2010, two days prior to the attempted sale of Plaintiffs
property, there was no transfer[8] of Trustee status recorded. (See Exhibit
S- a certified copy of Land Records showing NO Activity for the past two
years.)
42. This fraudulent activity is in direct violation of Virginia Code 55-59.1
(Notices required). In fact, Defendants did not record their fraudulent
appointment (conveniently backdated) of substitute trustee until October
18, 2010, nor did they bother to notify the Plaintiff of their fraudulent
substitution in violation of VA code 26-50, and 8.01-428(A)(i).
43. Upon information and belief HSBC never loaned any money at all.
Instead HSBC credited/deposited the Promissory Note signed by Plaintiff,
used that deposit to pay the seller, and continued to use Plaintiffs good
name and credit for its own profit and criminal enterprise.
44. Additionally, research by Plaintiff indicates that the original loan
application now has a CUSIP number attached to it. Such number strongly
suggests that the loan has been illegally converted to an instrument to
purchase a bond, and such bond was then used to obtain a loan from the
government to pass through money to buy real property.
45. If such allegations prove true, then any remaining loan is actually with the
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government, not HSBC.
46. Such action by HSBC constitutes a fraudulent conversion of an application
to an instrument.
47. All the listed Defendants were involved in a joint venture in furtherance of
making substantial profits for themselves using Plaintiffs signature, credit
score, and other information without disclosing these facts to the Plaintiff.
While Plaintiff thought he was getting a simple loan, his information was
actually being used to finance a very complex securities deal with
defendants forming relationships as further described in the PSA of the
alleged trust purportedly holding Plaintiffs Note. The Defendants formed a
joint venture for their own profit much before Plaintiff even applied for the
loan.
48. The Joint Venture formed by all the known and unknown Defendants
illegally and improperly securitized Plaintiffs note by disregarding the terms
of PSA itself and disregarding proper securitization procedures in an attempt
to evade paying taxes. Among other illegalities, Plaintiffs note was not
properly endorsed or correctly transferred to the REMIC[9] trustee.
COUNT ICIVIL FRAUD
(Bierman, Geesing & Ward and Slater)
49. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
50. Plaintiff alleges that Bierman & Geesing and Slater knowingly made false
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representations of material fact with the intent to mislead Plaintiff, and that
such justified reliance resulted in damage to Plaintiff.
51. As referenced above, Defendant Bierman & Geesing sent Plaintiff a letter
received on or after September 8, 2010. (See Exhibit R). In this
communication Bierman & Geesing falsely states that HSBC is the secured
party. This is a false representation as the beneficiary of the Deed of Trust is
MERS not HSBC as Bierman & Geesing states in that letter. (See Exhibit D).
52. Bierman & Geesing also fraudulently prepared the substitution of trustee
documents sometime on or about September 15, 2010. See Exhibit T- a
fraudulent trustee substitution.
53. Further, Defendants have referenced 55-59.1 (B) of the Virginia Code.
At the top of the correspondence it states that they are a debt collector
while at the bottom they declare themselves Attorneys for the Secured
Party.
54. As such, Defendants have fraudulently represented themselves as debt
collectors, Substitute Trustees and legal counsel. Such an obvious attempt
to clothe themselves in authority can only demonstrate underhanded
dealing with the Plaintiff.
55. Such representations by Defendants demonstrate an expectation that
Plaintiff should rely on such representations and cause him to act in a
manner that was detrimental to his interests thereby causing injury.
56. Defendant is not deserving of any sympathy or benefit of the doubt.
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57. Plaintiff has done further research and has determined that the
aforementioned fraud committed by Bierman & Geesing and/or Equity
Trustees is not a singular incident. (See Exhibit U). Bierman & Geesing has
been found to engage in fabrication of signatures, fabrication of documents,
notary misconduct, etc.
58. Because of the deceptive practice of the Bierman & Geesing law firm, the
Maryland Court of Appeals has changed how foreclosure cases must be
handled, and provides for independent verification of foreclosure
documents. (See Exhibit V). Plaintiff believes that his documents
evidencing such fraud have identified examples of fraud in the exhibits
before this Court.
COUNT IICIVIL FRAUD
(HSBC Mortgage Corporation (USA) ,MERS, & Debra Bassett,
59. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
60. Plaintiff alleges that HSBC directly and through its joint venture and/or
agency relationship with all other Defendants knowingly made false
representations of material fact with the intent to mislead Plaintiff and that
such justified reliance resulted in damage to Plaintiff. See for example
-Exhibit A, E, G, & N. The following are the fraudulent statements made:
On January 26, 2010, Latoya Crosby of HSBC
Mortgage Corp USA sent a correspondence where she alleged
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that she enclosed a copy of [the] loan documents. However, in
truth she only sent a copy of the alleged original note and
apparently mistakenly included a cropped off allonge page.
Further, what she claims is the original note was not the
original note as per Plaintiffs viewing on February 17, 2010.
See Exhibit E.
On February 24, 2010, LaToya Crosby again sent a
correspondence where she claimed to have sent copies of note,
DOT, TILDS, HUD-1, and Funding Details from Plaintiffs loan
file. In truth, Plaintiff only received the note from her and not
any of the other listed documents.
On June 25, S. Cox of HSBC indicated that
Plaintiffs loan file containing original signed loan documents
was sent to the local branch of HSBC. And S. Cox further states
that on February 17, 2010, that Plaintiff viewed original signed
loan documents. However, as stated in Exhibit E, Plaintiff saw
only a four page copy of the alleged note which clearly was a
photocopy and NOT the original. Further, there were no other
documents offered for viewing that day.
61. Defendants have used their superior knowledge of the Federal Reserve
Banking system to deceive Plaintiff.
62. Plaintiff alleges that nominal lenders, and HSBC, deceived borrowers,
including Plaintiff to render monthly installments to their mortgage servicer
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in payment of a fictitious and imaginary loan. (See Exhibit W).
63. Plaintiff also believes, based on attached affidavits and other testimony
that the alleged Note, Application, etc. were all fraudulently monetized
without the knowledge of the Plaintiff.
64. Because of the fraudulent nature of the Action, Plaintiff is led to believe
that he is still the original and only holder in due course.
65. Absent any proof or presentment of original wet ink signature promissory
note or loan contract Defendants have no right to attempt to foreclose upon
the Title to Plaintiffs real property.
66. Further, even as HSBC knows or should know that the Wells Fargo
Mortgage Backed Securities 2008-AR2 Trust is dissolved, it continued to
foreclose under its false authority.[10] A trigger even followed as a result of
credit default swaps payments and the trust was dissolved;
a) No payments are owed to any certificate holders (Tranches) or
synthetic security holders (derivatives)
b) HSBC created fabricated document to enroll Plaintiffs mortgage
in a Trust after dissolution of the TRUST.
c) HSBC created fabricated documents to allow Trustees duty to
continue for a Trust for which TRUSTEES DUTIES have been
TERMINATED.
d) Currently no distribution to certificate holders, even for the
CURRENTLY PAYING MORTGAGES.
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e) Payments are not being directed to the original designated
trust, Wells Fargo Mortgage Backed Securities 2008-AR2 Trust in
Plaintiffs case, because the trigger event and payments of credit
default swaps, insurance proceeds, caused its demise.
f) Since Trust has been dissolved and HSBC Bank USA, National
Association is no more Trustee, has acted wrongly in regard to the
issue at hand and now acting without any standing.
COUNT IIIFAILURE TO PROVIDE PROOF OF STANDING TO FORECLOSE (Defendants
HSBC, MERS , Beirman & Geesing, and Slater )
67. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
68. Around January 2010, February 17, 2010 and March 10, 2010, the Plaintiff
requested that HSBC provide clarification as to who owned and held the
subject Promissory Note and the Security Deed (Deed of Trust or DOT).
Such clarification would require that the purported holder of the Note
produce the original Promissory Note, with the Plaintiffs original signatures
and proof of the chain of title. Such information was not provided.
69. Defendants had an understanding that the underlying debt obligation
created by Plaintiffs loan would be immediately packaged and sold, to
investors on a secondary mortgage market as Mortgage Backed Securities
(MBS)1 and as Collateralized Mortgage Obligations (CMO)2, through the
creation of a Special Purpose Entity (SPE)3.
70. Despite knowing full well that Plaintiffs note has been sold multiple times
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and the trust allegedly holding Plaintiffs note had terminated, Defendants
continued to proceed with a wrongful foreclosure having no legal rights to
the action to cause Plaintiff injury.
71. Since HSBC has sold the note; they cannot foreclose as they are not the
holder or the holder in due course. HSBS had already sold what they had
some time, and admitted under sworn statement on S-3 Registration Form,
FAs-95 and Balance Sheets.
72. HSBC has been unable to provide evidence that validates the debt. It is
undisputed that the named lender on the loan documents has been paid in
full, plus a fee for standing in for the undisclosed lender, and that the note
was negotiated despite the fact that it was non-negotiable.
73. Upon information and belief, the mortgage note has been paid in whole or
in part by one or more undisclosed third party(ies) who, prior to or
contemporaneously with the closing on the loan, paid the originating
lender in exchange for certain unrecorded rights to the revenues arising out
of the loan documents. To the extent that Defendants have been paid on
the underlying obligation or have no legal interest therein or in the note or
mortgage, or do not have lawful possession of the note or mortgage,
Defendants allegations of possession and capacity to institute foreclosure
constitute a fraud upon the court and a violation of the rights of Plaintiff to
enjoyment of his property.
74. Plaintiff alleges that Defendants, and each of them, have represented to
Plaintiff and to third parties that they were the owner of the Trust Deed and
Note as either the Trustee or the Beneficiary regarding Plaintiffs real
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property.
75. Plaintiffs reliance was justified based upon the position and false
representations of Defendants.
76. Plaintiff alleges that Defendants, and each of them, knew at the time they
made these representations to Plaintiff that they were untrue and were
attempting to foreclose on Plaintiffs Trust Deed and Note that they had no
right to do so.
77. All the listed Defendants acted in a joint venture or an agency relationship
to attempt to foreclose on Plaintiffs note when none of them owned or had
actual control of Plaintiffs alleged debt.
COUNT IVCIVIL RICO
HSBC Mortgage Corp. (USA),MERS, Debra Bassett, Bierman, Geesing, and Ward, LLC, and Jared
Slater.
78. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
79. By Virginia Code 8.1A-103, Plaintiff now brings forward various UCC
violations pertaining to mail fraud, bank fraud, securities fraud, and RICO.
80. Plaintiff alleges that Defendants conduct in direct violation of U.S.C.
1962(c) was part of a pattern of continuous criminal violations and
racketeering activity. Plaintiff further alleges injury in his business or
property by reason of a violation of RICOs substantive provisions.
81. Racketeeringincludes the act of operating an illegal business or scheme
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in order to make a profit, perpetrated by a structured group.
Racketeering encompasses many criminal acts. It includes theft and fraud
against businesses or individuals.
82. Defendants are in direct violation of such statute by perpetrating
continuity of schemes of fraud against the Plaintiff and others as evidenced
by Exhibit U, the U.S. Bankruptcy Court, Southern District of New York,
Adv.Pro.No. 08-01789 SIPA.
83. The Defendants scheme to defraud violates mail and wire fraud statutes
18 U.S.C. 1341, 1343m by mailing copies of loan documents and making
fraudulent statements as to who the Trustee is or was by making false
reference to the Deed of Trust which they apparently have never seen
84. In addition, the Hobbs Act applies wherein Defendants are using color of
official right to attempt to steal Plaintiffs property, and under color of
law conspire to extort property from Plaintiff knowing full well that there is
no Note and, and thus no obligation. Plaintiff has indeed lost substantial
amounts of money in defense of Plaintiffs property while Defendants
continue their assault and attempt to extort what is not theirs to begin with.
85. Such violations are punishable by treble damages and an award of
attorneys fees.
86. Defendants are persons making conspiracy in committing the corrupt
activities by selling unregistered securities. This is called money laundering
or RICO. Since Defendants in a joint venture are selling unregistered
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securities consisting of Plaintiff mortgage, Plaintiff is also entitled to setoff
to settle the claim. Plaintiff has a right to restitution and rescission as
Defendants have sold the unregistered security, because the note is not a
registered security. The note is a non-negotiable instrument. When the
defendants converted it into a security, UCC Article 3 no longer applies,
rather UCC Article 4 does because it has been deposited in a bank. But
eventually after it has gone into an SPV, and been securitized, UCC Article 8
applies and Article 9 is applicable to the remedy.
87. The subject conspiracy has existed from date of Plaintiffs application to
get a loan and continues to the present.
88. Defendants actions and use of multiple corporate entities, multiple
parties, and concerted and predetermined acts and conduct specifically
designed to defraud Plaintiff constitutes an enterprise, with the aim and
objective of the enterprise being to perpetrate a fraud upon the Plaintiff
through the use of intentional nondisclosure, material misrepresentation,
and creation of fraudulent loan documents.
89. Each of the Defendants is an enterprise Defendant.
90. As a direct and proximate result of the actions of the Defendants Plaintiff
have and continue to suffer damages.
COUNT V
VIOLATION OF OF TILA, REG. Z, RESPA, REG. X AND FDCPABY DEFENDANTS FALSE STATEMENTS, FAILURE TO DISCLOSE, AND
VIOLATIONS (HSBC Mortgage Corp.(USA), MERS, Debra Bassett, Bierman& Geesing, and Jared Slater.
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91. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
92. Plaintiff alleges that all Defendants involved, in a joint and concerted
effort engaged in unfair and deceptive practices in connection with the
extension of consumer credit to purchase the Property, as follows:
A. Violation of tila and reg. z
93. In accordance with 15 U.S.C. 1601, et seq. (TILA) and 12 CFR 226
(Reg. Z) the closed-end real estate transactions at issue were made with a
creditor; incurred a finance charge; were payable in more than four (4)
installments; and were secured by Plaintiffs principal dwelling. As such, the
real estate transaction herein at issue is subject to the provisions of TILA
and Reg. Z.
94. Transactions that fall under the purview of TILA and Reg. Z must make
certain pre-disclosures which truthfully disclose and explain the following:
a. the name of all creditors in the transaction;b. the amount financed and itemization of the amount financed;c. the finance charge;d. the annual percentage rate;e. the maximum interest rate in variable rate transactions;f. the Truth in Lending disclosure statement (TILDS);g. the consumers handbook and loan program disclosures;h. the payment schedule;i. the total number of payments and total sales price;
j. the right of rescission;k. prepayment options and penalties;l. late payment consequences;m. security interest acquired and by whom;n. insurance and debt cancellation coverage;o. certain security interest charges; andp. Required deposits.
95. To date, Defendant HSBC and others have failed to properly provide
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Plaintiff with some or all of the pre-disclosures as required by TILA and Reg.
Z. Not only have Defendants failed to provide Plaintiff information, but
HSBC has actively provided false information so that Plaintiff would remain
ignorant about the true ownership of his loan.
96. Defendants failed to include and disclose certain charges in the finance
charge shown on the TIL statement, which charges were imposed on
Plaintiff incident to the extension of credit to the Plaintiff and were required
to be disclosed pursuant to 15 USC 1605 and Regulation Z, sec. 226.4,
thus resulting in an improper disclosure of finance charges in violation of 15
USC sec. 1601 et seq., Regulation Z sec. 226.18(d). Such undisclosed
charges include a sum identified on the Settlement Statement listing the
amount financed which is different from the sum listed on the original Note.
97. By calculating the annual percentage rate (APR) based upon improperly
calculated and disclosed amounts, Defendants are in violation of 15 USC
sec. 1601 et seq., Regulation Z sec. 226.18(c), 18(d), and 22.
98. Defendants failure to provide the required disclosures provides Plaintiff
with the right to rescind the transaction, and Plaintiff, through this public
Complaint which is intended to be construed, for purposes of this claim, as a
formal Notice of Rescission, hereby elect to rescind the transaction.
B. violation of respa, and reg. x
99. As mortgage lenders, Defendants are subject to the provisions of the Real
Estate Settlement Procedures Act (RESPA), 12 USC sec. 2601 et seq.
100. In violation of 12 USC sec. 2607 and in connection with the mortgage loan
to Plaintiff, Defendants accepted charges for the rendering of real estate
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services which were in fact charges for other than services actually
performed.
101. As a result of the Defendants violations of RESPA, Defendants are liable to
Plaintiff in an amount equal to three (3) times the amount of charges paid
by Plaintiff for settlement services pursuant to 12 USC sec. 2607 (d)(2).
102. As a lender, creditor, or mortgage broker of a federally related
mortgage loan, Defendant HSBC is subject to the provisions of RESPA, 12
USC 2601, et seq. and 24 C.F.R. 3500 of Reg. X.
103. On or before the date of settlement, Plaintiff was not provided with, and
did not receive proper pre-disclosure statements as required under RESPA
and Reg. X, as follows:
a. Pre-disclosure requirements under 12 U.S.C. 2606 and 24 C.F.R
3500.14 were violated because the required pre-disclosure
statements were not provided to Plaintiff within three business
days after the URLA was received or prepared. Thus, Plaintiff was
wrongfully denied any opportunity to inspect the projected costs
associated with closing; and
b. Accepted charges for the rendering of real estate settlement
services which were, in fact, charges for other than services
actually performed were not properly disclosed to Plaintiff. Such
undisclosed charges in the settlement statements are in violation
of RESPA and Reg. X.
104. Because Plaintiff was not provided with necessary RESPA pre-disclosures,
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the aforementioned charges are fees, kickbacks, or other things of value in
connection with settlement services that were not actually performed in
accordance with 24 C.F.R. 3500.14(b).
105. Further, in violation of RESPA, Defendants have failed to respond to
Plaintiffs Qualified Written Request within the appropriate time period and
have failed to provide documents as requested.
c. violation of FAIR DEBT COLLECTIONS PRACTICE ACT
(FDCPA) and FEDERAL CREDIT REPORTING ACT
(FCRA)
106. At all times material, Defendants qualified as a provider of information to
the Credit Reporting Agencies, including but not limited to Experian,
Equifax, and Trans Union, under the Federal Fair Credit Reporting Act. 65.
Defendants wrongfully, improperly, and illegally reported negative
information as to the Plaintiff to one or more Credit Reporting Agencies,
resulting in Plaintiff having negative information on their credit reports and
the lowering of their FICO scores. (Plaintiff has already filed a report with the
credit agencies asking for an investigation into this matter)
107. The negative information included but was not limited to an excessive
amount of debt into which Plaintiff was tricked and deceived into signing,
and that Plaintiff owed the debt to HSBC, an entity that did not verify or
validate the debt despite numerous requests from Plaintiff to do so.
108. Notwithstanding the above, Plaintiff has paid each and every payment on
time from the time of the loan closing through the time Plaintiff disputed the
validity of the debt but received no validation of the debt allegedly owed to
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HSBC. As stated, Plaintiff has continued to make payment into an escrow
account for the true creditor of Plaintiffs loan when ascertained.
109. Pursuant to 15 USC sec. 1681(s)(2)(b), Plaintiff is entitled to maintain a
private cause of action against Defendants for an award of damages in an
amount to be proven at the time of trial for all violations of the Fair Credit
Reporting Act which caused actual damages to Plaintiff, including emotional
distress and humiliation.
110. Plaintiff is entitled to recover damages from Defendants for negligent non-
compliance with the Fair Credit Reporting Act pursuant to 15 USC sec.
1681(o).
111. Plaintiff is also entitled to an award of punitive damages against
Defendants for their willful noncompliance with the Fair Credit Reporting Act
pursuant to 15 USC sec. 1681(n)(a)(2) in an amount to be proven at time of
trial.
112. Defendants also violated FDCPA in one or more of the following:
a. Falsely representing the character, amount and status of thealleged debt in violation 15 U.S.C. 1692c(a)(1);
b. Using a false, deceptive or misleading representation or means inconnection with the collection of the alleged debt, in violation of 15U.S.C. 1692e(10);
c. Continuing collection activities without providing verification of
the debt to Plaintiff after they requested verification of the debt in
writing, in violation of 15 U.S.C 1692g(b);
d. Falsely representing the character, amount and status of thealleged debt in violation of 15 U.S.C. 1692e(2)(A);
e. By acting in an otherwise deceptive, unfair and unconscionablemanner and failing to comply with FDCPA.
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113. In doing, or failing to do, the acts herein alleged, Defendants acted with
oppression, malice, fraud, and with disregard for harm to Plaintiff. Plaintiff
has suffered and continues to suffer humiliation, embarrassment, mental
anguish and emotional distress.
114. WHEREFORE, Plaintiff demands judgment against Defendants for all actual
compensatory damages suffered, statutory and punitive damages, and all
reasonable attorneys fees, witness fees, court costs, and other litigation
costs incurred by Plaintiff and any other relief deemed appropriate by this
Honorable Court.
COUNT VISLANDER OF TITLE
(HSBC, MERS and Bierman & Geesing)
115. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
116. The negotiable instruments for Plaintiffs loan are not enforceable because
the note was securitized and, therefore, is subject to and governed by a
Pooling and Servicing Agreement (PSA). When a mortgage note is
pooled with other similar debt obligations and then securitized, the newly
pooled note then becomes serviced by another entity as required by the
PSA. The pooling servicer must service the note in a manner that complies
with the PSA, which constitutes another record that the original note is
subject to or governed by. If the note is not enforceable because it is not an
unconditional promise to pay, none of the Defendants nor agents of the
Defendants can be considered persons entitled to enforce, holders, or
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holders in due course in connection with the negotiable instruments in
connection with the Loans to Plaintiff.
117. The purpose of MERS was to help in the securitization process. Basically,
MERS directed defaulting mortgages to the appropriate tranches of
mortgage bonds. MERS was essentially the operating table where the
digitized mortgage notes were sliced and diced and rearranged so as to
create the Mortgage Backed Securities.[11]
118. However, legally MERS didnt hold any mortgage note: The true owner of
the mortgage notes should have been the REMICs. But the REMICs didnt
own the note either, because of a fluke of the ratings agencies: The REMICs
had to be bankruptcy remote, in order to get the precious ratings needed
to peddle Mortgage Backed Securities to institutional investors. So,
somewhere between the REMICs and the MERS, the chain of title was
broken.[12]
119. By selling the Note without Plaintiff knowledge or consent through
securitization trusts, Defendant HSBC irreparably damaged Plaintiffs title to
the Property and such cloud on his title makes it impossible for Plaintiff to
sell the Property with a clean title until the Court determines the Deed of
Trust and related filings against the Property are no longer valid and orders
them removed.
120. Upon information and belief, Defendant Bierman & Geesing has filed false
documents against Plaintiffs Property in Fairfax County land records that
Bierman & Geesing knew or should have known to contain false[13]
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statements as to the owner of the Note and the beneficial owner of the DOT.
(See Exhibit T) As such, Defendant Bierman & Geesing has slandered title
to Plaintiffs property making it impossible for Plaintiff to sell the Property
with a clean title until the Court determines the DOT and related filings
against the Property are invalid and orders them removed.
121. Plaintiffs note contains MERS on the DOT, as such there is an immediate
and fatal flaw in title, making the mortgage unenforceable. When the
mortgage is unenforceable the foreclosure is void and a cloud on title exists
in the presence of the court judgment to the contrary. [14]
122. MERS act of assigning the mortgage instrument is invalid as it held no
beneficial interest in the mortgage instrument for two reasons: 1) a security
instrument, apart from the promissory note giving rise to the debt has no
value because there is no debt by which it secures payment; and 2) MERS
had no beneficial interest in the mortgage instrument that it could assign.
[15]
123. WHEREFORE, Plaintiff demands judgment jointly and severally, against
Defendants for compensatory damages in the amount of the Note, the
interest and fees paid to date on the same, plus punitive damages and
interest, costs, and reasonable attorneys fees.
COUNT VIIUNJUST ENRICHMENT
DEFENDANTS HSBC Mortgage Corp. (USA), MERS, and Bierman &Geesing
124. Plaintiff incorporates by reference the allegations in previous paragraphs
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of this Complaint as if fully set forth herein.
125. Defendants had an implied contract with the Plaintiff to ensure that
Plaintiff understood all fees which would be paid to the Defendants, to
obtain credit on Plaintiff behalf, and to not charge any fees which were not
related to the settlement of the loan and without full disclosure to Plaintiff.
126. Defendants cannot, in good conscience and equity, retain the benefits
from their actions of charging a higher interest rate, fees, rebates,
kickbacks, profits (including but not limited to from resale of mortgages and
notes using Plaintiffs identity, credit score and reputation without consent,
right, justification or excuse as part of an illegal enterprise scheme) and
gains and YSP (Yield Spread Premium) fee unrelated to the settlement
services provided at closing.
127. Defendants have been unjustly enrichedat the expense of the Plaintiff,
and maintenance of the enrichment would be contrary to principles of
equity.
128. Defendants have also been additionally enriched through the receipt of
PAYMENT from third parties including but not limited to investors, insurers,
other borrowers, the United States Department of the Treasury, the United
States Federal Reserve, and Federal bail- out from the tax payer money.
129. Defendants have also additionally enriched themselves by double dipping
when they sold the toxic assets to Maiden Lane I, II & III[16]after AIG Bailout
and fraudulently foreclosing the peoples homes including the Plaintiff when
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they knew the Defendants are not the owners of these properties.
Defendants do not own the loan, yet continue to attempt collection and/or
foreclose on Plaintiffs home.
130. WHEREFORE Plaintiff thus demands restitution from the Defendants in the
form of actual damages, exemplary damages, and attorneys fees.
COUNT-VIII CIVIL CONSPIRACY (as against all DEFENDANTS)
131. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein.
132. All listed Defendants acted together in a combined and concerted effort to
achieve a preconceived plan to induce Plaintiff to enter into a securities
transaction, the details of which were intentionally concealed from Plaintiff,
in violation of law.
133. Upon information and belief, Defendants had an understanding that the
underlying debt obligation created by Plaintiffs loan would be immediately
packaged and sold, to investors on a secondary mortgage market as
Mortgage Backed Securities (MBS)1 and as Collateralized Mortgage
Obligations (CMO)2, through the creation of a Special Purpose Entity
(SPE)3.
134. In an effort to conceal the true identity of the transaction, Defendants
agreed, between and among themselves, to engage in actions and a course
of conduct designed to further an illegal act or accomplish a legal act by
unlawful means, and to commit one or more overt acts in furtherance of the
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conspiracy to defraud the Plaintiff.
135. Defendants agreed between and among themselves to engage in the
conspiracy to defraud for the common purpose of accruing economic gains
for themselves at the expense of and detriment to Plaintiff.
136. Defendants actions were committed intentionally, willfully, wantonly, and
with reckless disregard for Plaintiffs rights.
137. In connection with the application for and consummation of the subject
mortgage loan, Defendants agreed, between and among themselves, to
engage in actions and a course of conduct designed to further an illegal act
or accomplish a legal act by unlawful means, and to commit one or more
overt acts in furtherance of the conspiracy to defraud the Plaintiff
138. Plaintiff thus demands an award of actual, compensatory, and punitive
damages.
COUNT-IX BREACH OF FIDUCIARY DUTYBEIRMAN & GEESING, BASSET, AND SLATER
139. Plaintiff incorporates by reference the allegations in previous paragraphs
of this Complaint as if fully set forth herein
140. As trustee and the substitute trustee, Defendants Basset and Bierman &
Geesing and Slater had a fiduciary duty to Plaintiff to both disclose truthful
information and foreclose only upon a valid note.
141. Bierman & Geesing, Basset and Slater failed to provide the information
Plaintiff requested, failed to verify the validity of the Plaintiff debt, yet
attempted foreclosure on behalf of a creditor that they knew did not own or
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control Plaintiffs debt.
142. As a direct and proximate result of the actions of the Defendants, Plaintiff
has suffered injury.
COUNT XBREACH OF CONTRACT/BREACH OF DUTY OF GOOD FAITH AND FAIRDEALING HSBC Mortgage Corporation (USA), and BIERMAN & GEESING
143. Plaintiff incorporates by reference the allegations in previous
paragraphs of this Complaint as if fully set forth herein.
144. Plaintiffs Deed of Trust, Paragraph 24 states that The Lender.may
appoint a substitute trustee Therefore, in attempting to foreclose
prematurely, Defendants have breached the provisions of the Deed of Trust.
Further, Plaintiff alleges that it has not defaulted on its obligations to pay on
the note and Deed of Trust as it has repeatedly asked for verification and
validation of its debt. Only the LENDER can appoint and the LENDER is
yet to be identified. To date, Defendants have not provided such verification
or validation of the debt. As such, without Plaintiffs default, No Defendant
had a right to accelerate Plaintiffs debt obligation.
145. Further, by failing to provide Plaintiff the requested information, by
collecting upfront fees for services not performed, by purposely giving
Plaintiff false information about the true owner of Plaintiffs note, by not
complying with the relevant Trust laws to obtain proper assignment of
Plaintiffs note and mortgage, and by attempting to foreclose on a debt that
it had not rights to foreclose, the listed Defendants routinely and regularly
breached their duties under the PSA (with Plaintiff being a third party
beneficiary), and breached their duty to Plaintiff of Good Faith and Fair
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promise to pay, 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.
153. In addition, the presence of insurance, credit default swaps[17], and
bailouts from the U.S. Treasury and Federal Reserve indicate that the listed
Defendants have been paid in full.
154. As discussed above, Defendants have failed to provide documents which
would offer sufficient facts for Plaintiff or this Court to establish who the
necessary parties to this action are, what are the Defendants legal
relationships to the Plaintiff, what rights do individual Defendants have to
the property including but not limited to a claim for foreclosure on the
Promissory Note.
155. Defendants failure to meet the standing requirements renders its threat of
foreclosure fatally defective and constitutes actionable misrepresentations
to this Court as to the identity and status of said parties.
156. To have legal standing to foreclose, HSBC must allege that it is a holder in
due course of the Note and the mortgage, an allegation which Defendant
already knows to be untrue.
157. To qualify as a holder in due course or qualify as having the rights of a
holder-in-due-course. In order to prove that they are the holder in due
course they (or a custodian) must physically possess the note.
Which we already know they do not.
158. Further, to be holder in due course, there must be proper endorsement to
the trust. This mean that there must be proper endorsement from the
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originating lender to the wholesale lender to the issuer, and finally
from issuer to a trust.
159. Conveyance, according to the Pooling and Servicing Agreement, requires
that the original Note be endorsed showing a complete, unbroken, chain of
endorsements from the originator to the depositor. (See PSA Article II
Conveyance of Mortgage Loans; Original Issuance of Certificates, Section
2.01.)
160. In order for the mortgage loan and Note to have been conveyed legally
into the Pool, the Note requires endorsement from all intervening parties
from the Originator HSBC to the Trustee, HSBC Bank USA, National
Association.
161. As discovered by LFA, (Legal Forensic Auditors):
At some point therein, the loan was sold to Wells fargo Bank, N.A., the
sponsor listed on the [PSA]. Thereafter, that sponsor then sold the loan to
the depositor, Wells Fargo Asset Securities Corporation.
Wells Fargo Asset Securities Corporation then sold the loan to the Issuing
Entity, Wells Fargo Mortgage Backed Securities 2008-AR2 Trust CIK#:
0001425053. The Issuing Entity, Wells Fargo Mortgage Backed Securities
2008-AR2 Trust CIK#: 0001425053 then sold the loan to the Trustee HSBC
Bank USA National Association for the benefit of the Certificate Holders.
See Forensic Audit entered previously.
162. Pursuant to the Deed of Trust, MERS is described as follows:
MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate
corporation that is acting solely as a nominee for Lender and Lenders
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successors and assigns. MERS is the beneficiary under this Security
Instrument. MERS is organized and existing under the laws of
Delaware . . . . Otherwise, MERS has no connection to the loan, promissory
note evidencing it and/or Deed of Trust allegedly securing it.
163. MERS is, simply stated and pursuant to its name, a registration system
through which promissory notes and the holders thereof may be
identified. MERS did not lend any money to Plaintiff at anytime, nor did
Plaintiff receive any monies or other benefit from MERS at anytime.
164. At no time, inclusive of the date of the alleged Deed of Appointment of
Substitute Trustee was MERS the holder of the Note, nor was MERS named
as a Trustee or Substitute Trustee, nor was it empowered pursuant to
the Deed of Trust with any power to name and/or designate a substitute
trustee under and pursuant to the terms of the Deed of Trust, nor was MERS
ever vested with the powers of a substitute trustee under the terms of the
Deed of Trust.
165. Accordingly and pursuant to the allegations heretofore set forth, the cause
and/or effect of the Deed of Appointment of Substitute Trustee is
meaningless in its entirety and is, at best, a legal nullity.
166. Plaintiff states that according to the Deed of Trust at paragraph 24,
ONLY THE LENDER has the authority to appoint a substitute trustee. The
Deed of Trust at paragraph 24 states as follows;
Lender at its option, may from time to time remove Trustee andappoint a successor trustee to any trustee appointedhereunder.........by applicable law.
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167. The appointment of the substitute trustee raises questions as such
appointment was not done as per paragraph 24 of the Deed of Trust.
Neither Maria Vadney nor Michelle Laster have any authority to appoint the
substitute trustee and execute the deed of appointment of the substitute
trustee. ONLY the LENDER can exercise the option of appointing a substitute
trustee. Neither Ms. Vadney nor Ms. Laster, lent any money; therefore, it
does not fit the definition of a lender, so neither are authorized to execute
the Deed of appointment of successor trustee. Therefore, this appointment
is NOT VALID and therefore, the acts of the substitute trustees including
foreclosure sale conducted by the substitute trustee, is also NOT VALID.
168. Also, Plaintiff has sent the following documents to the named Defendants:
On Feb.17, 2010, Plaintiff sent an authorized Qualified Written
Request (QWR) as per RESPA 12 USC 2605 (e) to the Defendants
HSBC and Basset, which said Defendants failed and refused to
answer. (See Exhibit F)
On April 02,2010,Plaintiff sent a Final Notice of
Default/Dishonor/Rescission and Demand letter to HSBC, via notary
service.
169. After the passage of 20 days (in addition to 5 days, as the Rescission and
Demand Letter was sent by U.S. Mail) Defendant had not produced the
requested document to Plaintiff or contacted Plaintiff to state that the
document is available for inspection and copying.
170. As Defendant HSVBC has failed to act in timely manner upon receipt of
the Rescission and Demand letter, it is noncompliant with federal law and
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has given rise to a claim against itself.
171. Rescission is self enforcing and it automatically extinguishes the
lien and the liability. The statute and regulation specify that the
security interest, promissory note or lien arising by operation of
law on property becomes automatically void (15 U.S.C 1635 (b); Z
226.15 (d) (1), 226.23 (d) (1).
172. The Defendants interest in the property is automatically
negated regardless of its status and whether or not it was recorded
or perfected. Official staff commentary 226.15 (d) (1)-1,226.23
(d) (1) 1.
173. Since the rescission process was intended to be self-enforcing, failure to
comply with the rescission obligation subject Defendant to potential liability
as noncompliance is a violation of the RESPA which gives rise to a claim for
actual and statutory damages under 15 U.S.C 1640.
174. The statute and Regulation Z state that if creditor disputes the consumers
right to rescind, it should file a declaratory judgment action within the
twenty days after receiving the rescission notice, before its deadline to
return the consumers money or property and record the termination of its
security interest (15 USC 1625(b)). Once the lender receives the notice, the
statute and Regulation Z mandate 3 steps to be followed.
a. By operation of law, the security interest and promissory note
automatically become void and the consumer is relieved of any
obligation to pay any finance or other charges (15 USC 1635(b);
Reg. Z-226.15(d)(1),226.23(d)(1). See Official Staff Commentary
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226.23(d)(2) -1.
b. Since Plaintiff has legally rescinded the loan, the supposed mortgage
holder, HSBC must return any money, including that which may have
been passed on to a third party, such as a broker or an appraiser and to
take any action necessary to reflect the termination of the security
interest within 20 calendar days of receiving the rescission notice (a term
which has long since expired).
c. The Defendant must take any necessary or appropriate action
to reflect the fact that the security interest was automatically
terminated by the rescission within 20 days of the Defendants
receipt of the rescission notice(15 USC 1635(b); Reg. Z-226.15(d)(2),
226.23(d)(2).
Non-compliance is a violation of the act which gives rise to a claim
for actual and statutory damages under 15 USC
1640..
175. Plaintiff requests the Honorable Court to order the Defendants to file
documents canceling the documents of the record and to issue
judgment for damages and refunds as the statute and regulation
specify that the security interest, promissory note or lien arising of
operation of law on property becomes automatically void.
176. Also, Defendants HSBC and Bierman & Geesing are to take any necessary
or appropriate action to reflect the fact that the security interest was
automatically terminated by the rescission (15 USC 1635(b); Reg.
Z-226.15(d)(2),226.23(d)(2).
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177. Plaintiff also requests the honorable Court to compel HSBC to produce an
S3 registration statement which will indicate that Defendants are not the
real parties in interest.
178. Plaintiffhas a claim in recoupment under 3-305 of the UCC, which
Plaintiff will exercise at his option, if Defendant HSBC does not credit
Plaintiffs account. The 1099-OID will identify who the principal is from,
which capital and interest were taken, and who the recipient or who the
payer of the funds are, and who is holding the account in escrow and
unadjusted.
179. WHEREFORE Plaintiff respectfully requests the Court to declare the DOT
currently encumbering the Property to be null and void and to order such
DOT and all related filings to be removed from the land records.
IV. PRAYER FOR RELIEF
WHEREFORE, having set forth numerous legally sufficient causes of action against
the Defendants, Plaintiff prays for:
a. The entry of Final Judgment against all Defendants jointly and
severally in an amount not yet quantified but to be proven at trial, for
violations and damages caused by of tort, breach of contract, fraud,
misrepresentation, violation of TILA, Usury statues, other consumer
protection acts and such other amounts to be proven at trial;
b. Award costs, interest and attorneys fees;
c. Award statutory damages;
d. All undisclosed profits and fees and all money paid at closing;
e. Award compensatory damages and special damages to be
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established at trial;
f. That the Court find that the transactions which are the subject of thisaction are illegal and are deemed void;
g. That the foreclosure which was instituted be deemed and declared
illegal and void;
h. That further proceedings in connection with the foreclosure beenjoined;
i. That the Court order Defendants to remove the fraudulent negativereports from all credit bureau agencies;
j. That a Quiet Title action be sustained; and,
k. For any other and further relief which is just and proper.
PRAYER FOR PUNITIVE RELIEF
WHEREFORE, Plaintiff respectfully prays that this Court award relief for
punitive damages in the sum of $5,000,000.
PRAYER FOR INJUNCTIVE RELIEF
WHEREFORE, Plaintiff seeks an injunction prohibiting the Defendants from
any action which would result in Plaintiff being ousted from the disputed Property.
By virtue of the foregoing, Defendants are not holders of the disputed
Promissory note and therefore are not entitled to enforce the same, and by further
virtue that HSBC is not the Lender, Beneficiary, nor party entitled to enforce
the terms of the pertinent Deed of Trust, no Defendants, nor anyone acting on
their behalves, has or had a right to issue a notice of default, accelerate the
balance due under the pertinent note and/or foreclose and/or commence and/or
attempt to foreclose on the disputed property.
Plaintiff is threatened with immediate, irreparable harm if any of the
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Defendants are permitted to continue to lay claim to Plaintiffs property and
commence any action to deprive Plaintiff of title or possession of the property. If
Defendants are not stopped from commencing and/or pursuing any action to
further their unlawful claims to an interest in the property, Plaintiff could and
would thereby lose his home, a loss Plaintiff should not be permitted to suffer.
Even if any of the Defendants can, at some point, prove that they are acting
under claim of right and with rightful authority, any injuries each might suffer by
the court granting a restraining order and preliminary injunction against them
would be substantially less harmful than those which Plaintiff would suffer by the
loss of his home. Accordingly, Plaintiff is entitled to a restraining order and
preliminary and permanent injunction against all Defendants in this case,
prohibiting them from issuing a notice of default, accelerating the balance due
under the pertinent note and/or foreclosing and/or commencing and/or attempting
to foreclose.
By the actions above and allegations set forth herein, Plaintiff has a strong
likelihood of prevailing on the merits of this case. Plaintiff requests that this Court
grant a restraining order and preliminary and permanent injunction precluding
Defendants from engaging in the wrongful conduct identified herein in the future.
RIGHT TO AMEND
Plaintiff hereby reserves the right to amend this lawsuit, including additional
facts and/or causes of action as more information becomes available.
JURY TRIAL
Plaintiff continues to request a jury trial of this action.
CERTIFICATE OF SERVICE
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Below are the footnotes, but they did not copy exactly in the samelocation:
[1] This entire notice was recorded in the public record of Jefferson County, WV asthe court in Virginia refused to accept the filing.[2] Also in the public record of Jefferson County, WV.
[3] Plaintiff provided Defendants HSBC and Basset a second opportunity to curethe defects in their response or non-responses by using a Notary to present thenotices. (See Exhibit I).[4]Making a photocopy of the negotiable instrument and presenting it to Plaintiffas evidence of the debt gives HSBC as much authority to collect on the debt asone would have to purchase items from a store using a photocopy of a $100.00bill.[5] The creditor/Investor receives an instrument which is generically referred to as a Mortgage BackedAsset Certificate/Bond (Certificate/ Bond). The Certificate/Bond incorporates terms by which the
promise to pay interest and principal is made by the issuing SPV and the manager for this in the present
case is HSBC Bank USA, National Association.
[6]The PSA, Exhibit 4.1 of the current 8K report filed before the SEC as per file #333-143751-13 and Accession # 914121-8-213 dated March 06, 2008, by thesecuritization partners is a public record available at www.sec.gov.[7]At minimum, Plaintiffs note should include the following endorsement to show
the proper chain of transfers: HSBS Mortgage CorporationWells Fargo Bank,
N.AWells Fargo Asset Securities CorporationLehman Brothers Special
Financing Inc.Lehman Brothers IncDealersAgentsInvestors. This can befound on the www.sec.govwebsite at the Prospectus Supplement 424(b)5, SEC file# 333-143751-13, Accession # 1193125-8-38785, filed on 02/26/2008 at 4:48PMET). This is also confirmed by examination of the securitization audit performed
and entered into evidence in the Eastern District Court of Virginia in Alexandria,Case: 1:10cv1427.
[8]Under PSAs, for a mortgage note to validly transfer to a mortgage securitization trust, the notemust bear special endorsements evidencing each and every transfer of the note from theoriginator of the loan to the securitization trustee. A note bearing a blank endorsement by theoriginator, or by another entity further along in the chain of transfer, does not satisfy therequirements of certain PSAs, and thus that the transfer of such a note into a trust is rendered voidby New York Estate, Powers and Trust Law 7-2.4.
https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref1https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref2https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref3https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref4https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref5https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref6http://www.sec.gov/https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref7http://www.sec.gov/https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref8https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref1https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref2https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref3https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref4https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref5https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref6http://www.sec.gov/https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref7http://www.sec.gov/https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref88/7/2019 Jeff Brown Amended Complaint 2
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ARTICLE II, CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIESPSA Section 2.01 (b)(i) states:
the original Mortgage Note bearing all intervening endorsements showing a complete chain ofendorsement from the originator to the last endorsee, endorsed "Pay to the order of _____________,without recourseand signed (which may be by facsimile signature) in the name of the last
endorsee by an authorized officer. To the extent that there is no room on the face of the MortgageNotes for endorsements, the endorsement may be contained on an allonge, unless state law doesnot so allow and the Trustee is so advised in writing by the applicable Original Loan Seller or theDepositor that state law does not so allow
[9] Real Estate Mortgage Investment Conduits, or "REMICs," (sometimes also called Collateralizedmortgage obligations) are a type ofspecial purpose vehicle used for the pooling ofmortgage loans and
issuance ofmortgage-backed securities. Such entities are defined under the United StatesInternal
Revenue Code (Tax Reform Act of 1986), and are the typical vehicle for the securitization of
residential mortgages.
Though REMICs provide relief from entity-level taxation, their allowable activities are limited toholding a fixed pool of mortgages and distributing payments currently to investors. A REMIC hassome freedom to substitute qualified mortgages, declare bankruptcy, deal with foreclosures and
defaults, dispose of and substitute defunct mortgages, prevent defaults on regular interests, prepay
regular interests when the costs exceed the value of maintaining those interests, and undergo a qualifiedliquidation, in which the REMIC has 90 days to sell its assets and distribute cash to its holders. All
other transactions are considered to be prohibited activities and are subject to a penalty tax of 100%, as
are all non-qualifying contributions.
[10]Maiden Lane III LLC (a Special Purpose Vehicle consolidated by the Federal Reserve Bank ofNew York) (the "LLC") is a Delaware limited liability company that was formed on October 14, 2008
to acquire Asset-Backed Security Collateralized Debt Obligations ("ABS CDOs") from certain third-party counterparties(Banks) of AIG Financial Products Corp. ("AIGFP"). In connection with theacquisitions, the third-party counter parties (Banks) agreed to terminate their related creditderivative contracts with AIGFP.1MBS means securities backed by specific mortgage loans and the payments on which are tied toor derived from the cash flows produced from underlying mortgage loans.
2CMO refers to series of securities created by dividing the cash flows from a pool of mortgageloans among various serially maturing tranches of securities. Typically, CMOs receive the taxclassification applicable to real estate mortgage investment conduits (REMIC) under U.S. tax laws.
3A SPE is a legal entity formed for a limited purpose; in securitization, it serves to hold legal rights
to the assets transferred from the originator. In the U.S., SPEs facilitate securitization by enablingthe use of bankruptcy-remote structures (a technique used for isolating assets or loans from thebankruptcy risk of the company financing or selling the assets).
[11]The whole purpose of MBSs was for different investors to have their different risk appetitessatiated with different bonds. Some bond customers wanted super-safe bonds with low returns;some others wanted riskier bonds with therefore higher rates of return. Therefore, as everyoneknows, the loans were bundled into REMICs (Real-Estate Mortgage Investment Conduits, aspecial vehicle designed to hold the loans for tax purposes), and then sliced & dicedsplit upand put into tranches, according to their likelihood of default, their interest rates, and other
https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref9http://en.wikipedia.org/wiki/Collateralized_mortgage_obligationshttp://en.wikipedia.org/wiki/Collateralized_mortgage_obligationshttp://en.wikipedia.org/wiki/Special_purpose_vehiclehttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage-backed_securitieshttp://en.wikipedia.org/wiki/Mortgage-backed_securitieshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Internal_Revenue_Codehttp://en.wikipedia.org/wiki/Internal_Revenue_Codehttp://en.wikipedia.org/wiki/Internal_Revenue_Codehttp://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986http://en.wikipedia.org/wiki/Securitizationhttps://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref10https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref10https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref11https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref12https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref13https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref14https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref14https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref9http://en.wikipedia.org/wiki/Collateralized_mortgage_obligationshttp://en.wikipedia.org/wiki/Collateralized_mortgage_obligationshttp://en.wikipedia.org/wiki/Special_purpose_vehiclehttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage-backed_securitieshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Internal_Revenue_Codehttp://en.wikipedia.org/wiki/Internal_Revenue_Codehttp://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986http://en.wikipedia.org/wiki/Securitizationhttps://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref10https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref11https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref12https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref13https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#_ftnref148/7/2019 Jeff Brown Amended Complaint 2
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characteristics. This slicing and dicing created senior tranches, where the loans would likely bepaid in full. And it also created junior tranches, where the loans might well default. (A wholerange of tranches were created, of course, but for purposes of this discussion, we can ignore allthose countless other variations.) These various tranches were sold to different investors,according to their risk appetite. Thats why some of the MBS bonds were rated as safe as Treasurybonds, and others were rated by the ratings agencies as risky as junk bonds. When an MBS wasfirst created, all the mortgages were pristinenone had defaulted yet, because they were allbrand new loans. Statistically, some would default and some others would be paid back in fullbut
which ones specificallywould default? No one knew, of course. If I toss a coin 1,000 times,statistically, 500 tosses the coin will land headsbut what will the result be of, say, the 723rd tossspecifically?
[12] The note homebuyer signs is the actual IOU. In order for the mortgage note to be sold or
transferred to someone else (and therefore turned into a Mortgage Backed Security), this document hasto be physically endorsed to the next person. All of these signatures on the note are called the chain of
title. Without a clear chain of title, the person who took out the mortgage no longer knows who to
pay. No assignment of the chain of transfer were recorded in the Fairfax County Land Records.
[13]A party cannot foreclose on a mortgage without having title, giving it standing to bring theaction. (SeeKluge v. Fugazy, 145 AD2d 537, 538 (2nd Dept 1988 ), holding that a foreclosure of a
mortgage may not be brought by one who has no title to it and absent transfer of the debt, theassignment of the mortgage is a nullity. Katz v. East-Ville Realty Co., 249 AD2d 243 (1st Dept1998), holding that [p]plaintiffs attempt to foreclose upon amortgage in which he had no legal or equitable interest was without foundation in law or fact
and Non-judicial sale is NOT an available election for a securitized loan
[14]In Carpenter v. Longan, the U.S. Supreme Court stated The note and mortgage areinseparable; the former as essential, the latter as an incident. An assignment of the notecarries the mortgage with it, while an assignment of the latter alone is a nullity.Carpenter v.Longan, 16 Wall. 271, 83 U.S. 271, 274, 21 L.Ed. 313 (1872). Assigning the mortgageinstrument was invalid as it held no beneficial interest in the mortgage instrument for tworeasons: 1) a security instrument, apart from the promissory note giving rise to the debt has novalue because there is no debt by which it secures payment; and 2) MERS had no beneficial
interest in the mortgage instrument that it could assign. An assignment of the note carriesthemortgage with it, while an assignment of the latter alone is a nullity. The mortgage loanbecomes ineffectual when the note holder did not also hold the deed of trust. Bellistri v.Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo. App. 2009)
[15]The practical effect of splitting the deed of trust from the promissory note is to make itimpossible for the holder of the note to foreclose, without the agency relationship, the personholding only the note lacks the power to foreclose in the event of default. The person holdingonly the deed of trust will never experience default because only the holder of the note isentitled to payment of the underlying obligation. The mortgage loan becomes ineffectualwhen the note holder did not also hold the deed of trust. Bellistri v. Ocwen Loan Servicing,
LLC, 284 S.W.3d 619, 623 (Mo. App. 2009). According to Restatement 3rd, when the note andDOT are split, they can never be put back together again.
Courts around the country started to recognize that MERS had no ownership in the notes andcould not transfer an interest in a mortgage upon which foreclosure could be based. InLandmark National Bank v. Kesler, the Kansas Supreme Court extensively analyzed the positionof MERS in relation to the, that it did not lend money, did not extend credit, is not owed anymoney by the mortgage debtors, did not receive any payments from the borrower, suffered nodirect, ascertainable monetary loss as a consequence of the litigation and consequently, hasno constitutionally protected interest in the mortgage loan. Landmark National Bank v. Kesler,216 P.3D 158 (Kansas, 2009).
In LaSalle Bank NA v. Lamy, the court denied a foreclosure action by an assignee of MERS on
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the grounds that MERS itself had no ownership interest in the underlying note and mortgage.LaSalle Bank NA v. Lamy, 824 N.Y.S.2d 769 (N.Y. Supp. 2006).
In the case In re Mitchell, the court found that MERS has no ownership interest in thepromissory note. The court found that though MERS attempts to make it appear as though itis a beneficiary of the mortgage, it in fact is not a beneficiary. The Court stated But it isobvious from the MERS' "Terms and Conditions that MERS is not a beneficiary as it has norights whatsoever to any payments, to any servicing rights, or to any of the properties secured
by the loans. In re Mitchell, Case No. BK-S-07-16226-LBR (Bankr.Nev., 2009),
[16]Maiden Lane III LLC (a Special Purpose Ve