Preview
OO
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Nov-21-2014 11:05 am
Case Number: CGC-14-538800
Filing Date: Nov-21-2014 11:04
Filed by: BOWMAN LIU
Juke Box: 001 Image: 04699404
COMPLAINT
JOSEPH S NEW VS. U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR
THE et al
001004699404
Instructions:
Please place this sheet on top of the document to be scanned.BY FAX
© —— ORGINAL
John S. Sargetis (SBN: 80630) Sy rior Gourt ‘of Chlifornia
Stephen J. Foondos (SBN: 148982) San Fr
UNITED LAW CENTER
3013 Douglas Boulevard, Suite 200
Roseville, California 95661 CLE
Telephone: (916) 367-0630
Facsimile: (916) 265-9000
Attorneys for Plaintiff
JOSEPH NEW
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO
Case No. CGC -14- 538800
JOSEPH 8. NEW
SECOND AMENDED COMPLAINT
Plaintiff,
VS.
)
)
)
)
U.S. BANK NATIONAL ASSOCIATION _)
AS TRUSTEE FOR THE BENEFIT OF )
HARBORVIEW 2005-2 TRUST FUND; )
RECONTRUST COMPANY, N.A.; )
MORTGAGE ELECTRONIC )
REGISTRATION SYSTEMS, INC.; BANK )
OF AMERICA, N.A.; and DOES 1 — 100, )
inclusive, )
)
)
)
)
)
)
)
Defendants.
Plaintiff Joseph S. New (hereinafter "Plaintiff") hereby complains against Defendants
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE BENEFIT OF
HARBORVIEW 2005-2 TRUST FUND; RECONTRUST COMPANY, N.A.; MORTGAGE
1
Second Amended Complaint© eo
ELECTRONIC REGISTRATION SYSTEMS, INC.; BANK OF AMERICA, N.A.; and DOES
1-100, inclusive, for causes of action alleged as follows:
1. Defendants had no rights to the Subject Loan at all, and therefore, the subsequent
foreclosure on the Subject Property was wrongful.
2. In order for Defendant to have been able to own the Subject Loan and subsequently
pool it with other mortgages, it had to have acquired the Loan and the security within 90 days of
the statutorily-mandated closing date of the Real Estate Mortgage Investment Conduit
(“REMIC”) Trust ( Trust). Under 26 U.S.C. §860G, a mortgage only qualifies to be placed into
a REMIC Trust if the REMIC possesses all necessary documents pertaining to the Subject Loan
(Note and Deed of Trust) within those 90 days. Failure to acquire those necessary documents
means the Loan is not a “qualified mortgage” as defined by the statute. As such, the Trust
cannot own the Loan.
3. The governing law of the Trust is New York Law, as New York Trust Law (NY EPTL
§7-2.4) specifies that any action taken by the Trustee in contravention of the Trust is a void act.
4. US Bank continuing to assert an ownership interest in the Subject Loan threatened the
REMIC status of the Trust, opening it to severe tax consequences. The late assignment of the
Deed of Trust to the Trust constituted a void act. (See Glaski v. Bank of America, N.A. (2013)
218 Cal.App.4th 1079, 1097.)
5. Plaintiff is not seeking recourse to the Pooling and Servicing Agreement (the “PSA”) in
order to enforce its terms. Plaintiff merely looks to the PSA to establish (1) the closing date of
Trust, which is not a unique aspect of this particular PSA, but rather is a statutorily mandated
requirement, and (2) the governing law of the Trust.
6. Plaintiff has standing under his own Deed of Trust to assert that these particular parties
are not parties to the loan because under Federal law, they did not properly acquire the Subject
Loan and are not parties to the loan because under Federal law, they did not properly acquire the
Subject Loan.
7. The Court of Appeals opinions in Yvanova, Keshtgar and Mendoza all having been
taken up for review by the California Supreme Court now cannot be cited as authority to
2
Second Amended Complaint© °
maintain as a defense to this action.
8. The Court of Appeal opinion in Jenkins is not applicable as being a pre trustee sale.
9. Plaintiff is not attempting to insert a requirement into the statute to force Defendants
to prove ownership or agency before they can proceed with a foreclosure. In fact, Plaintiff does
not even assert rights under Cal. Civ. Code §2924. This claim is one for damages following
what Plaintiff alleges was an illegal and wrongful sale of his home.
10, Since here the violations of the PSA also violated the Internal Revenue Code 26
US.C. §860G, et seq. which in turn violated New York Trust Law, the failure to properly
assign his Deed of Trust into the securitized pool was a VOID act. As such, plaintiff does not
seek to enforce the PSA as the PSA is simply evidence of the failure to follow the REMIC
statutes.
11. The implication in Jenkins — that the plaintiff was merely a third party to the PSA
and that any violations of the PSA were of sole concer to the parties to the PSA — is that the act
was VOIDABLE. That Jenkins implies the improper transfer is voidable is evident from the
third party analysis in which that Court engaged (i.e., since only the parties to the Agreement
are affected by failures to perform under the Agreement, such failures are up to the parties
themselves and no one else to dispute.).
12. Where the transaction is void ab intitio, as determined by the Internal Revenue
Code and New York Trust Law, the plaintiff's standing is not an issue because even the parties
to the Agreement do not have the ability to accept loans in contravention of the law.
13. In order for the Trust to enjoy tax-free status, it must follow very specific rules in
its creation. One of the most important rules is that within 90 days of the closing date of the
Trust (as established by the PSA), the Trust must “own” the loan and security interest to which
it will later claim to be the beneficiary. (26 U.S.C. §860G(a)(3)(ii) and §860G(a)(9).) Not doing
so exposes the entire trust to catastrophic tax consequences the Trust was specifically designed
to avoid. Moreover, a failure to abide by the specific REMIC rules exposes investors to the
Trust to the same consequences when attempting to realize return on their investment. Voiding
the attempted transfer is justified because it protects the beneficiaries of the Securitized Trust
3
Second Amended Complaint© °e
from the potential adverse tax consequence of the trust losing its status as a REMIC trust under
the Internal Revenue Code.”)
14. The California Supreme Court has granted Review in YVANOVA v. NEW
CENTURY MORTGAGE CORPORATION whose previous citation was 226 Cal.App.4th 495
but which is no longer citable since the California Supreme Court granted review in case No.
218973 on August 27, 2014. The California Supreme Court stated:
The petition for review is granted. Briefing and argument is
limited to the following issue (see Cal. Rules of Court, rule
8.516(a)(1)): In an action for wrongful foreclosure on a deed of
trust securing a home loan, does the borrower have standing to
challenge an assignment of the note and deed of trust on the basis
of defects allegedly rendering the assignment void?
15. Furthermore the subject Promissory Note itself was never transferred to the
Defendant Trust within the 90 day grace period, nor was it properly transferred at all.
16. Under this theory, Plaintiff asserts that the REMIC statutes require a loan to pass
through various Special Purpose Vehicles (“SPVs”) before getting to the Trust as doing so
ensures that the Trust is bankruptcy remote.
FIRST CAUSE OF ACTION
(Wrongful Foreclosure)
PARTIES
1. Plaintiff, is now, and at all times relevant to this action is and was a resident of
the County of San Francisco, State of California.
2. Plaintiff is and at all times mentioned was the legal owner and entitled to
possession of the real property residence commonly known as 215 DeLong Street #V, San
Francisco, CA 94112, State of California. (Property). :
3. Defendants U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE
BENEFIT OF HARBORVIEW 2005-2 TRUST FUND (US Bank); RECONTRUST
COMPANY, N.A. (Recontrust) ; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS,
4
Second Amended Complaint© °
INC. (MERS) ; BANK OF AMERICA, N.A (B of A) all conduct business in the state of
California, County of San Francisco.
4. Plaintiff is ignorant of the true names and capacities of defendants sued herein as
DOES 1 through 100 inclusive and, therefore sues these defendants by such fictitious names.
Plaintiff will amend this complaint to allege their true names and capacities when ascertained.
Plaintiff is informed and believes and based thereon alleges each of the fictitiously named
defendants is responsible in some manner for the injuries to Plaintiff alleged herein and that
such injuries as herein alleged were proximately caused by such defendants.
5. Plaintiff is informed and believes and thereon alleges that all times herein
mentioned each of the defendants was the agent and employee of the remaining defendants, and
in doing the things hereinafter alleged, was acting within the course and scope of such agency
and employment.
LOAN AND DEED OF TRUST
6. Plaintiff obtained a loan from America’s Wholesale Lender which was
secured by a Deed of Trust (DOT) recorded about February 22, 2005 against the Property. The
Lender named in the DOT was America’s Wholesale Lender but MERS was named as the
“beneficiary” acting as nominee for the Lender.
7. Paragraph 22 of the DOT sets forth the remedies available to the lender in the
event of a default. Those remedies include (1) the lender’s right to accelerate the debt after
notice to the borrower and (2) the lender’s right to “invoke the power of sale” after the borrower
has been given written notice of default and of the lender’s election to cause the property to be
sold. Thus, under the DOT, it is the lender-beneficiary who decides whether to pursue non-
judicial foreclosure in the event of an uncured default by the borrower. The trustee implements
the lender-beneficiary’s decision by conducting the non-judicial foreclosure.
FORECLOSURE RELATED RECORDED DOCUMENTS
8. On July 7, 2011 an ASSIGNMENT OF DEED OF TRUST (ADOT) of the said
DOT was recorded with the San Francisco Recorder. (Exhibit 1 hereto). This Assignment
5
Second Amended Complaint© °o
identified MERS referring to itself as the “holder of the Deed of Trust” as the assignor and US.
Bank as the assignee.
9. There is no presumption that the matters stated in the Assignment or any
recorded document described in this action are true or that judicial notice may be taken thereof.
10. Consequently, the Assignment of DOT does not establish that US Bank was, in
fact, the holder of the beneficial interest in the plaintiffs DOT. Similarly, it does not establish
that US Bank in fact became the owner or holder of that beneficial interest in order to be able to
initiate or maintain foreclosure proceedings.
11. Thereafter on October 14, 2011 there was recorded by Recontrust in,the capacity
of “agent for the beneficiary” a “NOTICE OF DEFAULT AND ELECTION TO SELL
UNDER DEED OF TRUST” (NOD) Exhibit 2, hereto.
12. The NOD informed Plaintiff that (1) the Property was in foreclosure because he
was behind in his payments and (2) the Property could be sold without any court action. The
NOD also stated that “the present beneficiary under” the DOT had delivered to the trustee a
written declaration and demand for sale. According to the NOD, all sums secured by the DOT
had been declared immediately due and payable and that the beneficiary elected to cause the
Property to be sold to satisfy that obligation.
13. The NOD stated the amount of past due payments was $29,813.13 as of October
10, 2011. It also stated: “To find out the amount you must pay, or to arrange for payment to
stop the foreclosure,... contact: US Bank care of Bank of America.
14. US Bank or its agent Bank of America directed Recontrust to issue the NOD.
Thereafter there was recorded on January 14, 2013 a “TRUSTEE’S DEED UPON SALE
executed by said Recontrust transferring the property to US Bank. US Bank or its agent Bank of
America directed Recontrust to issue the said Trustees Deed.
STANDING TO ASSERT FORECLOSURE IS VOID
15. Transfers that violate the terms of the Trust instrument created under the laws of
New York are void under New York trust law.
6
Second Amended Complaint© °
16. Plaintiff has standing to challenge a void Assignment of his loan and DOT even
though he is not a party to, or a third party beneficiary of the Pooling and Servicing Agreement
'| (PSA) that created the said Trust.
17. More specifically, Plaintiff may and does challenge the validity of the said
Assignment to the said Trust by alleging the transfer to it occurred after the Trust’s closing date
which would render the assignment absolutely invalid or ineffective, or void and consequently
any foreclosure proceedings arising therefrom.
18. Independently, Plaintiff may and does challenge the validity of the said
Assignment to the said Trust by alleging the transfer to it by the said Assignment document
violated the PSA which requires the Depositor to deliver to and deposit the original note, DOT
and assignment to the trustee which if not done would render the assignment absolutely invalid
or ineffective, or void.
19. Independently, Plaintiff may and does challenge the validity of any purported
prior unrecorded assignment to the said Trust by alleging the transfer to it violated the PSA
which requires the Depositor to deliver to and deposit the original note, DOT and assignment to
the trustee which if not done would render the assignment absolutely invalid or ineffective, or
void.
20. This action maintains defendants as the foreclosing entities were not the true
owners of the loan and DOT because its chain of ownership had been broken by illegal transfers
of the loan and DOT to the Trust.
THE SUBJECT SECURTIZED TRUST
21. Mortgage-backed securities are created through a complex process known as
“securitization. In simplified terms, “securitization” is the process where (1) many loans are
bundled:together and transferred to a passive entity, such as a trust, and (2) the trust holds the
loans and issues investment securities that are repaid from the mortgage payments made on the
loans. Hence, the securities issued by the trust are “mortgage-backed.”
22. The subject Trust is a common law trust formed pursuant to New York law,
named HARBORVIEW 2005-2 TRUST FUND.
7
Second Amended Complaint© °o
23. HARBORVIEW 2005-2 TRUST FUND of which defendant US Bank is the
purported trustee thereof consists of a pool of residential mortgage notes purportedly, but not
} actually as described below including plaintiff's loan allegedly secured by the DOT.
24. The Trust was formed under New York law and was subject to the requirements
imposed on REMIC trusts (entities that do not pay federal income tax) by the Internal Revenue
Code.
25. The Trust has no officers or directors and no continuing duties other than to hold
assets and to issue the series of certificates of investment.
26. A detailed description of the categories of mortgage loans is included in the
Prospectus ("the Prospectus") of the Trust duly filed with the Securities and Exchange
Commission.
27. The Trust issued investment bonds in the mortgage-backed Trust identified
herein. These securities were duly registered with the Securities and Exchange Commission
("SEC") on a registration statement. The registration statement and other reports and
information regarding the Trustee are available at the SEC's Internet site at http://www.sec.gov.
The materials are also available to read and copy at the SEC's Public Reference Room at 100 F.
Street, N.E., Washington, D.C. 20549.
28. US Bank is the purported original trustee for the Trust.
29. Under New York Trust Law, every sale, conveyance or other act of the trustee in
contravention of the Trust is void. EPTL § 7-2.4.
30. Per New York Estates, Powers & Trusts Law section 7-2.4: “If the trust is
expressed in an instrument creating the estate of the trustee, every sale, conveyance ot other act
of the trustee in contravention of the trust, except as authorized by this article and by any other
provision of law, is void.” The statutory purpose is “to protect trust beneficiaries from
unauthorized actions by the trustee.” (Turano, Practice Commentaries, McKinney’s
Consolidated Laws of New York, Book 17B, EPTL § 7-2.4.)
31. The closing date to validly assign the subject Note and DOT to the said Trust
was in 2005.
8
Second Amended Complaint© °
32. Therefore, the Assignment described above of the subject Note and DOT by the
trustee after the date the Trust closed is void. Under New York law, any transfer to the trust in
contravention of the trust documents is void.
33. Under New York law, assignment of the Note or DOT after the “closing date” is
void ab initio.
34. Separate from the said Assignment being void because it was done after the
closing date, the said Assignment is void as it violated the PSA which requires the Depositor to
deliver to and deposit the original note, DOT and assignment to the trustee which was not done
and therefore the Assignment is absolutely invalid or ineffective, or void.
35. Separate from the said Assignment being void on the grounds stated above any
prior assignment of the Note and DOT defendants can claim to have made to the trustee of said
Trust also violated the PSA which requires the Depositor to deliver to and deposit the original
note, DOT and assignment to the trustee which was not done and therefore any such claimed
assignment was absolutely invalid or ineffective, or void.
36. Finally, the Note and DOT were not duly endorsed, transferred and delivered to
the Trust in any other manner.
37. Therefore, the said Note and DOT were not effectively or legally transferred to
the Trust that held the pool of mortgage loans and thus the Trust never held the loan or DOT to
be able to initiate or legally maintain or direct foreclosure proceedings.
38. Although there is no requirement under California law for the said Assignment to
have been recorded, since it was recorded, defendants are subject to the consequences of said
recorded document. The purported assignee of the said Assignment was defendant US Bank.
The issuance of the Notice of Default, Notice of Trustee’s Sale, the conducting of the trustee’s
sale and the recording of the Trustees Deed were all directed by US Bank or its agents
Recontrust or B of A acting on their behalf and arising solely out of the US Bank’s claimed
rights per the said Assignment and not out of any other authority or right to institute foreclosure
proceedings.
9
Second Amended Complaint© °
39. The fact that the trustee’s sale was conducted is not conclusive that it was
performed legally.
40. Plaintiff is not required to establish prejudice in order to maintain this cause of
action as the foreclosure sale process was void under law, not merely voidable. However
plaintiff was prejudiced by the foreclosure sale as his lost title to his residence.
THE POOLING AND SERVICING AGREEMENT
41. The Trust was created by a Pooling and Servicing Agreement (PSA) which
established a closing date after which the Trust may no longer accept loans and the procedure
by which notes and DOT’s are assigned to the Trust. These statutory provisions provides a legal
basis for concluding that the trustee’s attempt to accept a loan after the closing date or violation
of the procedure in which it must receive them would be void as an act in contravention of the
Trust document.
42. — Pursuant to Section 2.05 of the Pooling and Servicing Agreement, all mortgage
files transferred to the Trust must be delivered on or before the closing date and "shall deliver to
and deposit with, or cause to be delivered to and deposited with, the Trustee or the Initial
Custodian of the Mortgage Files, which shall at all times be identified in the records of the
Trustee or the Initial Custodian, as applicable, as being held by or on behalf of the Trust.
Concurrently with the execution and delivery hereof, the Company shall cause to be filed with
respect to each Cooperative Loan the UCC assignment or amendment referred to in clause
(¥)(vii) of the definition of "Mortgage File." In connection with its servicing of Cooperative
Loans, the Servicer shall use its best efforts to file timely continuation statements, if necessary,
with regard to each financing statement relating toa Cooperative Loan".
43, One purpose of the PSA is to document that in the regular course of business the
Defendants otiginate and acquire mortgage loans and desire by the PSA to confirm the terms
and conditions under which the Trust will "acquire the mortgage loans" so originated.
44, Plaintiff's Note and DOT were not endorsed, transferred, and delivered into the
trust pursuant to the PSA before the closing date as set forth in Section 2.05 of the Pooling and
Servicing Agreement on file in this action, as it was not listed in any documents filed by the
10
Second Amended Complaint© °o
Trust and available to the public at ww-w.edgar.gov. Accordingly, the subject Note and DOT
were never lawfully negotiated and physically delivered to the Trust. Therefore, the Trust did
not have standing to initiate or direct foreclose on the Subject Property.
45. The said Assignment was ineffective as the Trust could not have accepted the
Deed of Trust after the Closing Date pursuant to the PSA and the requirements for a REMIC
Trust. If the Assignment was made after the closing date, the non-compliance with the REMIC
statutes would terminate the tax exempt status under the REMIC statutes.
46. The following is applicable regarding pooling and servicing agreements and the
federal tax code provisions applicable to REMIC trusts. “Once the bundled mortgages are given
to a depositor, the pooling and servicing agreement and IRS tax code provisions require that the
mortgages be transferred to the trust within a certain time frame, usually ninety dates from the
date the trust is created. After such time, the trust closes and any subsequent transfers are
invalid. The reason for this is purely economic for the trust. If the mortgages are properly
transferred within the ninety-day open period, and then the trust properly closes, the trust is
allowed to maintain REMIC tax status.” (Deconstructing Securitized Trusts, supra, 41 Stetson
L.Rev. at pp. 757-758.)
47. Furthermore the PSA requires the Depositor to deliver and deposit with the
trustee the original note, the original mortgage and original assignment. The trustee is then
required to provide the Depositor an acknowledgment of receipt of the assets. The rationale
behind this requirement is to provide at least two intermediate levels of transfer to ensure the
assets are protected from the possible bankruptcy by the originator which permits the security
to be provided with the rating required for the securitization to be saleable.
48. Any purported assignment that occurred with the subject Note and DOT whether
by the purported Assignment or any purported assignment failed to be assigned in this manner.
49. Therefore, the foreclosure of the Subject Property, as well as the Notice of
Default, Notice of Trustee's Sale, and Trustee's Deed Upon Sale, were wrongful and void ab
initio.
ll
Second Amended Complainto- °
50. Applying the statute to void the attempted transfer is justified because it protects
the beneficiaries of the Trust from the potential adverse tax consequence of the trust losing its
|} status as a REMIC trust under the Internal Revenue Code.
51. Defendants misrepresented and/or concealed the true facts regarding the transfer
of Plaintiff's Note and Deed of Trust by illegally executing an Assignment of the Deed of Trust
into the Trust after the closing date.
FORECLOSURE WRONGFUL PER CALIFORNIA LAW
52. Consequently, the said Notice of Default, Notice of Trustee Sale and Trustee’s
Deed and foreclosure sale of the Property was not executed in accordance with the requirements
of California Civil Code Section 2924 et seq.
53. A power of sale may be invoked only by certain parties pursuant to California
Civil Code Section 2924. As set forth in Plaintiff's Deed of Trust per paragraph 22 of the Deed
of Trust, only the Lender is authorized to accelerate the loan, stating:
"Lender shall give notice to Borrower prior to acceleration following Borrower's breach
of any covenant or agreement in this Security Instrument..."
“If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a
written notice of the [sic] occurrence of and event of default and of Lender's election to cause
the Property to be sold..."
54. The foreclosure being wrongful is based on (1) paragraph 22 of the DOT which
authorizes only the lender-beneficiary (or its assignee) which must be the legal assignee to (a)
accelerate the loan after a default and (b) elect to cause the Property to be sold and (2) a non-
holder of the DOT, rather than the true beneficiary, instructed CRC to initiate the foreclosure.
55. The entity causing the foreclosure must have a chain of ownership that would
establish it was the true beneficiary under the DOT by an unbroken chain of title.
56. Defendants who instructed the trustee to file a Notice of Default and initiate non-
judicial foreclosure was not a true beneficiary more specifically the defendant who invoked the
power of sale was not the true beneficiary.
12
Second Amended Complaint© 9°
TENDER OF LOAN AMOUNT NOT REQUIRED
57. With regards to this cause of action plaintiff is not required to allege he tendered
} payment of the loan balance because (1) absence of a tender does not bar a claim for damages,
(2) the tender rule is a principle of equity, (3) tender is not required where the foreclosure sale is
void, rather than voidable, such as alleged above the defendant lacked the authority to foreclose
on the property.
58. By utilizing a wrongful legal instrument to purportedly assign a Deed of Trust
after the closing date, the assignment becomes ineffective, thus precluding these Defendants,
and each of them, from conducting a Trustee's Sale, thus rendering the Trustee's Sale void ab
initio and requiring the Trustees Deed to be set aside.
59. As aresult of the above-described breaches and wrongful conduct by
Defendants, Plaintiff has suffered general and special damages in an amount according to proof.
60. The conducting of the foreclosure proceedings described above was done
with malice and oppression in that defendants had no legal right to foreclose and therefore
justifies the awarding of punitive damages.
SUMMARY OF ALLEGATIONS THAT THE FORECLOSRE SALE WAS WRONGFUL
61. Plaintiff is informed and believes that under the terms of her Deed of
Trust (hereinafter”DOT”), the governing law of the Deed of Trust is both Federal Law and the
law of the jurisdiction in which the Subject Property is located — California. As California law is|
silent as to the means and methods by which a Real Estate Mortgage Investment Conduit
(hereinafter a “REMIC”) trust is formed and by which property may be transferred into such a
trust, Plaintiff is informed and believes and thereon alleges that Federal Law controls the
construction of the Deed of Trust with respect to transfers and assignments when a REMIC trust
is involved.
62. At some time thereafter, Plaintiff is presently unaware of the exact
13
Second Amended Complaint© Qo
date, Lender purportedly took steps to sell the Subject Loan (including the Note and/or Deed of
Trust) to an entity that purportedly intended to pool the Subject Loan with other residential
|| mortgage loans, securitize the pool, and sell the securities on the open market. The Trust, into
which the Subject Loan was pooled and securitized, was called HARBORVIEW 2005-2 TRUST
FUND.
63. Under the Trust Agreement relating to the Trust, the closing date for the sale of
certificates for the Trust, including the Subject Loan, was in 2005. At that time, according to the
Internal Revenue Code, 26 U.S.C. §860A through §860G, mortgage files, as defined in the Trust
Agreement, were required to be transferred to and through the appropriate parties of the Trust
within a 90-day grace period of the closing date, and all transactions related to the sale of the
Subject Loan were to have been completed in that time frame in order to perfect the Real Estate
Mortgage Investment Conduit (REMIC) Trust.
64. In fact, the Trust Agreement specifically recognizes that its terms are
created for the sake of the REMIC provisions, as the Trust Agreement states in its Preliminary
Statement, “The startup day for each REMIC created hereby for purposes of the REMIC
Provisions is the Closing Date.”
65. Moreover, under the Trust Agreement, the term “REMIC Provisions”
is defined as “The provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at sections 860A through 860G of Subchapter of Chapter 1 1
the Code, and related provisions, and regulations, including proposed regulations and rulings,
and administrative pronouncements promulgated thereunder, as the foregoing may be in effect
from time to time.”
66. As a function of the securitization process, the Note was required to
14
Second Amended Complaint© °o
pass through various entities, called special-purpose entities (hereinafter “SPE”) prior to reachi
the Trust. The purpose of this process was to ensure that the asset (the Note) was bankruptcy
remote, for the benefit of the investor(s) to the Trust. All endorsements from SPE to SPE were
required to be on the face of the Note itself. Plaintiff is informed and believes and thereon
alleges that the chain of title was required to show the following on the face of the Note or
permanently affixed as an allonge to the Note:
a Lender to Seller ; then
b. Seller to Depositor ; then
« Depositor to Trust through the Trustee
67. Plaintiff is informed and believes and thereon alleges that the Note was never
properly and legally transferred.
68. On the said Assignment of Deed of Trust MERS does not state or explain its
authority to assign the Deed of Trust to any entity.
69. Therefore, Plaintiff maintains that defendants do not own the Deed of Trust
because the Deed of Trust, having purportedly been assigned by operation of the ADOT was de
facto not transferred to defendants within the 90-day grace period following the closing date on
the REMIC Trust.
70. Plaintiff is informed and believes and thereon alleges that no transfer of the
security interest in the Subject Property had ever been attempted prior to the date of the ADOT
because if it had, MERS on said date would have nothing left to transfer. The terms “hereby
grants, assigns and transfers” in the Assignment of Deed of Trust is legally operative language,
indicating a present action. However, the fact that the assignment is attempted in 2011
15
Second Amended Complaint© 0
necessarily proves a violation of federal law with respect to the transfer of assets to a REMIC
Trust.
71. Moreover, as the transfer is in violation of federal law governing the transfer off
Joans to REMIC Trusts, the transfer/sale of the loan and Deed of Trust is illegal under the terms
of the Deed of Trust, and Plaintiff has standing under her own Deed of Trust to seek judicial]
determination of his rights.
72. Moreover, since, as alleged infra, the necessary chain of title was broken due to
improper and illegal transfers (and non-transfers) of the Note, the Deed of Trust, the security for
that Note, necessarily could not have been properly transferred as well.
73. Additionally, because defendants do not own the Subject Loan, Plaintiff likewise
maintains that neither no other entity currently, had and has the rights to administer and service
the Subject Loan, as those rights would have derived from the same PSA that would void any
assignment into the Trust. No defendant or any entity has no right to proceed with foreclosure
on the Subject Property, as it is not an agent of the true beneficiary to the Subject Loan.
74. | With respect to the Note and its subsequent chain of title, Plaintiff contends the
following:
a As a function of the securitization process, the Subject Loan (Note and Deed of Trust)
was required to pass-through several SPEs, in a particular order, in order to ensure that the assets
of the Trust (including the Subject Note) were bankruptcy remote. The purpose of that
requirement is to ensure that the Trust is protected from the possibility that one of the SPEs in
the chain, or the Trustee, might subsequently file for bankruptcy. The strict chain of title
requirements protects the assets of the Trust (including the Subject Note) from any subsequent
bankruptcy by any of the SPEs in the chain, thus allowing the REMIC to enjoy preferred tax
16
Second Amended Complaint© 9
status. Essentially, this strict chain-of-title requirement assures that the trust may preserve its
REMIC status, a necessity under the provisions of the previously discussed New York Trust
Law, the governing law of the Trust.
db. As alleged above, the Subject Note self-evidently indicates that neither the Seller, the
Depositor, nor the Trust itself received the Note from the original Lender or its assign.
c. The break in the chain of title was fatal to the entire attempt to securitize the Note as it
failed to maintain the status of the assets in the trust (including the Subject Note) as bankruptcy
remote, and it opened up the REMIC to tax liabilities, in contravention of the Trust. Therefore,
under New York Trust Law, the transaction (the steps taken to transfer the Loan into the
securitized Trust) were void, and Defendants have never owned the Loan, have never had the
right to collect on the Loan, and have never had the right to threaten to foreclose on the Subject
Property.
d. Moreover, because of the goal of maintaining the Note as bankruptcy remote, the
movement of the Note from Lender to the Trust, via the SPE’s, necessarily extinguishes an
reversionary right to the Subject Loan where there is a failure to properly move the Loan through]
the proper SPVs to the Trust.
75. Finally, with respect to the Subject Loan, generally, Plaintiff contends the
following:
a. Plaintiff is informed and believes and thereon alleges that the Note and Deed of Trust
were split when the parties attempted to pool and securitize the Subject Loan. Plaintiff further
alleges that the Note and Deed of Trust are still split, and therefore, the Deed of Trust under
which defendants foreclosed does not constitute security.
17
Second Amended Complaint© 3°
b. Plaintiff is informed and believes and thereon alleges that the separation of the Note from
the Deed of Trust and the subsequent attempt to pool and securitize the Subject Loan forever
converted the Note into a security. As a security, it is treated as a stock and governed as a stock
under the Securities and Exchange Commission. As the Deed of Trust secures only the Note,
and as the Note has in essence been destroyed as a result of its conversion into a stock, the Deed
of Trust secures nothing.
c Finally, as stated above, under the California Commercial Code, the Note is a unique
instrument, and all assignments and endorsements must be made permanent fixtures to the Note.
Vs
In this instance, because of the breakdown in the chain of title, the Note is forever flawed, thus
extinguishing the Deed of Trust as a security instrument.
76. Plaintiff has standing to challenge both the ownership of their Loan as well as the
attempts to collect on her alleged debt and foreclose on the Subject Property precisely because
when the transfer of the Subject Loan was voided by Defendants’ own conduct, Defendants had
no legal right to claim ownership of the “debt”. Moreover, Plaintiff has standing to challenge the|
ownership of the Subject Loan because Defendants’ conduct has prejudiced her with respect to
any future claims under the Subject Loan and Deed of Trust brought by the true owner of the
Subject Loan, if one still exists.
77. Moreover, Plaintiff has standing to allege that these Defendants neither own, nor
are the agents of the true owner of their loan. That standing is established firmly in the terms of
Plaintiff's Deed of Trust which establishes that the governing law of the Deed of Trust is both
Federal and California law. With respect to transfers of the security interest as contemplated by
the Deed of Trust, Plaintiff is informed and believe and thereon allege that as California law is
18
Second Amended Complaint© 3°
silent with respect to proper and lawful transfers of loans to REMIC Trusts, Federal Law is the
only authority to construe the term “sold” with respect to a sale or transfer of the Deed of Trust.
PRIOR ACTIONS NOT RES JUDICATA OR
COLLATERAL ESTOPPEL TO INSTANT FAC
78. Prior actions filed by plaintiff are not res judicata or collateral estoppel to the
instant action.
A. Specifically the US District court case no. 14 0150 entitled New v. US Bank et al.
was dismissed by plaintiff without prejudice prior to any judgment or order
adjudicating any cause of action.
B. The Order granting relief from automatic stay in US Bankruptcy court case no. 13-
31147-DM makes no reference anywhere therein of the basis for the instant FAC,
namely that the foreclosure was wrongful based of a void assignment of the Deed of
Trust.
C. The Unlawful Detainer judgment referred to in the Register of Actions on San
Francisco Superior Court case no. CUD 13 644400 US Bank v. New makes no
reference anywhere therein of the basis for the instant SAC, namely that the
foreclosure was wrongful based of a void assignment of the Deed of Trust. More
specifically the defenses to an unlawful detainer action are limited and any allegation
to the effect that the foreclosure was wrongful based of a void assignment of the Deed
of Trust as set forth in the instant SAC is not a legal defense to an unlawful detainer
action. Neither New’s Answer to the Unlawful Detainer action nor the Judgment
against him in case no. CUD 13 644400, US Bank v. New, make any reference
anywhere therein that an issue raised therein was that the foreclosure was wrongful
based of a void assignment of the Deed of Trust.
D. More specifically the defenses to an unlawful detainer action are limited and any
allegation to the effect that the foreclosure was wrongful based of a void assignment o:
the Deed of Trust as set forth in the instant SAC is not a legal defense to an unlawful
detainer action and therefore cannot be res judicata to the instant action.
19
Second Amended ComplaintE. Asa general rule, in unlawful detainer proceedings, only claims bearing directly upon
the right to possession are involved. Vella v. Hudgins (1977) 20 Cal.3d 251, 255.
However, where title is acquired through proceedings described in Code of Civil
Procedure section 1161a, courts must make a limited inquiry into the basis of the
plaintiffs title. (Gonzales v. Gem Properties, Inc. (1974) 37 Cal.App.3d 1029, 1035.)
The Supreme Court has explained that where the plaintiff in the unlawful detainer
action is the purchaser at a trustee's sale, he or she “need only prove a sale in
compliance with the statute and deed of trust, followed by purchase at such sale, and
the defendant may raise objections only on that phase of the issue of title. Matters
affecting the validity of the trust deed or primary obligation itself, or other basic
defects in the plaintiff's title, are neither properly raised in this summary proceeding
for possession, nor are they concluded by the judgment.” (Cheney v. Trauzettel (1937)
9 Cal.2d 158, 160, emphasis added; see also Vella v. Hudgins, supra, 20 Cal.3d at p.
255. Further, the pendency of another action concerning title is immaterial to the
resolution of an unlawful detainer proceeding. (Evans v. Superior Court (1977) 67
Cal.App.3d 162, 171.
F. The Order denying plaintiff's herein Motion for Preliminary Injunction in US District
Court case No. 13 — cv- 03418- JST is based on an attempt therein to vacate the state
court unlawful detainer action described above wherein the US District Court held it
had no authority. Per the said Order no judicial order was made regarding the authority
of defendant herein to foreclose or that concerned the foreclosure was wrongful based
of a void assignment of the Deed of Trust as set forth in the instant FAC.
WHEREFORE, Plaintiff prays for judgment against Defendants, and each of them, as
hereinafter set forth.
a. For compensatory damages in an amount to be determined by proof at trial;
b. For special damages in an amount to be determined by proof at trial;
c For general damages in an amount to be determined by proof at trial;
For attorney’s fees and costs of this action;
20
Second Amended Complaint© e
e For punitive damages according to proof;
f. For judgment rescinding the said NOD, Assignment and Trustees Deed Upon Sale and;
g& For removal of any and all derogatory information reported to any and all credit
reporting agencies and/or bureaus relating to the transaction involved herein;
h For restoration of Plaintiffs’ credit scores and good name;
i. For any prejudgment or other interest according to law;
je Any other and further relief that this Court deems equitable and proper.
DATED: November 20, 2014 UNITED LAW CENTER
A Professional Law Corporation
By: =A
John S. Sargetis
Attorneys for Plaintiff
21
Second Amended Complaint© 3°
Resording Reguowed tty:
Bank of Americs
Prepares Ry: Cecilie Rodriguex,
450 E. Bawnitery St.
Chapia, SC 29636
‘ARR-£O3-0011
When reearded mait to:
CareLogic
450 &. Boundary St.
‘Attu: Retaase Dept.
sc
_Aunomgaiaiem
is teeta
Twseer eae. a DOLL 14:45:48
ee ae
etal TO/L-1
Doct 76"
Property Address:
219 DE LONG BTREET
Bact Francises, CA 94112
RaRay INET
so
eran
ASSIGNMENT oF DEED OF TRUST
For Vatue Recewedl tfte undorsigned holder of a Deed of Trust (herein “Assignor”) whose address if $308 S.AV. 30
Avene, Sutte 18t Ocala, FL'34474 does hereby grant setl. assign, wransfer und convoy umo U.S. BANK NATIONAL
ASSOCIATION, AS TRUSTEE, FOR THE RENEFIT OF HARBORVIEW 2005-2 TRUST FUND
whose address ip 209 LASALLE ST 3 FL, CHICAGO, FL 60684 pil benoficlal intocast uniier thot certoin Riged of Trust
stesctibed below vegethier with the naie(s) and obligations therein deserited and the mency duc ani to become due therwon
with Imacust ond ull rights nocrua! or to necrus under suid Deed of Trust
Qrageat tasoriee AMERICA'S WHOLESALE LANDER
‘Original Horrowerts)! JOSEPILS NEW, A MARRIED MAN, AS HIS BOLE AND SEPARATE PROPERTY
Original Trustee: * CTC REAL ESTATE SERVICES:
Nos af PeederTemt: 2/22/2008
Original Lows Antoun: $948/080.00
Recorded In Saw Reanetvco County, CA on: 2/25/2005, hooig B34, poge 0612 and instrument number 2OOK-149TO7S1-60
ww ye Mo yen she undersigned has caused this Assignmsnr of Deed of Thiat i be exccutcd on
MORTGAGE ELECTROMIC REGISTRATION SYSTEMS,
we
oy adel net [eta
Wehbie Niebian, Asehtnnt Secretary
State of Catifornia.
County of Veatera
On, before mo, Penny Fuso Marchal, Notary Pubtic, poronnlly eppcared Debbie Niebtas, ~
whofioved to me on the basis of satisfactory evidence 10 be the personiey whose namielayisferrsubsoribed to the
within instrument and acknowledged to tne thal he/she/tbey’excouted the same In ieesrorfthett authorized capacity
‘Goes. and thar by hisfhenthair sipmiunsteyon the instrument the pertonte}vor tho entity upon behalf of which the
penonferfeled, executed the instrument,
Fenrtlty under PENALTY OF PERJURY under tho Liws of the State of Californts that the faregoing
paragraph is trie and correct,
WHTNESS my hand and officist seal. a
PEANY RUSBO MaRcaAL
Commistion w 194992
Rotary Public - Graromia
Pdblic: Ponay Russo Marchal
nor Anawies County
1
My Cornmission Expi Comm.
: ESOS
tht wy
Exhibit“)
Description; San Francisco,CA Document-Year.DociID 2011.Z1021¢ Page: I of 1
Ordex: 2 Comnent:© 3°
Pog NB L075 |
Fils No, 15363870-565~ JF2
SCHEDULE C
LEGAL DESCRIPTION
All that certain real property situate in the City and County of San Francisco, State of Califomia,
described as follows:
PARCEL E
Portion of Lot 1, it Black “M”, as saié Lot and Block art delineated and so designated upon that certain
map entitled, “Map Showing Subdivision of the Project of the Mission Street Land Co.”, es pet Map
thereof filed Jaly 31, 1895 and zecorded in Book I of Maps, at Pages 195 and 196, in the office of the
Recorder of the City and County of San Franciscs, State of Califomia, described 2¢ follows:
Beginning at a point on the Southerty lins of De Long Streez at the point of ietersection thereon of the
most westerly comer of Lot 1, above referred to; running thence easterly ajong said line of De Long
Street 40,92 feet; thence at a right angle southerly 41.59 feet to the southwesterly line of said Lot 1;
thence northwesterly along the lest named line -64.86 feet to the point of beginning,
PARCEL I:
_. Portion of Lots 27, 28, and 29, in Block “M”, as said Lots and Block and delineated and so designated
upon thet certain map entitled, “Map Showing Subdivision of the Property of the Mission Street Land
Co. “, as per Map thernof filed July 31, 1895 and recorded in Book 1 of Maps, 195 and 196, in the office
of the Recorder of the City and County of Sun Francisoo, State of Califomiz , described as follows:
Beginning at a point on the southerly lite of De Long Street, distant thereon 43.754 feet easterly from
the westerly line of Lot 30, a3 suid lot is shown on the above referred to map; running thence casterly
along said line of De Long Street 2.84 feet to the intersection of the Northeasterly line of Lot 29, above
referred to; running thence southeasterly along said last line and the northeasterly line of Lots 28 and 27,
64.86 feet to the southeasterly Hine of ssid Lot 27; thence at a right angle southwesterly along the last
named line 30 feet; thence at a right angle northwesterly 67 feet, to the northeasterly line of lands now or
formerly owned by Raymond William Wunder, a single man , by Deed dated January 22, 1952 and
recorded Jume 18, 1952, Recorder's Series A-74060; thence at right angle Nostheasterly along the last
named line 28.14 feet to the southerly line of De Long Street and the point of beginning,
APN No: Lot 34, Block 7166
Description: San Francisoa,CA Document-Year.RooID 2005.910751 Page: 25 of 25
Order: 2 Comment:FLOURNOY
scription: San Francisco,CA Assessor Map 7166 Page: 1 of 1
wdex; 2 Comment:
WILSONExh 2WHEN RECORDED MAIL TO:
RECONTRUST COMPANY
in
1898 Tayo Canyon Ray CAG-9L401-94 fi tr a
SIMI VALLEY, CA 93863 Gheck Nuxber
2ie-8EE2
rey oct 16, 2824 at
Attn: Wally Onvidson i
FS 'No. 11-0803569
‘Thie Order Na, 110475129
cra a
NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED GF TRUST
IMPORTANT NOTICE
IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE
BEHIND IN YOUR PAYMENTS, IT MAY BE SOLD WETHOUT ANY
COURT ACTION,
and you tay have the fegal eight to bring your accoant in good atanding by paying all of
your past due payerents plus permitted costs and expenses within the time permitted by
few for reinstatement of your account, which is normally five business days prior ta the
date set for the sale af yeur property. No sale date may be set antil approximately 90 days
from the date this notice af defautt may be recorded ( whieh date of recordation appears on
this notice).
ake /KE/i-4
‘This amownt is $29,813.13, as of 10/11/2011 and will tecrease until your account becomes
current,
White your property ts in foreclosure, you still must pay other obligations ( such as
insurance and taxes) required by your note and deed of trust or mortgage. If you fail to
make futerc paymonts on the lean, pay taxes on the property, provide insurance on the
property, or pay other obligations ac required in the note and deed of trust or mortgage,
the beneficiary or mortgages may insist that you do so i order to reinstate your account in
geod standing. fn addition, the bencficlary ar mortgagee may require as a condition to
Feinstatoment that you provide relinble writes evidence chat yon paid all senior Gem,
property taxcs, and hazard bavurance premiums,
Upon your written request, the beneficiary er mortgagee will give you & written
itemization of the entire amount vou must pay, You may nat have to pay the entire unpaid
portion of your account, even though full payment was demanded, but you must pay all
ameunts in defsult at the time payment is made, However, you and your beneficiary or
mortgagee may mutually agree in writing prior to the time the notice of sale is posted
(ehich ray not be cartier than three months after this Notice of Default is recarded) to,
among ctor things, (1) provide additional time in which te cure the default by transfer of
the property or otherwine; or (2) establish 2 schedule of payments in order to curt your
default; oF both (1) and (2). Beayt Thule - O84, DA Be Long Syet
Sam Feomensco, CA HHT
_ Exhibet “yeTSNo. H016Se9
Following the expiration of the time period referred to in the first paragraph of thir notice,
unless the obligation being foreclosed. upen or a separate written between you
and your creditor permits s longer period, you have only the fogal right to stop: the sale of
your property by paying the entire amotint demanded by your creditor.
To find out the amoust you must pry, or to arrange for payment fo step the foreclosure,
og if your property is in foreelasure for any other reason, contact:
‘US, BANK NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFTT OF
BARBORVIEW 2005-2 TRUST FUND
C/O Bank of America, N.A,
400 National way
SIME VALLEY, CA 93065
FORECLOSURE DEPARTMENT (800) 669-6650
Kf you bave any questions, you shoukd contact # bewyor or the governmental agency
which may have insured your loan.
WN fing the fact that your property is m foreclosure, you may offer your
property fer sale, provided the sale is concinded prier to the conclusion of the fareciasure,
Remember,
YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT
ACTION,
NOTICE IS HEREBY GIVEN THAT: RECONTRUST COMPANY, N.A., is acting at an
Preview
OO SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Nov-21-2014 11:05 am Case Number: CGC-14-538800 Filing Date: Nov-21-2014 11:04 Filed by: BOWMAN LIU Juke Box: 001 Image: 04699404 COMPLAINT JOSEPH S NEW VS. U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE et al 001004699404 Instructions: Please place this sheet on top of the document to be scanned.BY FAX © —— ORGINAL John S. Sargetis (SBN: 80630) Sy rior Gourt ‘of Chlifornia Stephen J. Foondos (SBN: 148982) San Fr UNITED LAW CENTER 3013 Douglas Boulevard, Suite 200 Roseville, California 95661 CLE Telephone: (916) 367-0630 Facsimile: (916) 265-9000 Attorneys for Plaintiff JOSEPH NEW IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN FRANCISCO Case No. CGC -14- 538800 JOSEPH 8. NEW SECOND AMENDED COMPLAINT Plaintiff, VS. ) ) ) ) U.S. BANK NATIONAL ASSOCIATION _) AS TRUSTEE FOR THE BENEFIT OF ) HARBORVIEW 2005-2 TRUST FUND; ) RECONTRUST COMPANY, N.A.; ) MORTGAGE ELECTRONIC ) REGISTRATION SYSTEMS, INC.; BANK ) OF AMERICA, N.A.; and DOES 1 — 100, ) inclusive, ) ) ) ) ) ) ) ) Defendants. Plaintiff Joseph S. New (hereinafter "Plaintiff") hereby complains against Defendants U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE BENEFIT OF HARBORVIEW 2005-2 TRUST FUND; RECONTRUST COMPANY, N.A.; MORTGAGE 1 Second Amended Complaint© eo ELECTRONIC REGISTRATION SYSTEMS, INC.; BANK OF AMERICA, N.A.; and DOES 1-100, inclusive, for causes of action alleged as follows: 1. Defendants had no rights to the Subject Loan at all, and therefore, the subsequent foreclosure on the Subject Property was wrongful. 2. In order for Defendant to have been able to own the Subject Loan and subsequently pool it with other mortgages, it had to have acquired the Loan and the security within 90 days of the statutorily-mandated closing date of the Real Estate Mortgage Investment Conduit (“REMIC”) Trust ( Trust). Under 26 U.S.C. §860G, a mortgage only qualifies to be placed into a REMIC Trust if the REMIC possesses all necessary documents pertaining to the Subject Loan (Note and Deed of Trust) within those 90 days. Failure to acquire those necessary documents means the Loan is not a “qualified mortgage” as defined by the statute. As such, the Trust cannot own the Loan. 3. The governing law of the Trust is New York Law, as New York Trust Law (NY EPTL §7-2.4) specifies that any action taken by the Trustee in contravention of the Trust is a void act. 4. US Bank continuing to assert an ownership interest in the Subject Loan threatened the REMIC status of the Trust, opening it to severe tax consequences. The late assignment of the Deed of Trust to the Trust constituted a void act. (See Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079, 1097.) 5. Plaintiff is not seeking recourse to the Pooling and Servicing Agreement (the “PSA”) in order to enforce its terms. Plaintiff merely looks to the PSA to establish (1) the closing date of Trust, which is not a unique aspect of this particular PSA, but rather is a statutorily mandated requirement, and (2) the governing law of the Trust. 6. Plaintiff has standing under his own Deed of Trust to assert that these particular parties are not parties to the loan because under Federal law, they did not properly acquire the Subject Loan and are not parties to the loan because under Federal law, they did not properly acquire the Subject Loan. 7. The Court of Appeals opinions in Yvanova, Keshtgar and Mendoza all having been taken up for review by the California Supreme Court now cannot be cited as authority to 2 Second Amended Complaint© ° maintain as a defense to this action. 8. The Court of Appeal opinion in Jenkins is not applicable as being a pre trustee sale. 9. Plaintiff is not attempting to insert a requirement into the statute to force Defendants to prove ownership or agency before they can proceed with a foreclosure. In fact, Plaintiff does not even assert rights under Cal. Civ. Code §2924. This claim is one for damages following what Plaintiff alleges was an illegal and wrongful sale of his home. 10, Since here the violations of the PSA also violated the Internal Revenue Code 26 US.C. §860G, et seq. which in turn violated New York Trust Law, the failure to properly assign his Deed of Trust into the securitized pool was a VOID act. As such, plaintiff does not seek to enforce the PSA as the PSA is simply evidence of the failure to follow the REMIC statutes. 11. The implication in Jenkins — that the plaintiff was merely a third party to the PSA and that any violations of the PSA were of sole concer to the parties to the PSA — is that the act was VOIDABLE. That Jenkins implies the improper transfer is voidable is evident from the third party analysis in which that Court engaged (i.e., since only the parties to the Agreement are affected by failures to perform under the Agreement, such failures are up to the parties themselves and no one else to dispute.). 12. Where the transaction is void ab intitio, as determined by the Internal Revenue Code and New York Trust Law, the plaintiff's standing is not an issue because even the parties to the Agreement do not have the ability to accept loans in contravention of the law. 13. In order for the Trust to enjoy tax-free status, it must follow very specific rules in its creation. One of the most important rules is that within 90 days of the closing date of the Trust (as established by the PSA), the Trust must “own” the loan and security interest to which it will later claim to be the beneficiary. (26 U.S.C. §860G(a)(3)(ii) and §860G(a)(9).) Not doing so exposes the entire trust to catastrophic tax consequences the Trust was specifically designed to avoid. Moreover, a failure to abide by the specific REMIC rules exposes investors to the Trust to the same consequences when attempting to realize return on their investment. Voiding the attempted transfer is justified because it protects the beneficiaries of the Securitized Trust 3 Second Amended Complaint© °e from the potential adverse tax consequence of the trust losing its status as a REMIC trust under the Internal Revenue Code.”) 14. The California Supreme Court has granted Review in YVANOVA v. NEW CENTURY MORTGAGE CORPORATION whose previous citation was 226 Cal.App.4th 495 but which is no longer citable since the California Supreme Court granted review in case No. 218973 on August 27, 2014. The California Supreme Court stated: The petition for review is granted. Briefing and argument is limited to the following issue (see Cal. Rules of Court, rule 8.516(a)(1)): In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void? 15. Furthermore the subject Promissory Note itself was never transferred to the Defendant Trust within the 90 day grace period, nor was it properly transferred at all. 16. Under this theory, Plaintiff asserts that the REMIC statutes require a loan to pass through various Special Purpose Vehicles (“SPVs”) before getting to the Trust as doing so ensures that the Trust is bankruptcy remote. FIRST CAUSE OF ACTION (Wrongful Foreclosure) PARTIES 1. Plaintiff, is now, and at all times relevant to this action is and was a resident of the County of San Francisco, State of California. 2. Plaintiff is and at all times mentioned was the legal owner and entitled to possession of the real property residence commonly known as 215 DeLong Street #V, San Francisco, CA 94112, State of California. (Property). : 3. Defendants U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE BENEFIT OF HARBORVIEW 2005-2 TRUST FUND (US Bank); RECONTRUST COMPANY, N.A. (Recontrust) ; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, 4 Second Amended Complaint© ° INC. (MERS) ; BANK OF AMERICA, N.A (B of A) all conduct business in the state of California, County of San Francisco. 4. Plaintiff is ignorant of the true names and capacities of defendants sued herein as DOES 1 through 100 inclusive and, therefore sues these defendants by such fictitious names. Plaintiff will amend this complaint to allege their true names and capacities when ascertained. Plaintiff is informed and believes and based thereon alleges each of the fictitiously named defendants is responsible in some manner for the injuries to Plaintiff alleged herein and that such injuries as herein alleged were proximately caused by such defendants. 5. Plaintiff is informed and believes and thereon alleges that all times herein mentioned each of the defendants was the agent and employee of the remaining defendants, and in doing the things hereinafter alleged, was acting within the course and scope of such agency and employment. LOAN AND DEED OF TRUST 6. Plaintiff obtained a loan from America’s Wholesale Lender which was secured by a Deed of Trust (DOT) recorded about February 22, 2005 against the Property. The Lender named in the DOT was America’s Wholesale Lender but MERS was named as the “beneficiary” acting as nominee for the Lender. 7. Paragraph 22 of the DOT sets forth the remedies available to the lender in the event of a default. Those remedies include (1) the lender’s right to accelerate the debt after notice to the borrower and (2) the lender’s right to “invoke the power of sale” after the borrower has been given written notice of default and of the lender’s election to cause the property to be sold. Thus, under the DOT, it is the lender-beneficiary who decides whether to pursue non- judicial foreclosure in the event of an uncured default by the borrower. The trustee implements the lender-beneficiary’s decision by conducting the non-judicial foreclosure. FORECLOSURE RELATED RECORDED DOCUMENTS 8. On July 7, 2011 an ASSIGNMENT OF DEED OF TRUST (ADOT) of the said DOT was recorded with the San Francisco Recorder. (Exhibit 1 hereto). This Assignment 5 Second Amended Complaint© °o identified MERS referring to itself as the “holder of the Deed of Trust” as the assignor and US. Bank as the assignee. 9. There is no presumption that the matters stated in the Assignment or any recorded document described in this action are true or that judicial notice may be taken thereof. 10. Consequently, the Assignment of DOT does not establish that US Bank was, in fact, the holder of the beneficial interest in the plaintiffs DOT. Similarly, it does not establish that US Bank in fact became the owner or holder of that beneficial interest in order to be able to initiate or maintain foreclosure proceedings. 11. Thereafter on October 14, 2011 there was recorded by Recontrust in,the capacity of “agent for the beneficiary” a “NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST” (NOD) Exhibit 2, hereto. 12. The NOD informed Plaintiff that (1) the Property was in foreclosure because he was behind in his payments and (2) the Property could be sold without any court action. The NOD also stated that “the present beneficiary under” the DOT had delivered to the trustee a written declaration and demand for sale. According to the NOD, all sums secured by the DOT had been declared immediately due and payable and that the beneficiary elected to cause the Property to be sold to satisfy that obligation. 13. The NOD stated the amount of past due payments was $29,813.13 as of October 10, 2011. It also stated: “To find out the amount you must pay, or to arrange for payment to stop the foreclosure,... contact: US Bank care of Bank of America. 14. US Bank or its agent Bank of America directed Recontrust to issue the NOD. Thereafter there was recorded on January 14, 2013 a “TRUSTEE’S DEED UPON SALE executed by said Recontrust transferring the property to US Bank. US Bank or its agent Bank of America directed Recontrust to issue the said Trustees Deed. STANDING TO ASSERT FORECLOSURE IS VOID 15. Transfers that violate the terms of the Trust instrument created under the laws of New York are void under New York trust law. 6 Second Amended Complaint© ° 16. Plaintiff has standing to challenge a void Assignment of his loan and DOT even though he is not a party to, or a third party beneficiary of the Pooling and Servicing Agreement '| (PSA) that created the said Trust. 17. More specifically, Plaintiff may and does challenge the validity of the said Assignment to the said Trust by alleging the transfer to it occurred after the Trust’s closing date which would render the assignment absolutely invalid or ineffective, or void and consequently any foreclosure proceedings arising therefrom. 18. Independently, Plaintiff may and does challenge the validity of the said Assignment to the said Trust by alleging the transfer to it by the said Assignment document violated the PSA which requires the Depositor to deliver to and deposit the original note, DOT and assignment to the trustee which if not done would render the assignment absolutely invalid or ineffective, or void. 19. Independently, Plaintiff may and does challenge the validity of any purported prior unrecorded assignment to the said Trust by alleging the transfer to it violated the PSA which requires the Depositor to deliver to and deposit the original note, DOT and assignment to the trustee which if not done would render the assignment absolutely invalid or ineffective, or void. 20. This action maintains defendants as the foreclosing entities were not the true owners of the loan and DOT because its chain of ownership had been broken by illegal transfers of the loan and DOT to the Trust. THE SUBJECT SECURTIZED TRUST 21. Mortgage-backed securities are created through a complex process known as “securitization. In simplified terms, “securitization” is the process where (1) many loans are bundled:together and transferred to a passive entity, such as a trust, and (2) the trust holds the loans and issues investment securities that are repaid from the mortgage payments made on the loans. Hence, the securities issued by the trust are “mortgage-backed.” 22. The subject Trust is a common law trust formed pursuant to New York law, named HARBORVIEW 2005-2 TRUST FUND. 7 Second Amended Complaint© °o 23. HARBORVIEW 2005-2 TRUST FUND of which defendant US Bank is the purported trustee thereof consists of a pool of residential mortgage notes purportedly, but not } actually as described below including plaintiff's loan allegedly secured by the DOT. 24. The Trust was formed under New York law and was subject to the requirements imposed on REMIC trusts (entities that do not pay federal income tax) by the Internal Revenue Code. 25. The Trust has no officers or directors and no continuing duties other than to hold assets and to issue the series of certificates of investment. 26. A detailed description of the categories of mortgage loans is included in the Prospectus ("the Prospectus") of the Trust duly filed with the Securities and Exchange Commission. 27. The Trust issued investment bonds in the mortgage-backed Trust identified herein. These securities were duly registered with the Securities and Exchange Commission ("SEC") on a registration statement. The registration statement and other reports and information regarding the Trustee are available at the SEC's Internet site at http://www.sec.gov. The materials are also available to read and copy at the SEC's Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. 28. US Bank is the purported original trustee for the Trust. 29. Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of the Trust is void. EPTL § 7-2.4. 30. Per New York Estates, Powers & Trusts Law section 7-2.4: “If the trust is expressed in an instrument creating the estate of the trustee, every sale, conveyance ot other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void.” The statutory purpose is “to protect trust beneficiaries from unauthorized actions by the trustee.” (Turano, Practice Commentaries, McKinney’s Consolidated Laws of New York, Book 17B, EPTL § 7-2.4.) 31. The closing date to validly assign the subject Note and DOT to the said Trust was in 2005. 8 Second Amended Complaint© ° 32. Therefore, the Assignment described above of the subject Note and DOT by the trustee after the date the Trust closed is void. Under New York law, any transfer to the trust in contravention of the trust documents is void. 33. Under New York law, assignment of the Note or DOT after the “closing date” is void ab initio. 34. Separate from the said Assignment being void because it was done after the closing date, the said Assignment is void as it violated the PSA which requires the Depositor to deliver to and deposit the original note, DOT and assignment to the trustee which was not done and therefore the Assignment is absolutely invalid or ineffective, or void. 35. Separate from the said Assignment being void on the grounds stated above any prior assignment of the Note and DOT defendants can claim to have made to the trustee of said Trust also violated the PSA which requires the Depositor to deliver to and deposit the original note, DOT and assignment to the trustee which was not done and therefore any such claimed assignment was absolutely invalid or ineffective, or void. 36. Finally, the Note and DOT were not duly endorsed, transferred and delivered to the Trust in any other manner. 37. Therefore, the said Note and DOT were not effectively or legally transferred to the Trust that held the pool of mortgage loans and thus the Trust never held the loan or DOT to be able to initiate or legally maintain or direct foreclosure proceedings. 38. Although there is no requirement under California law for the said Assignment to have been recorded, since it was recorded, defendants are subject to the consequences of said recorded document. The purported assignee of the said Assignment was defendant US Bank. The issuance of the Notice of Default, Notice of Trustee’s Sale, the conducting of the trustee’s sale and the recording of the Trustees Deed were all directed by US Bank or its agents Recontrust or B of A acting on their behalf and arising solely out of the US Bank’s claimed rights per the said Assignment and not out of any other authority or right to institute foreclosure proceedings. 9 Second Amended Complaint© ° 39. The fact that the trustee’s sale was conducted is not conclusive that it was performed legally. 40. Plaintiff is not required to establish prejudice in order to maintain this cause of action as the foreclosure sale process was void under law, not merely voidable. However plaintiff was prejudiced by the foreclosure sale as his lost title to his residence. THE POOLING AND SERVICING AGREEMENT 41. The Trust was created by a Pooling and Servicing Agreement (PSA) which established a closing date after which the Trust may no longer accept loans and the procedure by which notes and DOT’s are assigned to the Trust. These statutory provisions provides a legal basis for concluding that the trustee’s attempt to accept a loan after the closing date or violation of the procedure in which it must receive them would be void as an act in contravention of the Trust document. 42. — Pursuant to Section 2.05 of the Pooling and Servicing Agreement, all mortgage files transferred to the Trust must be delivered on or before the closing date and "shall deliver to and deposit with, or cause to be delivered to and deposited with, the Trustee or the Initial Custodian of the Mortgage Files, which shall at all times be identified in the records of the Trustee or the Initial Custodian, as applicable, as being held by or on behalf of the Trust. Concurrently with the execution and delivery hereof, the Company shall cause to be filed with respect to each Cooperative Loan the UCC assignment or amendment referred to in clause (¥)(vii) of the definition of "Mortgage File." In connection with its servicing of Cooperative Loans, the Servicer shall use its best efforts to file timely continuation statements, if necessary, with regard to each financing statement relating toa Cooperative Loan". 43, One purpose of the PSA is to document that in the regular course of business the Defendants otiginate and acquire mortgage loans and desire by the PSA to confirm the terms and conditions under which the Trust will "acquire the mortgage loans" so originated. 44, Plaintiff's Note and DOT were not endorsed, transferred, and delivered into the trust pursuant to the PSA before the closing date as set forth in Section 2.05 of the Pooling and Servicing Agreement on file in this action, as it was not listed in any documents filed by the 10 Second Amended Complaint© °o Trust and available to the public at ww-w.edgar.gov. Accordingly, the subject Note and DOT were never lawfully negotiated and physically delivered to the Trust. Therefore, the Trust did not have standing to initiate or direct foreclose on the Subject Property. 45. The said Assignment was ineffective as the Trust could not have accepted the Deed of Trust after the Closing Date pursuant to the PSA and the requirements for a REMIC Trust. If the Assignment was made after the closing date, the non-compliance with the REMIC statutes would terminate the tax exempt status under the REMIC statutes. 46. The following is applicable regarding pooling and servicing agreements and the federal tax code provisions applicable to REMIC trusts. “Once the bundled mortgages are given to a depositor, the pooling and servicing agreement and IRS tax code provisions require that the mortgages be transferred to the trust within a certain time frame, usually ninety dates from the date the trust is created. After such time, the trust closes and any subsequent transfers are invalid. The reason for this is purely economic for the trust. If the mortgages are properly transferred within the ninety-day open period, and then the trust properly closes, the trust is allowed to maintain REMIC tax status.” (Deconstructing Securitized Trusts, supra, 41 Stetson L.Rev. at pp. 757-758.) 47. Furthermore the PSA requires the Depositor to deliver and deposit with the trustee the original note, the original mortgage and original assignment. The trustee is then required to provide the Depositor an acknowledgment of receipt of the assets. The rationale behind this requirement is to provide at least two intermediate levels of transfer to ensure the assets are protected from the possible bankruptcy by the originator which permits the security to be provided with the rating required for the securitization to be saleable. 48. Any purported assignment that occurred with the subject Note and DOT whether by the purported Assignment or any purported assignment failed to be assigned in this manner. 49. Therefore, the foreclosure of the Subject Property, as well as the Notice of Default, Notice of Trustee's Sale, and Trustee's Deed Upon Sale, were wrongful and void ab initio. ll Second Amended Complainto- ° 50. Applying the statute to void the attempted transfer is justified because it protects the beneficiaries of the Trust from the potential adverse tax consequence of the trust losing its |} status as a REMIC trust under the Internal Revenue Code. 51. Defendants misrepresented and/or concealed the true facts regarding the transfer of Plaintiff's Note and Deed of Trust by illegally executing an Assignment of the Deed of Trust into the Trust after the closing date. FORECLOSURE WRONGFUL PER CALIFORNIA LAW 52. Consequently, the said Notice of Default, Notice of Trustee Sale and Trustee’s Deed and foreclosure sale of the Property was not executed in accordance with the requirements of California Civil Code Section 2924 et seq. 53. A power of sale may be invoked only by certain parties pursuant to California Civil Code Section 2924. As set forth in Plaintiff's Deed of Trust per paragraph 22 of the Deed of Trust, only the Lender is authorized to accelerate the loan, stating: "Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument..." “If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the [sic] occurrence of and event of default and of Lender's election to cause the Property to be sold..." 54. The foreclosure being wrongful is based on (1) paragraph 22 of the DOT which authorizes only the lender-beneficiary (or its assignee) which must be the legal assignee to (a) accelerate the loan after a default and (b) elect to cause the Property to be sold and (2) a non- holder of the DOT, rather than the true beneficiary, instructed CRC to initiate the foreclosure. 55. The entity causing the foreclosure must have a chain of ownership that would establish it was the true beneficiary under the DOT by an unbroken chain of title. 56. Defendants who instructed the trustee to file a Notice of Default and initiate non- judicial foreclosure was not a true beneficiary more specifically the defendant who invoked the power of sale was not the true beneficiary. 12 Second Amended Complaint© 9° TENDER OF LOAN AMOUNT NOT REQUIRED 57. With regards to this cause of action plaintiff is not required to allege he tendered } payment of the loan balance because (1) absence of a tender does not bar a claim for damages, (2) the tender rule is a principle of equity, (3) tender is not required where the foreclosure sale is void, rather than voidable, such as alleged above the defendant lacked the authority to foreclose on the property. 58. By utilizing a wrongful legal instrument to purportedly assign a Deed of Trust after the closing date, the assignment becomes ineffective, thus precluding these Defendants, and each of them, from conducting a Trustee's Sale, thus rendering the Trustee's Sale void ab initio and requiring the Trustees Deed to be set aside. 59. As aresult of the above-described breaches and wrongful conduct by Defendants, Plaintiff has suffered general and special damages in an amount according to proof. 60. The conducting of the foreclosure proceedings described above was done with malice and oppression in that defendants had no legal right to foreclose and therefore justifies the awarding of punitive damages. SUMMARY OF ALLEGATIONS THAT THE FORECLOSRE SALE WAS WRONGFUL 61. Plaintiff is informed and believes that under the terms of her Deed of Trust (hereinafter”DOT”), the governing law of the Deed of Trust is both Federal Law and the law of the jurisdiction in which the Subject Property is located — California. As California law is| silent as to the means and methods by which a Real Estate Mortgage Investment Conduit (hereinafter a “REMIC”) trust is formed and by which property may be transferred into such a trust, Plaintiff is informed and believes and thereon alleges that Federal Law controls the construction of the Deed of Trust with respect to transfers and assignments when a REMIC trust is involved. 62. At some time thereafter, Plaintiff is presently unaware of the exact 13 Second Amended Complaint© Qo date, Lender purportedly took steps to sell the Subject Loan (including the Note and/or Deed of Trust) to an entity that purportedly intended to pool the Subject Loan with other residential || mortgage loans, securitize the pool, and sell the securities on the open market. The Trust, into which the Subject Loan was pooled and securitized, was called HARBORVIEW 2005-2 TRUST FUND. 63. Under the Trust Agreement relating to the Trust, the closing date for the sale of certificates for the Trust, including the Subject Loan, was in 2005. At that time, according to the Internal Revenue Code, 26 U.S.C. §860A through §860G, mortgage files, as defined in the Trust Agreement, were required to be transferred to and through the appropriate parties of the Trust within a 90-day grace period of the closing date, and all transactions related to the sale of the Subject Loan were to have been completed in that time frame in order to perfect the Real Estate Mortgage Investment Conduit (REMIC) Trust. 64. In fact, the Trust Agreement specifically recognizes that its terms are created for the sake of the REMIC provisions, as the Trust Agreement states in its Preliminary Statement, “The startup day for each REMIC created hereby for purposes of the REMIC Provisions is the Closing Date.” 65. Moreover, under the Trust Agreement, the term “REMIC Provisions” is defined as “The provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at sections 860A through 860G of Subchapter of Chapter 1 1 the Code, and related provisions, and regulations, including proposed regulations and rulings, and administrative pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.” 66. As a function of the securitization process, the Note was required to 14 Second Amended Complaint© °o pass through various entities, called special-purpose entities (hereinafter “SPE”) prior to reachi the Trust. The purpose of this process was to ensure that the asset (the Note) was bankruptcy remote, for the benefit of the investor(s) to the Trust. All endorsements from SPE to SPE were required to be on the face of the Note itself. Plaintiff is informed and believes and thereon alleges that the chain of title was required to show the following on the face of the Note or permanently affixed as an allonge to the Note: a Lender to Seller ; then b. Seller to Depositor ; then « Depositor to Trust through the Trustee 67. Plaintiff is informed and believes and thereon alleges that the Note was never properly and legally transferred. 68. On the said Assignment of Deed of Trust MERS does not state or explain its authority to assign the Deed of Trust to any entity. 69. Therefore, Plaintiff maintains that defendants do not own the Deed of Trust because the Deed of Trust, having purportedly been assigned by operation of the ADOT was de facto not transferred to defendants within the 90-day grace period following the closing date on the REMIC Trust. 70. Plaintiff is informed and believes and thereon alleges that no transfer of the security interest in the Subject Property had ever been attempted prior to the date of the ADOT because if it had, MERS on said date would have nothing left to transfer. The terms “hereby grants, assigns and transfers” in the Assignment of Deed of Trust is legally operative language, indicating a present action. However, the fact that the assignment is attempted in 2011 15 Second Amended Complaint© 0 necessarily proves a violation of federal law with respect to the transfer of assets to a REMIC Trust. 71. Moreover, as the transfer is in violation of federal law governing the transfer off Joans to REMIC Trusts, the transfer/sale of the loan and Deed of Trust is illegal under the terms of the Deed of Trust, and Plaintiff has standing under her own Deed of Trust to seek judicial] determination of his rights. 72. Moreover, since, as alleged infra, the necessary chain of title was broken due to improper and illegal transfers (and non-transfers) of the Note, the Deed of Trust, the security for that Note, necessarily could not have been properly transferred as well. 73. Additionally, because defendants do not own the Subject Loan, Plaintiff likewise maintains that neither no other entity currently, had and has the rights to administer and service the Subject Loan, as those rights would have derived from the same PSA that would void any assignment into the Trust. No defendant or any entity has no right to proceed with foreclosure on the Subject Property, as it is not an agent of the true beneficiary to the Subject Loan. 74. | With respect to the Note and its subsequent chain of title, Plaintiff contends the following: a As a function of the securitization process, the Subject Loan (Note and Deed of Trust) was required to pass-through several SPEs, in a particular order, in order to ensure that the assets of the Trust (including the Subject Note) were bankruptcy remote. The purpose of that requirement is to ensure that the Trust is protected from the possibility that one of the SPEs in the chain, or the Trustee, might subsequently file for bankruptcy. The strict chain of title requirements protects the assets of the Trust (including the Subject Note) from any subsequent bankruptcy by any of the SPEs in the chain, thus allowing the REMIC to enjoy preferred tax 16 Second Amended Complaint© 9 status. Essentially, this strict chain-of-title requirement assures that the trust may preserve its REMIC status, a necessity under the provisions of the previously discussed New York Trust Law, the governing law of the Trust. db. As alleged above, the Subject Note self-evidently indicates that neither the Seller, the Depositor, nor the Trust itself received the Note from the original Lender or its assign. c. The break in the chain of title was fatal to the entire attempt to securitize the Note as it failed to maintain the status of the assets in the trust (including the Subject Note) as bankruptcy remote, and it opened up the REMIC to tax liabilities, in contravention of the Trust. Therefore, under New York Trust Law, the transaction (the steps taken to transfer the Loan into the securitized Trust) were void, and Defendants have never owned the Loan, have never had the right to collect on the Loan, and have never had the right to threaten to foreclose on the Subject Property. d. Moreover, because of the goal of maintaining the Note as bankruptcy remote, the movement of the Note from Lender to the Trust, via the SPE’s, necessarily extinguishes an reversionary right to the Subject Loan where there is a failure to properly move the Loan through] the proper SPVs to the Trust. 75. Finally, with respect to the Subject Loan, generally, Plaintiff contends the following: a. Plaintiff is informed and believes and thereon alleges that the Note and Deed of Trust were split when the parties attempted to pool and securitize the Subject Loan. Plaintiff further alleges that the Note and Deed of Trust are still split, and therefore, the Deed of Trust under which defendants foreclosed does not constitute security. 17 Second Amended Complaint© 3° b. Plaintiff is informed and believes and thereon alleges that the separation of the Note from the Deed of Trust and the subsequent attempt to pool and securitize the Subject Loan forever converted the Note into a security. As a security, it is treated as a stock and governed as a stock under the Securities and Exchange Commission. As the Deed of Trust secures only the Note, and as the Note has in essence been destroyed as a result of its conversion into a stock, the Deed of Trust secures nothing. c Finally, as stated above, under the California Commercial Code, the Note is a unique instrument, and all assignments and endorsements must be made permanent fixtures to the Note. Vs In this instance, because of the breakdown in the chain of title, the Note is forever flawed, thus extinguishing the Deed of Trust as a security instrument. 76. Plaintiff has standing to challenge both the ownership of their Loan as well as the attempts to collect on her alleged debt and foreclose on the Subject Property precisely because when the transfer of the Subject Loan was voided by Defendants’ own conduct, Defendants had no legal right to claim ownership of the “debt”. Moreover, Plaintiff has standing to challenge the| ownership of the Subject Loan because Defendants’ conduct has prejudiced her with respect to any future claims under the Subject Loan and Deed of Trust brought by the true owner of the Subject Loan, if one still exists. 77. Moreover, Plaintiff has standing to allege that these Defendants neither own, nor are the agents of the true owner of their loan. That standing is established firmly in the terms of Plaintiff's Deed of Trust which establishes that the governing law of the Deed of Trust is both Federal and California law. With respect to transfers of the security interest as contemplated by the Deed of Trust, Plaintiff is informed and believe and thereon allege that as California law is 18 Second Amended Complaint© 3° silent with respect to proper and lawful transfers of loans to REMIC Trusts, Federal Law is the only authority to construe the term “sold” with respect to a sale or transfer of the Deed of Trust. PRIOR ACTIONS NOT RES JUDICATA OR COLLATERAL ESTOPPEL TO INSTANT FAC 78. Prior actions filed by plaintiff are not res judicata or collateral estoppel to the instant action. A. Specifically the US District court case no. 14 0150 entitled New v. US Bank et al. was dismissed by plaintiff without prejudice prior to any judgment or order adjudicating any cause of action. B. The Order granting relief from automatic stay in US Bankruptcy court case no. 13- 31147-DM makes no reference anywhere therein of the basis for the instant FAC, namely that the foreclosure was wrongful based of a void assignment of the Deed of Trust. C. The Unlawful Detainer judgment referred to in the Register of Actions on San Francisco Superior Court case no. CUD 13 644400 US Bank v. New makes no reference anywhere therein of the basis for the instant SAC, namely that the foreclosure was wrongful based of a void assignment of the Deed of Trust. More specifically the defenses to an unlawful detainer action are limited and any allegation to the effect that the foreclosure was wrongful based of a void assignment of the Deed of Trust as set forth in the instant SAC is not a legal defense to an unlawful detainer action. Neither New’s Answer to the Unlawful Detainer action nor the Judgment against him in case no. CUD 13 644400, US Bank v. New, make any reference anywhere therein that an issue raised therein was that the foreclosure was wrongful based of a void assignment of the Deed of Trust. D. More specifically the defenses to an unlawful detainer action are limited and any allegation to the effect that the foreclosure was wrongful based of a void assignment o: the Deed of Trust as set forth in the instant SAC is not a legal defense to an unlawful detainer action and therefore cannot be res judicata to the instant action. 19 Second Amended ComplaintE. Asa general rule, in unlawful detainer proceedings, only claims bearing directly upon the right to possession are involved. Vella v. Hudgins (1977) 20 Cal.3d 251, 255. However, where title is acquired through proceedings described in Code of Civil Procedure section 1161a, courts must make a limited inquiry into the basis of the plaintiffs title. (Gonzales v. Gem Properties, Inc. (1974) 37 Cal.App.3d 1029, 1035.) The Supreme Court has explained that where the plaintiff in the unlawful detainer action is the purchaser at a trustee's sale, he or she “need only prove a sale in compliance with the statute and deed of trust, followed by purchase at such sale, and the defendant may raise objections only on that phase of the issue of title. Matters affecting the validity of the trust deed or primary obligation itself, or other basic defects in the plaintiff's title, are neither properly raised in this summary proceeding for possession, nor are they concluded by the judgment.” (Cheney v. Trauzettel (1937) 9 Cal.2d 158, 160, emphasis added; see also Vella v. Hudgins, supra, 20 Cal.3d at p. 255. Further, the pendency of another action concerning title is immaterial to the resolution of an unlawful detainer proceeding. (Evans v. Superior Court (1977) 67 Cal.App.3d 162, 171. F. The Order denying plaintiff's herein Motion for Preliminary Injunction in US District Court case No. 13 — cv- 03418- JST is based on an attempt therein to vacate the state court unlawful detainer action described above wherein the US District Court held it had no authority. Per the said Order no judicial order was made regarding the authority of defendant herein to foreclose or that concerned the foreclosure was wrongful based of a void assignment of the Deed of Trust as set forth in the instant FAC. WHEREFORE, Plaintiff prays for judgment against Defendants, and each of them, as hereinafter set forth. a. For compensatory damages in an amount to be determined by proof at trial; b. For special damages in an amount to be determined by proof at trial; c For general damages in an amount to be determined by proof at trial; For attorney’s fees and costs of this action; 20 Second Amended Complaint© e e For punitive damages according to proof; f. For judgment rescinding the said NOD, Assignment and Trustees Deed Upon Sale and; g& For removal of any and all derogatory information reported to any and all credit reporting agencies and/or bureaus relating to the transaction involved herein; h For restoration of Plaintiffs’ credit scores and good name; i. For any prejudgment or other interest according to law; je Any other and further relief that this Court deems equitable and proper. DATED: November 20, 2014 UNITED LAW CENTER A Professional Law Corporation By: =A John S. Sargetis Attorneys for Plaintiff 21 Second Amended Complaint© 3° Resording Reguowed tty: Bank of Americs Prepares Ry: Cecilie Rodriguex, 450 E. Bawnitery St. Chapia, SC 29636 ‘ARR-£O3-0011 When reearded mait to: CareLogic 450 &. Boundary St. ‘Attu: Retaase Dept. sc _Aunomgaiaiem is teeta Twseer eae. a DOLL 14:45:48 ee ae etal TO/L-1 Doct 76" Property Address: 219 DE LONG BTREET Bact Francises, CA 94112 RaRay INET so eran ASSIGNMENT oF DEED OF TRUST For Vatue Recewedl tfte undorsigned holder of a Deed of Trust (herein “Assignor”) whose address if $308 S.AV. 30 Avene, Sutte 18t Ocala, FL'34474 does hereby grant setl. assign, wransfer und convoy umo U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE RENEFIT OF HARBORVIEW 2005-2 TRUST FUND whose address ip 209 LASALLE ST 3 FL, CHICAGO, FL 60684 pil benoficlal intocast uniier thot certoin Riged of Trust stesctibed below vegethier with the naie(s) and obligations therein deserited and the mency duc ani to become due therwon with Imacust ond ull rights nocrua! or to necrus under suid Deed of Trust Qrageat tasoriee AMERICA'S WHOLESALE LANDER ‘Original Horrowerts)! JOSEPILS NEW, A MARRIED MAN, AS HIS BOLE AND SEPARATE PROPERTY Original Trustee: * CTC REAL ESTATE SERVICES: Nos af PeederTemt: 2/22/2008 Original Lows Antoun: $948/080.00 Recorded In Saw Reanetvco County, CA on: 2/25/2005, hooig B34, poge 0612 and instrument number 2OOK-149TO7S1-60 ww ye Mo yen she undersigned has caused this Assignmsnr of Deed of Thiat i be exccutcd on MORTGAGE ELECTROMIC REGISTRATION SYSTEMS, we oy adel net [eta Wehbie Niebian, Asehtnnt Secretary State of Catifornia. County of Veatera On, before mo, Penny Fuso Marchal, Notary Pubtic, poronnlly eppcared Debbie Niebtas, ~ whofioved to me on the basis of satisfactory evidence 10 be the personiey whose namielayisferrsubsoribed to the within instrument and acknowledged to tne thal he/she/tbey’excouted the same In ieesrorfthett authorized capacity ‘Goes. and thar by hisfhenthair sipmiunsteyon the instrument the pertonte}vor tho entity upon behalf of which the penonferfeled, executed the instrument, Fenrtlty under PENALTY OF PERJURY under tho Liws of the State of Californts that the faregoing paragraph is trie and correct, WHTNESS my hand and officist seal. a PEANY RUSBO MaRcaAL Commistion w 194992 Rotary Public - Graromia Pdblic: Ponay Russo Marchal nor Anawies County 1 My Cornmission Expi Comm. : ESOS tht wy Exhibit“) Description; San Francisco,CA Document-Year.DociID 2011.Z1021¢ Page: I of 1 Ordex: 2 Comnent:© 3° Pog NB L075 | Fils No, 15363870-565~ JF2 SCHEDULE C LEGAL DESCRIPTION All that certain real property situate in the City and County of San Francisco, State of Califomia, described as follows: PARCEL E Portion of Lot 1, it Black “M”, as saié Lot and Block art delineated and so designated upon that certain map entitled, “Map Showing Subdivision of the Project of the Mission Street Land Co.”, es pet Map thereof filed Jaly 31, 1895 and zecorded in Book I of Maps, at Pages 195 and 196, in the office of the Recorder of the City and County of San Franciscs, State of Califomia, described 2¢ follows: Beginning at a point on the Southerty lins of De Long Streez at the point of ietersection thereon of the most westerly comer of Lot 1, above referred to; running thence easterly ajong said line of De Long Street 40,92 feet; thence at a right angle southerly 41.59 feet to the southwesterly line of said Lot 1; thence northwesterly along the lest named line -64.86 feet to the point of beginning, PARCEL I: _. Portion of Lots 27, 28, and 29, in Block “M”, as said Lots and Block and delineated and so designated upon thet certain map entitled, “Map Showing Subdivision of the Property of the Mission Street Land Co. “, as per Map thernof filed July 31, 1895 and recorded in Book 1 of Maps, 195 and 196, in the office of the Recorder of the City and County of Sun Francisoo, State of Califomiz , described as follows: Beginning at a point on the southerly lite of De Long Street, distant thereon 43.754 feet easterly from the westerly line of Lot 30, a3 suid lot is shown on the above referred to map; running thence casterly along said line of De Long Street 2.84 feet to the intersection of the Northeasterly line of Lot 29, above referred to; running thence southeasterly along said last line and the northeasterly line of Lots 28 and 27, 64.86 feet to the southeasterly Hine of ssid Lot 27; thence at a right angle southwesterly along the last named line 30 feet; thence at a right angle northwesterly 67 feet, to the northeasterly line of lands now or formerly owned by Raymond William Wunder, a single man , by Deed dated January 22, 1952 and recorded Jume 18, 1952, Recorder's Series A-74060; thence at right angle Nostheasterly along the last named line 28.14 feet to the southerly line of De Long Street and the point of beginning, APN No: Lot 34, Block 7166 Description: San Francisoa,CA Document-Year.RooID 2005.910751 Page: 25 of 25 Order: 2 Comment:FLOURNOY scription: San Francisco,CA Assessor Map 7166 Page: 1 of 1 wdex; 2 Comment: WILSONExh 2WHEN RECORDED MAIL TO: RECONTRUST COMPANY in 1898 Tayo Canyon Ray CAG-9L401-94 fi tr a SIMI VALLEY, CA 93863 Gheck Nuxber 2ie-8EE2 rey oct 16, 2824 at Attn: Wally Onvidson i FS 'No. 11-0803569 ‘Thie Order Na, 110475129 cra a NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED GF TRUST IMPORTANT NOTICE IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR PAYMENTS, IT MAY BE SOLD WETHOUT ANY COURT ACTION, and you tay have the fegal eight to bring your accoant in good atanding by paying all of your past due payerents plus permitted costs and expenses within the time permitted by few for reinstatement of your account, which is normally five business days prior ta the date set for the sale af yeur property. No sale date may be set antil approximately 90 days from the date this notice af defautt may be recorded ( whieh date of recordation appears on this notice). ake /KE/i-4 ‘This amownt is $29,813.13, as of 10/11/2011 and will tecrease until your account becomes current, White your property ts in foreclosure, you still must pay other obligations ( such as insurance and taxes) required by your note and deed of trust or mortgage. If you fail to make futerc paymonts on the lean, pay taxes on the property, provide insurance on the property, or pay other obligations ac required in the note and deed of trust or mortgage, the beneficiary or mortgages may insist that you do so i order to reinstate your account in geod standing. fn addition, the bencficlary ar mortgagee may require as a condition to Feinstatoment that you provide relinble writes evidence chat yon paid all senior Gem, property taxcs, and hazard bavurance premiums, Upon your written request, the beneficiary er mortgagee will give you & written itemization of the entire amount vou must pay, You may nat have to pay the entire unpaid portion of your account, even though full payment was demanded, but you must pay all ameunts in defsult at the time payment is made, However, you and your beneficiary or mortgagee may mutually agree in writing prior to the time the notice of sale is posted (ehich ray not be cartier than three months after this Notice of Default is recarded) to, among ctor things, (1) provide additional time in which te cure the default by transfer of the property or otherwine; or (2) establish 2 schedule of payments in order to curt your default; oF both (1) and (2). Beayt Thule - O84, DA Be Long Syet Sam Feomensco, CA HHT _ Exhibet “yeTSNo. H016Se9 Following the expiration of the time period referred to in the first paragraph of thir notice, unless the obligation being foreclosed. upen or a separate written between you and your creditor permits s longer period, you have only the fogal right to stop: the sale of your property by paying the entire amotint demanded by your creditor. To find out the amoust you must pry, or to arrange for payment fo step the foreclosure, og if your property is in foreelasure for any other reason, contact: ‘US, BANK NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFTT OF BARBORVIEW 2005-2 TRUST FUND C/O Bank of America, N.A, 400 National way SIME VALLEY, CA 93065 FORECLOSURE DEPARTMENT (800) 669-6650 Kf you bave any questions, you shoukd contact # bewyor or the governmental agency which may have insured your loan. WN fing the fact that your property is m foreclosure, you may offer your property fer sale, provided the sale is concinded prier to the conclusion of the fareciasure, Remember, YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT ACTION, NOTICE IS HEREBY GIVEN THAT: RECONTRUST COMPANY, N.A., is acting at an