Combined Final Amended Complaint Filed 04-13-2016 With

Case: 1:15-cv-10610 Document #: 64 Filed: 04/13/16 Page 1 of 1 PageID #:408
UNITED STATES DISTRICT COURT

FOR THE Northern District of Illinois CM/ECF LIVE, Ver 6,1
Eastern Division
Sebastian J Palladino
Plaintiff,
v. Case No.: 1:15cv10610
Honorable Joan B. Gottschall
Wells Fargo Bank, N.A., et al.
Defendant.
NOTIFICATION OF DOCKET ENTRY
This docket entry was made by the Clerk on Wednesday, April 13, 2016:
MINUTE entry before the Honorable Joan B. Gottschall: Motion hearing held. The
defendants do not object to the filing of the amended complaint. Plaintiff's motion for
leave to file an amended complaint [60] is granted. Plaintiff shall file the amended
complaint so it appears as a separate entry on the docket. Defendants shall answer or
otherwise plead by 5/11/16. Defendants intend to file a motion to dismiss. Status hearing
set for 6/15/16 at 9:30 a.m. Mailed notice(mjc, )
ATTENTION: This notice is being sent pursuant to Rule 77(d) of the Federal Rules of
Civil Procedure or Rule 49(c) of the Federal Rules of Criminal Procedure. It was
generated by CM/ECF, the automated docketing system used to maintain the civil and
criminal dockets of this District. If a minute order or other document is enclosed, please
refer to it for additional information.
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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SEBASTIAN J. PALLADINO )
Plaintiff )
)
v )
) Case No. 15-cv-10610
HSBC BANK, U.S.A, N.A.; FREMONT HOME LOAN TRUST )
2006 D; REAL INDUSTRY, INC., F/K/A FREMONT GENERAL )
CORP., F/K/A SIGNATURE GROUP HOLDINGS, F/K/A ) Hon. Joan B. Gottschall
FREMONT REORGANIZING CORPORATION, F/K/A )
FREMONT INVESTMENT AND LOAN; PIERCE AND )
ASSOCIATES, P.C; LOCKE LORD LLP; OCWEN LOAN )
SERVICING, LLC; WELLS FARGO BANK, N.A.; )
Defendants )
AMENDED COMPLAINT
NOW COMES SEBASTIAN J. PALLADINO (Mr. Palladino), by and through his
attorney HERB HILL and complaining against the Defendants states as follows:
NATURE OF THE CASE
1. This is an action by Mr. Palladino seeking damages and costs against the
Defendants scheme to defraud and take Mr. Palladinos home by a wrongful foreclosure which
violates federal and state laws.
2. As alleged below, Defendants conduct violates the Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. 1962(b) (Count I), RICO, 18 U.S.C.
1962(c) (Count II), the RICO conspiracy provision,18 U.S.C. 1962(d) (Count III), Aiding
and Abetting (COUNT IV), Truth in Lending Act (TILA) 15 U.S.C 1601 et seq (Count V),
Home Ownership Equity Protection Act (HOEPA) (Count VI), Home Ownership Equity
Protection Act (HOEPA) 15 U.S.C. 1639 et seq (Count VII), Illinois Consumer Fraud and
Deceptive Business Practices Act (ICFA) 815 ILCS 505/2 et. seq, (Count VIII); Conspiracy to
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Commit Fraud (Count IX); and Intentional Infliction of Emotional Distress (COUNT X) all
associated with this action.
JURISDICTION AND VENUE
3. Subject matter jurisdiction is conferred upon this Court by 18 U.S.C. 1964(c),
15 U.S.C. 1640(e), 28 U.S.C. 1331, and 28 U.S.C. 1337. The Court supplemental
jurisdiction over state law claims under 28 U.S.C. 1367.
4. Venue is proper in this Court pursuant to 28 U.S.C. 1391 as Defendants conduct
business in the Northern District of Illinois and all of the events or omissions giving rise to the
claims occurred within the Northern District of Illinois.
PARTIES
5. Plaintiff SEBASTIAN J. PALLADINO (Mr. Palladino) is a natural person
residing within this Courts jurisdiction at 917 Heathrow Lane, Naperville, IL 60540.
6. Non Party MARCELLA PALLADINO (Ms. Palladino) is a natural person
residing in this Courts jurisdiction.
7. Defendant HSBC Bank, U.S.A., N.A. (HSBC) is a national banking association
with its principal place of business in McLean, Virginia. As described below, HSBC, either
directly and/or indirectly through its agents, employees, subsidiaries and/or related companies,
including without limitation HSBC Mortgage Corp., U.S.A, HSBC Bank U.S.A Trust, and
HSBC Mortgage Services, Inc., engaged in transactions related to the securitization of mortgage
loans of real property located within the state of Illinois.
8. On June 18, 2008, Fremont General Corporation (FGC) filed a voluntary
Chapter 11 bankruptcy petition. On May 25, 2010. FGC became known as the Fremont
Reorganization Corp (FRC) On June 11, 2010 FRC merged with Fremont General Credit
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Corporation (FGCC) who then merged Signature Group Holdings, LLCs (SGH). Following
the consummation of the merger, the assets of FRC and FGCC became the assets of Signature and
any existing liabilities, guarantees, joint and several liabilitiesor obligations of Fremont, FRC and
FGCC become obligations of Signature. All of the stock of FGCC and FRC was canceled. Exhibit
1. On June 1, 2015, Signature Group Holdings, Inc. changed its name to Real Industry, Inc.
Exhibit 2
9. Defendant Fremont Home Loan Trust 2006-D, a New York common law trust,
formed by the depositor pursuant to the pooling and servicing agreement.
10. Defendant Fremont Mortgage Securities Corporation is a Delaware Corporation
with a principal office located at 2727 East Imperial Highway, Brea, California 92821.
11. Defendant Wells Fargo Bank, N.A. is a national banking association and maintains
corporate trust offices located at 9062 Old Annapolis Road, Columbia, Maryland 21045.
12. Defendant, Pierce & Associates, P.C. (Pierce) is a corporation that acts as a debt
collector, as defined by 1692a(6) of the FDCPA, because it regularly uses the mails and/or the
telephone to collect, or attempt to collect, directly or indirectly, delinquent consumer debts.
Pierces principal purpose is to enforce security interests, and Pierce is thus a debt collector for
the purposes of 1692f (6) as well as under the general definition of a debt collector under this
section.
13. Defendant Jill Rein, is a lawyer who works for Pierce and Associates, P.C. and at
all times participated in the scheme on behalf of her employers knowledgeof said acts described
herein.
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14. Defendant Amber Cowan is an Illinois notary and Supervisor for Pierce and
Associates, P.C. and at all times participated in the scheme on behalf of her employers
knowledge of said acts described herein.
15. Defendant, Locke Lord LLP. (Locke Lord) is a corporation that acts
as a debt collector, as defined by 1692a (6) of the FDCPA, because it regularly uses the
mails and/or the telephone to collect, or attempt to collect, directly or indirectly, delinquent
consumer debts. Locke Lords principal purpose is to enforce security interests, and Locke Lord
is thus a debt collector for the purposes of 1692f (6) as well as under the general definition of a
debt collector under this section.
16. Defendant David Standa, is a lawyer who works for Locke Lord and at all times
participated in the scheme to defraud on behalf of his employers knowledge of said acts
described herein.
17. Defendant Irina Dashevsky, is a lawyer who works for Locke Lord and at all times
participated in the scheme on behalf of her employers knowledge of said acts described herein.
18. Defendant, Ocwen Loan Servicing, LLC (Ocwen) is a financial institution with
its principal place of business located at 1661 Worthington Road, Suite 100, West Palm Beach,
Florida 33146. Defendant transacts business in Illinois. Defendant's Illinois registered agent is
Illinois Corporation Service C, 801 Adlai Stevenson Drive, Springfield, Illinois 62703.
19. Non-Party Defendant, Litton Loan Servicing, LLC (Litton) is a financial
institution with its principal place of business located at 4828 Loop Central Drive, Houston, TX
7708, and is a subsidiary of Ocwen Loan Servicing.
20. Defendant Howard R. Handville is an employee or agent of Ocwen and at all times
participated in the scheme on behalf of his employers knowledge of said acts described herein.
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THE SECURITIZATION PROCESS FOR THE FREMONT TRUST 2006 D
21. Securitization is the process in which certain types of assets are pooled so that they
can be repackaged into interest-bearing securities.
22. The Fremont Trust 2006-D (the Issuing Entity) was purportedly formed on or
about November 3, 2006 by Fremont Mortgage Securities Corporation (the Depositor) pursuant
to the pooling and servicing agreement (PSA) among HSBC Bank, National Association, (the
Trustee) Wells Fargo Bank, National Association, (the Master Servicer, Trust Administrator
and Custodian) Fremont Investment and Loan, (the Sponsor, Servicer and Originator)
23. The Issuing entity was purportedly a New York common law trust that has no
liabilities other than those incurred in connection with the PSA and any other related agreements.
23. Pursuant to the PSA, the Trustee, trust administrator, the Master Servicer, the
Depositor, the Originator and the servicer was supposed to act on behalf of the Issuing Entity and
were only to perform those actions on behalf of the Issuing Entity that are specified in the PSA
and other relative agreements.
24. The PSA clearly defined the roles and duties of the parties, which in most cases
including the originating lender, the Arranger, Servicers, and Trustee. The PSA established how
the parties would share in the profits and losses, who had indemnification rights and obligations,
the standards the originators had to meet, who was responsible for servicing and underwriting,
who controlled various aspects of the deal, the classes of the securities that would be created, and
the schedule of distributions to the investors.
25. After the Great Depression, the government began purchasing mortgage
loans from financial institutions in order to inject more liquidity into the housing market
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and encourage financial institutions to use that money to make additional mortgage loans which
became known as securitization. Securitization is the process in which certain types of assets are
pooled so that they can be repackaged into interest-bearing securities.
26. By pooling thousands of mortgages together, the securitization process transforms
relatively locked 30-year financial instruments into very dynamic and liquid financial
instruments. Bonds or Mortgage Backed Securities (MBS) are issued based upon the income
stream generated by the pool of mortgages, and then the MBS are sold to investors all over the
world. Meanwhile, the underlying mortgage loans are held in a trust for the benefit of these
various investors.
27. Although many entities and persons may be involved in the securitization
process and there may be slight variations, the broad framework of the securitization process is
always the same. As stated above, the five distinct actors in the Fremont Home Loan Trust 2006
D are: (1) the Issuing Entity- (Fremont Home Loan Trust 2006-D); (2); the Depositor -(Fremont
Mortgage Securities Corporation); (3) the Sponsor/Originator/Servicer-(Fremont Investment and
Loan), (4) the Master Servicer/Trust Administrator/Custodian-(Wells Fargo Bank, N.A.) and (5)
the Trustee-HSBC Bank USA, N.A.)
THE MORTGAGE LOAN PURCHASE AGREEMENT
28. Pursuant to the Mortgage Loan Purchase Agreement (MLPA) that was dated
November 1, 2006, Fremont Investment & Loan as the (Originator or FIL) and Fremont
Mortgage Securities Corporation (the Purchaser or FMSC) purportedly entered into an
agreement that stated FIL concurrently with the execution and delivery of said Agreement, and
pursuant to Section 2.01 Sale of Mortgage Loans, FIL does hereby sell, transfer, assign, set over,
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and otherwise convey to the FMSC, without recourse (i) all of its right, title and interest in and
each of the Mortgage Loans as of the Cut-off Date which was November 1, 2006. Exhibit 3
29. Pursuant to Section 2.02 Obligations of the Originator Upon Sale, FIL purportedly
was to agrees at its own expense, on or prior to the closing date which allegedly was November 3,
2006 to indicate on its books, records and computer systems that the Mortgage Loans have been
sold to FMSC pursuant to the MLPA, and deliver to FMSC and HSBC Bank USA, N.A. a
computer file containing a true and complete list of all such Mortgage Loans specifying for each
Mortgage Loan, as of the Cut-off Date, (i) its account number
30. Pursuant to section 2.03 of the MLPA, in consideration of the sale of the Mortgage
Loans from FIL to FMSC on the closing date, FMSC agrees to pay the FIL on the Closing Date
by transfer of immediately available funds, an amount equal to $1,547,770,224 and transfer
certain certificates.
THE DUTIES OF THE MASTER SERVICER, TRUST ADMINISTRATOR

AND CUSTODIAN
31. Pursuant to the PSA, Wells Fargo Bank N.A. purportedly was supposed to act as
Master Servicer, Trust Administrator, and Custodian.
32. As the Master Servicer, the primary servicing of the mortgage loans was to be
provided by Wells Fargo pursuant to the PSA.
33. Under the PSA and its underlying agreements, Wells Fargo had a duty to ensure
and monitor the mortgage servicing practices of any sub-servicers (including collection
procedures) were in conformance with those of prudent mortgage lending institutions which
service similar mortgage loans and to use its reasonable good faith efforts to ensure the sub-
servicers duly and punctually perform their duties and obligations.
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34. As Trust Administrator, Wells Fargo Bank was responsible for securities
administration, which includes pool performance calculations, distribution calculations and the
preparation of monthly distribution reports. Additionally, Wells Fargo Bank is responsible for the
preparation and filing of all REMIC tax returns on behalf of the Trust REMICs or other legal
entities formed pursuant to the pooling and servicing agreement and the preparation of monthly
reports on Form 10-D, current reports on Form 8-K and annual reports on Form 10-K that are
required to be filed with the Securities and Exchange Commission on behalf of the issuing Trust.
35. According to Wells Fargo, it has been engaged in the business of securities
administration since June 30, 1995 and has acted as trust administrator for all previous series of
publicly offered mortgage backed certificates issued by the Depositor. As of June 30, 2006, Wells
Fargo was acting as securities administrator with respect to more than $894,773,136,436 of
outstanding residential mortgage-backed securities.
36. The PSA requires that the Trust Administrator and the Master Servicer at all times
be the same person, so long as a Master Servicer is required by the provisions of the PSA.
37. As Custodian, Wells Fargo is responsible to hold, safeguard and certify the
mortgage notes and other contents of the mortgage files on behalf of the Trustee and the
Certificateholders.
TOLLING THE STAUTE OF LIMITATIONS

Fraudulent Concealment Tolling
38. Any applicable statute of limitations has been tolled by Defendants active
concealment, denial to produce discovery, and the misleading actions as alleged herein. Mr.
Palladino could not have reasonably discovered the true nature of Defendants actions and its
scheme to defraud until discovery was tendered on September 15, 2014 and on September 16,
2015.
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39. Defendants are knowingly and affirmatively actively concealing thetrue nature of
who owns Mr. Palladinos Note and Mortgage, when and if it was assigned, and if so, to whom.
Furthermore, they have fraudulently produced an endorsed Note since the start of litigation in the
state court foreclosure proceeding.
Discovery Rule
40. The cause of actions here was not discovered until September 16, 2015 when
partial discovery had been tendered.
Estoppel
41. Based on the foregoing, Defendants are estopped from relying on any statutes of
limitations as a defense in this cause of action.
STATEMENT OF FACTS
42. In January 2001, the Palladinos filed a chapter 13 bankruptcy to consolidate their
bills and reduce their monthly obligations.
43. In January, 2005, the Palladinos applied to Fremont Investment & Loan (FIL)
for a loan to refinance their existing mortgage. As a condition of the approval, the chapter 13
balance had to be paid off.
44. FIL approved the Palladinos loan on February 28, 2005, paid the chapter 13
bankruptcy trustee, thus obtaining a dismissal of the chapter 13.
45. On or about April or May of 2006, the Palladinos contacted FIL to refinance their
existing mortgage with FIL to lower their monthly mortgage payments.
46. Mr. Palladino spoke to Troy Malek, an employee at FIL who referred Mr.
Palladino to Ann Wachtel of Maywood mortgage who assisted with the refinance application
process.
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47. Although the intent was for Mr. and Mrs. Palladino to refinance the mortgage as
joint applicants, due to Mr. Palladinos employment situation and credit card obligations, the loan
could only be approved with Ms. Palladinos information.
48. Mr. Palladino faxed Ms. Palladinos 1003 application, check stubs, W2s and bank
statements to Ann Wachtel at Maywood Mortgage. (attached hereto as Exhibit 4 is a true and
accurate copy of the application sent)
49. On August 18, 2006, FIL provided a preliminary Truth in Lending disclosure
statement with an 8.229% Annual Percentage Rate. Exhibit 5 (see payment schedule below)
Payments Payment Payments Begin

36 $1,567.50 11/1/06
323 $2,553.14 11/1/09
1 $2,551.12 10/1/36
50. On August 28, 2006, FIL approved the Palladinos for a subprime loan with a
95% Loan to Value ratio, debt-to-income ratio in excess of 80%, and rated them A+.
51. The loan was an adjustable rate mortgage (ARM) in the amount of $313,500.00,
listing the interest at 7.19% until September 2009 when the interest rate was subject to change
every six months, up to a maximum of 13.19%. The monthly payment was $1,878.39 which was
calculated as interest only. Exhibit 6
52. At the closing, the Palladinos were provided a final 1003 that was different than
the original 1003 provided on August 18, 2006. Exhibit 7
Description of entry Changes

Final 1003
Original 1003
Amount of Existing Lien $277,089.00 $197,739.00 ($79,350.00)
Total Assets $330,400.00 $660,400.00 +$330,000.00
Total Liabilities $305,034.00 $5,378.00 ($299,656.00)
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Net Worth $25,366.00 $655,022.00 +$629,656.00
Fremont I&L Balance $191,898.84 $197,739.00 +$5,840.16
Cap One Auto Finance $14,541.83 $14,642.00 +$100.17
GEMN/Mohawk no entry $2,000.00 +$2,000.00
$90,555.00 $0.00 ($90,555.00)

Schedule of Liabilities
Mortgages & Liens $276,898.84 $197,739.00 ($79,159.84)
Mortgage Payments $2,277.56 $1,238.00 ($1,039.56)
53. On August 28, 2006, FIL provided a final Truth in Lending disclosure statement
with a 9.320% Annual Percentage Rate. Exhibit 8 (see payment schedule below)
36 $1,878.39 10/1/06
323 $2,803.00 10/1/09
1 $2,796.00 9/1/36
54. In March 2007, the Federal Deposit Insurance Corporation (FDIC) ordered a
cease and desist against FIL because it was offering subprime mortgage loans in a way that
substantially increased the likelihood of borrower default or other loss to the bank.
55. On May 5, 2008, FIL filed a foreclosure complaint in DuPage County, case #
2008 CH 1730 through Codilis and Associates, P.C.
56. FIL attached to the complaint a copy of the Mortgage and Rider. Exhibit 9
57. In response to the foreclosure complaint, Mr. Palladino contacted the Illinois
Attorney General, who in turn contacted FIL.
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58. On June 18, 2008, Fremont General Corporation (the parent company of FIL) filed
Bankruptcy.
59. On July 11, 2008, FIL voluntarily withdrew its foreclosure complaint.
60. On November 17, 2008, HSBC Bank USA, N.A., as Trustee Under the Pooling
and Servicing Agreement dated as of November 1, 2006 for the Fremont Home Loan Trust 2006-
D (HSBC) filed a filed a foreclosure complaint in DuPage County, case # 2008 CH 4548
through Pierce and Associates, P.C.
61. In its complaint, HSBC Bank alleged that it was the legal holder, agent or
nominee of the legal holder, of the indebtedness and that it was the owner, agent or nominee of
the owner, of the Mortgage given as security.
62. Attached to the complaint was an exhibit with an unendorsed Note and a
unnumbered fifth page reflecting an undated stamp with the words, Pay to the Order of [blank]
without recourse, with a signature above the words: Fremont Investment Loan Doug Pollock
Assistant Vice President. Exhibit 10
63. Mr. Palladino contacted several attorneys about defending him in the foreclosure
action, however all the attorneys required a minimum $5,000.00 retainer fee.
64. Mr. Palladino went to the Wheaton Law Library and after a few weeks of
researching and reading was able to prepare an answer to HSBCs foreclosure complaint.
65. On December 1, 2008, Mr. Palladino was terminated from his employment as a
result of missing work.
66. On December 15, 2008, Mr. Palladino filed an answer to the foreclosure
Complaint alleging HSBC did not have standing.
67. On March 3, 2009, Mr. Palladino filed a Motion to Compel discovery.
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68. On July 10, 2009, HSBC filed its Motion for Summary Judgment, and attached a
supplemental affidavit with an attached assignment alleging that MERS, as nominee for Fremont
purportedly, did hereby assign and deliver to HSBC prior to 11/13/08 the described mortgage
[t]ogether with all rights and interest in the same and the premises thereinand the note or
obligation thereby secured and that [t]his assignment is made without recourse and without
representation or warranty by assignor. Exhibit 11
69. The alleged assignment was signed by Jill Rein as certifying officer for MERS,
and was notarized by Amber Cowan. It contained a stamp which appeared to reflect that it was
recorded with the Du Page County Recorder on December 17, 2008.
70. In opposition to summary judgment, the Palladinos submitted an affidavit from
Forensic accountant David P. Sweeney. He attested that under the Pooling and Servicing
Agreement Dated as of November 1, 2006, Fremont Home Loan Trust 26-D, Fremont was the
only proper party to bring a foreclosure action in the event of default. He opined thatthe
mortgage and note continued to be Fremonts property. Exhibit 12
71. Following oral argument, the trial court granted HSBC Banks motion for
Summary judgment and entered a judgment of foreclosure and sale.
72. In June, 2010, Mr. Palladino secure a job for ADT.
73. In October of 2010, Mr. Palladino was injured at work and had to take a six month
leave of absence to have hip replacement surgery.
74. On May 31, 2011, Ms. Palladino filed an order of protection against Mr. Palladino
alleging spousal abuse.
75. Mr. Palladino was arrested and spent five days in solitary confinement in the
DuPage county jail.
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76. Mr. Palladino was in constant pain as a result of his hip surgery and no medication.
77. Mr. Palladino was able to post bail, but a restraining order was in effect which did
not allow him to go home.
78. As a result of the restraining order, Mr. Palladino had to sleep in his car for a short
time.
79. On April 6, 2011, Kropik, Papuga & Shaw entered a substitute appearance on
behalf of HSBC.
80. The Palladinos appealed and on April 29, 2011 the Appellate court reversed the
trial courts granting of summary judgment in HSBC Banks favor and remand for further
proceedings. HSBC Bank USA, Nat. Assn v. Palladino, 1 N.E.3d 666,408 Ill. App.3d 1128
(2011)
81. On June 20, 2011, Ms. Palladino filed a Petition for Dissolution of Marriage as a
direct and proximate cause of the ongoing litigation in regards to their propertyand the stress and
strain it had caused on their marriage.
82. On February 29, 2012, Theodore Woerthwein filed an appearance on behalf of the
Palladinos.
83. On May 1, 2012, the Dissolution of Marriage was granted and Mr. Palladino
granted was awarded sole possession of the property thus making him liable for the debts and
costs incurred in regards to the property and releasing Ms. Palladino from all claims or
obligations associated with the property.
84. In November 2012, discovery was requested for the third time on behalf of Mr.
Palladino.
85. On January 18, 2013, Morris Laing Evans Brock & Kennedy filed an additional
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appearance on behalf of HSBC.
86. On January 14, 2014, Prairie State Legal filed an appearance of behalf of Mr.
Palladino and initiated a discovery request for the fourth time.
87. On September 15, 2014, Justin Carter from Morris Laing Evans Brock &
Kennedy produced partial discovery to Joseph Miller from Prairie State Legal.
88. The Note provided in discovery was unendorsed and there was an unnumbered
fifth page reflecting an undated stamp with the words, Pay to the order of [blank] without
recourse, with signature above the words: Fremont Investment & Loan Doug Pollock Assistant
Vice President. Exhibit 13, a true and accurate copy of the Note provided from Justin Carter.
89. On April 13, 2015, HSBC filed a Motion for Protective Order objecting to certain
discovery requests alleging the documents requested was not relevant nor would it lead to the
discovery of any admissible evidence.
90. On May 1, 2015, Mr. Palladino filed an amended motion to dismiss to HSBCs
complaint.
91. On May 13, 2015, Locke Lord LLP filed an additional appearance on behalf of
HSBC.
92. On May 14, 2015 a hearing was held on Defendants Amended Motion to Dismiss.
93. At the hearing, David Standa from Locke Lord attempted to introduce an
endorsed note and make it part of the record. See excerpt from transcript below.
MR. STANDA [Counsel for Plaintiff]: ...Mr. Palladino had challenged

the endorsement on the back of the note, they said, well, the obligation then
was on the Plaintiff to produce the note. That is exactly why I brought the
original note here today [ ] The fact is the note was endorsed in blank in
possession of the trust on the date the complaint was filed [ ] Theres a
note that was endorsed in blank, is now especially endorsed to the Plaintiff
that is here in front of your Honor. Id represent to the Court that the
Plaintiff has been in possession of the note the entire time. That establishes
standing. There is no question. And that--That is the particular issue I want
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to address today. [] I understand if your Honor wants to brief me, but I

would like to get this note back into a fire proof safe as fast as possible; and
I dont want to have to bring it back to court. So I want to address standing
today. Hrg. Transcr. p. 12, 13(May 14, 2015)
94. The court denied Mr. Palladinos motion and the Court entered an order prepared
by Mr. Standa stating that Plaintiff had tendered the original note endorsed to it and that it has
been in possession of the original note throughout the pendency of the case, and has standing.
Exhibit 14
95. On May 20, 2015, Mr. Palladino filed a response to HSBC Motion for a
Protective order.
96. June 11, 2015, Mr. Palladino filed a Motion to Clarify the May 14, 2015 order.
97. On June 20, 2015, Mr. Palladino rescinded the transaction, by sending notice of
rescission to Fremont and Ocwen. Exhibit 15
98. On July 17, 2015, the Court struck the portion of the order stating that HSBC had
standing, set a status date for September 16, 2015 and HSBC to produce discovery that had been
requested since March 2009. Exhibit 16
99. In paragraph two of the order, the Court specifically ordered HSBC to produce an
affidavit as to HSBCs possession of the Note at the time of filing.
100. On September 16, 2015, Irina Dashevsky of Locke Lord LLP, sent an email to
Jennifer Luczkowiak from Prairie State Legal and had attached to it, Plaintiffs Affidavit of
Possession and corresponding exhibits, as well as Plaintiffs initial production documents, bates
labeled HSBC000001-000868.the discovery pursuant to the July 17, 2015 order.
101. The email also had attached an affidavit from Howard H. Handville attesting that
Wells Fargo Bank, N.A. as Master Servicer, Trust Administrator and Swap Administrator had
physical possession of the original Note on September 13, 2006. Exhibit 17
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102. The Note attached as Exhibit 1 was unendorsed.
103. On September 17, 2015 Irina Dashevsky sent an email to Jennifer which said:
Hi, I just reviewed the copy of the Affidavit that I provided

to you and realized that Exhibit 1 inadvertently contains an
old copy of the Note, which had a blank endorsement. This
is not the true and correct copy of the Note. As I mentioned
earlier today, the Note has been specifically endorsed to
HSBC Bank. I apologize for any confusion this may have
caused. The Affidavit with the corrected exhibit is attached.
Please disregard the version I transmitted earlier.
To eliminate any confusion, I am also sending you a hard

copy of this document via U.S. Mail.
104. Irina realized that the Note attached to the Handville was not endorsed so she
switched the unendorsed Note for a Note that contained an endorsement.
105. The 2nd affidavit from Howard H. Handville now had a Note that was now
endorsed completely different from the Note on the 1st affidavit he provided. Exhibit 18
106. On September 17, 2015, Mr. Palladinos case was continued to November 19,
2015.Mr. Palladino, reviewed the Pooling and Servicing Agreement (PSA) that had been
tendered in discovery that he had been requesting since March 3, 2009.
107. Pursuant to Section 2.01 in regards to Conveyance of Mortgage Loans, the PSA
states the Depositor assigns and conveys to the Trustee the original Note bearing all endorsements
showing a complete chain of endorsements from the originator to the last endorsee, endorsed Pay
to the Order ___________, without recourse and signed in the name of the last endorsee by an
authorized officer by the closing date. Exhibit 19
108. The Depositor for the Trust is Fremont Mortgage Securities Corporation and the
closing date was November 3, 2006.
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109. The document alleges MERS as nominee for Fremont did assign (past tense) the
mortgage and note to HSBC Bank prior to November 13, 2008 which is two years after the
November 3, 2006 closing date for the Trust.
110. Fremont Mortgage Securities Corporation is responsible for assigning loans to the
Trust, not MERS as Nominee or Fremont as alleged in the mortgage assignment.
111. Pursuant to the PSA, the underwriting guidelines state that in order to be qualified
as A+ category, the bankruptcy must have been discharged at least 24 months and the maximum
debt-to-income ratio is 50%.
112. Based on the discovery that was finally tendered on September 15, 2014 and
September 16, 2015, Mr. Palladino was able to discover that FIL violated the underwriting
guidelines in approving their loan, and that his loan had never been properly purchased or
assigned to the Trust, HSBC Bank, N.A., nor could it be.
RICO ALLEGATIONS
SCHEME TO DEFRAUD
113. All Defendants pursuant to the PSA conducted and participated in the conduct of
an enterprise in a scheme to defraud Mr. Palladino and other borrowers and investors by
originating and the securitization of subprime loans that they could not afford which greatly
increased the risk that Palladino and borrowers would default. The scheme was concealed from
the borrowers and Mr. Palladino because he was led to believe his lender was FIL, when it was
some unknown investors from Wall Street. By originating these predatory subprime loans,
Defendants leveraged risk by the alleged purchases of various mortgage-backed (really not
backed by anything) securities.
114. Each Defendants had a role in the securitization process which included
originating and selling the loans to the Depositor which was carried out by Fremont Investment
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& Loan as the Originator, Seller, and Servicer, then purchasing the loans which was done by
Fremont Mortgage Securities Corp. as the Depositor. Each of the other Defendants role and
duties were set out and governed in the pooling and servicing agreement (PSA)
115. The following parties signed the PSA respectively: Jeff Crusenberry signed the on
behalf of Fremont Mortgage Securities Corporation, the Depositor; Graham Oglesbly signed on
behalf of Wells Fargo Bank, N.A. as the Master Servicer, Trust Administrator, and Custodian;
Elena Zheng signed on behalf of HSBC Bank USA, N.A. as Trustee; and Jeff Crusenberry signed
on behalf of Fremont Investment & Loan.
116. The scheme was carried out both in the origination of Mr. Palladinos mortgage
loan, the creation and administration of the Trust, and in the filing of a wrongful foreclosure in an
attempt to steal Mr. Palladinos property to make a profit.
117. The scheme was carried out as follows: A Pooling and Servicing Agreement dated
November 1, 2006 was purportedly created by Fremont Investment & Loan as the originator,
sponsor and servicer. Its role is to work with brokers to originate high cost loans, service the
loans for a period of time until it had enough, and then sell those loans to Fremont Mortgage
Securities Corporation who purchased the loans pursuant to a Mortgage Loan Purchase
Agreement.
118. Fremont Mortgage Securities Corporation who in acting in its role as the
Depositor, purportedly is to transfer the mortgage and notes to the Issuing Entity, Fremont Home
Loan Trust 2006-D.
119. Fremont Home Loan Trust 2006-D is then formed on November 3, 2006, the
closing date at which time all the mortgages and notes have been purchased and transferred to
the Fremont Home Loan Trust 2006-D.
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120. HSBC Bank, USA National Association will act as Trustee. Its role is to
perform various functions such as including serving as indenture trustee, authenticating agent,
issuing and paying agent, securities registrar and transfer agent and calculation agent with
respect to the securities, custodian of the assets (on behalf of the issuer), analytics provider and
back-up servicer.
121. Wells Fargo Bank, National Associations role was to act as the Master
Servicer, Trust Administrator and Custodian. Its role as Master Servicer is to supervise and
oversee the servicing of the mortgage loans. Pursuant to the PSA, Wells Fargo as trust
administrator will act as paying agent and certificate registrar, prepare and make available a
monthly statement to Certificateholders, and perform certain administrative functions with
respect to the certificates and distribution account. In its capacity as trustadministrator, Wells
Fargo will also act as custodian. As custodian, Wells Fargo takes physical custody of notes and
other loan documents and is required to certify that it has reviewed the loan files in its possession
to determine that certain specified documents are in fact included in the loan file.
122. When the Palladinos went to FIL to get a mortgage, FIL sent them to Maywood
Mortgage. Maywood Mortgage gathered all their documents and sent the loan to FIL approve the
loan. Since there wasnt a program that the Palladinos qualified for based on their income,
assets and previous bankruptcy filing, FIL had to falsify their income, assets, underwriting
guidelines, HOEPA, and TILA to qualify them.
123. Since the Palladinos didnt qualify for the loan FIL approved them for, the loan
would be unaffordable and eventually lead to default. The Massachusetts Attorney General filed
suit on October 5, 2007 as a result of an investigation into the securitization of FIL loans and
20
found that from 2004 to 2007, FIL had engaged in predatory and unsatisfactory lending practices
that greatly increased the risk that borrowers will default on their loans.
124. On March 7, 2007 after being advised of the charges of FIL unsound banking
practices, FIL was ordered to cease and desist by the FDIC from engaging in unsatisfactory
lending practices.
125. When HSBC Bank, N.A. files its complaint on November 17, 2008 and Mr.
Palladino challenges its standing, Pierce and Associates in association with HSBC Bank, N.A.,
Wells Fargo Bank, N.A., Fremont Home Loan Trust 2006-D, and Fremont Mortgage Securities
Corp implement a scheme and conspiracy to commit fraud by creating an assignment and trying
to conceal the fact that Palladinos loan was never purchased by the Trust.
126. The purported assignment was created by Pierce and Associates and recorded
with the DuPage County Recorders Office in Wheaton, Illinois.
127. The assignment was signed by Jill Rein as a purported certifying officer for
MERS., and notarized by Amber Cowan acknowledging Jill Rein was a certifying officer for
MERS.
128. Jill Rein is not, however, a certifying officer for MERS in any traditional sense
of the term; instead she is actually an attorney at Pierce and Associates, P.C. and was aware that
the document and the statement that Jill Rein was a certifying officer was false.
129. Amber Cowan, who also is an employee for Pierce and Associates, made a false
statement in verifying that Jill Rein was an certifying officer for MERS.
130. Neither Jill Rein or Amber Cowan receive compensation from MERS, nor do they
communicate with anyone at MERS.
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131. Instead, they both work at Pierce and Associates; they receive their compensation,
oversight, and instructions from Pierce and Associates.
132. This fraudulent practice of Pierce and Associates in fabricating documents
purported to be assignments have happened thousands of times in the last ten years in the filing
and prosecuting foreclosures on behalf of the enterprise.
133. On June 24, 2008, Pierce and Associates recorded a purported assignment it
created with the Will County County Recorders Office in Joliet, Illinois. This document was
signed by Jill Rein as certifying officer for MERS and notarized by Amber Cowan. Exhibit 20
134. The assignment was false in that Jill Rein did not work for MERS and pursuant to
every PSA, the originator, servicer or seller pursuant to a Master Purchase Agreement sells each
loan to the purchaser also known as the Depositor, who then in turns assigns the note and
mortgage to the Trust. In Palladinos document which was purported to be an assignment, as
well as the document in 146, the chain of assignments was missing.
135. On March 6, 2009, Pierce and Associates recorded a purported assignment it
created with the DuPage County Recorders Office in Wheaton, Illinois. Exhibit 21
136. This document was signed by Jill Rein as certifying officer for MERS, and it
was false in that Jill Rein did not work for MERS. In addition, as stated in 147, pursuant to
mortgage to the Trust.
137. On May 21, 2009, Pierce and Associates recorded a purported assignment it
created with DuPage County Recorders Office in Wheaton, Illinois. Exhibit 22
138. This document was signed by Jill Rein as certifying officer for MERS, and it
22
was false in that Jill Rein did not work for MERS. In addition, as stated in 149, pursuant to
mortgage to the Trust.
139. On November 13, 2009, Pierce and Associates recorded a purported assignment it
created with the Cook County Recorders Office in Cook County, Illinois. Exhibit 23
140. This document was signed by Diana Athanasopoulos as certifying officer for
MERS, and it was false in that Diana did not work for MERS.
141. On September 16, 2009, Pierce and Associates recorded an assignment it created
with the Cook County Recorders Office in Chicago, Illinois that again alleged JillRein was a
certifying officer for MERS. Exhibit 24
142. On October 15, 2013, Pierce and Associates filed this Assignment with the Circuit
Clerk of Cook County.
THE ENTERPRISE
143. A RICO enterprise is a group of persons associated together for a common
purpose of engaging in a course of conduct.
144. The following persons constitute persons within the meaning of 18 U.S.C.
1961 (3). Fremont Trust 2006-D, Fremont Mortgage Securities Corporation, HSBC Bank,
National Association, Wells Fargo Bank, National Association, Pierce and Associates, P.C.,
Locke Lord, LLP, Ocwen Loan Servicing, LLC and Real Industry who thorough a series of
mergers and subsequent name changes took on all assets, liabilities, and responsibilities of
Fremont Investment and Loan. (The Wells Fargo Enterprise)
145. Each person above was and is responsible for operating and managing the
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business affairs of the enterprise as described in the PSA, Master Purchase Agreement, and
Master Servicing Agreement which is described in detail in 113-142.
146. Under the direction of Wells Fargo, its job was to authorize foreclosure
proceedings and/or retain the Law Firms pursuant to an engagement letter.
147. The Wells Fargo Enterprise knows that it has to prove the Trust is the
owner of the Palladinos loan, so Pierce and Associates on behalf of the Wells Fargo Enterprise
creates a document in which it purports to be an assignment, has it recorded on December 17,
2008 and files it with the DuPage County Clerk.
148. In addition to the document purported to be an assignment, the PSA, requires the
Note to be endorsed. So Locke Lord, LLP and Ocwen Loan Servicing, LLC on behalf of the
Wells Fargo Enterprise conspire and create an endorsed Note.
149. These activities, described above, also describe the manner with which each
Defendant conducted the affairs of the association in fact enterprise enumerated herein.
150. In order to foreclose on property belonging to Mr. Palladino, Defendants
employed a system that asserted demonstrably false claims, namely the documentation that
Defendants relied upon to effectuate the foreclosure did not show a viable chain of title.
151. Collectively, the Wells Fargo Enterprise constitute an enterprise engaged in and
whose activities affect interstate commerce. All of the enterprises described in the preceding
paragraph are an individual, partnership, corporation, association, or other legal entity and are
therefore valid enterprises within the definition of 1961(3) of the RICO Act.
152. The enterprise has existed at least since November 1, 2006 pursuant to the PSA
with the exception of the Defendant Law Firms who joined once the foreclosure proceedings
started.
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PATTERN OF RACKETEERING AND PREDICATE ACTS
153. Section 1961(1) of RICO provides that racketeering activity includes any act
indictable under 18 U.S.C. 1341 (relating to mail fraud) and 18 U.S.C. 1343(relating to wire
fraud). As set forth below, Defendants have engaged, and continue to engage, in conduct
violating each of these laws to effectuate their scheme.
Fremont Investment Loan n/k/a Real Industry
154. The pattern of racketeering activity, as evidenced by the predicate acts began in
2004 with FIL who after a series of mergers is n/k/a Real Industry originated 10,000 predatory
loans from 2004 through 2007. In the Matter of Fremont Investment & Loan Brea, California,
Docket No. FDIC -07-035b.
155. Fremont has also participated in the filing of fraudulent assignments or more than
three occasions and have been denied foreclosures because of questionable paperwork.
Fremont Investment Loan v Rose, 2008 NY Slip Op. 52409 (December 2, 2008)
Fremont Inv. & Loan v McBean, 2007 NY Slip Op. 27463 (Nov. 26, 2007)
Wells Fargo Bank, N.A.
156. Wells Fargo has either participated directly or indirectly in the creation and/or
having recorded fraudulent assignments or in a ten-year period.
Wells Fargo Bank. N.A. v. Marchione, 69 AD3d 204, 210. [2d Dept. 2009
Wells Fargo Bank, N.A. v Farmer, 2008 NY Slip Op. 50199 (February 4, 2008)
Wells Fargo Bank, N.A. v. Guy, 2008 NY Slip Op. 50916 (May 1, 2008)
GSAA Home Equity Trust 2006-2 v. Wells Fargo Bank et al., No. 14-CV-4166,
2015 WL 5734389 (D.S.D. Sept. 30, 2015).
Wolf v Wells Fargo, Case No. 2011-36476 verdict for fraudulent assignments
2011 and 2013 Consent orders in which Wells Fargo was accused of fraudulent
documents particularly assignments in which after the orders, they still are engaging in
racketeering
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Pierce & Associates, P.C.
157. Pierce and Associates predicate acts and pattern of Racketeering is described in
125-142.
HSBC Bank, N.A
158. Defendant HSBC Bank, N.A. pattern of racketeering based on questionable and
fraudulent paperwork.
HSBC Bank, USA N.A. v. Perboo, 2008 NY Slip Op. 51385 (July 11, 2008)
HSBC Bank, USA, N.A. v. Betts,2008 NY Slip Op. 31170 (April 23, 2008)
HSBC Bank, USA, N.A. v. Charlevagne, 2007 NY Slip Op. 33673 (Nov 15, 2008)
159. The pattern of racketeering activity has a viable threat of continuity, because
each Defendant continues to participate in the Wells Fargo Enterprise in their respective roles
and duties with the loans purported to be held in the Trust as well as other loans that have been
securitized pursuant to a PSA in which they are continuing to make huge profits.
VIOLATIONS OF 1341 AND 1343, MAIL AND WIRE FRAUD
160. For purposes of executing and/or attempting to execute the above described
scheme to fraudulently foreclose upon Mr. Palladinos property and other properties in
foreclosure, the Defendants, in violation of 18 U.S.C. 1341, placed or caused to be placed in
post offices and/or in authorized repositories matter and things to be sent or delivered by the
Postal Service, caused matter and things to be delivered by commercial interstate carrier, and
received matter and things from the Postal Service or commercial and interstate carriers,
including but not limited to falsified, fraudulent, and legally defective documents including but
not limited to fraudulent assignments.
161. The practices described in this complaint could not have occurred without the use
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of the U.S. Mail and various wires including telephones and the Internet. The overwhelming
majority of the evidence of these mailings and wires are in the possession of the Defendants and
are not public documents. However, specific instances of such fraudulent mails and/or wires
regarding Mr. Palladinos mortgage as well as other loans that have been securitized which
include all of the court filings in which participants in the Wells Fargo Enterprise have created
and recorded fraudulent assignments.
162. These fraudulent documents were filed in the Courts, sent in the mail to process
servers, mailed to the Recorder Offices.
163. The agents or employees of the Wells Fargo Enterprise including but not limited
agents or employees of Pierce and Associations, Locke Lord, LLP, Ocwen, placed in the mail or
caused to be placed in the mail on the following instances:
On July 2, 2009, an agent employee of Pierce & Associates sent in the mail the
document purported to be an assignment from Jill Rein
On July 6, 2009, an agent employee of Pierce & associates filed with the DuPage
County Clerk the document that purports to be an assignment.
On March 23, 2013, an agent employee of Pierce & Associates sent in the mail an
filed with the DuPage County Clerk the document purported to be an assignment from Jill Rein.
On June 23, 2010, an agent employee of Pierce & Associates sent in the mail an
filed with the DuPage County Clerk the document purported to be an assignment from Jill Rein.
On June 18, 2015 an agent or employee of Locke Lord, LLP caused to be filed
through the DuPage County Clerk, a copy of a fraudulent endorsed Note.
164. The above actions were all done in an attempt to have Mr. Palladino rely on the
fraudulent information and documents which he did to his detriment.
COUNT I
VIOLATION OF RICO 18 U.S.C. 1962(b)
(Real Industry)
165. Mr. Palladino incorporates all preceding paragraphs as if fully set forth herein.
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166. In violation of 18 U.S.C. 1962(b), Real Industry acquired an interest in the Wells
Fargo Enterprise due to the mergers that took place on or about June 11, 2010. Following the
consummation of the merger, the assets of FRC and FGCC became the assets of Signature and
any existing liabilities, guarantees, joint and several liabilitiesor obligations of Fremont, FRC
and FGCC become obligations of Signature.
167. As of the effective date, SGH, k/k/a Real Industry became the holders of the
majority share of the common equity from FGC and gained control and/or an ownership interest
in the stock.
168. Because the Wells Fargo Enterprise was engaged in a pattern of racketeering, and
Real Industry by the merger and the name change, it gained an interest in theWells Fargo
Enterprise.
169. Mr. Palladino has been injured because he has to incur attorney fees in excess of
$80,000.00 to defend the foreclosure based on the Defendants scheme to defraud him and take
his property.
WHEREFORE, Mr. Palladino respectfully requests that this Honorable Court grant:
(1) Statutory damages;
(2) Litigation expenses and costs of suit;
(3) Punitive Damages;
(4) Treble Damages;
(5) Attorney fees and
(6) Such other or further relief as the Court deems proper.
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COUNT II
Violation of the Federal RICO Act, 18 U.S.C. 1962(c)
(Wells Fargo Enterprise and Defendant Law Firms)
171. The Wells Fargo Enterprise conducted, or participated in the conduct of an
enterprise through a pattern of racketeering activity and through the use of wire and mail by: 1)
filing a foreclosure against Mr. Palladino despite its lack of interest in the mortgageand Note; 2)
drafting and filing a fraudulent mortgage assignment thus misrepresenting his loan had been
properly assigned to the Trust; 3) originating a predatory loan that violated thePSA underwriting
guidelines; 4) filing these documents (purported assignment and indorsed Note) with the DuPage
Recorders office and DuPage Circuit Clerk; 5) sending the fraudulent documents in the mailto
Palladino.
172. Each Defendant participated in its individual capacity and agreed to participate in
the affairs of the enterprise while committing predicate acts of mail and wire fraud to further the
goal of the enterprise and reap big profits while conducting their respective roles according to the
PSA.
173. For each part of Defendants role in the Wells Fargo Enterprise, they were paid a
fee. Defendants knew their predicate acts were part of a pattern of racketeering activity and
agreed to the commission of those acts to further the scheme.
174. Defendants are therefore liable to Mr. Palladino under the federal RICO Act.
(1) Actual damages;
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(4) Treble Damages;
(5) Attorney fees; and
COUNT III
Violation of the Federal RICO Act, 18 U.S.C. 1962(d)
(Wells Fargo Enterprise)
176. Defendants conspired to pursuant to the PSA to originate high cost predatory loans
in which they would securitize the loans in a mortgage pool and make a profit.
177. Once a loan is considered to be in default, the fabrication of documents begins
with the Defendant Law Firms and Wells Fargo.
178. Each participant is aware that the fabrication of documents has happen because the
PSA stated each of the Defendants roles and responsibility in which they signed.
179. HSBC Bank, N.A. as Trustee know the mortgage and note were not transferred as
well as Fremont Mortgage Securities, Corp, the Depositor.
180. However, to ensure they still receive their respective share of the profits, they
devise a scheme in which the Pierce & Associates, Lock Lorde, LLP and Ocwen create fraudulent
documents purported to be assignments and magically appearing indorsement on the Note.
181. The Defendants intentionally conspired and agreed to conduct and participate in
the conduct of the affairs of the Enterprise through a pattern of racketeering activity. Defendants
knew their predicate acts were part of a pattern of racketeering activity and agreed to the
commission of those acts to further the scheme. That conduct constitutes a conspiracy to violate 18
U.S.C. 1962(c) in violation of 18 U.S.C. 1962(d).
182. Defendants are therefore liable to Mr. Palladino under the federal RICO Act.
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(1) Actual damages;
(4) Treble Damages;
COUNT IV
Civil Conspiracy to Commit Actual Fraud
(Wells Fargo, HSBC Bank USA, N.A., Locke Lord, Ocwen, Pierce and Associates)
184. Defendants entered into an agreement to effectuate the scheme to defraud Mr.
Palladino out his property by creating fraudulent indorsements and a fabricated assignment.
185. When HSBC Bank, N.A. and Wells Fargo Bank, N.A. discovered there was no
mortgage assignment and indorsed note, they had to devise a plan to create the illusion thatHSBC
Bank, USA N.A. was entitled to prosecute the foreclosure.
186. Pierce and Associates and its agents/employees created a document which
purported to be an assignment and had it recorded with the DuPage County Recorders Office.
187. Locke Lord, LLP and Ocwen, along with its agents/employee put an indorsement
on Palladinos Note which had not been there at the filing of the foreclosure complaint, the
motion for summary judgment, nor in the first set of discovery provided by Justin Carter from
Morris Laing Evans & Brock.
188. This conspiracy started in 2008 and has continued for the last 71/2 years.
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189. Mr. Palladino has been damaged as a result by incurring attorney fees in excess of
$80,000.00, and emotional distress.
(1) Actual damages;
(4) Treble Damages;
COUNT V
Aiding and Abetting
Pierce & Associates and Locke Lord
191. As set forth herein, by creating a document purported to be an assignment,
producing a fraudulent indorsement on the Note, filing it with the DuPage County Clerks online
filing system, committed fraud.
192. The above Defendants substantially and materially assisted the Wells Fargo
Enterprise, Wells Fargo Bank, N.A., and HSBC Bank, USA N.A. by the creation of fabricated
documents that is alleged throughout this complaint and in 175.
193. As a result of the above Defendants aiding and abetting the Wells Fargo
Enterprise, Mr. Palladino has been in active litigation for over seven years and has suffered severe
financial and emotional distress.
(1) Actual damages;
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(4) Treble Damages;
COUNT VI
Truth in Lending Act (Rescission)
Real Industry and Ocwen
195. This consumer credit transaction was subject to Mr. Palladinos right of rescission
as described by 15 U.S.C. 1635 and Regulation Z 226.23 (12 C.F.R. 226.23)
196. Mr. Palladino has a continuing right to rescind the transaction until the third
business day after receiving all material disclosures, up to three years after consummation of the
transaction, pursuant to 15 U.S.C. 1635(a) and Regulation Z 226.23(a)(3).
197. On June 20, 2015, Mr. Palladino rescinded the transaction, by sending notice of
rescission to Fremont and Ocwen.
198. More than 20 calendar days have passed since Defendants received Plaintiffs
notice of rescission.
199. Defendants have failed to take any action necessary or appropriate to reflectthe
termination of any security interest created by the transaction, as requiredby 15 U.S.C. 1635(b)
and Regulation Z 226.23(d)(2).
200. Defendants have failed to return to Plaintiff any money or property given by Mr.
Palladino to anyone, including Defendants, as required by 15 U.S.C. 1635(b) and Regulation Z
226.23(d)(2).
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201. Defendant Ocwen, as servicer is also liable pursuant to 15 U.S.C. 1641.
202. As a result of these violations of the Truth in Lending Act and Regulation Z,
Defendants are liable to Plaintiff for:
a. Rescission of the transaction pursuant to 15 U.S.C. 1635(b).
b. Termination of any security interest in Plaintiffs property created by the
transaction pursuant to 15 U.S.C. 1635.
c. Return of any money or property given by the Plaintiff to anyone, including
Defendants, in connection with this transaction, under 15 U.S.C. 1635(b).
d. Statutory damages of $2000 for Defendants failure to respond properly to
Plaintiffs rescission notice pursuant to 15 U.S.C. 1640(a)(2)(A).
e. Forfeiture of return of loan proceeds under 15 U.S.C. 1635.
f. Actual damages in an amount to be determined pursuant to 15 U.S.C. 1640.
g. Costs in accordance with 15 U.S.C. 1640.
WHEREFORE, Mr. Palladino requests the following relief:
(1) Declaratory and/or injunctive relief rescinding the mortgage on Mr.
Palladinos home;
(2) Enforcement of recession;
(3) Return any money or property given by Mr. Palladino from any
Defendants in connection with this transaction
(4) Actual damages in an amount to be determined by the court; and
(5) Statutory damages in the amount of $2000.
(6) Reasonable attorney fees.
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COUNT VII
Home Ownership Equity Protection Act (HOEPA)
204. In 1994, Congress enacted the Home Ownership Equity Protection Act
(HOEPA) which is codified at 15 USC sec. 1639 et seq. with the intention of protecting
homeowners from predatory lending practices targeted at vulnerable consumers. HOEPA requires
lenders to make certain defined disclosures and prohibits certain terms from being included in
home loans. In the event of noncompliance, HOEPA imposes civil liability for rescission and
statutory and actual damages.
205. Plaintiff is a consumer and Defendants Real Industry and Ocwen are creditors
as defined by HOEPA.
206. Defendants Real Industry and Ocwen violated HOEPA by numerous acts, material
omissions, and a pattern of fraudulent concealment, including but not limited to engaging in a
pattern and practice of extending credit to the Palladinos without regard to their ability to repay
in violation of 15 USC sec. 1639(h).
207. By virtue of the Defendants Real Industry and Ocwen violations of HOEPA, Mr.
Palladino has a legal right to rescind the consumer credit transaction the subject of this action
pursuant to 15 USC sec. 1635.
208. Defendants Real Industry and Ocwen further violated HOEPA by failing to make
additional disclosures, including but not limited to the failure of said Defendants to provide an
accurate TIL disclosure which failure was executed through a pattern of fraudulent concealment
and intentional nondisclosure.
209. As a direct consequence of and in connection with Palladinos legal and lawful
35
exercise of their right of rescission, the true lender and its agents, including Defendant Ocwen
and, to the extent necessary, Defendant Real Industry, is required, within twenty (20) days of this
Notice of Rescission, to:
(a) desist from making any claims for finance charges in the transaction;
(b) return all monies paid by Plaintiffs in connection with the transaction to the
Plaintiff;
(c) satisfy all security interests, including mortgages, which were acquired in the
transaction.
210. Upon the true lenders full performance of its obligations under HOEPA
(including any necessary actions of Defendants Fremont and Ocwen as agents of the lender),
Plaintiff shall tender any sums to which the true lender is legally entitled.
WHEREFORE, Mr. Palladino requests the following relief: :
(1) enforcement of the rescission of the mortgage loan transactions;
(2) termination of the mortgage and security interest in the property the
subject of the mortgage loan documents created in the transaction;
(3) return of any money or property paid by the Plaintiffs including all
payments made in connection with the transactions;
(4) an amount of money equal to twice the finance charge in connection
with the transactions;
(5) relinquishment of the right to retain any proceeds; and
(6) actual damages in an amount to be determined at trial, including
attorneys fees.
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COUNT VIII
Home Ownership Equity Protection Act (HOEPA)
(Disclosure Statement)
212. The Truth in Lending Disclosure statement provided at the August 28, 2006
disclosed an amount financed of $309,690.50, a finance charge of $666,097.23, an annual
percentage rate of 9.32% and a security interest in the property.
213. The payment schedule is shown below:

36 $1,878.39 11/1/06
323 $2,803.00 11/1/09
1 $2,796.00 10/1/36
214. However, the loan was an adjustable rate mortgage interest at 7.19% until
September 2009 when the interest rate was subject to change every six months, up to a maximum
of 13.19%.
215. HOEPA loans whose interest rates are not fixed must disclose the amount of the
maximum monthly payment, based on the maximum interest rate. 15 U.S.C. 1639(a)(2)(B)
216. The rate was scheduled to increase after three years, and then change every six
months thereafter. The correct disclosure is shown below.
Payments Payment amount Rate

1-36 $1,879.39 7.19%
37-42 $2,845.96 10.19
43-48 $3,189.19 11.69%
49-360 $3540.53 13.19
217. Fremonts failure to give the Palladinos the material disclosures as required by
TILA violates 15 U.S.C. 1638, entitling Mr. Palladino to actual and statutory damages under 15
37
U.S.C. 1640(a) and extending the right to rescind until proper delivery of all material
disclosures.
WHEREFORE, Mr. Palladino requests the following relief:
(1) Rescission of the transaction, including a declaration that Mr. Palladino
is not liable for any finance charges or other charges imposed by Fremont;
(2) A declaration that the security interest is void;
(3) Return any money or property given by Mr. Palladino, including
Defendants in connection with this transaction
(4) Actual damages in an amount to be determined by the court; and
(5) Statutory damages in the amount of $6,000 (consisting $2,000.0 for
disclosure violation, $2,000 for failure to rescind, and $2,000 for lending without an ability to
repay. (6) Reasonable attorney fees.
COUNT IX
Violations of the Illinois Consumer Fraud Act (Deceptive)
Wells Fargo Bank, N.A., Pierce & Associates, Ocwen and Locke Lord, Jill Rein, Amber
Cowan, Howard Handville, Ocwen, David Standa, Irina Dashevsky
219. Defendants violated 815 ILCS 505/2 by engaging in unfair acts and practices to
collect a superseded debt.
220. It was deceptive for Defendant Pierce and Associates and its employee Jill Rein and
employee Amber Cowan to do the following:
a) Create, sign, and record in the DuPage County Recorders office and filing
in the DuPage County Clerks office, a document purported to be an assignment
which claimed under oath, to have personal knowledge of the information,
assertions, or averments contained in the document when in truth and in fact, the
signatory had no such knowledge;
b) Creating, signing, and recording in the DuPage County Recorders office
and filing in the DuPage County Clerks office a document purported to be an
38
assignment that contained false, deceptive, and misleading information, assertions,

or averments, such as:
i. Claiming under oath that the signatory had conducted a review of
the facts surrounding the purported transfer of a mortgage and note when,
in truth and fact, the signatory had not conducted such review and had no
such knowledge;
ii. Misrepresenting the signatory of the document as
certifying officer for MERS;
iii. Misrepresenting the note had been transferred to MERS or
from MERS to the Trust, when in fact it had not been transferred.
iv. Notarizing the purported documents without knowledge of
the information or averments within the document.
221. It was deceptive for Defendant Locke Lord, and its employee David Standa and
Irina Dashevsky, Ocwen and Howard Handville to do the following.
a) to falsify an affidavit alleging HSBC had been in possession of the

endorsed Note since the filing of the foreclosure complaint;
b) to fail to send the affidavit back to Howard Handville for re-execution; and
c) For David Standa to make false statements to the court about the Note and
Mortgage
222. As the Master Servicer of the Trust, Wells Fargo Bank, N.A is liable for the
conduct of the above Defendants because it authorized them to conduct itself in such behavior.
223. Mr. Palladino has been in constant fear and worry of losing this home which has
sentimental value to him and his family.
224. Mr. Palladino has suffered substantial damage in that, among other things: (a) he
has lost his wife, (b) credit has been damaged, (c) he has suffered severe emotional distress; has
lost profits, has spent money on legal fees including lawyers, photo copies, time researching and
reading that took away from his family.
225. Defendants conduct occurred in the course of trade or commerce
226. Defendants engaged in unfair conduct by violating the public policy of Illinois and
the federal guidelines enacted by Congress.
39
227. Defendants actions were the proximate cause of the damages to Mr. Palladino and
he has injured because he has incurred legal costs and fees to defend a foreclosure action.
228. An award of punitive damages is appropriate because Defendants conduct was
outrageous, willful, and wanton, and it showed a reckless disregard for the rights of Mr. Palladino
over the nine-year period.
WHEREFORE, Mr. Palladino respectfully requests that this Honorable Court:
(1) Statutory damages;
(2) Litigation expenses and costs of suit; and
(3) Punitive Damages
COUNT X
Intentional Infliction of Emotional Distress
Wells Fargo Enterprise
230. Defendants conduct alleged herein, specifically the willful and knowingly
fraudulently scheme to falsify the loan application, TILA, debt-to-income ratios, assignment, and
produce an indorsed note all in an effort to steal Mr. Palladinos home caused him severe and
emotional distress.
231. The scheme orchestrated by the Defendants caused Mr. Palladino may sleepless
nights, fear, worry, and anxiety. Mr. Palladino contacted Government Agencies, friends,
strangers, all in a desperate attempt to fight for his home, family, and life.
232. Mr. Palladino felt deeply disillusioned and oppressed as an American citizen
resulting from his experience with the Banking Giants, the justice system, and their law firms
retained to help them steal his home and destroy his life savings and family.
40
233. At times, Mr. Palladino felt numb, disconnected, vulnerable and felt the system
had defeated him no matter what he tried to do. He felt like he was the victimized twice. Onceby
the Defendants, and second by the Courts.
234. It was cruel and unusual punishment for a citizen to have to suffer at the type of
injustice that happened to Mr. Palladino.
235. As a result of Defendants conduct, Mr. Palladino endured severe and extreme emotional
distress that resulted in stress, jail time, anxiety and a judgment for dissolution of marriage.
236. As a direct and proximate result of Defendants willful and wanton conduct Mr. Palladino
suffered emotional distress, monetary losses and has been damaged in excess of $300,000.00.
WHEREFORE, Mr. Palladino respectfully requests that this Honorable Court:
(1) Actual damages;
(3) Punitive Damages for Defendants willful and wanton conduct; and
JURY DEMAND: Mr. Palladino demands a trial by jury.
Respectfully submitted,
By: /s/ Herbert Hill

Plaintiffs Attorney
Herbert Hill
The Law Office of Herbert Hill
605 N. Broadway
Aurora, Illinois 60505
Atty No: 1214853
P: 630-742-0374
h.hilllegaleagle1@gmail.com
41
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Combined Final Amended Complaint Filed 04-13-2016 With

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Copyright:

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Combined Final Amended Complaint Filed 04-13-2016 With

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Case: 1:15-cv-10610 Document #: 64 Filed: 04/13/16 Page 1 of 1 PageID #:408

UNITED STATES DISTRICT COURT

NOTIFICATION OF DOCKET ENTRY

UNITED STATES DISTRICT COURT

NOW COMES SEBASTIAN J. PALLADINO (Mr. Palladino), by and through his

NATURE OF THE CASE

violates federal and state laws.

2. As alleged below, Defendants conduct violates the Racketeer Influenced and

associated with this action.

JURISDICTION AND VENUE

3. Subject matter jurisdiction is conferred upon this Court by 18 U.S.C. 1964(c),

jurisdiction over state law claims under 28 U.S.C. 1367.

4. Venue is proper in this Court pursuant to 28 U.S.C. 1391 as Defendants conduct

claims occurred within the Northern District of Illinois.

5. Plaintiff SEBASTIAN J. PALLADINO (Mr. Palladino) is a natural person

6. Non Party MARCELLA PALLADINO (Ms. Palladino) is a natural person

residing in this Courts jurisdiction.

7. Defendant HSBC Bank, U.S.A., N.A. (HSBC) is a national banking association

loans of real property located within the state of Illinois.

8. On June 18, 2008, Fremont General Corporation (FGC) filed a voluntary

formed by the depositor pursuant to the pooling and servicing agreement.

10. Defendant Fremont Mortgage Securities Corporation is a Delaware Corporation

telephone to collect, or attempt to collect, directly or indirectly, delinquent consumer debts.

knowledge of said acts described herein.

debt collector under this section.

19. Non-Party Defendant, Litton Loan Servicing, LLC (Litton) is a financial

7708, and is a subsidiary of Ocwen Loan Servicing.

THE SECURITIZATION PROCESS FOR THE FREMONT TRUST 2006 D

can be repackaged into interest-bearing securities.

and other relative agreements.

the schedule of distributions to the investors.

pooled so that they can be repackaged into interest-bearing securities.

26. By pooling thousands of mortgages together, the securitization process transforms

Mortgage Securities Corporation); (3) the Sponsor/Originator/Servicer-(Fremont Investment and

the Trustee-HSBC Bank USA, N.A.)

THE MORTGAGE LOAN PURCHASE AGREEMENT

Mortgage Securities Corporation (the Purchaser or FMSC) purportedly entered into an

Mortgage Loan, as of the Cut-off Date, (i) its account number

by transfer of immediately available funds, an amount equal to $1,547,770,224 and transfer

THE DUTIES OF THE MASTER SERVICER, TRUST ADMINISTRATOR

Master Servicer, Trust Administrator, and Custodian.

provided by Wells Fargo pursuant to the PSA.

servicers duly and punctually perform their duties and obligations.

outstanding residential mortgage-backed securities.

TOLLING THE STAUTE OF LIMITATIONS

state court foreclosure proceeding.

partial discovery had been tendered.

limitations as a defense in this cause of action.

bills and reduce their monthly obligations.

balance had to be paid off.

bankruptcy trustee, thus obtaining a dismissal of the chapter 13.

existing mortgage with FIL to lower their monthly mortgage payments.

could only be approved with Ms. Palladinos information.

accurate copy of the application sent)

Payments Payment Payments Begin

calculated as interest only. Exhibit 6

the original 1003 provided on August 18, 2006. Exhibit 7

Description of entry Changes

Total Assets $330,400.00 $660,400.00 +$330,000.00

Total Liabilities $305,034.00 $5,378.00 ($299,656.00)

Net Worth $25,366.00 $655,022.00 +$629,656.00

Fremont I&L Balance $191,898.84 $197,739.00 +$5,840.16

Cap One Auto Finance $14,541.83 $14,642.00 +$100.17

GEMN/Mohawk no entry $2,000.00 +$2,000.00