David G. Baker, Boston

393 B.R. 259 (2008)
In re Robin HAYES, Debtor.

No. 07-13967-JNF.
United States Bankruptcy Court, D. Massachusetts.

August 19, 2008.
260 David G. Baker, Boston, MA, for Debtor.

261 MEMORANDUM

JOAN N. FEENEY, Bankruptcy Judge.

I. INTRODUCTION

Two matters are before the Court: 1) the First Omnibus Objection to Claims filed by the Debtor, Robin Hayes (the “Debtor”), pursuant to which the Debtor objected to a proof of claim filed by AMC Mortgage Services, Inc. (“AMC”); and 2) the Motion for Relief from Stay filed by Deutsche Bank National Trust Company, as Trustee of Argent Mortgage Securities, Inc. [sic] Asset-Backed Pass Through Certificates Series 2004-W11, under the Pooling and Servicing Agreement Dated as of October 1, 2004, without Recourse (“Deutsche Bank”), filed on September 17, 2007.[1] AMC, on November 6, 2007, filed a Response to the Debtor’s Objection to the proof of claim which AMC subsequently purported to transfer to a servicer of Deutsche Bank.[2] In her Objection to the proof of claim filed by AMC, the Debtor noted the absence of evidence of an assignment from the original holder of her mortgage. The Debtor filed an Objection to Deutsche Bank’s Motion for Relief from the Automatic Stay. In her Objection to Deutsche Bank’s Motion for Relief from Stay, the Debtor raised an issue of Deutsche Bank’s standing to seek relief from stay.

On July 14, 2008 and July 15, 2008, the Court conducted a consolidated evidentiary hearing on the Debtor’s Objection to Claim, and Deutsche Bank’s Motion for Relief from Stay. Three witnesses testified and 20 exhibits were introduced into evidence. The threshold issue is whether Deutsche Bank has standing to seek relief from the automatic stay and to oppose the Debtor’s Objection to the proof of claim filed by AMC. The specific issue is whether Deutsche Bank successfully traced the identity of the various holders and servicers of the mortgage from Argent Mortgage Company, LLC, the original holder of a mortgage executed by the Debtor and Tina Hayes, to itself. For the reasons set forth below, the Court finds that Deutsche Bank failed to trace the mortgage from Argent Mortgage Company, LLC to itself and thus lacks standing to obtain relief from stay and to defend the Debtor’s Objection to the claim filed by AMC.

II. FACTS

The Debtor filed a voluntary Chapter 13 petition on June 26, 2007, her third Chapter 13 petition since May of 2006, and the sixth involving real property located at 232 Perkins Avenue, Brockton, Massachusetts (the “Perkins Avenue property”), which the Debtor owns as a joint tenant with her mother, Tina Hayes.[3] The Perkins Avenue 262 property is encumbered by a mortgage dated November 3, 2004 (Exhibit 1), which secures an adjustable rate note of even date in the original principal amount of $324,000 (Exhibit 2). Only Tina Hayes executed the adjustable rate note; both she and the Debtor executed the mortgage.

The note and mortgage identify Argent Mortgage Company, LLC as the Lender. The note sets forth an initial monthly payment amount of $2,514.28 and provides for an adjustment of the initial 8.6% interest rate on December 1, 2006 and every six months thereafter based upon the LIBOR index. The note provides:

[T]he Note Holder will calculate my new interest rate by adding six percentage point(s) (6.000%) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eight [sic] of one percent (0.125%). Subject to the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at the new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment.
The note further provides that the interest rate was subject to a cap of 10.600% and a floor of 8.6% at the first Change Date and that, after first Change Date, it would never increase or decrease more than 1.000% from the rate payable for the previous six months, subject to an overall ceiling of 14.6% and floor of 8.6%. The note also provides for late charges and attorneys’ fees.

The mortgage contains additional pertinent provisions. It provides:

Lender [Argent Mortgage Company, LLC] may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payment in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current….
Further, the mortgage permits the Lender to obtain property insurance in the event the Borrower failed to maintain insurance coverage or perform obligations under the note and mortgage, as well as to take actions to protect its interest, including assessing the value of the property, appearing in court and paying reasonable attorneys’ fees.

As noted above, AMC, not Argent Mortgage Company, LLC, filed a proof of claim on August 13, 2007 “as loan servicer for Secured Creditor Argent Mortgage Company, LLC” (Exhibit 8). It set forth a pre-petition secured claim in the total amount of $398,099.18, comprised of the principal loan balance of $322,422.61, plus twenty-one delinquent monthly mortgage payments,[4] late fees, attorneys’ fees, and 263 other costs and charges, totaling $75,676.57.

The Debtor objected to the proof of claim on grounds that AMC failed to attach “a copy of the note and mortgage (and any related assignments)” and that its costs and charges were unreasonable and excessive in the absence of documentation. Additionally, the Debtor complained that she could not verify that twenty-two payments were in arrears without a complete loan history. She asked that “[a]bsent appropriate documentation … the claim be disallowed and the security interest voided pursuant to 11 USC § 506(d).”

AMC responded to the Debtor’s Objection “as servicer to the holder of the mortgage.” It attached to its Response a copy of the note and mortgage, as well as a loan history. On April 29, 2008, almost 16 months after AMC filed a proof of claim on behalf of Argent Mortgage Company, LLC, an attorney with the law firm of Buchalter Nemer filed with the Court a “Transfer of Claim Other Than for Security” (Exhibit 18), dated April 8, 2008, pursuant to which “AMC purported to transfer the proof of claim it filed on behalf of Argent Mortgage Company, LLC to Citi Residential Lending, Inc., as loan servicer for the secured creditor Deutsche Bank National Trust Company, as Trustee, in trust for the registered holders of Argent Securities Inc.”

On September 17, 2007, approximately three months after the Debtor filed her Chapter 13 petition, Deutsche Bank filed its Motion for Relief from Stay under 11 U.S.C. § 362(d)(1) and (d)(2), as Trustee of Argent Mortgage Securities, Inc. [sic]. In its Motion, it alleged that it is the current holder of the mortgage, that the Debtor failed to stay current with post-petition mortgage payments, that the Debtor had little, if any equity in the Perkins Avenue property, and that the property was unnecessary for an effective reorganization. The Debtor filed a timely Objection to Deutsche Bank’s Motion asserting that she lacked knowledge or information sufficient to respond to Deutsche Bank’s allegation that she had failed to make post-petition mortgage payments and, as noted above, raising the issue of Deutsche Bank’s standing to bring the Motion.

At trial, Deutsche Bank, through Andrea Rodriguez-Tapia, a bankruptcy specialist and so-called “team lead,” with Citi Residential Lending, Inc., introduced multiple documents in support of its standing to bring its Motion for Relief from Stay and respond to the Debtor’s objection to the proof of claim filed by AMC. In addition to the note, mortgage and Transfer of Claim (Exhibits 1, 2 and 18, respectively), Deutsche Bank introduced the following exhibits in support of its standing:

1) a “Confirmatory Corporation Assignment of Deed of Trust Mortgage” (Exhibit 3) pursuant to which Argent Mortgage Company, LLC, “[b]y its Attorney In-Fact, Citi Residential Lending, Inc.,” by Tamara Price, Vice President, purported to assign and transfer to “Deutsche Bank National Trust Company as Trustee of Argent Mortgage Securities, Inc. [sic], Asset-Backed Pass Through Certificates Series 2004-W11, under the Pooling and Servicing Agreement dated as of October 1, 2004 Without Recourse” “all beneficial interest under that certain mortgage dated November 3, 2004 executed by Tina Hayes aka Tena Hayes and Robin Hayes” with 264 respect to the Perkins Avenue property. The assignment was dated April 16, 2008, but it provided that “[t]he effective date of this assignment is October 24, 2005.”[5]
2) a “Limited Power of Attorney” (Exhibit 4) given by Argent Mortgage Company L.L.C. to Citi Residential Lending, Inc., dated September 6, 2007, pursuant to which Argent Mortgage Company LLC granted Citi Residential Lending, Inc. “full power and authority to sign, execute, … and record any instrument on its behalf and to perform such other act or acts as may be customarily and reasonably necessary and appropriate to effectuate the following enumerated transactions….” The Limited Power of Attorney further provides: “This Appointment shall apply only to the following enumerated transactions and nothing herein or in the Agreements shall be construed to the contrary:
“1. The modification or re-recording of a Mortgage or Deed of Trust, where said modification or re-recording is solely for the purpose of correcting the Mortgage or Deed of Trust to conform same to the original intent of the parties thereto or to correct title errors….
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement in favor of a public utility company of a government agency or unit with powers of eminent domain….
3. The conveyance of the properties [sic] to the mortgage insurer, or the closing of the title to the property to be acquired as real estate owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full conveyance upon payment and discharge of all sums secured thereby, including without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related Mortgage Note, in connection with the repurchase of the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and discharge of all sums secured thereby in conjunction with the refinancing thereof, including, without limitation, the assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of a deed in lieu of foreclosure, or the completion of judicial or non-judicial foreclosure or termination, cancellation or rescission of any such foreclosure….
9. With respect to the sale of property acquired through a foreclosure or deed-in-lieu of foreclosure, including, without limitation, the execution of the following documentation:
a. Listing agreements….
10. The modification or amendment of escrow agreements established for repairs to the mortgaged property 265 or reserves for replacement of personal property.
11. Endorse on behalf of Argent Mortgage all checks, drafts and/or negotiable instruments made payable to Argent Mortgage.”[6]
3) a “POOLING AND SERVICING AGREEMENT, dated as of October 1, 2004,” among “ARGENT SECURITIES INC., Depositor,” “AMERIQUEST MORTGAGE COMPANY, Master Servicer,” and “DEUTSCHE BANK NATIONAL TRUST COMPANY, Trustee.” (Exhibit 6). The title page contains a reference “Asset-Backed Pass-Through Certificates Series 2004-W11.” The agreement was signed by all three parties and their signatures were notarized on October 6 and 7, 2004. In the Preliminary Statement of the Pooling and Servicing Agreement (“PSA”), the parties agreed that “[t]he Depositor intends to sell pass-through certificates … to be issued hereunder in multiple classes which in the aggregate will evidence the entire beneficial ownership in each REMIC created hereunder.” The term REMIC is defined as a “real estate mortgage investment conduit within the meaning of Section 860D of the Code [the Internal Revenue Code of 1986, as amended].”
The PSA contains a reference to a Schedule 1, a “Mortgage Loan Schedule,” which was not attached to Exhibit 6. However, in Section 1.01 “Definitions,” at p. 35, the term “Mortgage Loan” is defined as “[e]ach mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement or pursuant to a Subsequent Transfer Instrument, as held from time to time as part of REMIC I, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.” The “Mortgage Loan Schedule” is defined as follows: “As of any date, the list of Mortgage Loans included in REMIC I on such date … attached hereto as Schedule 1 and as supplemented by each schedule of Subsequent Mortgage Loans attached to the Subsequent Transfer Instrument.” On p. 65, the term, “Subsequent Mortgage Loan,” is defined as “[a] Mortgage Loan sold by the Depositor to the Trust Fund pursuant to Section 2.09, such Mortgage Loan being identified on the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.” Section 2.01, entitled “Conveyance of Mortgage Loans,” provides that “[t]he Depositor … convey[s] to the Trustee, without recourse, for the benefit of the Certificateholders [sic] and Certificate Insurer, all right title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to the Mortgage Loans identified on the Mortgage Schedule….” Section 2.09 entitled “Conveyance of the Subsequent Mortgage Loans,” provides that “the Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over and convey without recourse to the Trustee for the benefit of the Trust Fund … all right, title and interest of the Depositor in and to (i) the Subsequent Mortgage Loans identified on the Mortgage Loan Schedule attached to the related Subsequent Transfer Instrument delivered by the Depositor on such Subsequent 266 Transfer Date….”[7]
Rodriguez-Tapia testified that Argent Mortgage Company, LLC and Ameriquest Mortgage Company are affiliated companies, that Ameriquest Mortgage Company created AMC to service loans, that Citi Residential Lending, Inc. purchased AMC’s loan servicing portfolio, and that Citi Residential Lending, Inc. is the current servicer of the mortgage on the Perkins Avenue property.[8]

III. DISCUSSION

A. Standing

As the Court noted in In re Maisel, 378 B.R. 19, 21 (Bankr.D.Mass.2007), “[t]he plain language of section 362 of the Bankruptcy Code requires that one be a `party in interest’ to seek relief from stay.” Although the United States Court of Appeals for the First Circuit in Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26, 32 (1st Cir.1994), determined that relief from stay hearings should not involve a full adjudication on the merits of claims, defenses, or counterclaims, but rather should involve a determination of “whether a creditor has a colorable claim to property of the estate,” this Court must ensure that Deutsche Bank is, in fact, a party in interest with standing to bring the Motion for Relief from Stay now before the Court.

As noted by this Court in In re Shamus Holdings, LLC, No. 08-1030-JNF, 2008 WL 3191315 (Bankr.D.Mass. Aug.6, 2008), the United States Bankruptcy Appellate Panel for the First Circuit in In re Newcare Health Corp., 244 B.R. 167 (1st Cir. BAP 2000), addressed the concept of standing in connection with a request for an accounting and turnover by a party that asserted a security interest in property belonging, not to the debtor, but to an affiliate of the debtor. It observed the following:

Standing is a “threshold question in every federal case, determining the power of the court to entertain the suit.” Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Hence, “a defect in standing cannot be waived; it must be raised, either by the parties or by the court, whenever it becomes apparent.” U.S. v. AVX Corp., 962 F.2d 108, 116 n. 7 (1st Cir.1992).
The inquiry into standing “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Warth, 422 U.S. at 498, 95 S.Ct. 2197, 45 L.Ed.2d 343. “In its constitutional dimension, standing 267 imports justiciability: whether the plaintiff has made out a `case or controversy’ between himself and the defendant within the meaning of Art. III.” Id. Apart from this minimum constitutional mandate, the Supreme Court recognizes other limits “… on the class of persons who may invoke the courts’ decisional remedial powers.” Id. at 499, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343. These prudential limitations are self-imposed rules of judicial restraint:
These considerations, which militate against standing, principally concern whether the litigant (1) asserts the rights and interests of a third party and not his or her own, (2) presents a claim arguably falling outside the zone of interests protected by the specific law invoked, or (3) advances abstract questions of wide public significance essentially amounting to generalized grievances more appropriately addressed to the representative branches.
Shamus Holdings, Slip op. at *6 (citing Newcare, 244 B.R. at 170)(emphasis in original).

To have standing to seek relief from the automatic stay, Deutsche Bank was required to establish that it is a party in interest and that it is asserting its rights and not those of another entity. In In re Woodberry, 383 B.R. 373 (Bankr.D.S.C. 2008), the court observed:

“Generally, the `real party in interest’ is the one who, under the applicable substantive law, has the legal right which is sought to be enforced or is the party entitled to bring suit.” In re Comcoach Corp., 698 F.2d 571, 573 (2nd Cir.1983) (citations omitted). While Comcoach has been criticized as unduly restrictive in the interpretation of “party in interest”, its general principle that “party in interest standing does not arise if a party seeks to assert some right that is purely derivative of another party’s rights in the bankruptcy proceeding” survives. In re Refco, 505 F.3d 109, 115 fn. 10 (2nd Cir.2007).
Woodberry, 383 B.R. at 379. Courts have held that mortgage servicers are parties in interest with standing by virtue of their pecuniary interest in collecting payments under the terms of the notes and mortgages they service. 383 B.R. at 379. See also In re Conde-Dedonato, 391 B.R. 247, 2008 WL 2873356 at *2 (Bankr.E.D.N.Y. July 22, 2008) (“A servicer of a mortgage is clearly a creditor and has standing to file a proof of claim against a debtor pursuant to its duties as a servicer.”).

Under Massachusetts law, a mortgage is an interest in real estate and an assignment is a conveyance of that legal estate in the mortgaged premises. An assignment need not be recorded. See generally Arthur L. Eno, Jr. and William V. Hovey, Assignment of Mortgage, 28 Mass. Prac., Real Estate Law, § 9.49 (4th ed.). “The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal … or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power….” Mass. Gen. Laws ch. 244, § 14. See In re Huggins, 357 B.R. 180 (Bankr.D.Mass.2006). Thus, a mortgagee or an entity with a valid assignment may foreclose on real estate in Massachusetts and seek relief from the automatic stay to do so. Moreover, a title is not defective “by reason of: … [t]he recording of an Assignment of Mortgage executed either prior, or subsequent, to foreclosure where said Mortgage has been foreclosed, of record by the Assignee.” 268 28B Mass. Prac. Series REBA Tit. Std. No. 58.

B. Deutsche Bank’s Motion for Relief from Stay

The foregoing provisions of Massachusetts law do not assist Deutsche Bank or establish its standing to file the Motion for Relief from Stay which is now before the Court. In this case, Deutsche Bank filed its Motion for Relief from Stay, as Trustee of Argent Mortgage Securities, Inc. [sic], an entity which was not a party to the PSA. It failed to prove that the mortgage executed by the Debtor and her mother in favor of Argent Mortgage Company, LLC was ever assigned to an entity by that name or to Argent Securities Inc., the Depositor under the PSA. The Confirmatory Corporation Assignment of Deed of Trust/Mortgage, dated April 16, 2008 (Exhibit 3), which was executed some seven months after the filing of the Motion for Relief from Stay, pursuant to which Argent Mortgage Company, LLC conveyed the mortgage on the Perkins Avenue property to Deutsche Bank was ineffective because Citi Residential Lending, Inc. lacked authority under the Limited Power or Attorney to assign the mortgage to Deutsche Bank on behalf of Argent Mortgage Company, LLC. Moreover, Deutsche Bank failed to submit any evidence that the November 3, 2004 mortgage was included in the PSA or was subject to Section 2.09 of the PSA as neither Schedule 1 to the PSA nor a Mortgage Loan Schedule attached to a Subsequent Transfer Instrument were submitted into evidence. Thus, consistent with the holdings in In re Maisel, 378 B.R. at 22, and In re Parrish, 326 B.R. 708, 719 (Bankr.N.D.Ohio 2005), the Court finds that Deutsche Bank failed to adequately trace the loan from the original holder, Argent Mortgage Company, LLC, to it. See also In re Foreclosure Cases, No. 1:07CV2282, 2007 WL 3232430 (N.D.Ohio Oct.31, 2007). Additionally, the Debtor’s reference to Deutsche Bank as a secured creditor in several of her proposed Chapter 13 plans cannot confer standing on it as a party in interest for purposes of its Motion for Relief from Stay. See In re Newcare Health Corp., 244 B.R. at 170 (“`a defect in standing cannot be waived.’”).

In In re Schwartz, 366 B.R. 265 (Bankr. D.Mass.2007), the court observed:

[I]t 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, it is no wonder that it is often difficult for unsophisticated borrowers to be certain of the identity of their lenders and mortgagees.
Id. at 266. In In re Nosek, 386 B.R. 374, 380 (Bankr.D.Mass.2008), a case involving Ameriquest Mortgage Company, an affiliate of Argent Mortgage Company, LLC and AMC, the court again chronicled the “the confusion and lack of knowledge, or perhaps sloppiness” which characterize practices in the residential mortgage industry, in particular, the failure by mortgage companies to document their standing. The court observed the following:

… “[M]istakes” and misrepresentations… [are not] … limited to the identification of roles played by various entities in this industry. In re Schuessler, 386 B.R. 458, 2008 WL 1747935, *3 (Bankr. S.D.N.Y.2008) (movant’s motion misrepresented debtor’s equity); Porter, Katherine M., “Misbehavior and Mistake in Bankruptcy Mortgage Claims” (November 6, 2007). University of Iowa Legal Studies Research Paper No. 07-29. Available at SSRN: http://ssrn.com/abstract=1027961. As this Court has noted on more than one occasion, those parties who do not hold the note or 269 mortgage and who do not service the mortgage do not have standing to pursue motions for relief or other actions arising from the mortgage obligation. Schwartz, 366 B.R. at 270. The Court has had to expend time and resources, as have debtors already burdened in their attempts to pay their mortgages, because of the carelessness of those in the residential mortgage industry and the bombast this Court and others have encountered when calling them on their shortcomings. In re Foreclosure Cases, 2007 WL 3232430 at *3, n. 1.
Nosek, 386 B.R. at 380.

Although courts have been addressing the issues raised by Bankruptcy Judge Rosenthal in the Nosek case for some time, see In re Foreclosure Cases, No. 1:07CV2282, 2007 WL 3232430 (N.D.Ohio Oct.31, 2007), problems associated with the practices are amplified in the instant case. The mortgage lender, its affiliates, assignees, and agents involved in this case, through the convoluted process of securitization, the submission of a 191-page, incomplete PSA, and reliance upon back-dated, unrecorded assignments, have confounded the identity of the current holder of the mortgage for the purpose of filing the Motion for Relief from Stay, as well as the proof of claim. The Court and the Debtor are entitled to insist that the moving party establish its standing in a motion for relief from stay through the submission of an accurate history of the chain of ownership of the mortgage. Absent such proof, relief from stay is unwarranted and a proof of claim filed by the wrong party, to which an objection is filed, must be disallowed.

Massachusetts Local Bankruptcy Rule 4001-1(b)(f) requires a movant to state “the original holder of the obligations secured by the security interest and/or mortgage and every subsequent transferee, if known to the movant, and whether the movant is holder of that obligation or an agent of the holder….” Inaccurate representations about the moving party’s status as a holder may constitute a violation of Fed. R. Bankr.P. 9011 and may warrant sanctions under 28 U.S.C. § 1927. Given the tangle of inconsistent and incomplete documents introduced into evidence purporting to establish Deutsche Bank as the holder of the Debtor’s mortgage, which were submitted during a two-day trial and required intensive scrutiny of hundreds of pages of documents, sanctions may be appropriate. See In re Nosek, 386 B.R. 374 (Bankr.D.Mass.2008).

C. The Proof of Claim

Pursuant to Fed. R. Bankr.P. 3001(f), “[a] proof of claim executed and filed in accordance with the Federal Rules of Bankruptcy Procedure constitutes prima facie evidence of the validity and amount of the claim.” See In re Long, 353 B.R. 1, 13 (Bankr.D.Mass.2006). See also Juniper Dev. Group v. Kahn (In re Hemingway Transp., Inc.), 993 F.2d 915, 925 (1st Cir.1993). In order to rebut the prima facie evidence, the objecting party must produce “substantial evidence,” and, if the objecting party produces substantial evidence in opposition to the proof of claim, rebutting the prima facie evidence, the burden shifts to the claimant to establish the validity of its claim. Long, 353 B.R. at 13 (citations omitted).

The proof of claim filed by AMC did not initially comply with Fed. R. Bankr.P. 3001(c) and (d), although it contained a reference to a “Summary of Exhibits,” including the note, mortgage and “Certificate of Assistant Secretary,” which exhibits were not attached. The Debtor objected to the claim, raising an issue under Rule 3001(c) and (d). Accordingly, AMC had the burden of establishing the 270 validity of the claim it filed—a burden assumed, sub silentio, by Deutsche Bank. Deutsche Bank submitted no evidence that Argent Mortgage Company, LLC executed a servicing agreement with AMC, although Rodriguez-Tapia testified that Ameriquest Mortgage Company created AMC to service its loans. Accordingly, the transfer of the claim by AMC to Citi Residential Lending, Inc. as loan servicer for Deutsche Bank under the PSA was insufficient for this Court to trace the claim from Argent Mortgage Company, LLC to AMC and from AMC to Argent Securities Inc. who sold the certificates backed by mortgages to Deutsche Bank pursuant to the PSA.

IV. CONCLUSION

As noted above, Deutsche Bank failed to establish that Argent Mortgage Company, LLC effectively assigned the mortgage executed by the Debtor to it or that Argent Mortgage Company, LLC’s grant of authority to Citi Residential Lending, Inc. under the Limited Power of Attorney (Exhibit 4) was sufficient to empower Citi Residential Lending, Inc. to execute the Confirmatory Corporation Assignment, dated April 16, 2008, on its behalf, so as to effectively transfer the mortgage on the Perkins Avenue property from Argent Mortgage Company, LLC to Deutsche Bank. Moreover, Argent Mortgage Company, LLC was not a party to the PSA and Deutsche Bank failed to submit evidence that Argent Mortgage Company, LLC ever conveyed its rights in and to the mortgage on the Perkins Avenue property to Argent Securities Inc.

As the court noted in In re Nosek, 386 B.R. 374, 380 (Bankr.D.Mass.2008), “those parties who do not hold the note or mortgage and who do not service the mortgage do not have standing to pursue motions for relief or other actions arising from the mortgage obligation.” Id. at 380 (citing In re Schwartz, 366 B.R. at 270). Because Deutsche Bank has failed to establish its standing to seek relief from the automatic stay and to defend the Debtor’s Objection to the proof of claim filed by AMC, the Court shall enter an order denying Deutsche Bank’s Motion for Relief from Stay. The Court shall also enter an order sustaining the Debtor’s Objection to the proof of claim without prejudice to reconsideration under 11 U.S.C. § 502(j) upon the filing of an amended proof of claim by the proper party. See also Fed. R. Bankr.P. 3008. The Court shall defer issues relating to lien avoidance pending submission of an amended claim or the filing of an amended plan.[9]

The Court shall enter orders consistent with the foregoing rulings.

[1] As discussed below, Deutsche Bank is a party to a Pooling and Service Agreement, dated as of October 1, 2004. The Depositor under the Pooling and Service Agreement, namely the seller of pass-through certificates reflecting beneficial ownership interests in certain real estate mortgage investment conduits, is Argent Securities Inc., not Argent Mortgage Securities, Inc. Under the Pooling and Service Agreement, the Trustee of the Trust Fund, consisting of a segregated pool of assets comprised of mortgage loans and certain other related assets, is Deutsche Bank National Trust Company. Deutsche Bank erroneously identified itself in its own Motion.

[2] In its Response, AMC identified itself as the servicer for the holder of the mortgage on 232 Perkins Avenue, Brockton, Massachusetts owned by the Debtor and her mother, Tina Hayes. It did not, however, specifically identify the holder of the mortgage. In the Motion for Relief from Stay filed approximately two months earlier, Deutsche Bank identified itself as the holder of the mortgage.

[3] The Court takes judicial notice that the Debtor filed Case No. 06-11255-JNF on May 3, 2006, and Case No. 06-12851-JNF on August 23, 2006. Her mother, Tina Hayes, filed Case No. 06-10565-WCH on March 13, 2006, Case No. 06-11599-RS on May 30, 2006, and Case No. 06-13311-WCH on September 22, 2006.

[4] The delinquent payments were set forth as follows: sixteen payments at $2,514.28 each for the period September 1, 2005 through December 1, 2006; five payments at $2,972.50 each for the period January 1, 2007 through May 1, 2007; and one payment at $3,199.25 for June 1, 2007. The late fees ($1,741.96), property inspection fees ($327.00), foreclosure fees and costs ($10,947.96), appraisal fees ($535), bankruptcy attorneys’ fees ($1,334.42), bankruptcy costs ($300), and foreclosure attorneys’ fees ($2,200) totaled $17,386.34.

[5] Deutsche Bank also introduced as Exhibit 5 an “Incumbency Certificate,” dated October 23, 2007, executed by Kathleen Wood-Wagner, the Secretary of Citi Residential Lending, Inc., purportedly attesting to Tamara Price’s authority to execute the Confirmatory Corporation Assignment. It did not submit evidence that Tamara Price retained that authority after October 23, 2007. Thus, it unclear whether she retained that authority on April 16, 2008, the date she executed the Confirmatory Corporation Assignment.

[6] The limited nature of the power of attorney is further emphasized in the document, which provides “[T]his appointment is to be construed and interpreted as a limited power of attorney. The enumeration of specific items, rights, acts or powers herein is not intended to, nor does it give rise to, and is not to be construed as a general power of attorney.”

[7] Deutsche Bank noted that Argent Mortgage Company, LLC was identified as an “Originator” in the PSA. See Exhibit 6 at p. 41, not p. 44 as cited by Deutsche Bank. Deutsche Bank failed to explain the relationship between Argent Securities Inc. and Argent Mortgage Company, LLC, in its capacity as an originator, and Argent Securities Inc.’s ownership of pass-through certificates backed by the mortgage originated by Argent Mortgage Company, LLC remains unclear. Deutsche Bank failed in its burden to explain the relationship and how it affects its standing.

[8] During final argument by Debtor’s counsel, after both parties had rested and the evidence was closed, counsel to the Debtor attempted to introduce into evidence two additional documents for the reason that they were attached to a pleading filed by Deutsche Bank, namely: 1) an “Assignment of Mortgage,” dated November 3, 2004, pursuant to which Argent Mortgage Company, LLC assigned the mortgage executed by the Debtor and Tina Hayes on that day to Ameriquest Mortgage Company; and 2) a “Corporation Assignment of Deed of Trust/Mortgage,” dated February 4, 2008, pursuant to which AMC Mortgage Services, Inc. by its Attorney-in-Fact, Citi Residential Lending, Inc., assigned the mortgage executed by the Debtor and Tina Hayes to Deutsche Bank. The Court sustained Deutsche Bank’s objection to the introduction of the documents.

[9] In view of the foregoing, the Court need not address issues raised by both parties with respect to the Debtor’s burden of establishing the existence of a plan in prospect under 11 U.S.C. § 362(d)(2)(B). The Court notes that the Debtor may have won a battle, but she still may lose the war. The evidence established that the Debtor has made a total of two postpetition mortgage payments in the 14 months her Chapter 13 case has been pending and that she had incurred substantial mortgage arrears at the time of the commencement of her second Chapter 13 case. Although the holder of the mortgage may be in doubt, the Debtor’s inadequate income and questionable ability to make mortgage and plan payments from self-employment is not. Outstanding issues remain and include whether the claim securing the Perkins Avenue property can be modified, and whether she can propose a feasible plan. The Court has sustained objections to her First Amended Chapter 13 plan because it had a balloon payment feature. At this time, she does not have a confirmable plan before the Court.

Finding the laws that govern us

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Finding the laws that govern us

11/17/2009 09:05:00 AM
As many of us recall from our civics lessons in school, the United States is a common law country. That means when judges issue opinions in legal cases, they often establish precedents that will guide the rulings of other judges in similar cases and jurisdictions. Over time, these legal opinions build, refine and clarify the laws that govern our land. For average citizens, however, it can be difficult to find or even read these landmark opinions. We think that’s a problem: Laws that you don’t know about, you can’t follow — or make effective arguments to change.

Starting today, we’re enabling people everywhere to find and read full text legal opinions from U.S. federal and state district, appellate and supreme courts using Google Scholar. You can find these opinions by searching for cases (like Planned Parenthood v. Casey), or by topics (like desegregation) or other queries that you are interested in. For example, go to Google Scholar, click on the “Legal opinions and journals” radio button, and try the query separate but equal. Your search results will include links to cases familiar to many of us in the U.S. such as Plessy v. Ferguson and Brown v. Board of Education, which explore the acceptablity of “separate but equal” facilities for citizens at two different points in the history of the U.S. But your results will also include opinions from cases that you might be less familiar with, but which have played an important role.

We think this addition to Google Scholar will empower the average citizen by helping everyone learn more about the laws that govern us all. To understand how an opinion has influenced other decisions, you can explore citing and related cases using the Cited by and Related articles links on search result pages. As you read an opinion, you can follow citations to the opinions to which it refers. You can also see how individual cases have been quoted or discussed in other opinions and in articles from law journals. Browse these by clicking on the “How Cited” link next to the case title. See, for example, the frequent citations for Roe v. Wade, for Miranda v. Arizona (the source of the famous Miranda warning) or for Terry v. Ohio (a case which helped to establish acceptable grounds for an investigative stop by a police officer).

As we worked to build this feature, we were struck by how readable and accessible these opinions are. Court opinions don’t just describe a decision but also present the reasons that support the decision. In doing so, they explain the intricacies of law in the context of real-life situations. And they often do it in language that is surprisingly straightforward, even for those of us outside the legal profession. In many cases, judges have gone quite a bit out of their way to make complex legal issues easy to follow. For example, in Korematsu v. United States, the Supreme Court justices present a fascinating and easy-to-follow debate on the legality of internment of natural born citizens based on their ancestry. And in United States v. Ramirez-Lopez, Judge Kozinski, in his dissent, illustrates the key issue of the case using an imagined good-news/bad-news dialogue between the defendant and his attorney.

We would like to take this opportunity to acknowledge the work of several pioneers, who have worked on making it possible for an average citizen to educate herself about the laws of the land: Tom Bruce (Cornell LII), Jerry Dupont (LLMC), Graham Greenleaf and Andrew Mowbray (AustLII), Carl Malamud (Public.Resource.Org), Daniel Poulin (LexUM), Tim Stanley (Justia), Joe Ury (BAILII), Tim Wu (AltLaw) and many others. It is an honor to follow in their footsteps. We would also like to acknowledge the judges who have built this cathedral of justice brick by brick and have tried to make it accessible to the rest of us. We hope Google Scholar will help all of us stand on the shoulders of these giants.

Posted by Anurag Acharya, Distinguished Engineer

Sal D’Anna

Mortgage Revocation Seminar

Mortgage Revocation Seminar

MORTGAGE REVOCATION SEMINAR

NOVEMBER 27-28, 2009, 10 AM TO 5:00 PM

Where:
Freedoms Phoenix Workshop
750 W Amelia Ave (Major Crossroads: 7th Ave and Indian School)
Phoenix, AZ 85013
(623) 252-9CAM (CameraFRAUD Even

2-DAY MORTGAGE WORKSHOP: HOW TO STOP FORECLOSURES!

Mickey Palotea of Harrisburg, Pennsylvania is once again coming to Phoenix on November 28 and 29, 2009 for a 2-Day Workshop: How to Stop Foreclosures! This will be the formal start of our group. If you want to save your home(s) you will need to be there. ALL are welcome. We will go over the process, laws, rules and documents for court.

The Harrisburg, Pennsylvania group has had 150+ wins and only 4 losses so far. We know what caused the losses and it will not be repeated. People have beaten the banks and we are developing a boiler plate document to kick the banks butt in State or Federal court. We would like to file the documents within a couple of weeks after that.

ALL mortgages are illegal, ab initio, and you owe the bank nothing. They never lent you money, it was a scam from the beginning. Our goal is to get at least 200 people to go down to the court at one time in Phoenix and file the documents to stop the banks. It does not matter if you already lost the house to foreclosure, if they are currently foreclosing, if you are not even close to losing the house, or even if it was an investment home. We would like to file the documents within a couple of weeks after this workshop.

There is no charge, no fees, etc. It’s all free. Everyone is donating their time and resources to help people keep their homes and squash the banks before they squash us.

You can pass this information around. If interested, you will need to attend a meeting and learn about what is going on and start doing paperwork very soon.

We are here to help you and to stop the banks. We are not here to make a profit from you. We all work together and no one charges or pays anyone. You will fill in your own documents and go down and file them yourself. Everyone shares all the information and helps each other. If you are not willing to help and are only in it for yourself, we don’t need you. But, if you want to save your home and maybe your country, and don’t want to pay an attorney, and are willing to do the work and help others, this is where you need to be. We are winning, and you will probably get to keep your home and never make another payment. You may even be able to get back homes lost, or compensation for such.

Notes:
It looks like a lot of people are coming. Lunch break will be between 1:15 and 1:45 p.m. There are a 7-11 and a Taco Bell across the street, but I advise bringing your own drinks and munchies. If you have folding or collapsible chairs, I would bring at least one for yourself, or prepare to stand.

Again, there is no charge. However we do have costs we will be accepting donations for the generous use of the meeting space. This way they can keep its doors open and water the tree of liberty.

The workshop will be video taped and anyone who brings blank DVDs can have copies made right then and there, at least for yourself and a few others.

Be sure to bring a pen and paper!

–
Abby Clarke
602-465-1100
abby1100@gmail.com

Federal Rules of Civil Procedure

Federal Rules of Civil Procedure
From Wikipedia, the free encyclopedia
Civil procedure in the United States
Federal Rules of Civil Procedure
Doctrines of civil procedure
Jurisdiction
Subject-matter jurisdiction
Diversity jurisdiction
Personal jurisdiction
Removal jurisdiction
Venue
Change of venue
Forum non conveniens
Pleadings and motions
Service of process
Complaint
Cause of action
Case Information Statement
Class action
Class Action Fairness Act of 2005
Demurrer
Answer
Affirmative defense
Reply
Counterclaim
Cross-claim
Joinder
Indispensable party
Impleader
Interpleader
Intervention
Pre-trial procedure
Discovery
Interrogatories
Depositions
Request for Admissions
Resolution without trial
Default judgment
Summary judgment
Voluntary dismissal
Involuntary dismissal
Settlement
Trial
Parties
Plaintiff
Defendant
Jury
Voir dire
Burden of proof
Judgment
Judgment as a matter of law (JMOL)
Renewed JMOL (JNOV)
Motion to set aside judgment
New trial
Remedy
Injunction
Damages
Attorney’s fees
American rule
English rule
Declaratory judgment
Appeal
Mandamus
Certiorari
view/edit this box
The Federal Rules of Civil Procedure (FRCP) are rules governing civil procedure in United States district (federal) courts, that is, court procedures for civil suits. The FRCP are promulgated by the United States Supreme Court pursuant to the Rules Enabling Act, and then approved by the United States Congress. The Court’s modifications to the rules are usually based on recommendations from the Judicial Conference of the United States, the federal judiciary’s internal policy-making body. Although federal courts are required to apply the substantive law of the states as rules of decision in cases where state law is in question, the federal courts almost always use the FRCP as their rules of procedure. (States determine their own rules, which apply in state courts, though most states have adopted rules that are based on the FRCP.)
The Rules, established in 1938, replaced the earlier Field Code and common law pleading systems. Significant revisions have been made to the FRCP in 1948, 1963, 1966, 1970, 1980, 1983, 1987, 1993, 2000, and 2006. (The FRCP contains a notes section that details the changes of each revision since 1938, explaining the rationale behind the language). The revisions that took effect in December 2006 made practical changes to discovery rules to make it easier for courts and litigating parties to manage electronic records.
The Federal Rules of Civil Procedure were completely rewritten, effective December 1, 2007, under the leadership of a committee headed by law professor and editor of Black’s Law Dictionary, Bryan A. Garner, for the avowed purpose of making them easier to understand. The style amendments were not intended to make substantive changes in the rules.
Before the FRCP were established, common law pleading was more formal, traditional, and particular in its phrases and requirements. For example, a plaintiff bringing a trespass suit would have to mention certain key words in his complaint or risk it being dismissed with prejudice. In contrast, the FRCP is based on a legal construction called notice pleading, which is less formal, created and modified by legal experts, and far less technical in requirements. In notice pleading, the same plaintiff bringing suit would not face dismissal for lack of the exact legal term, so long as the claim itself was legally actionable. The policy behind this change is to simply give “notice” of your grievances, and leave the details for later in the case. This acts in the interest of equity by concentrating on the actual law and not the exact construction of pleas.
Thirty-five states have adopted the federal rules as their own procedural code.
In addition to notice pleading, a minority of states (e.g., California) use an intermediate system known as code pleading. Code pleading is an older system than notice pleading and is based on legislative statute. It tends to straddle the gulf between obsolete common-law pleading and modern notice pleading. Code pleading places additional burdens on a party to plead the “ultimate facts” of its case, laying out the party’s entire case and the facts or allegations underlying it. Notice pleading, by contrast, simply requires a “short and plain statement” showing only that the pleader is entitled to relief. (FRCP 8(a)(2)). One important exception to this rule is that when a party alleges fraud, that party must plead the facts of the alleged fraud with particularity. (FRCP 9(b)).
(The Field Code was an intermediate step between common law and modern rules, created by New York attorney David Dudley Field. Adopted 1848–50. Field’s code, among other reforms, merged law and equity proceedings into one.)
Contents [hide]
1 Chapters of Rules
1.1 Chapter I – Scope of the FRCP
1.2 Chapter II – Commencement of Suits
1.3 Chapter III – Pleadings and Motions
1.4 Chapter IV – Parties
1.5 Chapter V – Discovery
1.6 Chapter VI – Trial
1.7 Chapter VII – Judgment
1.8 Chapter VIII – Provisional and Final Remedies
1.9 Chapter IX – Special Proceedings
2 References
3 See also
4 External links
[edit]Chapters of Rules

There are 86 rules in the FRCP, which are grouped into 11 chapters. Listed below are the most commonly used categories and rules.
[edit]Chapter I – Scope of the FRCP
Rules 1 and 2.
Chapter I is a sort of “mission statement” for the FRCP, especially Rule 1, which states that the rules “shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.” Rule 2 unified the procedure of law and equity in the federal courts by specifying that there shall be one form of action, the “civil action.”
[edit]Chapter II – Commencement of Suits
Rules 3 to 6.
Chapter II covers commencement of civil suits including filing, summons, and service of process. Rule 3 provides that a civil action is commenced by filing a complaint with the court. Rule 4 deals with procedure for issuance of a summons when the complaint is filed and service of the summons and complaint on the defendants. Rule 5 requires that all papers in an action be served on all parties and filed with the court. Rule 6 deals with technical issues concerning computation of time and authorizes the courts to extend certain deadlines in appropriate circumstances.
[edit]Chapter III – Pleadings and Motions
Rules 7 to 16.
Chapter III covers pleadings, motions, defenses, and counterclaims. The plaintiff’s original pleading is called a complaint. The defendant’s original pleading is called an answer.
Rule 8(a) sets out the plaintiff’s requirements for claim: a “short and plain statement” of jurisdiction, a “short and plain statement” of the claim, and a demand for judgment. It also allows relief in the alternative, so the plaintiff does not have to pre-guess the remedy most likely to be accepted by the court.
Rule 8(b) states that the defendant’s answer must admit or deny every element of the plaintiff’s claim.
Rule 8(c) also requires that the defendant’s answer state any affirmative defenses.
Rule 11 requires all papers to be signed by the attorney (if party is represented). It also provides for sanctions against the attorney or client for harassment, frivolous arguments, or a lack of factual investigation. The purpose of sanctions is deterrent, not punitive. Courts have broad discretion about the exact nature of the sanction, which can include consent to in personam jurisdiction, fines, dismissal of claims, or dismissal of the entire case. The current version of Rule 11 is much more lenient than its 1983 version. Supporters of tort reform in Congress regularly call for legislation to make Rule 11 stricter.
Rule 12(b) describes pretrial motions that can be filed.
lack of subject matter jurisdiction
lack of personal jurisdiction
improper venue
insufficient process
insufficient service of process
failure to state a claim
failure to join a party under Rule 19.
The Rule 12(b)(6) motion, which replaced the common law demurrer, is how lawsuits with insufficient legal theories underlying their cause of action are dismissed from court. For example, assault requires intent, so if the plaintiff has failed to plead intent, the defense can seek dismissal by filing a 12(b)(6) motion. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955 (No. 05-1126) (2007) (citations, internal quotation marks and footnote omitted). 12(b)(6) is the second of three procedural “hurdles” a cause of action must surmount before it gets to a trial (the first are the two jurisdictional dismissals, found in 12 (b)(1) and (2), and the third is summary judgment, found in Rule 56). A 12(b)(6) motion cannot include additional evidence such as affidavits. To dispose of claims with insufficient factual basis (where the movant must submit additional facts to demonstrate the factual weakness in the plaintiff’s case), a Rule 56 motion for summary judgment is used.
Rules 12(g) and 12(h) are also important because they state that if 12(b)(2)-12(b)(5) motions are not properly bundled together or included in an answer/allowable amendment to an answer, they are waived. Additionally, because 12(b)(1) motions are so fundamental, they may never be waived throughout the course of litigation, and 12(b)(6) and 12(b)(7) motions may be filed at any time until trial ends.
Rule 13 describes when a defendant is allowed or required to assert claims against other parties to the suit (joinder). The law encourages people to resolve all of their differences as efficiently as possible, so in many jurisdictions counterclaims that arise out of the same transaction or occurrence (compulsory counterclaims) must be brought during the original suit or they will be barred from future litigation (preclusion).
Rule 14 allows parties to bring in other third parties to a lawsuit.
Rule 15 allows pleadings to be amended or supplemented. Plaintiffs may amend once before an answer is filed, a defendant can amend once within 20 days of serving an answer, and if there is no right to amend, seek leave of court (“leave shall be given when justice so requires.”)
[edit]Chapter IV – Parties
Rules 17 to 25. Rule 17 states that all actions must be prosecuted in the name of the real party in interest, that is, the plaintiff must be person or entity whose rights are at issue in the case.
Rule 18 – Joinder of Claims and Remedies – states that a plaintiff who may plead in a single civil action as many claims as the plaintiff has against a defendant, even if the claims are not related, and may request any remedy to which the law entitles the plaintiff. Of course, each claim must have its own basis for jurisdiction in the court in which it is brought or be subject to dismissal.
Rule 19 – Compulsory Joinder of Parties – if a person is who is not a party to the suit is “necessary” to just adjudiciation the action, under the criteria set forth in subsection (a), then upon motion of any party that person shall be made a party, served with suit, and required to participate in the action. If the person cannot be made a party for any reason, such as lack of jurisdiction, inability to be located, etc., then the court uses the criteria in subsection (b) to determine if the absent party is “indispensable”. If so, the action must be dismissed.
Rule 20 Permissive Joinder of Parties. Joinder of parties at common law was controlled by the substantive rules of law, often as reflected in the forms of action, rather than by notions of judicial economy and trial convenience. Permissive joinder of plaintiffs allows the plaintiffs having an option to join their claims when they were not joint. (Ryder v. Jefferson Hotel Co.)
Rule 23 governs the procedure for class action litigation. In a class action, a single plaintiff or small group of plaintiffs seeks to proceed on behalf of an entire class who allegedly have been harmed by the same conduct by the same defendants. Court approval is required for this procedure to be used. Rule 23.1 governs derivative suits in which a plaintiff seeks to assert a right belonging to a corporation (or similar entity) in which the plaintiff is a shareholder, on behalf of the corporation that is not pursuing the claim itself. Rule 23.2 governs actions by or against unincorporated associations.
[edit]Chapter V – Discovery
Rules 26 to 37.
Chapter V covers the rules of discovery. Modern civil litigation is based upon the idea that the parties should not be subject to surprises at trial. Discovery is the process whereby civil litigants seek to obtain information both from other parties and from non parties (or third parties). Parties have a series of tools with which they can obtain information: 1) Document requests: a party can seek documents and other real objects from parties and non parties 2) Interrogatories: a party can require other parties to answer 25 questions 3) Requests for admissions: A party can require other parties to admit or deny the truth of certain statements 4) Depositions: A party can require at most 10 individuals or representatives of organizations to make themselves available for questioning for a maximum of one day of 7 hours, without obtaining leave of court.
Federal procedure also requires parties to divulge certain information without a formal discovery request, in contrast to many state courts where most discovery can only be had by request.
[edit]Chapter VI – Trial
Rules 38 to 53.
Chapter VI deals generally with the trial of civil actions, although some other topics are also included. Rules 38 and 39 deal with the parties’ right to a trial by jury and the procedure for requesting a jury trial instead of a bench trial. These rules must be construed in light of the Seventh Amendment to the United States Constitution, which preserves a right to jury trial in most actions at common law (as opposed to equity cases). Rule 40 deals in general terms with the order in which cases will be scheduled for trial and has little significance in practice.
Rule 41 deals with dismissal of actions. An action may be voluntarily dismissed at any time by the plaintiff prior to the defendant’s filing of an Answer or Motion for Summary Judgment[1]. In such an instance, the court retains jurisdiction only to award attorneys fees or costs (in rare circumstances). With certain exceptions (e.g. class actions), an action may also be dismissed at any time by agreement of the parties (e.g. when the parties reach a settlement). An action may also be involuntarily dismissed by the court if the plaintiff fails to comply with deadlines or court orders.
Rule 42 deals with consolidation of related cases or the holding of separate trials. Rule 43 addresses the taking of testimony, which is to be taken in open court whenever possible. Rule 44 governs authentication of official records.
Rule 45 deals with subpoenas. A subpoena commands a person to give testimony, to produce documents for inspection and copying, or both. Although included in the Chapter headed “trials,” subpoenas can also be used to obtain document production or depositions of non-parties to the litigation during the pre-trial discovery stage.
Rule 46 provides that formal “exceptions” to court rulings are no longer necessary so long as a sufficient record is made of the objecting party’s position.
The next several rules govern jury trials. Rule 47 provides for the selection of jurors and rule 48 governs the number of jurors in a civil case. A civil jury must consist of between six and twelve jurors (six jurors are presently used in the vast majority of federal civil trials; juries of twelve are still required in federal criminal cases). Rule 49 provides for use of “special verdicts” in jury trials, under which the jury may be asked to respond to specific questions rather than just finding liability or non-liability and determining the amount of the damages, if any. Rule 50 addresses situations in which a case is so one-sided that the court may grant “judgment as a matter of law” taking the case from the jury. Rule 51 governs jury instructions.
Rule 52 provides procedure for the judge to hand down findings and conclusions following non-jury trials. Rule 53 governs masters, who are typically lawyers designated by the court to act as neutrals and assist the court in a case.
[edit]Chapter VII – Judgment
Rules 54 to 63.
Rule 56 deals with summary judgment. It is considered the last gate-keeping function before trial, answering the question of whether the claim could even go to a jury. A successful summary judgment motion persuades the court there is no “genuine issue of material fact” and also that the moving party is “entitled to judgment as a matter of law.”
The moving party can show that the disputed factual issues are illusory, can show a lack of genuine issue by producing affidavits or can make a showing through discovery. The movant can point either to the other side’s inadequacies or can affirmatively negate the claim.
The moving party has the burden of production; it has to come up with some evidence that there’s no genuine issue of material fact. Then the burden shifts to the non-moving party, which has to show that the claim is adequate to let it get to the jury. The non-movant can submit affidavits, depositions, and other material.
The burden shifts again to the moving party, which must say that there’s still no genuine issue of material fact. A court grants summary judgment when there is no way the movant can lose at trial. When the moving party is the plaintiff, then it has to show that there’s no way that a jury could find against it.
(A partial summary judgment usually pertains only to certain claims, not the whole case.)
[edit]Chapter VIII – Provisional and Final Remedies
Rules 64 to 71.
This Chapter deals with remedies that may be granted by a federal court – both provisional remedies that may be ordered while the action is pending as well as final relief that may be granted to the winning party at the end of the case.
Rule 64 is captioned “Seizure of Person or Property” and authorizes procedures such as Prejudgment attachment, replevin, and garnishment. In general, these remedies may be awarded when they would be authorized under the law of the state in which the federal court is located – a rare instance in which the Federal Rules of Civil Procedure, generally designed to promote uniformity of practice in the federal districts throughout the country, defer to state law.
Rule 65 governs the procedure on applications for preliminary injunctions and temporary restraining orders.
Rule 65.1 addresses security and suretyship issues arising when the court orders a party to deposit security such as a bond. Rule 66 deals with receivership. Rule 67 deals with funds deposited in court, such as in interpleader actions. Rule 68 governs the offer of judgment procedure under which a party may make a confidential offer of settlement in an action for money damages. Rules 69 and 70 deal with execution of judgments and orders directing a party to take a specific act. Rule 71 deals with the effect of judgments on persons who are not parties to the action.

[edit]Chapter IX – Special Proceedings
Rules 71A to 76.
Chapter IX presently deals with special types of litigation that may take place in the federal courts. A former version of Chapter IX, contained in the original Rules of Civil Procedure, dealt with appeals from a District Court to a United States Court of Appeals. These rules were abrogated in 1967 when they were superseded by the Federal Rules of Appellate Procedure, a separate set of rules specifically governing the Courts of Appeals.
Rule 71A deals with procedure in condemnation actions.
Rule 72 sets forth procedures for matters before United States magistrate judges, including both “dispositive” and “nondispositive” matters, and provides for review of the magistrate judge’s decision by a District Judge. Rule 73 provides that Magistrate Judges may preside over certain trials consistent with statute and upon the consent of all parties.
(There are presently no rules numbered 74 to 76.)
[edit]References

^ Rule 41(A)(1)(a)(i)

notes on filing federal civil cases

from http://www.uscourts.gov/understand03/content_6_1.html

A federal civil case involves a legal dispute between two or more parties. To begin a civil lawsuit in federal court, the plaintiff files a complaint with the court and “serves” a copy of the complaint on the defendant. The complaint describes the plaintiff’s injury, explains how the defendant caused the injury, and asks the court to order relief. A plaintiff may seek money to compensate for the injury, or may ask the court to order the defendant to stop the conduct that is causing the harm. The court may also order other types of relief, such as a declaration of the legal rights of the plaintiff in a particular situation.

To prepare a case for trial, the litigants may conduct “discovery.” In discovery, the litigants must provide information to each other about the case, such as the identity of witnesses and copies of any documents related to the case. The purpose of discovery is to prepare for trial by requiring the litigants to assemble their evidence and prepare to call witnesses. Each side also may file requests, or “motions,” with the court seeking rulings on the discovery of evidence, or on the procedures to be followed at trial.

One common method of discovery is the deposition. In a deposition, a witness is required to answer under oath questions about the case asked by the lawyers in the presence of a court reporter. The court reporter is a person specially trained to record all testimony and produce a word-for-word account called a transcript.
To avoid the expense and delay of having a trial, judges encourage the litigants to try to reach an agreement resolving their dispute. In particular, the courts encourage the use of mediation, arbitration, and other forms of alternative dispute resolution, or “ADR,” designed to produce an early resolution of a dispute without the need for trial or other court proceedings. As a result, litigants often decide to resolve a civil lawsuit with an agreement known as a “settlement.”

If a case is not settled, the court will schedule a trial. In a wide variety of civil cases, either side is entitled under the Constitution to request a jury trial. If the parties waive their right to a jury, then the case will be heard by a judge without a jury.

At a trial, witnesses testify under the supervision of a judge. By applying rules of evidence, the judge determines which information may be presented in the courtroom. To ensure that witnesses speak from their own knowledge and do not change their story based on what they hear another witness say, witnesses are kept out of the courtroom until it is time for them to testify.

A court reporter keeps a record of the trial proceedings.

A deputy clerk of court also keeps a record of each person who testifies and marks for the record any documents, photographs, or other items introduced into evidence.

As the questioning of a witness proceeds, the opposing attorney may object to a question if it invites the witness to say something that is not based on the witness’s personal knowledge, is unfairly prejudicial, or is irrelevant to the case. The judge rules on the objection, generally by ruling that it is either sustained or overruled. If the objection is sustained, the witness is not required to answer the question, and the attorney must move on to his next question. The court reporter records the objections so that a court of appeals can review the arguments later if necessary.

At the conclusion of the evidence, each side gives a closing argument. In a jury trial, the judge will explain the law that is relevant to the case and the decisions the jury needs to make. The jury generally is asked to determine whether the defendant is responsible for harming the plaintiff in some way, and then to determine the amount of damages that the defendant will be required to pay. If the case is being tried before a judge without a jury, known as a “bench” trial, the judge will decide these issues. In a civil case the plaintiff must convince the jury by a “preponderance of the evidence” (i.e., that it is more likely than not) that the defendant is responsible for the harm the plaintiff has suffered.

Rob Harrington

Homeowner – here is some good news for a change.

http://jacksonville.bizjournals.com/jacksonville/stories/2009/11/23/story2.html?surround=etf&ana=e_article&b=1258952400^2472871

We are feverishly attempting to build a database of attorneys who are qualified to do foreclosure defense as a specialty practice. As a homeowner with 2 foreclosures, I understand your frustrations and fears regarding your situation. Millions of Americans are currently subject to foreclosure or have been foreclosed already. Expect 7 million more foreclosures from today.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aw6_gqc0EKKg

I think that over 15,000,000 loans were suspect from 2003 – 2006. This is only my opinion.

There are only a small handful of attorneys (approximately 300?) in the entire US who get this and most all of them will agree that the numbers of these attorneys are too few and far between. Yet, THE GOOD NEWS is homeowners are starting to win cases or are at least getting a little movement on the loan modification front. Check out April Charney’s quiet title action. Notice the banksterman basically downplaying it as if he was saying “just get out of our house because you won on a technicality…” Technically, defrauded homeowners should technically win in court, shouldn’t they, technically speaking of course?

http://jacksonville.bizjournals.com/jacksonville/stories/2009/11/23/story2.html?surround=etf&ana=e_article&b=1258952400^2472871

Here are some things you can do.

1- Keep working hard to find that special attorney. Don’t give up. Think outside the box and be creative with the attorneys you talk to.

http://iamfacingforeclosure.com/blog/2009/11/17/howto-loan-audits-and-qualified-attorneys/

2- Attempt to show good faith in trying to work with your lender. This may come in handy later in your case if it gets that far. Free house in NY?

http://livinglies.wordpress.com/2009/11/20/ny-judges-rock-indymac-bank-f-s-b-v-yano-horoski/

3- Keep researching. Find every foreclosure website you can surfing the net. There are a dozens of them I have found relevant information on and knowledge is power. (Beware of scammers asking for your money – they are all over the place.) Here are some of my *favorite sites for your research:

http://iamfacingforeclosure.com/

http://ml-implode.com/

http://livinglies.wordpress.com/

http://www.msfraud.org/

http://www.foreclosurehamlet.org/

http://brokencredit.com/

http://mariokenny.wordpress.com/

http://HomeEquityTheft.blogspot.com

http://HomeEquityTheft-Cases-Articles.blogspot.com

http://www.thepatriotswar.com/

4- Keep networking. Find others in foreclosure and share information. Create your own social network with others facing foreclosure. This will comfort and build strength through common cause.

5- Keep a database of all your research. It may come in handy for your case.

http://www.consumerlaw.org/

6- Keep a running log of every communication between you and your “lender.” This will aid your case down the road.

7- Think LEVERAGE. The banks are in disarray and their arrogance, greed, and incompetence will only aid you in the future.

8- You have to find that special attorney. Check with Legal aid in your community. Call the State Bar you live in. Again, network with others. Things are actually improving. Pro Se is your last resort but better than just giving up. Prepare to learn law and procedure in your State. With or without representation, you need to understand the rules of their game. Due process, fact and law, are really on your side in today’s situation… if you know the rules.

http://www.jurisdictionary.com/

9- Quit blaming yourself. You were most likely set up to fail at every step in the process. Fight!!!

http://www.truthout.org/013009T

10- Stall. Buy time. Extend time as time may be your best friend. More attorneys are getting into the fight. Governments are starting to bear down for the homeowners’ sake. Things will have to change because litigation and investigations are mounting. The whole mess is dirty. (D- OH) Marci Kaptur, as reported by CNN, gets it. She tells you to stay put and fight. We agree.

11- Be prepared to assist your attorney with research and assistance. Anything you can do to help your attorney to prepare for a better case should lighten the cost you pay to the attorney. Offer to volunteer with their office a few hours a week. Again, get creative.

12- UNITE! The is strength in numbers and knowledge is power. Strength and knowledge builds confidence. Become an activist and save our country – save your home – save the homes of others.

In summary, please understand that I AM FACING FORECLOSURE and other sites and organizations are at the ground floor. The IAFF site, in particular, is in a state of transition. I apologize that the difficulty of finding attorneys who get it, or will help clients out with more affordable representation is very difficult. In other words, we are in a state of construction as the site is changing to meet the demands of the market. If you have found any attorneys that seem to resemble knowledge, belief, flexibility, character, and determination, PLEASE have them contact me so we can add them to the database project. Any other great info you find, please send it on to me and to others.

Most importantly, keep the faith.

Also, if you have not done so, I need to know the State, city you live in, or nearest large city if in a small town or place who doesn’t have the right attorney. I make no guarantees.

Respectfully,
Rob Harrington
(850) 259-6422
**LoanChex, Inc
**(must be hired by your attorney and work under attorney supervision.)

UAE faces up to $184 billion total debt: BofA-Merrill Lynch

UAE faces up to $184 billion total debt: BofA-Merrill Lynch

27 Nov 2009, 1911 hrs IST, REUTERS

LONDON: The United Arab Emirate (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of

America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013. Dubai’s shock announcement this week that it is seeking to suspend payments on debt of its state-owned conglomerate Dubai World and property subsidiary Nakheel has roiled global markets, raising fears that the emirate which funded a spectacular building boom on a mountain of debt could default.

BofA-Merrill Lynch said in a report that the restructuring undertaken by Dubai would be a serious blow to the Gulf region’s economic recovery prospects, adding that the scale of the region’s debt was now the issue.

“The lack of official debt data may add up to uncertainty and cause higher risk premiums,” it said.

Of the $184 billion UAE debt, Dubai holds $88 billion while Abu Dhabi accounts for $90 billion. BofA-Merrill Lynch said the debt servicing cost will be higher than these estimates as their numbers only include the principal payments.

The bank said Dubai faces almost $50 billion of debt amortization in the next three years: $12 billion in 2010, $19 billion in 2011 and $18 billion in 2012.

“We estimate the total debt for Dubai World as $26.5 billion, 80 percent of which needs to be paid back in the next three years,” added BofA-Merrill.

Dubai Friday

The whole financial system seems to be taking hit after hit.

Posted on 11/26/09 at 11:49pm by tradermark

So much for a sleepy Thanksgiving week Friday… a tiny Black Swan called Dubai reared its ugly head. There has been some hand wringing in the UK papers about the debt situation in Greece (all of which ignored by giddy US traders who only know 1 trade anymore:. US dollar down, buy anything), so Dubai was a bit out of left field.

You might say Dubai what? Greece who? Small peanuts… but they key is contagion risk. In the late 90s a small economy (Thailand) caused a series of currency disasters which set the world on fire. Which ironically was the first real use of power by Alan Greenspan to flood the world with US dollars (outside Black Monday 1987)… a now knee jerk reaction to any crisis.

I know you laugh here saying “only $60 B!” – that’s nothing! Heck that’d 1/3rd of an AIG bailout, or 1/3rd of a Citigroup bailout. Heck we committed $13 Trillion of US treasure to backstop the global economy. [Mar 31, 2009: Financial Rescue Package Now Totals $12.8 Trillion] That’s how numb we’ve become to the figures and how epic the use of government/central bank interventions have been in this era… when $60 billion makes many shrug their shoulders. How far we’ve “advanced” in a decade.

Anyhow, the solution is easy… just have Ben print $60B and hand it to Dubai for the “betterment of the world”… and if it affects any of our financial oligarchs just print more money to give to them as well. Problem solved…. after all US dollars are akin to toilet paper nowadays. In fact S&P futures should be up at least 10% because this insures an even more “extended period of” super low rates. What happened to the party everyone?

Via Bloomberg:
Global financial markets swooned Thursday, with London seeing its most precipitous drop in nearly nine months, a day after Dubai stunned investors with the news that it was asking banks to allow its main investment vehicle, Dubai World, to suspend its debt repayments for six months.Standard & Poor’s 500 Index futures dived 2.2 percent.
Dubai World, the government investment company burdened by $59 billion of liabilities, sought to delay repayment on much of its debt.
The announcement — the global high finance equivalent of a homeowner asking the bank to allow six months of skipped mortgage payments, presumably because the homeowner was out of cash — sowed fear of a contagion of instability that could roil markets that are only now recovering from the near cataclysm of the last year.
“People are worried about the contagion effect from Dubai,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which holds $75 billion in assets. “Events like this bring back all the bad memories from the global financial crisis. The market has rallied a long way and is very sensitive to any bad news.”
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the first global recession since World War II. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG.
Like many Western consumers during the good times, Dubai gorged on debt and borrowed too much to finance a building boom that has gone bust in the downturn. When credit markets froze last year, Dubai, like Iceland, found itself overextended. But Dubai, which has no oil, was backed by its Arab emirate neighbors. At least that is what investors had assumed.
The cost of insuring Dubai’s debt against default quadrupled Thursday.
This was one of my 2009 Outlier Predictions [Dec 16, 2008: 13 Outlier 2009 Predictions], but I was focusing mostly on Eastern Europe

#12 Wildcard/Europe: Potential defaults on debt arise in a host of smaller countries – especially of the Eastern European variety. I don’t know which ones, but they have been mini U.S.’s, borrowing over and above their head, but unlike the U.S. do not enjoy the fact the entire world rushes into their debt market when a crisis emerges. The opposite will happen – Iceland & Ecuador are just the precursor. Russia, if low oil prices persist, invades another former satellite country both as a nationalistic reason (diversion to the populace from worsening domestic conditions) and to try to light a fire under European natural gas, and/or oil prices.

Keep an eye on Greece for the next one…maybe Ireland too.

The cost of protecting Greek and Irish government debt against default jumped on Thursday, according to data monitor CMA DataVision, as debt problems in Dubai fuelled risk aversion.
There is one benefit from this… rather than getting the annual CNBC cheerleading about consumer spending from dark mall parking lots across America, we might actually have some useful discussion tomorrow.

Dubai under scrutiny after debt payment delay

I cannot think where all this money went so quickly, this is so unbelievable.

http://news.bbc.co.uk/2/hi/business/8380105.stm

Dubai under scrutiny after debt payment delay

Dubai World has fuelled the emirate’s rapid economic growth of recent years
Dubai’s financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts.
Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year.
Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring.
The company has been hit hard by the global credit crunch and recession.
It was due to repay $3.5bn of its debts next month.

Put simply, everyone in the markets thought that, in the end, the federal government in Abu Dhabi would stand by all of Dubai’s bad bets. Apparently, they won’t.
Stephanie Flanders, BBC economics editor

Dubai: Too big to fail?
Dubai views: ‘The end of the dream’
The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies.
Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008.
This has led to Dubai property prices falling sharply.
‘Shocking’
The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.

ANALYSIS
Ben Thompson, business reporter, Dubai
Financial markets and businesses are closed here for the Eid holiday – some suggest that’s why the announcement was made when it was.
It’s sparked real shock that things have come to this. Just 12 months ago, few could have believed the city would find itself asking for this lifeline. It seems Dubai is now paying the price for living on borrowed money.
Of course, everyone knew the boom couldn’t last forever, but no-one expected it to collapse when, or as suddenly, as it did. Property prices have more than halved over the past year and investors have fled.
The official figure for Dubai’s debt is $80bn, but talk to anyone here and the feeling is the figure is much higher. Unpaid bills, abandoned cars and empty buildings are all too obvious. Some analysts put the real figure at close to $160bn.
“It’s shocking because for the past few months the news coming out has given investors comfort that Dubai would most probably be able to meet its debt obligations,” said analyst Shakeel Sarwar, of SICO Investment Bank.
Dubai is one of the seven self-governing emirates or states that make up the United Arab Emirates.
Analysts say the Dubai government has paid the price for a flamboyant economic model centred on foreign capital and giant construction projects.
Questions are now being raised about Dubai’s ability to repay its debts, said the BBC’s Middle East correspondent Jeremy Howell.
Some have speculated it is likely to turn to the more economically conservative Abu Dhabi emirate to bail it out.
Global credit rating agency Standard & Poor’s, which rules on a company’s or government’s ability to repay its debts, said the announcement “may be considered a [debt] default”.
Our correspondent said: “Standard & Poor’s and Moodys immediately downgraded all six state-backed corporations in Dubai, downgrading some to junk status.”
Junk is the term commonly used to describe bonds that are rated below investment grade by ratings agencies.
The Dubai World announcement was made on the eve of the Eid al-Adha Muslim festival, which will see many government agencies and companies close in Dubai until 6 December.

Warren Winning Means No Sale If You Can’t Explain It (Update1)

This fine lady is my hero, an educated woman who has the intellect of a leader.

Warren Winning Means No Sale If You Can’t Explain It (Update1)

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By Mark Pittman and Bob Ivry

Nov. 19 (Bloomberg) — In Elizabeth Warren’s world, credit card contracts would be so simple a teenager could read and understand them in four minutes. Loans would be as easy to compare as toasters, and online credit scores would be free.

“We need a new model: If you can’t explain it, you can’t sell it,” said Warren, 60, a Harvard University law professor who is head of the Congressional Oversight Panel for the Troubled Asset Relief Program, in an interview.

The 1966 high school debate champion of Oklahoma may get what she wants. The House of Representatives will vote in December on her idea. She suggested a Financial Product Safety Commission in a 2007 article in the magazine Democracy. President Barack Obama proposed it to Congress in June as the Consumer Financial Protection Agency.

Warren won’t discuss whether she may be a candidate to lead the authority, which would have the power to regulate $13.7 trillion of debt products. A Warren nomination would tell banks that Obama is determined to force reduced checking-account fees and limit lender claims in mortgage advertising, among other measures the industry opposes, said Thomas Cooley, dean of New York University’s Stern School of Business.

“She is an ideological crusader,” Cooley said in an interview. “She is a person who will stir up a lot of trouble.” In a column in Forbes magazine, Cooley accused her of “waging a self-righteous holy war.”

The criticism doesn’t bother her, Warren said. She learned to shake things off growing up in Norman, Oklahoma, with three older brothers “in a family of car parts and fist fights,” she said. “It was get tough or die, and I decided to get tough.”

Coors Light

The $700 billion bailout hasn’t stopped the “culture of excessive risk-taking” that led to the financial crisis, Warren said today during an oversight panel hearing. TARP has “injected an unprecedented level of pricing distortions and moral hazard into the marketplace,” she said.

Her detractors confuse prairie-born populism with elitism, probably because of her job, she said in the interview. On the faculty of Cambridge, Massachusetts-based Harvard since 1992, she is the Leo Gottlieb Professor of Law. Before Harvard, she taught law at five other universities in four states.

“Those comments are intended to be nasty, not accurate,” said Warren, who graduated from high school at 16 and said she prefers Coors Light beer over iced tea. “I think a lot of Americans are not sure which side Washington is on, the side of banks or the side of the people.”

Freedom of Choice

Warren is a superstar to anyone who has been baffled by financial fine print, according to Arianna Huffington, editor- in-chief of the Huffington Post, a news and opinion Web site.

“She’s been courageous in a culture where every other official is checking to see if what they’re saying is going to affect their career,” said Huffington, who met Warren when the professor was a guest on CNBC’s “Squawk Box” and Huffington was hosting. “If she doesn’t get the job, it would really mean that the special interests have won.”

A measure the House Financial Services Committee approved on Oct. 22 would empower the consumer agency to set limits on checking account overdraft fees and to ban credit cards with escalating rates and lending practices it deems predatory. Similar legislation is before the U.S. Senate Banking Committee.

If such an authority had existed, Americans might not have taken out the subprime and other mortgages that touched off the recession when house prices fell, Warren said. Congress is rewriting financial rules after the 2007-2008 crisis caused $1.67 trillion in writedowns and losses.

‘Pitchforks and Torches’

The agency’s opponents, including the U.S. Chamber of Commerce, the American Bankers Association and the Financial Services Roundtable, contend another layer of regulation would bury small community banks and rob consumers of freedom of choice in making basic financial decisions.

“It is positively Orwellian that, through this legislation, Democrats will empower an unelected bureaucrat to tell their fellow citizens whether or not they can fly on an airplane, take a vacation or purchase a home,” Representative Jeb Hensarling, a Texas Republican on Warren’s TARP panel, said Oct. 22. He declined through his spokesman, George Rasley, to be interviewed for this story.

If Congress creates the watchdog, the director should have “a working knowledge of how financial institutions operate,” said Scott Talbott, the financial roundtable’s chief lobbyist.

“The time for pitchforks and torches is over,” Talbott said in an interview. “The focus should be on reforming the system and making it better.”

Pork Bellies

Warren’s Wall Street experience consisted of a three-month summer associate position in 1975 at Cadwalader, Wickersham and Taft, the financial district’s oldest law firm, according to its Web site. Her aunt and mother moved to Rockaway, New Jersey, to care for her 4-year-old daughter while Warren worked at 2 Wall Street. At first, she said she thought she was being made fun of as a rookie from the sticks.

“I got out my little notebook, and the senior partner started talking about frozen pork belly futures,” Warren said, recalling an early meeting. “How dumb do they think I am? I wasn’t going to fall for it because I am a sophisticated person. It finally occurs to me that he is serious, and that there is a market for pork bellies.”

At Cadwalader she earned “an astonishing amount of money” that she used to get braces, she said. By the time she received her degree in 1976 from Rutgers School of Law in Newark, New Jersey, she was expecting her second child, Alex. After Wall Street firms showed no interest in hiring a pregnant recent graduate, Warren said she worked from home, writing wills and doing real estate closings for “anyone who came in the door.”

Trusting FDR

“At Cadwalader, I did a $9 million fifth mortgage on a ship,” she said. “In private practice, I worked for a couple starting a little business who had to negotiate some insurance contracts for about $18,000, but it mattered more to them than that ship mortgage mattered to anyone.”

Warren said she probably inherited her populism from her grandparents, who built one-room Indian schools during the Great Depression. While they didn’t understand the financial world, they knew President Franklin D. Roosevelt made their money safe by establishing the Federal Deposit Insurance Corp., she said.

There was little cash to spare during her childhood, she said. Her father was a maintenance man and her mother worked part-time taking catalog orders. Warren didn’t let them know she paid $25 application fees with baby-sitting money until she won a scholarship to George Washington University in Washington.

“Then, I could tell them I could go to college,” she said, “and someone else would pay for it.”

Credit Card Snakes

Warren began at George Washington at 17. At 19, she married mathematician Jim Warren, who worked at the Johnson Space Center in Houston, and finished her degree at the University of Houston. They divorced in 1978. Her second husband, Bruce Mann, is Harvard’s Carl F. Schipper Professor of Law and author of 2002’s “Republic of Debtors: Bankruptcy in the Age of American Independence” (Harvard University Press, 358 pages, $29.95).

Warren said she doesn’t know her credit score — “I assume it’s good” — and maintains zero Visa and MasterCard balances.

“Credit cards are like snakes: Handle ‘em long enough and one will bite you,” she said. “You have to remember what are incomes to banks are outgoes to families.”

Obama, with whom she attended a campaign event during the presidential race, read her work before proposing the consumer agency, according to Warren.

‘Pro-Consumer’

She is the author of nine books, including two with daughter Amelia Tyagi, 38, a former McKinsey & Co. consultant who runs an executive placement office. Tyagi and her mother wrote “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke” (Basic Books, 255 pages, $26) in 2003 and “All Your Worth: The Ultimate Lifetime Money Plan” in 2005 (Free Press, 289 pages, $24.95).

Senate Majority Leader Harry Reid, a Nevada Democrat, appointed Warren to the five-member TARP committee after she impressed him with her “strong pro-consumer views,” according to Jim Manley, Reid’s spokesman.

Warren, who began testifying before Congress more than a decade ago, wasn’t always accepted as a mainstream figure in Washington, said Representative Brad Miller, a North Carolina Democrat. He introduced a bill to create a Financial Product Safety Commission in 2007, and it went nowhere because consumers’ rights weren’t recognized as significant, he said.

“It’s now a very serious proposal,” Miller said in an interview. “If it were not for her, I don’t think it would have gotten this much support. She knew what was important, what was necessary and what would help the bill get through.”

Odd Hours

Barney Frank, chairman of the House Financial Services Committee, called Warren a “great partner” in crafting the legislation. The Massachusetts Democrat said he speaks with her by phone twice a week.

In her role overseeing the TARP, Warren has been critical of the administration, accusing the Treasury Department of undervaluing the stock warrants that were supposed to compensate taxpayers when banks repay their bailouts. A lack of transparency about how TARP functions “erodes the very confidence” it was to restore, her committee said in a report.

Treasury Secretary Timothy Geithner declined to comment for this story through his spokesman, Andrew Williams.

Named in May as one of Time Magazine’s 100 Most Influential People in the World, Warren teaches three days a week at Harvard, flying to Washington and New York for meetings, sometimes stopping just long enough to charge her laptop.

She keeps a pace few could maintain, Miller said.

Jon Stewart

“My last e-mail from her one Saturday night was after 11 p.m. and the first one on Sunday morning came before 7 a.m.,” he said. “It made me think she keeps some odd hours.”

Warren travels to Los Angeles, where her son and daughter live, about every six weeks. She said she was there to share Halloween with her grandchildren, Octavia, 8, and Lavinia, 4, dressed as a sheep to complement Lavinia’s Bo Peep costume.

Her students suggested she be a guest on “The Daily Show with Jon Stewart” on Comedy Central, she said. She was also interviewed by Michael Moore for his documentary, “Capitalism: A Love Story,” in which she makes a one-minute appearance in a segment about TARP.

She’ll “talk to anyone” about consumer protection and her belief that government should stop bank profits earned at the expense of people cheated by “tricks and traps,” she said.

Not Obama Country

“I made a decision at the beginning that the experts wrecked this economy and the public has a right to know what’s going on,” she said. “It’s our economy on the line and the experts can’t be trusted. I want everyone to be part of the solution to how we want to change our economic world. If it’s risky or makes me look stupid to someone, so be it.”

Warren, whose TARP job paid her $114,733.04 through Sept. 30, has a high profile the White House should appreciate, said Damon Silvers, an oversight panel member, in an interview.

“We were out in Colorado at a hearing for rural finance and people came up to her,” Silvers said. “That wasn’t exactly Obama country out there, if you know what I mean.”

Warren reflects Obama’s belief in the good that government can do, said Howard Marks, chairman of Oaktree Capital Management LLC in Los Angeles, who said he met Warren when Huffington brought her to a dinner at his house.

“We found out over the last eight years what kind of regulation you get from an administration that doesn’t believe in regulation,” said Marks, whose firm has about $67 billion in assets under management. “Now we’ll find out what oversight we will have from people who do.”

To contact the reporters on this story: Mark Pittman in New York at mpittman@bloomberg.net; Bob Ivry in New York at bivry@bloomberg.net.

Last Updated: November 19, 2009 16:00 EST