Download - Edited Complain Tag Asset Trust

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COMPLAINT FOR RECONVEYENCE OF PROPERTY RELEASE OF LIEN, DAMAGES AND

OTHER RELIEF

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF CONTRA COSTA

, an individual;

PLAINTIFF

Vs.

HSBC Bank USA. National Association as

Trustee for Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed

Pass-Through Certificates Series 2007-

AR6

DEFENDANTS.

COMPLAINT FOR RECONVEYENCE OF

PROPERTY RELEASE OF LIEN, DAMAGES

AND OTHER RELIEF

Comes now the Plaintiff, Hilary Spencer Gavenda, herein after “Plaintiff”, and files this

COMPLAINT FOR RECONVEYENCE OF PROPERTY, RELEASE OF LIEN, DAMAGES AND

OTHER RELIEF, against , Defendant, HSBC Bank USA. National Association as Trustee

for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through

Certificates Series 2007-AR6 as follows, to wit:

1. NOTICE TO THE COURT: Use of all codes, laws and/or rules of procedure cited herein that

may not be or represent law duly passed by the legislature of California, the state of the

constitutional republic, United States of America; that government directly created through the

sovereign electors on California ; and/or that may not be or represent law enacted by that

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legislature acting in its jurisdiction over California , the state of the republic and in its jurisdiction

over its state citizens domiciled on the land thereon, is only used here to notice the

Defendant(s) of that which is applicable to them and is not intended to be construed by this Court

as an act of the Plaintiff granting jurisdiction of such law over him/them , nor to be understood by

the Court to mean that Plaintiff, the living soul, confers, submits to, or has knowingly and

intentionally entered into any such other jurisdiction alluded to thereby.

As grounds for relief requested, Plaintiffs would show unto the Court the following:

2. Whereas, Defendant, HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6., has

assumed all rights and responsibilities for the actions and representations of the original lender in

the contract as if being the alleged original lender themselves in its purchase of the loan contract, it

is referred to herein, along with WELLS FARGO BANK, NA. , the original lender for whose actions,

, HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities Corporation,

Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6, is responsible to the Plaintiff,

both as “the bank”, and where not specifically differentiated, references to actions and

representations of the original lender in the making and closing of that loan, by, , HSBC Bank

USA. National Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage

Asset-Backed Pass-Through Certificates Series 2007-AR6’s liability assumed for said actions as

present holder of this loan, such references are hereby understood to include, , HSBC Bank USA.

National Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-

Backed Pass-Through Certificates Series 2007-AR6 as if their own actions.

As grounds for relief requested, Plaintiff would show unto the Court the following:

3. PLAINTIFF, Hilary Spencer Gavenda, is an adult Sovereign man on California, a state of the

Constitutional republic, United States of America domiciled on the land, on California, near 1542

Larkspur Ct., Oakley community, California, on California, state of the republic and the owner of

property at 1542 Larkspur Ct., Oakley community, California, on California, state of the republic.

4. DEFENDANT, HSBC Bank USA. National Association is a national banking corporation

allegedly organized and existing under the laws of the United States, whose address is 1 Federal

St, Boston, - 02110 acting in behalf of the holder of the Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 .

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GENERAL ALLEGATIONS

1. Defendant HSBC Bank USA. National Association, acting in behalf of the

alleged holder of the loan Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed

Pass-Through Certificates Series 2007-AR6 which is a trust entity also known as a Special

Purpose Vehicle became an alleged successor in interest to the originator and issued securities

collateralized by the deed of trust under a master pooling and servicing agreement dated

November 25. 2007, by which all legal and equitable interest was transferred to the certificate

holders. Defendant HSBC Bank USA. National Association as trustee is acting in the capacity of

the alleged representative for and nominee of the certificate holders for the purposes of

foreclosure of the property because the loan was allegedly in default. HSBC Bank USA. National

Association is not the holder or owner of the note.

2. Plaintiff is informed and believes and therefore alleges that the Defendant,

HSBC Bank USA. National Association acting in behalf of the holder of the loan Wells Fargo

Asset Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-

AR6 lacked standing to commence foreclosure proceedings being threatened because they are

not the lawful holders of the rights of the contract in this case.

3. Plaintiff alleges Defendant HSBC Bank USA. National Association as Trustee

for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates

Series 2007-AR6 ’s certificate holders lacked standing to commence foreclosure because they

were not the lawful holders of the rights of the contract under which foreclosure is being acted

on.

The note, which was a negotiable instrument under UCC Article 3, then converted to a security,

Once it is securitized, it falls under UCC Articles 8 and 9 as a security. The Federal Courts have

ruled that the only way to prove the perfection of any security is by actual possession of the

security. (Staff Mortgage & Investment Corp. 550 F.2d 1228 (9th Cir 1997). Under Uniform

Commercial Code, the security interest must be perfected by possession. Lacking proof of this

possession of the security, it did not have the right to initiate foreclosure proceedings in its name.

4. Defendants HSBC Bank USA. National Association as Trustee for Wells Fargo

Asset Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-

AR6 illegally sold the rights and interests in Defendant’s loan instruments as un-registered

securities. Selling un-registered securities is an automatic right of rescission of the original

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contract.

As already noted Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-

Through Certificates Series 2007-AR6 is a Special Purpose Vehicle and alleged successor in

interest to the originator and issued securities collateralized by the deed of trust under a master

pooling and servicing agreement dated November 25. 2007 , by which all legal and equitable

interest was transferred to the certificate holders.

5. Defendant HSBC Bank USA. National Association as Trustee is acting in the

capacity of the alleged representative for and nominee of the certificate holders for the purposes

of foreclosure of the property. Since the sale of the rights and interests in the unregistered

securities of which Plaintiff’s debt instruments were a part was illegal and invalid, no legal and

equitable interest in Plaintiff’s debt instruments was transferred to the certificate holders to give

Defendant HSBC Bank USA. National Association as trustee acting in the capacity of nominee of

the certificate holders to have power of foreclosure of the property in the certificate holders’

behalf and the rights of sale are void.

FIRST CAUSE OF ACTION

CIVIL RICO

Against , HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6

7. I repeat, re-allege and incorporate all herein by reference and each and every allegation

set forth in paragraphs 1 through 19 inclusive, of all allegations and re-plead the same as set out

in full with the same force and effect.

8. Plaintiff is informed and believes and thereon alleges that HSBC Bank USA. National

Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed

Pass-Through Certificates Series 2007-AR6 Defendants, have engaged in an unlawful pattern of

racketeering activity for the common purpose of carrying out a fraudulent scheme against people

that they have collected payments from.

9. Through the services of lenders marketed to the public that they are in the business to

loan money receiving notes and trust deeds as security for repayment they withhold from the

borrower, that in fact, they and the lenders with whom they work are in the business of pooling

and bundling these security instruments to sell the rights and interests in these non-registered

securities to investors in the form of certificates of investment.

10. Plaintiff is informed and believes and thereon alleges that Wells Fargo Bank National

Association is a servicer and Defendant HSBC Bank USA. National Association as Trustee

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Series 2007-AR6 is acting as a trustee, a third party, and as such, their activities affect interstate

commerce and each is an “enterprise” within the meaning of 18 USC 1961(4) and 1962(b) and

(c).

11.Plaintiff is informed and believes and thereon alleges that Defendants HSBC Bank USA.


Backed Pass-Through Certificates Series 2007-AR6 directly or indirectly conducted and

participated in the affairs of a RICO enterprise.

14. Plaintiff is informed and believes and thereon alleges that Defendants HSBC Bank USA.


Backed Pass-Through Certificates Series 2007-AR6 engaged in a scheme of and artifice to

defraud as herein described with the specific intent to defraud the public including Plaintiff, and

in furtherance thereof, used and/or caused the use of the United States Mail, an indictable

offense under USC 1341, in that the Defendants mailed, or caused to be mailed to Plaintiff or

others, letters and other matter reflecting their fraudulent scheme as herein described.

15. Plaintiff is informed and believes and thereon alleges that Defendants Wells Fargo Bank N/A

acting in behalf of the holder of the loan Wells Fargo Asset Securities Corporation, Mortgage

Asset-Backed Pass-Through Certificates Series 2007-AR6, knowingly, willingly, directly and

indirectly committed multiple predicate acts of racketeering activity since inception of

transaction in [[ July 17th, 2007 ]] , as hereinabove described, and thus have engaged in a

“pattern of racketeering activity” within the meaning of 18 USC 1961(5). These acts were

and are continuous, through and including the present, and reflect multiple and repeated acts

of misconduct that are not sporadic or isolated in time, but rather are inter-related by their

similar purpose and common targets as herein described.

16. Plaintiff is informed and believes and thereon alleges that Defendants Wells Fargo Bank

N/A acting in behalf of the holder of the loan Wells Fargo Asset Securities Corporation, Mortgage

Asset-Backed Pass-Through Certificates Series 2007-AR6 conduct and participation in these

affairs through the pattern of racketeering activity as hereinabove described, constitutes a

violation of 18 USC 1964(b) and (c).

17. Plaintiff has been injured by Defendants’ and Wells Fargo Bank N/A acting in behalf

of the holder of the loan Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-

Through Certificates Series 2007-AR6 and Defendants fraudulent and unscrupulous

activities. Their proceeding with the unlawful foreclosure without the legal power and

authority to act for a lawful owner of the interests in the debt instruments on Plaintiff’s

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property has caused extreme and undue hardship and detrimental effect on Plaintiff and

the loss of the rights of title to his property and the jeopardy of its possession .

18. As a direct and proximate result of the actions of the Defendants, Plaintiff has suffered

direct, actual injury and Plaintiff is entitled to recover threefold damages under 18 USC 1964(c).

The Plaintiff prays for relief from this court and asks that the court order the Defendant Wells

Fargo Bank N/A acting in behalf of the holder of the loan Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 to rescind the

Notice of Trustee’s Sale dated June 12, 2009 and the Notice of Default dated March 10, 2009

and release title back to Plaintiff and award damages as the court may determine.

The facts surrounding these allegations not having been fully developed, Plaintiff here reserves

the right to further plead facts and allegations in regard to this cause of action as may be found

or learned during the course of additional investigation and discovery.

SECOND CAUSE OF ACTION

CONSPIRACY TO COMMIT FRAUD AND CONVERSION

AGAINST HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series

2007-AR6

19. Plaintiff realleges and incorporates by reference all preceding allegations of the Verified

Complaint as it fully set forth herein.

20. Defendants parties as lenders, Securitizers, and/or’ servicers participating in the ERS

system formed an association to conspire to deprive Plaintiffs of the subject property through

fraud and misrepresentation that would result in Plaintiff entering into loan agreements for which

Plaintiffs was ultimately not qualified and which would eventually result in Plaintiff’s inability to

make payments and stay within the subject residence.

Upon information and belief; in furtherance of the conspiracy, Defendants intended that

the Plaintiff loan would be packaged with other loans and sold on the secondary market, resulting

in a profit to Defendants.

Defendants and each of them, knew prior to their origination of the loans or acceptance

of the loans for servicing and subsequent transfer of the loans that Plaintiff was not qualified to

make payments under the loan terms; however, defendant’s knew or should have known that

Plaintiffs would rely, and did rely on defendants representations, or the representations of

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defendants agents, as alleged herein related to Plaintiffs ability to repay the loan or to refinance

the loan in taking the loan and signing the documents.

Defendants violated the Federal fair Housing Act, and A B 489, AB 90i in procuring Plaintiffs

signature on the loan documents.

Defendants legal objective of packaging the loan made to the Plaintiffs with other loans

and selling the loan was accomplished by illegal means in procuring the loans because of

defendants violation of the Federal Fair Housing Act.

Upon information and belief; Defendants knew that the loans would be subject to foreclosure as a

result of ’Plaintiff’s inability to make payments on the loan as payments escalated during the term

of the Loans and/or as a result of Plaintiffs inability to qualify to refinance the loan at a later date

after the Payments began to escalate because of changes to the interest rates and arbitrary

increase of payments by the servicers of the loans, and thus the Defendants committed acts

which constitute unlawful stripping.

Upon information and belief; the escalating payments and/or increases in the interest

rate were not properly disclosed to Plaintiffs..

21. Defendants intended that the Plaintiffs would default on the loan and defendants

would be in a position of seizing the Plaintiffs home in foreclosure actions unlawfully depriving

Plaintiff of her home.

Defendants, each of them, in furtherance of the conspiracy and agreement alleged

herein, acted in a conceited manner to target Plaintiff as borrower, to misrepresent the loan

terms and/or to misrepresent Plaintiffs qualification for the loans, knowing that such action or

actions would result in Defendant’s ultimate possession of the home of the Plaintiff following

foreclosure.

s a result of the Defendants’ conspiracy described herein, the Plaintiff has suffered injuries

which include mental, anguish, emotional distress, embarrassment, humiliation, loss of

reputation and a decreased credit rating , which has, or will impair Plaintiffs ability to obtain credit

at a more favorable rate than before the decrease in credit rating, the loss or anticipated loss of

her home and other financial losses according to proof including the court cost and fees incurred

in this matter..

Defendants conspiracy to unlawfully deceive Plaintiff into taking out the subject loan when and

how they did as alleged herein was willful and wanton, justifying award for punitive damages..

That Defendants are with scienter concerning such actions as alleged.

Plaintiff alleges that he is entitled to equitable relief; including, restitution, disgorgement of profits

earned by defendants because of their unlawful and deceptive practices and attorneys fees and

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costs, declaratory relief and a permanent injunction enjoining defendants from the unlawful

activity and enforcement of this contract..




THIRD CAUSE OF ACTION

VOID SALE FROM ULTRA VIRES ACT


Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series

2007-AR6

26. Defendants HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 did

not have the power under their charter to do what they did; illegally sell the rights and interests in

Defendant’s loan instruments as un-registered securities to those seeking to make lawful security

investments. It is a violation of the Securities Act of 1933 and provides a right to

rescission of the contract.

27. In Central Transp. Co. v. Paullman, 139 U.S. 60, 11 S. Ct. 478, 35 L. Ed. 55, the court

said: “ contract ultra vires being unlawful and void, not because it is in itself immoral, but

because the corporation, by the law of its creation, is incapable of making it, the courts, while

refusing to maintain any action upon the unlawful contract, have always striven to do justice

between the parties, so far as could be done consistently with adherence to law, by permitting

property or money, parted with on the faith of the unlawful contract, to be recovered back, or

compensation to be made for it. In such case, however, the action is not maintained upon the

unlawful contract, nor according to its terms; but on an implied contract of the defendant to return,

or, failing to do that, to make compensation for, property or money which it has no right to retain.

To maintain such an action is not to affirm, but to disaffirm, the unlawful contract.”

28. “When a contract is once declared ultra vires, the fact that it is executed does not validate

it, nor can it be ratified, so as to make it the basis of suitor action, nor does the doctrine of

estoppel apply.” F&PR v. Richmond, 133 SE 898; 151 Va 195.

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29. HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 sold the

rights and interests in the debt instruments of the Plaintiff as an unregistered security. It

is a violation of the Securities Act of 1933 and provides a right to rescission of the

contract.

WHEREFORE, the Plaintiff moves this court to release the lien and restore title to Plaintiff.




.

FIFTH CAUSE OF ACTION

IMPROPER CONVERSION AND ALTERATION OF THE NOTE AND DEED OF TRUST


Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6

The Plaintiff here is attacking the enforceability of the note and deed of trust by conversion in

securitization without the consent of the trustor. Securitization of the note and deed of trust

effectively severs financial responsibility for losses from the authority to incur or avoid losses.

Securitization converts the deed of trust and note into unalienable instruments. HSBC Bank USA.


Backed Pass-Through Certificates Series 2007-AR6 seeks to enforce the note in this case.

Moreover the court need not decide whether private ordering will allow a trustor to consent to an

unmodifiable promissory note when the deed of trust is executed. The court need only rule that

the securitization conversion of the note cannot be given effect without the prior consent of the

trustor. The securitization of the note constitutes a conversion of the asset rendering it null, void

and untransferable and possibly unenforcible.

The trustee of a pass through trust or other special purpose vehicle has no legal or

equitable interest in the securitized deed of trusts. The trustee profits from the fees collected from

foreclosure. The certificate holders are ostensibly the owner and holder of the note. However, the

terms of the trust as spelled out in the master pooling and servicing agreement do not allow the

certificate holders to foreclose or to take part in controlling the deed of trust note. (see the

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prospectus for HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-

AR6 as found on SEC website http://www.secinfo.com/d14D5a.u6SE7.htm#44f7 .)

As seen therein, the certificate holders, guarantors and deed of trust insurers bear the

losses but do not control the deed of trust. Servicers collect the payments from the homeowners

on behalf of the investors. The bulk of their income comes from a percentage payment on the

outstanding principal balance in the pool; the bulk of their net worth is tied to the value of the

deed of trust servicing rights they purchased. A servicer may or may not lose money—or lose it in

the same amounts or on the same scale—when an investor loses money. And it is servicers, not

investors, who are making the day-to-day, on the ground, decisions as to whether or not to modify

any given loan. Servicers continue to receive most of their income from acting as largely

automated pass-through accounting entities, whose mechanical actions are performed offshore

or by personified computer systems.

As the document shows, their entire business model is predicated on making money by

skimming profits from what they are collecting: through a fixed percentage of the total loan pool,

fees charged homeowners for default, interest income on the payments during the time the

servicer holds them before they are turned over to the owners, and affiliated business

arrangements. Servicers make their money largely through lucky or strategic investment

decisions: purchases of the right pool of deed of trust servicing rights and the correct interest

hedging decisions. Performing large numbers of loan modifications would cost servicers

upfront money in fixed overhead costs, including staffing and physical infrastructure.

As established in the Prospectus herein referenced , The so-called trust is organized as a

special purpose vehicle (“SPV”). The SPV is organized by the securitizer so that the assets of the

SPV are shielded from the creditors of the securitizer. The SPV follows the rules prescribed by

the I.R.S. to qualify for treatment as a REMIC so that only the certificate holders but not the trust

are taxed. Double taxation of the deed of trust proceeds to the trust and then to the certificate

holder is avoided by “passing through” all the income to the certificate holders. The SPV is

accordingly a weak repository not engaged in active management of the assets. For this

purpose, a servicing agent is appointed. Moreover, all legal and equitable interest in the deed

of trusts are passed through to the certificate holders.

As established in the Prospectus herein referenced, a typical deed of trust pool consists of

anywhere from 2000-5000 loans. This is millions of dollars in cash flow payments each MONTH

from a Servicer (receiving payments from borrowers) to a REMIC (Trust) with the cash

flow “passing through” the Trust (RE IC) without taxation to the investors. The investors have to

http://www.secinfo.com/d14D5a.u6SE7.htm#44f7

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pay taxes on the cash flow payments from their interests just for the record. The taxes a Trust

would have to pay on $30, 50 or 100 million dollars per year if this “pass through” taxation benefit

didn’t exist would be enormous. In addition, if a Trust that was organized in February 2005 were

found to have violated the REMIC guidelines outlined in the Internal Revenue Code, at $4 million

per month in cash flow, there would be $190 Million or more now in TAXABLE income due to

have tax paid upon it by the REMIC.

If a Trust - or a Servicer or Trustee acting on behalf of the Trust - were found to have

violated these very strict REMIC guidelines to qualify as a REMIC, the taxable status of the

REMIC can be revoked; the equivalent of financial Armageddon for the Trust and its investors.

As established in the Prospectus herein referenced , A REMIC can be structured as an

entity (i.e., partnership, corporation, or trust) or simply as a segregated pool of assets, so long as

the entity or pool meets certain requirements regarding the composition of assets and the nature

of the investors’ interests. No tax is imposed at the RE IC level. To qualify as a RE IC, all of the

interests in the RE IC must consist of one or more classes of “regular interests” and a single

class of “residual interests.” Regular interests can be issued in the form of debt, stock,

partnership interests, or trust certificates, or any other form of securities, but must provide the

holder the unconditional right to receive a specified principal amount and interest payments.

REMIC regular interests are treated as debt for Federal tax purposes. A residual interest in a

REMIC, which is any REMIC interest other than a regular interest, is, on the other hand, taxable

as an equity interest.

As established in the Prospectus herein referenced, In order for the Trust to qualify as a REMIC,

all steps in the “contribution” and transfer process (of the notes) must be true and complete sales

between the parties and within the three month time limit from the Startup Day. Therefore, every

transfer of the Note(s) must be a true purchase and sale, and, consequently the Note must

be endorsed from one entity to another. Any deed of trust note/asset identified for

inclusion in a Trust seeking a REMIC status MUST be deposited into the Trust within the

three month time period calculated from the official Startup Day of the REMIC as per

Section 860 of the Internal Revenue Code.

Securitization effectively severs financial responsibility for losses from the authority to

incur or avoid losses. Foreclosure avoids litigation from disgruntled certificate holders

who could claim a deed of trust modification improperly resulted in a financial loss. Under

the original deed of trust, the party deciding to foreclose was the party suffering any loss resulting

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from foreclosure. With securitization the deed of trust is converted so the party making the

decision to foreclose does not bear the loss resulting from foreclosure but avoids the

liability which could result if a class of certificate holders claimed wrongful injury resulting

from a modification made to achieve an alternate dispute resolution. By separating the

incidence of loss from the authority to foreclose, the original note has been altered

resulting in a change to the deed of trust without the consent of the trustor.

Securitization also converts the deed of trust by rendering it unalienable. Once certificates have

been issued, the note cannot be transferred, sold or conveyed.

An assignee of a deed of trust and note assigned as collateral security is the real party in interest,

holds legal title to the deed of trust and the note, and is the proper party to file suit to foreclose

the deed of trust . Lawyers Title Ins. Co., Inc. v. Novastar Mortg., Inc., 862 So.2d 793 (App. 4

Dist.2003), rehearing denied, review denied 880 So.2d 1212. In the case of a securitization, the

certificate holders become the proper party to bring foreclosure because they own and hold the

note outright and not as a pledge of collateral.

It appears their inability to alienate and/or sell the note after securitization has no adverse

consequences for the maker/ borrower who is the debtor.

Recent history disproves this conclusion. Several legislative and executive efforts to pursue

alternate dispute resolution and provide financial relief to distressed homeowners have been

thwarted by the inability of the United States Government to buy securitized deeds of trust

without purchasing most of the certificates issued.

An SPV cannot sell a deed of trust to the United States which is owned by different

classes of certificate holders. The certificate holders likewise cannot sell the deeds of trust. All

they have are the securities held each of which can be publicly traded.

Failure to obtain the consent of the trustor to subsequent securitization of the deed of trust and

note renders the deed of trust unenforceable against him as its securitization constitutes an

alteration of the instrument, not on its face, but by change of the nature and use of the instrument

from that for which it was given by the trustor, the Plaintiff, i.e. to secure her payment of the note.

As now Plaintiff’s deed of trust and note are being used as un-registered securities to

collateralize certificates issued under a master pooling and servicing agreement dated May 1,

2006, by which all legal and equitable interest in the instruments was transferred to the certificate

holders.

As cited above, Securitization effectively severs financial responsibility for losses from the

authority to incur or avoid losses. Foreclosure avoids litigation from disgruntled certificate

holders who could claim a deed of trust modification improperly resulted in a financial

http://web2.westlaw.com/find/default.wl?tf=-1&serialnum=2003874451&rs=WLW9.06&ifm=NotSet&fn=_top&sv=Split&tc=-1&pbc=0CD390B6&ordoc=677925&findtype=Y&db=0000735&vr=2.0&rp=%2ffind%2fdefault.wl&mt=31



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loss. Under the original deed of trust, the party deciding to foreclose was the party suffering any

loss resulting from foreclosure. With securitization the deed of trust is converted so the party

making the decision to foreclose does not bear the loss resulting from foreclosure but

avoids the liability which could result if a class of certificate holders claimed wrongful

injury resulting from a modification made to achieve an alternate dispute resolution.

The deed of trust is a security agreement between the creditor and debtor to secure repayment of

the loan by encumbering collateral for the benefit of the creditor. In California, non-judicial

foreclosures are conducted by a duly appointed trustee. There can be no disagreement that the

deed of trust provides that the agreement may not be modified or amended by one party without

the prior written consent of the other.

The master pooling and servicing agreement which is the organic document creating the

mortgage backed securities changes the terms and conditions of the deed of trust. The changes

are made unilaterally by the holder of the deed of trust as a successor to the original beneficiary

named in the deed of trust. The changes are made without the consent of the trustor. These

changes restrict the ability of those making the financial decisions for the trust to modify the deed

of trust. See, e.g., Anna Gelpern & Adam J. Levitin, Rewriting Frankenstein Contracts: Workout

Prohibitions in Residential Deed of trust-Backed Securities, 82 S. CAL. L. REV. (forthcoming

2009). Manuel Adelino, Why Don't Lenders Renegotiate More Home Deed of trusts? Redefaults,

Self-Cures, and Securitization, Fed. Reserve Bank of Boston, Public Policy Discussion Paper No.

09-4, July 6, 2009, at

http://www.bos.frb.org/economic/ppdp/2009/ppdp0904.pdf Congressional Oversight Panel, The

Foreclosure Crisis: Working Toward a Solution, at http://cop.senate.gov/reports/library/report-

030609-cop.cfm. Alan White, Rewriting Contracts, Wholesale: Data on Voluntary Deed of trust

Modifications from 2007 and 2008 RemittanceReports, Fordham Urb. L. J. 20 (forthcoming 2009),

available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1259538#

When the parties executed the deed of trust, the trustor was neither obligated to agree to an

alternate dispute resolution in the event of a default nor restricted from entering an alternate

dispute resolution. When signing the deed of trust, the trustor neither knew, nor had reason to

know that a successor in interest to the beneficiary would subsequently self impose restrictions

upon modification of the deed of trust and create liability for itself if it agreed to alternate dispute

resolution.

The master pooling and servicing agreement creates restrictions upon modification of the

promissory note by:

http://www.bos.frb.org/economic/ppdp/2009/ppdp0904.pdf

http://cop.senate.gov/reports/library/report-030609-cop.cfm

http://cop.senate.gov/reports/library/report-030609-cop.cfm

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1259538

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(a) Imposing the restrictions on deed of trust modification required to be made to qualify for

pass through tax treatment under IRS regulations.

(b) Imposing restrictions upon the number of deed of trusts in the pool which may be

modified.

(c) Providing a procedure and fees to be paid for foreclosure but no procedure to modifying

the loan as an alternate dispute resolution.

(d) Creating securities with classes of ownership (“tranches”) with adverse and opposing

financial interests resulting in so called “tranche warfare” so that a modification which

favors one tranche may work a detriment upon another.

(e) Restricting the ability to lower interest payments on the note.

(f) Restricting the ability to increase the number of payments to be made.

(g) Restricting the ability to defer payments.

(h) Restricting the ability to extend the term of the deed of trust.

(i) Restricting the ability to impose a temporary moratorium on payments.

(j) Restricting the ability to accept “short sales”.

(k) Creating potential liability to a specific class of certificate holders by entering into a

modification agreement required for an alternate dispute resolution.

(l) Requiring the servicing agent to purchase any loan which has been modified.

By separating the incidence of loss from the authority to foreclose, the original note

and deed of trust has been altered resulting in a change to the deed of trust without the

consent of the trustor.

Because these restrictions were imposed by a subsequent transferee of the deed of trust without

the consent of the trustor, the deed of trust is unenforceable.

Further, as noted above securitization converts the deed of trust and note into unalienable

instruments which are not what they were or what was understood by the Plaintiff they were to

become, altering the nature and negotiability of the deed of trust and note without consent of the

trustor and the deed of trust is unenforceable for this reason .

Plaintiff alleges that he is entitled to equitable relief; including, restitution, disgorgement of profits

earned by defendants because of their unlawful and deceptive practices and attorneys fees and

costs, declaratory relief and a permanent injunction enjoining defendants from the unlawful

activity and enforcement of this contract..




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SIXTH CAUSE OF ACTION

FRADULENT MISREPRESENTATION AS TO STANDING TO FORECLOSE

HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6

Defendant has acted to enforce the deed of trust.

HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities Corporation,

Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 actions against Plaintiff’s

property in foreclosure is a wrongful and illegal act by FRAUDULENT MISREPRESENTATION

AS TO STANDING TO FORECLOSE jeopardizing the title and possession of the Plaintiff to his

property that is the subject of this dispute in that the Defendant lacked JURISDICTION AND

STANDING TO ENFORCE THE RIGHTS OF CONTRACT in this case.


Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 is identified of public

record, and further affirmed and represented in Assignment of Deed of Trust exhibit AD and

other official documents as actual holder of the loan contract at the time of, and with the power to

exercise foreclosure in its name in this contract that led to its ownership of the property. .

Suit upon a note is a case at law. Foreclosure is an equitable remedy where the court sits in

equity. All courts sitting in equity are supposed to do equity between the parties. Demorizi v.

Demorizi, 851 So2d 243 (3rd Fla. App. 2003). The requirements to sue to collect a debt upon a

promissory note are different from the requirements to foreclose a deed of trust securing a debt

on a promissory note.

A deed of trust may only be enforced by a person legally entitled to foreclose on the debt

or such person’s representative, such as a nominee or trustee. An assignee of a deed of trust and

note assigned as collateral security is the real party in interest, holds legal title to the deed of trust

and the note, and is the proper party to file suit to foreclose the deed of trust. Lawyers Title Ins.

Co., Inc. v. Novastar Mortg., Inc., 862 So.2d 793 App. (4 Dist. 2003), rehearing denied, review

denied 880 So.2d 1212.

By transferring ownership and holding of the deed of trust then selling the promissory note

to certificate holders of a publicly traded security, the transfer negates the ability of the trustee or

servicing agent to sue as the owner or holder of the promissory note. A deed of trust cannot be

foreclosed on behalf of the owner and holder of a note who does not actually own or hold the

note. There is a difference between what is required to enforce a note and what is required to




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enforce a deed of trust in foreclosure. The promissory note as a note remains enforceable but not

the deed of trust.

As publicly traded securities, the price, value and ownership of certificates are continually

in flux. As a collectivity, the certificate holders cannot appoint a representative for a continuously

changing collection of certificate holders with changing, competing and conflicting interests. The

certificate holders cannot appoint a representative to act as an agent for purposes of foreclosure

because the principal cannot convey power and authority to an agent which the principal lacks. If

the principal is incapacitated to foreclose, mutatis mutandi, so is the agent.

Pursuant to the portions of the IRS Code herein cited, To avoid double taxation of the trust and

the certificate holders and obtain a single event tax treatment from the Internal Revenue Service,

deeds of trust are held in Real Estate Mortgage Investment Conduits (“RE ICS”). To qualify for

the single taxable event, all interest in the deed of trust must be transferred forward to the

certificate holders. The legal basis of REMICs was established by the Tax Reform Act of 1986

(100 Stat. 2085, 26 U.S.C.A. §§ 47, 1042), which eliminated double taxation from these

securities. The principal advantage of forming REMICs for the sale of mortgage-backed securities

is that REMICs are treated as pass-through vehicles for tax purposes helping avoid double-

taxation. For instance, in most mortgage-backed securitizations, the owner of a pool of mortgage

loans (the Sponsor or Master Servicer usually) sells and transfers such loans to a special

purpose entity, usually a trust, that is designed specifically to qualify as a REMIC, and,

simultaneously, the special purpose entity issues securities that are backed by cash flows

generated from the transferred assets to investors in order to pay for the loans along with a

certain return. If the special purpose entity or the assets transferred qualify as a REMIC, then any

income of the RE IC is “passed through” and taxable to the holders of the RE IC Regular

Interests and Residual Interests.

Accordingly neither the trustee nor the servicing agent for the trust have a legal or equitable

interest in the securitized loans. Often, the servicing agent for the loan will appear to enforce the

loan, but the servicing agent does not have standing, for only a person who is the holder of the

note has standing to enforce the note. See, e.g., In re Hwang, 2008 WL 4899273 at Bank of

New York v. Williams, 979 So.2d 347 (Fla.App. 1 Dist.,2008). District Court of Appeal of Florida,

First District.

http://web2.westlaw.com/find/default.wl?rs=WLW9.07&ifm=NotSet&fn=_top&sv=Split&findtype=l&docname=CIK(LE10428483)&db=CO-LPAGE&vr=2.0&rp=%2ffind%2fdefault.wl&mt=31

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The servicing agent may have standing if acting as an agent for the holder, assuming that the

agent can both show agency status and that the principal is the holder. See, e.g., In re Vargas,

396 B.R. 511 (Bankr. C.D. Cal. 2008) at 520. The Defendants HSBC Bank USA. National

Association alleges that Defendant HSBC Bank USA. National Association is the holder of the

note for purposes of standing to bring an action of foreclosure. This is a legal impossibility and,

accordingly, a false assertion. Defendants HSBC Bank USA. National Association as Trustee


Series 2007-AR6 were instrumental in the issuance and sale of the certificate to certificate

holders. This means the Defendants knew that they were not any longer the holder of the

rights to the contract.

Only the certificate holders have standing. Hypothetically, HSBC Bank N/A may have derivative

standing to foreclose as the representative and nominee of the certificate holders. The servicing

agent may have standing if acting as an agent for the holder, assuming that the agent can both

show agency status and that the principle is the holder. See, e.g., In re Vargas, 396 B.R. 511

(Bankr. C.D. Cal. 2008) at 520. But there is yet no evidence of competent fact witness that


Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 has been appointed to act

on behalf of the certificate holders and that the certificate holders have conferred the

power and authority upon the Defendant necessary to bring an action in foreclosure.

Absent this, Defendant’s action in foreclosure is fraudulent.

Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through

Certificates Series 2007-AR6 is a statutory trust under Delaware Statutory law which,

according to its prospectus as found on the Securities and Exchange Commission web

site http://www.secinfo.com/d14D5a.u6SE7.htm#44f7 , is a specifically created

investment vehicle that issues securities “backed” or supported by mortgage

financial assets.

Attached is a Memorandum of law of the United States Trustee in support of sanctions

against JP Morgan Chase Bank, National Association. This Memorandum is a brief

concerning a bankruptcy case that involved Chase, Long Beach Mortgage, Long Beach

Mortgage Loan Trust 2006-2, Long Beach securities, WaMu, Deutsche Bank and Lender

Processing Service (LPS). (exhibit MS). In further support there is submitted articles from

publication in Fraud Digest by competent authorities in the field of bank fraud (exhibit FD).


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And a redacted affidavit from one of the cases referenced (exhibit AR).

According to the authorities therein cited in the affidavit and memoranda, In tens of

thousands of foreclosure cases filed by trustees for a mortgage-backed trust, the trustee

for the Asset Trust has used specially prepared Mortgage Assignments to show that they

have the right to foreclose.

These documented authorities spell out in the cases referenced the same thing the facts

show to have happened in this case:

According to Lynn E. Szymoniak, Certified Fraud Examiner and Expert Witness for

the federal Government in Insurance Regulatory and Fraud Matters in the action

for sanctions in the cases referenced and in U.S. v. Michael Zapetis, et al.,

8:2006cr00026, Middle District of Florida; U.S. v. Thomas D. King, 3:2006cr00212,

Middle District of Florida; U.S. v. Donald E. Touchet, Richard E. Standridge and

Robert J. Jennings, 3:2007cr00090, Middle District of Florida, 2008 WL 111306M;

affirmed, United States v. Jennings, Case No. 08-13434 (11th Cir. Jan. 5, 2010) The

People of the State of California v. Mitchell Zogob, Orange County, California; U.S.

v. James Kernan, 5:2008cr00061, Northern District of New York; if a loan was put

into a trust with a closing date in the pooling and servicing agreement in 2007, ( in

this case November 25, 2007 ) or if the trust indentures show that it was suppose

to be put in that trust and follow a chain of ownership until it ended up in that trust

by a certain date (closing date of the trust November 25, 2007 ), any assignments

after that closing date, are actually an Assignment specially, and in many cases,

fraudulently, made to facilitate foreclosures.

As she states, In all of these thousands of cases, no Assignment actually took place on

the date stated and no consideration was paid by the grantee to the grantor despite the

representations in the Assignments. Most significantly, no disclosure was ever made to

the Court in the foreclosure or bankruptcy case or to the homeowners in default that the

original Assignments to the Trust were never made or were defective and that the

recently-filed Assignments were specially made to facilitate foreclosures years after

the property was already transferred if in fact it had been.

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As she states in these articles, “In the rush to securitize residential mortgages, many

securities companies did not secure the essential paperwork. In particular, many trusts

have missing Mortgage Assignments. This is true even though the trust documents set

forth plainly that such Assignments shall have been delivered to the Trust by the loan

originators by a set closing date.”

According to these authorities, (the originator) should have delivered a signed and dated

Assignment to the Trust Depositor, which ultimately should have resulted in delivery of a

signed and dated Assignment to the trustee, in 2007.

According to these authorities, and as may be found in the prospectus and other official

governing documents for these investment vehicles, upon examination, such Mortgage-

backed trust contains very specific provisions regarding conveyances of mortgages, notes

and Assignments and most often even include the form that each document custodian

must sign attesting to the delivery and acceptance of such documents.

Further, according to these authorities herein cited, Mortgage-backed trusts are

not allowed under their own rules to acquire non-performing loans after the closing

date of the trust and add such loans to the trust because of significant additional

tax liability to the trust if it adds properties in violation of its own documents.

These rules are in place to protect the investors in the trust.

In addition, Mortgage Backed Securities Trusts do not acquire loans after the closing

date of the trust because they are prohibited from doing so under the Internal

Revenue Code, as evidenced by a 100% penalty tax on such prohibited transactions.

According to these authorities and as confirmed under the very strict rules of its operation

to protect the investors as found in the prospectus and other official governing documents

for this investment vehicle, ( as found on the self authenticating official Securities and

Exchange Commission website, http://www.secinfo.com/d14D5a.u6SE7.htm#44f7 ,

where either the Mortgage Backed Securities Trust lacked title to the mortgage, or

shows assignment to it after the start-up period, the REMIC requirements for a static


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pool of qualified mortgages were breached. The notes were not “qualified mortgages”

under IRC §860G and the Mortgage Backed Securities Trust received income from

borrowers NOT attributable to a qualified mortgage or permitted investment. And under

IRC §860F, the Mortgage Backed Securities Trust will owe a 100% penalty tax.

Pursuant to IRC §860G, all assignments to the Mortgage Backed Securities Trust after

the REMIC start-up period are subject to a 100% penalty tax.

Further, pursuant to IRC§ 61, all the payments made from borrowers to the Mortgage

Backed Securities Trust in relation to notes and mortgage loans not so protected by

assignment to the Mortgage Backed Securities Trust prior the REMIC start-up period

represent gross income and are subject to federal income taxes.

Again, as a consequence, according to Ms. Szymoniak, if a loan was put into a trust with

a closing date in the pooling and servicing agreement in 2007 or if the trust indentures

show that it was suppose to be put in that trust and follow a chain of ownership until it

ended up in that trust by a certain date (closing date of the trust), as in the case of the

assignment of this loan, any assignments after that closing date is actually an Assignment

specially, or fraudulently made after the fact to legitimize a chain of title to facilitate

foreclosure.

As a consequence of these facts affirmed, this is evidence that the assignment to this

present claimed holder of rights to this contract is invalid if not fraudulent or

illegal. Or that No Assignment actually took place on the date stated and no

consideration was paid by the grantee to the grantor despite the representations in the

Assignments.

Most significantly, no disclosure was ever made to the Court in the foreclosure or in this

bankruptcy case or to the homeowners in default that the original Assignments to the

Trust were never made or were defective and that the recently-filed Assignments were

specially made to facilitate foreclosures years after the fact.

The record in this case shows exactly that. The Debt instruments of this contract were

not assigned to HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

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AR6 by the then present holder, until April 7, 2009, some 18 months after the closing

date of November 25, 2007 see exhibit AS attached, for the REMIC start-up period

and of the Pooling and Servicing Agreement, as confirmed in the prospectus for this

investment vehicle. Therefore, based on the documentation and expert testimony of

these authorities in this and other cases herein cited, with the documents in this case,

this is prima facie evidence that the assignment of plaintiff’s mortgage to

defendant is shown to be invalid, if not illegal or fraudulent as these others were,

voiding the standing of the Claimant as the assignment was made solely to

facilitate foreclosure and proves no ownership of Plaintiff’s loan whatever by the

Claimant and on this basis this claim of the Defendant is invalid and/or fraudulent.

As a proximate result of these fraudulent misrepresentations and failures of disclosure and

Plaintiff’s justifiable reliance upon the same, the Plaintiff has been damaged by denying him the

right to full disclosure of these fraudulent misrepresentations by which he would have had the

cause, incentive and opportunity to make defenses against enforcement of the contract he

now faces.

Plaintiff did not discover either the nature or the extent of this FRAUD AND DECEIT, and

MISREPRESENTATION perpetrated upon him by the Defendants until a date on or about August

2010.

Defendants’ actions in foreclosure in the name of HSBC Bank USA. National Association as

Trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through

Certificates Series 2007-AR6 was fraudulent, misleading, and with callous disregard for the rights

of said Plaintiff, with the intention that the Plaintiff would be deceived and placed at

unconscionable disadvantage and abuse at the hands of the Defendants.

As a proximate result of Defendants’ actions in foreclosure, Plaintiff has suffered damages and is

made to suffer loss thereby in the amount of the market value of the property at the time such

spurious sale and Defendant should be ordered to make full reconveyance of said property

to Plaintiff or the Court should restore and quiet title to the security and benefit of the

Plaintiff if it has been sold to a third party by the time these issues are adjudicated by the

Court.

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Plaintiff prays the Court for this relief and that it be so ordered.

41.Further, HSBC Bank USA. National Association as Trustee for Wells Fargo Asset Securities

Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6 are not the

holder in due course because they are not the drawer, maker, issuer, originator and do not

have attachment, enforceability, secured interest, or priority. As these terms are defined in

UCC 9-203 (a)(b) and priority in Sections UCC 9-301 and UCC 9-317.

42. According to section UCC 3-302 (c) “a person does not acquire rights of a holder

in due course of an instrument taken (i) by legal process or by purchase in an execution.”

43. In UCC 3-106(d) “If a promise or order at the time it is issued or first comes into

the possession of a holder contains a statement, required by applicable statutory or

administrative law, to the effect that the rights of a holder or transferee are subject to claims or

defenses that the issuer [you] could assert against the original payee [bank], the promise, or

order is not thereby made conditional for the purposes of Section UCC 3-104(a); but if the

promise or order is an instrument, there cannot be a holder in due course of the instrument.”

Plaintiff is the true holder in due course and the only person who can assert a claim or defense

under UCC 3-305, 3-306 & 3-307 (California Commercial Code 3305, 3306, 3307 respectively).

44. The note signed by Plaintiff as the drawer/maker became a financial asset under UCC

8-102(9) and a security under UCC 8-102 (9)(i), (15), which makes Plaintiff the Appropriate

person under section UCC 8-107 and gives Plaintiff control under UCC section 8-106, which in

turn gives Plaintiff “Security entitlement” under UCC 8-102 (17), which makes Plaintiff the

“Entitlement holder” under UCC 8-102(7), which generates an “Entitlement order” under UCC 8-

102(8).

45. WHEREFORE, the Plaintiff moves this court to release the lien and restore quiet title to

Plaintiff.

46, The facts surrounding these allegations not having been fully developed, Plaintiff here

reserves the right to further plead facts and allegations in regard to this cause of action as may

be found or learned during the course of additional investigation and discovery.

Conclusion

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The Trustee’s Sale (the sale date has been cancelled at this time) should be disallowed by

this Court because the deed of trust is unenforceable and because the Defendants lack

standing.

A. The deed of trust is unenforceable because:

1. The trustor never consented to the securitization of the deed of trust

2. A subsequent transferee of the deed of trust modified the deed of trust by imposing

restrictions upon the holder’s ability to modify the deed of trust without the consent of

the trustor.

3. A subsequent transferee of the deed of trust converted the deed of trust by

restricting its transferability and dividing incidence of loss from authority to foreclose

without the consent of the trustor.

4. A subsequent transferee of the deed of trust modified the deed of trust without

consideration.

B. Defendant HSBC Bank USA. National Association as Trustee for Wells Fargo Asset

Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates Series 2007-AR6

lacked standing to foreclose because:

(1) Defendant HSBC Bank USA. National Association as Trustee for Wells Fargo Asset


AR6 does not own or hold the rights to enforce the contract;

(2) Defendant HSBC Bank USA. National Association as Trustee for Wells Fargo Asset


AR6 does not and cannot act as the agent for the certificate holders for purposes

of foreclosure; and

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(3) The Notice of Default was void, thus rendering the subsequent recordings void as

well. Select Portfolio Servicing Inc. was not the trustee of record with the ability to

conduct the foreclosure.

WHEREFORE, Plaintiff having set forth the claims for relief against Defendants,

respectfully prays that this Court grant the following relief against the Defendants:

1. Actual Economic and Non-Economic Damages;

2. For a declaration of the rights and duties of the parties relative to Plaintiff’s Home

to determine the actual status and validity of the loan, Deed of Trust, and Notice of

Default.

3. For a temporary restraining order, a preliminary injunction and permanent

injunction enjoining all Defendants, their agents, assigns, and all person acting under, for,

or in concert with them, from taking possession of or selling, offering, or advertising this

property for sale, or transferring or conveying the property located at 1542 Larkspur Ct.

Oakley, California while a question of title still exists in Superior Court.

4. Restoration of title to Plaintiff;

5. For damages as provided by statute;

6. For an Order enjoining Defendants from continuing to violate the statutes alleged

herein;

7. For punitive damages;

8. For consequential and incidental damages of $1,000,000.00;

9. For such other and further relief as the court may deem just and proper.

Dated: August 23, 2010

________________________________

, sui juris Plaintiff

VERIFICATION

I, Hilary Spencer Gavenda, the Plaintiff in this proceeding, have read the foregoing Complaint,

am informed and thereon believe and allege the matters stated in it are true, and of my own

knowledge. I declare under the penalty of perjury under the laws of the State of California and the

United States of America that the foregoing is true and correct.

Dated: _______________ _________________________________

, sui juris Plaintiff

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