Garfield Wrong – Jesinoski Loses

Neil Garfield Wrong – Jesinoski Loses, Big Time

Jesinoski v. Countrywide Home Loans, Inc., 134 S. Ct. 1935 – Supreme Court 2014

JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016

Neil Garfield and his minions and fellow incompetent “Lawyers who get it” across America have ballyhooed the January 2015 SCOTUS decision that Larry and Cheryle Jesinoski did not have to sue for TILA rescission within the 3 year period of repose after loan consummation for violation of the Truth In Lending Act by failing to give the necessary disclosures of the right to rescind. Well, the case went back to the US 8th Circuit Court of Appeals and thence back to the Minnesota District Court for trial of the question of rescission for the Jesinoskis.

A few days ago Judge Donovan Frank issued the below Order dashing Jesinoskis’ ill-founded hopes. The order granted summary judgment to the creditor because Jesinoskis had signed an acknowledgment of receipt of the disclosures, and because they did not have the money to tender as required by TILA for a rescission. It also denied statutory damages because no TILA violations occurred, even thought Jesinoskis claimed they spent $800,000, mostly in lawyer fees, prosecuting their case all the way up to the US Supreme Court and back.

It looks to me like they stupidly heeded some nonsense Garfield or one of his foreclosure pretense defense attorney buddies “who get it” had written. Ever since the 2015 SCOTUS Jesinoski opinon, Garfield has insisted that every mortgage loan borrower should send a notice of TILA rescission to the creditor. He has insisted that the creditor must terminate the lien immediately upon receipt of notice of rescission, AND tender return of what the borrower paid. The Jesinoski opinion shows with crystal clarity why Garfield was dead wrong – many borrowers have no just reason to rescind, and creditors would be idiots to go through the rescission trouble without just cause.


WARNING to Home Loan Borrowers:

Listen to foreclosure pretense defense lawyers at your peril.  Most will not diligently look for injuries you have suffered in your loan (TILA violations is one kind, but many other kinds are typical), and most litigate ONLY to delay the ultimate loss of your home.  Both delay and non-diligence violate bar rules, so you should file a bar complaint against your attorney if he did that.  And you should get a competent professional to examine your loan transaction comprehensively to dig out the valid causes of action you have against the appraiser, mortgage broker, loan officer, title company, lender, servicer, creditor, or other scalawag involved in your loan process.  The mortgage exam will give you the evidence of your injuries to show the judge, AND it will give you the basis for suing your incompetent, negligent, scamming attorney for legal malpractice.

Note to Borrowers Hoping for a Favorable Yvanova Decision


Yvanova v. New Century Mortgage Corp., 365 P. 3d 845 – Cal: Supreme Court 2016

Forget about it.  The California Supreme Court ruled in the Yvanova case that the borrower has the right to challenge the right of a creditor to foreclose a loan that the borrower breached. Yvanova had lost her house to foreclosure, and sued for wrongful foreclosure because New Century, instead of its bankruptcy liquidation trustee, sold Yvanova’s loan to a securitization trust sponsor.  Yvanova claimed New Century did not have the right to do that.  Now her case heads back to trial court like Jesinoskis’ did.  She will get a similar result.  After she has blown all that money of her husband’s on pointless litigation, probably at Garfield’s urging, she will now learn the hard way that the foreclosure was legitimate because she has no right to challenge the validity of New Century’s sale of her loan because she was not a party to it, did not get injured by it, and had no beneficial interest in it.  She has told me that I don’t understand her case.  Oh, yes I do.  And she will lose it.

TRENDING:  Creditors make Foreclosed Borrowers Pay Legal Fees

I have seen several cases recently where the foreclosing creditor has asked the court to award legal fees, which the borrower must pay, for litigation related to the foreclosure.  Most borrowers do not put up a fight.  But look at the Jesinoski and Yvanova cases.  They have dragged on for years, stupidly.  Creditors have grown sick and tired of the frivolous efforts by borrowers to challenge righteous foreclosures.  Jesinoski said he spent nearly $800,000 on his legal fees.  I imagine he padded the bill, but I imagine the creditor padded theirs even more.  Maybe they will ask the court to award legal fees and costs.  In my opinion, they should.

I shudder to contemplate the damage Neil Garfield has done to borrowers across America by encouraging them to fight pointless battles (hiring him as a consultant or attorney, of course) to defeat foreclosure.  You cannot win with his ridiculous methods.

If you want to win, and I mean win MONEY or its equivalent, get your mortgage examined (call me for a recommendation), and go on the attack.
Get more info at

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JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016

Larry D. Jesinoski and Cheryle Jesinoski, individuals, Plaintiffs,
Countrywide Home Loans, Inc., d/b/a America’s Wholesale Lender, subsidiary of Bank of America N.A.; BAC Home Loans Servicing, LP, a subsidiary of Bank of America, N.A., a Texas Limited Partnership f/k/a Countrywide Home Loans Servicing, LP; Mortgage Electronic Registration Systems, Inc., a Delaware Corporation; and John and Jane Does 1-10, Defendants.

Civil No. 11-474 (DWF/FLN).United States District Court, D. Minnesota.

July 21, 2016.Larry D. Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Cheryle Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Countrywide Home Loans, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

BAC Home Loans Servicing, LP, Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

Mortgage Electronic Registration Systems, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.


DONOVAN W. FRANK, District Judge.


This matter is before the Court on a Motion for Summary Judgment brought by Defendants Countrywide Home Loans, Inc. (“Countrywide”), Bank of America, N.A. (“BANA”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (together, “Defendants”) (Doc. No. 51).[1] For the reasons set forth below, the Court grants Defendants’ motion.


I. Factual Background

This “Factual Background” section reiterates, in large part, the “Background” section included in the Court’s April 19, 2012 Memorandum Opinion and Order. (Doc. No. 23.)

On February 23, 2007, Plaintiffs Larry Jesinoski and Cheryle Jesinoski (collectively, “Plaintiffs”) refinanced their home in Eagan, Minnesota, by borrowing $611,000 from Countrywide, a predecessor-in-interest of BANA. (Doc. No. 7 (“Am. Compl.”) ¶¶ 7, 15, 16, 17; Doc. No. 55 (“Hanson Decl.”) ¶ 5, Ex. D (“L. Jesinoski Dep.”) at 125.) MERS also gained a mortgage interest in the property. (Am. Compl. ¶ 25.) Plaintiffs used the loan to pay off existing loan obligations on the property and other consumer debts. (L. Jesinoski Dep. at 114-15; Hanson Decl. ¶ 6, Ex. E (“C. Jesinoski Dep.”) at 49-50; Am. Compl. ¶ 22.)[2] The refinancing included an interest-only, adjustable-rate note. (L. Jesinoski Dep. at 137.) Plaintiffs wanted these terms because they intended to sell the property. (L. Jesinoski Dep. at 125-26, 137; C. Jesinoski Dep. at 38, 46-7.)

At the closing on February 23, 2007, Plaintiffs received and executed a Truth in Lending Act (“TILA”) Disclosure Statement and the Notice of Right to Cancel. (Doc. No. 56 (Jenkins Decl.) ¶¶ 5, 6, Exs. C & D; L. Jesinoski Dep. at 61, 67, 159; C. Jesinoski Dep. at 30-33; Hanson Decl. ¶¶ 2-3, Exs. A & B.) By signing the Notice of Right to Cancel, each Plaintiff acknowledged the “receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D.) Per the Notice of Right to Cancel, Plaintiffs had until midnight on February 27, 2007, to rescind. (Id.) Plaintiffs did not exercise their right to cancel, and the loan funded.

In February 2010, Plaintiffs paid $3,000 to a company named Modify My Loan USA to help them modify the loan. (L. Jesinoski Dep. at 79-81; C. Jesinoski Dep. at 94-95.) The company turned out to be a scam, and Plaintiffs lost $3,000. (L. Jesinoski Dep. at 79-81.) Plaintiffs then sought modification assistance from Mark Heinzman of Financial Integrity, who originally referred Plaintiffs to Modify My Loan USA. (Id. at 86.) Plaintiffs contend that Heinzman reviewed their loan file and told them that certain disclosure statements were missing from the closing documents, which entitled Plaintiffs to rescind the loan. (Id. at 88-91.)[3] Since then, and in connection with this litigation, Heinzman submitted a declaration stating that he has no documents relating to Plaintiffs and does not recall Plaintiffs’ file. (Hanson Decl. ¶ 4, Ex. C (“Heinzman Decl.”) ¶ 4.)[4]

On February 23, 2010, Plaintiffs purported to rescind the loan by mailing a letter to “all known parties in interest.” (Am. Compl. ¶ 30; L. Jesinoski Dep., Ex. 8.) On March 16, 2010, BANA denied Plaintiffs’ request to rescind because Plaintiffs had been provided the required disclosures, as evidenced by the acknowledgments Plaintiffs signed. (Am. Compl. ¶ 32; L. Jesinoski Dep., Ex. 9.)

II. Procedural Background

On February 24, 2011, Plaintiffs filed the present action. (Doc. No. 1.) By agreement of the parties, Plaintiffs filed their Amended Complaint, in which Plaintiffs assert four causes of action: Count 1—Truth in Lending Act, 15 U.S.C. § 1601, et seq.; Count 2—Rescission of Security Interest; Count 3—Servicing a Mortgage Loan in Violation of Standards of Conduct, Minn. Stat. § 58.13; and Count 4—Plaintiffs’ Cause of Action under Minn. Stat. § 8.31. At the heart of all of Plaintiffs’ claims is their request that the Court declare the mortgage transaction rescinded and order statutory damages related to Defendants’ purported failure to rescind.

Plaintiffs do not dispute that they had an opportunity to review the loan documents before closing. (L. Jesinoski Dep. at 152-58; C. Jesinoski Dep. at 56.) Although Plaintiffs each admit to signing the acknowledgement of receipt of two copies of the Notice of Right to Cancel, they now contend that they did not each receive the correct number of copies as required by TILA’s implementing regulation, Regulation Z. (Am. Compl. ¶ 47 (citing C.F.R. §§ 226.17(b) & (d), 226.23(b)).)

Earlier in this litigation, Defendants moved for judgment on the pleadings based on TILA’s three-year statute of repose. In April 2012, the Court issued an order granting Defendants’ motion, finding that TILA required a plaintiff to file a lawsuit within the 3-year repose period, and that Plaintiffs had filed this lawsuit outside of that period. (Doc. No. 23 at 6.) The Eighth Circuit affirmed. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013). The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period.Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants now move for summary judgment.


I. Summary Judgment Standard

Summary judgment is appropriate if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Weitz Co. v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). A party opposing a properly supported motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).


Defendants move for summary judgment with respect to Plaintiffs’ claims, all of which stem from Defendants’ alleged violation of TILA—namely, failing to give Plaintiffs the required number of disclosures and rescission notices at the closing.

The purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit . . .” 15 U.S.C. § 1601(a). In transactions, like the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The three-day rescission period begins upon the consummation of the transaction or the delivery of the required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required disclosures must be made to “each consumer whose ownership interest is or will be subject to the security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. § 226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3).

If a consumer acknowledges in writing that he or she received a required disclosure or notice, a rebuttable presumption of delivery is created:

Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof.

15 U.S.C. §1635(c).

A. Number of Disclosure Statements

Plaintiffs claim that Defendants violated TILA by failing to provide them with a sufficient number of copies of the right to rescind and the disclosure statement at the closing of the loan. (Am. Compl. ¶ 47.) Defendants assert that Plaintiffs’ claims (both TILA and derivative state-law claims) fail as a matter of law because Plaintiffs signed an express acknowledgement that they received all required disclosures at closing, and they cannot rebut the legally controlling presumption of proper delivery of those disclosures.

It is undisputed that at the closing, each Plaintiff signed an acknowledgement that each received two copies of the Notice of Right to Cancel. Plaintiffs argue, however, that no presumption of proper delivery is created here because Plaintiffs acknowledged the receipt of two copies total, not the required four (two for each of the Plaintiffs). In particular, both Larry Jesinoski and Cheryle Jesinoski assert that they “read the acknowledgment . . . to mean that both” Larry and Cheryle “acknowledge receiving two notices total, not four.” (Doc. No. 60 (“L. Jesinoski Decl.”) ¶ 3; Doc. No. 61 (“C. Jesinoski Decl.”) ¶ 3.) Thus, Plaintiffs argue that they read the word “each” to mean “together,” and therefore that they collectively acknowledged the receipt of only two copies.

The Court finds this argument unavailing. The language in the Notice is unambiguous and clearly states that “[t]he undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D (italics added).) Plaintiffs’ asserted interpretation is inconsistent with the language of the acknowledgment. The Court instead finds that this acknowledgement gives rise to a rebuttable presumption of proper delivery of two copies of the notice to each Plaintiff. See, e.g., Kieran v. Home Cap., Inc., Civ. No. 10-4418, 2015 WL 5123258, at *1, 3 (D. Minn. Sept. 1, 2015) (finding the creation of a rebuttable presumption of proper delivery where each borrower signed an acknowledgment stating that they each received a copy of the disclosure statement—”each of [t]he undersigned acknowledge receipt of a complete copy of this disclosure”).[5]

The only evidence provided by Plaintiffs to rebut the presumption of receipt is their testimony that they did not receive the correct number of documents. As noted inKieran, this Court has consistently held that statements merely contradicting a prior signature are insufficient to overcome the presumption. Kieran, 2015 WL 5123258, at *3-4 (citing Gomez v. Market Home Mortg., LLC, Civ. No. 12-153, 2012 WL 1517260, at *3 (D. Minn. April 30, 2012) (agreeing with “the majority of courts that mere testimony to the contrary is insufficient to rebut the statutory presumption of proper delivery”)); see also Lee, 692 F.3d at 451 (explaining that a notice signed by both borrowers stating “[t]he undersigned each acknowledge receipt of two copies of [notice]” creates “a presumption of delivery that cannot be overcome without specific evidence demonstrating that the borrower did not receive the appropriate number of copies”); Golden v. Town & Country Credit, Civ. No. 02-3627, 2004 WL 229078, at *2 (D. Minn. Feb. 3, 2004) (finding deposition testimony insufficient to overcome presumption); Gaona v. Town & Country Credit, Civ. No. 01-44, 2001 WL 1640100, at *3 (D. Minn. Nov. 20, 2001)) (“[A]n allegation that the notices are now not contained in the closing folder is insufficient to rebut the presumption.”), aff’d in part, rev’d in part, 324 F.3d 1050 (8th Cir. 2003).

Plaintiffs, however, contend that their testimony is sufficient to rebut the presumption and create a factual issue for trial. Plaintiffs rely primarily on the Eighth Circuit’s decision in Bank of North America v. Peterson, 746 F.3d 357, 361 (8th Cir. 2014),cert. granted, judgment vacated, 135 S. Ct. 1153 (2015), and opinion vacated in part, reinstated in part, 782 F.3d 1049 (8th Cir. 2015). In Peterson, the plaintiffs acknowledged that they signed the TILA disclosure and rescission notice at their loan closing, but later submitted affidavit testimony that they had not received their TILA disclosure statements at closing. Peterson, 764 F.3d at 361. The Eighth Circuit determined that this testimony was sufficient to overcome the presumption of proper delivery. Id. The facts of this case, however, are distinguishable from those inPeterson. In particular, the plaintiffs in Peterson testified that at the closing, the agent took the documents after they had signed them and did not give them any copies. Id.Here, it is undisputed that Plaintiffs left with copies of their closing documents. (L. Jesinoski Dep. at 94-95.) In addition, Plaintiffs did not testify unequivocally that they did not each receive two copies of the rescission notice. Instead, they have testified that they do not know what they received. (See, e.g., id. at 161.) Moreover, Cheryle Jesinoski testified that she did not look through the closing documents at the time of closing, and therefore cannot attest to whether the required notices were included. (C. Jesinoski Dep. at 85.)[6]

Based on the evidence in the record, the Court determines that the facts of this case are more line with cases that have found that self-serving assertions of non-delivery do not defeat the presumption. Indeed, the Court agrees with the reasoning in Kieran,which granted summary judgment in favor of defendants under similar facts, and which was decided after the Eighth Circuit issued its decision in Peterson.Accordingly, Plaintiffs have not overcome the rebuttable presumption of proper delivery of TILA notices, and Defendants’ motion for summary judgment is granted as to the Plaintiffs’ TILA claims.

B. Ability to Tender

Defendants also argue that Plaintiffs’ claims fails as a matter of law on a second independent basis—Plaintiffs’ admission that they do not have the present ability to tender the amount of the loan proceeds. Rescission under TILA is conditioned on repayment of the amounts advanced by the lender. See Yamamoto v. Bank of N.Y.,329 F.3d 1167, 1170 (9th Cir. 2003). This Court has concluded that it is appropriate to dismiss rescission claims under TILA at the pleading stage based on a plaintiff’s failure to allege an ability to tender loan proceeds. See, e.g., Franz v. BAC Home Loans Servicing, LP, Civ. No. 10-2025, 2011 WL 846835, at *3 (D. Minn. Mar. 8, 2011); Hintz v. JP Morgan Chase Bank, Civ. No. 10-119, 2010 WL 4220486, at *4 (D. Minn. Oct. 20, 2010). In addition, courts have granted summary judgment in favor of defendants where the evidence shows that a TILA plaintiff cannot demonstrate an ability to tender the amount borrowed. See, e.g., Am. Mortg. Network, Inc. v. Shelton,486 F.3d 815, 822 (4th Cir. 2007) (affirming grant of summary judgment for defendants on TILA rescission claim “given the appellants’ inability to tender payment of the loan amount”); Taylor v. Deutsche Bank Nat’l Trust Co., Civ. No. 10-149, 2010 WL 4103305, at *5 (E.D. Va. Oct. 18, 2010) (granting summary judgment on TILA rescission claim where plaintiff could not show ability to tender funds aside from selling the house “as a last resort”).

Plaintiffs argue that the Supreme Court in Jesinoski eliminated tender as a requirement for rescission under TILA. The Court disagrees. In Jesinoski, the Supreme Court reached the narrow issue of whether Plaintiffs had to file a lawsuit to enforce a rescission under 15 U.S.C. § 1635, or merely deliver a rescission notice, within three years of the loan transaction. Jesinoski, 135 S. Ct. at 792-93. The Supreme Court determined that a borrower need only provide written notice to a lender in order to exercise a right to rescind. Id. The Court discerns nothing in the Supreme Court’s opinion that would override TILA’s tender requirement. Specifically, under 15 U.S.C. § 1635(b), a borrower must at some point tender the loan proceeds to the lender.[7] Plaintiffs testified that they do not presently have the ability to tender back the loan proceeds. (L. Jesinoski Dep. at 54, 202; C. Jesinoski Dep. at 118-119.) Because Plaintiffs have failed to point to evidence creating a genuine issue of fact that they could tender the unpaid balance of the loan in the event the Court granted them rescission, their TILA rescission claim fails as a matter of law on this additional ground.[8]

Plaintiffs argue that if the Court conditions rescission on Plaintiffs’ tender, the amount of tender would be exceeded, and therefore eliminated, by Plaintiffs’ damages. In particular, Plaintiffs claim over $800,000 in damages (namely, attorney fees), and contend that this amount would negate any amount tendered. Plaintiffs, however, have not cited to any legal authority that would allow Plaintiffs to rely on the potential recovery of fees to satisfy their tender obligation. Moreover, Plaintiffs’ argument presumes that they will prevail on their TILA claims, a presumption that this Order forecloses.

C. Damages

Next, Defendants argue that Plaintiffs are not entitled to TILA statutory damages allegedly flowing from Defendants’ decision not to rescind because there was no TILA violation in the first instance. Plaintiffs argue that their damages claim is separate and distinct from their TILA rescission claim.

For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan.

D. State-law Claims

Plaintiffs’ state-law claims under Minn. Stat. § 58.13 and Minnesota’s Private Attorney General statute, Minn. Stat. § 8.31, are derivative of Plaintiffs’ TILA rescission claim. Thus, because Plaintiffs’ TILA claim fails as a matter law, so do their state-law claims.


Based upon the foregoing, IT IS HEREBY ORDERED that:

1. Defendants’ Motion for Summary Judgment (Doc. No. [51]) is GRANTED.

2. Plaintiffs’ Amended Complaint (Doc. No. [7]) is DISMISSED WITH PREJUDICE.


[1] According to Defendants, Countrywide was acquired by BANA in 2008, and became BAC Home Loans Servicing, LP (“BACHLS”), and in July 2011, BACHLS merged with BANA. (Doc. No. 15 at 1 n.1.) Thus, the only two defendants in this case are BANA and MERS.

[2] Larry Jesinoski testified that he had been involved in about a half a dozen mortgage loan closings, at least three of which were refinancing loans, and that he is familiar with the loan closing process. (L. Jesinoski Dep. at 150-51.)

[3] Plaintiffs claim that upon leaving the loan closing they were given a copy of the closing documents, and then brought the documents straight home and placed them in L. Jesinoski’s unlocked file drawer, where they remained until they brought the documents to Heinzman.

[4] At oral argument, counsel for Plaintiffs requested leave to depose Heinzman in the event that the Court views his testimony as determinative. The Court denies the request for two reasons. First, it appears that Plaintiffs had ample opportunity to notice Heinzman’s deposition during the discovery period, but did not do so. Second, Heinzman’s testimony will not affect the outcome of the pending motion, and therefore, the request is moot.

[5] See also, e.g., Lee v. Countrywide Home Loans, Inc., 692 F.3d 442, 451 (6th Cir. 2012) (rebuttable presumption arose where each party signed an acknowledgement of receipt of two copies);Hendricksen v. Countrywide Home Loans, Civ. No. 09-82, 2010 WL 2553589, at *4 (W.D. Va. June 24, 2010) (rebuttable presumption of delivery of two copies of TILA disclosure arose where plaintiffs each signed disclosure stating “[t]he undersigned further acknowledge receipt of a copy of this Disclosure for keeping prior to consummation”).

[6] This case is also distinguishable from Stutzka v. McCarville, 420 F.3d 757, 762 (8th Cir. 2005), a case in which a borrower’s assertion of non-delivery was sufficient to overcome the statutory presumption. In Stutzka, the plaintiffs signed acknowledgements that they received required disclosures but left the closing without any documents. Stutzka, 420 F.3d at 776.

[7] TILA follows a statutorily prescribed sequence of events for rescission that specifically discusses the lender performing before the borrower. See § 1635(b). However, TILA also states that “[t]he procedures prescribed by this subsection shall apply except when otherwise ordered by a court.” Id.Considering the facts of this case, it is entirely appropriate to require Plaintiffs to tender the loan proceeds to Defendants before requiring Defendants to surrender their security interest in the loan.

[8] The Court acknowledges that there is disagreement in the District over whether a borrower asserting a rescission claim must tender, or allege an ability to tender, before seeking rescission. See, e.g. Tacheny v. M&I Marshall & Ilsley Bank, Civ. No. 10-2067, 2011 WL 1657877, at *4 (D. Minn. Apr. 29, 2011) (respectfully disagreeing with courts that have held that, in order to state a claim for rescission under TILA, a borrower must allege a present ability to tender). However, there is no dispute that to effect rescission under § 1635(b), a borrower must tender the loan proceeds. Here, the record demonstrates that Plaintiffs are unable to tender. Therefore, their rescission claim fails on summary judgment.

Fla Court Destroys Garfield Arguments in Maslanka

Zdzislaw Maslanka wrote paid in full on a mortgage payment check, and then sued for quiet title in 2011. He kept his loan payments current, though. He named as defendants his home loan creditor, Wells Fargo, and the loan originator Embrace, who had sold WF the loan soon after closing.  Maslanka didn’t fare well in the litigation, so he hired Neil Garfield to soup up and manage the case, and to show those bumpkins how a real pro handles things.

Garfield half photo

Garfield hosed his client as you will read in the case documents, specifically, the court’s dismissal order to the 3rd amended complaint, the 5th amended complaint, the motions to dismiss it, the order to dismiss it, and the appellate docket. The complaints read like jibberish-filled lunacy.

In short, the creditors’ attorneys rightly called the effort an abuse of the judicial process.  The trial judge dismissed the complaints for failure to state a claim for which the court could grant relief.  In a 12 May 2016 decision, the appellate panel affirmed without comment, and it awarded unconditional attorney fees to the creditors.  Maslanka worries that he will have to pay it.  Maybe he should sue Garfield for it.

See the main case documents zipped here for easy download.  If you prefer more torture, access the rest of the trial docs here.

BozoIn fairness, maybe I’m too harsh on Neil Garfield.  Maybe he did his best for Maslanka, or maybe Maslanka forced him to lodge those inane arguments that I have complained against for years. And maybe Garfield has reformed since he wrote that 5th amended complaint.

But if Garfield did that on his own, he deserves severe discipline by the Florida Bar, in my humble opinion, for he just made Maslanka look like a fool. And that makes Garfield a Bozo in my book.

Mort Gezzam photo
Mort Gezzam


Randy Kelton a known scammer and legal illiterate of Rule of Law Radio infamy, who rips off homeowners by teaching them how to lose their homes, got spanked by the court for using his foolish arguments:  Kelton v. DEUTSCHE BANK NATIONAL TRUST COMPANY, Dist. Court, ND Texas 2014 Kelton v. WELLS FARGO BANK, NA, Dist. Court, ND Texas 2016

Neil Garfield Recommends Mortgage Exam for Troubled Borrowers

In his LivingLies Blog entry of 2016-04-27, Foreclosure Pretender Defender and Kool-Aid Drinker Neil Garfield wrote this, correct for a change:

“… you need a thorough analysis of everything that happened with your alleged loan and a careful examination of the pleadings if you are already in court. We readily understand the reluctance to spend more money on what has been a frustrating experience, but the ONLY way you can select a strategy that will or might get traction is by having an experienced eye do a thorough review and report.”

Garfield FAILS to tell his readers that he and his crew don’t have a clue about doing mortgage examinations.  They only do securitization and forensic loan audits, not full-bore examinations.  And because Garfield has spouted bogus legal theories for years,  THOUSANDS of people have lost their homes to foreclosure by relying upon his advice.

So DON’T rely upon it.  Instead, rely upon the court opinions that I have cited in the Articles section of this site.  They prove nearly everything Garfield promotes is a band-aid, at best.

The ONLY reliable place to get a comprehensive mortgage examination that finds all the ways a borrower got injured in the loan is at Mortgage Attack.

Go to the Contact page in the site menu and explain your situation.  Then submit the form.  The Mortgage Attack Maven will show you exactly how to get a comprehensive mortgage examination AND how to use it for best results.

If you feel time pressure, call 727 669 5511 RIGHT NOW.

Court Opinions Destroy Neil Garfield Bogus Legal Theories

Courts Destroy Garfield’s Bozo Theories

For nearly a year and a half, Neil Garfield has expounded on the meaning of the US Supreme Court’s January 2015 Jesinoski opinion regarding TILA rescission.  By and large, he is dead wrong.  He has encouraged readers of his LivingLies blog to buy his apparently worthless TILA Rescission Package.  He has told readers to submit TILA rescission letters regarding purchase money loans (not qualified for TILA rescission),  He has told them to submit letters years after the expiration of the TILA statute of repose.  And his minions on his blog spread his nonsensical opinions in their comments.  And worst of all, he deletes dissenter postings from his blog and terminates their posting privilege because they post case law showing what an idiot or charlatan Garfield is.

Readers can now read court opinions, collected in one place, that utterly destroy Garfield’s ridiculous and nonsensical TILA rescission theories.

Take some of your valuable time and review the opinions so you will know first hand that Garfield is full of beans, and you won’t fall prey to his bogus legal theories.

Sick and tired of your nonsense, Garfield,

Mort Gezzam photo
Mort Gezzam


Our Mortgage Examiner saw the California Yvanova case as much ado about nothing.  The borrower, Yvanova, sued for wrongful foreclosure because she discovered that the lender New Century Mortgage had, in bankruptcy, wrongfully assigned her note to a securitizer rather than allowing the bankruptcy liquidation trustee do it.  That meant the securitization trust had no rightful ownership of the note and therefore no authority to foreclose.  The California supremes supported her right to challenge the foreclosure for that reason.

Thus, despite expounding on the issues for 30 pages, the Yvanova opinion simply stands for the unremarkable  and largely undisputed proposition that a borrower can sue for wrongful foreclosure where the transaction by which the beneficiary acquired the loan became void from its inception.

The California Supreme Court clarified the only issue before it. The court opined that in a lawsuit for wrongful foreclosure on a deed of trust securing a home loan, the borrower has standing to challenge a creditor’s void assignment of the note and deed of trust to a successor creditor who successfully foreclosed the loan.

The Yvanova case has gone back to trial court to deal with the issue of the impact of the void assignment on the foreclosure.  Tsvetana Yvanova has assured me I don’t understand her case well enough to predict the outcome.  Nevertheless, I have predicted that in the end, the court will uphold the foreclosure sale of Yvanova’s property for failure to pay timely.

Likewise, borrowers’ counsel, and some in the financial industry, have misconstrued the Court’s narrow holding by reading more into it than it contains. They seem to think that the borrower ought to have standing to challenge a defective assignment or a violation of the Pooling and Servicing Agreement, even thought it does not injure or benefit the borrower, andthe borrower never became a party to it.

Recently, California’s 4th District Court of Appeals, in Saterbak v. JPMCB, addressed what the Yvanova courts did not.  It thereby put to rest many of the specious legal theories that borrowers use in an effort to welch on their home loan and get a free house.   Notice from the opinion, which I have shown below, how the Court keeps going back to the language of the contract .

The upshot:

Borrowers can win setoffs, settlements, and damage awards by attacking the contract, NOT by attacking the foreclosure.

Notice key text in bold typeface.

Court of Appeal, Fourth District, Division 1, California.

Laura SATERBAK, Plaintiff and Appellant, v. JPMORGAN CHASE BANK, N.A., as Trustee, etc., Defendant and Respondent.


    Decided: March 16, 2016

Law Offices of Richard L. Antognini and Richard L. Antognini, Lincoln, for Plaintiff and Appellant. Bryan Cave, Glenn J. Plattner and Richard P. Steelman, Jr., Santa Monica, for Defendant and Respondent.

Laura Saterbak appeals a judgment dismissing her first amended complaint (FAC) after the sustaining of a demurrer without leave to amend.  Saterbak claims the assignment of the deed of trust (DOT) to her home by Mortgage Electronic Registration Systems, Inc. (MERS) to Structured Asset Mortgage Investment II Trust 2007–AR7 Mortgage Pass–Through Certificates 2007–AR7 (2007–AR7 trust or Defendant) was invalid.  Arguing the assignment occurred after the closing date for the 2007–AR7 trust, and that the signature on the instrument was forged or robo-signed, she seeks to cancel the assignment and obtain declaratory relief.  We conclude Saterbak lacks standing and affirm the judgment.


In April 2007, Saterbak purchased real property on Mount Helix Drive, La Mesa, California through a grant deed.  She executed a promissory note (Note) in May 2007, in the amount of $1 million, secured by the DOT. The DOT named MERS as the beneficiary, “solely as nominee for Lender and Lender’s successors and assigns.”  It acknowledged MERS had the right “to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property.”

On December 27, 2011, MERS executed an assignment of the DOT to “Citibank, N.A. as Trustee for [2007–AR7 trust].”  The assignment was recorded nearly a year later, on December 17, 2012.  It is this assignment that Saterbak challenges.  The 2007–AR7 trust is a real estate mortgage investment conduit (REMIC) trust;  its terms are set forth in a pooling and servicing agreement (PSA) for the trust, which is governed under New York law.  Pursuant to the PSA, all loans had to be transferred to the 2007–AR7 trust on or before its September 18, 2007, closing date.

Saterbak fell behind on her payments.  On December 17, 2012, Citibank N.A. substituted and appointed National Default Servicing Corporation (NDS) as trustee under the DOT.  The substitution of trustee form was executed by JPMorgan Chase Bank, N.A. (hereafter Chase) as attorney-in-fact for Citibank N.A., trustee for the 2007–AR7 trust.  NDS recorded a notice of default on December 17, 2012.  By that point, Saterbak had fallen $346,113.99 behind in payments.  On March 19, 2013, NDS recorded a notice of trustee’s sale, scheduling a foreclosure sale for April 10, 2013.  By that point, Saterbak owed an estimated $1,600,219.13.1

Saterbak filed suit in January 2014.  She alleged the DOT was transferred to the 2007–AR7 trust four years after the closing date for the security, rendering the assignment invalid.  She further alleged the signature on the assignment document was robo-signed or a forgery.  She sought to cancel the assignment as a “cloud” on her title pursuant to Civil Code 2 section 3412.  She also sought declaratory relief that the same defects rendered the assignment void.

In May 2014, the trial court sustained Chase’s demurrer.  It held Saterbak lacked standing to sue based on alleged noncompliance with the PSA for 2007–AR7 trust because she did not allege she was a party to that agreement.  The court granted Saterbak leave to amend to plead a different theory for cancellation of the DOT.

Saterbak filed the FAC in May 2014.  The FAC asserted the same causes of action for cancellation of the assignment and declaratory relief premised on the same theories of untimely securitization of the DOT and robo-signing.  The FAC claimed it did not “seek to challenge ․ any Foreclosure Proceedings and or Trustee’s Sale.”

Chase demurred and requested judicial notice of the following instruments:  the DOT, the corporate assignment DOT, substitution of trustee, notice of default, and notice of trustee sale.  The trial court granted Chase’s request for judicial notice and sustained its demurrer.  The court held, “Despite the arguments made by Plaintiff, the FAC does, in fact, allege that the assignment is void because the loan was not moved into the securitized trust in a timely manner.”  As it had previously, the court held Saterbak lacked standing to sue based on alleged noncompliance with the PSA, as she was not a party to that agreement.  The court also rejected Saterbak’s robo-signing theory for lack of standing, stating she had not alleged that she “relied” on the assignment or sustained injury from it.  The court denied leave to amend, noting the FAC was Saterbak’s second attempt and concluding there was no possibility she could remedy her standing deficiencies through amendment.

The court entered judgment for Chase in August 2014, and Saterbak timely appealed.


“On appeal from a judgment of dismissal entered after a demurrer has been sustained, this court reviews the complaint de novo to determine whether it states a cause of action.  [Citation.]  We assume the truth of all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.”  (Folgelstrom v. Lamps Plus, Inc. (2011) 195 Cal.App.4th 986, 989–990.)  We may consider matters that are properly judicially noticed.  (Four Star Electric, Inc. v. F & H Construction (1992) 7 Cal.App.4th 1375, 1379.)

“If the trial court has sustained the demurrer, we determine whether the complaint states facts sufficient to state a cause of action.  If the court sustained the demurrer without leave to amend, as here, we must decide whether there is a reasonable possibility the plaintiff could cure the defect with an amendment.  [Citation.]  If we find that an amendment could cure the defect, we conclude that the trial court abused its discretion and we reverse;  if not, no abuse of discretion has occurred.  [Citation.]  The plaintiff has the burden of proving that an amendment would cure the defect.”  (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)

Central to this appeal is whether as a borrower, Saterbak has standing to challenge the assignment of the DOT on grounds that it does not comply with the PSA for the securitized instrument.  For the reasons discussed below, the trial court properly sustained Defendant’s demurrer to the FAC without leave to amend.


A. Saterbak Bears the Burden to Demonstrate Standing

“Standing is a threshold issue, because without it no justiciable controversy exists.”  (Iglesia Evangelica Latina, Inc. v. Southern Pacific Latin American Dist. of the Assemblies of God (2009) 173 Cal.App.4th 420, 445.)  “Standing goes to the existence of a cause of action.”  (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2006) 136 Cal.App.4th 119, 128.)  Pursuant to Code of Civil Procedure section 367, “[e]very action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.”

Saterbak contends the 2007–AR7 trust bears the burden of proving the assignment in question was valid.  This is incorrect.  As the party seeking to cancel the assignment through this action, Saterbak “must be able to demonstrate that ․ she has some such beneficial interest that is concrete and actual, and not conjectural or hypothetical.”  (Holmes v. California Nat. Guard (2001) 90 Cal.App.4th 297, 315.)

Saterbak’s authorities do not suggest otherwise.  She cites Fontenot, but that case actually held “MERS did not bear the burden of proving a valid assignment”—instead, “the burden rested with plaintiff affirmatively to plead facts demonstrating the impropriety.”  (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 270 (Fontenot ), disapproved on other grounds in Yvanova v. New Century Mortgage Corp. 62 Cal.4th 919, 939, fn. 13 (Yvanova ).)  Saterbak also cites Cockerell and Neptune, but those cases merely held that an assignee who files suit to enforce an assigned right bears the burden of proving a valid assignment.  (Cockerell v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284, 292;  Neptune Society Corp. v. Longanecker (1987) 194 Cal.App.3d 1233, 1242.)

B. Saterbak Lacks Standing to Challenge the Assignment

Saterbak alleges the DOT was assigned to the 2007–AR7 trust in an untimely manner under the PSA. Specifically, she contends the assignment was void under the PSA because MERS did not assign the DOT to the 2007–AR7 trust until years after the closing date.  Saterbak also alleges the signature of “Nicole M. Wicks” on the assignment document was forged or robo-signed.

Saterbak lacks standing to pursue these theories.  The crux of Saterbak’s argument is that she may bring a preemptive action to determine whether the 2007–AR7 trust may initiate a nonjudicial foreclosure.  She argues, “If the alleged ‘Lender’ is not the true ‘Lender,’ ” it “has no right to order a foreclosure sale.”  However, California courts do not allow such preemptive suits because they “would result in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature.”  (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513 (Jenkins ), disapproved on other grounds in Yvanova, supra, 62 Cal.4th at p. 939, fn. 13;  see Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1156 (Gomes ) [“California’s nonjudicial foreclosure law does not provide for the filing of a lawsuit to determine whether MERS has been authorized by the holder of the Note to initiate a foreclosure”].)  As the court reasoned in Gomes:

“[The borrower] is not seeking a remedy for misconduct.  He is seeking to impose the additional requirement that MERS demonstrate in court that it is authorized to initiate a foreclosure․  [S]uch a requirement would be inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpensive and efficient remedy.”  (Gomes, supra, at p. 1154, fn. 5.) 3

The California Supreme Court recently held that a borrower has standing to sue for wrongful foreclosure where an alleged defect in the assignment renders the assignment void.  (Yvanova, supra, 62 Cal.4th at pp. 942–943.)  However, Yvanova’s ruling is expressly limited to the post-foreclosure context.  (Id. at pp. 934–935 (“narrow question” under review was whether a borrower seeking remedies for wrongful foreclosure has standing, not whether a borrower could preempt a nonjudicial foreclosure).)  Because Saterbak brings a preforeclosure suit challenging Defendant’s ability to foreclose,Yvanova does not alter her standing obligations.4

Moreover, Yvanova recognizes borrower standing only where the defect in the assignment renders the assignment void, rather than voidable.  (Yvanova, supra, 62 Cal.4th at pp. 942–943.)  “Unlike a voidable transaction, a void one cannot be ratified or validated by the parties to it even if they so desire.”  (Id. at p. 936.)  Yvanova expressly offers no opinion as to whether, under New York law, an untimely assignment to a securitized trust made after the trust’s closing date is void or merely voidable.  (Id. at pp. 940–941.)  We conclude such an assignment is merely voidable.  (See Rajamin v. Deutsche Bank Nat’l Trust Co. (2d Cir.2014) 757 F.3d 79, 88–89 [“the weight of New York authority is contrary to plaintiffs’ contention that any failure to comply with the terms of the PSAs rendered defendants’ acquisition of plaintiffs’ loans and mortgages void as a matter of trust law”;  “an unauthorized act by the trustee is not void but merely voidable by the beneficiary”].) 5Consequently, Saterbak lacks standing to challenge alleged defects in the MERS assignment of the DOT to the 2007–AR7 trust.

C. The DOT Does Not Confer Standing

Saterbak argues “clear language” in the DOT and “the rules of adhesion contracts” confer standing.  We disagree.In signing the DOT, Saterbak agreed the Note and DOT could be sold “one or more times without prior notice.”  She further agreed:

“Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right:  to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property;  and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.” 6

The authority to exercise all of the rights and interests of the lender necessarily includes the authority to assign the deed of trust.”  (Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 84, disapproved on other grounds in Yvanova, supra, 62 Cal.4th at p. 939, fn. 13;  see Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1504 [interpreting language identical to Saterbak’s DOT to give MERS “the right to assign the DOT”], disapproved on other grounds in Yvanova, at p. 939, fn. 13.)  The federal court adjudicating Saterbak’s parallel case against her loan servicer cited the above-quoted language in the DOT to reject the same securitization theory proffered here.  (Saterbak v. National Default Servicing Corp. (S.D.Cal. Oct. 1, 2015, Civ. No. 15–CV–956–WQH–NLS) 2015 WL 5794560, at *7.)

Saterbak nevertheless points to language in the DOT that only the “Lender” has the power to declare default and foreclose, while the “Borrower” has the right to sue prior to foreclosure in order to “ ‘assert the non-existence of a default or any other defense of Borrower to acceleration and sale.’ ”  But these provisions do not change her standing obligations under California law; they merely give Saterbak the power to argue any defense the borrower may have to avoid foreclosure.  As explained ante, Saterbak lacks standing to challenge the assignment as invalid under the PSA. (Jenkins, supra, 216 Cal.App.4th at p. 515.)

Saterbak also points to the presuit notice provisions in the DOT to argue the DOT contemplates her action.  She quotes language in the DOT requiring the Borrower and Lender to provide notice and a reasonable opportunity to repair before “any judicial action that arises from the other party’s actions pursuant to this Security Instrument.”  However, by Saterbak’s own theory, her action does not arise “pursuant to this Security Instrument”;  it is premised instead on a violation of the PSA.  The presuit notice provisions in the DOT do not contemplate her action.

Finally, Saterbak contends the deed of trust is an adhesion contract, and, therefore, restrictive language that “deprives a borrower of the right to argue her loan has been invalidly assigned” must be “conspicuous and clear.”  She claims, “If the assignment clause was intended by the drafter to cutoff the borrower’s right to challenge the assignment, it should have used clear language to that effect.  It did not.”  As a rule, “contracts of adhesion are generally enforceable according to their terms, [but] a provision contained in such a contract cannot be enforced if it does not fall within the reasonable expectations of the weaker or ‘adhering’ party.”  (Fischer v. First Internat. Bank (2003) 109 Cal.App.4th 1433, 1446 (Fischer ).)  However, “[b]ecause a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor” (Fontenot, supra, 198 Cal.App.4th at p. 272), together with the deed of trust securing it.Saterbak “irrevocably grant[ed] and convey[ed]” the Mount Helix property to the Lender; recognized that MERS (as nominee) had the right “to exercise any or all” of the interests of the Lender; and agreed that the Note, together with the DOT, could be sold one or more times without notice to her.  There is no reasonable expectation from this language that the parties intended to allow Saterbak to challenge future assignments made to unrelated third parties.  (Cf. Fischer, supra, at pp. 1448–1449 [holding there was a triable issue of fact “as to whether the parties mutually intended to permit cross-collateralization” on two separate loans, given ambiguity between the broadly worded dragnet clause and a “ ‘Related Document[ ]’ ” incorporated by reference into the loan agreement as to whether the parties mutually intended it].) 7

D. The Homeowner Bill of Rights Does Not Confer Standing

For the first time on appeal, Saterbak relies on the California Homeowner Bill of Rights (HBOR) to claim standing.  She argues sections 2924.17 and 2924.12 allow her to challenge the alleged defects in MERS’s assignment of the DOT to the 2007–AR7 trust.  In relevant part, section 2924.17, subdivision (a), provides an “assignment of a deed of trust ․ shall be accurate and complete and supported by competent and reliable evidence.”  Section 2924.12, subdivisions (a) and (b) allow borrowers to bring an action for damages or injunctive relief for “a material violation of Section ․ 2924.17.”

As Saterbak acknowledges, the HBOR went into effect on January 1, 2013. (§ 2923.4.) The FAC alleges the DOT was assigned on December 27, 2011, and recorded on December 17, 2012.  Saterbak fails to point to any provision suggesting that the California Legislature intended the HBOR to apply retroactively.  (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 841 [“California courts comply with the legal principle that unless there is an ‘express retroactivity provision, a statute will not be applied retroactively unless it is very clear from extrinsic sources that the Legislature ․ must have intended a retroactive application’ ”].) Therefore, the HBOR does not grant Saterbak new rights on appeal.8

In summary, for the reasons discussed above, we conclude Saterbak lacks standing to challenge MERS’s assignment of the DOT to the 2007–AR7 trust.


Saterbak seeks to cancel the assignment of the DOT pursuant to section 3412.  She argues that to withstand a demurrer, she merely needs to allege the assignment was void or voidable and that it could cause serious injury.  We disagree.

To state a cause of action under section 3412, Saterbak must allege the assignment was void or voidable against her.  (§ 3412 [“A written instrument, in respect to which there is reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled” (italics added) ];  see also Johnson v. PNC Mortg. (N.D.Cal.2015) 80 F.Supp.3d 980, 990 (Johnson ) [section 3412 requires “the challenged instrument be void or voidable against the party seeking to cancel it”].)  Johnson dismissed a similar cause of action under section 3412 because the plaintiffs, borrowers like Saterbak, failed to “allege a plausible case that the assignment is ‘void or voidable’ against them.”  (Johnson, supra, at p. 990.)  Here, Saterbak fails to state a cause of action under section 3412 because she cannot allege that MERS’s assignment of the DOT to the 2007–AR7 trust was void or voidable against her.

Saterbak also fails to allege “serious injury.”  She argues she “faces the prospect of losing her home due to the actions of an entity that has no power to foreclose because it does not own her [DOT].”  However, even if the assignment was invalid, it could not “cause serious injury” under the statute because her obligations on the Note remained unchanged. (§ 3412, italics added.)  For example, in Johnson, supra, 80 F.Supp.3d 980, borrowers sought to cancel the assignment of their deed of trust, claiming alleged infirmities in the assignment cast a shadow on their title and continued to ruin their credit.  The court rejected this theory because the alleged defects did not change the borrowers’ payment obligations, and the borrowers did not deny they had defaulted.  The court concluded: “It is not really the assignment, then, or its challenged provenance, that has stained their credit report.It is the fact that they defaulted.”  (Id. at p. 989.)  Likewise, here, the allegedly defective assignment did not alter Saterbak’s payment obligations under the Note. Saterbak does not deny she defaulted or that her debt remains in arrears.  Consequently, she cannot demonstrate how the allegedly invalid assignment could “cause serious injury” within the meaning of section 3412 if left outstanding. (§ 3412, italics added.)

Finally, because a cause of action to cancel a written instrument under section 3412 sounds in equity, a debtor must generally allege tender or offer of tender of the amounts borrowed as a prerequisite to such claims.  The tender requirement “is based on the theory that one who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose.”  (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878, italics omitted.)  The tender rule is not absolute; tender is not required to cancel a written instrument that is void and not merely voidable.  (Id. at p. 876;  Smith v. Williams (1961) 55 Cal.2d 617, 620–621;  Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 11.)  As discussed ante, we conclude the alleged defects merely rendered MERS’s assignment of the DOT to the 2007–AR7 trust voidable under New York law.  In any event, because we affirm the judgment on standing grounds, we do not decide whether Saterbak was required to plead the ability or willingness to tender to cancel the assignment pursuant to section 3412.


We must consider whether Saterbak has demonstrated a reasonable probability that she could cure the defects that we have identified.  (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.)  Saterbak contends she could amend her complaint to “argue that the language in her [DOT] gives her the right to attack a void assignment of her loan.”  As discussed in detail above, we conclude the DOT does not confer this right.  Because Saterbak has not shown how she could remedy her lack of standing to challenge MERS’s assignment of the DOT to the 2007–AR7 trust, we conclude the trial court properly sustained Defendant’s demurrer to the FAC without leave to amend.


The judgment is affirmed.  Respondent 2007–AR7 trust shall recover its costs on appeal.


  1.    The parties do not dispute Saterbak is in arrears on her debt obligations and a foreclosure sale has yet to take place.
  2.    All further statutory references are to the Civil Code unless otherwise specified.
  3.     Saterbak is mistaken in claiming Gomes holds “a borrower can challenge the power of an alleged loan purchaser to foreclose if [the borrower] can allege specific facts showing the assignment is invalid.”  As discussed, Gomes holds that under California law, plaintiffs may not bring preemptive actions to challenge a defendant’s power to foreclose.  (Gomes, supra, 192 Cal.App.4th at p. 1156.)
  4.     The Supreme Court has granted review in Keshtgar v. U.S. Bank, N.A., review granted October 1, 2014, S220012, a case involving a preforeclosure challenge based on alleged deficiencies in the assignment of the deed of trust.
  5.     Saterbak cites Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, but the New York case upon which Glaski relied has been overturned.  (Wells Fargo Bank, N.A. v. Erobobo (N.Y. App. Div.2015) 127 A.D.3d 1176, 1178; see Rajamin, supra, 757 F.3d at p. 90 [rejecting Glaski’s interpretation of New York law].)  We decline to follow Glaski and conclude the alleged defects here merely render the assignment voidable.
  6.     As the court explained in Fontenot: “MERS is a private corporation that administers a national registry of real estate debt interest transactions.  Members of the MERS System assign limited interests in the real property to MERS, which is listed as a grantee in the official records of local governments, but the members retain the promissory notes and mortgage servicing rights.  The notes may thereafter be transferred among members without requiring recordation in the public records.  [Citation.]  [¶] Ordinarily, the owner of a promissory note secured by a deed of trust is designated as the beneficiary of the deed of trust.  [Citation.]  Under the MERS System, however, MERS is designated as the beneficiary in deeds of trust, acting as ‘nominee’ for the lender, and granted the authority to exercise legal rights of the lender.”  (Fontenot, supra, 198 Cal.App.4th at p. 267.)
  7.     Saterbak also cites Haynes v. Farmers Ins. Exchange (2004) 32 Cal.4th 1198, which involved a dispute over auto insurance coverage.  The court stated the general rule that “to be enforceable, any [insurance] provision that takes away or limits coverage reasonably expected by an insured must be ‘conspicuous, plain and clear.’ ”  (Id. at p. 1204, italics added.)  Even if Haynes were relevant to the current context, there is no reasonable expectation created in the DOT that Saterbak would have the power to challenge assignments made to unrelated third parties.  (Fontenot, supra, 198 Cal.App.4th at p. 272.)
  8.     Saterbak contends the notice of trustee’s sale was recorded after the HBOR went into effect.  However, the FAC challenges MERS’s assignment of the DOT to the 2007–AR7 trust, not the notice of trustee’s sale.  We further reject Saterbak’s argument that the HBOR “overruled” Jenkins and cases citing it:  Jenkins was decided after the HBOR went into effect.  (Jenkins, supra, 216 Cal.App.4th 497 [decided May 17, 2013].)



Mort Gezzam photo
Mort Gezzam