Sima Schwartz

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS

In re : Chapter 7

SIMA SCHWARTZ a/k/a, : CASE NO. 06-42476-] BR
SIMA M SHWARTZ

DEBTOR

MEMORANDUM OF DECISION ON MOTION FOR RELIEF
This matter came before the Court for hearing on the second “Motion of HomEg

for Relief from Stay” [docket #31] to pursue an action to evict the Debtor from property
located at 23 Sigel Street, Worcester, Massachusetts (the “Property”). As with its
previous unsuccessful motion for relief [docket #10], HomEq Servicing Corporation
(“HomEq”) claims that a proper foreclosure sale was conducted pnor to the
commencement of the Debtor's bankruptcy. The Debtor does not dispute that the sale
occurred prepetition but argues, as she did in her pnor opposition, that it was not
properly conducted because the correct party did not conduct the sale.

As many homeowners know or come to leam, it is not uncommon for notes and
mortgages to be assigned, often more than once. When the role of a servicing agent
acting on behalf of a mortgagee is thrown into the mix, itis no wonder that it is often
difficult for unsophisticated borrowers to be certain of the identity of their lenders and
mortgagees. On more than one occasion this Court has heard debtors complain that
they did not know to whom or where they were supposed to send their mortgage
payments. In fact the Court has observed instances in which attomeys representing
alleged mortgagees or their servicing agents did not know whether the client was a

mortgagee ora serving agent, or how their client came to acquire its role. When this

1MLBR4001-1(b)(2)(F) requires the movant to state “the original holder of the
obligations... and every subsequent transferee, if known to the movant....” Despite the
fact that HomEq produced documents in which it claimed to be the servicing agent for at
least one other subsequent transferee, namely Ocwen Federal Bank, FSB, it failed to
disclose such information in either of its two motions for relief.
2
pro se Debtor found herself in just such a situation, she challenged whether the correct
party brought and conducted the foreclosure proceedings. When HomEq was required
to prove its authority to conduct the sale, and despite having been given ample
opportunity to do so, what it produced instead was a jumble of documents and
conclusory statements, some of which are not supported by the documents and indeed
even contradicted by them.
The Court has drawn the facts from the documents provided by HomeEq or the
party which appears to be the present mortgagee, Deutsche Bank National Trust
Company, as Trustee (“Deutsche”), as well as documents attached to the Debtor’s
previous opposition. Neither party requested an evidentiary hearing. The parties
should be aware that the Court spent considerable time sifting through the various
documents they provided. The Court, however, cautions the parties, especially the
movant, that it is not the Court’s responsibility to ferret out the facts to determine if the
movant has met its burden of proof. In the future should movants seeking relief fail to
set forth the necessary facts, including complying with MLBR 4001-1(b)(2)(F), 1 the
Court will deny the motions summarily. As one court has stated:
[t]his Court should not, and cannot, be required to sift
through multifarious documents and testimony in an effort to
congregate those facts which are necessary to establish a
party's action or defense. Rather, it is the duty of the litigants
to present their evidence in a manner which logically,
systematically, and efficiently leads to the conclusion sought.
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2The November 7, 2005 letter specifically references the date of the creation of
the loan as July 22, 2005 and the amount of the loan at the time Ocwen received the
obligation ($271,602.25) and states that the note was placed for servicing with HomEq
on November 1, 2005.
3This is the only instance in which Ocwen’s name appears. As discussed later,
there are two purported assignments of the mortgage to Deutsche. Both are allegedly
executed by MERS.
3
If the evidence does not clearly establish the basis, upon
which the Court can, in an independent review, determine
liability, the litigants have effectively failed to meet their
burden of proof with regard to their respective position in the
case. As a result, judgment cannot be granted to the extent
the elements of an action or defense are not clearly
demonstrable in the record.
McGraw v. Allen (In re Bell & Beckwith), 64 B.R. 620, 635 (Bankr. N.D. Ohio 1986).
FACTS
On July 22, 2005 the Debtor signed a promissory note in the amount of $272,000
in favor of First NLC Financial Services, LLC. (“First NLC”). The note was secured by a
mortgage on the Property. The mortgagee was Mortgage Electronic Registration
Systems, Inc. (“MERS”) acting solely as the nominee for First NLC and its successors
and assigns. 	By letter captioned “Validation of Debt” and dated November 7,
2005, HomEq informed the Debtor that it was the servicing agent for Ocwen Federal
Bank FSB (“Ocwen”), which the letter identified as the creditor with respect to the
mortgage. 2 There is nothing in the record to indicate that MERS or First NLC informed
the Debtor of the placement of the mortgage with Ocwen.3 By letter dated January 17,
2006 HomEq, which stated in the letter that it was the servicing agent for Deutsche,
sent the Debtor a default letter. Again there is nothing in the record to indicate that the
MERS or First NCL (or even Ocwen) notified the Debtor of the purported assignment.
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4As Mr. Dunnery’s signature is illegible, the Court refers to the jurat which lists
John A. Dunnery, vice president of HomEq as one of the signatories.
4
In March 2006 Deutsche, representing that it was the assignee of the mortgage,
filed a complaint to foreclose mortgage which the land court subsequently allowed. A
“Notice of Intent to Foreclose and Intent to Pursue Deficiency After Foreclosure of
Mortgage” dated May 5, 2006 was sent to the Debtor. The letter was signed by
Deutsche as Trustee by its attorneys, Doonan, Graves, & Longoria L.L.C. On May 23,
2006 the land court entered its judgment permitting Deutsche to conduct the
foreclosure. A foreclosure sale was held on May 24, 2006 at which Deutsche
purchased the property. As reflected in the Certificate of Entry to Foreclose dated May
24, 2006, the witnesses certified that Attorney Longoria “duly authorized agent of
Deutsche Bank National Trust Company, as Trustee pursuant to authority contained in
a Power of Attorney recorded herewith” made entry upon the premises. The
referenced Power of Attorney was not produced to the Court. On September 7, 2006 a
foreclosure deed in favor of Deutsche was executed. The foreclosure deed is signed by
John A. Dunnery4 and Jeff Szymendera, both identified as vice presidents of HomEq.
The foreclosure deed has a handwritten notation referencing a “power of attorney
recorded in book 33822 page 354.” The Court was not given a recorded copy of the
foreclosure deed or the recorded power of attorney. The Court, however, was provided
with an unrecorded copy of a “Uniform Durable Power of Attorney” that is dated
September 18, 2006. The power of attorney purports to be from Deutsche, which the
document identifies as the current mortgagee, and appoints “Reneau J. Longoria”,
among others, as its attorney “to do all acts authorized or required by the power of sale
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5There is no indication in the record whether the note was also assigned or who
the current holder of the note is.
6The signature appears to be little more than a very large check mark attached to
a downward line. A stamp of the individual’s name and title identifies the signor as
Liquenda Allotey, a vice president of MERS.
7The Court believes this to be the same individual whom the foreclosure deed
identifies as a vice president of HomEq.
5
contained in said mortgage, for the purpose of foreclosing said mortgage upon breach
of conditions thereof, and further to make open, peaceable and unopposed entry on the
premises described in said mortgage, for the purpose of foreclosing said mortgage for
the breach of conditions thereof.” The power of attorney is signed by Jeff Szymendera
as Deutsche’s attorney in fact. As other documents establish, Mr. Szymendera is a vice
president of HomEq.
There are two documents captioned “Assignment of Mortgage” among the
papers provided to the Court. 5 The earlier of the two is an assignment dated May 23,
2006 pursuant to which MERS as nominee for First NLC assigned its or First NLC’s
interest in the mortgage to Deutsche. The document is “signed”6 by a vice president of
MERS. Interestingly this document was attached to the Debtor’s submissions. A
duplicate copy is not to be found in among Deutsche’s papers. Instead Deutsche
submitted an assignment of mortgage that was dated June 14, 2006 and signed by
John A. Dunnery whom the assignment identifies as a vice president of MERS.7 In its
“Memorandum in Response to Court Order dated February 8, 2007 [docket #61],
Deutsche states that the assignment was recorded on June 14, 2006. The copy of the
assignment it attached to that Memorandum is not a recorded copy and reflects that the
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6
assignment was executed on June 14, 2006. Moreover the jurat signed by the notary
public states that John A Dunnery, on behalf of MERS, personally appeared before the
notary and executed the assignment on June 14, 2006. There is nothing in the record
to indicate whether Ocwen, on whose behalf HomEq had previously sent the Validation
of Debt letter, transferred the mortgage back to MERS or whether HomEq was simply
incorrect when it claimed Ocwen was the mortgage holder in November 2005.
On November 13, 2006 the Debtor, who is acting pro se, filed a voluntary petition
under Chapter 7 of the United States Bankruptcy Code. On December 10, 2006
HomEq filed its first Motion for Relief [docket #10] to which the Debtor objected. The
Court denied HomEq’s first motion for relief and cautioned that it was not persuaded
that the moving party was the proper party to bring the motion. On January 8, 2007
HomEq filed its second motion for relief. At the hearing on the second motion for relief,
the Court raised the same concerns, and provided each party with an opportunity to
submit memoranda of law in support of their positions.
DISCUSSION
Deutsche filed a memorandum providing a broad overview of foreclosure
procedure in Massachusetts, and dealing with MERS right to act as a nominee to
conduct foreclosure proceeding, a point it acknowledges is irrelevant to this proceeding.
Unfortunately it glosses over the critical element in this controversy. It simply assumes
that the mortgage was properly assigned to it prior to the foreclosure. Indeed Deutsche
states in its memorandum that “[t]here is no requirement that an assignment be
recorded prior to the foreclosure.” While this is a correct statement of the law, Lamson
v. Abrams, 305 Mass. 238, 241, 25 N.E.2d 374 (1940), it ignores that the assignment it
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8M.G.L. c. 244, § 1 provides
A mortgagee may, after breach of condition of a mortgage of
land, recover possession of the land mortgaged by an open
and peaceable entry thereon, if not opposed by the
mortgagor or other person claiming it, or by action under this
chapter; and possession so obtained, if continued peaceably
for three years from the date of recording of the
memorandum or certificate as provided in section two, shall
forever foreclose the right of redemption. (Emphasis added).
7
provided to the Court was not signed until after the foreclosure sale. Acquiring the
mortgage after the entry and foreclosure sale does not satisfy the Massachusetts
statute. 8 While “mortgagee” has been defined to include assignees of a mortgage, in
other words the current mortgagee, there is nothing to suggest that one who expects to
receive the mortgage by assignment may undertake any foreclosure activity. Cf. Id.
That Deutsche did not produce the assignment dated May 23, 2006, which is the
one attached to the Debtor’s opposition, suggests to the Court that Deutsche itself
questioned the validity of the May assignment. Moreover the Court notes that even if
the May assignment were the operative one, Deutsche represented that it was the
mortgagee far earlier, including in documents filed with the land court and in the notices
published in the newspaper suggesting that Deutsche is confused as to when it
acquired the mortgage. When the question of what place, if any, Ocwen had in the
chain of mortgagees, the Court concludes that HomEq and Deutsche were careless in
their documentation, a problem that falls squarely upon them.
In addition many of the crucial documents, including the power of attorney
authorizing Attorney Longoria to conduct the foreclosure sale was executed by HomEq
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8
which, although representing that it is the attorney-in-fact for Deutsche, failed to
produce any documentation as to its status. Furthermore the power of attorney signed
in September 2006 states that it “shall be construed as a Uniform Durable Power of
Attorney pursuant ot M.G.L. Chapter 201B” despite the fact that such powers of attorney
are usually seen only in circumstances where the parties are concerned about the
future incapacity of the principal to conduct his affairs. Although the Uniform Durable
Power of Attorney executed in the instant case lacks the statutorily-mandated
expression of an intent to continue the principal and attorney-in-fact relationship in the
event of the principal’s incapacity, § 1(a) is very explicit that a durable power of attorney
must be in writing. Therefore it appears that Deutsche had not yet authorized the
attorneys to act on its behalf when the foreclosure sale was conducted.
Conclusion
For the foregoing reasons, the Court cannot find that the foreclosure sale was
proper and therefore the Motion for Relief [#31] is DENIED. A separate order shall
issue.
Dated: April 19, 2007 	__________________________
Joel B. Rosenthal
United States Bankruptcy Judge
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