...[T]he issue before the Court is the distribution of $490,000.00, deposited by defendant BUTLER with the Kings County Clerk, pursuant to my June 27, 2011 order authorizing the sale of the premises. This money is claimed by both CHASE and BUTLER. However, CHASE never owned the subject mortgage and note, despite asserting for almost two years that it did, and BUTLER never paid the balance due.
After numerous misrepresentations to the Court by various counsel for CHASE, it is clear that the actual BUTLER mortgage and note, given in 2007 by the defunct WASHINGTON MUTUAL BANK, FA [WAMU], was acquired in 2007 by the FEDERAL NATIONAL MORTGAGE ASSOCIATION [FANNIE MAE] from WAMU. Despite CHASE'S claims, before December 2011, to the Special Referee and the Court that it owned the subject mortgage and note, plaintiff CHASE only purchased the servicing rights to the subject mortgage and note from the FEDERAL DEPOSIT INSURANCE CORPORATION [FDIC] in September 2008, when WAMU was seized by the FDIC.
Plaintiff CHASE, as will be explained, never owned the subject BUTLER mortgage and note.
Therefore, CHASE had no right to foreclose on the subject mortgage and note.
Moreover, the continued subterfuge by CHASE and its counsel to the Special Referee and Court that it owned the subject BUTLER mortgage and note demonstrated "bad faith" in violation of CPLR Rule 3408 (f), which requires that "[b]oth the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible."
Researcher JusticefactorX: Because so many cases are alleged to be illegal because the claim is that the lender does not own or hold the "note" to the property, it is difficult to tell in judicial foreclosure states what happened prior to the ruling, if we have not seen the entire case from the beginning. In California many cases do not require the "banks" which foreclose, to prove they have the original note. Because CA is non judicial foreclosure, banks have resorted to simply making copies of purported notes from what we have seen and or read. For example, Wells Fargo may assert it obtained a beneficial interest in a property from Option One, but what beneficial interest was it? We have seen judges simply ignore that and claim the banks have colorable interest for standing to assert legal interest. Fact that such "claim" is not actually based on anything other than bank's assertion is pretty common. Not saying it's right, just that it is common.