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Serving California only 949-388-7779 & 925-957-9797

We have uncovered a number of the Newspapers that “publish” for 21 days the notice of Trustee sale are not legally qualified to do so.
A “newspaper of general circulation” is a newspaper published for the dissemination of local or telegraphic news and intelligence of a general character, which has a bona fide subscription list of paying subscribers, and has been established, printed and published at regular intervals in the State, county, or city where publication, notice by publication, or official advertising is to be given or made for at least one year preceding the date of the publication, notice or advertisement.
The Paso Robles Press in Paso Robles California are not Judicially adjudicated and they are printed outside the county, We are currently litigating cases and having the Trustee Sales set aside. This paper is printed hundreds of miles ouside the San Luis Obispo county in Watsonville…

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Mandelman sounds the alert “Calling All Lawyers to 5,000,000 Crime Scenes”

Calling All Lawyers to 5,000,000 Crime Scenes

It’s time for me to have an adult conversation with the experienced practicing attorneys in this country.  Other grown-ups are welcome to sit in as well, but it’s time for children to be in bed or occupied elsewhere, okay?

If there’s no money to be made solving something… no profit incentive… then for the most part, we don’t quite have a handle on to solving it.  For example, we’re not very good at cleaning up our oceans in general, and if there weren’t money to be made cleaning up oceans after oil spills, my guess would be that we wouldn’t be very good at doing that either.
To-date, however, BP has reportedly spent $21 billion cleaning up the Gulf of Mexico since its last mega-disaster, and guess what?  The Gulf of Mexico is pretty clean again… just two years later!  I remember hearing environmentalists predict that it could take 100 years to clean up the Gulf after the Deepwater Horizon catastrophe.  I guess they were underestimating just how much solution $21 billion can often buy.

Well, today we have a mammoth size foreclosure problem in this country, and it’s being talked about like it’s damn near an unsolvable problem… as if solving it would require determining the chemical origins of life, or figuring out whether black holes really do exist in space.

The foreclosure crisis, thank goodness, is not a black hole-type problem as many would have us believe.  It is a problem that, political constraints notwithstanding, exists at the juncture of economics and the rule of law.  In other words… it’s an oil spill… perhaps the worst oil spill of which the world has ever conceived… the Exxon Valdez meets Deepwater Horizon x 100, if you will… but it’s still just an oil spill.

It’s also important to note that as an economics problem alone, the foreclosure crisis is not a particularly challenging one to solve.  Some would rush to remind me that any proposed solution would be rife with “moral hazard,” and while that may be true, it doesn’t make the problem insoluble, by any means.

The elephant in the room is that what we’re facing in this country today is not just a foreclosure crisis, what we’re dealing with with is much better described as a FRAUDclosure crisis.

A couple of years ago, many would have said that my use of the word “fraud” before “closure,” is just hyperbole.  Today, however, anyone voicing that sort of opinion is selling something.  Even a cursory review of last year’s scathing “consent orders,” that federal regulators issued after months spent investigating mortgage servicers… or a quick perusal of the complaints filed against the servicers by attorneys general in Massachusetts, Nevada, Maryland, or Arizona… or by reading any number of published court decisions favoring homeowners… and one can only conclude that use of the word “fraud” is, if anything, understatement.

Additionally, this past year has been a turning point for the general public as far as FRAUDclosures are concerned.  Television’s most venerable news magazine, “60 Minutes,” along with newspaper-of-record, “The New York Times,” joined a long list of others documenting the many ways that banks and mortgage servicers are routinely breaking numerous laws in order to take advantage of homeowners in foreclosure.  It’s now widely understood to be something that’s occurring all over the country, and even though the banking industry continues to try to dismiss publicized instances as insignificant dalliances or “isolated incidents,” their sheer number has made such attempts laughable.  And the levels of wholesale anger and dissatisfaction with government felt among the populace are both palpable and rising fast.

Today, even forecasts from the likes of Goldman Sachs and Amherst Securities peg the number of foreclosures between 10.4 and 14 million by year-end 2014, and those numbers could easily go higher should home prices continue to fall… which they invariably will.  Add those numbers to the millions of foreclosures already water under the bridge, and were talking about a crisis that results in ONE IN FOUR Americans with mortgages losing their homes to foreclosure in the next handful of years.

What I’m describing will unquestionably devastate any hope for recovery in our broader economy for any number of reasons.  For one thing, as banks are forced to recognize their losses incurred on the mortgage-backed securities and CDOs that capitalize their balance sheets, they will become insolvent… and this time many will be forced to fail.  For another, home prices will continue falling pushing more and more homeowners underwater and consumer spending will continue to decline and that will lead to rising unemployment, which will in turn fuel further foreclosures.  And those hopelessly underwater will begin walking away en masse, which will further exacerbate the decline in prices and become impossible to combat.

All of these factors and more will combine to reduce future demand for residential real estate dramatically… perhaps by half, but in addition, with no secondary mortgage market… no ability to securitize debt… even those wanting to buy homes going forward will find credit to be tight and tighter, destroying any potential for recovery in the housing market.

And I’m no longer in a small group of people writing about this deteriorating situation as was the case three plus years ago.  Every day others are waking up to the fact that what we’ve been told about foreclosures to-date by our government and the financial services and related industries, has proven itself to be at best mistaken… at worst misdirection… or, not to put too fine a point on it, outright folderol.

As conservative columnist, Peggy Noonan, has pointed out recently, it’s simply impossible to imagine this sort of future without also seeing social unrest on a scale not seen in this country since at least the 1930s.  Writing recently about the Occupy Wall Street (“OWS”) movement, Noonan echoes my sentiments on the situation to a tee…

“OWS is an expression of American discontent, and others will follow.  Protests and social unrest are particularly likely if people feel they are unfairly losing their homes to support irresponsible, law-breaking institutions that have successfully disregarded the fundamental rules of capitalism and good citizenship.”

The harsh truth is that whatever is done in the future at state or federal levels to mitigate the damage caused by foreclosures, it’s simply too late to prevent our FRAUDclosure crisis from pretty much wiping out our nation’s middle class economy for more than a generation.  As a practical matter, the only real question we face today is how many are wounded and how many are killed… none of us is getting out unscathed.

There should be no question in anyone’s mind… there are only two paths ahead from which to choose.  Both involve fighting a war… but on one path the battle is fought by lawyers in our courts… on the other, by citizens in our streets.

Make no mistake about it… if we are to mitigate any of the  damage being caused, uphold the rule of law, and protect the rights of millions of homeowners… it should be obvious to anyone that WE NEED TENS OF THOUSANDS OF LAWYERS trained in foreclosure defense, loss mitigation and bankruptcy.  And yet, more than four years into the FRAUDclosure crisis, we don’t have anywhere near the number of trained, ethical attorneys required to meet the demand.

We’re all adults here, so let’s not kid ourselves about why that’s the case.  

We all know why we don’t have the lawyers we need to marshall a more effective defense of homeowners engulfed by the FRAUDclosure crisis… it’s because THERE’S NO MONEY IN IT.  Or, at least that’s what lawyers have been told they are supposed to believe.  Not only that, but the message has been that there  shouldn’t be any money in representing homeowners at risk of FRAUDclosure. It’s as if attorneys profiting from representing homeowners at risk of FRAUDclosure is somehow a bad thing.


Don’t you see what’s happened here?  We’ve allowed the banks, and the government that’s been bailing them out, to essentially criminalize the profit potential in representing homeowners at risk of foreclosure… and wonder of wonders, miracles of miracles… here we sit with what appears to be an unsolvable problem.

Consider this… bankers say that they’ve been overwhelmed by the millions of homeowners unexpectedly seeking loan modifications and that’s why applying for a loan modification has been such a nightmare.  But, what about the number of foreclosures occurring in the same time frame?  Haven’t there been an unprecedented and unexpected number of foreclosures too?  So,why is it that the banks have no problems accommodating the millions of unexpected foreclosures, but the millions of unexpected loan modifications represent an unsolvable problem?

It’s simple… because on the foreclosure side of the equation, banks allow lawyers to be profitably compensated for handling foreclosures, and sure enough those law firms have figured out how to handle any number of foreclosures that come down the pike… in fact, the more the merrier, as they say.  On the loan modification side of the house, however, profits are a dirty word… and wouldn’t you know it, the problem is unsolvable.  Why am I not surprised?

Over the TWO YEARS following the Deepwater Horizon disaster, BP spent $21 billion to clean up the Gulf of Mexico.  In the FOUR YEARS since the tsunami of foreclosures began, we’ve spent roughly ten percent of what BP spent cleaning up the Gulf… $2.4 billion… and the vast majority of that amount paid to mortgage servicers… and we’re wondering why the problem can’t be solved?


It’s the biggest financial opportunity for the legal profession


The fact is… there is a HUGE OPPORTUNITY today to build a very profitable legal practice based on the ethical and effective representation of homeowners caught in the FRAUDclosure crisis.

From the very beginning of the mortgage meltdown, banks have tried to make sure that homeowners were not represented by attorneys when trying to save their homes from FRAUDclosure.   The reason is now apparent: Banks knew it was a FRAUDclosure crisis before the rest of us did because they’re the ones who put the FRAUD into FRAUDclosure.  From the earliest days of the crisis, the banks and the Obama Administration have been reinforcing TWO LIES:

  1. Homeowners at risk of foreclosure don’t need lawyers… they can just call their bank directly.  That’s like the police telling someone under arrest that he or she doesn’t need a lawyer because any questions can be answered by the District Attorney.  It’s a damn lie… homeowners DO NEED LAWYERS to help them save their homes because it’s not just a foreclosure crisis, it’s a FRAUDclosure crisis.
  2. A lawyer who charges a homeowner at risk of foreclosure up front… is a “SCAMMER.”  That is not only a LIE, but it’s a lie to achieve two key bank objectives.  One – It stopped many homeowners from seeking legal representation, thus allowing the banks to do whatever they wanted as related to foreclosing on their homes.  Two – It stopped countless attorneys from building a profitable practice based on representing homeowners at risk of foreclosure.

The California Example…

In California, the efforts to stop lawyers from representing homeowners have been more extreme than in any other state.  Here the campaign to malign the legal profession has been driven by legislative committees and supported by the California State Bar Association.  In October 2009, California’s SB 94 created a law that has effectively prevented lawyers from offering to represent homeowners who are seeking to avoid foreclosure through modification of their loans.  Under the guise of “charging up front makes you a scammer,” SB 94 has made it illegal for a lawyer to charge a homeowner an upfront retainer for legal fees.

Quite predictably, the law has made it difficult or even impossible for California homeowners to find quality legal representation related to seeking loan modifications, forcing those at risk of foreclosure who want to be represented by an attorney into either litigation or bankruptcy.  Writing for The New York Times in December 2010, David Streitfeld’s article titled, “Homes at Risk, and No Help from Lawyers,” described the situation in California related to SB 94.

In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time. 

Now they face yet another obstacle: hiring a lawyer.

Sharon Bell, a retiree who lives in Laguna Niguel, southeast of Los Angeles, needs a modification to keep her home. She says she is scared of her bank and its plentiful resources, so much so that she cannot even open its certified letters inquiring where her mortgage payments may be. Yet the half-dozen lawyers she has called have refused to represent her.

“They said they couldn’t help,” said Ms. Bell, 63. “But I’ve got to find help, because I’m dying every day.”

Lawyers throughout California say they have no choice but to reject clients like Ms. Bell because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts.

To make matters worse, SB 94 has recently become controversial.  In late September 2011, Suzan Anderson, who is the supervising trial council of the state bar’s special team on loan modifications, made an unscheduled appearance at the bar’s annual conference, presenting what she purported to be the bar’s new interpretation of SB 94.  Literally hundreds of attorneys and legal scholars disagree, however, and litigation has recently been filed against the bar seeking declaratory relief, so we’ll soon see the courts decide the issue.

The core issue is about when a lawyer who represents a homeowner trying to get their loan modified can be compensated.  The bar claims the law requires an attorney to wait until the very end of the case, however, the actual language contained in SB 94 doesn’t say that… it says lawyers cannot be paid until completing “any and all services (the lawyer) has contracted to perform…” Up until Ms. Anderson’s presentation at the annual meeting, lawyers were dividing services into separate contractual arrangements and accepting payments from homeowners as discreet sets of services were completed.

Regardless of which side of the debate you’re on, the issue highlights how far the banking lobby will push a state legislature and state bar association in an attempt to prevent homeowners from being represented by legal council when trying to to avoid foreclosure, and it should come as absolutely no surprise that SB 94 was born in the state’s Senate Banking Committee, sponsored by Sen. Ron Calderon, who chairs that committee.

Advocates of SB 94 claim that it was needed to stop “scammers” who were preying on homeowners in distress from accepting up-front fees.  As quoted from Streitfeld’s article in The New York Times…

A spokesman for the Mortgage Bankers Association said it simply wanted to protect homeowners from fraud. “Be very careful about anyone who wants you to pay them to help you get a loan modification,” said the spokesman, John Mechem.

The evidence of any sort of army of lawyers-turned-scammers ripping off homeowners has always been thin, and by “thin” I mean nonexistant.  In the two years since the bill became law, the bar has taken some type of disciplinary action related to the representation of homeowners in foreclosure against two dozen lawyers, give or take a few.  In a state with more than 200,000 lawyers and 2 million homeowners in foreclosure, two dozen lawyers disciplined would hardly seem justification for a law that effectively prevents lawyers from helping homeowners get their loans modified.

Last December, Suzan Anderson, who heads up the bar’s task force on loan modifications, told The New York Times…

“I wish the law had worked,” Ms. Anderson said.

It’s also telling that no other state in the country has a law anything like SB 94, in fact, the rest of the states follow the FTC’s Mortgage Assistance Relief Services rule, MARS, which was adopted on January 30, 2011, and it does allow attorneys representing homeowners seeking loan modifications to accept funds in advance into their trust accounts.

The New York Times article also offered the perspective of several California homeowners seeking legal assistance in a post SB 94 world…

Mark Stone, a 56-year-old general contractor in Sierra Madre, feels differently. A few years ago, he got sick with hepatitis C. Unable to work full time, he began to miss mortgage payments. The drugs he was taking left him “a little confused,” he said.

Mr. Stone knew that his condition put him at a disadvantage in negotiations with his bank. So he hired Gregory Royston, a real estate lawyer in Redondo Beach. It took Mr. Royston nearly a year, but he restructured the loan.

 Without the lawyer, Mr. Stone said, “I’d be living under a bridge.
The legal bill, paid in advance, was $3,500. “Worth every penny,” said Mr. Stone, who is now back at work.
“This law,” Mr. Royston said, “took the wrong people out of the game.”

A Bleak Picture in California…

California’s approach to discouraging lawyers from representing homeowners at risk of foreclosure has not served the state or its residents well at all.  California is the “hardest hit” of all 50 states, accounting for one of every five foreclosures in the U.S.  Almost half of California’s homeowners are either underwater or effectively underwater today.  Since 2008, there have been 1.2 million foreclosures statewide, and that number is expected to exceed 2 million by the end of 2012.  And, according to the report published by the California Reinvestment Coalition…

The 2 million foreclosures expected by the end of this year are forecasted to cost the state and its residents $650 billion statewide.

Today, in California alone there are roughly TWO MILLION homeowners in foreclosure.  I don’t know exactly how many we have nationwide, estimates vary, but are in the 5 million range.  I do know that if two million people needed just 10 hours of legal assistance, it would take 20 million man hours.  Assuming a six hour work day and a 260 day work year… that’s just under 13,000 years assuming only one lawyer were involved.  To help two million people, assuming 10 hours each, at best would require more than 10,000 lawyers trained and working efficiently.

How many attorneys do we have  trained and ready to help loans get modified, represent homeowners in foreclosure defense matters and/or in bankruptcy.  Nowhere near 13,000 that’s for sure… in fact, we might not find 1300 either… and many would say the number could be closer to 130, and with the proliferating fraudulent documents… the abuses by servicers… the number of people who are foreclosed on illegally… its become easy to see the disease, and trained ethical lawyers would seem the only cure.

Mandelman out.


We need a literal army of experienced litigators, and Max Gardner’s Bankruptcy Boot Camp has trained close to 900 attorneys to protect the rights of homeowners in foreclosure.  I’ve attended Max’s Boot Camp… I could never recommend it strongly enough… and often do.  But, there’s more than legal training that’s required here… and if we’re going to attract the number of lawyers we need to fight this war…

The Answer is Money…

What Was Your Question?

Ohio’s former Attorney General Marc Dann is a highly experienced foreclosure defense attorney and a graduate of Max Gardner’s Boot Camp. He’s proven in his own successful practice that lawyers have the opportunity to DO GOOD… and DO WELL at the same time by learning the ins and outs of this, unfortunately, very fast growing and specialized field.  And he’s developed a comprehensive training and ongoing support program that allows experienced foreclosure defense attorneys to immediately access new clients and the right clients, improve operations within their firms, and yes… increase their profitability dramatically.

Marc understands our need for an experienced army of foreclosure defense lawyers, but he also understands the reality that lawyers have to make money in order to operate effectively.  In a phrase, a lawyer that can provide effective representation for homeowners at risk of foreclosure today, should not be worried about losing his or her own home to foreclosure because that benefits no one.

So, Marc has developed and employed best practices in building his own successful foreclosure defense practice, and now he’s teaching other attorneys how to make money in foreclosure defense so that ultimately he will have provided countless thousands of homeowners all over the country with access to highly capable, ethical and experienced attorneys.

Marc Dann’s LAW PROFITS program will take experienced and effective attorneys committed to foreclosure defense and protecting the rights of homeowners, and help transform them into vibrant, profitable firms or individual legal practices.  Some of the innovative solutions Marc will be delivering include:

  • How to cut through the noise created by scammers, reaching out to homeowners in a very honest and compelling way.
  • When and how to sue the bad modification company or bad lawyer.
  • Suing the foreclosure mills for fun and profits.
  • Using Fair Debt Collection Practices and State Consumer Protection.
  • Learn about the new practices available under Dodd Frank.
  • Harnessing TILA and RESPA inside and outside bankruptcy court.
  • Unconventional approaches stay one step ahead of servicer practices.
  • Billing structures, methodologies, and practice accounting.
  • Designing compensation programs that balance the needs of homeowners with the needs of your firm.  
  • Never lose clients – Ongoing communications program that’s turn-key and educates clients so they become fans.
  • Fee agreements – for contingency and hourly clients.
  • Become part of a highly visible network of top foreclosure defense attorneys, and strategic partners.
  • Communications strategies and tactics proven effective and unavailable anywhere else.

Making little or no money in foreclosure defense isn’t doing your clients any favors because you cannot be your best without it.  Marc Dann’s LAW PROFITS is not a pot of gold, or a winning lottery ticket, but it is a proven process and suite of best practices that makes a law practice profitable… essentially immediately.  It’s work, no question about it, but it’s important and gratifying work.

I wholeheartedly support Mar’c Dann’s LAW PROFITS initiative.  And I strongly urge all of the lawyers reading this to take action now by clicking the link below, so you can find out more about what his LAW PROFITS program for foreclosure defense and bankruptcy lawyers can do for you and your firm.  The FRAUDclosure crisis and its ancillary topics, I’m sorry to say, are going to be with us for a long time… a decade plus, if we’re lucky.  Longer if we’re not.  It’s time to settle in and start capitalizing on being one of the best at solving on of the worst case scenarios.

Click below to find out more about…

Marc Dann’s


Damages From Mortgage Servicer’sPractices

Chapter 11 Suit for Damages From Mortgage Servicer’sPractices
Michael P. Malakoff has been a member of Malakoff, Doyle & Finberg, P.C. (or its predecessors) in Pittsburgh since 1971, where he specializes in class action litigation. A 1970graduate of the University of Pittsburgh Law School, he is a charter member and former Chairman of the Allegheny County Antitrust and Class Action Committee. Mr. Malakoff hasserved on the faculty and as a lecturer on class action programs sponsored by the American Bar Association, American Trial Lawyers Association, Practicing Law Institute, Pennsylvania Bar Institute, New York Academy of Trial Lawyers, and the Allegheny County Bar Association. Heserves as a member of the Advisory Boards of the RICO Law Reporter and the Class Action LawReporter. He is also a NACA Charter Board Member and Chairman of the NACA IssuesCommittee.Section 11.1 is an amended complaint against a mortgage originator and the purchasers of its mortgages and successors to its mortgage originating and servicing business. The claimsasserted in the Amended Complaint are based on five alleged practices:First, the homeowners allege that the mortgage originator and owners improperly chargedloan advances to the homeowners’ outstanding balances where the accounts were not actually inarrears. According to the homeowners, the mortgages assessed periodic bill charges that weretoo low to cover homeowners’ property taxes, insurance, water or sewage charges. They thenadded loan advances to homeowners’ outstanding balances to cover the shortfall, without notice.Second, the homeowners allege that the mortgage holders improperly placed into escrow periodic bill payments belonging to mortgagors whose mortgages required use of thecapitalization method for applying the periodic bill payments. According to the homeowners,the homeowners were entitled to the capitalization method applying periodic bill payments,under which they receive the effect of lowering the interest which accrued annually on theunpaid balance.Third, the homeowners allege that the mortgage holders improperly charged interest onloan advances from the first of each month for loan advances made later in the month.Fourth, the homeowners allege that the mortgage holders improperly delayed paymentuntil March of 1996 on escrow interest that accrued during 1995 that they were entitled toreceive by year end 1995.Fifth, the homeowners allege that the mortgage holders improperly sent annualstatements on or after April 8, 1987 that implied that a prior mortgage owner was the currentmortgage owner. The homeowners allege that the new mortgage owner’s acquisition of mortgages was deceptively concealed from homeowners.The practices were alleged to involve breach of contract, unfair and deceptive acts and practices, tortious interference with contract, and breach of fiduciary duty.
One of the very interesting opinions issued by the court in the case on which the pleadings in this chapter are based was an opinion denying defendants’ motion to dismiss andsustaining the homeowners’ claims that a document
under seal
was subject to a 20 year statute of limitations in Pennsylvania. This case, although it only included 144 homeowners, was thesubject of very, very extensive litigation.Section 11.2 is the homeowners’ interrogatories to the mortgage servicer about its practices and employees involved and section 11.3 are interrogatories designed to obtaininformation needed for certification of the class action. Sections 11.4 and 11.5 are motions to produce documents directed to the mortgage servicer and the mortgage owner.Section 11.6 is the homeowner’s memorandum of law opposing the motion to dismissfiled by the mortgage servicer. The memorandum argues that the complaint states a claim, thatthe claims were not released in a prior class action against the servicer, and that the claims arenot time barred because they were subject to state 20 year limitation period for documents under seal. The motion to dismiss was denied.
 Section 11.7 is the homeowner’s memorandum of law opposing the motion to dismissfiled by the transferee of the ownership of the mortgage. The memorandum argues that thetransferee was not a government instrumentality entitled to governmental immunity, had engagedin unfair and deceptive acts and practices violating state law, and had violated its obligations as atrustee under the mortgage. This motion to dismiss was granted
.Finally, the parties’ joint settlement motion (§11.8) with attached settlement agreement(§11.9), class notice (§11.10), and proposed order (11.11) are included in the materials. The proposed settlement established a settlement fund of $235,000 and provided that it would bedistributed pro rata to the class members after deducting attorney fees of 30%, costs up to $7000,costs of distribution, and a $2500 incentive payment to the named plaintiffs. The settlement was pending before the court at press time.
[Plaintiff] v. Standard Mortgage Corp
., 1999 U.S. Dist. LEXIS 15787 (W.D. Pa. 1999).
[Plaintiff] v. Standard Mortgage Corp
., 129 F.Supp.2d 793 (W.D. Pa. 2000) (Defendant Freddie Macdismissed as not liable for acts of its mortgage servicers).
11.1 Amended Class Action Complaint
, his wife,individually and on behalf of allothers similarly situated,Plaintiffs,v.
, and
, and
Defendants.)))))))))))))))Civil Action No.:
 1. This class action is brought on behalf of certain Pennsylvania mortgagorswhose mortgage agreements were originated with or acquired by Community SavingsAssociation (“Community”). Plaintiffs assert claims against Defendant Standard MortgageCorporation of Georgia (“Standard”), which services the mortgages, and Defendants FederalHome Loan Mortgage Corporation (“Freddie Mac”) and Three Rivers Bank & Trust Company(“Three Rivers Bank”), which own or owned the mortgages. The claims are based on wrongfulactions engaged in by Defendants Standard, Freddie Mac, and Three Rivers Bank and byCommunity and South View Savings and Loan Association (“South View”), the Defendants’ predecessors in interest.2. The putative class is defined as all Pennsylvania mortgagors who enteredinto mortgage agreements that originated with or were acquired by Community (“CommunityMortgagors”, and who were subject to one or more of the following practices engaged in by theDefendants, Community, and/or South View: (1) charging the mortgagor for a loan advance usedto pay a tax, insurance, water, or sewage bill (the “bills”, unless the mortgagor’s monthly payments, as in fact billed, were in arrears; (2) charging the mortgagor interest on a loan advancefor time that preceded the disbursement of the loan advance; (3) failing to pay the mortgagor,until March, 1996, for escrow interest that had accrued during calendar year 1995; (4) sendingthe mortgagor an annual statement on or after April of 1987 that listed Community as themortgage owner; and/or (5) placing payments made by a mortgagor whose mortgage originatedwith South View in an escrow account.
3. This Court has jurisdiction over the claims and parties pursuant to theEmergency Home Finance Act of 1970, 12 U.S.C. § 1452(e), and 28 U.S.C. § 1367(a). Standardalso claims, in its notice of removal, that this Court has jurisdiction under 28 U.S.C. § 1332.
4. Plaintiffs, [First Plaintiff] and [Second Plaintiff] (“[First and SecondPlaintiffs]”, are adult individuals who have resided at all relevant times at [Plaintiff’s Address].They had a mortgage relationship with South View until about December, 1983 and thereafter with Community until April 1987 and thereafter with Freddie Mac until they prepaid their mortgage in full in September, 1998.5. South View Savings and Loan Association (“South View”) was aPennsylvania Corporation from March 1974 through late 1983, when it consolidated withCommunity. It is no longer registered as a Pennsylvania Corporation, and its last known addresswas P.O. Box 51 South, Pittsburgh, Pennsylvania 15236.6. Community Savings Association (“Community”) was a Pennsylvaniacorporation, with its principal place of business at 2681 Mosside Boulevard, Monroeville,Pennsylvania 15136, until July 18, 1997, when it consolidated with Three Rivers Bank & TrustCompany.7. Defendant, Federal Home Loan Mortgage Corporation (“Freddie Mac”) isa federal instrumentality created under the Emergency Home Finance Act of 1970, 12 U.S.C.1452(a). In 1987, it acquired Community mortgages, including the [First and Second Plaintiffs’]mortgage. As a successor in interest on the mortgages it acquired, Freddie Mac is liable for Community’s wrongful conduct, as alleged in this Amended Complaint. To the extent thatFreddie Mac acquired mortgages originated with South View, it is liable as a successor ininterest for South View’s wrongful conduct, as alleged in this Amended Complaint.
 8. Defendant, Three Rivers Bank & Trust Company (“Three Rivers Bank”),is a Pennsylvania corporation registered to do business at Route 51 South, Jefferson Borough,Pennsylvania 15236, into which Community was consolidated in 1997. It is liable as a successor in interest for Community’s wrongful conduct, as alleged in this Amended Complaint. SinceCommunity was a successor in interest to South View, Three Rivers Bank is also liable as asuccessor in interest for South View’s wrongful conduct, as alleged in this Amended Complaint.9. Defendant, Standard Mortgage Corporation of Georgia (“Standard”), is aGeorgia corporation licensed to do business in Pennsylvania. It began servicing Community andFreddie Mac mortgages in 1994, pursuant to a service contract dated November 15, 1994. As the
This defendant, commonly referred to as Freddie Mac was dismissed from the action on the legal finding that itwas not responsible for the acts of its mortgage servicers
. [Plaintiff] v. Standard Mortgage Corp
., 129 F.Supp.2d793 (W.D. Pa. 2000).

Plaintiff’s Brief in Opposition to First Defendant’s Motion to Dismiss PL01_C11

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more debt than money

Something More Dangerous Than Debt Is Crushing America
August 23, 2011 | From

The deadly deficit in economic education By Robert Morley

Over the weekend I heard a radio program discussing what should be done to fix the economy. It proved that America cannot be fixed before it collapses.

The interviewer asked random individuals what they thought the government should do to fix the economy. Every single person was of the opinion that the government needed to stimulate the economy with more spending. More frustratingly, many people said that consumers in general needed to be more patriotic and spend a greater portion of their paycheck to help the economy recover.

Strong delusion intoxicates America. I have never heard so many people sound so dogmatically self-righteous in their opinion that more spending—government and private—would fix things.

The argument was that if everyone just started spending more money, then more jobs would be created and America’s economic problems would be solved.

Sounds deceptively logical.

Gary Burtless, a former Labor Department economist, articulates: “We want to spend money. We want to create demand for businesses so that they want to add to their payroll” (emphasis added).

Ah. But there are two types of demand. There is the good consumer demand, powered by savings—and the other kind, driven by deficit spending. One is sustainable. The other causes bubbles, and ultimately bankruptcy.

In case there is any question, America is expert at the latter. And a blowup is looming.

Yet most Americans remain clueless. Burtless says the government should take advantage of its borrowing ability to stimulate the economy. “The world is willing to buy government debt, and the government—if it’s willing to spend this money—can create additional demand to put people to work,” he says.

What Burtless conveniently doesn’t say is what happens after the government has spent all its borrowed money. Or what happens when already-debt-saturated consumers further indebt themselves.

What lasting benefit will America receive for indenturing its taxpayers? Will repaving America’s roads make America that much more efficient? Will shinier Chinese-made bridges increase our productivity? Will the latest iPhone make workers more proficient (or, actually, more distracted)?

In reality, once the money is spent, America will just be back to where it began—only with a lot more debt.

In other words, America will be worse off.

The problem is that today, America is already worse off. Deficit spending has been America’s modus operandi for decades.

Remember the savings and loan crisis? The solution: Borrow money to throw at it. Dot-com bust? Borrow and spend more money. Housing bubble pops and banking sector fails? Borrow and spend even more.

Why is it so hard to connect the dots? The supposed solution is the cause.

The truth is that there is no easy way out of America’s predicament. America has spent tomorrow’s money. It has spent next week’s and next year’s money. It has spent its grandchildren’s money too. It has spent money it does not have and never will have.

In addition to the money America has stolen from its own children, it has also spent a couple trillion worth of China’s money. It has squandered several hundred billion worth of Japan’s. Saudi Arabia’s billions are long gone, as is the money America borrowed from Mexico.

Yes, Mexico—America has been reduced to borrowing tens of billions from a country that many Americans consider its poor, underdeveloped neighbor. America borrows tens of billions from Thailand too. And billions from Malaysia.

And it has done this all in a vain effort to prop up an economy that is founded on over-consumption and debt—the opposite of what a stable economy should be founded on.

America has forgotten that it is hard work and savings—not deficit spending—that makes an economy successful. It is savings that drives investment. Savings drives growth. Savings makes prosperity possible.

Just look where the decades of deficit spending have gotten us.

America’s default on the gold standard in 1971 was a fulcrum in U.S. economics. America had been trending as a nation of savers and producers. This country was literally the world’s marketplace, dominating global trade and manufacturing. America was an established net lender, lending other nations far more money than it borrowed. And America’s middle class? The largest and richest in history. Employers couldn’t get enough workers. A short decade and a half after the end of the gold standard, the wealthiest, most powerful country on Earth was reduced to a net debtor.

But look at America now.

The world’s richest nation now finds itself in the ignominious position of the world’s largest debtor. The jobs are gone. Debt payments are draining the life out of the economy. And the dollar, which used to be “good as gold,” is now a debased and increasingly discredited currency.

Meanwhile, the “patriotic” consumer ignorantly continues the impossible task of spending his way to prosperity.

America is about to be crushed. Not just by debt, but by its ignorance. There are both economic and moral laws that when upheld result in prosperity—and America is breaking them all.

Securitization Crisis

The subject of securitized loans has been slowly but surely surfacing as time has passed.  At first, the area seemed very complex and often confusing – even to the trustees conducting foreclosures or the judges who were ruling on them. Nobody was completely certain of what the full implications or impact would be on the American homeowner, and many thought that it was just a “ploy by homeowners” to get out of making mortgage payments.

However, as time has passed and experts have researched the area as well as tried and won cases in court, the full impact is beginning to be realized.  It sums up as this:  Millions upon millions of homeowners could be illegally foreclosed upon, thousands upon thousands already have been.

In essence, since the real estate bubble burst, and lenders have been dealing with the fallout they created by issuing predatory loans, they have been guilty of foreclosure fraud. They’ve been presenting themselves as the rightful owners of the loans they are foreclosing on (often through their self-created agent, MERS). They are not.

The lenders created mortgage backed securities (MBS) by a complex process of turning mortgage loans into stocks that could be traded on the stock market. However, they didn’t do it right.  They lost the actual ownership rights to the note, they let the deed get separated from the note, and very often they set up the trusts that would hold these mortgages for maximum IRS tax benefit, which caused the trust to literally have no owners of the notes they contained. They created MERS (Mortgage Electronic Registration System) to operate as a “fast and efficient” registry and agent and thereby avoid the cost and time to properly record these legally required documents at the county.

Foreign and domestic investors (banks, large companies, hedge funds, etc.) all bought into these “Mortgage backed Securities.”  And they bought heavily, including the US Government.
Today, most homeowners’ notes are not owned by the investor who claims to own it.  The servicer who operates to collect your payment and/or foreclose on you has no right to do so, and MERS is getting more and more supreme courts ruling against their self-imposed right to operate as an agent.

And of course the state governments, congress and even the Securities and Exchange Commission are all busy investigating and demanding answers from the banks. Class action lawsuits abound, and homeowners everywhere are still displaced through wrongful foreclosure – despite all the bank’s illegalities.

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