Comment: Busy with work and all that, and haven’t had much time to post, so I recommend everyone keep an eye on 4closurefraud.com, livinglies, your google notifications, ForeclosureDefenseNationwide, etcetera. New cases coming out of Florida (lien theory state like Wisconsin) and California (deed of trust/title theory state) weekly. Although decisions that yield truthful interpretations of state laws that are long in the tooth in providing homestead rights are emerging, the judiciary continues to act in an extrajurisdictional manner and rule contrary to existing law. The tide is turning because of homeowners and qualified, dedicated attorneys are taking these cases TO WIN, NOT TO MODIFY. You cannot modify a loan obligation that is void ad initio. Fraud in the factum regarding table funding of loans by alleged national banks using non-existent entities to originate securities using credit provided by foreign national banks combined with investor funds taken under false pretenses. Then, they used THE TITLE TO YOUR HOME to leverage their borrowing and creation of debt-based currency posting those loans multiple times. In an effort to help those understand the causes of action one would have had regarding fraudulent origination and underwriting are detailed in this pleading. Although the case was dismissed without prejudice (wherein I actually prevailed) I got whacked for $45g’s to silence me and they have gone after my now-associate counsel for sanctions. As Wells Fargo/Litchfield Cavo/Hinshaw and Culbertson/Gray and Associates try to bar me from Federal jurisdictional claims relating to the racketeering actions of the law firms and Wells Fargo Bank, N.A., I have never been afforded an evidentiary hearing to prove my claims. This abuse of process, prevalent in the corrupt 7th Circuit based in Chicago, needs to be publicized and fought against. For your reading enjoyment, I’m attaching my original pleading against the parties listed so you may all understand how deep the rabbit hole runs. The forty-six page pleading will be posted and I will see how the exhibits show up. Please feel free to plagiarize and insert the names of your respective lenders, counterparties, and co-conspirators and file your own action. Read, learn, understand. It all comes down to forgery and fraud. Think of it as copies of cashed, paid off checks (COPIES OF YOUR DEFAULTED, PAID OFF NOTE WITH NO VALID TRANSFER OR RECORDED CLAIM (mortgage) SECURING THAT DEBT (note) WITH YOUR HOUSE!!! Checks written by the banks using YOUR HOUSE PLEDGED MULTIPLE TIMES FOR FICTITIOUS REMIC TRUSTS AS COLLATERAL and now they’re taking your house for themselves after everybody (the banks) stole the investor “money”, aka “short-term commerical paper” and Federal Reserve notes, all the TARP money, and buried it offshore. Welcome to my world…..
STATE OF WISCONSIN CIRCUIT COURT KENOSHA COUNTY
Roger P. Rinaldi ) COMPLAINT
Desa L. Rinaldi Pro Se Plaintiffs )
And Heirs and Assigns ) CASE NUMBER:
- ) 11CV1477 S.Michael Wilk
Wells Fargo Bank, National Association ) Circuit Judge Branch 7
d/b/a Wells Fargo Home Mortgage ) (filed June 10, 2011)
d/b/a Wells Fargo Asset Securities Corporation)
d/b/a Wells Fargo Home-Equity Asset-Backed )
Certificates 2005-2 (WFHET 05-2) ) CASE CODE: 30303 Other-Contract
d/b/a America’s Servicing Company ) Misrepresentation
) Damages for Fraud
Gray and Associates, LLP ) WOCCA, RICO, Wire Fraud
HSBC Bank, as Trustee, for Wells Fargo Home ) Unfair and Deceptive Acts and
Equity Asset-Backed Certificates 2005-2 ) Practices
John Does 1-1000 ) Quiet Title/Declaratory Relief
PLAINTIFF’S FIRST AMENDED PLEADING
COMES NOW, THE PLAINTIFF, Roger P. Rinaldi, Desa L. Rinaldi, and their Heirs and Assigns, and are here in after referred to as “Plaintiff” or “Plaintiffs” and for his/her/their Causes of Action herein, alleges, and states as follows, affirming any prior pleading:
- Jurisdiction of this Court is proper, as the real property, which is the subject of this action, is located in Kenosha County.
- Plaintiffs are adult residents of Kenosha County, Wisconsin, and reside at 22311 121st Street, Bristol, Wisconsin, 53104.
- Plaintiffs are the owner, in equity and at law, of the real property known as 22311 121st Street, Bristol, Wisconsin, and reside in the property with their children. 
- Plaintiffs take leave to amend the pleading as necessary and allowed.
PARTIES TO THE ACTION
- Wells Fargo Bank, N.A. is a national banking association operating under 500 or more trade names, identities, SEC Identifying numbers, in thousands of offices worldwide, providing institutional investor services, mortgage servicing, providers of financial services for retail, institutional, and international investors and banking customers, real estate appraisal companies, trustee service companies, and the like. Herein after referred to as “Wells Defendants”.
- HSBC Bank, USA, National Association, is a national banking association, a LIBOR PANEL Member, operating under multiple trade names, including, but not limited to HSBC Mortgage, HSBC Bank, Nevada (credit cards), HSBC Mastercard, Orchard Bank, and is the successor by merger to Household Finance, and is named in the Pooling and Serving agreement of the Wells Fargo Home Equity Trust 2005-2, and is referred to as HSBC Bank.
- Gray and Associates, Milwaukee, Wisconsin, is the foreclosure-mill law firm hired by Wells Defendants to attempt to collect the unknown, unpaid balance of Plaintiff’s debt.
- On or around May 24th, 2005, Plaintiffs applied for, and subsequently obtained, a purchase money loan allegedly from Wells Fargo Home Mortgage and secured by a mortgage allegedly granted to Wells Fargo Home Mortgage, a wholly owned subsidiary of Wells Fargo Bank, N.A., a national banking association, to purchase the aforementioned real property. This transaction, consisting of a note and mortgage, is the subject of this lawsuit.
- The loan transaction was closed June 10, 2005, in xxxxxx Wisconsin, at XXX Title Services. XXX, at this time, is not a party to this action.
- The Statute of Limitation on Fraud is tolling, and prompt adjudication of the matter is imperative.
- This lawsuit arises from, among other things: (i) the deception in inducing Plaintiffs to enter into a loan and mortgage that they could not repay; (ii) the fraudulent and illegal use of documents created by Defendant and its employees and agents to facilitate fraud (DFI-Bkg 43.01, Wis.Stat. 224.80) (Judicial Estoppel); (iii) Defendants commission of common law fraud and misrepresentation; (iv) Defendants negligent supervision of employees; (v) Defendant’s malicious prosecution of an illegal foreclosure; (vi) Defendant’s attempted “theft by conversion” by attempting to conduct a foreclosure sale of Plaintiff’s property; (vi) failing to follow any of the requisite administerial actions of the Trust and the Pooling and Servicing Agreement of Wells Fargo Home Equity Trust 2005-2, including, but not limited to, New York Trust Law, Securities and Exchange Act of 1933, Internal Revenue REMIC Tax Code, and numerous State and Federal Law violations, and failing to protect Plaintiff’s title to the real property; (vii) breach of fiduciary duty and aiding and abetting breach of fiduciary duty.
- Plaintiffs allege Defendants, and each of them, wrongfully acted and continue to act as if they are the owner, beneficiary, successor, assignee, trustee, or have some right, title, or interest in Plaintiff’s note and mortgage, as a “holder in due course”. The Defendants, and each of them, are committing and continuing a fraud, by utilizing and foreclosing upon assets to which they have no secured claims whatsoever.
- Plaintiffs allege the Defendants, and each of them, are committing and continuing a fraud, by utilizing and foreclosing upon assets to which they have no secured claims whatsoever.
- At all times material hereto, the business of Defendants was operated through a common plan and scheme designed to conceal the material facts set forth by Plaintiff, and to conceal their plans from regulators, both State and Federal.
- The concealment was completed, ratified and/or confirmed by each Defendant herein directly or as a successor in interest as the acquirer of an entire business, and each Defendant performed or has sought to benefit from the tortuous acts set forth herein for its own monetary gain and as a part of a common plan developed and carried out by the other Defendants or as a successor in interest to the business that did the foregoing.
- The true names and capacities of the Defendants listed herein as DOES 1 through 1000 are unknown to Plaintiffs who therefore sue these Defendants by such fictitious names. Each of the DOE Defendants was the agent of each of the other Defendants herein, named or unnamed, and thereby participated in all of the wrongdoing set forth herein.
- On information and belief, each such Defendant is responsible for the acts, events, frauds, and concealment set forth herein and is sued for that reason. Upon learning the true names and capacities of DOE Defendants, Plaintiffs shall amend this Complaint accordingly.
- Plaintiffs believe and thereon allege that the agents and co-conspirators through which the named Defendants operated included, without limitation, financial institutions and other firms that originated, securitized, and serviced mortgage loans under the name Wells Fargo Bank, N.A., a national banking association. These institutions acted at the behest and direction of the enterprise and the Wells Defendants, or agreed to participate-knowingly or unknowingly-in the fraudulent scheme described in this complaint.
- For avoidance of doubt, such knowing participants include, without limitation, legal and natural persons owned in whole or in part by the enterprise or Defendants or affiliates thereof, legal and natural persons owning directly or through affiliates financial interests in the enterprise or Defendants; legal and natural persons directly or through affiliates acting pursuant to contracts to share in the benefits of the wrongdoing alleged in this Complaint and knowing to at least some degree committing acts and omissions in support thereof; and legal and natural persons knowing to at least some degree acting in concert with the enterprise or the Defendants.
- As to the legal and natural persons acting in concert without an express legal relationship with the Defendants or their affiliates, on information and belief, the Defendants knowingly induced and encouraged the parallel acts, created circumstance permitting and authorizing the parallel acts and omissions, benefited there from and ratified the improper behavior, becoming jointly and severally liable therefore.
- As to those legal and natural persons whose acts in support of the loan scheme were unwitting, Plaintiffs will consider whether and on what basis such persons might be liable for their acts; however, on information and belief, the Defendants knowingly induced and encouraged the acts and omissions, benefitted there from and ratified the improper behavior, becoming liable therefore.
- The Defendants’ mortgage lending business implemented a plan to “pool” the foregoing mortgages and sell the pools for inflated value. Rapidly, these two intertwined schemes grew into a brazen plan to disregard underwriting standards and fraudulently approve as many borrowers as they could find; originating, purchasing, pooling, and reselling mortgage loans converted into “bonds”, or “mortgage backed securities”.
- Plaintiffs believe, and thereon allege, Defendants repeatedly and willfully, without regard for the laws of the State of Wisconsin, the laws of the State of New York (which govern the creation and administration of the REMIC trust), the Internal Revenue Code, and the Securities and Exchange Act of 1933, breached their fiduciary duty to the Plaintiffs by failing to prevent their employees from committing fraud via creation of false and fraudulent loan applications, underwriting documents, closing documents, and inducing Plaintiffs with their fraudulent underwriting practices, and fraudulent misrepresentation to take a loan that Defendants knew Plaintiffs could not repay.
- Plaintiffs allege, upon knowledge and belief, that Defendants submitted fraudulent affidavits of ownership and therewith committed fraud upon the Court and perjury in an act of attempted theft by conversion of Plaintiffs homestead, and by instituting a foreclosure action when Defendants had no recorded or pecuniary interest in the Plaintiffs property.
- Plaintiffs claim, upon knowledge and belief, and therefore allege, that Wells Fargo Bank, N.A., willfully and intentionally, used Plaintiffs signature, identity, and credit history to originate not one, but TWO different loans in the name of Plaintiff.
- Plaintiffs allege, upon knowledge and belief, that the entity known commonly as Wells Fargo Bank, N.A., is actually a consortium of major players in the international banking community, and with the use of the brand name Wells Fargo, intended to deceive their patrons nationwide with a plan to lend as much money as possible via the mortgage markets, originate loans that were fraudulently underwritten, sell the originated loans in the form of mortgage-backed securities on the world market, and force the borrowers into default, allowing them to take back the real property, utilizing fraudulent securitization documents, and repeat the cycle of enticing borrowers to enter into mortgage loans.
- Plaintiffs believe, and therefore allege, that the registrant known as Wells Fargo Home Equity Asset-Backed Certificates 2005-2, is an empty REMIC trust which Wells Fargo used to commit fraud with use of Plaintiff’s note (or notes), going so far as to tender the certificates with the Federal Reserve Bank via TARP and Maiden Lane (Repository for the toxic assets assumed by the United States Treasury) to further profit at the expense of the Plaintiff and other taxpayers, constituting a False Claims Act Violation.
- Plaintiffs allege Wells Fargo brought the foreclosure action 09-CV-0353 in Kenosha County Court under the named plaintiff “HSBC Bank, U.S.A., as Trustee for Wells Fargo Home Equity Asset Backed Certificates 2005-2”, there was never any true sale upon which HSBC could be named as Trustee for the certificate holders of the trust, nor was there standing to foreclose, as no security interest is recorded at the county land record.
- Defendants HSBC Bank aided and abetted the fraud committed by their joint venture/partner Wells Fargo, by allowing Wells Fargo to bring a fraudulent foreclosure action in their name for which they never had any secured, pecuniary, nor any interest whatsoever in Plaintiffs’ real property.
- Plaintiffs believe, and therefore allege, that Deutsche Bank A.G. violated numerous state and federal laws with their illegal table funding of Plaintiffs loan and subsequent fraudulent securitization of Plaintiffs note (or notes), subsequent sale to investors of the certificates using Plaintiffs identity, credit, and real property to allegedly collateralize their sale of worthless mortgage backed securities, thereby committing fraud upon the Plaintiff, the investor, and the United States Government.
- Plaintiff was in process of renting a domicile to house his family in May, 2005.
- Plaintiff was aware that his credit score and credit history was not rated highly rated, and had not contemplated purchasing real estate, as he had no assets.
- Plaintiff had recently settled a tax lien from a failed business and past due personal taxes with the Internal Revenue Service in March, 2005, and through an “Offer in Compromise” sold off all personal tangible assets of value to satisfy said tax lien.
- Plaintiff was contacted via referral by Ms. XXX, an agent for Wells Fargo Home Mortgage, Chicago, Illinois
- Ewing stated that it was in Plaintiffs’ best interest to try and purchase property while mortgage rates were low, real estate was increasing in value, and that Wells Fargo had “plenty of money” to loan, even for those with “marginal credit”.
- Plaintiff explained to XXX that he had less than $5000 on hand, and doubted that he would “qualify for a mortgage”, as Plaintiff believed, and therefore alleges, that Plaintiff had a basic understanding of the terms as they related to purchasing a house and the costs thereof.
- XXX assured Plaintiff that he could “easily afford” a home, and faxed an application to Plaintiff at his place of employment on or around May 23, 2005. Plaintiff filled out the application and faxed it back to Ewing at the Chicago Office.
- Plaintiff was contacted by xxx short time later that day and Ewing informed him that he “was approved for a mortgage ‘in the sevens’”, meaning approved for a loan in the 7% interest range.
- Ewing contacted Rinaldi and instructed him to “go find a house. And send me a contract.” Plaintiff was armed with his interest rate and loan payment, and located a home for $159,000.
- xxx directed Rinaldi to submit bank statements and W-2’s for proof of income and proof of assets tox xxx an agent inside the Wells Fargo Home Mortgage Office Chicago.
- XXXX, in theX office, contacted Rinaldi June 2nd and said that in order to qualify for the loan, Rinaldi would have to “clean up the bureau”, referring to some past due collection accountsXXXXdirected Plaintiff to use his cash on hand to pay these bills.
- XXX contacted Plaintiff and informed him that he was approved for his loan and tendered a Truth In Lending Disclosure Statement, dated May 26, 2005, via U.S. Mail, showing an annual percentage rate of 7.57% and estimated monthly payments of $1171.91.
- Around May 30th, Plaintiff contacted XXX and expressed concerns that most of his cash on hand was gone as a result of paying off collections. XXX directed Rinaldi to raise the selling price on the contract by $4000 (four thousand dollars), and that Wells Fargo would provide the cash back to him at the closing.
- Wells Fargo Home Mortgage contracted RELS Real Estate Services (a d/b/a of Wells Fargo & Company) to obtain an appraisal of the real property. Plaintiff questioned Ewing about the appraisal in relation to the purchase price, and Ewing assured Plaintiff that “the property will appraise just fine”.
- RELS’ appraiser appraised the property for $168,000, ($19,000 more than the purchase price ten months previous) and Plaintiff relied on the appraisal as a true representation of its value.
- Plaintiff closed the loan on June 10, 2005, atXXX CLOSING in Wisconsin, by signing a note (one note) secured by a Mortgage naming “Wells Fargo Home Mortgage” as mortgagee.
- Plaintiff alleges that they were justified in relying, and relied upon the representation that Wells Fargo Home Mortgage, a division of Wells Fargo Bank, National Association, was lending Wells Defendants’ money to Plaintiff in the transaction, for the purpose of funding a real estate purchase, and would therefore not offer the Plaintiff a loan that they could never repay.
- Plaintiff alleges, upon knowledge and belief, that Deutsche Bank, AG, a German bank and unregistered foreign corporation, was doing business in the State of Wisconsin as an “undisclosed table funder”, in violation of Wisconsin Statute 224.03. Deutsche is not a named defendant at this time.
- Plaintiffs loan package and closing was prepared by XXXXX, a Wells Fargo employee (Closing Package Cover Letter, Exhibit 14).
- Plaintiff names employee XXXXXX, Wells Fargo Home Mortgage employee, as a preparer of the underwriting worksheets approved by XXXXXXX. Worksheets show non-existent asset for $15,630.
- Plaintiff’s loan was underwritten by XXXXXXX, an underwriter in Wells Fargo’s Minnesota office.
- At the closing, Plaintiffs were presented with a large stack of documents with “post-it” style notes interleaved at signature pages, which they were directed to sign.
- Plaintiffs reviewed the documents the best they could as time was allowed (approximately 5-20 seconds per document) by those directing the closing.
- Plaintiffs secured the services of an attorney to represent them at the closing. Plaintiffs were unaware that the lawyer they retained OWNED THE CLOSING AGENCY.
- Plaintiffs noticed some documents had been dated three days prior to the closing, June 7, 2005. When Plaintiffs questioned the closing agent, they were told not to worry because those documents were received by them prior to the closing appointment.
- During the closing, there were some discussions outside the room, and phone calls ensued between the closing agent and the lender, (John Doe Defendant). Plaintiff was not aware of what was discussed amongst the parties.
- Upon information and belief, and therefore alleged, agents at the closing had found the closing instructions required “proof of asset at closing” of a purported savings account at Citibank, which did not exist.
- Closing Instructions required “proof of asset” (Citibank Account) at closing.
- Plaintiff tendered a check for $555.00 drawn on TCF Bank, at closing.
- Plaintiffs were presented with an interest rate substantially higher that what was disclosed in the “Truth in Lending Statement” dated May 25th.
- Since Plaintiffs had already terminated their lease and were soon to be without shelter, they accepted the terms of the loan as presented at the closing in spite of the higher rate of interest and higher payment.
- Plaintiffs received a check “outside of closing” for approximately $1200. When Rinaldi questioned XXX at the closing about the additional $4000 added to the contract amount, XXXstated that “ it was consumed in fees”. Plaintiff received no other monies.
- Plaintiff alleges, upon knowledge and belief, and with documents obtained in discovery related to the prior foreclosure case, herewith evidences numerous fraudulent acts committed by Wells Fargo Home Mortgage, including, but not limited to:
- A) creation of a fraudulent asset statement reflecting that Plaintiff
had $15,630 in a Citibank Bank Account #1.
- B) altering the fraudulent asset statement after the closing, changing ac- count number to 875023-09, and forging Plaintiff’s signature on the changed documents.
- C) forging Plaintiff’s initials on disclosures not presented (Exhibit 25)
- D) violating industry standards of underwriting by using the non-existent
asset to ascertain Plaintiffs ability to pay (Exhibits 4,5,17);
- E) violating the Truth in Lending Act by raising the interest rate on the Plaintiff prior to the closing without notifying the Plaintiff (Exhibit 20);
- F) violating Wisconsin statutes by conducting business as an unregistered mortgage entity inside the State of Wisconsin;
- G) violating Federal Regulation Z, RESPA, TILA, and committing fraud upon the Plaintiff with the table funding of the loan by Defendant Deutsche Bank (Exhibit 2);
(H) contracting for the appraisal of the real property with WELLS DE- FENDANTS OWN APPRAISAL COMPANY, RELS, and gene rating said appraisal to support the loan value of the note, not representing the true collateral value of the real property;
(I) and thus committing the fraudulent misrepresentation alleged.
SERVICING OF THE LOAN
- When Plaintiff first encountered difficulty making the payments, as early as October 2006, Wells Fargo requested a “deed in lieu of foreclosure” to take Plaintiffs home. Plaintiff refused to give up the deed to their real property.
- In December 2006, servicer Wells Fargo Home Mortgage began notifying their mortgage insurer (John Doe Defendant) that loan #0145099792 was in default status and began collecting payments from their mortgage bond insurer (or insurers, as discovery will reveal).
- In January 2007, prior to any entry of default, Plaintiff brought the loan current with full payment of principal and interest payments due (see servicing notes January 22, 2007, “22 day delinq letter, letter sent”.
- Plaintiff alleges, upon knowledge and belief, that at this point in time Wells Fargo Home Mortgage engaged in the practice of levying extra fees and charges ($4,507.56) for home inspections, default services, broker price opinions, and property preservation fees, and failed to post borrower payments to principal and interest.
- In February 2007, Defendant Wells Fargo Home Mortgage held Plaintiffs payment, delivered via U.S. Mail, to Defendants payment processing center in Carol Stream, Illinois. Wells Defendants denied receipt of check. Wells Defendants demanded telephone payment for lost check, and subsequently deposited Plaintiff’s original “lost payment” within 48 hours of drafting Plaintiff’s bank account for the same payment, causing overdrafts at Plaintiff’s bank, resulting in multiple overdraft charges and fees.
- Plaintiff alleges, upon knowledge and belief, that the Wells Defendants collected Plaintiffs payments throughout the year of 2007 and through July 2008, while reporting Plaintiffs loan in default through the mortgage insurance carriers (John Doe Defendants), and forced the default of Plaintiffs through the addition of illegitimate fees and charges, therein violating the servicing standards and fiduciary interest of the Plaintiff.
- Plaintiff made their July 2008 payment, July 4, for $1776.00. Plaintiff realized that Wells Defendants were intent on creating the default to force a foreclosure. Plaintiff repeatedly tried to address the servicing mistakes committed by Wells Defendants, and eventually succumbed to an advanced state of arrears brought on by the increased payments and predatory fees and practices engaged in by the Wells Defendants.
- Wells Defendants failed to pay Plaintiff’s 2008 property tax bill, as required by the Pooling and Servicing Agreement.
- Plaintiff alleges, upon knowledge and belief, that the Wells Defendants deliberately committed laches, by failing to mitigate the losses to Plaintiff and investors (John Doe Defendants) in a timely fashion via proper servicing of the account and timely modification as set forth in the Prospectus and Pooling and Servicing Agreement for Wells Fargo Home Equity Asset-Backed Certificates 2005-2.
- Plaintiff alleges, upon knowledge and belief, that Wells Defendants committed laches with the late recording of the Trustee’s security interests in the real property to the detriment of Plaintiff and those alleged security holders (John Doe Defendants) , resulting in a disturbed, wild deed, and a subsequent slander of Plaintiffs title to the real property, of which the Plaintiff is the owner in law and in equity.
- Plaintiffs allege, upon knowledge and belief that Wells Defendants, by and through their default servicing department, repeatedly asserted that the Plaintiffs loan “did not meet investor guidelines for modification” as early as October 2006.
- Plaintiff alleges, upon knowledge and belief, that Wells Defendants intended to “originate loans to default”, and that Plaintiffs were but one of many homeowner/borrowers who were forced into default by Wells Defendants actions.
- Plaintiffs allege, upon knowledge and belief, that Wells Defendants created two loan accounts, pledging Plaintiffs note and payment stream to more than one mortgage security, as evidenced by the HOPE NOW solicitations, dated three days apart, with different account numbers in the identifying information.
- Wells Defendants continue to run “two sets of books” on Plaintiffs loan, as one is defaulted and one is held as “current”.
- Wells Defendants pursued an “unfair and fraudulent debt collection practice” by holding themselves out as the beneficiary, holder, and real party in interest to Plaintiff’s mortgage and note, with the collusion of HSBC Bank, USA, N.A., as Trustee, and perpetrated fraud on the Court by bringing the action and submitting false testimony via affidavits of ownership., 
- Plaintiff alleges Wells Defendants, by and through their co-venturers, filed a foreclosure action and Lis Pendens in the name of “HSBC as Trustee for Wells Fargo Home Equity Asset-Backed Certificates 2005-2” knowing that the filing of such document and foreclosure action was fraudulent in nature.
- Plaintiff alleges, upon knowledge and belief, Wells Defendants, and each of them, attempted to steal, through an illegal sheriff’s sale, Plaintiff’s real property while collecting payments under the modification “trial payment” plan, executing a draft on Plaintiff’s bank account on October 4, 2010, and concurrently advertising the Plaintiff’s home for sale on October 6, 2010.
- Plaintiffs allege, upon knowledge and belief, that Wells Defendants collected Plaintiff payment on the “trial modification” October 4th, 2010, and contemporaneously published the “Notice of Sheriff’s Sale” in the Kenosha News, advertising the sheriff’s sale, demonstrating their “bad faith” and “malicious intent” in dealing with the Plaintiff.
- “Wells Fargo Home Equity Trust 2005-2” was a Trust consisting of 5,189 loan accounts, of which 436 loans were “prime, fixed rate loans” and 4,753 “subprime, adjustable rate loans”.
- Plaintiff alleges, upon knowledge and belief, that the securitization transaction known as “Wells Fargo Home Equity Trust 2005-2” was a mortgage-backed security transaction that was rated as a “AAA+ rated” investment vehicle (REMIC), which was downgraded to “JUNK”, soon after the issuance of the certificates.
- As evidenced by the Pooling and Servicing Agreement on file with the Securities and Ex- change Commission of the United States, the Trust fund closed September 29, 2005, and was [precluded] from accepting ANY assets after the September 29, 2005, close date.
- Plaintiff alleges, upon knowledge and belief, that the majority of the loans contained in the Wells Fargo Home Equity Trust 2005-2, were of a fraudulent nature, negligently underwritten, and therefore the default rates on the trust were high enough to trigger a “default” event.
- Plaintiffs allege, upon knowledge and belief, that once the trigger event occurred, Wells Defendants, as Sponsor, Depositor, Originator, Servicer, Master Servicer, Special Servicer, Custodian, and Securities Administrator, were obligated to take Plaintiff’s loan “back onto their balance sheet”, and subsequently extinguished the account known as “0145099792”, pursuant to “FASB 140-3 Extinguishment of Liabilities”, on an unknown date.
- Upon extinguishment of the Plaintiff’s loan account, the defaulted loan was transferred back to Wells Defendants (Wells Fargo Asset Securities Corporation, formerly Norwest Asset Securities Corporation, 1999 Trust) and listed as an asset.
- According to the assignment dated April 5, 2010, Wells Fargo Bank, N.A., Assignor, transferred for “a valuable consideration” to “HSBC Bank USA, as Trustee, for the Wells Fargo Asset Securities Corporation Home Equity Asset-Backed Certificates, 2005-2” the “mortgage and note” executed by Plaintiff.
- Plaintiff alleges, upon knowledge and belief, that the “Assignment of Mortgage” was drafted by Duncan C. Delhey of Gray and Associates, Milwaukee, Wisconsin, and Mr. Delhey (whose name appears on the assignment) should have known that said “Assignment of Mortgage” document #1614342 was fraudulent on its face, as the assignee of the mortgage was in receipt of a defaulted loan, contrary to the Uniform Commercial Code, and that the Trustee could not accept the mortgage (asset) more than 5 years after the closing date of the Trust, and knowingly recorded said false document in the County Recorder’s Office (Wis.Stat 181.0291).
- The “Assignment of Mortgage” was executed by Herman John Kennerty, a known robo-signor, who’s testimony is attached evidencing that Mr. Kennerty really has no idea as to what he is assigning, other than a defaulted, extinguished obligation, summarily without any real knowledge of any facts relating to the borrower account, amount of defaults, inspection of business records, verifiable proof of ownership of the asset being foreclosed upon, nor any actual documentation of the note the borrower signed at closing with any legal, binding, necessary endorsement required by the “Mortgage Loan Purchase Agreement”, the initial transaction to which he is attesting to as assignor.
- JOHN KENNERTY, a/k/a HERMAN JOHN KENNERTY,
JOHN KENNERTY a/k/a Herman John Kennerty has been employed for many years in the Ft. Mill, SC offices of America’s Servicing Company, a division of Wells Fargo Bank, N.A. He signed many different job titles on mortgage-related documents, often using different titles on the same day. He often signs as an officer of MERS (“Mortgage Electronic Registration Systems, Inc.”) On many Mortgage Assignments signed by Kennerty, Wells Fargo, or the trust serviced by ASC, is shown as acquiring the mortgage weeks or even months AFTER the foreclosure action is filed.
Titles attributed to John Kennerty include the following:
Secretary, MERS, as Nominee for 1st Continental Mortgage Corp.;
Asst. Secretary, MERS, as Nominee for American Brokers Conduit;
Asst. Secretary, MERS, as Nominee for American Enterprise Bank of Florida;
Asst. Secretary, MERS, as Nominee for American Home Mortgage;
Asst. Secretary, MERS, as Nominee for Amnet Mortgage, Inc. d/b/a American Mortgage Network of Florida;
Asst. Secretary, MERS, as Nominee for Bayside Mortgage Services, Inc.;
Asst. Secretary, MERS, as Nominee for CT Mortgage, Inc.;
Asst. Secretary, MERS, as Nominee for First Magnus Financial Corporation, an Arizona Corp.;
Asst. Secretary, MERS, as Nominee for First National Bank of AZ;
Asst. Secretary, MERS, as Nominee for Fremont Investment & Loan;
Asst. Secretary, MERS, as Nominee for Group One Mortgage, Inc.;
Asst. Secretary, MERS, as Nominee for Guaranty Bank;
Asst. Secretary, MERS, as Nominee for Homebuyers Financial, LLC;
Asst. Secretary, MERS, as Nominee for IndyMac Bank, FSB, a Federally Chartered Savings Bank (in June 2010);
Asst. Secretary, MERS, as Nominee for Irwin Mortgage Corporation;
Asst. Secretary, MERS, as Nominee for Ivanhoe Financial, Inc., a Delaware Corp.;
Asst. Secretary, MERS, as Nominee for Mortgage Network, Inc.;
- Secretary, MERS, as Nominee for Ohio Savings Bank;
Asst. Secretary, MERS, as Nominee for Paramount Financial, Inc.;
Asst. Secretary, MERS, as Nominee for Pinnacle Direct Funding Corp.;
Asst. Secretary, MERS, as Nominee for RBC Mortgage Company;
Asst. Secretary, MERS, as Nominee for Seacoast National Bank;
Asst. Secretary, MERS, as Nominee for Shelter Mortgage Company, LLC;
Asst. Secretary, MERS, as Nominee for Stuart Mortgage Corp.
Asst. Secretary, MERS, as Nominee for Suntrust Mortgage;
Asst. Secretary, MERS, as Nominee for Transaland Financial Corp.;
Asst. Secretary, MERS, as Nominee for Universal American Mortgage Co., LLC;
Asst. Secretary, MERS, as Nominee for Wachovia Mortgage Corp.;
Vice President of Loan Documentation, Wells Fargo Bank, N.A.;
Vice President of Loan Documentation, Wells Fargo Bank, N.A., successor by merger to Wells Fargo Home Mortgage, Inc. f/k/a Norwest Mortgage, Inc.
- The Defendant Trust (WFHET 05-2) is a New York Common Law Trust, organized under the REMIC Tax Structure for Real Estate Mortgage Investment Conduits, and governed by New York Law based on its Trust Agreement.
- Plaintiff was sued by HSBC Bank, U.S.A., National Association, as Trustee, for Wells Fargo Asset Backed Securities 2005-2, with the action 09CV0353 being filed February 3rd, 2009, pursuant to an alleged Pooling and Servicing Agreement that governed the Trust.
- Plaintiff alleges, upon knowledge and belief, that Defendant HSBC Bank, USA, N.A. was not the originator of the loan, but is an appointed Trustee, or nominee, allegedly to hold the assets of the WFHET 05-2 Trust.
- Plaintiffs allege Wells Fargo brought the foreclosure action 09-CV-0353 in Kenosha County Court under the named plaintiff “HSBC Bank, U.S.A., as Trustee for Wells Fargo Home Equity Asset Backed Certificates 2005-2”, there was never any true sale upon which HSBC could be named as Trustee for the certificate holders of the trust., nor was there standing to foreclose, as no security interest is recorded in the county land record.
- Plaintiffs allege, upon knowledge and belief, that Wells Defendants, together with their attorneys of record in prior actions, have submitted affidavits to the courts that are fraudulent with respect to ownership of the payment stream of Plaintiffs original note, the ownership of the actual security instrument securing payment of the note, and the real holder in due course who is entitled to enforce the instrument as a bearer.
- Plaintiffs further allege, upon knowledge and belief, that the “Assignment of Mortgage” filed in the Kenosha County Recorder’s Office is a sham instrument, and fraudulent on its face, resulting in a slander of Plaintiff’s title.
DISCUSSION AND ARGUMENT
- The party identified as “lender,” “mortgagee”, or “beneficiary” was either a non-lending institution or an institution who could have loaned the money but didn’t. Plaintiffs were not advised that Deutsche Bank was involved in the transaction.
- The pattern of conduct evidences table-funded transactions, which according to the Truth in Lending Act and Regulation Z are presumptively predatory loans. They are considered predatory because by depriving the borrower of important information concerning the identity of the actual lender/creditor, the borrower was prevented from knowing facts that went into the decision about whether to execute the documents. This constitutes a fraud in the inducement. The failure to disclose the table-funded nature of the transaction, hidden fees paid to the party identified as the originating lender were withheld from the disclosure statements given to the borrower. Thus, by not knowing who he/she was dealing with and by not knowing about all the extra fees distributed in the feeding frenzy, the borrower was not alerted to the fact that excessive fees were being paid to everyone concerned, including the mortgage broker and the appraiser. Failing to know this, the borrower was unaware that by shopping further (in a market controlled and funded bv all the same parties operating under different, fraudulent identities), the truth about the price of the loan, the loan appraisal, and the viability of the loan were not only withheld from the Plaintiff/borrower, but were used against him. This in turn gives rise to rights of rescission which have been declared by the Plaintiff/borrower but ignored by the servicer and the securitizers, as well as causes of action for fraud that could easily exceed the nominal balance of the mortgage stated on the closing documents.
- The documented transaction was created with an unresolvable defect: the party identified on the closing documents was neither the source of funding nor the creditor in any sense of the word.
- The effect of this is that the note names a payee based upon a loan from that payee that the payee never funded. The note therefore while appearing real on its face is actually a nullity (void) because it describes a transaction that never in fact took place.
- Additionally, the mortgage purports to secure the named lender for collection of the balance due on the note. The balance due under the note is zero because the transaction described never took place. While it is possible to reconstitute the mortgage and maybe even the note, it would take a lawsuit filed in a court of competent jurisdiction (which we have here today), in which the (Plaintiff) pleads and proves a case that there was a scrivener’s error in the identification of the lender and payee. This is why the notes were never actually transferred and why it is necessary for the Banks to fabricate and forge documents (Assignment of Mortgage, Exhibit 2, “Affidavits of Robinson”, (Exhibits 7 & 8) to make it appear that there was a transfer of the note and mortgage when the underlying transaction did not exist.
- The monetary transaction dubbed as a “mortgage loan” is undocumented and unsecured. The investor-lender was the source of funds and neither the investors nor lenders have been described, as they are now, as “certificate holders” (a euphemism if the certificates were never issued either) or if the pool was actually created and a trustee or manager appointed as authorized agent, the Trustee or agent should have been named as a payee on a note and the secured party on a mortgage, in violation Wisconsin Statute 706.02.
- HSBC purported to represent itself as a holder in due course, and a real party in interest, based on assumptions laid out in a Pooling and Servicing Agreement, referenced multiple times in the pleadings of the foreclosing entity, that had no bearing on Plaintiff’s loan and mortgage, according to the evidence provided by HSBC and Wells Defendants in their foreclosure action against the Plaintiff.
- Wells Defendants offered up unauthenticated documents in their attempt to foreclose on the Plaintiffs in February 2009, that is, documents that failed to meet the requirements of WIS. STAT. § 802.08(3) (2009-2010) .
- The presence and identity of the presumed creditor was already known to Defendants (but withheld from borrower) at closing. Even the title agent was aware of the deception. The proper parties were not named in the closing documentation and even if they were, the money trail shows that the funds taken from the investor were not used in the manner expected or desired by the investor, with special emphasis on those instances in which the investment bank took 50% or more of the investor funds and claimed them as profits, which were secreted off-shore (Goldman Sachs, LOCHSONG, Grand Cayman), and which are gradually being repatriated to create the illusion of trading profits when in fact the profits are not real nor legal (Patriot Act, Money Laundering, RICO, WOCCA). The absence of documentation for the actual monetary transaction means that none of these transactions are secured.
- Plaintiff alleges, upon knowledge and belief, that after entering into the transactions with each of the Defendants, known and unknown, the Wells Defendants sold, in the form of securities transactions, the note and mortgage pertaining to the Plaintiff’s real property. The sale:
A.) involved misrepresentations by the Wells Defendants, HSBC, and others, to investors and concealment from investors of Plaintiff’s true financial condition and the true value of Plaintiff’s home and mortgage;
B.) of Plaintiff’s note and mortgage was for consideration greater than the income stream that could be generated from the instruments due to Plaintiff’s financial condition;
C.) was part of a scheme by which the Wells Defendants and their co-ventures bilked investors by selling collateralized mortgage pools at an inflated value;
D.) was part of a scheme wherein Wells Defendants, Deutsche Bank, HSBC, and others, bilked mortgage bond insurers by misrepresenting the Plaintiff’s financial condition and the value of the real property in obtaining private mortgage insur- ance (“Wells Fargo Home Mortgage, Inc. assigned to the trust fund loan-level primary mortgage insurance policies. 88.40% of the mortgage loans with OLTVs (Overall Loan to Value) greater than 80% are covered.”) against the Plaintiff’s default, knowing that Plaintiff could never fulfill the terms of the obligation;
E.) required Wells Defendants to force Plaintiff into default on their contract with misapplication of payments, and adding fees against borrower to prevent Plaintiff from curing the default, so Wells Defendants could realize the profits generated upon extinguishment, resulting in insurance payoffs and payoffs on Credit Default Swaps, and on multiple contemporaneous transactions involving Plaintiff’s note and mortgage.
- Plaintiff was served with a foreclosure action February 9, 2009, on behalf of the legal entity, “HSBC Bank, U.S.A., as Trustee, for Wells Fargo Asset Securities Corporation Home Equity Asset-Backed Certificates 2005-2, c/o Wells Fargo Bank, N.A., 3476 Stateview Boulevard, Fort Mill, South Carolina, 29715. HSBC is not the originator of the mortgage, the servicer, or even a bank doing business in this State. Instead, this entity is a New York Common Law Trust created by an agreement known as a PSA, or Pooling and Servicing Agreement. Allegedly, the Plaintiff’s loan, along with other loans, were pooled into a trust and converted into mortgage-backed securities (“MBS”) that can be bought and sold by investors–a process known as securitization. The underlying promissory notes of each and every mortgage held by the Trust serve to generate a potential income stream for investors.
- The Trust allegedly holding the Plaintiff’s note was created June 1, 2005, and is identified as “Wells Fargo Asset Securities Corporation Home Equity Asset-Backed Certificates, Series 2005-2”./ The Trust, by its terms, set a closing date of September 29, 2005. The terms of the Trust are contained in the PSA (Trust Agreement), which is an approximately 326 page document that creates the Trust and defines the rights, duties and obligations of the parties to the Trust Agreement . The PSA is filed under oath with the Securities and Exchange Commission and is attached, via excerpt, as particular exhibits. The PSA also incorporates by reference a separate document called the Mortgage Loan Purchase Agreement (“MLPA”). These various documents, and hence the acquisition of the mortgage assets for the Trust, are governed under the law of the State of New York Pursuant to Section 11.04, and is quoted as
“ This Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.”
- The Trust, while litigating through its trustee, is a New York Corporate Trust formed to act as a “REMIC”, trust (defined below) pursuant to the U.S. Internal Revenue Code (“IRC”). Pursuant to the terms of the Trust and the applicable Internal Revenue Service regulations adopted and incorporated into the terms of the Trust, the “Closing Date” of the Trust (September 29, 2005) is also the “Startup Day” for the Trust under the REMIC provisions of the IRC. The Startup Day is significant because the IRC ties the limitations upon which a REMIC trust may receive its assets to this date. The relevant portion of the IRC addressing the definition of a REMIC is:
(A) General Rule. For purposes of this title, the tems ‘real estate mortgage investment conduit and REMIC mean any entity—
(1) to which an election to be treated as a REMIC applies for the taxable year and all prior taxable years,
(2) all of the interests in which are regular interests or residual interests,
(3) which has 1 (and only 1) class of residual interests (and all distributions, if any, with respect to such interests are pro rata),
(4) as of the close of the 3rd month beginning after the startup day and at all times thereafter, substantially all of the assets of which consist of qualified mortgages and permitted investments.
26 U.S.C.S.§ 860D(emphasis added)110. The IRC also provides definitions of prohibited transactions and prohibited contributions which are relevant to this case as well. In the context of this case, the relevant statute is the definition of prohibited contributions which is as follows: 26 U.S.C. 860G(d)(1) states: Except as provided in section 860G(d)2, “if any amount is contributed to a REMIC after the startup day, there is herby imposed a tax for the taxable year of the REMIC in which the contribution is received equal to 100 percent of the amount of such contribution.” 26 U>S>C> 860G(d)(2) states: (2) Exceptions. Paragraph (1) shall not apply to any contribution which is made in cash and is described in any of the following subparagraphs: (A) Any contribution to facilitate a clean-up call (as defined in Regulations) or a qualified liquidation. (B) Any payment in the nature of a guarantee. ( C ) Any contribution during the 3-month period beginning on the startup day. (D) Any contribution to a qualified reserve fund by any holder of a residual interest in the REMIC. (E) Any other contributions permitted in regulations. 113. The PSA (primarily section 9.01) addresses these sections of the IRC by obliging the parties to the Trust to avoid any action which might jeopardize the tax status of any REMIC and/or impose any tax upon the Trust for the prohibited transactions. These PSA provisions are important to the court’s analysis of the facts in this case because of the interplay between the New York Trust Law, the IRC’s REMIC provisions, and the PSA’s incorporation of the IRC REMIC provisions. 114. The Trust seeking to foreclose on the Plaintiff has included in the terms of its Trust agreement (PSA) a specific time, method and manner of funding the Trust with its assets. The most critical time is the Trust’s closing date, September 29, 2005. According to the terms of the PSA, all of the assets of the Trust were to be transferred to the Trust on or before the closing date. This requirement is to ensure that the Trust will receive REMIC status and thus be exempt from federal income taxation. The Trust must receive all assets with 90 days of the closing date. The additional 90 days is afforded to allow a “clean up period”, for a REMIC to complete the documents associated with the transfers of assets to a REMIC after the startup day(which is the also the Trust closing date). Therefore, according to the plain terms of the Trust agreement in this case, the closing date/startup date was September 29, 2005 and the last day for a transfer of assets into the trust was December 29, 2005. 115. The Trust agreement provides the only manner in which assets may be properly transferred to the Trust and any act in contravention of the Trust agreement is VOID. A.) Transfer of Assets to the Trust Pursuant to the PSA As a generic matter, there are several methods by which the underlying assets of the Trust, specifically the individual promissory notes, might be transferred or conveyed. A trust’s ability to transact is restricted to the actions authorized by its trust documents. In this case, the Trust documents permit only one specific method of transfer to the Trust. That method is set forth in Section 2.01 of the PSA: (a) The Depositor, concurrently with the execution and deliveryhereof, does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, without recourse for the benefit of the Certificate holders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (i) each Mortgage Loan identified on the Mortgage Loan Schedules, including the related Cut-off Date Principal Balance, all interest accruing thereon after the applicable Cut-off Date and all collections in respect of interest and principal due after the applicable Cut-off Date; (ii) property which secured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Mortgage Loans; (iv) all other assets included or to be included in the Trust Fund; (v) all proceeds of any of the foregoing; and (vi) the rights of the Depositor under the Mortgage Loan Purchase Agreement. Such assignment includes all interest and principal due to the Depositor or the Servicer after the applicable Cut-off Date with respect to the Mortgage Loans. It is agreed and understood by the Depositor and the Trustee that it is not intended that any mortgage loan be included in the Trust Fund that is a “High-Cost Home Loan” as defined in (i) the New Jersey Home Ownership Act effective November 27, 2003,(ii) the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) the Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004 or (iv) the Indiana Home Loan Practices Act, effective January 1, 2005. In connection with such assignment, the Depositor shall, withrespect to each Mortgage Loan, deliver, or cause to be delivered, to the Custodian, on or before the Closing Date the following documents or instruments with respect to each Mortgage Loan: (i) The original Mortgage Note either (A) endorsed in blank or (B)endorsed as provided in Section 2.01(d), with all prior and intervening endorsements as may be necessary to show a complete chain of endorsements or with respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or destroyed and has not been replaced, a lost note affidavit with a copy of the Mortgage Note and, in the case of any Mortgage Loan originated in the State of New York documented by a NYCEMA, the NYCEMA, the new Mortgage Note, if applicable, the consolidatedMortgage Note and the consolidated Mortgage; (ii) A recorded original assignment of the related Mortgage from Wells Fargo Bank assigning the related Mortgage to the Trustee, certified by the recording office, or, if such assignment is in the process of being recorded, a copy of the related Mortgage transmitted for recordationcertified by an officer of Wells Fargo Bank or applicable Wells Fargo BankCorrespondent to be a true and correct copy of such assignment submitted for recordation; provided, however, if recordation is not required as described below, an assignment in recordable form (which may be assigned in blank) with respect to the related Mortgage; (iii) The original of each assumption agreement, modification, written assurance or substitution agreement pertaining to such Mortgage Note, if any; and (iv)For each Mortgage Loan secured by Co op Shares, the originalsof the following documents or instruments: (A) The loan security agreement; (B) The stock certificate; (C) The stock power, executed in blank; (D) The executed proprietary lease; (E) The executed recognition agreement; (F) The executed UCC-1 financing statement with evidence of recording there on; and (G) The executed UCC-3 financing statements or other appropriate UCC financing statements required by state law, evidencing a complete and unbroken chain from the mortgagee to the Trustee with evidence of recording thereon (or in a form suitable for recordation). (b) Following a Document Transfer Event, the Seller shall, withrespect to each Mortgage Loan, deliver, or cause to be delivered, to the corporate trust services division of the Custodian within 60 days copies (which may be in electronic form mutually agreed upon by the Seller and the Custodian) of the following additional documents or instruments with respect to each Mortgage Loan; provided, however, that originals of such documents or instruments shall be delivered to the Custodian if originals are required under the law in which the related Mortgaged Property is located in order to exercise all remedies available to the Trust under applicable law following default by the related Mortgagor: (i) The original recorded Mortgage with evidence of recordation noted thereon or attached thereto, together with any addenda or ridersthereto, or a copy of such recorded Mortgage with such evidence of recordation certified to be true and correct by the appropriate governmental recording office; or a copy of such recorded Mortgage with such evidence of recordation, or if the original Mortgage has been submitted for recordation but has not been returned from the applicable public recording office, a copy of the Mortgage certified by an officer of Wells Fargo Bank or the applicable Wells Fargo Bank Correspondent to be a true and correct copy of the original Mortgage submitted for recordation; (ii) The original of each assumption agreement, modification, written assurance or substitution agreement pertaining to such Mortgage,if any, or, if such document is in the process of being recorded, a copyof such document, certified by an officer of Wells Fargo Bank or the applicable Wells Fargo Bank Correspondent of such Mortgage Loan or by the applicable title insurance company, closing agent, settlement agent,escrow agent or closing attorney to be a true and correct copy of such document transmitted for recordation, if any; (iii) For each MERS Mortgage Loan that is not a MOM Mortgage Loan, the original assignment showing MERS as the assignee of the Mortgage, with evidence of recording thereon or copies thereof certified by an officer of Wells Fargo Bank or the applicable Wells Fargo Bank Correspondent to have been submitted for recordation; (iv) Each original recorded intervening assignment of the Mortgage as may be necessary to show a complete chain of title from the Mortgage Loan originator to Wells Fargo Bank or Wells Fargo Home Mortgage, Inc., with evidence of recordation noted thereon or attached thereto, or a copy of such assignment with such evidence of recordation to be true and correct by the appropriate governmental recording office, or, if any such assignment has been submitted for recordation but has not been returned from the applicable public recording office or is not otherwise available, a copy of such assignment certified by an officer of Wells Fargo Bank or the applicable Wells Fargo Bank Correspondent to be a true and correct copy of the recorded assignment submitted for recordation; and (v) The original policy of the title insurance or certificate of title insurance or a written commitment to issue such a title insurance policy or certificate of title insurance, or a copy of such title insurance certified as true and correct by the applicable insurer or any attorney’s certificate of title with an Officer’s Certificate of Wells Fargo Bank or the applicable Wells Fargo Bank Correspondent that such attorney’s certificate of title is customarily used in lieu of a title insurance policy in the jurisdiction in which the related mortgage property is located. (c) If any assignment of a Mortgage to the Trustee is in the processof being recorded on the Closing Date, the Depositor shall use its best efforts to cause each such original recorded document or certified copy thereof to be delivered to the Custodian promptly following its recordation, but in no event later than one (1) year following the Closing Date. If any Mortgage has been recorded in the name of MERS or its designee, no assignment of Mortgage in favorof the Trustee will be required to be prepared or delivered and instead, the Master Servicer shall take all actions as are necessary to cause the Trust Fund to be shown as the owner of the related Mortgage Loan on the records of MERS for the purpose of the system of recording transfers of beneficial ownership of mortgages maintained by MERS. The Depositor shall also cause to be delivered to the Custodian any other original mortgage loan document included in the Owner Mortgage File (and, if applicable, the Retained Mortgage File) if a copy thereof has been delivered. The Depositor shall pay from its own funds, without any right of reimbursement therefor, the amount of any costs, liabilities and expenses incurred by the Trust by reason of the failure of the Depositor to cause to be delivered to the Custodian within one (1) year following the Closing Date any assignment of a Mortgage (except with respect to any Mortgage recorded in the name of MERS) not delivered to the Custodian on the Closing Date. In lieu of recording an assignment of any Mortgage the Depositormay, deliver or cause to be delivered to the Custodian the assignment of the Mortgage Loan to the Trustee in a form suitable for recordation, if (i) with respect to a particular state the Trustee and the Custodian have received an Opinion of Counsel acceptable to it that such recording is not required to make the assignment effective against the parties to the Mortgage or subsequent purchasers or encumbrancers of the Mortgaged Property or (ii) the Depositor has been advised by each Rating Agency that non recordation in a state will not result in a reduction of the rating assigned by that Rating Agency at the time of initial issuance of the Certificates. Set forth on Exhibit Q attached hereto is a list of all states where recordation is required by either Rating Agency to obtain the initial ratings of the Certificates. The Custodian may rely and shall be protected in relying upon the information contained in such Exhibit Q. In the event that the Custodian receives notice that recording is required to protect the right, title and interest of the Trustee in and to any such Mortgage Loan for which recordation of an assignment has not previously been required, the Custodian shall promptly notify the Trustee and the Custodian shall within five Business Days (or such other reasonable period of time mutually agreed upon by the Custodian and the Trustee) of its receipt of such notice deliver each previously unrecorded assignment to the related Servicer for recordation. d) Except for Mortgage Notes endorsed in blank, endorsements shallcomply with the following format: WITHOUT RECOURSEPAY TO THE ORDER OF: HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE under the pooling and servicing Agreement dated as of [September 29, 2005]. And its successors and assigns, [Wells Fargo Bank, N.A.][Wells Fargo Home Mortgage, Inc.][Signature of Officer][Officer’s Name and Title] Except where assignments in blank are authorized or in the case ofany Mortgage registered in the name of MERS, assignments of any Mortgage shall comply with the following: HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEEand its successors and assigns (end) 116. The analysis of this transfer language requires the court to consider each part. In the second paragraph of the language in the Trust Agreement, the first statement is one of transfer, stating: “In connection with such assignment, the Depositor shall, with respect to each Mortgage Loan, deliver, or cause to be delivered, to the Custodian, on or before the Closing Date the following documents or instruments with respect to each Mortgage Loan: (i) The original Mortgage Note either (A) endorsed in blank or (B)endorsed as provided in Section 2.01(d), with all prior and interveningendorsements as may be necessary to show a complete chain of endorsements”…. 117. The key document is the mortgage note, which requires mandatory endorsements found in this language: “the original mortgage note…..endorsed WITHOUT RECOURSE”Followed by two alternatives which are phrased in the either/or format. The first labeled “A” states: “endorsed in blank,” or “endorsed as provided in section 2.01(d) (a) The Depositor, concurrently with the execution and delivery, with all prior and intervening endorsements as may be necessary to show a complete chain of endorsements…” 118. In each case, the affirmative language of the Trust agreement places a burden on the Depositor (Wells Defendants) to make a valid legal transfer in the terms required by the Trust instrument. The key language in the entire paragraph is the final statement trailing the “either/or” language of A and B which reads: @(G) The executed UCC-# …or other appropriate…statements…evidencing a complete and unbroken chain from the mortgagee to the Trustee with evidence of recording thereon(or in a form suitable for recordation). 119. Stacked upon the top of this requirement of an unbroken chain of endorsements is the requirement of certification of the final contents of the collateral file for the benefit of the Trust. This requirement is found at Exhibit 1 to the MLPA (mortgage loan purchase agreement), which is an attachment to and incorporated as a part of the PSA in Section 2.01. In part, The MLPA states: In connection with such sale, the Depositor has delivered to, and deposited with, the Trustee or the Custodian the following documents”. 120. The foregoing requirement demonstrates clearly that while the parties to the securitization made provisions whereby promissory notes for this Trust might be delivered in blank to the Trustee, there were two requirements that were mandatory. First, all notes sold to the Trust were required to have an unbroken chain of endorsements from the original payee to the person endorsing it to the Trustee. This requirement stems from a particular business concern in securitization, namely to evidence that there was in fact a “true sale” of the securitized assets and that they are in no way still property of the originator, sponsor, or depositor, and thus not subject to the claims of creditors of the originator, sponsor, or depositor. 121. Second, there was a requirement that ultimately, within the 90 days of the Trust closing date, the actual promissory note must be endorsed over to the Trustee for the specific trust (HSBC Bank, U.S.A., National Association, Defendant), to effectively transfer the asset into the trust and therefore make the Plaintiff Rinaldi’s promissory note Trust property. This requirement finds support in logic and in law and is, in fact, the ancient and settled law of New York on this issue.
- New York Law governs the mandatory requirements to effectively transfer an asset to a trust. It is not contested that securitization trusts, such as the Defendant, are subject to the common law of New York. New York’s trust law is ancient and settled. There are a few principles of New York trust law that are particularly important to the analysis of whether any particular asset is an asset of a given trust. Under New York law, the analysis of whether an asset is trust property is determined under the law of gifts. In order to have a valid inter vivos gift, there must be a delivery of the gift (either by a physical delivery of the subject of the gift) or a constructive or symbolic delivery (such as by an instrument of gift) sufficient to divest the donor of dominion and control over the property  and “what is sufficient to constitute delivery ‘must be tailored to suit the circumstances of the case’”. The delivery rule requires that “‘[the] delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit.’”
- “Under New York law there are four essential elements of a valid trust of personal property: (1) A designated beneficiary; (2) a designated trustee, who must not be the beneficiary; (3) a fund or other property sufficiently designated or identified to enable title thereto to pass to the trustee; and (4) the actual delivery of the fund or other property, or of a legal assignment thereof to the trustee, with the intention of passing legal title thereto to him as trustee.”There is no trust under the common law until there is a valid delivery of the asset in question to the Trust. If the trust fails to acquire the property, then there is no trust over that property which may be enforced. An attempt to convey to a trust will fail if there is no designated beneficiary in the conveyance.
- In the context of mortgage-backed securitization, it is clear that registration of the notes and mortgages in the name of the trustee for the trust is necessary for effective transfer to the trust. Within the Statutes of New York governing Trusts, Estates Powers and Trusts Law (EPTL) section 7-2.1(c) authorizes investment trusts to acquire real or personal property “in the name of the trust as such name is designated in the instrument creating said trust.” Further, the actual contracts of the parties, which include the custodial agreements, the mortgage loan purchase agreements, and the trust instrument known as the “pooling and servicing agreement”, prescribe a very specific method of transfer of the notes and mortgages to the Trust. Because the method of transfer is set forth in the Trust instrument, it is not subject to any variance or exception.The trust documents require that the promissory notes and mortgages be transferred to the Trustee, which under New York trust law requires valid delivery. The question then arises—what constitutes valid delivery to the Trustee?
- When the requirements of the transfer to the trustee are viewed in the context of the corporate or business trust indenture, more information about compliance with these requirements becomes apparent. One must first understand that
“[t]he corporate trustee has very little in common with the ordinary trustee….The trustee under a corporate indenture…has his [or her] rights and duties defined, not by the fiduciary relationship, but exclusively by the terms of the agreement. His [or her] status is more that of a stakeholder than one of a trustee.”
- Indeed, “[a]n indenture trustee is unlike the ordinary trustee. In contrast with the latter, some cases have confined the duties of the indenture trustee to those set forth in the indenture.” The indenture trustee, it has been said, resembles a stakeholder who obligations are defined by the terms of the indenture agreement. Moreover, “[i]t is settled that the duties and powers of a trustee are defined by the terms of the trust agreement and are tempered only by the fiduciary obligation of loyalty to the beneficiaries”.
- The clear import of these cases and statutes is that the delivery of an asset to a trustee under the terms of a corporate indenture requires strict compliance with the mandatory transfer terms of the trust indenture. Thus the Trustee in this case can only take delivery in strict compliance with the terms of the PSA/Trust document. Further, given that New York Estates Powers and Trusts Law section 7-2.1(c) authorizes a trustee to acquire property “in the name of the trust as such name is designated in the instrument creating said trust property,” there should be little doubt that for transfer to a trustee to be effective, the property must be registered in the name of the trustee for the particular trust. Trust property cannot be held in incomplete endorsements and assignments that do not indicate that the property is held in trust by a trustee for a specific beneficiary trust. In fact, it is clear in the law of New York that an attempt to transfer to a trust which fails to specify both a trustee and a beneficiary is ineffective as a conveyance to the Trust. “The failure to name a beneficiary for the Trustee renders the assignment without merit.”
- This position is further supported logically in the common law of New York by the following propositions:
(1) “Until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise”.
(2) The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit; there must be a change of dominion and ownership; intention or mere words cannot supply the place of an actual surrender of control and authority over the thing intended to be given. It is the consummation of the donor’s intent to five that completes the trans- action. Intention alone, no matter how fully established, is of no avail without the con- summated act of delivery.
- How could one logically argue that delivering a promissory note endorsed in blank (making it bearer paper) into a custodian’s vault is “delivery beyond the authority and control of the donor” when the vault is managed by the donor itself? If the donor were to claim that the promissory note were its property, not the trustee’s there would be no evidentiary basis for the trustee to claim ownership. Accordingly, New York law expressly requires that for property to be validly delivered to a trust, the property must pass completely out of the control of the donor (and its agents):
“If the donor delivers the property to the third person simply for the purpose of his deli- vering it to the donee as the agent of the donor, the gift is not complete until the property has actually been delivered to the donee. Such a delivery is not absolute, for the ordinary principle of the agency applies, by which the donor can revoke the authority of the agent, and resume possession of the property, at any time before the authority is executed.””
- Trustees for securitizations often occupy many roles simultaneously and conflictingly both as document custodians and trustees for myriad thousands of securitizations as well as for various parties who are active in the securitization process including originators, servicers, sponsors and depositors. Accordingly, it is inconceivable that anything other than registration into “the name of the trust as such name is designated in the instrument creating said trust property” could ever qualify as delivery to any particular securitization trust. Absent such registration, there would be nothing that would indicate which of thousands of trusts in the care of a trustee a particular promissory note might belong to or if it were the personal property of the trustee itself. Absent such registration, a promissory note would simply be bearer paper, and thus the property of anyone who obtained possession of it. Further, if anything less constituted delivery, why are our courts overwhelmed with robo-signed mortgage assignments and affidavitsexpressing legally-impossible transfers into the specific trusts long after the trusts have closed for funding?
- Recently, on January 7, 2011, the Supreme Judicial Court of Massachusetts rendered a unanimous verdict in a case captioned U.S. Nat’l. Bank Assn., Trustee, v. Ibanez, For ABFC 2005-OPT 1 Trust, ABFC Asset Backed Certificates, Series 2005-OPT 1, No. SJC-10694, (Mass. Jan. 7, 2011). While that ruling is of course not binding upon this court, it is very much contrary to the mortgage securitization industry’s position in cases involving the foreclosure of mortgage loans which have allegedly been securitized. The facts of the case in Massachusetts and the facts of this instant case are similar. Both the Massachusetts and the Plaintiffs cases concern an entity seeking to foreclose on the mortgagor when the foreclosing entities did not possess the underlying promissory note at the time of the foreclosure (or attempted foreclosure, in the Rinaldi’s situation). The case was a ruling on two consolidated cases—both cases were filed by banks (as trustees for two separate trusts) to quiet title on properties they had foreclosed and purchased at the foreclosure sale to satisfy the mortgagor’s debt. The Massachusetts Supreme Judicial Court held that neither bank proved that its trust owned the mortgages when they foreclosed on the homes; therefore, neither had title to the foreclosed properties and that their foreclosures were void. Effectively, this put the borrowers back into the place they were before the foreclosure. The Massachusetts Supreme Judicial Court did not tell the homeowners they are allowed to shirk their obligation to pay their mortgages, which are still outstanding, valid obligations. The Massachusetts Supreme Judicial Court did, however, sharply instruct the banks that they must have the proper documentation which demonstrates a valid right to foreclose before a foreclosure can be carried out. It is well worth noting the conclusion of the Massachusetts Ibanez opinion. The Massachusetts Supreme Judicial Court noted that “The legal principles and requirements we set forth are well established in our case law and our statutes. All that has changed is the [bank’s] apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities.” The principles and requirements of Massachusetts law are well-founded, so too are those of New York law, and they should be upheld even if adherence to the law is inconvenient for banks rushing to sell mortgage-backed securities.
- Plaintiff has shown that Wells Defendants, by and through their employees, agents, assigns, law firms, and other co-ventures, committed fraud upon the Plaintiff with their inducement to enter a loan transaction which was illegal from the start, funded and serviced in a predatory manner, and used that transaction to force the Plaintiff into a foreclosure action which was premeditated by the Wells Defendants.
- Plaintiff has shown that the mortgage and note, prima facie, are void, if not voidable, due to the fraudulent actions of Wells Defendants and their employees.
- Plaintiff has shown that the Wells Defendants and HSBC perpetrated a “fraud on the court” by committing perjury with testimony via affidavit, dated July 29, 2009, when Wells Defendants created and filed with the court the original “Affidavit of Jennifer Robinson in Support of Plaintiff’s Motion for Summary Judgment” when the affiant testified that “HSBC Bank, U.S.A., National Association, as Trustee for Wells Fargo Asset Securities Corporation Home Equity Asset Backed Certificates, Series 2005-2,…is the current owner and holder of said mortgage and note”, when the “Assignment of Mortgage” was not drafted, signed, and filed until April 5, 2010, more than 17 months after that testimony was entered into the record.
- Plaintiff has shown that Wells Defendants could not have possibly incurred any kind of economic loss whatsoever in the course of lending the money of an unknown third party at the closing, obtaining insurance on at least TWO loan accounts, forcing the loan accounts into default, and subsequently collecting the proceeds of insurance against the note in the amount of over $142,292.00, TWICE, therefore realizing over $298,584.00 by forcing Plaintiff to default on their obligation. And if that wasn’t enough, Wells Defendants also sought to profit from the illegal taking of Plaintiff’s homestead and subsequent fraudulent sheriff’s sale by obtaining Plaintiff’s real property with a “credit bid” on the courthouse steps, when they were never a creditor or lender in any sense of the word
- Plaintiff has shown that Wells Defendants have failed to supervise their employees and take the necessary steps to prevent such fraudulent behavior from occurring.
- Plaintiff has shown that the whole of mortgage-backed security structure, as set forth in Trust Agreements, as related to Wells Fargo Home Equity Asset Backed Certificates 2005-2, constitutes a concerted effort to originate loans, with total disregard to State and Federal Laws, and securitize said loans, totally devoid of any real “underwriting” of the loans with regard to borrowers ability to repay, contrary to industry practice.
- Plaintiff has demonstrated that Wells Defendants serviced the Plaintiff’s loan account into default as the normal course of business, and part of their business model, to realize unjust profits in the course of violating their fiduciary duty to the Plaintiff in origination and servicing, and further violating the law to obtain their unjust enrichment.
FIRST CLAIM FOR RELIEF
FRAUD IN THE INDUCEMENT
- The preceding paragraphs are incorporated here by reference as if fully stated herein.
- Plaintiffs were induced to accept the mortgage and loan from Wells Defendants, by and through the actions of their employees, co-ventures, and co-defendants, and induced the Plaintiff to enter a predatory loan contract, secured by a mortgage to homestead property, with their fraudulent underwriting, creation of false documents, and their fraudulent appraisal of property.
- Wisconsin Statute 224.77 , (1) (b) prohibits, among other things, to “ Make, in any manner, any materially false or deceptive statement or representation, including engaging in bait and switch advertising or falsely representing residential mortgage loan rates, points, or other financing terms or conditions. Wells Defendants engaged in EXACTLY this behavior originating Plaintiff’s loan.
- Wisconsin Statute 224.77 also prohibits (c) (the) Make(ing of) a false, deceptive, or misleading promise relating to the services being offered or that influences, persuades, or induces a client to act to his or her detriment. Wells Defendants, by and through it’s employees, assured Plaintiff that “rates are only going down, and property values are rising so fast…” that it was “foolish NOT TO BUY REAL ESTATE”.
- Wisconsin Statute 227.77 (e) Act for more than one party in a transaction without the knowledge and consent of all parties on whose behalf the mortgage banker, mortgage loan originator, or mortgage broker is acting. Plaintiff was not advised that they were entering a loan transaction with Deutsche Bank, nor HSBC, at the time of the transaction occurring.
- Wisconsin Statute 227.77 (gp) As a mortgage banker or mortgage broker, conduct business at or from a principal office or branch office that is not licensed under this subchapter. Again, Deutsche Bank was a foreign corporation not licensed in this State.
- Wisconsin Statute 227.77 (L) state that it is illegal to “Engage in conduct that violates a standard of professional behavior which, through professional experience, has become established for mortgage bankers, mortgage loan originators, or mortgage brokers.” Wells Defendants must not have read this one when they came to Wisconsin; Wells Defendants violated every tenet of prudent lending practices. Wis.Stat. 227.77(m) continues with “Engage in conduct, whether of the same or a different character than specified elsewhere in this section, that constitutes improper, fraudulent, or dishonest dealing.” Wells Defendants engaged in multiple frauds, by and through its employees and co-ventures.
The elements of fraud in Wisconsin are that the defendant (i) made a representation of fact (ii) which was untrue, that the untrue representation (iii) “was made by the defendant knowing the representation was untrue or recklessly without caring whether it was true or false” and (iv) “with intent to deceive and induce the plaintiff to act upon it to the plaintiff’s pecuniary …
– in IN RE ADELPHIA COMMUNICATIONS CORPORATION SECURITIES AND DERIVATIVE LITIGTION, 2009
“A plaintiff is not required to prove reasonable reliance as an element of a misrepresen- tation claim under this section, but the reasonableness of a plaintiff’s reliance may be relevant in considering whether the representation materially induced (caused) the plain tiff to sustain a loss. The reasonableness of a person’s actions in relying on representa tions is a defense and may be considered by a jury in determining cause. A court may de termine that the representation did not materially induce the plaintiff’s decision to act and that the plaintiff would have acted in the absence of the representation.” Novell v. Migliaccio, 2008 WI 44, 309 Wis. 2d 132, 749 N.W.2d 544, 05-2852.
“The elements of fraudulent misrepresentation are well established in the case law: First, there must be a false representation; second, it must be made with intent to defraud and for the purpose of inducing another to act upon it; and third, such other person must rely on it and be induced to act, to his injury or damage.”
– in Miles v. Mackle Bros., Div. Deltona Corp., 1976
SECOND CLAIM FOR RELIEF
JUDICIAL ESTOPPEL AND COLLATERAL ESTOPPEL
- The preceding paragraphs are incorporated by reference as though set forth herein.
- The Supreme Court has fashioned a three pronged test for whether judicial estoppel should apply: (1) whether a party’s later position is clearly inconsistent with its position in a prior case; (2) whether the party succeeded in persuading the first court to accept its position, creating “the perception that either the first or the second court was misled;” and (3)whether the party espousing the inconsistency has gained an unfair advantage or imposed an unfair detriment on an opposing party by that means.”
- American equitable estoppel is the counterpart to estoppel by representation, and its elements are summarized as:
- facts misrepresented or concealed
- knowledge of true facts
- fraudulent intent
- inducement and reliance
- injury to complainant
- clear, concise, unequivocal proof of actus (not by implication)
- It is clear that Wells Defendants deceived the Court in 09-CV-0353 with their submission of the Robinson Affidavits, and subsequently obtained the “Judgment of Foreclosure” to the detriment of Plaintiff utilizing fraud and a fraudulent conveyance.
THIRD CLAIM FOR RELIEF
NEGLIGENT SUPERVISION OF EMPLOYEES
- The preceding paragraphs are incorporated by reference as though set forth herein.
- Wells Defendants, by failing to supervise and control their employees, are culpable and liable for the actions of those employees. Ewing, Lucero, Vang, Peterson, and others unknown to Plaintiff, knowingly, wantonly, and with total disregard for the validity, legality, and subsequent losses to Plaintiff, engaged in the fraudulent behavior that resulted in Plaintiff’s loss of quality of life, financial prosperity, and enjoyment of the real estate, and the subsequent economic hardship brought upon Plaintiff by their fraudulent acts.
FOURTH CLAIM FOR RELIEF
BREACH OF FIDUCIARY DUTY AND AIDING
AND ABETTING BREACH OF FIDUCIARY DUTY
- The preceding paragraphs are incorporated as though set forth herein.
- Wells Defendants aided and abetted each other to further the scheme of originating loans to fail with the intention of capitalizing on the insurance costs and predatory fees that the mortgage servicing industry thrives on. Plaintiffs were subjected to a myriad of fees totaling over $4000 before succumbing to default at the hands of the servicer.
- Plaintiff relied upon the Wells Defendants superior knowledge and expertise to provide him a loan, secured by a mortgage, that would enable Plaintiff to buy a home and provide shelter for his family. Plaintiff looked to Wells Fargo as a quality lender, and was encouraged to believe in the lender as the Wells Defendants held themselves out to be “one of America’s oldest banks”.
- Wells Defendants, by and through their actions in underwriting and approving Plaintiff for a mortgage loan, enjoyed a position of superior knowledge and expertise over the Plaintiff, who had not purchased a home with a mortgage before. The Wells Defendants had a fiduciary position in that Wells Defendants had the power direct the Plaintiff to whatever loan program they could make the most money on. That, in and of itself, is not a breach of fiduciary duty. Plaintiffs employees had a duty to their own company to see that they earned a profit on their transaction.
- The breach of that fiduciary duty occurred with the Wells Defendants falsifying Plaintiffs assets, using those assets to underwrite Plaintiff’s ability to uphold his end of the bargain, knowing all along that Plaintiff was going into this mortgage and loan with less than one month of income on hand, virtually guaranteeing the default of the Plaintiff.
- Plaintiff notices the ABSnet deal summary that shows Wells Defendants originated thousands of loans that entered an early stage of default. Early defaults are the red flag that signify fraud in mortgage loan origination. By December 2008, nearly 40% of the Pool Assets were in arrears, from 30 days delinquent to REO (real estate foreclosed and taken onto the bank’s balance sheet). This surely was not an accident, as Wells Defendants fraudulent underwriting resulted in the widespread failure of these borrowers to pay back their loans.
- Wells Defendants aided and abetted the fraud and breach of fiduciary duty by allowing their employees to break the laws without fear of retribution, only promotion.
“ a special relationship may exist between defendants, who possess specialized knowledge and experience in the field of mortgage refinance, and plaintiff, a homeowner without any training or education in mortgage refinance. Based upon the parties’ vast difference in knowledge, there are issues of fact whether plaintiff’s reliance on defendants’ misrepresentations was justified. (See Fresh Direct, LLC v. Blue Martine Software, Inc., 7 AD3d 487 [2nd Dept. 2004].
FIFTH CLAIM FOR RELIEF
WISCONSIN ORGANIZED CRIME CONTROL ACT
- The preceding paragraphs are incorporated as though set forth herein.
- Plaintiff alleges, upon knowledge and belief, that criminal acts committed by Wells Fargo Bank, N.A., HSBC Bank, U.S.A., Gray and Associates, including the attempted fraudulent foreclosure of Plaintiffs homestead, the filing of false and fraudulent documents in the Court System of Kenosha County and the Kenosha County Recorder’s Office, is indicative of a Racketeering operation.
- The drafting and construction of fraudulent documents, and subsequent filing with the County Recorder, is a CLASS ONE FELONY in and of itself. The “Assignment of Mortgage”, drafted and constructed by “Duncan D. Delhey”, an employee of Gray and Associates, and subsequently executed by Herman John Kennerty, is prima facie evidence of the fraud (Wis. Stat. § 946.72) that the Wells Defendants are willing to perpetrating on a daily basis throughout the County and throughout the State. The filing of the fraudulent “Assignment of Mortgage” is intended to interfere with the true disposition of the Kenosha County Land Records system.
- Plaintiffs allege, on knowledge and belief, that the actions of the Wells Defendants demonstrates (Wis.Stat. § 946.82(3)) “a pattern of racketeering activity”. As this scenario has played out thousands of times throughout the State of Wisconsin and the nation over the last several years, thousands of homeowners have been subjected to the filing of fraudulent affidavits of ownership of “the note and mortgage” in the Court system to facilitate fraudulent foreclosures by parties with no recorded security interest in the real property.
- Plaintiffs allege, upon knowledge and belief, that the Wells Defendants are engaged in an “enterprise”, namely “Wells Fargo Asset Securities Corporation Home Equity Asset-Backed Securities 2005-2”, and by and through this enterprise, are committing fraud on the court, the land recording system, and practicing “theft by conversion” in the taking of citizens real property by filing false and fraudulent documents in the court system.
- Plaintiff states, upon knowledge and belief, that the Wells Defendants are operating a “continuing criminal enterprise”, as set forth in Wis.Statute §946.85:
946.85 Continuing criminal enterprise.
946.85(1) (1) Any person who engages in a continuing criminal enterprise is guilty of a Class E felony.
946.85(2)(a) (a) The activity is undertaken by the person in concert with 5 or more other persons, each of whom acted with intent to commit a crime and with respect to whom the person occupies a supervisory position; and
946.85(2)(b) (b) The person obtains gross income or resources in excess of $25,000 from the activity.
- Plaintiff alleges, upon knowledge and belief, that they are entitle to restitution for the criminal acts committed by the Wells Defendants, pursuant to Wis. Statute §946.84 Penalties:
946.84(2) (2) In lieu of a fine under sub. (1), any person convicted of engaging in conduct in violation of s. 946.83, through which he or she derived pecuniary value, or by which he or she caused personal injury or property damage or other loss, may be fined not to exceed 2 times the gross value gained or 2 times the gross loss caused, whichever is the greater, plus court costs and the costs of investigation and prosecution, reasonably incurred. In calculating the amount of fine based on personal injury, any measurement of pain and suffering shall be excluded.
946.84(4)(a) (a) Anything of value in the form of money, a negotiable instrument, or a commercial interest or anything else the primary significance of which is economic advantage; or
946.84(4)(b) (b) Any other property or service that has a value in excess of $100.
- Plaintiffs allege, upon knowledge and belief, that they are entitled to pursue civil remedies against the Wells Defendants, pursuant to Wis. Statute §946.86:
Wis.Stat. §946.86 Criminal forfeitures.
946.86(1) (1) In addition to the penalties under ss. 946.84 and 946.85, the court shall order forfeiture, according to the procedures set forth in subs. (2) to (4), of all real or personal property used in the course of, or intended for use in the course of, derived from or realized through conduct in violation of s. 946.83 or 946.85. All forfeitures under this section shall be made with due provision for the rights of innocent persons. Property constituting proceeds derived from conduct in violation of s. 946.83 or 946.85 includes, but is not limited to, any of the following:
946.86(1)(a) (a) Any position, office, appointment, tenure, commission or employment contract of any kind that the defendant acquired or maintained in violation of s. 946.83 or 946.85, through which the defendant conducted or participated in the conduct of the affairs of an enterprise in violation of s. 946.83 or 946.85, or that afforded the defendant a source of influence or control over the affairs of an enterprise that the defendant exercised in violation of s. 946.83 or 946.85.
946.86(1)(b) (b) Any compensation, right or benefit derived from a position, office, appointment, tenure, commission or employment contract that accrued to the defendant during the period of conduct in violation of s. 946.83 or 946.85.
946.86(1)(c) (c) Any interest in, security of, claim against or property or contractual right affording the defendant a source of influence or control over the affairs of an enterprise in which the defendant participated in violation of s. 946.83 or 946.85.
946.86(2) (2) Any criminal complaint alleging violation of s. 946.83 or 946.85 shall allege the extent of property subject to forfeiture under this section. At trial, the trier of fact shall return a special verdict determining the extent of property, if any, to be subject to forfeiture under this section. When a special verdict contains a finding of property subject to a forfeiture under this section, a judgment of criminal forfeiture shall be entered along with the judgment of conviction under s. 972.13.
946.86(3) (3) If any property included in a special verdict of criminal forfeiture cannot be located, has been sold to a bona fide purchaser for value, has been placed beyond the jurisdiction of the court, has been substantially diminished in value by the conduct of the defendant, has been commingled with other property that cannot be divided without difficulty or undue injury to innocent persons or is otherwise unreachable without undue injury to innocent persons, the court may order forfeiture of any other property of the defendant up to the value of the property that is unreachable.
946.86(4) (4) Any injured person has a right or claim to forfeited property or the proceeds derived therefrom superior to any right or claim the state has under this section in the same property or proceeds. This subsection does not grant the injured person priority over state claims or rights by reason of a tax lien or other basis not covered by ss. 946.80 to 946.88. All rights, titles and interest in property described in sub. (1) vest in the state upon the commission of the act giving rise to forfeiture under this section.
PRAYER FOR RELIEF
- Plaintiffs request the court for declaratory relief under the cited statutes to forever enjoin the Wells Defendants, and each of them, from pursuing the foreclosure of the property deeded to the Plaintiff, as penalty for their criminal acts in attempting the fraudulent foreclosure and attempted “theft by conversion”.
- Plaintiffs request the court for declaratory relief in the form of “quiet title”, that is, to declare that the Plaintiff’s homestead is free of any and all claims against it, as the land title records for the real property are now tainted with filing of lis pendens and security interests by those who are a stranger to the property, have no valid security interest, and have broken the law in an attempt to lay claim and confiscate Plaintiffs homestead.
- Plaintiff, pursuant to the law, seeks treble damages in AN AMOUNT TO BE DETERMINED BY THE COURT for the criminal behavior, including, but not limited to, fraud, perjury, and violations of the Wisconsin Organized Crime Control Act.
- PLAINTIFF DEMANDS TRIAL BY A JURY OF 12 PERSONS.
Submitted this 5th Day of July, 2011.
Roger P. Rinaldi, Plaintiff Desa L. Rinaldi, Plaintiff
Roger P. Rinaldi Desa L. Rinaldi, Pro Se Litigants
22311 121st Street, Bristol, WI 53104
Subscribed and sworn to before me on this 15th Day of July, 2011
 Warranty Deed, Exhibit_1_
 “1003 Asset Statements, Exhibits 3, 4 and 5
 “Land Title Records, Kenosha County” Exhibit 6
 DFI-Bkg 43.02 Improper, fraudulent, or dishonest dealing.
 Exhibit 7: First Affidavit of Robinson, Exhibit 8: Second Affidavit of Robinson
 Case #09CV0353, HSBC Bank, U.S.A. as Trustee for Wells Fargo Home Equity Asset Backed Certificates 2005-2 v Rinaldi, Roger and Rinaldi, Desa
 “Hope Now Default Solicitations” 2 different account numbers 3 days apart, Exhibit 9 and Exhibit 10
 “Maiden Lane LLC Holdings 01/29/2010, Page 1, 130, CDS: (WFHET 05-2-M7/8/9 Certificates)” Exhibit 11
 Exhibit 6, id.
 “Offer in Compromise December 2004 (Exhibit 12)
 Ewing’s last known employer is Bank of America
 Plaintiff Bank Statement June 9, 2005 TCF Bank Acct.#8876330152 (Exhibit 13)
 Truth in Lending Disclosure, Dated May 26, 2005, (Exhibit
 Plaintiff Banking Records June 2005 (Exhibit 42)
 Deutsche Loan Funding Check (Exhibit 2)
 Counteroffer Work Paper, Mark Peterson signor, (Exhibit 16)
 Mr. Vang’s name appears on the survey letter forged with “RR” 6/7/2010 (Exhibit 25)
 Underwriting Worksheets, (Exhibit 17)
 Letter from Citibank, dated August 10, 2009 (Exhibit 18)
 Closing Instructions Page 3 @ #2 (Exhibit 24)
 TCF Bank Check for $555.44 (Exhibit 19)
 Truth In Lending Disclosure Dated 5-26-2005 (Exhibit 15)
 Truth In Lending Disclosure Dated 6-10-2005 (Exhibit 20)
 Asset Statement showing Citibank Account #1, $15,630 (Exhibit 4)
 Asset Statement showing Citibank Account #875023-09, $15,630 (Exhibit 5)
 Wis.Stat. § 224.03 “Banking, Unlawful, Without Charter”
 Appraisal of Subject Property (Exhibit 26)
 Servicing Records 12/18/06 (MI NOTICE OF DEFAULT FILED) (S-23K) (Exhibit 27)
 Servicing Records 1/22/2007 “22 day Delinq” (Exhibit 21)
 Loan Modification Settlement Statement showing $4507.56 in default fees (Exhibit 22)
 2008 Mortgage Interest Statement Evidencing payments (Exhibit 28)
 Mortgage Loan History shows posting on 7-07-2008 $1776.00
 Kenosha County Assessor’s Office, unpaid taxes (Exhibit 30)
 Pooling and Servicing Agreement, WFHET 05-2 @Line 32,157: “The Servicer may also modify the payment terms of Mortgage Loans that are in default, or as to which default is reasonably foreseeable, that remain in the Trust Fund rather than foreclose on such Mortgage Loans; provided that no such modification shall forgive principal owing under such Mortgage Loan or permanently reduce the Mortgage Interest Rate on such Mortgage Loan. Any such modification will be made only upon the determination by the Servicer that such modification is likely to increase the proceeds of such Mortgage Loan over the amount expected to be collected pursuant to foreclosure.”
 “Assignment of Mortgage dated April 5, 2010” (Exhibit 23)
 “Assignment of Mortgage dated April 5, 2010” (Exhibit 23)
 ABSnet.net Deal Summary, Wells Fargo Home Equity Trust 2005-2 (Exhibit 31)
 “Hope Now Solicitations” (Exhibits 9 and 10)
 “Notice of Intent to Change Interest Rate, December 10, 2010” (Exhibit 32)
 “Affidavit of Jennifer Robinson in Support of Plaintiff’s Motion for Summary Judgment” July 29, 2009” (Exhibit 33)
 “Affidavit of Jennifer L. Robinson in Opposition to Defendant’s Motion for Relief” November 17, 2010 (Exhibit 34)
 Wis.Stat. 706.02 Formal Requisites. 706.02(1)(a)(b)(c)(d)(e)(f)(g)
 Plaintiff Bank Statement evidencing payment of October 4, 2010
 ABSnet.net Deal Summary (Exhibit 31)
 “Fitch Rates $863.6 MM Wells Fargo Home Equity Asset-Backed 2005-2 Trust Sept 2005” (Exhibit 34)
 “Fitch Affirms $778.0 MM and Downgrades $142.6MM from 3 Wells Fargo 2005 Subprime Deals” (Exhibit 35)
 ABSnet.net deal summary (Exhibit 31)
 Wells Fargo Asset Securities Corp “8k” 8/26/1999 (Exhibit 37)
 “Assignment of Mortgage” dated April 5, 2010 (Exhibit 23)
 181.0129(1)(1) Signing false document. A person may not sign a document with intent that it be delivered to the department for filing or deliver, or cause to be delivered, a document to the department for filing, if the person knows that the document is false in any material respect at the time of its delivery.181.0129(2)(2) Penalty. Whoever violates this section is guilty of a Class I felony.
“Testimony of H.J. Kennerty ‘In the Matter of: Geline v. Northwest Trustee Services, et al’” (Exhibit 33)
 706.06(4) In addition to any criminal penalty or civil remedy otherwise provided by law, knowingly false authentication of an instrument shall subject the authenticator to liability in tort for compensatory and punitive damages caused thereby to any person.
 “Robo-Signing: Documents show Citi and Wells Also Committed Foreclosure Fraud”, Abigail Field, Daily Finance 6/9/2011
 “Funding Check, Deutsche Bank AG” (Exhibit 2)
 Wis.Stat. 706.02 “Conveyances of Real Property; RECORDING; TITLES; (1)Formal Requisites
 All references to the Wisconsin Statutes are to the 2009-10 version unless otherwise noted.
 Lochsong, Ltd, is a synthetic collateralized debt obligation, registered in the Cayman Islands, and uses Plaintiff’s loan account as a referenced transaction. (Exhibit 38).
 Goldman Sachs and Co. are under subpoena as of June 2, 2011, by the U.S. Attorney’s Office (Exhibit 39)
 “Fitch Rates $863.6MM Wells Fargo Home Equity Asset-Backed Securities 2005-2 Trust” (Exhibit 34)
 Modification Settlement Statement (Exhibit 22)
 The Wells Fargo Home Equity Trust 2005-2 was used to 1) collect money from the U.S. Government via TARP (Exhibit 11), 2) collect on insurance proceeds (Exhibit 36, Exhibit 39) from bond insurers, and 3) to further the fraud on investors with CDO and synthetic CDO transactions (LOCHSONG) (Exhibit 38).
 It is settled that the duties and powers of a trustee are defined by the terms of the trust agreement and are tempered only by the fiduciary obligation of loyalty to the beneficiaries (see, United States Trust Co. v First Nat’l City Bank, 57 A.D.2d 285, 295-296, aff’d 45 NY2d 869; Restatement [Second] of Trusts § 186, comments a, d). See In re IBJ Schroder Bank & Trust Co., 271 A.D.2d 322 (N.Y.App.Div. 1st Dep’t 2000)
 The Pooling and Servicing Agreement specifies this date (http://www.secinfo.com/$/SEC/Registrant.asp?CIK=1340310)
 This requirement is found in Sec. 2.01 of the PSA “Conveyance of Mortgage Loans”
 As early as 1935, in Burgoyne v. James, 282 N.Y.S. 18, 21 (1935), the New York Supreme Court recognized that business trusts, also known as “Massachussets Law Trusts”, are deemed to be common law trusts. See also In re Estate of Plotkin, 290 N.Y.S.2d 46, 49(N.Y.Sur. 1968)(characterizing common stock trust funds as “”common law trust[s])””.Other jurisdictions are in accord. See, e.g., Mayfield v First Nat’l Bank of Chattanooga, 137 F.2d 1013(6th Circ. 1943)(applying common law trust principles to a pool of mortgage participation certificate holders).
 “”In the case of a trust where there is a trustee other than the grantor, transfer will be governed by the existing rules as to intent and delivery (the elements of a gift)””In re Becker, 2004 N.Y. Slip Op. 51773U, 4(N.Y. Sur.Ct.2004)
 (see, Matter of Szabo, 10 N.Y..2d 94, 98-99, supra; Matter hn, 187 App. Div.392, 395) as cited in Gruen v Gruen, 68 N.Y.2d, 56 (N.Y. 1986)
 (Matter of Szabo, supra, at p. 98)
 (i.d.; Vincent v Rix, 248 N.Y.76, 83; Matter of Van Alstyne, supra, at p 309; see Beaver v. Beaver, supra, at p428) as cited in Gruen v Gruen, 68 N.Y.2d 48, 56-57 (N.Y. 1986)
 Brown v Spohr, 180 N.Y. 201, 209-210 (N.Y. 1904)
 Until the delivery to the trustee is performed by the settler, or until the securities are definitely ascertained by the declaration of the settler, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise (cf. Riegel v Central Hanover Bank and Trust Co., 266, App Div.586; Matter of Gurlitz [Lynde], 105 Misc 30, aff’d 190 App. Div. 907, supra; Marx v Marx, 5 Misc 2d 42) as cited Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep’t 1978)
 In an action against the individual defendant as trustee, based on the theory of breach of fiduciary obligation, the complaint was properly dismissed on the ground that he had acquired no title or separate control of the goods and, hence, there was no actual trust over the property to breach. Kermani v. Liberty Mut. Ins. Co., 4 A.D.2d 603 (N.Y.App. Div. 3d Dep’t 1957)
 Wells Fargo Bank v. Farmer, 2008 N.Y. Misc Lexis 3248
 Courts may neither ignore the actual provisions of transaction documents nor create contractual remedies that were omitted from the governing contracts by the contracting parties. See Schmidt v. Magnetic Head Corp., 468 N.Y.S.2d649, 654 (N.Y. App. Div. 1983)(““It is fundamental that courts enforce contracts and do not rewrite them . . . An obligation undertaken by one of the parties that is intended as a promise . . . should be expressed as such, and not left to implication.”” (citations omitted)); Morlee Sales Corp. v. Manufacturers Trust Co., 172 N.E.2d 280, 282 (N.Y.1961)(““[T]he courts may not by construction add or excise terms . . . and thereby ‘make a new contract for the parties under the guise of interpret[ation].’““ (quoting Heller v. Pope, 250 N.E. 881, 882 (N.Y. 1928))
 AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 2008 N.Y. Slip Op. 5766, 7 (N.Y. 2008)
 Green v. Title Guarantee & Trust Co., 223 A.D. 12, 227 N.Y.S. 252 (1st Dept.), aff’d, 248 N.Y. 627 (1928);Hazzard v. Chase National Bank, 159 Misc. 57, 287 N.Y.S. 541 (Sup. Ct. 1936), aff’d, 257 A.D. 950, 14 N.Y.S.2d147 (1st Dept.), aff’d, 282 N.Y. 652, cert. denied, 311 U.S. 708 (1940)
 See Meckel v. Continental Resources, 758 F.2d 811, 816 (2d Cir. 1985) as cited in Ambac Indem. Corp. v.Bankers Trust Co., 151 Misc. 2d 334, 336 (N.Y. Sup. Ct. 1991)
 See, United States Trust Co. v First Nat’l City bank, 57 a.d.2d 285, 295-296, aff’d 45 NY2d 869; Restatement [Second} of Trusts § 186, comments a, d) as cited in In re IBJ Schroder Bank & Trust Co., 271A.D.2d 322 (n.Y. App. Div. 1st Dep’t 2000)
 Wells Fargo Bank, N.A. v. Farmer, 2008 NY Slip Op 51133U, 6 (N.Y. Sup. Ct. 2008)
 cf. Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc. 30,aff’d 190 App. Div. 907, supra; Marx v. Marx, 5 Misc 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y.App. Div. 2d Dep’t 1978).
 Vincent v. Putnam, 248 N.Y. 76, 82-84 (N.Y. 1928)
 Phillippsen v. Emigrant Indus.Sav. Bank, 86 N.Y.S.2d 133, 137-138 (N.Y. Sup. Ct. 1948). (Beaver v. Beaver,supra,117 N.Y. 421, 428, 22 N.E. 940, 941, 6 L.R.A. 403, 15 Am.St.Rep. 531).
 (See, also, Grant Trust & Savings Co. v. Tucker, 49 Ind. App. 345; Furenes v. Eide, 109 Ia. 511; Dickeschied v.Exchange Bank, 28 W. Va. 340; Love v. Francis, 63 Mich. 181; [**428] Merchant v. Building Co. [***15] , 17Ohio Circuit Ct. 190.)
 EPTL 7-2.1 (c)
 “Affidavits of Robinson, first and second”(Exhibits 7 and 8)
 @ Exhibit 20, TILA Total of Payments $426,548.64 times 35% = $142,292.00 (Exhibit 39 WFASC 8K @ line 6, “.35” refers to the amount of insurance purchased) times 2 loan accounts
 Underwriting Worksheets (Exhibit 17)
 “Modification Settlement Statement” (Exhibit 22)
 Deal Summary for Wells Fargo Home Equity Trust 2005-2 (Exhibit 31)
 Wis.Stat. §946.72 Tampering with public records and notices.
 Wis.Stat. §946.82(2) ”Enterprise” means any sole proprietorship, partnership, limited liability company, corporation, business trust, union organized under the laws of this state or other legal entity or any union not organized under the laws of this state, association or group of individuals associated in fact although not a legal entity. “Enterprise” includes illicit and licit enterprises and governmental and other entities. “Wells Fargo Home Equity Trust 2005-2” is an enterprise.