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Leighton Lee Perry

Plaintiff Pro Se

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF CONTRA COSTA

LEIGHTON LEE PERRY, Plaintiff, vs.


JP MORGAN CHASE BANK N.A.; CHASE HOME FINANCE LLC; FEDERAL NATIONAL MORTGAGE ASSOCIATION; QUALITY LOAN SERVICE CORP.; and all persons unknown, claiming any legal or equitable right, title estate, lien or interest in the property described in this Complaint adverse to Plaintiffs title thereto and as DOES 1100, Inclusive,

Case No. MSC10-02914 PLAINTIFFS FIRST AMENDED COMPLAINT MEMORANDUM OF POINTS AND AUTHORITIES

Judge: Hon. Laurel S. Brady Dept: 31 Date: 9:00 a.m.

Defendant.

TABLE OF CONTENTS: 1 2 3 4 5 6 VI. 7 8 9 10 11 IX. 12 A. 13 B. 14 C. 15 D. 16 X. 17 XI. 18 19 20 21 22 23 24 25 26 27 28 i


PERRY v. JPMORGAN CHASE et al -

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I. II. III. IV. V.

INTRODUCTION ...........................................................................................................................1 PARTIES .........................................................................................................................................2 DEMAND FOR JURY TRIAL .......................................................................................................4 STATEMENT OF FACTS ..............................................................................................................5 FIRST CAUSE OF ACTION DECLARATORY RELIEF (as to Defendants FNMA, Chase, JPMorgan, and QLS)............................................................................................................9 SECOND CAUSE OF ACTION SLANDER OF TITLE (as to Defendants FNMA, Chase, JPMorgan, and QLS)..........................................................................................................12 THIRD CAUSE OF ACTION QUIET TITLE (against all Defendants)....................................13 A. REQUIREMENT OF TENDER ........................................................................................15

VII.

VIII.

FOURTH CAUSE OF ACTION VIOLATION OF CALIF. CIVIL CODE 2943 (against Chase, JPMorgan, and FNMA) ........................................................................................17 MEMORANDUM OF POINTS AND AUTHORITIES ...............................................................19 SECURITIZATION BIFURCATING SECURITY INTEREST ......................................19 ILLEGAL RECORDING OF PROPERTY RECORDS ...................................................22 FORGED INSTRUMENTS ..............................................................................................23 PRODUCE THE NOTE ....................................................................................................23

PRAYER FOR RELIEF. ...............................................................................................................27 VERIFICATION............................................................................................................................28

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Black v. Sullivan (1975), 48 Cal App 3d 557; 122 Cal Rptr 119 ............................................................. 18 Bovard v. Dickerson, 131 Cal. 162 [63 P. 162]........................................................................................ 24 Brown v. Ball, 123 Cal. App. 758............................................................................................................. 23 California Golf, L.L.C. v. Cooper, 163 Cal. App. 4th 1053, 78 Cal. Rptr. 3d 153, 2008 Cal. App. LEXIS 850 (Cal. App. 2d Dist. 2008)............................................................................................................. 25 Committee on Childrens Television, Inc, [35Cal. 3d at 216].................................................................. 11 Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878.............................................................. 16 Ford v. Bushard, 116 Cal 273 [48 P. 119] ................................................................................................ 23 Gustafson v. Stockton etc. R.R. Co, 132 Cal. 619 [64 P. 995] ................................................................. 24 McKell v. Washington Mutual, Inc., ___ Cal.App.4th ___ (Sept. 18, 2006) (Second Appellate District, Division One)...................................................................................................................................... 18 Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 12491250 [26 Cal. Rptr. 3d 413] 24 Nakagawa v. Okamoto, 164 Cal. 718 [130 P. 707] .................................................................................. 24 Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783] ............................................................................. 24 Read v. Buffrum, 79Cal 77; [21P 555; 12 Am.St.Rep. 131] .................................................................... 23

Cal. Civ. Code 2924............................................................................................ 10, 13, 22, 24, 25, 26, 27 Cal. Civ. Code 2932.5............................................................................................................................. 22 Cal. Civ. Code 2934.......................................................................................................... 8, 13, 19, 22, 25 Cal. Civ. Code 2941................................................................................................................................ 27 Cal. Civ. Code 2941(a) ........................................................................................................................... 16 Cal. Civ. Code 2943(e)(4)................................................................................................................. 10, 17 Cal. Comm. Code 3203........................................................................................................................... 24 Cal. Comm. Code 3205........................................................................................................................... 24 Cal. Comm. Code 3301............................................................................................................... 12, 24, 26 Cal. Comm. Code 3302..................................................................................................................... 21, 23 Cal. Comm. Code 3305..................................................................................................................... 23, 27 Cal. Comm. Code 3305(c) ...................................................................................................................... 27 ii
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Cal. Comm. Code 3306........................................................................................................................... 23 Cal. Comm. Code 3312........................................................................................................................... 25 Cal. Penal Code 115.......................................................................................................................... 22, 23 Cal. Penal Code 115.5............................................................................................................................. 23 Cal. Penal Code 470.......................................................................................................................... 22, 23 Cal. Penal Code 471.......................................................................................................................... 22, 23 Other Authorities FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) / TRUST INDENTURE / For / GUARANTEED MORTGAGE PASS-THROUGH CERTIFICATES / Evidencing undivided beneficial interests in / POOLS OF ADJUSTABLE RATE RESIDENTIAL / MORTGAGE LOANS available online at: http://www.fanniemae.com/mbs/pdf/adjustableratetrustindenture.pdf ......... 19, 20 Miller & Starr, Cal. Real Estate (3d ed. 2000) Deeds of Trust, 10:212, p. 686..................................... 16 UCC Article 3 .................................................................................................................................... passim Noticed Documents Assignment of Deed of Trust of August 30, 2010 ...................................................................................... 7 Assignment of Deed of Trust of July 29, 1991........................................................................................... 6 Deed of Trust executed on May 14, 1988 and recorded on May 20, 1988........................................ passim Notice of Default and Election to Sell of June 15, 2010 ................................................................... passim Notice of Trustee Sale of Sept. 16, 2010 .................................................................................................... 8 Notice of Trustees Sale of Sept. 28, 2010 ................................................................................................. 8 Substitution of Trustee of Sept. 23, 2010, effective Sept. 16, 2010 ........................................................... 8

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I.

INTRODUCTION LEIGHTON LEE PERRY (Plaintiff) contends that Defendants JP MORGAN CHASE BANK

N.A. (JPMorgan), CHASE HOME FINANCE LLC (Chase); FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA), and QUALITY LOAN SERVICE CORP (QLS) have interposed themselves into a contract for a mortgage loan whose original parties were Plaintiff, Valley Federal Savings and Loan (Valley), and its trustee All Valley Financial Corporation. Plaintiff filed his first Complaint on Oct. 14, 2010. Defendants filed a Demurrer on Nov. 24, 2010. On motions of the Court the hearing was delayed, and then Plaintiffs original Opposition was refused with leave to amend. Plaintiff filed an Amended Opposition to Demurrer on March 30, 2011. On April 14, 2011 Plaintiff filed an ex parte TRO and Application for OSC for a Preliminary Injunction to be heard on May 5, 2011. The Preliminary Injunction was granted with no requirement for bond on condition that rent be paid to Defense counsels law firm. The hearing for the Demurrer to Complaint was held May 27, 2011 and a decision rendered July 7, 2011. A. DELAY IN FILING

Plaintiff apologizes to the Court for the delay in filing this First Amended Complaint. The delay is due to the increased complexity of the case due to the changes in the issues from its inception with the recent allegation by opposing counsel that they now have in their possession Plaintiffs promissory note. Furthermore, the judge signed the order on July 8, and the envelope was postmarked July 12. Allowing for 5 days after the order was post-marked, plus the 10 days leave to amend. Plaintiff calculates the last day for filing is August 2, 2011. B. CHANGES IN ISSUES

There are three significant considerations that have changed from the time the Complaint was filed. The first is the discovery by Defendants of an Assignment of Deed of Trust from the original lender, Valley, to FNMA, which had been incorrectly indexed by the County Recorder and did not show up properly under Plaintiffs correct name. Plaintiff addressed this in his Amended Opposition to Demurrer and will incorporate that language with an elaboration of the legal implications of a negotiable instrument with a corresponding security instrument being securitized.
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2.)

The second is the discovery by Plaintiff that he confused the format of the Deed of Trust, which is printed double-sided, with that of his promissory note, which was printed single-sided. This was not an intentional act on Plaintiffs part, but rather an indication of the slow demise of his mental capacities due to age, and possible subterfuge on the part of Defendants. The third is the unverified claim by opposing counsel that unnamed defendants have produced Plaintiffs original promissory note and hold it in their possession. II.
1.)

PARTIES At all times relevant herein, Plaintiff, LEIGHTON LEE PERRY (Plaintiff) is a resident of the

City of Martinez, county of Contra Costa, state of California. At all times relevant herein is equitable owner of real property located at (Subject Property). The Subject Property is further described as Assessors Parcel Number 2 with a property description of: ACCORDING TO THE MAP THEREOF FILED SEPTEMBER 29, 1965 IN BOOK 107 OF MAPS, PAGE 38, RECORDS OF CONTRA COSTA COUNTY Plaintiff is the Trustor of a Deed of Trust executed on May 14, 1988 and recorded on May 20,

14 1988 (DoT) to purportedly secure a Promissory Note in the amount of $130,000 (Note). A copy of 15 the DoT recorded with the Contra Costa County Recorders Office is attached hereto as Exhibit A. 16 VALLEY FEDERAL SAVINGS AND LOAN ASSOCIATION (Valley) is identified as the Lender 17 on the Note and the Lender and Beneficiary on the DoT. Plaintiff is the Grantee of a Grant Deed of 18 the Subject Property filed May 20, 1988 in the Contra Costa County Recorders Office. 19
3.)

Valley, which is not a party to this action, was under seizure of the Federal Deposit Insurance

20 Corporation (FDIC) in April 1992 and was merged with government financial assistance with 21 WASHINGTON MUTUAL BANK (WAMU). 22
4.)

WAMU, which is not a party to this action, is a business entity, form unknown, purporting to be

23 authorized to conduct business in the State of California, and is under seizure of the Federal Deposit 24 Insurance Corporation (FDIC). WAMU failed in September, 2008, and the FDIC acquired its 25 liabilities and sold its assets to JPMorgan Chase Bank. 26
5.)

Defendant JP MORGAN CHASE BANK, N.A. (JPMorgan), as successor in interest to

27 WAMU, is a business entity, form unknown, purporting to be authorized to conduct business in the state 28
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of California. JPMorgan purports to be the owner of the Note and DoT as a result of the seizure of WAMU and the transfer of some of its assets through the FDIC. Furthermore, Defendant JPMorgan claims to have the original Note as a result of an Assignment of Deed of Trust from FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA).
6.)

Defendant CHASE HOME FINANCE, LLC (Chase) is a business entity, form unknown,

purporting to be authorized to conduct business in the state of California. Defendant Chase services the subject loan as a wholly-owned subsidiary of JPMorgan.
7.)

Defendant FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) is a business

entity, form unknown, purporting to be authorized to conduct business in the state of California. Defendant FNMA recorded an Assignment of Deed of Trust in the Contra Costa County Recorders Office purporting to assign the Deed of Trust from FNMA to JPMorgan as owner of the Note.
8.)

Defendant QUALITY LOAN SERVICE CORP. (QLS) is a business entity, form unknown,

purporting to be authorized to conduct business in the state of California. QLS was purportedly the Trustee of the DoT, pursuant to a purported Substitution of Trustee. QLS is believed to have an agency / partnership relationship with McCarthy and Holthus, LLP.
9.)

McCarthy and Holthus, LLP, which is not a party to this action, is a law firm purporting to be

authorized to conduct business in the state of California. McCarthy and Holthus is shown as an Attorney in Fact to FNMA in the Assignment of Deed of Trust dated August 25, 2010 and filed August 30, 2010 granting, assigning, and transferring Plaintiffs loan from FNMA to JPMorgan.
10.)

Lender Processing Services, Inc. (LPS), which is not a party to this action, is company that

provides loan processing services to lending institutions. It is located in Jacksonville, FL. On July 2, 2008, Fidelity National Information Services spun off LPS. LPS owns LPS, LLC; Federal National Tax Services; LSI Title Co.; LSI Title, LLC, and thru LSI Title Co., LSI Title Agency, Inc. LPS is under investigation in Michigan for producing forged documents through its deactivated DOCX division.
11.)

LSI Title Company (CA), a/k/a LSI Division (LSI), which is not a party to this action, is a

business entity, form unknown, purporting to be authorized to conduct business in the state of California. LSI is a Lender Processing Services company according to its website LSI is the largest centralized provider of appraisal, title and closing services to first mortgage and home equity lenders as
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well as to mortgage servicers and investors. LSI performs property valuations and settlement services in all 50 states, plus the District of Columbia.
12.)

The Defendants names herein all persons unknown, claiming any legal or equitable right, title,

estate, lien, or interest in the Subject Property described in this First Amended Complaint adverse to Plaintiffs title thereto and as DOES 1-100 (hereinafter sometimes referred to as the unknown Defendants) are unknown to Plaintiff. These unknown Defendants, and each of them, claim some right, title, estate, lien or interest in the Subject Property hereinafter described adverse to Plaintiffs title and their claims, and each of them, constitute a cloud on Plaintiffs title to the Subject Property. Plaintiff is informed and believes, and on that basis alleges, that each fictitiously named herein as a DOE is responsible for the events and happenings hereinafter referred to, and thereby proximately caused the injuries and damages to Plaintiff as hereinafter alleged. Plaintiff will seek leave of the Court to amend this Complaint to allege the true names and capacities of said fictitiously named Defendants when ascertained.
13.)

Plaintiff is informed and believes, and on that basis alleges, that at all times mentioned herein,

the unknown Defendants are individuals and/or business entities whose forms are unknown and were agents, principals, employees, employers, and co-conspirators of each and every other named or unnamed Defendant in this Complaint. Plaintiff is further informed and believes, and on that basis also alleges that each of such Defendants is, and at all relevant times herein, was acting within the scope of their authority as such agents, employees, or alter-egos with permission and consent of the remaining named and unnamed Defendants.
14.)

Whenever in the Complaint an act or omission of a corporation or business entity is alleged, the

allegation shall be deemed to mean and include an allegation that the corporation or business entity acted or omitted to act through it authorized officers, directors, agents, servants, an/or employees, acting within the course and scope of their duties; that the act or omission was authorized by corporate managerial officers or directors; and that the act or omission was ratified by the officers and directors of the corporation or business entity. III.
15.)

DEMAND FOR JURY TRIAL Plaintiff requests a jury trial on all issues to be tried in this matter.
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IV.

STATEMENT OF FACTS Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set

forth herein.
16.)

Defendants and their agents, officers, employees, and affiliated or associated parties have

engaged in and continue to engage in a pattern of unlawful, fraudulent or unfair practices causing victims of their actions, including Plaintiff herein, to lose or be in jeopardy of losing their homes through the foreclosure process. The Court should not only be disturbed but also appalled by the increasing reports of the rampant, widespread, and irresponsible practices of document fraud and forgery by foreclosure mills, like Defendants Chase and QLS, involved in mortgage assignments and foreclosures. These actions have not only been alleged for years but have now been brought to light by admissions from Defendants themselves in numerous depositions and tacit admissions in statements made concerning postponing foreclosures due to questionable documents and affidavits presented in Court. The illegal foreclosures taking place represent the largest seizure of private property ever attempted by banks. This is lawlessness at the highest level. In this case, JPMorgan, Chase, and QLS are attempting to foreclose on a home pursuant to a purported default of a loan that they do not rightfully own. Taking someones home and leaving behind a clouded title is not something to be taken lightly.
17.)

In or around May 1998 Plaintiff obtained a loan from Valley in the amount of $130,000 for the

Subject Property (Subject Loan). In connection with the Subject Loan, Valley tendered to Plaintiff the Note and DoT. The Note indicates that Valley was the lender. The DoT also indicates that Valley was the Lender and Beneficiary. Successors in interest of Valley were WAMU with it merged with Valley after seizure by the FDIC to WAMU, and receiver FDIC to JPMorgan. None of the successors in interest recorded an assignment with the Contra Costa Recorder. There was no investor described in any of the original documents. The Deed of Trust allowed for the sale of the loan, but made no provisions for converting the loan into a security to be sold as a financial asset instead of remaining a negotiable instrument.
18.)

Plaintiff had been dutifully paying his mortgage payments for more than two decades since the

inception of the Subject Loan.


19.)

An Assignment of Deed of Trust was recorded in the Contra Costa County Recorders Office on
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July 29, 1991 against Plaintiffs property but Plaintiff was unaware of it because it was indexed by name incorrectly (PLAINTIFFS EXHIBITS IN SUPPORT OF OPPOSITION TO DEMURRER TO COMPLAINT Exhibit A). The assignment purports to grant, assign, and transfer the Subject Loan to FNMA, together with the Note and beneficiary rights, and all rights under the Deed of Trust, effective October 7, 1988.
20.)

On January 7, 2010, Plaintiff spoke with a customer service representative from Chase regarding

an unexplained charge labeled other on his January statement. Plaintiff was informed it was for a drive-by inspection. Plaintiff then requested a copy of his Deed of Trust.
21.)

On January 11, 2010, Mark Christian B. Lanceta, a Customer Care Professional from Chase

sent a letter in response stating that they do not have a copy of the Deed of Trust.
22.)

On January 27, 2010, Plaintiff was eligible to transfer Subject Property with a reverse mortgage

and, prompted by a concern of a potential clouded title, wrote a letter to Chase requesting a beneficiary statement pursuant to California Civil Code 2943 and a true copy of the Note and DoT. The USPS reports the request was delivered on February 1, 2010 at 10:30 AM in Columbus, OH to Joe Cowans.
23.)

On March 1, 2010, Plaintiff elected to stop making payments to a pretender lender who could not

comply with Californias implementation of the UCC-3 legal right of presentment and provide a copy of his promissory note.
24.)

On March 11, 2010, Mark Christian B. Lancenta sent a letter to Plaintiff stating that he was

writing in response to the request Chase received for a copy of the Mortgage Deed of Trust for your mortgage loan. There was no discussion or acknowledgment from Chase or Mr. Lanceta about Plaintiffs request for a copy of the Promissory Note. Instead Chase and Mr. Lanceta admitted that their record center does not have the requested document available on paper, microfiche, or image. Moreover, there was acknowledgment of the request for beneficiary statement. In addition, in violation of, Clearly Defendants Chase, FNMA, and JPMorgan failed to provide a beneficiary statement within 21 days provided by California Civil Code 2943, thereby reinforcing Plaintiffs belief that Chase was not the proper beneficiary of his mortgage.
25.)

On June 9, 2010, Plaintiff wrote to Chase again asking for the same information that was

requested in the December 2009 January 7, 2010 phone call and January 27, 2010 correspondence.
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26.)

On June 15, 2010, JPMorgan and QLS caused to be recorded a Notice of Default and Election to

Sell under Deed of Trust (NoD) with the Contra Costa County Recorders Office. A true and correct copy of the NoD recorded with the Contra Costa County Recorders Office is attached hereto as Exhibit B.
27.)

For the first time Chase provided a purported copy of the Note and the Deed of Trust in

correspondence dated August 24, 2010, which named FNMA as Investor. No beneficiary statement was provided. The original Note consisted of an Adjustable Rate Note on a single piece of paper printed in full on both sides 2 pieces of paper printed single-sided and an Adjustable Rate Rider. The purported copy of the Note was printed single sided on two pieces of paper with a third piece of paper depicting an allonge to the Note that was constructed of an endorsement payable to the second successor in interest that was signed by the original lender and marked across as CANCELLED, and a second endorsement in blank signed by Thomas E. Patrick, who passed away in 2009. It is evident from the pattern of the staple holes that the supplied document could not be a true copy of the original Note with the supplied allonge attached. The allonge was not attached to the original Note, but was attached as evidenced by the matching pattern of staple holes to a copy composed of two single-sided pieces of paper of the double-sided original Note. The lack of endorsement by FNMA casts suspicion on whether the transfer from Valley to FNMA ever took place and instead, a document was manufactured with a stamped endorsement from Valley; or whether the transfer to FNMA took place, and after a default was declared and the mortgage default insurance paid to FNMA, the Note held no further value that FNMA would legitimately underwrite with its endorsement.
28.)

On August 30, 2010, JPMorgan caused to be recorded an Assignment of Deed of Trust. The

assignment was purportedly executed on August 25, 2010 by Tim Bargenquast as Assistant Vice President. Above Mr. Bargenquasts signature appears the words Federal National Mortgage Association, By McCarthy and Holthus, LLP, Its Attorney in Fact. It is not clear which entity Defendant FNMA, McCarthy and Holthus, or QLS employs Mr. Bargenquast as its Vice President.
29.)

The Assignment of Deed of Trust of August 30, 2010 is invalid and ineffective as FNMA was

neither (1) a beneficiary of the Note or Deed of Trust which can assign the Deed of Trust; nor (2) an agent authorized by Valley or its duly recorded successors in interest by endorsement. Additionally,
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Plaintiff alleges that there is no written authorization executed by Valley or its duly recorded successors in interest by endorsement to vest any authority to execute to either McCarthy and Holthus or FNMA the purported Assignment of Deed of Trust. Furthermore, there was no endorsement by FNMA either to JPMorgan or in blank. A true and correct copy of the Assignment of the Deed of Trust of August 30, 2010 recorded with the Contra Costa County Recorders Office is attached hereto as Exhibit C.
30.)

On September 16, 2010, Defendant QLS caused to be posted on the front door of Plaintiffs

Subject Property a Notice of Trustee Sale with an auction date of October 8, 2010.
31.)

On September 23, 2010, Defendant QLS caused to be recorded a Substitution of Trustee with the

Contra Costa County Recorders Office. The Substitution of Trustee was purportedly executed by Elizabeth Dollar of JPMorgan on September 16, 2010. The Substitution of Trustee is invalid, void, and ineffective because it was executed in violation of California Civil Code 2934(a). A true and correct copy of the Substitution of Trustee recorded with the Contra Costa County Recorders Office is attached hereto as Exhibit D.
32.)

On September 28, 2010, QLS caused to be recorded a Notice of Trustees Sale with the Contra

Costa County Recorders Office purportedly executed on September 22, 2010 by Quality Loan Service Corp by: Ronald Alonzo, as Authorized Agent. A Notice of Trustees Sale was also conspicuously posted on the front door of Plaintiffs Subject Property with an auction date of October 19, 2010. A true and correct copy of the Notice of Trustees Sale recorded with the Contra Costa County Recorders Office is attached hereto as Exhibit E.
33.)

At a Case Management Conference of June 22, 2011, Defendants counsel provided Plaintiff an

unverified copy of his promissory note, stated they had physical possession of Plaintiffs promissory note, and invited him to examine it at their offices. In the email correspondence to schedule an examination, Plaintiff informed defense counsel that he would be bringing a forensic document examiner along at his expense. Defense counsel stated they would refuse to allow the examiner access to the document, and that only Plaintiff would be allowed to examine the document. At this point further email communication was cut off by defense counsel and Plaintiff declined to examine the alleged original promissory note. The copy of the alleged original supplied by defense counsel did not exhibit the 2 fastener holes at the top of the document as does the copy sent Aug. 30, 2010, and Plaintiffs copy
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from loan origination. In the absence of any supporting affidavit or statement under oath Plaintiff considers this document hearsay evidence at best, and a possible forgery and violation of the Penal Code. V. FIRST CAUSE OF ACTION DECLARATORY RELIEF (as to Defendants FNMA, Chase, JPMorgan, and QLS) Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set forth herein.
34.)

An actual controversy exists between Plaintiff and Defendants concerning their respective rights

and duties pertaining to the Subject Property and the described transactions in the (1) Plaintiff contends that the Note and Deed of Trust must be extinguished in their entireties, and all subsequent recordings must be likewise extinguished, including the Notice of Default and Notice of Trustees Sale and (2) Defendants JPMorgan, Chase, FNMA, and QLS, and each of them, dispute the contention and contend that the Note and Deed of Trust are legally enforceable and that, therefore, Defendants JPMorgan, Chase, FNMA, and QLS have the right to initiate and conduct a trustees sale.
35.)

Defendants imminently intend to conduct a trustees sale of the Subject Property ostensibly to

collect the unpaid balance on the Note secured by a Deed of Trust.


36.)

Defendants Chase, JPMorgan, and FNMA are not and were never the holder of, or possessor for

the owner of the Note and its beneficiary interest, properly endorsed to it, duly recorded, or otherwise entitled by law in California to collect on the loan as beneficiary, assign trustees, and initiate foreclosure under the Deed of Trust pursuant to this states summary non-judicial foreclosure remedies, which are intended to equally protect the interests of the beneficiary, borrower, and subsequent owner of title. This is evidenced by the inability of Chase to provide a true copy of the original Note during the period FNMA allegedly was assigned the loan, before the NoD was filed, when presented with the California Civil Code 2943 request by Plaintiff.
37.)

Neither Defendant Chase, JPMorgan, nor FNMA has and had right as beneficiary to declare

default and initiate foreclosure, nor did each have a right to direct Defendant QLS to foreclose or sell the Subject Property at an auction under the DoT. Chase and JPMorgan knew or reasonably should have known that they have no right to collect on the loan and foreclose the Deed of Trust unless and until
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each of them actually had beneficiary interest evidenced by in its possession the original Note properly endorsed to them or assigned to them, and duly acknowledged by being recorded as of a date preceding the Notice of Default by QLS.
38.)

Plaintiff further alleges that the non-judicial foreclosure of the Subject Property according to the

mandates of California Civil Code 2924 does not apply to an unlawfully initiated foreclosure, and is therefore unlawful void and of legal nullity. for the following reasons: JPMorgan is depicted as the beneficiary on the Notice of Default, yet the assignment from FNMA to JPMorgan was not effective until August 25, 2010 and was filed August 30, 2010. This is a violation of Penal Code 115.5, false filing of a real property title instrument. Any document used to further an illegal act is void. The legal solution to correct this act was not undertaken by Defendants.
39.)

Neither JPMorgan, Chase, nor FNMA were legal owners of the Note, nor successors in the

beneficiary interest, nor were they holders of the Note with powers of the beneficiary at any time as evidenced by the lack of due entries with the Contra Costa County Recorders Office and corresponding endorsements on the Note. Only the owner of the Note, or successor of beneficiary interest, can determine that a breach of contract has occurred and declare a default necessary to commence a foreclosure.
40.)

It is likely the original Note has been destroyed during a securitization process as indicated by

the introduction of FNMA as investor on the response to Plaintiffs 2943 request; the unavailability of the Note in paper format as stated by Chase; and the introduction of an unverified, yet true copy of the original Note and allonge with demonstrable defects. Only an evidentiary hearing will establish the chain of possession of the original Note and beneficiary interest, and its current state and most recent owner. The Assignment of the Note on the alleged allonge was not permanently attached to the original Note. As such there is no evidence that any assignment of the Note was ever made by Valley. It is equally possible that Valley destroyed the Note as it is that the Note was transferred from Valley by endorsement. Only the original Note and allonge, together with corroborating documents, can determine beyond a shadow of a doubt the state of the Note and holder in due course of the beneficiary interest of Plaintiffs promissory note.
41.)

FNMA unilaterally breached the terms of the contract made by Plaintiff, and is attempting to
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defraud Plaintiff by keeping 3rd party remunerations applied to his loan hidden from him. The lack of specificity should be considered in light of defendants possession of full information concerning the facts of the controversy see Committee on Childrens Television, Inc, [35Cal. 3d at 216].
42.)

An assignment from Valley to FNMA was filed in 1991 although the documents were allegedly

signed in 1988. California laws in effect at that time determine that it is the filing date, and not the document date, that is of legal force.
43.)

The Trust Indenture document governing the loan pool where the beneficiary interest was

supposedly transferred only allowed a 2-year window for adding loans to the pool, and the filing date precludes the possibility that Plaintiffs loan was legally securitized. As a result, neither the MBS Trustee nor the investors in the MBS had the beneficiary power to declare a default or power of sale because of violations of SEC rules.
44.)

By the business model and insurance terms of the trust, portions of loan payments from members

of a pool were collected in a reserve to pay for default insurance and cover any short payments so the beneficiary interest to receive payments never saw missing payments. It is the Trustee of the pool that supposedly holds the power to declare a default. However, that power is not ascribed to the Trustee in the Plaintiffs Deed of Trust. Furthermore the terms of the pool provide for inclusion of loans preinsured against default, or for insurance on a pool or loan basis to insure all loans in the pool against default. This is a business arrangement that benefits Plaintiff as a third party to which he was not a knowing participant, even though a portion of his loan payments paid default insurance premiums. Since Plaintiffs loan defaulted, a claim presumably was made and the loan paid off by insurance. The question then arises whether Plaintiffs loan surreptitiously securitized into a financial asset can be desecuritized and reconstructed back into a negotiable instrument after its beneficiary powers to declare default and receive payments have been split by a third party contract without Plaintiffs participation. In that process the loan is taken off one set of books regulated by state property laws, transferred to another set of books regulated by securities laws, and then returned to the first set of books. Clearly that is beyond the original intent, scope, and disclosure of the contract Plaintiff entered into with Valley.
45.)

Plaintiff further alleges that the foreclosure-related notices and the foreclosure proceeding itself

failed to comply with the provisions of California Civil Code 2920 2923.5, et seq. and California
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Commercial Code 3301, et seq., as a necessary prequel to a non-judicial foreclosure process. If there was no default because a third party insurance paid off Plaintiffs loan, there can be no default.
46.)

Plaintiff alleges that by their conduct the Defendants engaged in, with respect to many other

mortgage or Deed of Trust security instruments, in a pattern and practice of using the non-judicial foreclosure procedures of California to take title to real properties when they do not, in fact, have the right to do so, knowing that the several affected property owners do not have knowledge and means to contest the right of Defendants to foreclose. These actions result in a trail of clouded titles to any property that has a foreclosure in its history that was predicated by Defendants and were facilitated by the use of false documents such as may have been presented to Plaintiff.
47.)

Defendants are strangers to the Note and DoT and have no standing to collect on the debt or to

initiate and conduct non-judicial proceedings. WHEREFORE, Plaintiff prays for relief as set for the below. VI. SECOND CAUSE OF ACTION SLANDER OF TITLE (as to Defendants FNMA, Chase, JPMorgan, and QLS) Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set forth herein.
48.)

The tort of Slander of Title involves the action of one, who, without privilege or without

justification to do so, publishes matter which is untrue and disparaging to anothers property in land.
49.)

QLS, JPMorgan, FNMA, and Chase, and each of them, purportedly acting as the beneficiary

and/or the agents of the beneficiary of the Deed of Trust for the loan, wrongfully and without privilege, caused the following documents to be recorded against the Subject Property: A. B. C. D.
50.)

The Notice of Default of June 15, 2010 The Assignment of Deed of Trust of August 23, 2010 The Substitution of Trustee of August 25, 2010 The Notice of Trustees Sale

QLS and Chase wrongfully and without privilege recorded the Notice of Default for a purported

beneficiary of the Deed of Trust, which to date, is still uncertain. Neither FNMA nor JPMorgan is and was the entity with the right to collect on the debt as it was not the true beneficiary since the loan originated by the Lender and Beneficiary Valley.
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51.)

QLS, JPMorgan, FNMA, and Chase, and each of them, even with full knowledge of the

falsehood that neither FNMA nor JPMorgan was the true beneficiary who can declare a default and election to sell pursuant to California Civil Code 2924(a)(1)(C) recorded the said documents with the willful and conscious disregard of Plaintiffs rights as to cause injury to Plaintiff. Plaintiff further alleges that QLS, JPMorgan, FNMA, and Chase, and each of them, did the acts described above in pursuit of obtaining either the purported full amount due on the loan or foreclose on the Subject Property and obtain title thereto and receive funds for conducting the trustees sale.
52.)

By doing the acts described above, QLS, JPMorgan, FNMA, and Chase slandered Plaintiffs title

to the Subject Property.


53.)

In that the conduct and acts of QLS, JPMorgan, FNMA, and Chase, and each of them in view of

their knowledge of the facts of the transaction and QLS, JPMorgan, FNMA, and Chases participation in defrauding Plaintiff, Defendants violated, among other things, California Civil Code 2934 (a)(1)(C) and such conduct and acts were not privileged.
54.)

In that the conduct and acts of QLS, JPMorgan, and Chase, and each of them in view of their

knowledge of the facts of the transaction and QLS, JPMorgan, and Chases participation in defrauding Plaintiff, Defendants violated, among other things, California Penal Code 115.5 and such conduct and acts are subject to incarceration and fines.
55.)

The conduct of QLS, JPMorgan, FNMA, and Chase, and each of them, caused Plaintiff to suffer

damages in an amount to be proven at trial and because Plaintiffs damages were the result of the unprotected and unlawful conduct and acts of QLS, JPMorgan, FNMA, and Chase, and each of them, Plaintiff is entitled to recover damages in an amount to be proven at trial against such Defendants. WHEREFORE, Plaintiff prays for relief as set forth below. VII. THIRD CAUSE OF ACTION QUIET TITLE (against all Defendants) Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set forth herein.
56.)

Plaintiff seeks to quiet title against all the claims of all Defendants. Defendants are strangers to

the Note and DoT. Neither Defendant JPMorgan, Chase, FNMA, nor QLS is listed anywhere on the Note or Deed of Trust, nor has a perfected chain of ownership been established by endorsement.
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57.)

Valley is the only party entitled to enforce the Note and any security interest in it according to

the chain of ownership of valid assigns recorded with the Contra Costa County Recorders Office. The assignment of mortgage to FNMA is defective because the signature of the endorser, Thomas E. Patrick, cannot be assumed as true as he passed away in 2009. There is no date on the endorsement, no notarization, and the entire endorsement, including signature, appears stamped. Furthermore, Valley is no longer a legal business entity.
58.)

The purported assignment from Valley to FNMA has an unexplained delay in filing that would

preclude the loan becoming a legal member of the pool to which it was seemed to be assigned, so it could not be considered duly acknowledged. Without corroborating evidence the transfer to FNMA cannot be assumed as perfected.
59.)

The assignment of mortgage to JPMorgan is defective because there is no endorsement from

FNMA.
60.)

California Civil Code 2932.5 governs the power of sale under an assigned mortgage Deed of

Trust, and provides that power of sale can only vest in a person entitled to money payments. The power of sale may only be exercised by the assignee if the assignment is duly acknowledged and recorded.
61.)

Defendants have no right or interest in the Subject Property and no right to entertain any rights of

ownership by a Trustees Deed of Sale because: A. Defendants have presented documents stating the Note was not available in paper format

before the assignment to JPMorgan; then an unverified true copy of the Note endorsed in blank by Valley with fastener holes was presented after assignment of the loan to JPMorgan; then opposing counsel introduced an unverified, true copy of the original Note without fastener holes not endorsed by FNMA that is supposedly in possession of their unnamed client . B. There have been no beneficiaries identified, nor has any beneficiary statement returned
1

indicating any amount was due, as a result of Plaintiffs QWRs. Either Valley, who is the only recorded endorser of any of the different versions of the alleged Note, remains the beneficiary, or

Opposing counsel refused to allow Plaintiff to have a forensic document examiner determine the validity of his alleged original promissory note except on noticed court order because they didnt know who the examiner was going to be (nor did they ask).

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63.) 62.)

the Note was intentionally destroyed by FNMA and the beneficiary interest forfeit when it was securitized, or the Note was paid in full while in FNMAs possession then sold for value to JPMorgan without FNMAs warranty by endorsement in order for the banks to get a free house. C. FNMA was identified as Investor in the last response to Plaintiffs QWRs, which is not

a term or a party to the Note or DoT. Since only a beneficiary can assign their rights by assignment, neither FNMA, JPMorgan, Chase, nor QLS have any legal standing to challenge Plaintiffs ownership in his property. An assignment of a mortgage without assignment of the corresponding debt is a nullity under controlling law. [Carpenter v. Longan, 83 U.S. 271, 275 (1872); Kelley v. Howarth, 39 Cal. 2d 179, 192 (1952); Johnson v. Razy,181 Cal. 342, 344 (1919) ("A mortgage is mere security for the debt, and it cannot pass without transfer of the debt."); Polhemus v. Trainer, 30 Cal. 686, 688 (1866) (interest in the collateral subject to the mortgage does not pass "unless the debt itself [is] assigned.")]. Within California's comprehensive statutory non-judicial foreclosure scheme found at Civil Code sections 29202944.7, four separate statutes corroborate that the secured debt must be assigned with the deed of trust . Defendants claims are without any right, and Defendants have no title, estate, lien, or interest in
2

the Subject Property based on grounds and allegations in the preceding paragraphs and are incorporated herein. There is an unexplained broken chain of ownership of the Note and beneficiary interest and any attempt to foreclose is a fraud on the Court. Only a foreclosure would convert a lien interest into a title interest, and Defendants have neither rights nor basis to foreclose. A. REQUIREMENT OF TENDER

Plaintiff is willing to tender the amount received subject to equitable adjustment for the

damages caused to Defendant by the Plaintiffs activities. However, no amount has been specified as a

These statutes are: Civil Code sections 2932.5 (assignee of secured debt cannot nonjudicially foreclose without right to payment and a recorded assignment), 2935 (notice of an assignment of a mortgage does not change the borrowers' obligation to make payments to the holder of the note), 2936 (transfer of a note carries with it an assignment of the debt, not vice versa), and 2937 (borrowers must be notified of transfers of servicingrights).
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result of Plaintiffs request for a beneficiary statement. Such equitable adjustment should also include consideration that Defendants have recently lost the confidence of title companies to insure a property after foreclosure, and that such property is subject to very limited warranty, and therefore reduces the value of auction bids for the property, which constitutes an unjust enrichment on Defendants part and the possibility of a clouded title to any future purchaser. This is especially likely due to inability to provide a true copy of the original Note by Defendants, the lack of endorsement by FNMA guaranteeing the value and validity of the Note on the alleged copy of the Note provided, and the legal right of Plaintiff to obtain his original Note at the conclusion of the mortgage as provided in California Civil Code 2941(a).
64.)

Plaintiff has sufficient equity of Subject Property to allow him to refinance with a reverse that

would satisfy his mortgage obligation and has a loan pending, subject to the results of this action.
65.)

Until the beneficiary interest in the Subject Property can be proved, the Deed of Trust is void as

to power of sale and transfer of title. Furthermore, the beneficiary in the Notice of Default was not assigned beneficiary interest until months after the Notice was filed. No attempt at correcting the problem was made by Defendants, and therefore the NoD is a legal nullity and any sale as a result would be totally VOID. In Dimock [Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878.], the court recognized that where the trust deed is void rather than merely voidable, the party attacking the deed is "not required to meet any of the burdens imposed when, as a matter of equity, a party wishes to set aside a voidable deed. In particular, [that party is] not required to tender any of the amounts due under the note." (Ibid.; see also Miller & Starr, Cal. Real Estate (3d ed. 2000) Deeds of Trust, 10:212, p. 686 [while tender is "a condition precedent to an action by the trustor to set aside the trustee's sale on grounds that the sale is voidable, when the sale is totally void, a tender usually is not required"].
66.)

An assignment of a mortgage without assignment of the corresponding debt is a nullity under

controlling law. [Carpenter v. Longan, 83 U.S. 271, 275 (1872); Kelley v. Howarth, 39 Cal. 2d 179, 192 (1952); Johnson v. Razy,181 Cal. 342, 344 (1919) ("A mortgage is mere security for the debt, and it cannot pass without transfer of the debt."); Polhemus v. Trainer, 30 Cal. 686, 688 (1866) (interest in the collateral subject to the mortgage does not pass "unless the debt itself [is] assigned.")].
67.)

Plaintiff desires and is entitled to a judicial declaration quieting title in Plaintiffs Subject
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Property as of the filing of this Complaint. WHEREFORE, Plaintiff prays for relief as set forth below. VIII. FOURTH CAUSE OF ACTION VIOLATION OF CALIF. CIVIL CODE 2943 (against Chase, JPMorgan, and FNMA) Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set forth herein.
68.)

Pursuant to the provisions of California Civil Code 2943(e)(4) Chase, as agent for FNMA and

JPMorgan, failed to honor Plaintiffs Qualified Written Requests.


If a beneficiary for a period of 21 days after receipt of the written demand willfully fails to prepare and deliver the statement, he or she is liable to the entitled person for all damages which he or she may sustain by reason of the refusal and, whether or not actual damages are sustained, he or she shall forfeit to the entitled person the sum of three hundred dollars ($300). Each failure to prepare and deliver the statement, occurring at a time when, pursuant to this section, the beneficiary is required to prepare and deliver the statement, creates a separate cause of action, 69.)

Plaintiff was entitled as the holder of title to the Subject Property and properly identified himself

by name, loan number, and his signature on the QWR request. As stated previously:
Defendants received the first request February 1, 2010. Plaintiff sent a second QWR on June 9, 2010 Defendants did not return a copy of the note until August 24, 2010 Defendants did not return a beneficiary statement at any time.

Defendants failed to provide the requested information within the 21 day statutory period provided and failed to provide a true copy of the original Note, but provided instead, an unverified copy of the purported Note.
70.)

Defendant willfully refused to provide a legal response according to Cal. Civ. Code 2943(e)(4)

which states For the purposes of this subdivision, willfully means an intentional failure to comply with the
requirements of this section without just cause or excuse.. Stating a document is unavailable is a what,

not a why. Had Defendants reply included because the note was shredded by us 18 years ago, or a claim against default was paid to FNMA , that would have been a cause or excuse.
71.)

FNMA was identified as an Investor in the last response to Plaintiffs QWRs requesting a

beneficiary statement, which is not a term or a party to the Note or DoT.


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72.)

California Civil Code 2943 is a vital state interest as an implementation of UCC-3 in the

operation of presentment, or recognition and confirmation of an obligation, of a binding contract document that may be sold or otherwise removed from the originating parties known to each other. As such it serves to protect the borrowers and subsequent purchasers interest of real property. Both commercial and property laws are excluded from federal preemption due to the nature of negotiable instruments necessarily recorded in the several states. [12 C.F.R. 560.2(c)(1,2,6)]. It is similar to the exemption regarding filing title documents with county recorders, even though filings is listed in 560.2(b)(1) as a federal preemption, because they, too, are both commercial and real estate impacting. See McKell v. Washington Mutual, Inc., ___ Cal.App.4th ___ (Sept. 18, 2006) (Second Appellate District, Division One). (Consumer protection laws should be complimentary before preemption applied)
73.)

Plaintiff was lead to believe by Defendant Chases willful failure as assignee to FNMA to

provide a beneficiary statement requested by his first QWR that Defendants did not hold the beneficiary interest to his Note. As a result Plaintiff discontinued making mortgage payments to Defendants. Defendant Chase then sent a response that the documents requested in the QWR were not available in paper format. This reinforced Plaintiffs belief that Defendants held no beneficiary interest, as they did not possess or control his promissory Note . Defendants and each of them executed and recorded or caused to be recorded the NoD; said Defendants at the time knew full well that their refusal to provide a proper beneficiary statement would likely provoke such default and thus render the property subject to trust deed sale proceedings; thereupon, defendants intended to recover Plaintiffs Subject Property through a trustees sale proceedings to Defendant JPMorgan for substantially less than the market value of the Subject Property, thereby depriving Plaintiff of his substantial equity. See [Black v. Sullivan (1975), 48 Cal App 3d 557; 122 Cal Rptr 119]
74.)
3

The aforementioned conspiracy was formed with full knowledge and intent of each Defendant to

deprive Plaintiff of his equitable interest in the Subject Property, or in the alternative to exact payment

28

Plaintiffs were asked what their response documents are not available in paper format meant, at a hearing for a Preliminary Injunction, but failed to provide an answer.

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of additional fees and costs exceeding $30,000 not called for by the terms of the Note and / or DoT.
75.)

Defendants tactic of deceiving Plaintiff into believing they did not possess his note may

partially account for his mistake in judgment regarding the physical properties of his promissory Note as promulgated in his original complaint. As a direct result of their deceptive practices Plaintiff filed this action to defend his rights and title to the Subject Property, incurring court costs and attorney fees for all parties, and causing Plaintiff to file bankruptcy in order to delay the foreclosure, with its attendant increased cost to acquire credit to Plaintiff. This has come at great emotional stress to Plaintiff, who is feeling his advanced years. Had Defendants been forthcoming with a legal response within the limits of the first QWR, Plaintiff would have submitted the application he filled out for a reverse mortgage and paid off the obligation then. WHEREFORE, Plaintiff prays for relief as set forth below. IX. MEMORANDUM OF POINTS AND AUTHORITIES Plaintiff re-alleges and incorporates by reference all preceding paragraphs as though fully set forth herein. A.
76.)

SECURITIZATION BIFURCATING SECURITY INTEREST

Plaintiffs loan was improperly admitted to the pool because of the filing date of 1991 for a pool

that closed in 1988. The Trust Indenture for FNMA states loans cannot be added to a pool later than 2 years after the closing date, or certificate issue date. The statute governing the ability to have the documents reflect the effective date instead of the date received for recording was changed in 1998 by Cal. Civ. Code 2934 (a) to allow the backdating available today. In order for FNMA in Trustee capacity to have beneficial interest as holder in due course, the transfer had to be acknowledged (evidenced by recording with county Recorder), and the loan admitted to the pool according to the terms available in the Trust Indenture (Indenture) and Supplement cited here: FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) TRUST INDENTURE For GUARANTEED MORTGAGE PASS-THROUGH CERTIFICATES

27 Evidencing undivided beneficial interests in 28 POOLS OF ADJUSTABLE RATE RESIDENTIAL


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4

MORTGAGE LOANS [Authorized by Title III of the National Housing Act, 12 U.S.C. 1719(d)]
77.)
4

The Indenture by which Plaintiffs loan was securitized defines FNMA in both Corporate, and

simultaneously, Trustee capacity [Indenture - Art II Sect 2.01]. FNMA is holding all of the related Trust Fund (including the Mortgage Loans evidencing specified beneficial interests therein, comprising the related Pool) in trust for the exclusive benefit of the Holders of all Certificates [Indenture - Art III Sect 3.01]. Concurrently with the execution and delivery of an Issue Supplement, FNMA (Corporate) shall transfer, assign, set over and otherwise convey to the Trustee (FNMA), on behalf of Holders of Certificates evidencing Fractional Undivided Interests therein, all of FNMAs right, title and interest in and to the Mortgage Loans identified in the attached Mortgage Loan Schedule, including all payments of principal and interest thereon received after the respective date or dates on which the Issue Date Principal Balance was determined (other than payments permitted to be retained by FNMA by the terms hereof, including payments of principal and interest due on or before the Issue Date). [Indenture - Art IV, Sect 4.01]
78.)

In order to pass income without tax liabilities, financial assets by their nature cannot use Deeds

of Trust to secure the beneficiary interest. They are backed by insurance companies based on their relative risk of defaulting, in the case of MBSs and CDOs. For income tax purposes the beneficial power of repayment (only) is passed through to the shareholders in the pool (Investor). The beneficial power to declare a default is passed to the Trustee of the MBS. This results in the impossible situation under UCC-3 that the holders of beneficial interest in due course cannot declare a default. All defaulted loans that were securitized are removed from their pools in order to invoke the power of sale. [Indenture - Art IV, Sect 4.01]
FNMA shall have the right and option, without obligation and in its discretion, to withdraw from the related pool, upon appropriate entry in the Accounting Records, any Mortgage Loan at any time after such Mortgage Loan becomes delinquent, in whole or in part, as to four consecutive monthly installments of principal and interest. Any such withdrawn Mortgage Loan or any Mortgage Loan secured by any such withdrawn Mortgaged Property shall be deemed to be a Fully Prepaid Mortgage Loan. [Indenture Art V, Sect 5.03] 79.)

Even if the Note was negotiated properly to FNMA, it was not negotiated when it was

This document is available online at: http://www.fanniemae.com/mbs/pdf/adjustableratetrustindenture.pdf

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securitized. It went off one set of books and on to another in the conversion from a negotiable instrument subject to the implementation of the UCC and consumer protection laws, to a financial asset subject to securities law and accounting practices. A financial asset cannot be accounted for as a sale. It therefore cannot be securitized by negotiation, and it cannot be de-securitized by negotiation. In that period as a financial asset Plaintiff paid over $200,000, and a breach of a unilaterally modified contract was declared by a non-beneficial party to the trust holding the pool of loans. Then, again without notice to Plaintiff, the loan was de-securitized and reconstituted to the terms of the original contract, without negotiation, or application of third party remuneration for insurance reimbursement, if Defendants are to be believed.
80.)

FNMAs website showed that Plaintiffs loan was held by them when he queried it in September

2010. Information for the pool of loans that was available on FNMAs website in December, 2010, is no longer returned. The loan only remained in the pool until a default occurred. JPMorgan supposedly negotiated Plaintiffs loan after recorded notice of default in violation of Cal. Comm. Code 3302(a)(2)(C). Further discovery is necessary to determine how much the foreclosure insurance premium on the loan cost, and how much of the Treasury-paid insurance award was paid to the investors as a result of the default. The difference has not been applied toward Plaintiffs existing account arrearages. A chance to claim Plaintiffs considerable equity in Subject Property with no cash outlay from a credit bid is sufficient motive to explain why JPMorgan would buy for consideration a known non-performing loan. Likely the consideration was a credit the bank can use as a credit bid to gain unfair advantage against other bidders and drive the auction price to a point that maximizes the equity remaining in Plaintiffs property.
Pool Proceeds: As to a particular Pool, all payments and other recoveries received on account of the Mortgage Loans in such Pool, including, without limitation, any insurance proceeds, other than (i) any payments due on or before the Issue Date for such Pool or, in the case of anySubstitute Mortgage Loan, due on or before the first day of the month of the related substitution, (ii) that portion of each payment of interest on a particular Mortgage Loan which is not required to be distributed to Certificateholders pursuant hereto and the applicable Issue Supplement and (iii) any amount received upon the final payment or other liquidation of a Mortgage Loan which is in excess of the Stated Principal Balance of such Mortgage Loan together with interest on such Stated Principal Balance at the applicable Accrual Rate to the first day of the month following such final payment or liquidation. [Indenture - Art I] 81.)

Plaintiff did not present this issue in the original Complaint because the assignment was miss-

recorded by the Clerk using Plaintiffs first name as his last.


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82.)

Even if the assignment to FNMA is held to be valid, Defendants JPMorgan, Chase, and QLS are

unlikely to be able to prove the security interest was retained or could be re-applied after the process of securitization. Defendants will be unable to prove by clear and convincing evidence the loan was legally negotiated and the security right of power of sale was conveyed to them by assignment of title from FNMA. B.
83.)

ILLEGAL RECORDING OF PROPERTY RECORDS

The NoD was executed by Quality Loan Service Corp. (QLS) acting as agent for beneficiary

JPMorgan and states the Note is held by the beneficiary. It is signed BY:, followed by a squiggle of an unnamed entity of LSI Title Company. A check of the County Recorder will show that none of these names were recorded on any documents affecting Plaintiffs property on or before the date of this NoD. This Notice is VOID as the beneficiary interest of enforcement by sale of property does not meet the duly recorded provisions of Cal. Civ. Code 2932.5. Legal remedy is provided in Cal. Civ. Code 2934(a) but was not followed. Furthermore, FNMA was listed as Investor on the reply from Chase to the second QWR (Exhibit B). There is no provision for the rights of investor to issue a Notice of Default in Cal. Civ. Code 2924. For these reasons the NoD is an illegal recording of a forged document and would present a fraud upon the Court under Cal Penal Code 470(c)(d), 471, 115, and 115.5. If the assignment to FNMA is held to be valid, then FNMA was the beneficiary; otherwise Valley or its unassigned and unrecorded successor in interest was the beneficiary, or a yet-unidentified party may be the beneficiary from an unrecorded sale. In neither case was Defendant JPMorgan the beneficiary when the document was recorded.
84.)

The recording of a Notice of Sale by QLS was made on September 16, 2010. Clearly the

supposed Trustee executing a non-judicial foreclosure was assigned months after the NoD dated June 15, 2010, and was therefore not duly recorded and empowered with the ability to lawfully execute such foreclosure. If the assignment of the beneficiary interest to JPMorgan is found to be a fraud upon the Court and VOID, then the Substitution of Trustee on September 23, 2010, without authority, is an illegal recording of a real estate document under Cal. Penal Code 115 and 115.5. Based on the questionable
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substitution on September 28, 2010, the Notice of Trustee Sale recorded by QLS against Plaintiffs property, as evidenced by the public record with the County Recorder is VOID as a violation of Cal. Penal Code 115 and 115.5. C.
85.)

FORGED INSTRUMENTS

On August 30, 2010, an assignment of the beneficiary interest was recorded by FNMA assigning

title to JPMorgan together with a transfer of the Note and DoT. It was signed by Tim Bargenquast, Assistant Vice President of McCarthy and Holthus, Attorney in Fact to FNMA. Mr. Bargenquast is an employee of an agency, QLS, who becomes a subsequent Trustee. As was said in [Brown v. Ball, 123 Cal. App. 758],
we think that it would be a dangerous innovation to hold that on such proof, without more, assignments purporting to be executed by an agent, as each of these were, could be introduced into evidence. We are asked to presume not only that the persons whose names are subscribed actually executed the assignments, but also that they had authority to do so merely because they were received through the mail in their present form after having been mailed to the alleged assignors with a request that they be executed.

Although the Brown case was referring to work requests submitted through the mails, it is not a stretch to consider that work requests passed through the internet are comparable.
86.)

Cal. Comm. Code 3302 states "holder in due course" means the holder of an instrument if the

instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity; and the holder took the instrument (A) for value, (B) in good faith, (C) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series, (D) without notice that the instrument contains an unauthorized signature or has been altered, (E) without notice of any claim to the instrument described in 3306, and (F) without notice that any party has a defense or claim in recoupment described in 3305(a). Since a default was recorded by agents of JPMorgan before the assignment to JPMorgan was effective, JPMorgan was prevented from being a holder in due course as a matter of law. D. PRODUCE THE NOTE

The burden of proving an assignment falls upon the party asserting the rights thereunder (Read v. Buffrum, 79Cal 77; [21P 555; 12 Am.St.Rep. 131]; Ford v. Bushard, 116 Cal 273 [48 P. 119]; Bovard v. Dickerson, 131 Cal. 162 [63 P. 162]; Nakagawa v. Okamoto, 164 Cal. 718 [130 P. 707]). In an action
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by an assignee to enforce an assigned right, the evidence must not only be sufficient to establish the fact of assignment when the fact is in issue (Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783]) but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an obligor from any further claim by the primary obligee (Gustafson v. Stockton etc. R.R. Co, 132 Cal. 619 [64 P. 995]). A negotiable promissory note such as the Note can only be enforced in accordance with Article 18 of the Commercial Code ("CCC"), Cal. Com. Code 3101-3505 (Deering 2011). The CCC permits enforcement of a note by a party who: (1) holds a directly endorsed note (3205 ); (2) previously had the ability to enforce the note, but it was lost, destroyed, or stolen (3309); (3) has possession of an endorsed-in-blank instrument (3205); or (4) can prove both possession of the enforcement rights received from its transferor (3301). Id; In re McMullen Oil Co.,251 B.R. 558, 568 (Bankr.C.D. Cal.
2000); In Re Carlyle, 242 B.R. 881, 887 (Bankr. E.D. Va. 1999). These requirements apply to every link in the chain of transfer of the note. Where a note has been assigned several times, each assignment in the chain must be valid or the party claiming the note cannot enforce it. In re Gavin, 319 B.R. 27, 32 (B.A.P. 1st Cir. 2004); In re Wells, 407 B.R. 873 (Bank:r. N.D. Ohio 2009). Even if a party is the owner of a promissory note, it is not entitled to enforce the note unless it meets the statutory criteria for enforcement. [Cal. Comm. Code 3203(b) cmt.2].

Although the Note is necessary to define and execute the contract, and changes to the beneficiary interest are to be endorsed on the Note, the California Courts thinks its hooey that the Note be possessed in order to foreclose. California Civil Code sections 2924 through 2924(l) provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust. This comprehensive statutory scheme has three purposes: (1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the debtor / trustor from wrongful loss of the property; and (3) to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser. Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 12491250 [26 Cal. Rptr. 3d 413]. Notwithstanding, the foreclosure statutes are not exclusive. If someone commits murder during an auction taking place under Civil Code 2924, that does not automatically mean they are immune
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from criminal and civil liability. Perhaps this is where some of these courts are missing the boat, particularly Appellate courts who are fixated on 2924 2924(l). Indeed, the federal courts regard Civil Code 2920 2944.7 to be the non-judicial statutes. By the process of stare decisis the California courts have been dumbed down to disregard non-judicial foreclosure as a multi-step process, with one of those steps being defined in 2924 2924(k). There are necessary preliminary steps to that process, particularly regarding the power of the beneficiary to declare a default. They have only to look at 2934 to see a reference to 2924(b,f) to see that other statutes are complementary to 2924. Likewise, in South Bay Building Enterprises, Inc. v. Riviera Lend-Lease, Inc. [*1071] (1999) 72 Cal.App.4th 1111, 1121 [85 Cal. Rptr. 2d 647], the court held that a junior lienor retains the right to recover damages from the trustee and the beneficiary of the foreclosing lien if there have been material irregularities in the conduct of the foreclosure sale. (See also Melendrez v. D & I Investment, Inc., supra, 127 Cal.App.4th at pp. 12571258; Lo v. Jensen (2001) 88 Cal.App.4th 1093, 1095 [106 Cal. Rptr. 2d 443] [a trustee's sale tainted by fraud may be set aside].) In looking past the comprehensive statutory framework, these other Courts also considered the policies advanced by the statutory scheme, and whether those policies would be frustrated by other laws. Recently, in the case of California Golf, L.L.C. v. Cooper, 163 Cal. App. 4th 1053, 78 Cal. Rptr. 3d 153, 2008 Cal. App. LEXIS 850 (Cal. App. 2d Dist. 2008), the Appellate Court held that the remedies of 2924h were not exclusive. Of greater importance is that the Appellate Court reversed the lower court and specifically held that provisions in UCC Article 3 were allowed in the foreclosure context: Considering the policy interests advanced by the statutory scheme governing non-judicial foreclosure sales, and the policy interests advanced by Cal. Comm. Code 3312, it is clear that allowing a remedy under the latter does not undermine the former. Indeed, the two remedies are complementary and advance the same goals. The first two goals of the non-judicial foreclosure statutes: (1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor and (2) to protect the debtor / trustor from a wrongful loss of the property, are not impacted by the decision that we reach. This case most certainly, however, involves the third policy interest: to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser.
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This is very significant since it provides further support to lawsuits brought against foreclosing parties lacking the ability to enforce the underlying note, since those laws also arise under Article 3. Under Cal. Comm. Code 3301, a note may only be enforced if one has actual possession of the note as a holder, or has possession of the note not as a non-holder but with holder rights. Plaintiff requested a copy of his note prior to a default being declared under the auspices of Cal. Civil Code 2943 in order to determine who held the beneficiary interest by displaying a true copy of the note and how much he owed with his request for a beneficiary statement on January 27, 2010. Neither was returned, which in effect informed Plaintiff that the Defendant to whom he was making mortgage payments was not the beneficiary or their agent of his loan. Just like in California Golf, enforcing 3301 operates to protect the debtor/trustor from a wrongful loss of the property. To the extent that a foreclosing party might argue that such lawsuits disrupt a quick, inexpensive, and efficient remedy against a defaulting debtor/trustor, the response is that since there is no enforceable obligation, the foreclosing entity is not a party/creditor/beneficiary entitled to a quick, inexpensive, and efficient remedy, but simply a declarant that recorded false documents. This is primarily because being entitled to foreclose non-judicially under 2924 can only take place after a breach of the obligation for which that mortgage or transfer is a security. Thus, 2924 by its own terms, looks outside of the statute to the actual obligation to see if there was a breach, and if the note is unenforceable under UCC Article 3, there can simply be no breach. Accordingly, if there is no possession of the note or possession was not obtained until after the notice of sale was recorded, it is impossible to trigger 2924, and simple compliance with the notice requirements in 2924 does not suddenly bless the felony of grand theft of the unknown foreclosing entity. To hold otherwise would create absurd results since it would allow any person or company the right to take another persons home by simply recording a false notice of default and notice of sale. Indeed, such absurdity would allow you to foreclose on your own home again to get it back should you simply record the same false documents. Thus it is obvious that these courts improperly assume the allegations contained in the notice of default and notice of sale are truthful. Perhaps these courts simply can not or choose not to believe such frauds are taking place due to the magnitude and volume of foreclosures in this Country at this time. One can only image the chaos that would ensue in
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America if the truth is known that millions of foreclosures took place unlawfully and millions more are now on hold as a result of not having the ability to enforce the underlying obligation pursuant to UCC Article 3. There is no claim of a lost or destroyed note as a result of the QWRs, nor is there a true copy. Defendants claim they need not offer proof of possessing the Note with its attached allonge, but the QWRs were made before the NoD and outside the procedural jurisdiction of 2924. Defendants cannot show an unbroken chain of beneficial interest to claim a breach of contract, so the procedures of 2924 cannot be initiated. Defendants were put on notice that their right to a beneficiary interest was being challenged and cannot plead mistake or surprise as a defense against their illegal activities. Cal. Civil Code 2941 states the Note must be returned, when requested, within 30 days after a loan is paid off. The two responses to the QWRs, one before the NoD, and one after, clearly demonstrate that Defendants will be unable to comply with 2941 and lends credence to Plaintiffs contention that Defendants are not the legitimate beneficiaries of his mortgage, cannot declare a breach, and cannot invoke the procedures of 2924. Cal. Comm. Code 3305(c), states an obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument. X. PRAYER FOR RELIEF. D. For a declaration that the purported power of sale contained in the Deed of Trust has been

rendered void and ineffective against the Subject Property; E. F. For a declaration that the title to the Subject Property is quieted in Plaintiff; For the return of Plaintiffs original Note under court supervision if the obligation is

found to be owing to Defendants and foreclosure is allowed by the court to proceed; G. For a declaration of the state and ownership of Plaintiffs Note and corresponding

obligation, and if the obligation is found to be void, actual economic and non-economic damages incurred from the point in time the obligation was nullified; H. I. J. For a declaration that Plaintiff is the prevailing party; For forfeitures and damages as provided by statute; For removal by Defendants of all negative reports to all credit reporting agencies,
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including all late payments, late payment fees, and notice of default, and should reflect a satisfactory loan completion or cancellation as the court determines; K. L. M. For attorney fees and costs of suit incurred herein per the terms of the Deed of Trust; For general, special, punitive, and exemplary damages; And For such other and further relief as the Court deems just and proper.

VERIFICATION I declare under penalty of perjury under the laws of the state of California that the foregoing is

true and correct.

Dated: July 29, 2011

___________________ LEIGHTON LEE PERRY Plaintiff pro se

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