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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION OBAMIKEL ALSTON

and FIKRIYYAH ALSTON, Plaintiffs, V. D ) ) ) ) ) ) ) ) Defendants, ) __________________________________________) THE BANK OF NEW YORK MELLON; NOVASTAR MORTGAGE, INC.; SAXON MORTGAGE SERVICES, INC.; MERSCORP, INC.; SHAPIRO & INGLE, LLP; HUTCHENS, SENTER & BRITTON, P.A.; PHILIP A. GLASS, and JOHN DOES, THIRD AMENDED COMPLAINT With the Written Consent of the Opposing Parties AND NOW, come Plaintiffs, under F.R.C.P. 15(A)(2), by and through their attorneys Lucas and Nowak, LLP, and with the consent of opposing parties and complains of the Defendants and alleges the following: PARTIES Plaintiffs are adult residents of North Carolina whose address is 3509 Crofton Court, Raleigh, North Carolina 27604. Defendant The Bank of New York Mellon is a New York Corporation with its principal place of business at One Wall Street, New York, New York 10286, doing business in the State of North Carolina, and purporting to be a holder in ) ) ) ) ) ) )

Civil Action No. 5:10-CV-562-

due course of the Note at issue in this case. Defendant NovaStar Mortgage, Inc. is a subsidiary of NovaStar Financial, a Missouri corporation with its principal place of business at 2114 Central Street, Suite 600, Kansas City, MO 64108, and was the original lender for the Note and Deed of Trust at issue in this action. Defendant Saxon Mortgage Services, Inc. is a Texas corporation with a principal place of business at PO Box 161489, Fort Worth, TX 76161, and purports to act as a servicing agent for the loan account evidenced by the Note and Deed of Trust at issue in this action. Defendant MersCorp, Inc. is a Delaware corporation with a principal place of business at 1818 Library Street, Suite 300, Reston, VA 20190, doing business in the State of North Carolina as a mortgage industry registration service which operates through its subsidiary Mortgage Electronic Registrations Systems, Inc. (hereinafter collectively referred to as MERS), and served as nominee on the Note at issue in this action. Defendant Law Firm Shapiro & Ingle, LLP, is a law firm with its principal place of business at 10130 Perimeter Parkway, Suite 400, Charlotte NC, 28216, from which it does business within the State of North Carolina, and operated as a purported substitute trustee in this action. Defendant Law Firm Hutchens, Senter & Britton, P.A., d/b/a Substitute Trustee Services, Inc., is a law firm with its principal place of business at 4317 Ramsey Street, Fayetteville, NC 28311, from which it does business within the State of North Carolina, and operated as a purported substitute

trustee in this action. Defendant Philip A. Glass is an Attorney with the Law Firm of Nodell, Glass, & Haskell LLP, with a principal place of business at 5540 Centerview Drive, Suite 416, Raleigh, North Carolina 27606, from which he performs legal services within the State of North Carolina, and operates as a purported substitute trustee in this action. Any allegations about acts of any corporate or other business Defendants means that the corporation or other business did the alleged acts through its officers, directors, employees, agents and/or representatives while they were acting within the actual or ostensible scope of their authority. At all relevant times, each Defendant committed acts, caused or directed others to commit the acts, or permitted others to commit the acts alleged in this Complaint; additionally, some of the Defendants acted as the agent for other Defendants, and all of the Defendants acted within the scope of their agency as if acting as the agent of another. Knowing or realizing that other Defendants were engaging in or planning to engage in unlawful conduct, each Defendant nevertheless facilitated the commission of those unlawful acts. Each Defendant intended to and did encourage, facilitate or assist in the commission of the unlawful acts, and thereby aided and abetted the other Defendants in the unlawful conduct. All Defendants engaged in continuous and multiple unfair and deceptive trade practices, fraud and misrepresentations that affected interstate commerce

and proximately caused the herein injuries to the Plaintiff. II. JURISDICTION AND VENUE The Court has original and subject matter jurisdiction under 28 U.S.C. 1332, 18 U.S.C. 19611968, and over the statutory and common law violations of North Carolina and common law. Plaintiffs have consented to new Complaint and Venue is proper in this Judicial District as the Plaintiffs property is located in Wake County North Carolina. All Defendants have conducted business in this State by filing fabricated, illegal and unenforceable transfers of Deeds of Trust, Promissory Notes, Assignments of Promissory Notes, Appointments of Substitute Trustees, Affidavits as to loan ownership of Plaintiffs Note and Deed of Trust and Status of Accounts, Mortgages and Assignments of Mortgages and/or other court documents. III. INTRODUCTION On July 24, 2003, Plaintiff Alston executed a 30-year mortgage note (hereinafter referred to as the Note) of $152,000 at 8.990% annual interest for monthly installments of $1,221.93 on his home located at 3509 Crofton Court, Raleigh, with Defendant NovaStar Mortgage, Inc. identified as Lender, signed by Plaintiff Alston and signed PAY TO THE ORDER OF (no name or signature provided), WITHOUT RECOURSE NovaStar Mortgage, Inc. (allegedly signed by David A. Pazgan, Snr. Vice President, Joel D. Brenner, Vice President); a copy of the Note is attached hereto and incorporated herein and marked Exhibit "A-1".

At some point in time subsequent to the aforementioned execution of the Note, an almost indentical note was produced (hereinafter referred to as the Second Note), differing from the original Note by purporting to be endorsed to JPMorgan Chase Bank, as Trustee (stamped), and certifying itself as a True and Correct Copy of the Original (stamped and signed by an unknown signature). This Note was not signed by Plaintiffs. A copy of the Second Note is attached hereto and incorporated herein and marked Exhibit "A-2".

As security for the aforementioned Note, on July 24, 2003, Plaintiffs executed a Deed of Trust (hereinafter referred to as the Deed of Trust) identifying NovaStar Mortgage, Inc. as lender, MERS as nominee for Lender and Lenders successors and assigns .... [and as a] beneficiary under [the instrument], and the Law Offices of Benita Walker Gibbs as Trustee. A copy of the Deed of Trust is attached hereto and incorporated herein and marked Exhibit "B".

Upon information and belief, MERS was established in or around 1993 by members of the mortgage banking industry so as to create a centralized document custodial system through which mortgages can be easily transferred between members without having to record or pay county filing fees for such assignments.

Plaintiffs never executed a note naming MERS as a party, nor were Plaintiffs ever notified or informed of a transfer of a note to MERS.

No evidence exists to support the claim that MERS is or ever was the holder in due course of the Note at issue in this action.

MERS, listed on the Deed of Trust as the nominee or agent, and as the onetime purported holder of the Note, by and through its membership rules, was not empowered to act as an agent or nominee for its members, and therefore, without specific written approval from a principal, lacked the mandate to effectuate mortgage-related assignments, transfers or appointments of any kind.

There is no evidence to suggest that during the relevant time periods contemplated in this Action, MERS was empowered by its principals to effectuate any mortgage-related assignment, transfer or appointment.

On or about February 10, 2004, Defendant Shapiro & Ingle, LLP (Shapiro & Ingle), drafted an appointment of substitute trustee on behalf of MERS, the purported Owner and Holder of the Note secured by said Deed of Trust, removing Benita Walker Gibbs as Trustee and naming Elizabeth B. Ells or David W. Neill as Substitute Trustee under said Deed of Trust, signed February 10, 2004, NovaStar Mortgage, Inc., as Servicer for Mortgage Electronic Registration Systems, Inc., Scott Forst, V.P., before Nicole J. Taylor, Notary Public - Missouri; a copy of the appointment of substitute trustee is attached hereto and incorporated herein and marked Exhibit "C".

Upon information and belief, Elizabeth B. Ells and/or David W. Neill, were either employees or licensed attorneys for Shapiro & Ingle at the time of said appointment.

On or about May 14, 2009 Defendant Law Firm of Hutchens, Senter & Britton, P.A. (Hutchens, Senter & Britton) drafted an appointment of

substitute trustee on behalf of Defendant Bank of New York Mellon, as Successor Trustee under NovaStar Mortgage Funding Trust, Series 2003-3 and purported holder of the Note, removing all prior trustees in favor of Substitute Trustee Services, Inc., signed May 14, 2009 by Bank of New York Mellon by its Attorney-In-Fact, Saxon Mortgage Services, Inc., Craig Hanlon, Asst. Vice President, before Christina Anne Sauerer, Notary Public Minnesota; a copy of the appointment of substitute trustee is attached hereto and incorporated herein and marked Exhibit D. Substitute Trustee Services, Inc. operates under the direction and control of Defendant Hutchens, Senter & Britton, and therefore for purposes of this case, both are treated as the same entity. Plaintiffs were never informed or notified of any transfer of the Note to Defendant Bank of New York Mellon. No evidence exists to support the claim that the Bank of New York Mellon is the holder in due course of the Note at issue in this action. On June 1, 2009, Substitute Trustee Services, Inc. executed and filed a Notice of Hearing Prior to Foreclosure of Deed of Trust before the Clerk in the General Court of Justice on behalf of Bank of New York Mellon, purported owner and holder of the mortgage Note; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit E. On July 6, 2009, Substitute Trustee Services, Inc. executed a Notice of Foreclosure Sale giving notice of the sale of Plaintiffs property set to take place on July 27, 2009; a copy of the Notice is attached hereto and

incorporated herein and marked Exhibit F. On July 13, 2009, Substitute Trustee Services, Inc. filed a Notice of Dismissal before the Clerk in the General Court of Justice voluntarily dismissing the aforementioned foreclosure action; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit G. On December 4, 2009, John Cotrell, purported Assistant Vice President of Saxon Mortgage Services, Inc., purported servicer of the loan account evidenced by a note and deed of trust, executed and signed before Angelo Dupon Mayfield, Notary Public Texas, an affidavit naming Bank of New York Mellon as holder of the Note, alleging Plaintiffs default with respect to the indebtedness evidenced by said note, declaring acceleration and the balance of indebtedness immediately due, demanding foreclosure of the Deed of Trust securing the indebtedness, and naming Substitute Trustee Services, Inc. as substitute trustee; a copy of the Affidavit is attached hereto and incorporated herein and marked Exhibit H. On December 11, 2009, Substitute Trustee Services, Inc. filed a Notice of Hearing Prior to Foreclosure of Deed of Trust before the Clerk in the General Court of Justice on behalf of Bank of New York Mellon, purported owner and holder of the mortgage Note; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit I. On January 13, 2010, Substitute Trustee Services, Inc. executed a Notice of Foreclosure Sale giving notice of the sale of Plaintiffs property set to take place on February 8, 2010; a copy of the Notice is attached hereto and

incorporated herein and marked Exhibit J. On Jauary 13, 2010, John Cotrell, purported Assistant Vice President of Saxon Mortgage Services, Inc., purported servicer of the loan account evidenced by a note and deed of trust, signed before Angelo Dupon Mayfield, Notary Public Texas an affidavit naming Bank of New York Mellon as holder of the Note, alleging Plaintiffs default with respect to the indebtedness evidenced by said note, declaring acceleration and the balance of indebtedness immediately due, demanding foreclosure of the Deed of Trust securing the indebtedness, and naming Substitute Trustee Services, Inc. as substitute trustee; a copy of the Affidavit is attached hereto and incorporated herein and marked Exhibit K. Between February 2010 and April 2010 a series of Motions and Orders to Continue, initiated by Substitute Trustee Services, Inc. were filed, ultimately delaying the foreclosure hearing to June 21, 2010; copies of the Motions and Orders are attached hereto and incorporated herein and marked Exhibit L. On May 24, 2010, Substitute Trustee Services, Inc. filed a Notice of Dismissal before the Clerk in the General Court of Justice voluntarily dismissing the aforementioned foreclosure action; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit M. On October 12, 2010 Defendant Attorney Philip A. Glass, drafted an appointment of substitute trustee on behalf of Defendant Saxon Mortgage Services, Inc., as servicing agent for Bank of New York Mellon, as Successor Trustee under NovaStar Mortgage Funding Trust, Series 2003-3 and purported holder of the Note, removing all prior trustees in favor of

Philip A. Glass, Lenny Cicero, or Matthew Hoptry, signed October 12, 2010 by Saxon Mortgage Services, Inc., Regina Alexander, Assistant Vice President, before Angelo Dupon Mayfield, Notary Public - Texas; a copy of the appointment of substitute trustee is attached hereto and incorporated herein and marked Exhibit N. On October 26, 2010, Defendant Attorney Philip A. Glass filed a Notice of Foreclosure Hearing for November 29, 2010 on behalf of the Bank of New York Mellon, purported owner and holder of the mortgage Note, signed October 21, 2010, Philip A. Glass, Substitute Trustee; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit O. On October 26, 2010, Attorney Philip A. Glass filed a Notice of Foreclosure Sale giving notice of the sale of Plaintiffs property set to take place on December 20, 2010, signed October 21, 2010, Philip A. Glass, Substitute Trustee; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit P. On December 1, 2010, Attorney Philip A. Glass executed and signed a ReNotice of Foreclosure Sale giving notice of the sale of Plaintiffs property for January 31, 2011, which was subsequently edited to reflect a new sale date of February 14, 2011, posted on January 10, 2011; a copy of the Notice is attached hereto and incorporated herein and marked Exhibit Q. Plaintiffs mortgage and the unlawful attempted foreclosures that followed were, and are, based upon a Deed of Trust and a Note in the mortgage that are no longer held by any identifiable entity or party.

Plaintiffs mortgage was flawed from the date of origination of the loan because MERS was named as the beneficiary and nominee of the lender on the Deed of Trust, which was done for purposes of deception, fraud, confusing and therefore harming the Plaintiff, and theft of revenue from the local county government through the illegal avoidance of mortgage recording fees.

MERS is unregistered and unlicensed to conduct mortgage lending or any other type of business in the State of North Carolina and has been and continues to knowingly, intentionally, illegally and fraudulently record mortgages and conduct business in North Carolina on a large scale and systematic fashion.

Neither MERS nor Bank of New York Mellon are the original lenders for the Plaintiffs subject Deed of Trust or Note herein.

Neither MERS nor Bank of New York Mellon are legally documented assignees of either the Plaintiffs Deed of Trust or Note and do not hold the original Deed of Trust nor have they ever held the Plaintiffs Note.

No Note or other evidence exists which could ever make the Plaintiffs indebted to MERS or Bank of New York Mellon in any way.

Neither MERS nor Bank of New York Mellon ever had nor will they ever have the authority to assign the Mortgage to any entity.

Neither MERS nor Bank of New York Mellon ever had any right to collect on the Note or enforce the Deed of Trust or Mortgage, nor have they ever had a right to hold, enforce or collect upon Plaintiff's Note.

At the time Plaintiff signed the Note and Deed of Trust, he was unknowingly

converting his property into an asset of a MBS and was deliberately induced into signing a Negotiable Instrument which was never intended as such, but was intended by NovaStar Mortgage, Inc. as collateral for a MBS. The alleged Note in question started its life as a negotiable instrument, similar to a check. The negotiation and enforceability of the Note is governed by Article Three (3) of the Uniform Commercial Code. The Defendants are not in possession of the original negotiable instrument with any legally binding original endorsement. There is no assignment of the Note to any of the foreclosing Parties/Defendants. The endorsement stamped on the copy of the Note (Exhibit A-1) bears no signature and is blank and invalid; the subsequent alteration of the original Note (Exhibit A-2), confusingly endorsed to JPMorgan Chase and certified by an unknown signature as a true and correct copy of the original, serves only to further cloud the already broken chain of title, evidencing fraud, misrepresentation, and other offenses. Defendants Shapiro & Ingle, Hutchens, Senter & Britton, and Attorney Philip A. Glass (collectively referred to herein as Defendant Law Firms) have conspired to file false and fraudulent Foreclosure Actions against Plaintiff; it is asserted that such actions are part of Defendant Law Firms' regular practices and procedures of systemic fraud across the State of North Carolina in conspiracy with its clients, who Defendant Law Firms knew, or should reasonably have known, were not entitled under the law to foreclose on Plaintiffs property.

The note that had been executed with the deed of trust became part of a pool of mortgages losing its individual identity as a note between a lender and a borrower; it merged with other unknown notes as a total obligation due to the investor or investors; it is no longer a negotiable instrument, rather, collateral for a federally regulated Security under the confines of the SEC.

In actuality, MERS was not the nominee for the lenders; the true lenders were investors who had provided the funds for the loans through mortgage backed security pools which were held as trusts.

This fact was known to MERS and the Servicers and the subsequent assignees of any and all rights purported to have been assigned by MERS at the time the note and deed of trust was signed by Plaintiff and at the time of each and every later purported assignment by MERS, or others, of any interest in the note and deed of trust.

The proper parties to this action would be the investors of the mortgagebacked securities to which Plaintiffs loan was securitized; but these parties have no recorded interest in the mortgage or deed of trust, which were never delivered to the Trustee for the mortgage backed security pool; therefore the note itself is, at best, unsecured rights to payment.

All Defendants knew that Plaintiffs loan was securitized and intended to be securitized prior to the preparation of the note and mortgage reflecting the loan.

The Servicers profited by foreclosing because of the standard Prospectus and Pooling and Service Agreements, allowing Servicers to keep proceeds of the

foreclosures when the MBS has been closed or the investors paid off. All of the purported Assignments, transfers and filing of foreclosure notices were done by the Defendants without the required corporate resolution giving authorityfor that person to COUNT I. FRAUD AND CONSPIRACY TO COMMIT FRAUD AND MISREPRESENTATION and ABUSE OF PROCESS ALL DEFENDANTS Plaintiffs re-allege and affirm each preceding paragraph of this Complaint and incorporate such as if alleged anew. Defendant Shapiro & Ingle conspired to create and did create and file with the Wake County Court a false, phony and fictitious Appointment of Substitute Trustee on behalf of MERS, which said Defendant knowingly and falsey purported to be holder and owner of the Note at issue, naming employees, attorneys, and/or agents of said Defendants law firm as substitute trustees. Defendants Hutchens, Senter & Britton and Attorney Philip A. Glass, respectively, conspired to create and did create and file with the Wake County Court false, phony and fictitious Appointments of Substitute Trustee on behalf of Bank of New York Mellon, which said Defendants knowingly and falsey purported to be holder and owner of the Note at issue, naming employees, attorneys, and/or agents of said Defendants law firms as substitute trustees. Purporting to act on behalf of the Bank of New York Mellon, as successor trustees under NovaStar Mortgage Funding Trust, Series 2003-3, and without a lawful assignment of the Note or Deed of Trust, Defendant Hutchens, Senter & Britton filed multiple foreclosure actions, voluntary dismissals and motions

to continue against Plaintiffs between June 2009 and May 2010 in Wake County North Carolina. Purporting to act on behalf of the Bank of New York Mellon, as successor trustees under NovaStar Mortgage Funding Trust, Series 2003-3, and without a lawful assignment of the Note or Deed of Trust, Defendant Philip A. Glass filed a foreclosure action against Plaintiffs beginning in or about October 2010, in Wake County North Carolina. At the time of the foregoing false Appointments, foreclosures, and other actions, none of the Defendant Law Firms possessed a lawful and valid assignment of Deed and Trust from NovaStar Mortgage, Inc., the orignal lender and holder of the Note and Deed of Trust, and therefore knowingly lacked standing and the capacity to foreclose. Defendant Saxon Mortgage Services, Inc., by and through its purported Assistant Vice President John Cottrell, twice executed, signed and notorized affidavits falsely naming The Bank of New York Mellon as holder of the Note and indebtedness, alleging Plaintiffs default on the loan, and declaring acceleration, balance due and foreclosure, despite having no first-hand knowledge of the loan, no valid assignment of any loan document, and therefore no authority to file affidavits as to the validity of the loan documents or of the existence of the loan. COUNT II. DECEPTIVE AND UNFAIR TRADE PRACTICES Plaintiff re-alleges and affirms each and every preceding paragraph of this Complaint and incorporate such as if alleged anew.

In 2010, Defendants Bank of New York-Mellon, Novastar Mortgage and Saxon Mortgage Service intentionally instituted other foreclosures against Plaintiffs based upon fraudulent documents in the Wake County Court.

The scheme employed by Defendants Hutchens, Senter & Britton whereby they filed multiple foreclosure actions, intentionally had the capacity and tendency to deceive Plaintiffs, and did deceive Plaintiffs, and others similarly situated.

The acts of the Defendants violated standards of fair trade practices. As a result of the conduct of the Defendants The Bank of New York Mellon, NovaStar Mortgage, Inc., Saxon Mortgage Services, Inc. MersCorp, Inc. Shapiro & Ingle, LLP Hutchens, Senter & Britton, P.A. Philip A. Glass (or, alternatively, Nodell, Glass & Haskell, LLP) Plaintiff was proximately injured in his business and his person. COUNT III. NEGLIGENT SUPERVISION The Bank of New York Mellon, NovaStar Mortgage, Inc., Saxon Mortgage Services, Inc. MersCorp, Inc. Shapiro & Ingle, LLP Hutchens, Senter & Britton, P.A. Philip A. Glass

Plaintiff re-alleges and affirms each and every preceding paragraph of this Complaint and incorporate such as if alleged anew.

Defendants had a duty of care to supervise the actions of their employees and agents

Defendants employees' and/or agents' actions, as alleged previously, were unlawful and violated Plaintiff's property rights.

Defendants knew or should have known that their employees and/or agents

were acting unlawfully. As a result of the Defendants' negligent supervision, Plaintiff was proximately injured by the unlawful acts of their employees and/or agents. An agency relationship exists between the individual defendants and the corporate defendants. The actions of the individual defendants were done on behalf of and at the direction of the corporate defendants and within the scope of their agency relationship. As a result of the actions of the individual defendants, the Plaintiff was injured. COUNT IV. Common Law Fraud and Injurious Falsehood Plaintiff incorporates by this reference each and every paragraph of this Complaint as if set forth fully herein. The lack of notice and lack of required evidence of the alleged mortgage assignments enabled the Defendants to perpetrate the fraudulent foreclosures. The Defendants conspired together and knew the material representations were false. The material representations to the Court and to the Plaintiff were made so that the Court and the Plaintiff would believe that the Defendants had legitimate claims in the property. The Plaintiff and County Clerk relied on such and the Plaintiff was injured as a result with the entering of a judgment and the facing of foreclosure litigation. COUNT V. Fraud by Misrepresentation UNFAIR AND DECEPTIVE TRADE PRACTICES

Plaintiff incorporates by this reference each and every paragraph of this Complaint as if set forth fully herein.

The deceptive acts of the original Lender, MERS, Bank of New York, Saxon Mortgage and Novastar Mortgage and the Servicers resulted in a multitude of misrepresentations, including but not limited to the true identity of the Lender, and the fraudulent misrepresentation as to the Mortgagee.

The aforementioned Defendants induced the Plaintiff to enter into the transaction when there existed in the inducement and execution material representations which were false and were known to be false or were made recklessly, which inducement was reasonably acted upon by Plaintiff and acted upon in reliance thereon and Plaintiff has suffered injury proximately due to such.

The deceptive acts of the Lender, MERS, and the other Defendants constitute fraudulent misrepresentation and the parties in question are jointly and severally liable for their acts of fraud by their misrepresentation and all damages stemming from such, including punitive damages and attorneys fees. COUNT VI. CONSPIRACY TO COMMIT FRAUD BY OMISSION AND INDUCEMENT

Plaintiff incorporates by this reference each and every paragraph of this Complaint as if set forth fully herein

The Lender conspired to fraudulently conceal the True Lender at closing, and the Note was unlawfully securitized and converted into an investment

vehicle. MERS had a duty to disclose material facts, failed to disclose those facts; and that failure induced the Plaintiff to act, and he has suffered actual damages due to the fraudulent omissions. The Defendants had a duty to disclose the true nature of their relationship and the fact that the Lender was merely a Pretender Lender and thus, the agent for the Concealed and Unknown Lender. The Defendants and MERS are jointly and severally liable for their acts of Fraud by Omission and all damages stemming from such. COUNT VII. Conspiracy to Commit Fraud by the Creation, Operation and Use of MERS System Plaintiff incorporates by this reference and re-alleges the allegations contained in all the paragraphs above as if set forth fully herein. Upon information and belief, Defendants and each of them, did knowingly and willfully conspire and agree among themselves to engage in a conspiracy to promote, encourage, facilitate and actively engage in fraudulent and predatory lending practices perpetrated on Plaintiff as alleged herein and the actions of the Defendant conspirators were taken as part of the business policies and practices of each Defendant conspirator in participating in the MERS system. Upon information and belief, the Defendant conspirators Saxon, Novastar, and the foreclosure Defendants are members of and participants in the MERS system, and, through their employees and agents, served as members of MERSCORP, Inc. and/or MERS, Inc., and participated in the design and coordination of the MERS system described in this complaint.

Defendants participation as shareholders, directors, operators, or members of MERSCORP, Inc. and/or MERS, Inc. are as follows:

Whenever this Complaint refers to any corporation's act, deed, or transaction, it means that such corporation engaged in the act, deed, or transaction by or through its members, officers, directors, agents, employees, or other representatives while they actively were engaged in the management, direction, control, organization or transaction of its business and affairs.

MERS, Inc. and/or MERSCORP, Inc. arranged for bilateral and multilateral meetings, bilateral and multilateral teleconferences, and bilateral internet communications with potential Shareholders, actual Shareholders, candidates for Membership, and Members.

Upon information and belief, the Defendants conspired among themselves and with other unknown parties to: a) Develop a system of earning profits from the origination and securitization of residential loans without regard for the rights of Plaintiffs; and b) In furtherance of the system referred to immediately above, the Defendant conspirators intentionally utilized, created, managed, operated and controlled the Defendants MERSCORP, Inc. and MERS, Inc. for the specific purpose of MERS, Inc. being designated as a sham beneficiary in the original deeds of trust securing those loans, including the loans made to Plaintiff and other similarly situated individuals by the lenders; and c) Defendant conspirators intentionally organized, created, managed, operated and controlled the MERS system with the unlawful intent and for the unlawful purpose of making it difficult or impossible for Plaintiffs and other victims of

such industry-wide predatory policies and practices to identify and hold responsible the persons and entities responsible for the unlawful actions of Defendants and their co-conspirators. MERSCORP, Inc. informed its co-conspirators that using the MERS system would remove transaction records from the public record. MERSCORP, Inc. and MERS, Inc. have publicly stated the following: MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. 1) With the recording of the security instrument(s), MERS becomes the mortgagee in the county land records and no assignments are required during a subsequent sale and transfer of the loan between MERS members. and 2) There is no dependency on the corporate name you use on closing documents and the corresponding corporate name on the MERS System because the MERS System is not the legal system of record of ownership of mortgage loans. MERSCORP, Inc.s marketing materials also promises Members with assistance with foreclosures. MERSCORP, Inc. and/or MERS, Inc. have publicly stated MERS has assembled a Foreclosure Manual to provide a state-by-state guideline for our Members to follow when foreclosing a mortgage loan in the name of MERS. MERSCORP, Inc. and/or MERS, Inc. offered Members increased profits. MERSCORP, Inc. has publicly stated: 1) The MERS web site enables you to target directly your MERS Ready products and services to MERS members. 2) Commercial originators and issuers save hundreds to

thousands of dollars (in the case of cross-collateralized loans) in preparing and recording assignments. Where the originator has not recorded a MERS as Original Mortgagee (MOM) security instrument, the issuer saves the costs of assigning to the Trust by having the originator assign to MERS. and 3) It will reduce risk and generate more profits for lenders because the Notes registered on it will be in electronic format. It shortens the timeframe between the closing and the securitization of the loan, enabling the Note to move instantly, creating faster funding. When the Plaintiffs' Note was split from the deed of trust, the note became unsecured. Utilizing the MERS system, Servicers were able to hide profits and fees that were not disclosed to the Plaintiffs or to the investor in the note. The Servicer-conspirators agreed to unlawfully foreclose on loans despite the separation of the loan from the unsecured deed of trust. All of the conspirators agreed to the participation of the other conspirators in their individual roles in the conspiracy. The Servicers agreed to foreclose despite full knowledge of the loan file of the Plaintiffs. Defendants have acted as players in the conspiracy, and as Securitizers or the agents of securitizers in the conspiracy. The Defendants-Securitizers knowingly, and by agreement, serviced the unlawfully obtained mortgage; Defendants named herein as co-conspirators profited from their respective

roles in originating loans, selling them, and pooling their MERS registered home loans together in large bundles which were sold and turned into financial derivative instruments; The mortgage securitization process became known in financial industry parlance as slicing and dicing. The slicing and dicing resulted in a pool of mortgages, including Plaintiffs, which had lost its individual characteristic but had a high value to those who created them; The Defendant-Servicers have attempted to unlawfully foreclose on the Plaintiffs property. The Servicers continue to misrepresent the legal right to foreclose when they have no such right. All Defendants named as MERS members agreed to promote and to utilize MERS in an unlawful manner in order to deprive Plaintiffs, and those similarly situated, of property. As a result of Defendant conspirators conspiracy described herein, Plaintiffs suffered injuries which include mental anguish, emotional distress, embarrassment, humiliation, loss of reputation and a decreased credit rating which has, or will, impair Plaintiffs ability to obtain credit at a more favorable rate than before the decrease in credit rating, the anticipated loss of their Residence and other financial losses according to proof, and Plaintiffs have incurred attorneys fees and costs in this matter. Defendant conspirators actions were wanton, willful and reckless, and justify an award of punitive damages against each of them. COUNT VIII. Fraudulent Conveyance

Plaintiffs incorporate by this reference each and every paragraph of this Complaint as if set forth fully herein.

The Defendants knowingly engaged in fraudulent conveyances. The Plaintiffs were aggrieved by the transfers and assignments of their mortgage of their real property and this action serves as a Petition in Equity against the Defendants.

All parties taking part in or who conspired with those who participated in the acts or practices in question are jointly and severally liable to the Plaintiffs.

COUNT IX - VIOLATIONS OF THE FAIR DEBT COLLECTIONS PRACTICES ACT ("FDCPA") 15 USC 1692 Plaintiffs re-allege and affirm each and every preceding paragraph of this Complaint and incorporate such as if alleged anew. Defendants Saxon, Novastar and the law firms are debt collectors as defined by 15 USC 1692(a)(6). Defendants filed false, deceptive, misleading, and perjured affidavits in connection with the collections of debts in violation of 15 USC 1692(e). Plaintiffs suffered actual damages from these violations. Pursuant to 15 USC 1692(k), Plaintiffs are entitled to actual damages, statutory damages as set forth herein, and reasonable attorney fees and costs. Because the conduct of the Defendants was frequent and persistent, because the nature of the violations of the FDCPA were so egregious, because the FDCPA violations were a part of a deliberate scheme, Plaintiffs are entitled to

the maximum possible relief permitted under 15 USC 1692k(a). Defendants failed to inform Plaintiffs of any Assignments and transfers of the mortgage in violation RESPA. COUNT X: Reformation Plaintiffs incorporate by this reference each paragraph of this Complaint as if set forth fully herein. Based on this Petition in Equity, the Plaintiffs are entitled to have clear title restored and the Court should Order the Clerk of the County to release the mortgage and strike all mortgage assignments filed in the name of the Defendants as to the Plaintiffs. COUNT XI: Slander of Title Plaintiffs incorporate by this reference each and every paragraph of this Complaint as if set forth fully herein. The Defendants have knowingly and maliciously communicated, in writing, a false statement which has the effect of disparaging the plaintiffs title to property. The Plaintiffs have incurred special damage as a result. MERS has no legally enforceable claim, interest or standing to sue as to the Note or Mortgage in question and the claim is a cloud on the Defendants title and should be quieted as against MERS under North Carolina law. Plaintiffs are the rightful owner of the subject property. Plaintiffs are the legal title holders of this property. MERS has knowingly and unlawfully caused a cloud to be recorded against the title of the Plaintiffs property and cause to be sent notices of default,

foreclosures and served and filed mortgage documents that claim an interest in the property of the Plaintiffs. Any purported transfer of any interest in the Plaintiffs real estate was wrongful and invalid because the mortgages, foreclosures or purported foreclosures were invalid and were not conducted in accordance with the laws of North Carolina. MERS knew or should have known that such transfers were wrongful and invalid. Any publication of an ownership interest in any of the Plaintiffs properties is, therefore false. The recording of the mortgages published the information to third parties. As a result of said wrongful publication of an ownership interest in the Plaintiffs property, Plaintiffs have incurred damages and will continue to incur attorneys fees and costs related to this litigation, in an amount to be proven at trial. Defendants have filed mortgages, threatened foreclosure and have foreclosed against Plaintiffs for which Defendants were not owed any payments, had no lawful right to foreclose and have unlawfully deprived and attempted to deprive Plaintiffs of their home and failed to notify the Plaintiffs of the discharge of their obligations on the notes associated with their mortgage. Plaintiffs seeks a declaratory judgment against Defendants stating that Defendants have violated Plaintiffs rights and that the Defendants had and have no right to hold mortgages in the name of MERS and/or foreclose on the Plaintiffs property and that the Defendants are entitled to no further payments from the Plaintiffs or recognition in Plaintiffs Title to his property.

Plaintiffs have been intentionally misled about the terms and conditions of the agreements entered into with the Defendants, MERS and all others who have attempted to foreclose on the Plaintiffs.

The Plaintiffs are entitled to a reformation of these notes as unsecured notes or as partially or wholly discharged notes and a right to reformation of the contracts with the persons or entities who are owed obligations because of funding of the loans of the Plaintiffs. COUNT XII: Quiet Title

Plaintiffs incorporate by this reference each and every paragraph of this Complaint as if set forth fully herein.

The Plaintiffs are entitled to have their property as referred to herein quieted in Defendants' names until and unless some party comes forward in this litigation who has a right to enforce the loans upon his house free and clear of all encumbrances.

The originator of the loan was a broker of loans and intended to place the loans and never be the lenders that they purported to be.

The originator of the loan employed a means by which MERS and the Defendants could insulate themselves from liability for the breach of contract, the violation of lending and recording laws and for all the reasons stated in the allegations of this Complaint.

The Defendants have not loaned any money to the Plaintiffs. The Defendants have no contractual relationship with the Plaintiffs. The Defendants are not the holders in due course of the notes on the Plaintiffs

property. No one who has an legal interest in the Plaintiffs properties has made any claim of that interest. Plaintiffs have been required to retain counsel in this matter to protect their rights and seek these remedies and has incurred attorneys fees and costs in this matter.

CONCLUSION Upon information and belief, the Defendants, did not and cannot legally obtain foreclosures and/or file an Assignment of the Notes or Mortgages of the Plaintiffs. The Plaintiffs are entitled to equitable relief. MERS should be enjoined from this day forward from drafting, executing and filing Mortgages and Mortgage Assignments and should be further enjoined from filing Complaints in Foreclosure based in fraud and further be enjoined from prosecuting all pending cases. WHEREFORE, Plaintiffs demand judgment against Defendants as follows: Judgment against Defendants as Jointly and Severally Liable for all issues. Actual and statutory damages for violations of FDCPA pursuant to 15 USC 1692(k) and relevant North Carolina law; Pre-Judgment and post judgment interest at the maximum rate allowable by law; Compensatory damages; Punitive damages as allowed by law; Such other and further relief available under all applicable under state and

federal laws and any relief the court deems just and appropriate; DEMAND FOR JURY TRIAL pursuant to rule 38(a) of the F.R.C.P. Plaintiffs demands a jury trial as to all issues triable by a jury.

Respectfully submitted this the 14th day of March, 2011.

/s/ Jeffrey Nowak Jeffrey Nowak, Esquire NC Bar # 40625 Lucas & Nowak, LLP 2631 E. Geer St. Durham, NC 27704 919-237-1934 lucasandnowak@nc.rr.com

/s/ H.E. Luke Lucas H.E. Luke Lucas, Esquire PA Bar # 61124

Attorneys for Plaintiffs OBAMIKEL ALSTON and FIKRIYYAH ALSTON

CERTIFICATE OF ELECTRONIC FILING AND SERVICE

I, the undersigned counsel for the Plaintiffs, hereby certify that on, March 14, 2011, a copy of Plaintiffs 3rd Amended Complaint was filed electronically. I understand that notice of this filing will be sent to all parties below by operation of the Court's electronic filing system. Parties may access this filing through the Court's CM/ECF system.

Avery A. Simmons BOA Corporate Ctr 100 N. Tryon St Ste 2690 Charlotte, NC 28202

asimmons@babe.com
Phillip A. Harris Jr. phillip.harris@nelsonmullins.com Nelson Mullins Riley & Scarborough LLP GlenLake One, Suite 200 4140 Parklake Avenue, Raleigh, North Carolina 27612

/s/ Harold E. Lucas Lucas & Nowak, LLP 2631 E. Geer St. Durham, NC 27704