IN THE COURT OF APPEALS OF OHIO

SECOND APPELLATE DIVISION

Wells Fargo Bank NA. as Trustee for Securitized
023136
Asset Backed Receivables LLC 2006-OP1
Mortgage Pass-Through Certificates,
Series 2006 OP1
Plaintiff,

C.A. Case No.

v.
John A. Reed, et al.
Defendant
DEFENDANTS MOTION TO VACATE
Now comes Defendant John A. Reed (Defendant), for this motion
to vacate this Courts November 13th 2008 judgment entry granting
Plaintiff Wells Fargo Bank NA. as Trustee for Securitized Asset Backed
Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series
2006 OP1 (Plaintiff) motion of judgment on the basis of the State of
Ohios Supreme Courts October 31, 2012 holding in Federal Home
Loan Mortgage Corporation v. Schwartzwald, 2012-Ohio-5017.
Respectful
ly submitted,
________________________
John A. Reed
40 Maple Ave..
Centerville, Ohio 45459
937-890-2576
Yotraj@Yahoo.com

SERVICE
A true and exact copy of the foregoing has been served this 16th
day of August, 2010 via email as follows:
Attys for Plaintif
Amelia A. Bower (0013474)
and
David Van Slyke (0077721)
300 East Broad St., Suite 590
Columbus, Ohio 43235
Via email @ abower@plunkettcooney.com
And dvanslyke@plunkettcooney.com
and
Sara M. Petersmann 0055402
Lerner, Sampson & Rothfuss
P.O. Box 5480
Cincinnati, Ohio 45201-5480
Via email @ attyemail@lsrlaw.com
Atty for Defendant John L. Reed
Thomas W. Kendo
7925 Paragon Rd.
Dayton, Ohio 45459
Via email @ tkendo@midam-title.com
CERTIFICATE OF SERVICE
THE UNDERSIGNED HEREBY CERTIFIES that a true and
correct copy of the foregoing has been forwarded, via U,

Introductory Statement
As an initial matter, Defendant freely acknowledges that Plaintiff
filed this lawsuit in 2008, and much litigation and time has since
ensued, including an appeal and motion for relief from judgment
pursuant to Civ. R. 60(B).
Plaintiff debt collector Wells Fargo Bank as Trustee for Trust
alleges an impossibility, to be the real party in interest to foreclose on
an alleged Note and Mortgage created between H&R Block and
Defendant Reed. Defendant Reed has repeatedly disavowed any
knowledge of same.
Plaintiff Debt collector alleges the right to commence this action
against Defendant Reed and submits documentation which they allege
proves their right to same. Defendant Reed proves their evidence of
ownership or even of Holder status of the note & mortgage that is
the subject matter of this litigation is an impossibility.1
Further, none of the above changes the fact that within Plaintiffs
Pleadings and the entirety of their own exhibits, the Court never had
jurisdiction to hear this matter, nor was Plaintiff Wells Fargo Bank N.A.
as Trustee, the real party in interest entitled to enforce the alleged
note and mortgage on February 27th, 2008, the date Plaintiff filed the
foreclosure complaint, nor can it be at any point thereafter, without
Plaintiff having first been assigned or otherwise been legally vested as
the true Holder in Due Course of the note & mortgage in question.
Defendant submits that Plaintiff is not, was not, and by the Trusts own
controlling documents terms and agreements, could never have been.

"Constructive fraud: A contract or act, which, not originating in evil design and contrivance to perpetuate a positive
fraud or injury upon other persons, yet, by its necessary tendency to deceive or mislead them, or to violate a public or
private confidence, or to impair or injure public interest, is deemed equally reprehensible with positive fraud, and
therefore is prohibited by law, ... " Bovier's Law Dictionary - 1856 Edition
"Fraud vitiates the most solemn contracts, documents, and even judgments." i.e. Documents, Constitutions, Court
Decisions.. U.S. vs. Throckmorton, 98 U.S. 61

Plaintiff debt collectors right to initiate this suit against Defendant

is/was a legal impossibility.
Defendant also states that by the terms found upon the alleged
Mortgage itself, as is shown on page one, under the heading
BORROWER COVENANTS:
Borrower warrants and will defend generally the title to
the Property against all claims and demands, subject to
any encumbrances of record.
Within this action, Defendant, being forced to accept the
assumption the mortgage and note is in fact legitimate (which he
adamantly does not) is merely exercising his alleged legal &
contractual requirement and duty of warranting and defending
generally the contractual terms of the alleged mortgage contract.
Debt collector Plaintif Wells Fargo Bank N.A. as Trustee
(WFB) lacked standing to bring, initiate or invoke this action
because it was not, nor was it allowed to be, the holder of the
note or the assignee of the mortgage at the time it filed suit
(explained infra). If a party does not have standing at the time
the complaint is filed, it is a jurisdictional problem that cannot
later be cured.
The question of standing is a threshold question of whether the
party has a personal stake in the outcomeand if that personal stake
does not exist when the lawsuit is filed, the suit must be dismissed.
Plaintiff Wells Fargo Bank N.A. as Trustee had no legal interest at the
time it filed the complaint, and standing cannot exist without a legal
right or claim.

Since the foreclosing bank relied on an alleged after foreclosure

initiation acquired interest in the alleged note and mortgage to
represent its right to enforce the agreements, Defendant Reed I Moves
the Court to vacate the judgment in its entirety or to remand back to
the civil court with instruction for same.
I need not proceed under Civ.R. 60(B) because the judgment is void.
The on point decision of the Ohio Supreme Courts Schwartzwald
decision2 states that standing has to exist at the time the case is filed,
and if it does not exist, the jurisdiction of the common pleas court was
not, it could not have been invoked. A court without jurisdiction cannot
enter any judgment (except one dismissing the case for lack of
jurisdiction). A motion to vacate a void (as opposed to a voidable)
judgment is not based on Civ. R. 60(B), it invokes the courts inherent
power. Patton v. Diemer, 35 Ohio St. 3d 68 (1988).
Plaintiff Debt Collector, according to the binding case law in the
State of Ohio and Montgomery County, was not entitled to judgment as
a matter of law because they were not and could not ever have been
the real party in interest. The judgment is void ab initio. Res judicata
cannot be a bar to judgment that is void ab initio.
I.

Relevant Factual Background

1. On February 27th, 2008 (Ex. A) , Plaintif filed the

foreclosure complaint in this action.
2. As of March 6th, 2008 the note & mortgage at issue had not
been assigned from whoever the previous holder/owner was,
to Plaintiff herein.
2

Fed. Home Loan Mtge. Corp. v. Schwartzwald, 2012-Ohio-5017. (Standing is required to invoke the jurisdiction of the
common pleas court, and it is determined as of the filing of the complaint.)

3. On August 26th, 2008 Plaintiff filed a Notice of Assignment of

Mortgage (which contains therein also an Assignment of Note)
(Exh C), which contained a copy of a recorded assignment of
Defendants note & mortgage to Plaintiff. (The Assignment,
attached hereto as Exh. B).
4. Plaintiff recorded the Assignment on March 27th, 2008 or 29
days after the foreclosure lawsuit filing.
5. On November 13th, 2008 the Court granted Plaintiffs
judgment and entered a decree of foreclosure against
Defendant.
Defendant has repeatedly and continuously held that Plaintiff in
the case at Bar lacked the capacity to evoke the jurisdiction of the
court in this action;3 hence Plaintiff lacked standing to initiate this
suit.4

II.

Law and Argument

August 15, 2008, Memorandum in Opposition to Plaintiffs Motion for Summary Judgment
October 15, 2008, Reply to Complaint
November 21,2008, Motion to Vacate a Void Judgment
December 1, 2008, Memorandum in Opposition to Plaintiffs Memorandum in Opposition to Defendant John A. Reed's
Motion to Vacate
January 16, 2009, Motion for Reconsideration
April 1,2010, Amended Motion to Appeal Ruling of the Lower COURT
April 30, 2010, Application for Emergency Reconsideration
February 14,2011, Motion to Vacate Judgment Entry
4

Civ.R. 10(D) requires attachment to the pleading of a copy of the written account or any other written instrument when
a claim or defense is founded on those documents.
Fed. Home Loan Mtge. Corp. v. Schwartzwald, 2012-Ohio-5017. (Standing is required to invoke the jurisdiction of the
common pleas court, and it is determined as of the filing of the complaint.)
Wells Fargo v. Burrows, 2012-Ohio-5995 (9th Dist.)(A plaintiff must attach documents evidencing the right to enforce
both the note and the mortgage to the complaint to show standing, or be subject to dismissal.)
HSBC Bank USA, N.A. v. Sherman, 2013-Ohio-4220 (1st Dist.)(Determination of standing should be made based on
attachments to a complaint, but standing in a foreclosure action can be established by showing the right to enforce either
the note or mortgage. Also adopted in the Second, Fifth, Eleventh, and Twelfth Districts.)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (To survive a motion for summary judgment for lack of standing, a
party must set forth by affidavit or other evidence specific facts to support its claim.)

There are more issues with this post dated assignment Ex.B
than just those addressed in the Schwartzwald Decision. But, invoking
the rules of evidence, thats where we start.
The POST DATED ASSIGNMENT issue # 1.
As is evidenced in Plaintiffs alleged Assignment from Option
One Mortgage Corp. to The Trust the date of the transference or
Assignment of both the Note & Mortgage did not occur until after
the suit to foreclose had already been filed.
In Federal Home Loan Mortgage Corporation v. Schwarzwald, et
al., a case recently decided by the Ohio Supreme Court, plaintiff bank
brought a foreclosure lawsuit before it obtained an assignment of
mortgage securing defendant homeowners loan. Defendants
maintained that plaintiff lacked standing to sue (much as Defendant
previously contended in this case) because the assignment of
mortgage had not been recorded prior to the filing of the lawsuit.
Plaintiff was assigned the mortgage via formal assignment, as here,
only after the filing of the lawsuit. The trial court entered a judgment
in favor of plaintiff, and the Second District Court of Appeals affirmed.
The Supreme Court reversed, holding that standing is a
jurisdictional requirement that must be satisfied to even initiate a
foreclosure lawsuit, stating:
We recognized that standing is a jurisdictional
requirement in State ex rel. Dallman v. Franklin Cty.
Court of Common Pleas (1973), 35 Ohio St. 2d 176, and
we stated: It is an elementary concept of law that a
party lacks standing to invoke the jurisdiction of the
court unless he has, in an individual or representative
capacity, some real interest in the subject matter of the
action. (Emphasis added by the Court).
7

(Schwarzwald, attached hereto as Exh. D at para. 22).

Further, the Court stated,
Because standing to sue is required to invoke the
jurisdiction of the common pleas court, standing is to
be determined as of the commencement of suit. Id. At
para. 24 Invoking jurisdiction of the court, thus,
depends on the state of things at the time the action is
brought, and not after. Id. At para. 25.
In reversing the Second District, the Supreme Court included:
The lack of standing at the commencement of a
foreclosure action requires dismissal of the complaint[.]
Id. At para. 40 (Emphasis added).
Hence, in accordance with the ruling of the Supreme Court of
the State of Ohio, when Plaintiff debt collector filed this lawsuit on
February 27th 2008, Plaintiff lacked the capacity to invoke the
jurisdiction of the court or in other words, Plaintiff did not have
standing to invoke the jurisdiction of the court because Plaintiff debt
collector had not yet been assigned the mortgage and note, and for
reasons stated in specificity below it could not then nor can it ever
cure this lack of standing through a later filing of the mortgage
assignment as it attempted to do on March 27th, 2008 making
Plaintiffs standing to foreclose a legal impossibility.
HISTORY as alleged by Plaintif.
Plaintiff brought this action to foreclose based on an alleged
mortgage, dated June 9th, 2005, which secured an alleged loan of
$100,000 issued to the Defendant by H&R Block Mortgage
Corporation, a Massachusetts Corporation, (H&RB). On June 9th,
8

2005, H&RB assigned the alleged note and mortgage to Option One
Mortgage Corporation, (Option One). Option One then alleges to
have assigned the note and mortgage to Plaintiff by assignment
executed March 7th, 2008. Plaintiff is the alleged debt collector
Trustee for a securitized trust titled Securitized Asset Backed
Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series
2006 OP1, (the Trust). On February 27th 2008 Plaintiff Trustee
initiated the foreclosure suit at Bar.
HISTORY as shown by the EVIDENCE
Plaintiff brought this action to foreclose based on an alleged
mortgage, dated June 9th, 2005, which secured an alleged loan of
$100,000 issued to the Defendant by H&R Block Mortgage
Corporation, a Massachusetts Corporation, (H&RB).
On June 9th, 2005, H&RB (Entity A), with the use of an Allonge
(exhibit **) allegedly assigned all of their rights to the note and
mortgage to Option One Mortgage Corporation (Entity B), (Option
One).
Option One simultaneously (using the same Signatory) creates a
secondary allonge (exhibit**) transferring all of their rights to the note
and mortgage to _________________.

Option One then allegedly (there is no assignment proffered by

Plaintiff for this action), through 2 unsigned and unauthenticated,
previously created documents (intent6),
5

I would write Blank but according to SEC Law, if I did that then I would be representing that only
Blank was the authorized holder, those would be the same SEC laws which require the word Bearer to
be inserted before this Allonge can be treated as a Bearer instrument.
6

Blacks 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. While motive is
the inducement to do some act, intent is the mental resolution or determination to do it. When the intent to
do an act that violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.

1. titled: Purchase Price and Terms Agreement (Ex..**)

and
2. titled: EXECUTION COPY FLOW AMENDED AND
RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (Ex**),
with which we are lead to believe (without any proof whatsoever) that
Option One does assign/sells/transfers7 all of their rights to the NOTE
& Mortgage to Barclays Bank (Entity C)(Sponsor) who then, we are led
to believe (intent8), bundles the Note & Mortgage along with
approximately 5,000 other like kind investments and uses the entire
bundle to create a new financial entity called a Special Purpose Vehicle
(SPV), which is designed to accept deposit of the bundled notes and
mortgages and is a REMIC Trust.
Barclays Bank (Entity C) then, we are then lead to believe,
allegedly sells through a document titled BILL OF SALE Ex _ ;
in consideration of (i) the sum of $1,214,208,.30 (not a
typo!) to be paid to it in immediately available fund by
SECURITIZED ASSET BACKED RECEIVABLES LLC (Purchaser) and
(ii) the Class X, Class P and Class R Certificates issued pursuant to
a Pooling and Servicing Agreement, dated as of January 1,2006 (the
Pooling and Servicing Agreement), among the Purchaser, as
Depositor, Option One Mortgage Corporation, as servicer, and Wells
Fargo Bank, National Association, as trustee, does as of January 26,
2006 hereby sell, transfer, assign, set over and otherwise convey to
the Purchaser without recourse, all the Sellers right, title and
interest in and to the Mortgage Loans described on Exhibit A
7

As with almost all of Plaintiffs document submissions, the documents Plaintiff submits that are to be
representative of the transfer of the Note & Mortgage from Option One to Barclays Bank are all unsigned
and unauthenticated so no true method of transfer is even represented. BUT, the controlling Law (IRS &
NY. EPTL) both require full sales and transfer of all rights and ownership before a true securitization of the
notes and mortgages into the trust can exist and the Trusts controlling document, the PSA also mandates a
complete evidentiary trail of all transfers and/or assignments of both the note and mortgage before being
allowed to be deposited into the trust.
8
Blacks 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. While motive is
the inducement to do some act, intent is the mental resolution or determination to do it. When the intent to
do an act that violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.

10

attached hereto and made a part hereof, including all interest and
principal received by the Seller on or with respect to such Mortgage
Loans.
and then transfers all of their rights to the contents of the
bundled notes and mortgages which contains Defendants alleged Note
& Mortgage (again without a physical assignment, no proof of transfer,
no proof of negotiation, no receipt of delivery, etc.) to the securitized
trusts Depositor9 Securitized Asset Backed Receivables LLC(Entity
D) (SABR), who then allegedly deposits and transfers all of their
interests and rights (yet again without a physical assignment, no proof
of transfer, no proof of negotiation, no receipt of delivery, etc.) to the
notes and mortgages in to the Trust (Entity E).

10

Option One (Entity B) then alleges (with intent and scienter11) to

have assigned the note and mortgage to Plaintiff (Entity E) by
assignment of Mortgage (ex**) executed March 7th, 2008. Plaintiff had
previously initiated suit on February 27th, 2008. The important aspect
from above is the assignment from Entity B directly to Entity E.
Plaintiff, as represented is the alleged debt collector Trustee for
a securitized REMIC trust titled Securitized Asset Backed Receivables
LLC 2006-OP1 Mortgage Pass-Through Certificates, Series 2006 OP1,
(the Trust).
ASSIGNMENT ARGUMENT 2 (besides Schwartzwald (post
dating))
9

Same as Footnote 5 above no signed or authenticated contract.

It is important here to note that in each transaction listed above, Plaintiff also proffers no receipts, no
delivery acceptance, nothing whatsoever to show proof of conveyance or transfer or negotiation or sale of, in
the end, an alleged $5 Billion worth of financial instruments from any party to any other party whatsoever.
11
Blacks 9th scienter (sI-en-tJr or see-), n. [Latin "knowingly"] (1824)
1. A degree of knowledge that makes a person legally responsible for the consequences of his or her act or
omission; the fact of an act's having been done knowingly, esp. as a ground for civil damages or criminal
punishment. See KNOWLEDGE; MENS REA. [Cases: Criminal Law C=>20; Negligence (::::J212, 302.] 2.
A mental state consisting in an intent to deceive, manipulate, or defraud. - In this sense, the term is used
most often in the context of securities fraud. The Supreme Court has held that to establish a claim for
damages under Rule lOb-5. a plaintiff must prove that the defendant acted with scienter. Ernst & Ernst v.
Hochfelder, 425 U.S. 185,96 S.Ct. 1375 (1976). [Cases: Securities Regulation G:::c60,45, 60.51(2).]
10

11

The lack of proper transfers of the note & mortgage (proper

would be A B, B C, C D and D E) and in fact, the improper
transfers (as in the case at Bar where Plaintiffs Assignment alleges
transfer from Entity B to E), to others creates a series of document
defects and deficiencies that include, but are not limited to the
following:
a) Broken endorsement chains (A B, B E);
b) Original Notes without signatures on endorsements;
c) Notes with skipping endorsements;
d) Notes with endorsements on unattached allonges;
e) Allonges unattached to their original wet-ink notes;
f) Allonges copied and taken from other notes and placed onto a
different note ;
g) Allonges unattached to original notes with blank
endorsements;
h) Notes never endorsed;
i) Allonges never dated;
j) Allonges in blank and pre-executed and undated for later fillins by unknown parties;
k) Double pledges of the same note and/or loan to different
parties;
l) Post-dated assignments of mortgages and notes;
m) Robo-signed assignments of mortgages and notes;
n) Post-dated assignments of mortgages and notes;
o) Assignments executed with no lawful authority;
p) Assignors assigning to themselves;
q) Two different parties claiming the ownership of the same
note/loan.
Can the Trustee Foreclose?
12

Further, Defendant requests Judicial Notice that in the case at

Bar, it is the Trustee for the Trust that is bringing the foreclosure
suit. Plaintiff Trustee offers no proof of any transfer of any ownership,
or rights or authority from the Trust to the Trustee12 of/or pertaining to
the alleged Note and/or the Mortgage and/or pertaining to the rights
or authority granted to the Trustee, in the case at Bar to foreclose.
The above statement is of utmost importance because within the
Trusts controlling document, its Indenture, the Pooling and Servicing
Agreement (PSA), at section 3.15 we find that by contractual
agreement it is not the Trustees position to engage in any foreclosing
related activities, it is instead the Servicers13 obligation. Section
3.15 reads:
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer shall use its best
efforts, consistent with Accepted Servicing Practices, to foreclose upon or otherwise comparably
convert (which may include an acquisition of REO Property) the ownership of properties securing
such of the Mortgage Loans as come into and continue in default emphasis mine

43.

Again, Plaintiff Trustee, an entity separate from yet created

in the entirety from the Trust itself, actions of which are limited by law
and by contract, lacked not only any proper Assignment of the Note
and/or mortgage that is the subject of this action, but also lacked
authority to initiate the foreclosure action which must be given from
within the trusts governing document, its Indenture, the Pooling and
Servicing Agreement (PSA). Plaintiff Trustee lacked the legal and
mandatory requirement of capacity to invoke the jurisdiction of this

12

Or for that matter any proof of transfer to the trust from the Depositor or proof of transfer from the
Sponsor (Barclays Bank) to the Depositor or proof of transfer from the Lender Option One to the Sponsor
Barclays Bank! One can only transfer what one has to transfer.
13
Servicer, another separate legal entity hired by the trust to service the document requirements of the trust.
Its duties are outlined with specificity within the trusts Pooling and Servicing Agreement.

13

court and therefore, Plaintiff had no standing to initiate this suit which
means this suit was VOID ab initio.
44.

Further, Plaintiff can never suffer a loss or injury as is

required by the Real Party in Interest Rule. As Plaintiff Trustee is only

an incident of the Trust and as the Trust Indenture gives no rights to
Plaintiff Trustee to otherwise obtain, purchase, or hold legal
ownership of any item other than trusts possessions, Plaintiff Trustee
fails to satisfy the U.S. Constitution Article IIIs standing requirements
that a plaintiff must show which require:
(a) it has suffered an injury in fact that is concrete and
particularized and actual or imminent, not conjectural or
hypothetical;
(b) the injury is fairly traceable to the challenged action of the
defendant; and (c) it is likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.
Standing is a threshold issue. Without standing to invoke the
jurisdiction of the court at the initiation of suit, no further mutterings
or protestations of the Plaintiff can be heard for they are moot.
THE TRUST
The Trust was formed as a vehicle for purchasing mortgage
backed securities and then selling certificates based solely on the
income generated by those monthly principal and interest payments
generated by those notes and mortgages held within the Trust. The
Trust is subject to the terms of the trust indenture (controlling
document) memorialized in a document titled the Pooling and
Servicing Agreement, (the PSA). The PSA was signed by the
14

Depositor, Securitized Asset Backed Receivables LLC (SABR), by the

Servicer, Option One, and by the Trustee, WELLS FARGO BANK, NA,
and is dated January 1, 2006.
The PSA contractually sets forth the governing law of the trust
and the manner in which mortgages would be purchased by the trust,
as well as the duties of the trustee and the servicer. It is the trusts
own contractual controlling document.
Section 2.01, subsection 1 of the PSA requires that transfer and
assignment of mortgages must be effected by hand delivery, for deposit
with the Trustee with the original note endorsed in blank.
Section 2.05 of the PSA requires that the Depositor transfer all
right, title, interest in the mortgages to the Trustee, on behalf of the
trust, as of the Closing Date. The Closing Date as provided in the
PSA is January 26th, 2006.
The Date of the Assignment of Mortgage (and Note) referenced
infra, is over 2 years past the date allowed for deposits into the trust.
If the trust does not perfect legal title by taking physical possession of
the notes and mortgages, the Internal Revenue Code, specifically 26
U.S.C. 860G(d)(1), provides for a 100 percent tax penalty on those
non-complying cash flows severely affecting the Trusts Investors
Return On Investment (ROI).
As listed in the PSA, the Depositor in the case at Bar was
Securitized Asset Backed Receivables LLC ("SABR"). Within the
schema of a securitized MBS (Mortgage Backed Security) REMIC (Real
Estate Mortgage Investment Conduit) trust, the Depositor is the
mandated entity in the title chain that provides the Bankruptcy
remoteness necessary to the Notes and the Mortgages deposited into
the trust, for compliance to obtain the AAA rating with the securities
15

ratings agencies required by the Trust, and also mandated for

compliance with IRS rule 86014

The Depositor is also the authorized

and designated sole depositor to the trust.

In the case at Bar, Plaintiff shows not 1 iota of proof that said
Sponsor, Barclays Bank (Entity C), ever received Defendants Note
and/or Mortgage.
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Depositor (Entity D) ever received Defendants Note and/or Mortgage
OR the alleged and previously allegedly created SPV (from Sponsor
Barclays Bank) containing Defendants alleged Note and/or Mortgage.
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Depositor (SABR) ever received or deposited the alleged Mortgage and
Note (or SPV) into the Plaintiff Trust.
In the case at Bar, Plaintiff shows not 1 iota of proof that said
Plaintiff Trust ever transferred the alleged Mortgage and Note to the
Plaintiff Trusts Trustee, Wells Fargo Bank N.A. who is the Plaintiff in
this case.
It is essential for the courts to understand that before the alleged
note & mortgage could be placed within any REMIC trust, each of
these steps was mandated by N.Y. E.P.T.L, I.R.C. requirements AND by
the contractual terms found within the PSA which was signed and
agreed upon by the participants of the securitization. The rules for the
deposit of all of the Notes & Mortgages allegedly held within the pool
14

IRC 860 requires that, among other things, the REMIC trust be a closed entity and bankruptcy remote. New
Yorks Estate Powers & Trust laws were chosen by RMBS sponsors (in the PSAs) as the controlling statutes to govern
REMIC trusts, as the EPTLs rules and concomitant common law establish common law trusts that conform the
REMIC tax free pass-through requirements. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 7

16

of assets owned by the trust are strict and are mandated to be adhered
to punctiliously.
As stated in the NYSBA NY Business Law Journal|Summer 2012|Vol.
16 |No. 1 pg. 77;
The Mortgage Securitization Transaction In 1986, Congress changed the tax code. One
of these changes was the creation of the Real Estate Mortgage Investment Conduit
(REMIC). A REMIC or special purpose vehicle (SPV) is an entity that is created for the
specific purpose of being a tax-free pass-through for interest income generated by pooled
mortgages. This allowed investors to purchase shares or certificates in a mortgage pool
that was only taxed once at the investor level. The REMIC rules allowed the mortgage
pools to collect interest income from the pool and disburse that income to the certificate
holders tax-free at the pool level. Prior to the REMIC, interest income from pooled
mortgage investments were taxed twice, once at the pool level and again at the investor
level.
REMIC rules are very specific,15 and to qualify as a REMIC under federal and state tax
codes, the SPV had to meet very stringent requirements. With respect to RMBS the
controlling trust document is known as the Pooling and Servicing Agreement (PSA). One
function of the PSA is to establish the rules governing the trust such that the trusts
activities and management conform to IRC 860. If the trust did not conform, it could
lose its REMIC status and its tax-free pass-through status. 16
NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 pg. 77

The Trusts agreement (known as the Pooling and Servicing

Agreement (PSA)), the trusts indenture17, sets forth in its entirety
how the trust acquires and is allowed to acquire its assets and the
Trust agreement sets forth both powers and the limits of the powers
of the Trust and the Trusts participants.

15

IRC 860 requires that, among other things, the REMIC trust be a closed entity and bankruptcy remote. New
Yorks Estate Powers & Trust laws were chosen by RMBS sponsors (in the PSAs) as the controlling statutes to govern
REMIC trusts, as the EPTLs rules and concomitant common law establish common law trusts that conform the
REMIC tax free pass-through requirements. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 7
16

If a tax-free pass-through trust lost its REMIC status, the tax penalties to an investor that purchased certificates would
be devastating. It would also trigger an event called a put back. There was considerable argument over whether these
trusts were business trusts or common law trusts, but the trend appears to be a judicial recognition that they are in fact
common law trusts. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 8
17

Blacks 9th. trust indenture. 1. A document containing the terms and conditions governing a trustee's
conduct and the trust beneficiaries' rights. - Also termed indenture of trust. [Cases: Trusts C=> 19-29.] 2. See
deed of trust under DEED.

17

The PSA18 requires that each party to the sale of the mortgage
loans endorse each promissory note to the next party in the chain of
title until the promissory note and mortgage is delivered to the
Trustee for the benefit of the Trust. This requirement is included in
the PSA and is found at Section 2.01 (b) which in part reads;
(b) In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered
or caused to be delivered to the Trustee for the benefit of the Certificateholders the following
documents or instruments with respect to each Mortgage Loan so assigned:
(i)

the original Mortgage Note bearing all intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee...

(ii) the original of any guarantee executed in connection with the Mortgage Note;
(iii)

the original Mortgage with evidence of recording thereon or a certified true copy of such
Mortgage submitted for recording.19

(iv)

the originals of all assumption, modification, consolidation and extension agreements, if any,
with evidence of recording thereon;

(v)

the original Assignment of Mortgage for each Mortgage Loan endorsed in blank;

(vi)

the originals of all intervening assignments of Mortgage (if any) evidencing a complete chain
of assignment from the applicable originator to the last endorsee with evidence of recording
thereon....

(vii) the original mortgagee title insurance policy ...

(viii) the original or, if unavailable, a copy of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if provided) ...

Plaintiff proffers no series of endorsements of the alleged

promissory note reflective of each party who had an alleged ownership
interest in the alleged promissory note.
Further, this chain of endorsements, or rather the lack thereof, in
order to comply with this Trusts PSA, would have had to be complete
on or before the closing date of the trust specified within the PSA of
this securitization but in no event more than 90 days from the closing
18

The Trusts Pooling and Servicing Agreement is a Public Document available here
http://www.secinfo.com/dRSm6.v8h.d.htm
Note: indeed NY EPTL law requires recordation of the note before its acceptance as a part of the trust
is consummated.
19

18

date of the trust pursuant to section 2.02 of the PSA. The absence of
these endorsements on this promissory note is not only very
compelling proof of lack of note holder status, but also proof of
Plaintiffs fraud in the production to the Court of the Assignment of
Mortgage (Exhibit E) which by the terms of the trusts own
governing document (PSA) cannot, does not and cannot now (post
trust closing date) ever legally exist.
Under the terms of the trust which are contractually, legally
governed under NY E.P.T.L., the contracts between the parties (PSA),
and/or UCC 9 in the case at Bar, there are unmet requirements for
the chain of title by the foreclosing entity to be qualified as a PETE
(person entitled to enforce). In other words, single endorsements in
blank, claiming that any party in possession of a note can enforce a
note, even a thief, skipped assignees, no proof of Holder in Due Course
does not work. In the case at bar, the trusts Trustee is specifically
NOT allowed to own an asset acquired out of thin air on its own its
sole existence is for service to the Trust. Anything done by any trust
participant in contravention to the trusts indenture is by contractual
agreement VOID at its inception. As such, in the case at Bar, should
the Assignment of Mortgage to Plaintiff be deemed legitimate, then the
Plaintiff Trustee would be a non legal entity. In essence its a catch-22.
Either way, Plaintiff lacked the capacity to invoke the jurisdiction of
the court to initiate their action.
The evidence in the collateral file shows an utter and complete
failure of the parties to this alleged securitization to actually convey
this alleged promissory note to this alleged Trust as was articulated by
the Defendant in each and every previous pleading. The plaintiff
Trustee has offered no proof of ownership and the collateral file
proffered by the Plaintiff through Discovery clearly demonstrates that
19

this loan was not securitized into nor was it ever transferred to this
Trust.
Assuming the note and/or mortgage at issue could somehow
retroactively be properly and legally deposited into the Trust, the
Court should also be made aware that Sections 2.07 d., e., h., 3.01 c.,
3.17 (h), 5.02, c, 8.11 of the PSA are all specific to the case at bar
which set forth further explicit restrictions on the powers of the
Trustee, Depositor and the Servicer of the trust and which prohibits
the Trustee, Depositor and the Servicer from taking any action which
would jeopardize the REMIC status of the Trust. The production of the
post dated, forged and fabricated Assignment of Mortgage is itself a
prohibited action. These types of limitations are common and are
present in this or a similar form in every pooling and servicing
agreement which seeks to create a securitized trust that can claim the
tax benefits of REMIC status under the US Tax Code.
Any attempt to accept a transfer of this alleged Promissory note
after the January 26, 2006, plus 90 day closing date of the trust would
have violated both SEC code 424 & 1122 and the REMIC provisions of
the IRS tax code 26 USC 860 A thru F -for a number of reasons.
a. First, the alleged loan is in default at this time. Therefore
the alleged loan cannot be a qualified mortgage loan under
the IRS tax code because a qualified mortgage loan is a
performing mortgage loan.
b. Second, an attempted transfer to the trust is now at a point
in time after the closing day of the Trust and after the
certificates were issued, in effect, the Plaintiff would be
claiming to have transferred an asset to a trust that had by its

20

own terms been closed for more than 2 years at the time the
alleged transfer took place.
c. Third, the alleged promissory note was never endorsed to
the Trust by the Depositor and as such is devoid of the
required chain of endorsements required within the PSA and
which any reasonable market participant would expect to be
present for the purposes of establishing the series of true
sales set forth in the PSA to establish a whole and complete
chain of title of the promissory note for the purposes of
bankruptcy remoteness.
d. Fourth, The claim that the alleged note has been
transferred to the Trust only because it is endorsed in blank
simply flies in the face of the mandatory terms of the PSA and
N.Y. E.P.T.L. and is an extreme deviation from the industry
standards, customs and practices which prevailed at all times
material to this transaction and which prevail today.
e. Fifth, any transfer allowed to be accepted into the trust
past the trusts own cut-off date of deposits invokes the rather
draconian IRS mandate of taxing the REMIC trusts assets not
at the favorable rate of 0% that they now enjoy, but at the rate
of 100% of the value of their assets causing, massive
financial losses to the Certificate Holder Investors.
Equally, by allowing a Deposit into the trust after the trusts
closing date as Plaintiffs Assignment of Mortgage alleges,
Plaintiff Wells Fargo Bank as Trustee again violates the plain
language found within the PSA at section 8.11 titled Tax Matters
section (j) para. 6 which reads in part;

21

Neither the Servicer nor Trustee shall (i) permit the creation of any interests in any
Trust REMIC other than the regular and residual interests set forth in the Preliminary
Statement, or (iii) otherwise knowingly or intentionally take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)any action
reasonably within its control and the scope of duties more specifically set forth herein,
that, under the REMIC Provisions, if taken or not taken, as the case may be, could (A)
endanger the status of any Trust REMIC as a REMIC or (B) result in the imposition of
a tax upon any Trust REMIC or the Trust Fund (including but not limited to the tax on
"prohibited transactions" as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a Trust REMIC set forth in Section 860G(d) of the Code, or the tax on
"net income from foreclosure property") unless the Trustee receives an Opinion of
Counsel (at the expense of the party seeking to take such action or, if such party fails to
pay such expense, and the Trustee determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the Trust Fund,
but in no event at the expense of the Trustee) to the effect that the contemplated action
will not, with respect to the Trust Fund or any Trust REMIC created hereunder,
endanger such status or, unless the Trustee determines in its sole discretion to
indemnify the Trust Fund against such tax, result in the imposition of such a tax).

To Summarize, (The closing date of this trust was January 26,

2006. The creation date of Plaintiffs Assignment of Mortgage is
March 7, 2008 or 25+ Months past the trusts closing date) as such it
is in violation of the trusts own controlling document, the Pooling and
Servicing Agreement (PSA), I.R.C. regulations and the trusts
controlling law, N.Y. E.P.T.L. and is VOID. Plaintiffs and Plaintiffs
counsel clearly show scienter by having acted in contravention to the
trust by;
1. creating or manufacturing, (forgery with intent to defraud
(intent & scienter))
2. attempting the use of (distribution) and (intent to fraud)
3. actually submitting (selling) false, forged and fraudulent
documents within this very Court of Law and Equity,
evidenced not only by their late creation date as it concerns
legal standing to invoke the jurisdiction of the Court, but
also in contravention of IRS REMIC Law as explained above
and again within the PSA at Section 8.11 Tax Matters (g)
which reads;
22

(g) not knowingly or intentionally take any action or omit

to take any action that would cause the termination of the
REMIC status of any Trust REMIC created hereunder;
4. Making false statements to the Court
Nemo dat quod non habet
One can only give/assign and/or transfer that which one has to
give/assign and/or transfer. Only the legitimate rights of the transferor
can be transferred to the transferee.
There is no trust if the trust fails to acquire the property.
Kermani v. Liberty Mut. Ins. Co., 4 A.D. 2d 603 (N.Y. App. Div. sa
Depart. 1957).
In so doing the above, in violation of the law, codes, rules &
regulations articulated above, Plaintiff also acted in violation of the
Fair Debt Collection Practices Act. The allegations above are realleged and incorporated herein by reference.
Defendant John A. Reed incorporates by reference all of the
proceeding and foregoing allegations in the entirety of Defendants
answers & pleadings as in regard to the Complaint in its entirety and
from its inception.

The POST DATED ASSIGNMENT 2

As is referred to above, Plaintiffs Assignment of Mortgage
(and Note) was created on March 7th, 2008. The Plaintiff Trust, by
23

virtue of its REMIC status has what is called a Cut-Off date. The
Trusts cut-Off date is the date in which the Trust is mandated by law
to stop accepting deposits into it. Aside from the creation post
foreclosure issue related above, by the terms of the Trusts own PSA,
N.Y. E.P.T.L. & I.R.C. regulations all mandate that this Assignment was
void at its inception.
The Trust is also a Real Estate Mortgage Investment Conduit
(REMIC) trust and as such is held in strict regulations with both I.R.S.
REMIC trust rules of Law and the Laws and Rules created specifically
in accordance with the Trust laws of either the State of the Trusts
creation or by the contractual choice of the participants of the Trust,
as is the case at bar. The agreed contractual choice of Law to be
adhered to by the Trusts participants in the case at Bar is New York
Trust Law E.P.T.L..
Plaintiffs production of the Assignment is contrary to New
York Law and IRS 860. In short, the Plaintiff Trust exercised a
prohibited act on March 7th, 2008.
The aforementioned Assignment is contrary to the Trusts
Instruments and therefore Void pursuant to IRS 860A-G and New York
Estates, Powers & Trusts (E.P.T.L) - Part 2 - 7 2.4 and the Trusts
Indenture requirements.
"Any action which deviates from the Trust documents is void. 7-2.4 Act of trustee in
contravention of trust If the trust is expressed in the instrument creating the estate of the
trustee, every sale, conveyance or other act of the trustee in contravention of the trust,
except as authorized by this article and by any other provision of law, is void".

No possession of the Asset exists until there has been a delivery

and an acceptance of the Asset and the giver of the Asset has
relinquished all dominion and control over the Asset signifying a true
24

sale of the Asset to the Plaintiff Trust thereby making the Asset, inter
alia, bankruptcy remote and securely within the Trust Vault.
Plaintiffs proffered Assignment in the case at Bar proves only
that it was a forged and fabricated document created solely for the
purpose of facilitating the easy theft of Defendants home within a
Court of Law and the use of the Court in the laundering of the illegal
paperwork used to create the alleged Note & Mortgage and
subsequent alleged MBS Investment Trust.
The Trust is a REMIC Trust
The Trust was formed as a REMIC trust.20 Under the REMIC
provisions of the Internal Revenue Code (IRC) the closing date of the
Trust is also the startup day for the Trust. The closing date/startup day
is significant because all assets of the Trust are mandated to be
transferred to the Trust on or before the closing date to ensure
that the Trust received its REMIC status. The IRC provides in
pertinent part that:
Except as provided in section 860G(d)(2), if any amount is contributed to a
REMIC after the startup day, there is hereby 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)(1).

The assignment of the note and the mortgage which alleges the
transfer of the Note & Mortgage in this case was dated March 7th,
2008, however, pursuant to the terms of the PSA the trust closed on
January 1st, 2006. Acceptance of the alleged Note & Mortgage into
20
The Internal Revenue Code provides that the terms 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.

25

Plaintiff Trust at the date shown on Plaintiffs Assignment is in

violation of IRC 860G(d)(2) and as such is mandated to be declared
VOID by the terms found within the PSA and by N.Y. E.P.T.L. & I.R.C.
regulations.21
THE POST DATED ASIGNMENT 2
In the case at bar, Wells Fargo Bank, N.A, as Trustee of the
Trust, claims to be the sole and exclusive owner of the securitized
note & mortgage. If Wells, as Trustee for the Trust is in fact the true
and legal owner, it must have acquired legal title to the loan within 90
days of January 1, 2006 (the trusts closing date).
For clarification of the above; New York law states that transfers
to a REMIC trust after the closing date of the trust are void. N.Y.
Estates, Powers and Trusts Law 7-1.18, 7-2.4. Glaski v. Bank of
America, N.A., 218 Cal.Rptr.4th 1079 (2013). See also, Saldivar v.
JPMorgan Chase, 2013 WL 2452699 (Bky. SD Tex. 6/5/13) (holding
that trustee mortgagees position is void if notes and assignments of
mortgage not delivered within 90 day of closing of trust); Wells Fargo
v. Erobobo, 2013 WL 1831799 (NY Slip Op. 4/29/13) (holding that NY
trust law governs securitization (not Ohio law) and that notes and
assignments of mortgage must be physically delivered to trustee
within 90 days of closing for trustee to have claim of ownership). The
Internal Revenue Code provides for 100 percent tax penalties for
asset transfers to the trust after the closing date of the trust and the
Trusts controlling document, the PSA, specifically Section 9.02,
forbids all participants in the securitization of the assets of the trust to
perform any action in contravention to the IRS code.

There is no trust if the trust fails to acquire the property. Kermani v. Liberty
Mut. Ins. Co., 4 A.D. 2d 603 (N.Y. App. Div. sa Depart. 1957).
21

26

Further, Section 9.02 of the PSA specifically prohibits the

acquisition of any asset for a REMIC fund after the closing date unless
the party permitting the acquisition and the NIMS (net interest margin
securities) Insurer have received an Opinion letter from counsel, at the
party's expense, that the acceptance of the asset will not affect the
REMIC's status.
Plaintiff offers no such evidence or proof that a letter has been
provided to show compliance with these requirements of the PSA.
Plaintiff has proffered22 no evidence of Depositors depositing of the
note and mortgage into the Trust and has proffered no evidence that
the trustee had authority to acquire the note and mortgage herein
after the trust had closed or for the purpose of foreclosure.
Defendant asserts that the alleged transfer of the note &
mortgage to Plaintiff Trust herein was VOID ab initio because the note
is represented to have been acquired after the trusts closing date and
as such is a violation of the contractual terms established and
memorialized within the Trusts controlling document, the PSA.
Whereas in Ohio Law it may be permissible for a Holder to
execute suit on a note and/or mortgage, in the case at Bar the alleged
contraction between parties is not being done by an Ohioan against an
Ohioan. Instead it is being committed by a debt collector who is an
alleged representative of a NY Trust, a trust which is bound by NY
Laws and as such it is up to Plaintiff to prove not only that he is indeed
the true PETE (Person Entitled To Enforce) of the alleged Note &
Mortgage, but also that he has any legal capacity whatsoever to hold
anything in contravention to the trust. In the case at Bar, Plaintiff debt
collector has not the legal capacity to even be a Holder.
22

Blacks 9th proffer (prof-dr), vb. (l4c) To offer or tender (something, esp. evidence) for immediate acceptance.
[Cases: Criminal Law C':.:o670; Federal Civil Procedure 2013; Trial (7.::>44.]- proffer, n.

27

Plaintiff debt collector offers only 3 signed documents, just 3

pieces of paper attesting to their alleged legitimacy to foreclose, their
right to be PETE. Those documents are:
1.

the post dated, post created and filed with the court
months after foreclosure initiation, Assignment of
Mortgage which is Robo-Signed23 by a known RoboSigner24 named Ms. Topaka Love.25

2.

The post dated, post created and filed with the court
months after foreclosure initiation, Affidavit of Status of
Account and Military Status again signed by the same
Robo-Signer Ms. Topaka Love

3.

The unattached Allonge from Option One Mort. Corp. to

______________.

Defendant submits new evidence in this case in the form of an

Affidavit attesting to the Robo-signing (explained infra) of both
23

we now have a legal definition of "Robo-signer" from the U.S.C.O.A. for the 5th Circuit (TX) in the case of
REINAGEL v. DEUTSCHE BANK NATIONAL TRUST COMPANY, No. 12-50569 (5th Cir. Oct. 29, 2013).
The court defined "Robo-signing" as follows;
"Robosigning is the colloquial term the media, politicians, and consumer advocates have used to describe an
array of questionable practices banks deployed to perfect their right to foreclose in the wake of the subprime
mortgage crisis, practices that included having bank employees or third-party contractors: (1) execute and
acknowledge transfer documents in large quantities within a short period of time, often without the purported
assignors authorization and outside of the presence of the notary certifying the acknowledgment, and (2)
swear out affidavits confirming the existence of missing pieces of loan documentation, without personal
knowledge and often outside of the presence of the notary."

24

In January 2011, John L. OBrien, Register of the Essex Southern District registry of Deeds in Salem, Massachusetts
(Register OBrien), commissioned McDonnell Property Analytics, Inc. (MPA) to conduct a forensic examination to
test the integrity of his registry due to his concerns that: 1.) Mortgage Electronic Registration Systems, Inc. (MERS)
proclaims that its members can avoid recording assignments of mortgage if they register them electronically in the
MERS System; and 2.) due to the robo-signing scandal spotlighting Linda Green an employee of Defendant DocX,
LLC as featured in a 60 Minutes expose on the subject which first aired on April 3, 2011.
A true and correct copy of my report entitled Forensic Examination Of Assignments Of Mortgage Recorded During 2010
In The Essex Southern District Registry Of Deeds, which I released on June 28, 2011, is available on Register OBriens
website at: http://salemdeeds.com/pdf/Audit.pdf.
25

John L. OBrien, Register of the Essex Southern District registry of Deeds in Salem, Massachusetts publishes a list of
known Robo-Signers at his website at http://www.salemdeeds.com/robosite/pdf/robosigners.pdf. Ms. Loves name
appears on page 2, Column B, Row 23.

28

Plaintiffs Assignment of Mortgage and Plaintiffs Affidavit of Status

of Account and Military Status marked Exhibit __..
THE ALLONGE
On or about June 9, 2005, as the evidence of record shows Mr.
Reed's alleged original lender, H&R Block Mortgage Corp., claims that
through the use of an alleged executed endorsement which was
unattached, is incomplete, is non-authenticated by affidavit, and is left
unexecuted Pay to the Order(as in existing distinctly separate under
law from bearer paper) document entitled allonge dated June 9,
2005 from Option One to __________.26
26

Comments Of Nye Lavalle To Florida Supreme Court Page 52

Nye Lavalle, Pew Mortgage Institute, 407/968-9097 mortgagefrauds@aol.com
243. In fact, a common industry practice was to create an unattached and an undated endorsed in blank piece of
paper the industry wrongly inferred was an allonge! 244. The unattached piece of paper with an executed endorsement
upon its face would then be placed in a file with or without a note, scanned and imaged into an imaging system and then
discarded, destroyed, concealed, or even later attached if necessary, upon default by a borrower when a servicer needed
to create evidence of note ownership or holder status. 245. Under UCC Article 3, indorsement means a signature on
an instrument, not on a blank piece of paper. 246. In order for the endorsement on an allonge to be valid, the proper
document custody process that should have been followed was to: a) determine if room existed on the last page of the
note or its backside to see if any room existed for the endorsement; b) only if no room existed, a blank piece of paper
should be firmly affixed to the last page of the original wet-ink note, so as to prevent its removal and replacement; c)
the first page on the face of the note should then be stamped Allonge property address, loan number etc. should be
placed upon the blank piece of paper; and then e) the endorsement stamp and signature should be placed on the affixed
piece of paper to the note (i.e. an allonge). 247. An unattached to an original note blank piece of paper is not an allonge.
An unattached to an original note blank piece of paper with an endorsement on its face is not an allonge either. If the
endorsement is placed upon the blank piece of paper and then the endorsement and signature are placed on the blank
piece of paper while unattached, all someone has endorsed was the blank piece of paper, not the original note itself. 248.
Darrell W. Pierce is a Michigan lawyer for the national law firm of Dykema Gossett. Mr. Pierce served as member of the
Article 9 Study Committee for the Permanent Editorial Board for the Uniform Commercial Code, as Chair of the Article
9 Filing Project and as the primary drafter of the International Association of Commercial Administrators Model
Administrative Rules for Article 9 filing offices. He is a frequent lecturer and writer regarding UCC matters. 249. Mr.
Pierce authored an article for the Association of Corporate Counsel titled Allonges: Separate Indorsements Not
Effective Unless Affixed. In this article, Mr. Pierce exposes the lenders dirty secret of the motives and use of
allonges by the mortgage industry when he writes:
Secured lenders routinely take pledges of instruments (including negotiable instruments under UCC Article 3 and
other promissory notes) as collateral. Instruments are subject to special priority rules.
Security interests perfected merely by filing a UCC1 financing statement are junior to security interests
perfected by possession, without regard to time of filing or possession.
Security interests perfected by control (possession plus indorsement) are senior to those perfected merely by
filing or possession. Accordingly, secured parties who are relying on instruments as collateral will want to have
control over the instruments.
Instruments may be indorsed to secured parties, but it is a cumbersome process that has to be unwound when
the loan is repaid as expected. It is, therefore, convenient and common practice to have the requisite
indorsements supplied on a separate piece of paper. This keeps the instrument clean so that it can be returned
clean when the secured obligations are paid. The separate piece of paper is kept with the instrument but is not
typically attached to it, though the lender or its custodian has authority to do so, at least upon default.
This practice works well in most cases. Even though the lender is not yet a holder under Article 3, because
the indorsement is not attached, the lender has possession and the related loan documents should cause the
lender to be a nonholder in possession of the instrument who has the rights of a holder, that is one who can
enforce the instrument as such under UCC 3-301 , and compel indorsement under UCC 3-203.

29

It is Defendants position that along beside the known bogus,

forged and fabricated Assignment of Mortgage referenced above, the
proffered Allonge from Option One Mort. Co. to blank is also a
fraud and a sham created solely to represent to this Court Plaintiffs
interest in an alleged Note & Mortgage which in truth has no legal
value whatsoever except to prove Plaintiffs and Plaintiffs Counsels
willingness to forge, to fabricate, to create and bring into this court
fraudulent documents created solely to induce the Courts bias at
Defendants (and the Courts) expense.
The Wells Fargo Manual
Defendant submits new and previously unobtainable evidence in
this case of Plaintiff Wells Fargo Banks recently publicly published, in
In addition, secured parties in (mere) possession have priority over other secured parties except those who
have control (possession plus indorsement), so the failure to achieve full control does not normally impair
priority (no one else will have possession except in rare cases). UCC 9-330(d).
So, even if a separate indorsement is not initially affixed to an instrument, a secured party in Attached; d)

identifying information on the note such as origination date, borrower name,

possession normally maintains first priority and has the power to negotiate the instrument upon
default.
There are occasions, however, when having an indorsement is critically important. One would be the relatively rare
case where one competing secured party has possession for itself as well as for the other competing secured party,
so both would be in possession and priority could depend on the effectiveness of an indorsement. Another would be
where the maker of a negotiable instrument has defenses against the named payee but the secured party, with the
indorsement, would be a holder in due course. Yet another would be an assignment of a note or a casual pledge
where the related documents do not clearly provide the lender with the rights of a holder.
Under UCC Article 3, which applies to negotiable instruments (as defined in Article 3) and which
is commonly applied by courts to non-negotiable instruments, indorsement means a signature on an
instrument For the purpose of determining whether a signature is made on an instrument, a paper affixed
to the instrument is a part of the instrument. UCC 3-204(a) (emphasis supplied). Under this rule, a
separate assignment document is not sufficient to create the requisite indorsement, unless it is affixed to
the instrument.
Some Michigan assignees found out the hard way how important it is to have ones separate indorsement affixed.
In one case, a separate indorsement was not attached to the note in question and the assignee was unwilling to
produce the underlying assignment of loans agreement. The court held the separate indorsement was not effective
and, because it referenced the unproduced underlying agreement, it did not prove an absolute assignment was
intended. Brown Bark, II, LP v. Bay Are Floor Covering & Design, Inc., Case No. 296660, (Mich. Ct. App. May 31,
2011). In the other case, the assignee ultimately had two problems after it took a note and placed it in an envelope
with a separate indorsement. Not only was the separate indorsement ineffective because it was not affixed to the
note, it turned out the note was in fact a color copy of the original note, so the assignee did not even have
possession of the note. Without ever having had possession, the assignee did have standing to enforce the note as a
lost note under UCC 3-309. Shaya v. Karam, Case No. 308905 (Mich. Ct. App. May 6, 2014). Pledgees and other
assignees of notes need to ensure that original notes are delivered to them, and if indorsements are separately
provided, that transaction documents properly authorize them to attach the separate indorsements when
appropriate.

30

house manual titled Wells Fargo Home Mortgage Foreclosure

Attorney Procedure Manual, Version 1 proving scienter through a
pattern and practice of Plaintiffs and Plaintiffs Counsel in the
creation of forged and fraudulent documents created solely to allow
Plaintiff and Plaintiffs Counsel to fraudulently steal free homes from
homeowners when they lacked the legal right to do so because they
lacked the mandated proof to accomplish it legally.
A distinguished colleague, New York bankruptcy attorney Linda
Tirelli has been working in exposing these remediation practices.
Their ta-da Perry Mason-like moments of evidence all of a sudden
appearing in foreclosure and bankruptcy litigation are not amusing. On
March 12, 2014, the New York Post published a story on Ms. Terellis
work wherein it wrote:
Wells Fargo, the nations biggest mortgage servicer, appears to have set up
detailed internal procedures to fabricate foreclosure papers on demand,
according to allegations in papers filed Tuesday in a New York federal court. In a filing in
New Yorks Southern District in White Plains for a local homeowner in bankruptcy,
attorney Linda Tirelli described a 150-page Wells Fargo Foreclosure Attorney
Procedures Manual created November 9, 2011 and updated February 24, 2012.
According to court papers, the Manual details a procedure for processing
[mortgage] notes without endorsements and obtaining endorsements and
allonges.

The Wells Fargos manual Ms. Terilli speaks of is even more

disconcerting when you review just a few of the steps in its numerous
processes as reflected below:
Attorney: If an allonge is still needed after a note has been
endorsed, forward the allonge attachment to Wells Fargo Default
Docs area via email address
Defaultallongemailbox@wellsfargo.com and add step Y44,
ATTORNEY REQUESTED ALLONGE, to FOR3
WFHM Default Docs Team: If property is located in an original doc
state and attorney has the original note, review the allonge
attachment to determine if we have signing authority to execute
internally.

31

 If WFHM does have signing authority, enter log code FCALGI

(ALLONGE SENT FOR INTERNAL SIGNATURE)
If WFHM does not have signing authority, enter log code FCALGE
(ALLONGE SENT OUT FOR EXECUTION) and mail document for 3rd
party signature.
After allonge has been executed, enter log code FCALGA
(ALLONGE COMPLETED/RETURNED TO ATTORNEY).
Complete the Y44 actual date with the date allonge was returned
to attorney.

The Wells Fargo manual may be reviewed and downloaded at

http://stopforeclosurefraud.com/wpcontent/uploads/2014/03/foreclosur
e_attorney_procedure_manual-1.pdf.
This manual, is the foundation for the strong rebuke of Wells
Fargo in the recent 30- page opinion of Federal Bankruptcy Judge
Robert Drain in New Yorks Southern District wherein in his opinion,
Judge Drain stated with emphasis:
[T]he blank indorsement, upon which Wells Fargo is relying,
was forged, Nevertheless it does show a general willingness
and practice on Wells Fargos part to create documentary
evidence, after the-fact, when enforcing its claims, WHICH IS
EXTRAORDINARY,
This was on the heels of another major defeat for Wells Fargo
wherein a family who had actually paid off their mortgage was
unlawfully foreclosed on by Wells Fargo and the Judge awarded over
$3 million in punitive and compensatory damages by Judge R. Brent
Elliott of Missouris 43rd Judicial Circuit.
In this Missouri case, the automated robotic foreclosure,
evidence and witness process was in perfect focus for this Honorable
Court to understand when the corporate witness for Wells Fargo
testified that:

32

Im not here as a human being. Im here as a

representative of Wells Fargo.
In his opinion attached as Exhibit H, Judge Elliott chastised Wells
Fargo for their outrageous and reprehensible decisions and
deceptive and intentional conduct that displayed a complete and
total disregard for the rights of the borrowers. He went on to state:
Defendant Wells Fargo operated from a position of
superiority provided by its enormous wealth. Wells
Fargos decision took advantage of an obviously financially
vulnerable family,
the judge continued, noting that Wells Fargo showed no evidence of
remorse for the harm caused. The judge wrote.
In fact, the Court recalls the lack of remorse and
humanity illustrated by a Wells Fargo corporate
representative who testified, Im not here as a human
being. Im here as a representative of Wells Fargo,
The ROBO-SIGNED DOCs.
When Plaintiff, several months after initiating foreclosure,
introduced into the court record a forged and fabricated, back dated
and Robo-Signed document titled Assignment of Mortgage, Plaintiffs
Counsel certified the legitimacy of a document that could, by the very
terms within the controlling document of the Trust (PSA) itself, never
possibly exist.
This document is titled Assignment of Mortgage. Upon
inspection though, this document is in reality not only the alleged
assignment of the alleged mortgage but also the alleged assignment of
the alleged note.
Also upon inspection it can be found that this document was
attested to and signed by one Ms. Topaka Love. Ms. Love is an
33

employee of Lender Processing Services in Dakota County, Minnesota

and as such the AOM was also fraudulently signed by a person who
had no authority to sign. It is patently fraudulent and is an obvious
forgery and as explained infra it was executed two years after the
Plaintiff trusts mandated Cut-Off date for deposits and after
foreclosure initiation.
Mortgages may be enforced only by, or on behalf of, the entity
that is entitled to enforce the obligation the mortgage secures. The
underlying obligation in all cases is a promissory note. The mortgage is
the security instrument that secures the indebtedness created by the
note to the real property.
The practice of Plaintiff Wells Fargo Banks use of unauthorized
document forgers in Affidavit & Assignment of Mortgage creation is
now common knowledge. It is a matter that has even been
unaffectionately termed Robo-Signing27

28

AND now through common

knowledge of Plaintiff Wells Fargo Banks Public admissions (and

payment of $ Billions in fines concerning same) of participation in that
very same illegal action on a daily, monthly and yearly basis, Defendant
submits and requests the Courts Judicial Notice of the recently and
previously unavailable Affidavit and accompanying letter attached
hereto as Exhibit F stating in part;
In an attempt to provide you with more assistance, I have enclosed, an affidavit signed
by me, as Register of the Southern Essex District Registry of Deeds, attesting to the
presence of a robo-signed signature on your document as listed on McDonnell Property
27

The term "robosigning" does not accurately describe the pattern and practice. The pattern and practice are more
accurately described as contract perjury, contract forgery, evidence fabrication, fraud upon the Court, and theft in which
families are rendered homeless as a result of criminal behavior.
28

The practice from investopedia, "In the third and fourth quarters of 2010, a robo-signing scandal emerged in the
United States involving GMAC Mortgage and a number of major U.S banks. Banks had to halt thousands of foreclosures
in numerous states when it became known that the paperwork was illegitimate because the signers had not actually
reviewed it. While some robo-signers were middle managers, others were temporary workers with virtually no
understanding of the work they were doing."

34

Ana1ytics Approved Robo-signers List. If you are currently being foreclosed upon, this
affidavit may be presented to your attorney, the lender, or the court to show that your
chain of title has been corrupted.

The above referenced Affidavit attests to the unlawful and

known Robo-Signer signature status of Plaintiffs Assignment of
Mortgage (Ex E) as well as signature status of Plaintiffs sole
proffered and alleged legal conclusory Affidavit titled STATUS OF
ACCOUNT AND MILITARY STATUS AFFIDAVIT (Ex. __) which are
both signed by one Ms. Topaka Love, as was previously articulated to
this Court by Defendant in all of Defendants previous pleadings. The
above mentioned forged, fraudulent and conclusory Affidavit and
Assignment of Mortgage are 2 of the three solely signed
documents Plaintiff presented to the court in their case to establish
their alleged ownership of the alleged Note & Mortgage and their
subsequent right to initiate this foreclosure suit against Defendant.
The above Love conclusory affidavit represents that it is based
on Loves familiarity with Defendants account stating Affiant has
access of and has personal knowledge of the accounts of said company,
and specifically with the account of John L. Reed, defendant herein.
Love also avers that said account is in default and that plaintiff has
elected to call the entire balance of said account due and payable...
While the Love Affidavit states that Loves personal knowledge is
limited to her review of Option One Mortgage Co. as Servicing Agent
for Plaintiff, Love fails to identify, describe or annex the particular
business records upon which her limited knowledge is based.
Significantly, the Love Moving Affidavit makes the conclusory
representation that plaintiff has been in continuous possession of the
note and mortgage since prior to the commencement of this action
without providing any factual details, or the source of Loves
knowledge. In addition to a lack of foundation, the Love Moving
35

Affidavit fails to provide evidence that the originating lender, H&R

Block Inc., indorsed and physically delivered the alleged Reed Note,
through the proper and mandated legal processes necessary to
effectuate a true transference of ownership with complete rights and
interests thereof to each participant in the securitization chain and
then finally to the Asset Backed Receivables Trust as is a requirement
found within the PSA, a requirement of N.Y. E.P.T.L. and a requirement
of IRC.
Defendant has repeatedly denied plaintiffs actions on the ground
that Plaintiff Wells Fargo Bank as Trustee for trust lacks standing to
foreclose.
Specifically, Defendant contends and has always contended in
each and every of his pleadings that Ms. Love also lacked the actual
authority to execute the Option One Assignment.
The above referenced affidavit of John Obrien, combined with the
several other factual inconsistencies the Defendant has previously
articulated to this Court29

30 31 32

, prove beyond any doubt that

Plaintiffs position, a position which is completely void of legal

standing to have initiated this foreclosure action against Defendant,
could not have been accomplished without the use of, as was
previously articulated by Defendant,33 forged and fraudulently created
documents, created specifically by and delivered into this Court while
29

Answer of Defendant John Reed (5/26/2008) 8, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, and throughout the rest
of the pleadings.
30

Answer of Defendant John A. Reed Memorandum in Opposition to Plaintiffs Motion For Summary Judgment and
Request For Trial By Jury (filed Aug, 15th, 2008) The opening statement Firstly, You Honor, the plaintiff hasnt even
proven that it owned or held the promissory note which is the subject of the complaint 1, 2,
31

Each and every other pleading submitted by Defendant and already a part of this legal actions record.
MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY
AMENDED MOTION TO VACATE A VOID JUDGMENT in its entirety
32

33

MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY
AMENDED MOTION TO VACATE A VOID JUDGMENT at 4 thru 16, 35, 45, 46, 47,48, 50, 52, 58, 60, 67, 239, 240,
241, 242, .

36

being Certified by Plaintiffs Counsel as being true, just and accurate

for the sole purpose of blinding this Court to the legal realities of their
position and the situation which then lead to the ultimate theft of
Defendants home, loss of Defendants personal and business inventory
and possessions, forced homelessness upon Defendant and became the
cause of Defendants mental injury while allowing Plaintiffs own
unjust enrichment. In essence, they not only got a free house, they also
got the Court to launder their dirty money.
Defendants pleadings and exhibits show undeniable proof that
each of the entities involved in their entirety and throughout the entire
chronology (time-line) of this alleged mortgage did fail in their legal
and mandatory due diligence duties and requirements to sign, date,
authenticate, record and more ( stated in more specificity infra). The
true holder in due course of the alleged Note & Mortgage and true
holder of the legal right to foreclose upon this alleged Note &
Mortgage is entirely a falsity and under no circumstance of fact is it,
was it, nor can it ever be the Plaintiff Wells Fargo Bank NA. as Trustee
for this Trust who would have the legal authority or right to bring a
foreclosure action against Defendant Reed..

As a result, the Courts November 13th, 2008 entry granting

Plaintiffs motion for judgment and issuing a decree of foreclosure is
void ab initio (as opposed to voidable).
Accordingly, based upon the foregoing, Defendant respectfully
requests that the November 13th 2008 entry be vacated and this matter
remanded back to the Civil Court with instruction to dismiss,
instruction to quiet title and each of Defendants Counterclaims to be
lawfully adjudged.

37

Respectfully submitted,

________________________
John A. Reed
40 Maple Ave.
Centerville, Ohio 45459
937-890-2576
Yotraj@Yahoo.com

38

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Fed Home Loan Mtge. Corp. v. Schwartzwald, Slip Opinion No. 2012-0hio-5017.]

NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of
the Ohio Official Reports. Readers are requested to promptly notify the Reporter of
Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any
typographical or other formal errors in the opinion, in order that corrections may be made
before the opinion is published.

SLIP OPINION No. 2012-0HIO-5017

FEDERAL HOME LOAN MORTGAGE CORPORATION, APPELLEE, v.
SCHWARTZWALD ET AL., APPELLANTS.
[Until this opinion appears in the Ohio Official Reports advance sheets,
it may be cited as Fed. Home Loan Mtge. Corp. v. Schwartzwald,

Slip Opinion No. 2012-0hio-5017.]

Foreclosure---Jurisdictional aspects of standing-Civ.R. 17(A)-Jurisdiction
determined as of time of filing suit.
(Nos. 2011-1201 and 2011-1362-Submitted April 4, 2012-Decided
October 31, 2012.)

APPEAL from and CERTIFIED by the Court of Appeals for Greene County,
No. 2010 CA 41, 194 Ohio App.3d 644, 2011-Ohio-2681.

O'DONNELL, J.
{1} Duane and Julie Schwartzwald appeal from a judgment of the Second District
Court of Appeals affirming a decree of foreclosure entered in favor of the Federal Home
Loan Mortgage Corporation. In addition, the appellate court certified that its decision in
this case conflicts with decisions of the First and

SUPREME COURT OF OHIO

39

Eighth Districts on the following issue: "In a mortgage foreclosure action, the
lack of standing or a real party in interest defect can be cured by the assignment of
the mortgage prior to judgment."
{2} Federal Home Loan commenced this foreclosure action before it obtained an
assignment of the promissory note and mortgage securing the Schwartzwalds loan. The
Schwartzwalds maintained that Federal Home Loan lacked standing to sue. The trial court
granted summary judgment in favor of Federal Home Loan and entered a decree of
foreclosure. The appellate court affirmed, holding that Federal Home Loan had remedied
its lack of standing when it obtained an assignment from the real party in interest.
{3} However, standing is required to invoke the jurisdiction of the common pleas
court, and therefore it is determined as of the filing of the complaint. Thus, receiving an
assignment of a promissory note and mortgage from the real party in interest subsequent
to the filing of an action but prior to the entry of judgment does not cure a lack of standing
to file a foreclosure action.
(4} Accordingly, the judgment of the court of appeals is reversed, and the cause is
dismissed.
Facts and Procedural History
(5} In November 2006, Duane and Julie Schwartzwald purchased a home in
Xenia, Ohio, and received a mortgage loan from Legacy Mortgage in the amount of
$251,250. They executed a promissory note and a mortgage granting Legacy Mortgage a
security interest in the property. Legacy Mortgage then endorsed the promissory note as
payable to Wells Fargo Bank, N.A., and assigned it the mortgage.
{ 6} In September 2008, Duane Schwartzwald lost his job at Barco, Inc., and the
Schwartzwalds moved to Indiana so he could accept a new position.
They continued making mortgage payments as they tried to sell the house in Xenia, but
they went into default on January 1, 2009. In March 2009, Wells 2
January Term, 2012

40

Fargo agreed to list the property for a short sale, and on April 8, 2009, the Schwartzwalds
entered into a contract to sell it for $259,900, with closing set for June 8, 2009.
{7} However, on April 15, 2009, Federal Home Loan Mortgage Corporation
commenced this foreclosure action, alleging that the Schwartzwalds had defaulted on their
loan and owed $245,085.18 plus interest, costs, and advances. It attached a copy of the
mortgage identifying the Schwartzwalds as borrowers and Legacy Mortgage as lender, but
did not attach a copy of the note, claiming that "a copy of [the note] is currently
unavailable."
{8} Julie Schwartzwald then contacted Wells Fargo about the foreclosure
complaint. She testified, "I was told that it was 'standard procedure' and 'don't worry about
it' because we were doing a short sale." The Schwartzwalds did not answer the complaint.
{9} On April 24, 2009, Federal Home Loan filed with the court a copy
of the note signed by the Schwartzwalds in favor of Legacy Mortgage. The final
page carries a blank endorsement by Wells Fargo placed above the endorsement
by Legacy Mortgage payable to Wells Fargo.
{10} On May 15, 2009, Wells Fargo assigned the note and mortgage to
Federal Home Loan, and Federal Home Loan filed with the court a copy of the
assignment on June 17, 2009. It then moved for a default judgment and a
summary judgment, but the trial court discovered that Federal Home Loan had
failed to establish a chain of title because no assignment of the mortgage from
Legacy Mortgage to Wells Fargo appeared in the record.
{11} During this time, even though it had assigned its interest in the
note and mortgage to Federal Home Loan, Wells Fargo continued discussing a
short sale of the property with the Schwartzwalds, but delays in. this process
eventually caused the Schwartzwalds' buyer to rescind the offer. On December
14, 2009, the trial court granted the Schwartzwalds leave to file an answer. That
3
SUPREME COURT
same day, Federal Home Loan filed with the court a copy of the assignment of the
mortgage from Legacy Mortgage to Wells Fargo dated November 27,2006.
{12} Federal Home Loan again moved for summary judgment,
41

supporting the motion with the affidavit of Herman John Kennerty, vice president
of loan documentation for Wells Fargo as servicing agent for Federal Home Loan,
who averred that the Schwartzwalds were in default and who authenticated the .
note and mortgage as well as the assignment of the note and mortgage from Wells
Fargo. Subsequently, Federal Home Loan filed copies of the notarized
assignments from Legacy Mortgage to Wells Fargo and from Wells Fargo to
Federal Home Loan.
{13} The Schwartzwalds also moved for summary judgment, asserting
that Federal Home Loan lacked standing to foreclose on their property.
{14} The trial court entered summary judgment for Federal Home Loan,
finding that the Schwartzwalds had defaulted on the note, and it ordered the
equity of redemption foreclosed and the property sold. Federal Home Loan
purchased the property at a sheriff's sale.
{15} On appeal, the Second District Court of Appeals affirmed and held
that Federal Home Loan had established its right to enforce the promissory note
as a nonholder in possession, because assignment of the mortgage effected a
transfer of the note it secured. The court further explained that standing is not a
jurisdictional prerequisite and that a lack of standing may be cured by substituting
the real party in interest for an original party pursuant to Civ.R. 17(A). Thus, the
court concluded that although Federal Home Loan lacked standing at the time it
commenced the foreclosure action, it cured that defect by the assignment of the
mortgage and transfer of the note prior to entry of judgment.
{16} The court of appeals certified that its decision conflicted with
Wells Fargo Bank, N.A. v. Byrd, 178 Ohio App.3d 285, 2008-0hio-4603, 897
N.E.2d 722 (1st Dist.), 15-16; Bank of New York v. Gindele, 1st Dist. No. C4
January Term, 2012
090251, 2010-0hio-542, 3-4; and Wells Fargo Bank, N.A. v. Jordan, 8th Dist.
No. 91675, 2009-0hio-I092, 21, cases that held that a lack of standing cannot
be cured by substituting the real party in interest for an original party pursuant to
42

Civ.R. 17(A). We accepted the conflict and the Schwartzwalds' discretionary

appeal on the same issue.
Arguments on Appeal
{17} The Schwartzwalds explain that the essential aspect of standing is
injury to a legally protected right and claim that Federal Home Loan had not been
injured by their default at the time it commenced this foreclosure action, because
it had not obtained the note and mortgage until after it filed the complaint.
Relying on federal caselaw, they maintain that standing is determined as of the
time the action is brought, so that subsequent events do not cure a lack of
standing. They further urge that although the requirement of a real party in
interest can be waived, that requirement cannot be equated with the requirement
of standing.
{18} Federal Home Loan asserts that pursuant to R.C. 1303.31, it is a
"person entitled to enforce the note" because it is "[a] nonholder in possession of
the instrument who has the rights of a holder" by virtue of the negotiation of the
note from Legacy to Wells Fargo and the assignment from Wells Fargo. Further,
it maintains that R.C. 1303.31 defines only which party is entitled to enforce a
note and that the failure to be a real party in interest at the commencement of suit
can be cured pursuant to Civ.R. 17(A) by the assignment of the mortgage, and
note. It also contends that the jurisdictional requirement of justiciability is
satisfied if the allegations of the complaint establish that the plaintiff has standing
to present a justiciable controversy and that even if it is determined that those
allegations were in fact false, the matter remains justiciable so long as the plaintiff
subsequently obtains the right to foreclose prior to judgment. On this basis, it
argues that because "the Ohio Constitution bestows general (and not limited)
5
SUPREME COURT OF OHIO
jurisdiction on common pleas courts, common pleas courts have 'jurisdiction' to
hear disputes, even if the named plaintiff was not the correct person to invoke it."
Thus, it concedes that the record in this case does not establish that it was a
person entitled to enforce the note as of the date the complaint was filed, but it
43

maintains that it "proved that it was such a person prior to judgment."

{19} Accordingly, the question presented is whether a lack of standing
at the commencement of a foreclosure action filed in a common pleas court may
be cured by obtaining an assignment of a note and mortgage sufficient to establish
standing prior to the entry of judgment.
Law and Analysis .
Standing to Sue
{20} The Ohio Constitution provides in Article IV, Section 4(B); "The
courts of common pleas and divisions thereof shall have such original jurisdiction
over all justiciable matters and such powers of review of proceedings of
administrative officers and agencies as may be provided by law." (Emphasis
added.)
{21} In Cleveland v. Shaker Hts., 30 Ohio St.3d 49, 51, 507 N.E.2d 323
(I 987), we stated:
" 'Whether a party has a sufficient stake in an otherwise
justiciable controversy to obtain judicial resolution of that
controversy is what has traditionally been referred to as the
question of standing to sue. Where the party does not rely on any
specific statute authorizing invocation of the judicial process, the
question of standing depends on whether the party has alleged
...... a "personal stake in the outcome of the controversy." "
6
January Term, 2012
Id, quoting Middletown v. Ferguson, 25 Ohio St.3d 71, 75, 495 N.E.2d 380
(1986), quoting Sierra Club v. Morton, 405 U.S. 727, 731-732, 92 S.Ct. 1361, 31
L.Ed.2d 636 (1972), quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7
L.Ed.2d 663 (1972). Similarly, the United States Supreme Court observed in
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 102, 118 S.Ct. 1003,
140 L.Ed.2d 210 (1998), that "[s]tanding to sue is part of the common
44

understanding of what it takes to make a justiciable case."

{22} We recognized that standing is a "jurisdictional requirement" in
State ex rel. Dallman v. Franklin Cty. Court of Common Pleas, 35 Ohio St.2d
176, 179, 298 N.E.2d 515 (1973), and we stated: "It is an elementary concept of
law that a party lacks standing to invoke the jurisdiction of the court unless he has,
in an individual or representative capacity, some real interest in the subject matter
of the action." (Emphasis added.) See also New Boston Coke Corp. v. Tyler, 32
Ohio St.3d 216, 218, 513 N.E.2d 302 (1987) (''the issue of standing, inasmuch as
it is jurisdictional in nature, may be raised at any time during the pendency of the
proceedings"); Steinglass & Scarselli, The Ohio State Constitution: A Reference
Guide 180 (2004) (noting that the jurisdiction of the common pleas court is
limited to justiciable matters).
{23} And recently, in Kincaid v. Erie Ins. Co., 128 Ohio St.3d 322,
2010-0hio-6036, 944 N.E.2d 207, we affirmed the dismissal of a complaint for
lack of standing when it had been filed before the claimant had suffered any
injury. There, Kincaid asserted claims that his insurer had breached the insurance
contract by failing to pay expenses covered by the policy; however, he had never
presented a claim for reimbursement to the insurer. We concluded that Kincaid
lacked standing to assert the cause of action, explaining, "Until Erie refuses to pay
a claim for a loss, Kincaid has suffered no actual damages for breach of contract,
the parties do not have adverse legal interests, and there is no justiciable
controversy." Id. at 13.
7
SUPREME COURT OF OHIO
{24} Because standing to sue is required to invoke the jurisdiction of the
common pleas court, "standing is to be determined as of the commencement of
suit." Lujan v. Defenders of Wildlife, 504 U.S. 555, 570-571, 112 S.Ct. 2130, 119
L.Ed.2d 351 (1992), fn. 5; see also Friends of the Earth, Inc. v. Laidlaw
Environmental Servs. (TOC), 528 U.S. 167, 180, 120 S.Ct.693, 145 L.Ed.2d 610
(2000); Nova Health Sys. v. Gandy, 416 F.3d 1149, 1154-1155 (10th Cir.2005);
Focus on the Family v. Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1275
(11th Cir.2003); Perry v. Arlington Hts., 186 F.3d 826, 830 (7th Cir.1999); Carr
45

v. Alta Verde Industries, lnc., 931 F.2d 1055, 1061 (5th Cir.1991).
{25} Further, invoking the jurisdiction of the court "depends on the state
of things at the time of the action brought," Mullan v. Torrance, 22 U.S. 537, 539,
6 L.Ed. 154 (1824), and the Supreme Court has observed that "[t]he state of
things and the originally alleged state of things are not synonymous;
demonstration that the original allegations were false will defeat jurisdiction."
Rockwell Internatl. Corp. v. United States, 549 U.S. 457, 473, 127 S.Ct. 1397,
167 L.Ed.2d 190 (2007).
{26} Thus, "[p]ost-filing events that supply standing that did not exist
on filing may be disregarded, denying standing despite a showing of sufficient
present injury caused by the challenged acts and capable of judicial redress." 13A
Wright, Miller & Cooper, Federal Practice and Procedure 9, Section 3531
(2008); see Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 575, 124
S.Ct. 1920, 158 L.Ed.2d 866 (2004), quoting Caterpillar Inc. v. Lewis, 519 U.S.
61, 75, 117 S.Ct. 467, 136 L.Ed.2d 437 (rejecting argument that" 'finality,
efficiency, and judicial economy' " can justify suspension of the time-of-filing
rule); Utah Assn. of Counties v. Bush, 455 F.3d 1094, 1101, and fn. 6 (10th
Cir.2006) (a plaintiff cannot rely on injuries occurring after the filing of the
complaint to establish standing).
8
January Term, 2012
{27} This principle accords with decisions from other states holding that
standing is determined as of the filing the complaint. See, e.g., Deutsche Bank
Natl. Trust v. Brumbaugh, 2012 OK 3, 270 P.3d 151, 11 ("If Deutsche Bank
became a person entitled to enforce the note as either a holder or nonholder in
possession who has the rights of a holder after the foreclosure action was filed,
then the case may be dismissed without prejudice * * *" [emphasis added]); U.S.
Bank Natl. Assn. v. Kimball, 190 Vt. 210, 2011 VT 81, 27 A.3d 1087, 14 ("U.S.
Bank was required to show that at the time the complaint was filed it possessed
the original note either made payable to bearer with a blank endorsement or made
46

payable to order with an endorsement specifically to U.S. Bank" [emphasis

added]); Mtge. Electronic Registration Sys., Inc.v. Saunders, 2010 ME 79, 2 A.3d
287, 15 ("Without possession of or any interest in the note, MERS lacked
standing to institute foreclosure proceedings and could not invoke the jurisdiction
of our trial courts" [emphasis added]); RMS Residential Properties, L.L.C. v,
Miller, 303 Conn. 224, 229, 232, 32 A.3d 309 (2011), quoting Hiland v. Ives, 28
Conn.Supp. 243, 245, 257 A.2d 822 (1966) (explaining that" '[s]tanding is the
legal right to set judicial machinery in motion' " and holding that the plaintiff had
standing because it proved ownership of the note and mortgage at the time it
commenced foreclosure action); Mclean v. JP Morgan Chase Bank Natl. Assn.,
79 So.3d 170, 173 (Fla.App.2012) ("the plaintiff must prove that it had standing
to foreclose when the complaint was filed"); see also Burley v. Douglas, 26 So.3d
1013, 1019 (Miss.2009), quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,
571, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), fn. 5 ("'standing is to be
determined as of the commencement of suit' "); In re 2007 Administration of
Appropriations of Water of the Niobrara, 278 Neb. 137, 145, 768 N.W.2d 420
(2009) ("only a party that has standing may invoke the jurisdiction of a court or
tribunal. And the junior appropriators did not lose standing if they possessed it
under the facts existing when they commenced the litigation" [footnote omitted]).
9
SUPREME COURT OF OHIO
{28} Here, Federal Home Loan concedes that there is no evidence that it
had suffered any injury at the time it commenced this foreclosure action. Thus,
because it failed to establish an interest in the note or mortgage at the time it filed
suit, it had no standing to invoke the jurisdiction of the common pleas court.
The Real-Party-in-Interest Rule
{ 29} The court of appeals and Federal Home Loan relied on the
plurality opinion in State ex rel. Jones v. Suster, 84 Ohio St.d 70, 77, 701 N.E.2d
1002 (1998), which suggested that "[t]he lack of standing may be cured by
substituting the proper party so that a court otherwise having subject matter
47

jurisdiction may proceed to adjudicate the matter. Civ.R. 17." However, four
justices declined to join that portion of the opinion, and therefore it is not a
holding of this court. See Ohio Constitution, Article N, Section 2(A) ("A
majority of the supreme court shall be necessary to constitute a quorum or to
render a judgment").
{30} At common law, all actions had to be brought in the name of the
person holding legal title to the right asserted, and individuals possessing only
equitable or beneficial interests could not sue in their own right. See generally
Clark & Hutchins, The Real Party in Interest, 34 Yale L.J. 259 (1925); 6A
Wright, Miller & Kane, Federal Practice and Procedure, Section 1541 (2010).
However, the practice in equity relaxed this requirement, and states later
abrogated the common-law rules and adopted "rules that permitted any 'real party
in interest' to bring suit." Sprint Communications Co., L.P. v.APCC Servs., Inc.,
554 U.S. 269, 279, 128 S.Ct. 2531, 171 L.Ed 2d 424 (2008).
{31} In Ohio, Civ.R. 17(A) governs the procedural requirement that a
complaint be brought in the name of the real party in interest and provides:
Every action shall be prosecuted in the name of the real party in interest.
An executor, administrator, guardian, bailee,
10
January Term, 2012
trustee of an express trust, a party with whom or in whose name a contract has
been made for the benefit of another, or a party authorized by statute may sue in
his name as such representative without joining with him the party for whose
benefit the action is brought. When a statute of this.state so provides, an action for
the use or benefit of another shall be brought in the name of this state. No action
shall be dismissed on the ground that it is not prosecuted in the name of the real
party in interest until a reasonable time has been allowed after objection for
ratification of commencement of the action by, or joinder or substitution of, the
real party in interest. Such ratification, joinder, or substitution shall have the same
48

effect as if the action had been commenced in the name of the real party .in
interest.
{32} Considering Civ.R. 17(A) in Shealy v. Campbell, 20 Ohio St.3d 23,
2425,485 N.E.2d 701 (1985), we observed:
The purpose behind the real party in interest rule is '* * * to enable the
defendant to avail himself of evidence and defenses that the defendant has against
the real party in interest, and to assure him finality of the judgment, and that he
will be protected against another suit brought by the real party at interest on the
same matter.' Celanese Corp. of America v. John Clark Industries (5 Cir.l954), 214
F.2d 551, 556." [In re Highland Holiday Subdivision (1971), 27 Ohio App.2d
237] 240 [273 N.E.2d 903).
{33} As the Supreme Court explained in Lincoln Property Co. v. Roche,
546 U.S. 81,90, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005), the real-party-in-interest
rule concerns only proper party joinder. Civ.R. 17(A) does not address standing;
rather, the point of the rule is that "suits by representative plaintiffs on behalf of
the real parties in interest are the exception rather than the rule and should only be
allowed when the real parties in interest are identifiable and the res judicata scope
of the judgment can be effectively determined.". Consumer Fedn. of Am. v. Upjohn Co.,
346 A.2d 725, 729 (D.C.1975) (construing analogous District of
Columbia rule).
{34} Thus, the Third and the Ninth Circuits have rejected the notion that
Fed.R.Civ.P. 17(a), on which Civ.R. 17(A) is based, allows a party with no personal stake
in a controversy to file a claim on behalf of a third party, obtain the
cause of action by assignment, and then have the assignment relate back to
commencement of the action, stating:
"Rule 17(a) does not apply to a situation where a party with no cause of
action files a lawsuit to toll the statute of limitations and later obtains a cause of
action through assignment. Rule 17(a) is the codification of the salutary principle
49

that an action should not be forfeited because of an honest mistake; it is not a

provision to be distorted by parties to circumvent the limitations period."
Gardner v. State Farm Fire & Cas. Co., 544F.3d 553, 563 (3d Cir.2008), quoting
United States ex rel. Wulff v. CMA, Inc., 890 F.2d 1070, 1075 (9th Cir.l989).
{ 35} The Sixth Circuit Court of Appeals' decision in Zurich Ins. Co. v.
Logitrans, Inc., 297 F.3d 528 (6th Cir.2002), illustrates this point. In that case, a
fire at a warehouse destroyed property insured by American Guarantee, which
paid out a claim for damages. However, another insurance company, Zurich
Switzerland, filed a complaint claiming to be the insured's subrogee,
notwithstanding the fact that Zurich Switzerland had neither issued an insurance
12
January Term,2012
policy nor paid out any money to the insured. The defendants moved to dismiss
for lack of standing, and. Zurich Switzerland sought to substitute American
Guarantee as the real party in interest pursuant to Fed.R.Civ.P. 17(a). The district
court dismissed the action.
{36} The Sixth Circuit Court of Appeals acknowledged that the statute of
limitations would bar American Guarantee's claim unless Fed.R.Civ.P. 17(a) allowed it to
be substituted for Zurich Switzerland. However, the court distinguished between the
requirement of standing and the objection that the
plaintiff is not the real party in interest, and it held that because "Zurich American
admittedly has not suffered injury in fact by the defendants, it had no standing to
bring this action and no standing to make a motion to substitute the real party in
interest." ld.
{37} Other courts have also determined that a plaintiff cannot rely on
procedural rules similar to Civ.R. 17(A) to cure a lack of standing at the
commencement of litigation.. Davis v. Yageo Corp., 481 F.3d 661, 678 (9th
Cir.2007) ("whether or not Dux was the real-party-in-interest, it does not have
50

standing, and it cannot cure its standing problem through an invocation of

Fed.R.Civ.P. 17(a)"); Clark v. Trailiner Corp., 242 F.3d 388 (10th Cir.2000)
(table), opinion reported at 2000 WL 1694299 (noting that the plaintiff cannot
"retroactively become the real-party-in-interest" in order to cure a lack of
standing at the filing of the complaint [emphasis sic]); accord State v. Property at
2018 Rainbow Drive, 740 So.2d 1025, 1027-1028 (Ala.1999) (rejecting the
argument that a lack of standing can be cured after filing of the complaint);
Consumer Fedn. of Am. v. Upjohn Co., 346 A.2d 725, 729 (D.C.App.1975)
(explaining that dismissal for lack of standing is consistent with D.C.
Super.Ct.Civ.R. 17(a)); see also McLean v. JPMorgan Chase Bank Natl. Assn.,
79 So.3d 170, 173 (Fla.App.2012) ("a party is not permitted to establish the right
13
SUPREME COURT OF OHIO
to maintain an action retroactively by acquiring standing to file a lawsuit after the
fact").
{38} We agree with the reasoning and analysis presented in these cases.
Standing is required to invoke the jurisdiction of the common pleas court.
Pursuant to Civ.R. 82, the Rules of Civil Procedure do not extend the jurisdiction
of the courts of this state, and a common pleas court cannot substitute a real party
in interest for another party if no party with standing has invoked its jurisdiction
in the first instance.
{39} Accordingly, a litigant cannot pursuant to Civ.R. 17(A) cure the
lack of standing after commencement of the action by obtaining an interest in the
subject of the litigation and substituting itself as the real party in interest.
Effect of Lack of Standing on Foreclosure Actions
{40} The lack of standing at the commencement of a foreclosure action
requires dismissal of the complaint; however, that dismissal is not an adjudication
on the merits and is therefore without prejudice. See State ex rel, Coles v.
Granville, 116 Ohio St.3d 231, 2007-0hio-6057, 877N.E.2d 968, 51. Because
there has been no adjudication on the underlying indebtedness, our dismissal has
51

no effect on the underlying duties, rights, or obligations of the parties.

Conclusion
{41} It is fundamental that a party commencing litigation must have
standing to sue in order to present a justiciable controversy and invoke the
jurisdiction of the common pleas court. Civ.R. 17(A) does not change this principle, and a
lack of standing at the outset of litigation cannot be cured by
receipt of an assignment of the claim or by substitution of the real party in
interest.'
{ 42} Here, it is undisputed that Federal Home Loan did not have
standing at the time it commenced this foreclosure action, and therefore it failed
14
January Term, 2012
to invoke the jurisdiction of the court of common pleas. Accordingly, the
judgment of the court of appeals is reversed, and the cause is dismissed.
Judgment reversed
and cause dismissed.
O'CONNOR, C.J., and PFEIFER, LUNDBERG STRAlTON, ANZlNGER, CUPP,
and MCGEE BROWN,JJ., concur.
_____________________________
Thompson Hine, L.L.P., Scott A. King, and Terry W. Posey Jr., for
appellee.
Andrew M. Engle, for appellants.
Bruce M. Broyles, urging reversal for amici curiae Homeowners of the
State of Ohio and Ohiofraudclosure.blogspot.com,
Advocates for Basic Legal Equality, Inc., and Andrew D. Neuhauser;
Legal Aid Society of Cleveland and Julie K. Robie; Legal Aid Society of
Southwest Ohio, L.L.C., and Noel M. Morgan; Community Legal Aid Services,
Inc., Christina M. Janice, and Paul E. Zindle; and Ohio Poverty Law Center and
Linda Cook, urging reversal for amici curiae Advocates for Basic Legal Equality,
Inc., Legal Aid Society of Cleveland, Legal Aid Society of Southwest Ohio,
52

L.L.C., Community Legal Aid Services, Inc., Ohio Poverty Law Center, Legal
Aid Society of Columbus, Southeastern Ohio Legal Services, Legal Aid of
Western Ohio, and Pro Seniors, Inc.
______________________________

53

EXHIBITS
Exhibit A
Original Complaint

54

55

56

57

58

59

60

61

62

63

64

65

ALLONGE From H&R Block to Option One

66

Allonge Option One to Blank

67

68

69

70

71

72

73

74

75

76

77

Exhibit B
Assignment of Mortgage from Option One Mort. Corp.
to Wells Fargo Bank Na.

78

Exhibit C
Notice of Filing of Assignment

79

80

81

82

83

Exhibit E

Purchase Price & Terms Agreement

84

Exhibit E2

Purchase Price & Terms Agreement signature

page

85

Exhibit G
EXECUTION COPY FLOW AMENDED AND RESTATEDMORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT (ECFAARMLPAWA)

86

Exhibit G2
(ECFAARMLPAWA) Due Diligence Statement

87

Exhibit G3
(ECFAARMLPAWA) Validity of Mortgage Documents & Ownership

88

Exhibit G4
(ECFAARMLPAWA) Origination Due Diligence

89

Exhibit G5
(ECFAARMLPAWA) Signatory page 1

90

Exhibit G6
(ECFAARMLPAWA) Signatory page 2

91

Exhibit G7
(ECFAARMLPAWA) Signatory page 3

92

OBrien Affidavit 1

93

94

Affidavit of Topaka Love

95

96

97

98