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Steven N. Taieb, Esq.Attorney at LawBY /s/ Steven N. Taieb, Esq.Steven N. Taieb,
1155 Rt. 73, Suite 11Mt. Laurel, NJ 08054(856) 235-4994
UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF NEW JERSEY
HONORABLE JUDITH H. WIZMUR____________________________________________________________________________In Re: : CASE NO: 08-18700
JOHN KEMP : CHAPTER 13Plaintiff-Debtor(s)
: ADVERSARY NO:Vs.
: COMPLAINT TO DETERMINE VALIDITY OFCOUNTRYWIDES LIEN AND TO EXPUNGE
: PROOF OF CLAIMCOUNTRYWIDE :
____________________________________________________________________________
John Kemp, residing at 120 Chestnut St., Audubon, NJ states:
1. This complaint is a court proceeding pursuant to federal rule, Bankruptcy procedure7001 and 28 USC section 157(b)(2)(A).
2. Venue of this complaint is proper in the district of New Jersey pursuant to 28 USC1409(a).
3. On 6/10/08 Countrywide filed a claim for $211,202.41 with arrears of $4056.69. Acopy is attached hereto as Exhibit A.
4. Countrywide has failed to provide original loan documentation to show they are thetrue mortgagee on 1316 Kings Highway, Haddon Heights, NJ 08035.
5. The property at 1315 Kings Highway, Haddon Heights, NJ was purchased on May 31,2006 by the debtor.
6. Countrywide has failed to provide the original loan documentation to show that theyhave a proper mortgage on said property pursuant to NJSA 46:9-9.
7. Without proper documentation Countrywides claim must be expunged since there isno proof to establish its lien.
WHEREFORE, Plaintiff demands judgment:
A. Expunging Countrywides proof of claim and determining that Countrywide hasfailed to establish a valid lien on 1316 Kings Highway, Haddon Heights, NJ.
B. Such other relief as is just and proper.
Dated: October 10, 2008 /s/ Steven N. Taieb, Esq.STEVEN N. TAIEB
Attorney for Plaintiff
Case 08-02448-JHW Doc 1 Filed 10/16/08 Entered 10/16/08 11:03:22 Desc MainDocument Page 1 of 1USCA Case #14-5265 Document #1535317 Filed: 02/01/2015 Page 1 of 2
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Case 08-02448-JHW Doc 1-1 Filed 10/16/08 Entered 10/16/08 11:03:22 DescExhibit Page 1 of 1USCA Case #14-5265 Document #1535317 Filed: 02/01/2015 Page 2 of 2
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IN THE UNITED STATES BANKRUPTCY COURTDISTRICT OF NEW JERSEY
IN RE: ) Bankruptcy No. 08-18700))
)
JOHN T. KEMP, ) )
Debtor. )---------------------------------) )JOHN T. KEMP, ) Adversary No. 08-02448 ) Plaintiff, ) ) vs. ) )COUNTRYWIDE HOME LOANS, INC., ) Camden, New Jersey ) August 11, 2009 Defendant. ) 10:24 a.m. )---------------------------------)
TRANSCRIPT OF HEARINGBEFORE THE HONORABLE JUDITH H. WIZMUR
UNITED STATES BANKRUPTCY JUDGE
APPEARANCES:
For the Plaintiff: BRUCE LEVITT, ESQUIRELEVITT & SLAFKES, PC
76 South Orange Avenue, Suite 305 South Orange, New Jersey, 07079
Cherry Hill, New Jersey 08003
For the Defendant: HAROLD KAPLAN, ESQUIREFRENKEL, LAMBERT, WEISS, WEISMAN& GORDON, LLP80 Main Street, Suite 460West Orange, New Jersey 07052
Audio Operator: NORMA SADER
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2
Transcribed by: DIANA DOMAN TRANSCRIBING SERVICESP.O. Box 129Gibbsboro, New Jersey 08026-0129Phone: (856) 435-7172Fax: (856) 435-7124E-mail: [email protected]
Proceedings recorded by electronic sound recording, transcriptproduced by transcription service.
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3
LINDA DeMARTINI, DEFENSE WITNESS, SWORN1
THE COURT: Please have a seat. Your full name,2
first and last, and spell your last name, please.3
THE WITNESS: My name is Linda DeMartini. The last4
name is spelled D-E capital M-A-R-T-I-N-I.5
DIRECT EXAMINATION6
BY MR. KAPLAN:7
Q Okay, Ms. DeMartini, would you -- who are you employed by?8
A I am employed by Bank of America Home Loans, formally9
known as Countrywide Home Loans.10
Q Okay. And how long have you been employed there?11
A A total of almost ten years.12
Q And what is your position there?13
A I am an operational team leader for the Litigation14
Management Department currently. Ive been there just about a15
year.16
Q Are you familiar with the documents relating to Mr. Kemps17
mortgage loan?18
A Yes, I am.19
Q Okay. Now who, based upon your knowledge of the loan20
documents, whos presently the owner, holder, transferee of21
the note?22
A Well, the owner as in the investor, that would be Bank of23
New York, and we -- we are the servicer, Bank of America Home24
Loan, Servicing, LP, formally known as Countrywide Home Loan25
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4DeMartini - Cross
Servicing, LP.1
Q Okay.2
MR. KAPLAN: Id like this marked as I guess D-1.3
Okay, may I approach the witness, Your Honor?4
THE COURT: Yes.5
BY MR. KAPLAN:6
Q Could you tell the Court what that document is?7
A Thats the allonge to the promissory note.8
Q And is that the original?9
A Yes, this is.10
Q And it references -- what -- could you -- and who signed11
that document?12
A Sharon Mason.13
Q And whats Ms. Masons position with Country --14
A She is Vice President. Shes actually part of our15
Bankruptcy Risk Litigation Management Department. Shes16
actually my bosss boss.17
Q Okay. And youre familiar with Ms. Masons signature?18
A Yes, I know it very well.19
Q And thats Ms. Masons signature?20
A Definitely.21
Q And the allonge is -- the purpose of the allonge?22
A It shows the transfer to Bank of New York as the trustee.23
Q Okay. So it -- its your testimony that Bank of New York24
is trustee as the holder or the investor of that loan?25
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5DeMartini - Cross
A Yes, thats correct.1
MR. KAPLAN: Your Honor, essentially she has2
testified to the document. I really dont have any other3
questions that --4
THE COURT: Well, lets cross.5
CROSS-EXAMINATION6
BY MR. LEVITT:7
Q Ms. DeMartini, you said youre familiar with the loan8
documents?9
A Hm-hmm.10
Q What do they consist of?11
A Well, weve got the notice there, the mortgage is there.12
In our system we have any of the documents -- settlement13
statement, title policy, every single document that would have14
been signed at the time that the loan was taken out.15
Q When was the first time that you saw those documents?16
A A few weeks ago.17
Q Were you at all involved in the preparation of the proof18
of claim?19
A No, I was not involved in the proof of claim. That would20
have been before it got to the Litigation Department.21
Q When was the first time that you saw the allonge to the22
promissory note?23
A Approximately two weeks ago.24
Q And how was it that you came to see the allonge to the25
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6DeMartini - Cross
promissory note?1
A Well, in my role as a supervisor in the department I have2
litigation specialists who work for me. When cases are coming3
up, I review their cases as a regular matter of course so Id4
be reviewing the documents with that. When this date came up5
as far as having this hearing today and it became known to me6
that I was most likely going to be the one traveling here to7
be a part of it, I made sure that I got involved in every8
aspect of the case.9
Q When was this allonge prepared?10
A This allonge would have been prepared by my specialists.11
I dont have the exact date committed to memory, but this12
would have been done within the last couple of months most13
likely.14
Q So one of your employees prepared the allonge?15
A One of my employees would have taken -- would have gotten16
the allonge and we would have been the ones that obtained the17
signature from Sharon, yes.18
Q So it was just recently signed?19
A Fairly recently signed, yes.20
Q Signed essentially in contemplation or in the course of21
this litigation, correct?22
A Most likely.23
Q And it was prepared in your office?24
A It would have been -- whether it was originally prepared25
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8DeMartini - Cross
have originated it, we are the ones that have always serviced1
it.2
Q Today who is the owner of the loan?3
A Bank of New York.4
Q Bank of New York?5
A As -- as the trustee for the certificate holder CWABS,6
Asset-Backed Securities series number --7
Q And who is in possession of the note?8
A Who is in possession of the note? We have the note in our9
origination file.10
Q So -- so Bank of New York as trustee does not hold the11
note, is that correct, or is not in possession of the note?12
A The original note to my knowledge is in the origination13
file.14
Q Where is the -- do you have it here today?15
A No, I dont have it with me here today.16
Q So you dont have the note?17
A Its in our office.18
Q So its in your office, its not with this trust that owns19
the -- thats supposedly holds the -- or is the owner of this20
note, is that correct?21
A Thats correct.22
Q And your testimony is that this allonge was never23
submitted to -- it was never in the possession of Bank of New24
York as trustee for the certificate holder, is that correct?25
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9DeMartini - Cross
MR. KAPLAN: Your Honor, I object. Countrywide or1
Bank of America is the servicer. They possess and hold all2
the documents.3
THE COURT: Dont give me an argument, thats not an4
objection to the question. I dont mean to be -- to cut your5
off, but youre welcome to make that argument bottom line, but6
thats a perfectly proper question.7
BY MR. LEVITT:8
Q And this allonge, its a stand-alone document, correct?9
Its not attached to anything, is that correct?10
A Im not sure Im understanding your question.11
Q Was there anything -- when you brought the original thats12
in front of you, did you remove it? Was it stapled to13
something else?14
A No, it wouldnt have necessarily been stapled to something15
else. There would have probably been other documents showing16
the -- you know, we would have shown her the note. We would17
have reviewed all of that before.18
Q And where are all the documents that you showed her?19
A Well, I have copies of -- I have a copy of the note, I20
have a copy of the deed with me here today.21
Q And those --22
A Theyre signed copies.23
Q Can you show me exactly the documents that you showed her24
when you had her sign this allonge?25
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10DeMartini - Cross
A Theyre probably right -- well, they would be in that1
clump there. Thats mostly the Pooling and Servicing2
Agreement, the larger one.3
Q This one?4
A Yeah. Theres the note in there, theres the deed and the5
mortgage and you sign it.6
Q You just --7
MR. KAPLAN: May I provide this --8
MR. LEVITT: -- Im sorry.9
MR. KAPLAN: -- provide this note?10
MR. LEVITT: Yeah, go ahead.11
THE WITNESS: Because this was provided to me by my12
specialist to -- to bring along so that I have the documents13
here for you today.14
BY MR. LEVITT:15
Q Let me ask you this. Did you show those documents to --16
is it Sharon Mason?17
A Did I personally show the documents? Whoever brought her18
-- and to be honest with you, I dont know if it was me or my19
specialist, Dee, who brought them to her -- whoever brought20
them to her would have had them with them, yes, whichever of21
the two of us.22
Q Who brought them to her?23
A Generally speaking, it would have been me, but I dont24
recall bringing this particular one to her so I believe it was25
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11DeMartini - Cross
Dee.1
Q So you dont recall bringing it, you dont recall -- and2
you dont know what documents were shown to her, is that3
correct?4
A No, I know what documents were shown to her because5
theyre right here and they -- and theyre all together.6
Q Did you bring those documents to Sharon Mason? Did you7
personally?8
A Not to my knowledge, no.9
Q Do you know specifically who brought those documents to10
Ms. Mason?11
A My specialist, Dee.12
Q And you saw her bring the documents to Ms. Mason?13
A Did I physically stand over her --14
Q Yes.15
A -- and witness it? No.16
Q Okay. Is the original note in that stack of documents?17
A An imaged copy of the signed note is in here.18
Q Is --19
A The absolute original, no, it is not.20
Q And again, my question before was was this attached to the21
note? This allonge, was it attached physically, with a22
staple, with a piece of glue -- was it attached?23
A With a staple? No, because then it would have a hole in24
it. But it would have been brought along with it. We would25
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12DeMartini - Cross
have shown it to her.1
Q But again, now again getting back to my other question, so2
this is a stand-alone document, it wasnt attached to3
anything?4
A Okay, then yes.5
Q Okay. And can you take a look at the -- what you believe6
to be the good copy of the note that you have?7
A Okay.8
Q Do you mind separating it from the rest of the papers?9
A Sure, Ill take it apart.10
(Pause in proceedings)11
A Okay, and your question?12
MR. LEVITT: Your Honor, may I approach the witness?13
THE COURT: Sure.14
BY MR. LEVITT:15
Q Not the mortgage, the note --16
A Yeah, Ive got all kinds of stuff.17
MR. LEVITT: Your Honor, if you could excuse us one18
second. There seems to be a discrepancy between what the19
witness has and what my office was provided.20
THE COURT: Certainly.21
MR. KAPLAN: Judge --22
THE COURT: And while you look at that, let me see23
whats going on with the other case. Youre welcome to take a24
few minutes.25
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13DeMartini - Redirect
(The Court hears another matter)1
MR. LEVITT: Your Honor, with counsels permission,2
since we have stipulated, Id like to provide a copy to Your3
Honor.4
THE COURT: All right. Is this a copy that we can5
mark?6
MR. LEVITT: Its an exact copy and we can mark that7
as joint Exhibit 1, I believe.8
THE COURT: J-1, interest only adjustable rate note.9
BY MR. LEVITT:10
Q Now, that document is the note that was contained in your11
file?12
A Yes.13
Q And theres no endorsement on the last page of that note,14
is there?15
A No --16
Q Theres --17
A -- theres no signature.18
Q Is there room on the bottom if somebody wanted to put Pay19
To The Order Of? Would there be room on the bottom?20
A Well, Im sure you could find a way to fit it in.21
Q Okay.22
MR. LEVITT: I have no further questions of this23
witness, Your Honor.24
THE COURT: All right.25
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14DeMartini - Redirect
MR. KAPLAN: Cross-examine, Your Honor?1
THE COURT: Please, please.2
REDIRECT EXAMINATION3
BY MR. KAPLAN:4
Q Ms. DeMartini, is it generally the custom to -- for your5
investor to hold the documents?6
A No. They would stay with us as the servicer.7
Q And are documents ever transferred to the investor?8
A If we service-release them they would be transferred to9
whomever were service-releasing them to.10
Q So I believe you testified Countrywide was the originator11
of this loan?12
A Yes.13
Q So Countrywide had possession of the documents from the14
outset?15
A Yes.16
Q And subsequent l y di d Count r ywi de t r ansf er t hese document s17
by ass i gnment or an al l onge?18
A Yes.19
Q And - -20
A Wel l , t r ansf er r ed t he r i ght s, yes, t r ansf er r ed t he21
ownershi p, not t he physi cal document s.22
Q So t he physi cal document s were r etai ned wi t hi n t he23
corporate ent i t y Count r ywi de or Bank of Amer i ca?24
A Cor r ect .25
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15DeMartini - Recross
Q Okay. And woul d you say t hat t hi s i s st andard oper at i ng1
pr ocedur e i n the mor t gage banki ng busi ness?2
A Yes. I t woul d be normal - - t he normal cour se of busi ness3
as t he r eason t hat we are t he servi cer , as we r e t he ones t hat4
ar e doi ng al l t he ser vi ci ng, and t hat woul d i ncl ude r et ai ni ng5
t he documents.6
Q Now, you were asked about whet her or not t he not e coul d be7
- - was endor sed at t he bot t om. I s i t gener al l y t he pr act i ce8
t o endor se t he act ual not e or t o use an al l onge?9
A I t s - - I ve never seen an act ual not e t hat has an10
endor sement on t he bot t om.11
Q So woul d you say i t s normal - -12
A I t s gener al l y mor e - -13
Q - - t o have an al l onge?14
A Yeah, i t woul d be more nor mal t o have an al l onge.15
Q Okay. And once t he al l onge was si gned, what woul d16
gener al l y happen to t he al l onge?17
A Wel l , i t woul d al so be i maged and i t woul d be r ecor ded and18
i t woul d be put i n our syst em and i t woul d be kept as a normal19
cour se. I n a si t uat i on l i ke t hi s, we f or war ded i t ont o t he20
at t or neys because of t he case but - -21
Q Okay. And i f i t had not been f orwarded t o t he at t orneys,22
what woul d have happened t o t he al l onge?23
A I t woul d have ended up i n t he f i l e wi t h ever ythi ng el se.24
Q And t he note at t ached t o i t ?25
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16DeMartini - Redirect
A Yes.1
Q Thank you.2
MR. KAPLAN: I have no f ur t her quest i ons, Your3
Honor .4
MR. LEVI TT: J ust br i ef l y, Your Honor .5
RECROSS- EXAMI NATI ON6
BY MR. LEVI TT:7
Q Ms. DeMar t i ni , you t est i f i ed t hat t hi s al l onge was j ust8
pr epared a coupl e of weeks ago, corr ect ?9
A Yeah, a shor t t i me ago, yes.10
Q And wasn t i t prepared because counsel cal l ed up and sai d11
we need and al l onge?12
A Yes.13
Q So i t wasn t your nor mal cour se t o have an al l onge i n t hi s14
si t uat i on, cor r ect ?15
A Wel l - -16
Q When was t hi s l oan made?17
A Thi s l oan was t aken out I bel i eve i n 2006 - - yes.18
Q So between 2006 and 2009 when you got a phone cal l f r om19
counsel t hat sai d we ve got a pr obl em, pr epare an al l onge,20
t her e was no al l onge, cor r ect ?21
A Ther e wasn t an al l onge pr i or t o t hat , no. Thi s l oan,22
l i ke I sai d, i t was al ways - - t hi s was a l oan t hat we23
or i gi nated t hat has al ways been wi t hi n t he company t hat yes,24
i t was sol d t o - - as Bank of New Yor k as t he t r ust ee and25
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17DeMartini - Redirect
secur i t i zed, but t her e wasn t a need f or an al l onge pr i or t o1
t hi s case.2
Q Because t her e was no l i t i gat i on pendi ng, cor r ect ?3
A Wel l , because t her e was no l i t i gat i on - -4
Q Thank you.5
A - - and because t her e was nothi ng t o - - t o get i n t he way6
of t he f act of t he nor mal cour se of - - of t he way t hat t hi s7
l oan s bei ng execut ed and bei ng - -8
Q That s f i ne.9
A - - bei ng ser vi ced.10
Q Thank you.11
MR. LEVI TT: That s i t , Your Honor .12
MR. KAPLAN: One mor e quest i on, Your Honor .13
REDI RECT EXAMI NATI ON14
BY MR. KAPLAN:15
Q Was i t t he i nt ent i on of Count r ywi de t o assi gn bot h i t s16
r i ght s i n t he mort gage and t he note t o Bank of - - t o Bank of17
New Yor k as t r ust ee?18
A Yes.19
THE COURT: Say t hat agai n?20
BY MR. KAPLAN:21
Q Was i t t he i nt ent i on of Count r ywi de t o assi gn i t s r i ght s22
i n bot h t he not e and t he mor t gage t o Bank of New Yor k?23
MR. LEVI TT: I m goi ng t o obj ect t o t he quest i on,24
Your Honor . I m not sure t hi s wi t ness i s competent t o answer25
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18DeMartini - By the Court
t hat quest i on based upon t he f oundat i on l ai d.1
THE COURT: I agree.2
MR. KAPLAN: Wel l , Your Honor , t hey - - t o t he ext ent3
t hat t her e wasn t a physi cal document at some - - at t he t i me,4
t hey r emedi at ed t hat by si gni ng t he al l onge and f aci l i t at i ng5
t hei r i nt ent i ons.6
THE COURT: Wel l , t hat s cer t ai nl y a val i d ar gument ,7
but i t s not - - i t st i l l doesn t answer t he quest i on of8
whether Ms. DeMar t i ni can speak f or Count r ywi de i n t erms of9
t hei r i nt ent i n doi ng anyt hi ng.10
MR. KAPLAN: Wel l , i t s evi dence t hat i t was t hei r11
i nt ent t o assi gn t he mor t gage.12
THE COURT: I t ver y wel l may be, and we l l l eave i t13
at t hat .14
MR. KAPLAN: Okay.15
THE COURT: Obj ect i on sust ai ned. Let me ask you a16
coupl e of quest i ons.17
EXAMI NATI ON18
BY THE COURT:19
Q There was an unexecut ed al l onge t o Amer i ca s Whol esal e20
Lender t hat was f i l ed wi t h t he pr oof of cl ai m. I s t hat i n21
your f i l e as wel l , t hat - -22
A Yeah. I have t he - - t he unsi gned copy i n t her e.23
Q And i t i s unsi gned?24
A The ol d one? Yeah, t hat s t he - - t he copy I have, i t25
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19DeMartini - By the Court
l ooks l i ke i t s unsi gned, yeah.1
Q So i s i t t he nor mal pr act i ce of Count r ywi de not t o si gn2
al l onges i n t he nor mal cour se?3
A I can t answer t o why t hat one was unsi gned and t hat was4
i n t her e. When a l oan goes i nt o bankr upt cy, our Bankr upt cy5
Depart ment i s t he one t hat woul d be t he ones actual l y6
pr epar i ng and f i l i ng t he pr oof of cl ai m. Our group get s7
i nvol ved when t hi ngs t ur n t o l i t i gat ed mat t er s - -8
Q But I m not - -9
A - - and so t hat s why I can t speak t o what t hey do i n10
t hei r - - i n t hei r nor mal cour se of act i on. I haven t seen an11
unsi gned one bef ore.12
Q Wel l , I m not t al ki ng about t he pr ocess of f i l i ng a pr oof13
of cl ai m. I m t al ki ng about t he cust omar y busi ness pr act i ce14
of Count r ywi de when a l oan i s t r ansf er r ed, when owner shi p i s15
t r ansf er r ed, when i n t hi s case the mort gage assi gnment16
occur r ed on March 24t h, 2008, corr ect ?17
A Yes.18
Q And woul d t hat have been t he dat e t hat t he owner shi p of19
t he not e and mor t gage were sought t o be t r ansf er r ed t o Bank of20
New Yor k as t r ust ee?21
A That woul d have been t he day t hey got t he owner shi p, yes.22
Q So t he quest i on i s whet her you know whet her i t s nor mal23
pr act i ce f or Count r ywi de t o execut e an al l onge at t he t i me24
t hat t hat t r ansf er t akes pl ace.25
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20DeMartini - By the Court
A I don t bel i eve t hat t hey r e al ways execut ed exact l y when1
t he t r ansf er t akes pl ace. I bel i eve t hat i t of t en t i mes2
happens t hat i t happens af t er t he f act .3
Q And does i t al ways happen?4
A I can speak t hat i t al ways happens, no.5
Q So t her e s no r out i ne t hat r equi r es i nt er nal l y, t o your6
knowl edge, t hat t he al l onge be execut ed i n connect i on wi t h t he7
t r ansf er of owner shi p?8
A No, I don t t hi nk t hat t her e i s a nor m i n t hat r espect9
because i n a normal cour se of act i on and f or - - and normal i s10
ki nd of a hard word anyway - - but - -11
Q A nor mal busi ness pr act i ce, an or di nary - -12
A - - but as a nor mal busi ness pr act i ce wi t h a nor mal l oan,13
of t en t i mes t her e r eal l y i sn t a need f or i t unl ess t he l oan14
i s goi ng t o cont i nual l y t o be sol d, and si nce t hi s l oan was - -15
yes, i t was t r ansf er r ed t o Bank of New York as t r ust ee as i t16
was secur i t i zed, but i t wasn t t hat another mort gage company17
had t he l oan and t hen we bought i t f r om t hem. Li ke I18
ment i oned, t hi s was al ways done by Count r ywi de and we19
secur i t i zed i t and we - - you know, we sol d i t t o t hem - -20
Q Thi s was done - -21
A - - and so - -22
Q - - I m not aski ng whet her i t was necessar y, I am aski ng23
whet her t her e was an ordi nary busi ness pr act i ce t o si gn an24
al l onge and t he answer i s no, t her e was not?25
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21DeMartini - By the Court
A I don t bel i eve so.1
Q Count r ywi de, t he same ent i t y as t he or i gi nat or of t he2
l oan, ser vi ced t he l oan f r om t he out set or was i t a di f f er ent3
aspect of t he company?4
A No. I t woul d have al ways been t he same. Even t hough Bank5
of Amer i ca has t aken over Count r ywi de so t o speak and we ar e6
now whol l y owned by Bank of Amer i ca, al l of t he Count r ywi de7
l oans are st i l l bei ng ser vi ced and t he Bank of Amer i ca - -8
pr i or Bank of Amer i ca l oans, t hey r e al l st i l l bei ng ser vi ced9
and done separat el y. Thi s has al ways been by Count r ywi de.10
Q Okay. Put t i ng asi de t he t akeover by Bank of Amer i ca, t hi s11
l oan was gi ven on May 31st , 2006, cor r ect ?12
A Yes.13
Q And when t he l oan was gi ven, af t er t he l oan was gi ven,14
Count r ywi de Home Loans, I nc. r et ai ned t he ser vi ci ng on t he - -15
A Yes, t hat s cor r ect.16
Q And as of March 24t h, 2008, t hat cont i nued t o be t he case,17
i s that r i ght ?18
A That s cor r ect .19
Q And t her e was a Pool i ng and Ser vi ci ng Agreement bet ween20
Count r ywi de and - -21
A Bank of New Yor k.22
Q - - Bank of New Yor k - -23
A Yes.24
Q - - r egar di ng t he cont i nued ser vi ci ng of t he l oan, i s t hat25
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22Levitt - Argument
r i ght ?1
A That s cor r ect .2
Q And t o your knowl edge - - I t hi nk you mi ght have t he3
servi ci ng ar r angement - -4
A Yes, I br ought a copy of i t .5
Q - - wi t h you, t o your knowl edge, i s t her e any pr ovi si on6
t hat i n t he ser vi ci ng of t hi s l oan t hat Count r ywi de act s as7
t he agent f or Bank of New Yor k i n t erms of possessi on of8
or i gi nal document s i ncl udi ng t he not e i n connect i on wi t h t hi s9
t r ansact i on?10
A I have t he Pool i ng and Ser vi ci ng Agr eement ther e. I t s11
over 200 pages l ong. I l l be ver y honest ; I di d not r ead t he12
ent i r e Pool i ng and Ser vi ci ng Agr eement . I do know t hat i t i s13
our nor mal cour se of act i on wi t h t he l oans t hat we servi ce14
t hat we ar e t he ones t hat r et ai n t he - - t hat we r et ai n t hose15
document s.16
Q Coul d such a cl ause be i ncl uded i n t hat , and i f t her e wer e17
such a cl ause, woul d t hat - - what woul d be t he ef f ect of t hat ?18
Shoul d I l ook f or t hat cl ause? Shoul d I ask you t o l ook f or19
t hat cl ause, or i s i t a f r ui t l ess ent er pr i se?20
MR. LEVI TT: Your Honor , I t hi nk - - and I have i t21
al so and i t i s a ver y t hi ck document , Your Honor - - t her e ar e22
ot her pr ovi si ons i n t hi s document t hat I t hi nk woul d be - -23
even i f t her e was somet hi ng i n t her e t hat says t hey coul d24
r et ai n document s, t her e s other pr ovi si ons i n t hi s document25
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23Levitt - Argument
whi ch woul d be cont r adi ct or y because t her e s pr ovi si ons i n t he1
Pool i ng and Servi ci ng Agr eement t hat say t hat document s have2
t o be del i ver ed t o an i nt ermedi ary between Bank of Amer i ca and3
Bank of New Yor k, t he - -4
THE COURT: Wel l , shoul dn t I consi der al l of t hat ?5
I n ot her wor ds, your - - one of your key poi nt s i s t he not e was6
not pr oper l y t r ansf er r ed because possessi on of t he or i gi nal7
note was not gi ven t o the new owner , i s t hat r i ght ?8
MR. LEVI TT: Par t i al l y, Your Honor .9
THE COURT: Okay.10
MR. LEVI TT: But agai n, I m not - -11
THE COURT: What s t he - -12
MR. LEVI TT: - - but I m not r ai si ng - -13
THE COURT: What par t of i t i s - -14
MR. LEVI TT: - - but I m not - - I m not def endi ng15
t hi s. The pr oof s t hat have been submi t t ed t o t he Cour t ar e16
t hat t her e s a pi ece of paper t hat t hey r e cal l i ng an al l onge17
t hat was pr epar ed i n t he cour se of t hi s l i t i gat i on t hat18
t hey r e r el yi ng on as an endorsement .19
THE COURT: You r e r i ght .20
MR. LEVI TT: I haven t - -21
THE COURT: You r e r i ght , but - -22
MR. LEVI TT: But I haven t hear d - -23
THE COURT: - - I m aski ng t he quest i on, and maybe i t24
shoul d have been asked ot her wi se, but i f t her e i s such a25
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24Levitt - Argument
pr ovi si on i n t he servi ci ng agr eement about t he r et ent i on of1
possessi on as agent f or t he owner - -2
MR. LEVI TT: And i f - - i f - -3
THE COURT: - - what par t of your ar gument i s i t ? I n4
other words, you say possessi on of t he document i s par t of t he5
argument . What el se i s a par t of t he argument ?6
MR. LEVI TT: No, but possessi on - - you have t o have7
possessi on of t he document but i n addi t i on t o possessi on, you8
ei t her have t o have an endor sement , or you have t o have proof9
t hat t hese document s wer e act ual l y t r ansf er r ed t o t he ul t i mat e10
owner , even i f t he agent f or t he owner i s hol di ng t hem. But11
t her e st i l l has t o be pr oof t hat i t was del i ver ed f r om A t o B12
t o C but none of t hose pr oof s have been submi t t ed and i t s not13
my burden, Your Honor .14
I f counsel want s t o say al l r i ght , f or get t he hol der15
ar gument , I l ost on hol der but her e s my case that t hi s not e16
was t r ansf er r ed f r om A t o B t o C, her e s t he del i ver y r ecei pt s17
and yeah, i t may be si t t i ng i n somebody s vaul t i n Cal i f or ni a18
and not wi t h t hi s t r ust , f i ne. But I haven t hear d t hose19
pr oof s and I don t t hi nk t he Pool i ng and Ser vi ci ng Agr eement20
gi ves us t hat , Your Honor . We need t o see t he del i ver y21
r ecei pt s, we need t o show t he chai n and t her e s not hi ng bef ore22
t he Cour t .23
THE COURT: Under st ood. Mr . Kapl an, i s t here24
anyt hi ng i n t hose document s i n t he Pool i ng and Ser vi ci ng25
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25Levitt - Argument
cont r act t hat woul d - -1
MR. KAPLAN: That s a good quest i on, Your Honor ,2
but , you know - -3
THE COURT: Don t you t hi nk you - -4
MR. KAPLAN: - - and I bel i eve t he wi t ness s5
exper i ence i s t hat document s are not physi cal l y t r ansf er r ed6
f r om par t y t o par t y t o par t y.7
THE COURT: But i t s not exper i ence t hat we r e8
t al ki ng about , i t s UCC r equi r ement s.9
MR. KAPLAN: I underst and.10
THE COURT: I s Mr . Levi t t r i ght when he says t hat11
some ki nd of del i ver y of possessi on i s r equi r ed i n or der t o12
qual i f y as a t r ansf er ee, not a hol der ? I t hi nk we ve pr et t y13
wel l est abl i shed t hat t he af f i xi ng t hat i s r equi r ed f or hol der14
i n due cour se st at us as not appar ent i n t hi s case, has not15
been est abl i shed, but i f you est abl i sh under UCC r equi r ement s16
t hat t her e i s a pr oper t r ansf er , t her e may st i l l be17
oppor t uni t y t o enf or ce t he obl i gat i on.18
MR. KAPLAN: Ri ght . Your Honor , I under st and but , I19
mean, t her e s no way I m goi ng t o ar gue t hat t her e was a20
physi cal t r ansf er . Count r ywi de was t he ser vi cer , t he21
or i gi nat or . They had t he document s - -22
THE COURT: Ri ght , t here was no - -23
MR. KAPLAN: - - t hey physi cal l y si gned t he necessary24
document s r equi r ed t o document t hei r ownershi p i nt er est s bei ng25
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26Kaplan - Argument
t r ansf er r ed t o t he t r ust - -1
THE COURT: That s t he i ssue. I n ot her wor ds,2
I m - -3
MR. KAPLAN: - - but t hey di dn t physi cal l y del i ver4
i t .5
THE COURT: - - I m r ai si ng t he possi bi l i t y t hat t he6
Pool i ng and Ser vi ci ng Agr eement mi ght cont ai n pr ovi si ons t hat7
woul d serve t o of f er Count r ywi de an out , meani ng I m not - -8
you know, her e to advocate Count r ywi de s cause, but I am her e9
t o get t o the - - as cl ose as I can t o what shoul d happen her e.10
MR. LEVI TT: Your Honor , I l l answer t he quest i on11
because I di d see i n t he i ndex - - and i f Your Honor woul d l i ke12
I can hand up t he Pool i ng and Ser vi ci ng Agr eement . Thi s i s13
t he Pool i ng and Servi ci ng Agr eement t hat was pr ovi ded by t he14
def endant and I l l cal l your at t ent i on t o Sect i on 8- 13.15
THE COURT: Thank you.16
MR. KAPLAN: What page i s he on?17
MR. LEVI TT: I t s 150.18
THE COURT: 8. 13, Access t o r ecor ds of t he t r ust ee.19
The t r ust ee shal l af f or d t he sel l er s, t he deposi t or , t he20
mast er ser vi cer , t he NI M I nsur er and each cer t i f i cat e owner21
upon r easonabl e not i ce dur i ng normal busi ness hour s access t o22
al l r ecor ds mai nt ai ned by t he t r ust ee - -23
MR. LEVI TT: That t el l s me t he t r ust ee has t he24
r ecor ds, Your Honor . That s as cl ose as I can get . But I l l25
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27Kaplan - Argument
l et you f i ni sh.1
THE COURT: Wel l , yes, t hat doesn t seem t o get at2
i t . I f t her e i s no aut hor i t y i n t hi s document f or Count r ywi de3
t o act as t he agent f or t he t r ust ee i n mai nt ai ni ng t he4
or i gi nal document s, t hen we f ace squarel y the quest i on of5
whet her l ack of possessi on by t he owner , t he r et ent i on of6
possessi on by the ser vi cer , vi ol at es t he t r ansf er ee st at us of7
t he owner , or whet her t he servi cer who f i l ed t he pr oof of8
cl ai m can st and by t hat st at us t o succeed agai nst t hi s9
chal l enge.10
MR. KAPLAN: Wel l , Your Honor , t he servi cer has11
aut hor i t y t o act i n ser vi ci ng t he l oan, i ncl udi ng f i l i ng a12
pr oof of cl ai m under t he Pool i ng and Ser vi ci ng Agr eement . I n13
addi t i on, I bel i eve t her e s a power or at t or ney that Bank of14
New Yor k has pr ovi ded t o Count r ywi de t o act on t hei r behal f t o15
admi ni st er - -16
THE COURT: Wel l , where i s t hat ?17
MR. KAPLAN: I d be happy t o pr ovi de t hat t o Your18
Honor . Okay, we can mark t hat as Def endant s Exhi bi t 2.19
THE COURT: Di d we mar k t hi s copy of t he ser vi ci ng20
agr eement as Def endant s Exhi bi t 3?21
MR. KAPLAN: That s f i ne, Your Honor .22
THE COURT: And di d we al l ow you a chance t o l ook at23
t hi s document t o ascer t ai n what i n i t mi ght be hel pf ul t o24
you - -25
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28Kaplan - Argument
MR. KAPLAN: Your Honor , t her e s - -1
THE COURT: - - r at her t han j ust l eavi ng i t t o me t o2
peruse?3
MR. KAPLAN: Wel l , t hat s f i ne, Your Honor , we l l be4
happy t o go t hr ough and submi t t o Your Honor r ef erences t o t he5
var i ous pr ovi si ons i n t he document .6
THE COURT: Okay, l et s t ake a l ook, D- 2, power of7
at t or ney si gned by t he t r ust ee. Under t he Pool i ng and8
Ser vi ci ng Agr eement s - - const i t ut i ng and appoi nt i ng9
Count r ywi de Home Loan Ser vi ci ng, LP f ul l power of subst i t ut i on10
and r e- subst i t ut i on f or t he l i mi t ed pur pose of execut i ng and11
r ecordi ng any and al l document s necessary t o ef f ect a12
f or ecl osur e of a mor t gage l oan, t he di sposi t i on of an REO13
pr opert y, an assumpt i on agr eement or modi f i cat i on agr eement t o14
suppl ement - - or suppl ement t o t he mor t gage not e, mor t gage or15
deed of t r ust and a reconveyance, deed of r econveyance or16
r el ease or sat i sf act i on of mor t gage or such i nst r ument17
r el easi ng t he l i en of a mor t gage i n connect i on wi t h t he18
t r ansact i ons cont empl at ed i n t hose cer t ai n Pool i ng and19
Ser vi ci ng Agreement s, by and among the under si gned, et20
cet er a.21
The under si gned al so gr ant s - - f ul l power and22
aut hor i t y t o do and per f or m each and ever y act and thi ng23
r equi si t e and necessary t o be done i n and about t he pr emi ses24
as f ul l y t o al l i nt ent s and pur poses as mi ght or coul d be done25
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29Kaplan - Argument
i n per son t o ef f ect i t ems one, t wo and t hr ee above, her eby1
r at i f yi ng and conf i r mi ng al l t hat sai d at t or neys i n f act and2
agent s or any of t hem or t hei r subst i t ut es may l awf ul l y do or3
cause t o be done by vi r t ue her eof . 4
Wel l , t her e s a quest i on mar k - - does t hi s power of5
at t or ney aut hor i ze t he agent / ser vi cer t o hol d t he or i gi nal6
document s i n subst i t ut i on f or and sat i sf act i on of t he7
r equi r ement s of t he UCC. I mean, t hat s a quest i on mark.8
MR. KAPLAN: I under st and. I under st and, Your9
Honor . But , I mean, Your Honor s pr obabl y f ami l i ar , mor t gage10
l ender s and ser vi cer s don t nor mal l y t r ansf er document s back11
and f or t h i n or der t o ef f ect uat e physi cal t r ansf er . They12
ut i l i ze agent s or ser vi cer s t o execut e document s and ret ai n13
t he document s and t hey don t send them acr oss t he count r y by14
messenger s or Feder al Expr ess t o go t o di f f er ent vaul t s t o be15
mai nt ai ned because - -16
THE COURT: And t hat s f i ne. That s - -17
MR. KAPLAN: And t hat s st andard - -18
THE COURT: I mean, I m not accept i ng your t est i mony19
as an exper t - -20
MR. KAPLAN: Yeah, I know, I know.21
THE COURT: - - t o t hat ef f ect - -22
MR. KAPLAN: But I t hi nk i t s r easonabl e - -23
THE COURT: - - but I m accept i ng i t and i t may ver y24
wel l be r easonabl e. I s i t per mi ssi bl e under t he Code.25
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30Kaplan - Argument
MR. KAPLAN: I underst and, okay.1
THE COURT: That s al l I m aski ng.2
MR. KAPLAN: Al l I m sayi ng i s I bel i eve t hat i t s a3
st andard busi ness pr act i ce amongst t he mor t gage banki ng4
i ndust r y and ser vi ci ng i ndust r y not t o physi cal l y move5
document s f r om part y to part y unl ess t her e i s a change of6
ser vi ci ng, i n whi ch case t he physi cal f i l es t hen must be sent7
t o the new ser vi cer , not necessari l y t he new i nvest or , hol der8
or - - you know, r ecorded owner of an assi gnment of mor t gage,9
et cet er a, but t he new ser vi cer .10
THE COURT: Wel l , i t cer t ai nl y makes sense and11
pr esumabl y t he Pool i ng and Ser vi ci ng Agr eement wi l l cl ar i f y12
t hat t her e i s agency st at us f or t hat pur pose and we woul d t r y13
t o under st and whet her t hat woul d be suf f i ci ent f or UCC14
pur poses. What el se shoul d I be l ooki ng at , counsel ? We r e15
t al ki ng f i r st about possessi on. What el se ar e we t al ki ng16
about ? Al l r i ght , l et me ask one quest i on bef or e I f or get . I17
t ake i t t hat t he al l onge t hat we ve l ooked at , t he new18
al l onge, has not been r ecorded?19
MR. KAPLAN: Wel l , normal l y you woul d not r ecor d a20
not e, Your Honor . The not e passes f r om par t y t o par t y. I t s21
l i ke a check - -22
THE COURT: Ri ght .23
MR. KAPLAN: - - i t doesn t get r ecor ded i n t he24
Count y Cl er k s Of f i ce gener al l y - -25
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THE COURT: That s f i ne.1
MR. KAPLAN: - - so i t woul d normal l y be pl aced i n2
or i gi nal - - wi t h al l t he or i gi nal document s and essent i al l y3
at t ached t o t he not e.4
THE COURT: Under st ood. Okay, what el se shoul d I be5
l ooki ng at ?6
MR. LEVI TT: Your Honor , i f Your Honor does want t o7
f ocus on t he Pool i ng and Ser vi ci ng Agr eement , t her e ar e ot her8
pr ovi si ons i n the Pool i ng and Ser vi ci ng Agr eement t hat Your9
Honor mi ght want t o l ook at , speci f i cal l y - - and i f I coul d10
j ust grab my copy - -11
THE COURT: Of cour se. I s t hi s your copy?12
MR. LEVI TT: Yes, i t i s. Actual l y, I have - - I have13
excer pt s - - copi es of excer pt s, Your Honor , and I l l - -14
actual l y I l l hand up t he or i gi nal t o you so - -15
MR. KAPLAN: I woul d al so argue, Your Honor , i n t hat16
- - as I sai d, I bel i eve i t s st andar d oper at i ng pr ocedur e f or17
ser vi cer s, especi al l y when t hey wer e t he or i gi nat or of t he18
document s and when t hey sel l t hem or secur i t i ze t hem and19
r emai n t he servi cer , t o execut e t he document s t hat are20
r equi r ed f or t r ansf er , but t hat t her e s not a physi cal21
t r ansf er . And i f you r e goi ng t o det er mi ne - -22
THE COURT: Mr . Kapl an, you r e t est i f yi ng about t he23
or di nar y - -24
MR. KAPLAN: My wi t ness I t hi nk can t est i f y t o t hat25
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shape or f or m t est i f yi ng but I can advi se t he Cour t t hat I1
spent many hour s t r yi ng t o f i nd t hi s Pool i ng and Ser vi ci ng2
Agreement on t he SEC websi t e wher e t hey have t o be f i l ed and I3
coul d not f i nd i t , so the onl y copy of t he Pool i ng and4
Ser vi ci ng Agr eement t hat I have i s t hi s unsi gned copy pr ovi ded5
by counsel f or t he def endant whi ch I have t o accept as a val i d6
document .7
But I can t el l Your Honor , t he SEC websi t e i s wher e8
- - wher e you can f i nd t hem; I can t f i nd i t . I can f i nd a l ot9
of ot her s i n a si mi l ar name but wi t h di f f er ent number s. I10
can t f i nd t hi s one.11
THE COURT: I s t here r ef er ence i n t hi s document t hat12
I have i n my hand t o t hi s part i cul ar mort gage?13
THE WI TNESS: I don t have i t i n f r ont of me.14
THE COURT: Ther e ar e al l ki nds of exhi bi t s - -15
THE WI TNESS: I t s - -16
THE COURT: - - t hat have numbers but don t have17
subst ance.18
( Pause i n pr oceedi ngs)19
THE COURT: Have you l ooked at t hat , counsel ?20
MR. LEVI TT: Excuse me, Your Honor ?21
THE COURT: Have you l ooked at whether t here i s22
r ef er ence t o t hi s par t i cul ar mor t gage?23
MR. LEVI TT: No, Your Honor . Your Honor , i t wasn t24
agai n my exper i ence - - because I ve been readi ng a l ot of25
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t hese l at el y - - my exper i ence i s t her e s a schedul e t hat s1
annexed. Ver y of t en I m f i ndi ng t hat t hey don t i ncl ude t he2
schedul e i n t he f i l i ng wi t h SEC I guess f or pr i vacy pur poses3
and you r e di r ect ed t o whi chever l aw f i r m i s t he f i r m t hat4
f i l ed t he document s wi t h t he SEC, but I wasn t even pr ovi ded5
t he schedul e as par t of t hi s submi ssi on.6
And agai n, I went ont o the SEC websi t e l ooki ng f or7
i t and coul dn t f i nd i t . I wi l l al so poi nt out t o Your Honor8
t hat t he copy that I was pr ovi ded and t he copy that s i n f r ont9
of Your Honor on t he f i r st page r ef er ences a dr af t . I t says10
Si dl ey - - I guess Si dl ey and Aust i n was t he l aw f i r m, i t was11
t hei r draf t dat ed 06/ 27/ 06. I don t bel i eve, agai n because12
t hi s i s l abel ed dr af t , t hi s may not be t he oper at i ve document13
but i t i s t he onl y document t hat I was provi ded by t he14
def endant .15
MR. KAPLAN: I underst and, Your Honor , and I wasn t16
i nvol ved i n t r ansmi t t i ng t he document but I am awar e t hat i t17
does say t hat .18
THE COURT: Wel l , I t hi nk you need t o get i nvol ved19
and - -20
MR. KAPLAN: I di d - - I di d ask speci f i cal l y f or a21
document t hat was si gned and essent i al l y was f i nal .22
THE COURT: Essent i al l y?23
MR. KAPLAN: Wel l , i t was a f i nal document - -24
si gned, f i nal document , not as al l eged, a dr af t .25
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THE COURT: And you di dn t get i t ?1
MR. KAPLAN: And I have not , no.2
THE COURT: So we don t know what t hi s i s, nor do we3
know whet her i t appl i es to t hi s par t i cul ar si t uat i on. The4
onl y cl ue we have i s t hat i t s bet ween Count r ywi de and t he5
Bank of New Yor k t r ust ee and t hat i t r el ates t o Asset - Backed6
Cer t i f i cat e Ser i es 2006/ 8 - -7
MR. KAPLAN: Ri ght .8
THE COURT: - - whi ch suggest s t hat i t mi ght be t he9
same pool , but we don t know whet her i t was execut ed. We have10
quest i ons r ai sed because i t s not on t he SEC websi t e and we11
don t have a speci f i c l i st i ng of t hi s par t i cul ar mor t gage, and12
I t ake i t t hat addi t i onal t i me wi l l not hel p you?13
MR. KAPLAN: Wel l , I don t have physi cal access. I t14
woul d be up t o Count r ywi de or Bank of Amer i ca - -15
THE COURT: Wel l , you as counsel f or Count r ywi de - -16
MR. KAPLAN: Wel l , Your Honor , I woul d cer t ai nl y17
r equest addi t i onal t i me t o al l ow Count r ywi de, t he def endant ,18
t o pr ocur e t he document s, pr ovi de t hem t o counsel and Your19
Honor , as wel l as f or us t o synopsi ze t he i nf or mat i on20
cont ai ned i n t her e per t ai ni ng t o possessi on and r et ent i on of21
document s.22
THE COURT: Wel l , you know, t hi s i s a ser i ous23
consequence - - t hi s meani ng t he rel i ef sought by t he24
pl ai nt i f f . I f t her e ar e substant i al gaps i n my abi l i t y t o25
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f ol l ow t he st r eam, t hen t he pl ai nt i f f wi l l be successf ul . I1
woul d of f er t hat oppor t uni t y t o Count r ywi de.2
I f t hey can t come up wi t h a si gned l egi t i mat e3
ver i f i ed copy of i t - - and i t can be i n t he f i r st i nst ance t he4
f i nal execut ed document wi t h some t i e- i n t o t hi s mort gage - -5
somebody has an exhi bi t t hat woul d, you know, l i st t hi s6
mor t gage t heor et i cal l y - - and i f t hey don t , t hat s a pr obl em7
- - wi t h a cer t i f i cat i on f r om a qual i f i ed Count r ywi de8
r epr esent at i ve t hat t hi s i s what i t pur por t s t o be.9
I f t her e ar e f ur t her quest i ons, we can t ake f ur t her10
t est i mony, ei t her i n Cour t or by t el ephone conf er ence cal l . I11
hat e t o make you come back f r om Cal i f or ni a, al t hough - - and12
i t s not ver y ni ce t hi s t i me of year i n New J er sey, I wi l l13
gr ant you t hat , but we can, you know, t r y t o keep goi ng i n14
t er ms of get t i ng i t .15
Ther e i s a l i mi t and t here i s a bur den, I f ul l y16
agr ee wi t h you, counsel . I m pushi ng t he envel ope t o see17
wher e we get t o i n t er ms of l i ni ng t hese t hi ngs up or not .18
That s what I m ai mi ng f or because I f r ankl y don t want t o19
gr ant r el i ef i f t her e i s somet hi ng f or i nst ance i n t hese20
document s and i f t he f i nal dr af t has been execut ed and so21
f or t h t hat shoul d gui de r esol ut i on of t hi s deci si on. I t has22
maj or i mpl i cat i ons potent i al l y. I mean, you know, my wr i t t en23
deci si on may be i gnored but i t may be a basi s f or other such24
rel i ef and I d l i ke t o get i t r i ght i f I can so - -25
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was af f i xed i n t he way t hat t he Thi r d Ci r cui t i magi ned was1
necessary - - not i magi ned but pr ocl ai med was necessary.2
Your asser t i on woul d be t hat t he al l onge t hat was3
execut ed t wo weeks ago shoul d not be consi der ed as an4
appr opr i at e t r ansf er because i t was post - pet i t i on, i t was i n5
t he l i t i gat i on, i t wasn t ef f ecti ve as of t he dat e of t he6
pr oof of cl ai m or bet t er yet , as of t he dat e of t he f i l i ng of7
t he pet i t i on and t hat t her ef or e, i t i s i nval i d.8
MR. LEVI TT: Cor r ect , Your Honor .9
THE COURT: And t hat i s a ver y l egi t i mat e and10
i mpor t ant i ssue and I woul d appr eci at e Mr . Kapl an deal i ng wi t h11
t hat .12
MR. LEVI TT: And so get t i ng t o t he ot her por t i on,13
Your Honor , t he onl y - - and i t has not hi ng t o do wi t h hol der14
i n due cour se, we r e not r ai si ng t he f r aud i ssue, we r e not15
r ai si ng t hose i ssues. The i ssue i s does t hi s credi t or have16
t he r i ght t o enf or ce t he not e. So wi t h r egar d t o t he al l onge,17
l ucki l y I have a Thi r d Ci r cui t deci si on t hat makes i t easy.18
Wi t h r egar d t o the ot her , t her e s onl y one ot her way t o19
enf or ce and t hat s t o t ake t he r i ght s of t he t r ansf er ee - -20
t r ansf er or under t he Thi r d Ci r cui t deci si on and under 3- 203.21
And agai n t her e, Your Honor , i f my posi t i on i s t he22
t r ust has t o be i n possessi on of t he not e and t he t r ust has t o23
pr ove t hat i t t ook possessi on and i f we r e goi ng t o deal wi t h24
t he Pool i ng and Ser vi ci ng Agr eement - - and, Your Honor , one of25
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t he reasons why I wasn t movi ng i t i nt o evi dence was because1
t o me i t wasn t compet ent evi dence at t hi s poi nt , agai n, i t2
wasn t my bur den, but i f counsel i s goi ng t o f i nd t he3
l egi t i mat e document t hat s r ecor ded wi t h t he SEC, wel l t hat s4
goi ng t o be t he Bi bl e, Your Honor , and t hat s goi ng t o say5
t hat t hi s not e had t o be del i ver ed.6
Whet her i t ul t i mat el y ended up wi t h t he t r ust - -7
wi t h t he ser vi cer , t he Pool i ng and Ser vi ci ng Agr eement , i f8
i t s at al l cl ose t o t hi s dr af t or l i ke ever y ot her Pool i ng9
and Ser vi ci ng Agr eement I ve r ead, i t s goi ng t o say i t woul d10
have had t o be physi cal l y t r ansf er r ed f i r st f r om Count r ywi de11
was t he or i gi nat or t o t he deposi t or , and t hen f r om t he12
deposi t or ul t i mat el y t o t he t r ust .13
The physi cal documents accor di ng t o t he Pool i ng and14
Ser vi ci ng have t o be t r ansf er r ed and i n t hi s document you r e15
goi ng t o see i t had t o be endorsed. We r e not goi ng t o have16
t hat her e. So i f t hey can pr ove t hat t hese document s wer e17
physi cal l y t r ansf er r ed, meani ng t her e s del i ver y r ecei pt s18
showi ng t hey wer e physi cal l y t r ansf er r ed f r om A t o B, f r om B19
t o C, and i f C deci ded t o l et i t s agent hol d t hem, I t hi nk,20
Your Honor - -21
THE COURT: Wel l , t here s no quest i on on t hi s r ecor d22
and, you know, I m r eady t o accept i t as f act t hat t hese23
or i gi nal document s never moved. I mean, t hat was the24
t est i mony.25
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MR. LEVI TT: And i f t hat s t he case, Your Honor , I1
t hi nk we r e done because unl ess t he document s were physi cal l y2
t r ansf er r ed, t he t r ust ul t i mat el y coul d deci de t o l et i t s3
agent - - you know, Count r ywi de her e, despi t e t he wi t ness s4
bel i ef s and asser t i ons, Count r ywi de her e i s wear i ng t wo5
di f f er ent hat s, i t s wear i ng t he hat as Count r ywi de Home6
Mort gage, t he one t hat or i gi nated t hese mort gages, packaged7
t hem and got r i d of t hem as qui ckl y as t hey possi bl y coul d,8
t hat s hat number one, and t hen as anot her way t o make money,9
t hey r e a ser vi cer .10
THE COURT: Ri ght .11
MR. LEVI TT: So i t s t wo di f f er ent - - f r om al l12
pr act i cal pur poses and i n f act I t hi nk t he Pool i ng and13
Ser vi ci ng Agr eement wi l l show, i t s t wo separ at e and di st i nct14
l egal ent i t i es, bot h Count r ywi de ent i t i es, now Bank of Amer i ca15
ent i t i es. So i f A, whi ch i s Count r ywi de t he or i gi nat or , ended16
up secur i t i zi ng and sel l i ng t hi s l oan t hey woul d have had t o17
have f ol l owed t he t erms of t he Pool i ng and Servi ci ng Agr eement18
t o get i t i nt o t he hands of t he t r ust and t hen D, whi ch i s19
Count r ywi de t he servi cer , coul d have got t en possessi on. And20
even i f i t meant - - even i f t hey st ayed i n t he same vaul t but21
i f i t meant t hat t her e was a del i ver y recei pt f r om A t o D or A22
t o B t o C t o D, t hat s what t hey have t o pr ove.23
And because t hey r e sayi ng t hat , now maybe t hey do24
have those del i ver y r ecei pt s and i f t hey want t o pr oduce them,25
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t hat s gr eat , but i f t hat document never moved f r om t hat saf e,1
f i rst of al l t hey re i n vi ol at i on of t hei r Pool i ng and2
Ser vi ci ng Agr eement , t hey r e i n vi ol at i on of t he UCC - - we r e3
done.4
THE COURT: I f t hey r e i n vi ol at i on of t he UCC, I m5
agr eei ng wi t h you. I f t hey r e i n vi ol at i on of t he Pool i ng and6
Servi ci ng Agr eement , I wonder how a debt or can avai l7
t hemsel ves of enf or cement of t he pool i ng and ser vi ci ng - -8
MR. LEVI TT: Thi r d- par t y benef i ci ar y.9
THE COURT: I m sor r y?10
MR. LEVI TT: They r e t he t hi r d- par t y benef i ci ar y of11
t hi s cont r act .12
THE COURT: Benef i ci ar y i n t er ms of where t he13
document s are - - t hat s a t ough one.14
MR. LEVI TT: I n t er ms of - - and somet i mes i t s15
t hi r d- part y det r i ment t oo because we have al l t hese pr obl ems16
of t he way t hese ser vi cer s act , but t he r eal i t y i s, Your17
Honor - -18
THE COURT: I t s a whol e ot her st or y.19
MR. LEVI TT: - - we r e r ef er enced, agai n, t hey r e20
goi ng to pr oduce t he document , we r e goi ng t o be ref erenced as21
one of t he l oans t hat ar e subj ect t o t hi s Pool i ng and22
Ser vi ci ng Agr eement .23
THE COURT: Yes, but t he movi ng ar ound of t he24
document s ar e not f or t he benef i t of t he t hi r d- par t y25
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benef i ci ary. You can make t he argument t hat t hey are because1
t hey act upon t he UCC pr ot ect i ons of knowi ng who s hol di ng2
what . That s not an unr easonabl e ar gument and I m t hi nki ng i t3
out as we go, but here s what I need, counsel . Because your4
submi ssi on di dn t f ocus, I woul d - - because you di dn t have5
the - -6
MR. LEVI TT: I - -7
THE COURT: - - t he f act ual basi s - -8
MR. LEVI TT: Cor r ect .9
THE COURT: - - now you do, I woul d appr eci at e your10
honi ng i n on your argument s. They are t o - - we ve el i mi nated11
t he af f i xi ng as we ve sai d, but I m i nt er est ed i n t he12
possessi on el ement . At t he same t i me t hat I al l ow t he13
def endant t o ampl i f y upon t hei r argument by f ut ur e submi ssi on,14
not onl y of a document t hat i s a f i nal ver si on i f you have i t15
and can get i t and can cer t i f y that t hat s what i t i s and a16
f ocus on what pr ovi si ons i n t hat document I shoul d - - on bot h17
si des pay at t ent i on t o - - obvi ousl y, when you get i t you18
pr ovi de i t t o counsel as wel l , i n addi t i on t o any ar gument19
t hat you woul d f ocus me on.20
So i t s hal f - baked. We ve made some pr ogr ess.21
We ve under st ood cer t ai n f actual pr edi cat es t hat t he document s22
r emai ned where t hey were, t hat t he al l onge was cr eat ed t wo23
weeks ago and t hose are i mpor t ant f act s t o f i t i nt o t he24
equat i on.25
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43DeMartini - By the Court
Di d you have a comment , si r ?1
MR. KAPLAN: Yeah, I m j ust - - I m j ust a l i t t l e - -2
and bel i eve me, I under st and wher e Your Honor i s headi ng. I m3
not - - I know I m not goi ng t o change Your Honor s mi nd, but4
I m a l i t t l e t r oubl ed by t he f act t hat we r e accept i ng a5
r epr esent at i on her e. And t hi s wi t ness i s i n t he Li t i gat i on6
Depar t ment , t hi s wi t ness i s not t he per son t hat was7
r esponsi bl e f or t he Pool i ng and Ser vi ci ng Agr eement or how8
t hese document s ar e deal t wi t h.9
I t hi nk at t he ver y l east , even i f we don t have10
l i ve test i mony, we need t o have somet hi ng f r om someone who can11
say t hey r e cust odi an of r ecor ds t hat t r ul y t r acks t hi s.12
We r e accept i ng a r epr esent at i on - -13
THE COURT: Whi ch r epresent at i on?14
MR. KAPLAN: The r epr esent at i on t hat t hey st ayed i n15
t he same vaul t and t hey never moved. We don t know t hat , Your16
Honor . We r e - - t hi s i s - -17
THE COURT: But l et s exami ne - -18
MR. KAPLAN: - - and a l ot of t hat i s counsel s19
r epr esent at i on.20
THE COURT: - - Ms. DeMar t i ni i n t er ms of her21
knowl edge of t hat f act .22
EXAMI NATI ON23
BY THE COURT:24
Q You ve t est i f i ed t hat t hese document s, t he or i gi nal s, t he25
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44DeMartini - By the Court
f i l es - -1
A Have r emai ned wi t h Count r ywi de.2
Q - - st ayed wi t h - - now, ar e t her e t wo di f f er ent ent i t i es?3
Thi s not e was enter ed i nt o wi t h Count r ywi de Home Loans, I nc.4
A Yes.5
Q I s t hat t he same as Count r ywi de Home Loan Ser vi ci ng, LP?6
A Count r ywi de Home Loan Ser vi ci ng, LP i s t he - - i s our7
ser vi ce - - i s t he por t i on of t he busi ness t hat does t he8
ser vi ci ng of t he l oan so t hey ar e sl i ght l y di f f er ent i n t hat9
t hey wer e both part of t he - - what was f ormer l y Count r ywi de10
Fi nanci al Cor por at i on. Count r ywi de Ser vi ci ng Home Loans, LP11
was t he ser vi ci ng por t i on of t hat busi ness. They woul d - - and12
Count r ywi de Home Loans woul d have been the ones t hat13
or i gi nat ed t he l oan.14
Q Wel l , l et s t al k f i r st about your exper i ence wi t h t he15
company. You sai d t hat you st ar t ed about t en years ago?16
A Yes.17
Q And wi t h whi ch company, t he ser vi cer or t he - -18
A I ve al ways been i nvol ved wi t h servi ci ng.19
Q I n t he ser vi ci ng.20
A Yes.21
Q And what wer e your posi t i ons wi t h ser vi ci ng?22
A Oh, I ve had a l ot of posi t i ons wi t h ser vi ci ng. I ve been23
a cust omer servi ce r epr esent at i ve, I ve been a super vi sor ,24
I ve been a t r ai ner , I ve been a t r ai ni ng devel oper , I ve25
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46DeMartini - By the Court
i nt er nal l y as bet ween t he or i gi nat or and t he ser vi cer as soon1
as t he l oan i s gi ven?2
A Wel l , af t er t he l oan s or i gi nat ed, t hen i t s goi ng t o what3
we woul d have cal l ed boar ded our syst em. I woul d be f ami l i ar4
wi t h i t f r om t he t i me t hat i t boar ded on - -5
Q What does t hat mean?6
A Boar ded i s when i t woul d get put i nt o t he comput er syst em.7
That woul d be when t he documents ar e al l i maged and t hen8
st ored. That al l happens when t he l oan comes on board or9
becomes a par t of our servi ci ng. What happens t o i t pr i or t o10
t hat as f ar as t he or i gi nat i on pr ocess i nasmuch as t he11
under wr i t i ng or any of t hat , t hat I m not as f ami l i ar wi t h,12
no.13
Q When t he f i l e i s - - when t he l oan i s boar ded, who does14
that?15
A Let me f i nd t he best way t o descr i be t hat . Wel l , t he16
document s t hemsel ves, we have a Document s Depar t ment t hat17
woul d be i n charge of i magi ng and t hen t hey woul d be t he ones18
t hat woul d be st or i ng t he or i gi nal document s. We have a19
system--20
Q I s t hat wi t hi n your ser vi ci ng company?21
A That woul d be under our ser vi ci ng company, yes.22
Q Have you ever deal t i n t hat depar t ment - - t he Document s23
Depar t ment ?24
A I have not physi cal l y wor ked i n t hat depar t ment . I ve25
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47DeMartini - By the Court
been i n t hat bui l di ng, I - - but f or me t o speci f i cal l y be t he1
one doi ng t hat , no, I haven t .2
Q Have you had occasi on t o go t her e t o l ook f or a document3
l et s say or - -4
A I ve had occasi on t o speak t o peopl e - - t he document s - -5
some of t hem ar e st or ed - - t hey r e st or ed t her e and then we6
al so have ot her st or age f aci l i t i es. These par t i cul ar7
document s ar e i n our bui l di ng because I l ooked these ones up,8
but - -9
Q What do you mean, you ve l ooked t hese up - - t hese ones up?10
A Wel l , when we went t o or der t he or i gi nat i ons f i l e we11
l ooked - - l ooked f or t he - - t he document s. The document s had12
been pr evi ousl y r equest ed by our Forecl osure Depar t ment and so13
t hat s wher e t hey r e l ocat ed r i ght now. The physi cal14
document s ar e i n t he For ecl osur e Depar t ment .15
Q The or i gi nal physi cal document s?16
A Yeah.17
Q So i s i t your cust om t o r equest or i gi nal document s - -18
A The - -19
Q - - f r om t hi s depart ment when t he Li t i gat i on Depar t ment20
needs t hem?21
A I f t hey r e r equest ed by counsel , i f t hey r e r equest ed f or22
var i ous t hi ngs wi t h whet her i t s wi t hi n a f or ecl osur e or a23
bankr upt cy. But i f t her e s somet hi ng t hat comes up wher e24
we r e bei ng asked t o pr ove somethi ng, t hen i t s becomi ng more25
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48DeMartini - By the Court
cust omar y l at el y.1
I t never used t o be t o wher e t he or i gi nal s wer e ever2
r equest ed but l at el y more and more of t he t i me of day of3
t hi ngs around t he count r y, we ar e bei ng asked t o physi cal l y4
pr oduce t he or i gi nal s mor e f r equent l y.5
Q And you woul d di r ect t hose i nqui r i es t o t he Document6
Depar t ment?7
A Yes, Document Request . I t s our DMS syst em, i t s our8
Document Request .9
Q And so t o your knowl edge, t he or i gi nal document s, t he10
or i gi nat i on document s, t he notes and t he mort gages are11
mai nt ai ned i n t hat f aci l i t y?12
A Yes.13
Q To your knowl edge, ar e t hey ever moved except f or14
i nqui r i es f r om counsel ? Ar e t hey ever moved t o f ol l ow t he15
t r ansf er of owner shi p?16
A I can t say t hat t hey r e never moved because, I mean, wi t h17
t hi s many mi l l i ons of l oans as we have I woul dn t pr esume to18
say t hat , but i t i s not cust omar y f or t hem t o move.19
Q Do you have per sonal knowl edge of under what ci r cumst ances20
t hey woul d move or whet her and t o what extent t hey r e ever21
moved?22
A Not - - not speci f i cal l y t o what I woul d be comf or t abl e23
t est i f yi ng t o, no.24
Q Okay. I n t er ms of t hi s par t i cul ar t r ansact i on, f r om your25
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49DeMartini - By the Court
exper i ence of r equest i ng t hese or i gi nal document s, wer e you1
abl e to est abl i sh t hat t hese wer e not moved?2
A We wer e abl e t o est abl i sh t hat t hey r e i n our - - what we3
cal l t he 400 Bui l di ng whi ch i s t he bui l di ng t hat we r e - -4
wher e we r e at and we wer e abl e to est abl i sh t hat t hat s wher e5
t hey r e l ocat ed and t hat s - - we wer e st i l l i n t he pr ocess of6
t r yi ng t o physi cal l y get t hem t o br i ng t hem her e t oday but i t7
j ust - - I wasn t abl e t o obt ai n t hem i n t i me.8
Q And your i nf ormat i on i s t hat t hey may be at t he9
For ecl osur e Depart ment , but are you cer t ai n t hat t hey wer en t10
moved out of t he ser vi ci ng company?11
A We had Federal Express t r acki ng. Even when we move12
somet hi ng i nt er nal l y l i ke t hat a l ot of t i mes i t wi l l go Fed13
Ex so t hat we have t hat t r acki ng so that s how I know t hat14
t hey went t here because I have t he t r acki ng number - -15
Q I see.16
A - - so t hat s how I know t hat t hey r e t her e, and I don t17
have any r ecei pt or any t r acki ng that t hey ve ever moved18
beyond t hat .19
Q Underst ood.20
THE COURT: Di d I gener at e addi t i onal quest i ons?21
MR. KAPLAN: No, Your Honor .22
MR. LEVI TT: No, Your Honor .23
THE COURT: Al l r i ght . Ar e t here any ot her24
quest i ons f or Ms. DeMar t i ni ?25
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50
MR. LEVI TT: No, Your Honor .1
THE COURT: Thank you, Ms. DeMar t i ni . You may st ep2
down.3
( Wi t ness excused)4
5
* * *6
7
8
C E R T I F I C A T I O N
I, Diane Gallagher, court approved transcriber,
certify that the foregoing is a correct transcript from the
official electronic sound recording of the proceedings in the
above-entitled matter.
/s/Diane Gallagher November 22, 2010
DIANE GALLAGHER
DIANA DOMAN TRANSCRIBING
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Case 08 02448 JHW Doc 25 Filed 11 16 10 Entered 11 17 10 09:29:50 Desc Main
Document Page 3 of 22 .
On
June 11,2008,
the defendant herein,
Countrywide Home Loans, Inc.
(hereinafter Countrywide ),
identifying
itself
as
the servicer for the Bank of
New York, filed a
secured proof of
claim
in
the
amount
of
$211,202.41,
including $40,569.69 in arrears,
noting
the property at 1316 Kings
Highway
as
the
collateral for
the
claim.
2
The debtor filed this adversary complaint on
October 16,2008 against Countrywide, seeking
to expunge
its proof of claim.
3
The debtor asserts that the Bank of New York cannot enforce the underlying
obligation.
and maintained the second
Countrywide mortgage
arrears
at $6,000. A second
modified
plan was
filed
on
April 15,
2010
and
is
currently scheduled
for
confirmation on December 8,2010. The latest
modified
plan does
not
list
Countrywide
as
a creditor
to
be treated under the plan.
2 Although the debtor
listed
two mortgages held by Countrywide
against
1316 Kings
Highway
in
his
schedules, Countrywide only flied one proof
of
claim
regarding one
mortgage
and note.
3 In 2008, Countrywide
Financial
Corporation, the umbrella
organization for Countrywide Home Loans,
Inc.,
was
purchased by the
Bank of
America Corporation. Effective April
27, 2009,
Countrywide Home Loans, Inc.
changed its
name
to BAC Home Loan Servicing, L.P.
( BAC
Servicing ). Motion
to Dismiss, Van Beveren Certif.
at
1. On July 1, 2010, a
Transfer
of Claim for
Security
was filed on the debtor's claim register, transferring the claim
from
Countrywide Home Loans, Inc., servicer for Bank
of
New York
to
BAC Home
Loan Servicing, LP . In this opinion, I will continue to refer
to
the defendant as
Countrywide.
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Case
08 02448 JHW Doc 25 iled 11 16 10 Entered 11 17 10 09:29:50 Desc
Main
Document
Page
4 of 22
F CTS
In
his
complaint,
the
debtor
does
not
dispute
that
he
signed
the
original
mortgage
documents
in
question. The note and mortgage were executed by
the debtor on May 31, 2006.
The
note, designated as an Interest Only
Adjustable
Rate Note ,
listed
the lender as Countrywide
Home Loans,
Inc.
No
indorsement appeared
on the
note. Accompanying
the
note was an unsigned
Allonge to Note dated the
same
day, May 31,
2006,
in favor of America's
Wholesale Lender , directing
that
the
debtor
Pay to the Order of
Countrywide
Home Loans, Inc., d b a America's Wholesale Lender.,,4
The
mortgage, in the
amount
of
$167,000,
listed the lender
as
America's
Wholesale Lender . Mortgage Electronic Registration Systems, Inc., or MERS ,
is
named as
the
mortgagee ,
and
is authorized to
act
solely
as the
nominee
for the lender and the
lender's
successors
and assigns. The
mortgage
references the promissory
note
signed by the borrower
on
the
same
date.
The
mortgage was recorded
in
the Camden County Clerk's Office
on
July 13, 2006.
Shortly after the execution by the debtor of the note and mortgage, the
4 The record does not reflect whether the unsigned allonge was
physically
affixed
to the note.
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Case 08-02448-JHW Doc 25
Filed 11 16 10
Entered
11 17 10
09:29:50 Desc
Main
Document Page 5 of 22
instruments executed by the debtor were apparently pooled with other similar
instruments
and
sold as
a
package
to the
Bank
of New York
as
Trustee. On
June
28, 2006,
a Pooling
and
Servicing
Agreement
( PSA
or the
Agreement )
was executed by CWABS, Inc. as the depositor, with Countrywide Home Loans,
Inc., Park Monaco, Inc. and Park Sienna, LLC as the sellers,
Countrywide
Home Loans Servicing
LP
( Countrywide Servicing )
as the master
servicer,
and
the Bank of New York as the
Trustee.
Pursuant
to
the Agreement, the
depositor
was directed
to transfer
the Trust Fund, consisting of specified
mortgage loans and their
proceeds,
including the
debtor's loan, to
the Bank of
New York as
Trustee,
in return for certificates referred
to
as Asset-backed
Certificates, Series 2006-8.
The
sellers sold, transferred
or assigned
to the
depositor all
the
right, title and
interest
of such Seller in and to the applicable
Initial Mortgage Loans, including all interest and
principal
received and
receivable
by
such
Seller. PSA
2.01(a)
at
52.
In
tum,
the
depositor
immediately transferred all right title
and interest
in the Initial Mortgage
Loans, including the debtor's loan, to the Trustee, for the benefit of the
certificate holders. Id.
The Agreement expressly provided
that in connection with
the
transfer
of
each loan, the depositor
was
to deliver
the
original Mortgage Note, endorsed
by
manual
or facsimile signature in
blank
in the following form: 'Pay to the order
-5-
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Case
08-02448-JHW Doc 25 iled 11/16/10 Entered 11/17/1009:29:50 Desc Main
Document
Page
6 of 22
of without recourse',
with
all intervening endorsements that show