LITIGATION WRONGFUL FORECLOSURE

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SOLANO Plaintiff, vs. Defendant EXPERT WITNESS ENGAGEMENT AND NOTICE TO COURT AND PARTIES For the purpose of providing the parties and court its proper notice, _____________shall offer its services as an Expert Witness as of _________ whereby the witness is engaged by plaintiff in the above mentioned matter. Under this engagement, the witness hereby attests to the necessary education, training and career qualifications suitable for meeting a minimum threshold of requirements need to satisfy the court of its competency and capacity in the foregoing matter and where offering testimony as an expert. The expert’s testimony will rely on a degree of specific accounting best practices in accordance with a registrant, published earnings, and statements by its officers. This shall include for interpretation by the expert any published documents and public records including auditor attestation reports, recent foreclosures analysis , troubled assets levels, default projections, capital reserves and risk weighted set asides, proper disclosure requirements, evidence of misstated earnings obtained from publicly distributed materials found in the securities Exchange Commissions (EDGAR) web site, available documents and reported financial information. Dated: November 9, 2009 _______________________ Maher E Soliman Expert Witness 1. The plaintiff [ ID:] 32002099 is the debtor of the alleged obligation and outstanding balance totaling $557,100.00 and secured by a lien in first (senior) position or 1st deed of trust. The matter concerns the collateral located in the postal area of 94592 as set forth in public records and whose address is shown as Vallejo CA 94592 (see legal description). 2. The defendants are a security holder whereby their interest is recorded in public records as a first mortgage deed of trust that was executed and or recorded on or about 11/21/2005. 3. The occupancy for the subject property is owner occupied. The purpose of the parties to and all successors and assigns is for providing the consumer homeowner financing. 4. The financing was to facilitate a purchase of real property. The subject property and dwelling is considered acceptable collateral to the investor apprised of 1 to 4 units. 5. The terms of the contract and obligation are for monthly accrual to be paid in arrears for the commencement of the debtor’s obligation as maker of the note starting at an interest rate of 7% and where the monthly amount due totals initially $3,191.72. The borrower if having no other consumer credit would earn no less than $7,000 a month in order to qualify. 6. The originating lender does not appear a party to the action whereby the suit is against the successors and assigns, dba as Aurora Loan Services. The issues subject to this complaint are for claims of California civil code and other regulatory enforcements provided by the United States of America with congressional passage of legislation including RESPA and regulation Z. 7. Therefore questions do exist that further give rise to inquiries into the cause for the borrowers claims of non compliance with regulatory guidelines for the originator and successors and assigns and for what cause and motivations are to be made for the aggressive recovery by the lender and alleged beneficiary of record and their title as duly sworn agent listed herein as cal-western reconveyance corp. Who has identified the trustee and sale number as TS 1163198-14 8. Interviews conducted and regarding the allegations and failure for the lender and beneficiary (parties of interest) to cooperate with the legislation in California under amended civil code 2923.5 and the new administration’s proposal for economic revitalization and stimulus for the enforcement of the troubled assets relief preprogram are documents and subject to a sworn affidavit . 9. The lender was contacted repeatedly throughout the year 2008 by the parties listed below seeking to intervene Contact dates are for Brenda Michelson 6/24/08 , (7/1/08) and Aviv Raphael 10. 8/15/2008, 6/10/2008; 6/17/2008. The dates are evident whereby there was no effort by the lender to acknowledge the borrowers hardships. 11. SUMMARY OF EVENTS 12. The parties in the conflict and desire for resolution include the plaintiff who is homeowner and a lender seeking to foreclose. The defendant in the case # ---------is not a traditional lender as one will remember in years past. The notion of going to a bank and providing a bank an application that is subject to approval are something of the past. 13. Today the Lenders acts and implementation of their programs actually mirror one another and solely based upon a premise of “loan to own”. 14. A borrower is solicited at home by a variety of solicitations from multiple sources of information that may have little if anything to do with the capacity for providing such financing. Faith and a adequate level of trust are supposed by the mere fact anyone can initiate a call and seem to show a relatively good handle for the vernacular and pricing associated with providing financing. In fact, its not uncommon for the party calling to recite an above average understanding for the borrowers financial condition and qualifying criteria subject to a controlling and high pressured sales presentation. 15. Lender programs that market new loans consider hitting “pay dirt” whenever their broad and general presentation or pitch can opportunistically be timed with homeowner’s views of falling interest rates and appreciating property values. 16. The process requires a detailed loan application and substantiating key information such as credit score and savings with job history and earnings. Often no initial consideration is given to the property value and merit for seeking a new loan. Prudent underwriting evaluation is known as acceptance. 17. CONDITIONAL OR QUALIFIED ACCEPTANCE 18. Acceptance requires modification(s) of the conditions before the final satisfaction and approval is granted. For example, a contract that needs to be accepted from two parties may be adjusted or modified so that it fits both parties’ satisfactions. A person has been made an offer that they are willing to agree as long as some changes are made in its terms or that some conditions or event occurs. 19. A business contract that is made from the business to the employer, both parties may change and modify the contract until both parties agree or accept the details in the business contract. A banker's acceptance, or BA, is a negotiable instrument or time draft drawn on and accepted by a bank. Before acceptance, the draft is not an obligation of the bank; it is merely an order by the drawer to the bank to pay a specified sum of money on a specified date to a named person or to the bearer of the draft. Upon acceptance, which occurs when an authorized bank accepts and signs it, the draft becomes a primary and unconditional liability of the bank. If the bank is well known and enjoys a good reputation, the accepted draft may be readily sold in an active market. A banker's acceptance is also a money market instrument – a short-term discount instrument that usually arises in the course of international trade. 20. A banker's acceptance starts as an order to a bank by a bank's customer to pay a sum of money at a future date, typically within six months. At this stage, it is like a postdated check. When the bank endorses the order for payment as "accepted", it assumes responsibility for ultimate payment to the holder of the acceptance. At this point, the acceptance may be traded in secondary markets much like any other claim on the bank. [1] 21. Bankers' acceptances are considered very safe assets, as they allow traders to substitute the banks' credit standing for their own. They are used widely in international trade where the creditworthiness of one trader is unknown to the trading partner. Acceptances sell at a discount from face value of the payment order, just as US Treasury bills are issued and trade at a discount from par value. Bankers' acceptances trade at a spread over T-bills. The rates at which they trade are called bankers' acceptance rates. The Fed publishes BA rates in its weekly H.15 bulletin. Those rates are a standard index used as an underlie in various interest rate swaps and other derivatives. 22. Acceptances arise most often in connection with international trade. For example, an American importer may request acceptance financing from its bank when, as is frequently the case in international trade, it does not have a close relationship with and cannot obtain financing from the exporter it is dealing with. Once the importer and bank have completed an acceptance agreement, in which the bank agrees to accept drafts for the importer and the importer agrees to repay any drafts the bank accepts, the importer draws a time draft on the bank. The bank accepts the draft and discounts it; that is, it gives the importer cash for the draft but gives it an amount less than the face value of the draft. The importer uses the proceeds to pay the exporter. 23. The bank may hold the acceptance in its portfolio or it may sell, or rediscount, it in the secondary market. In the former case, the bank is making a loan to the importer; in the latter case, it is in effect substituting its credit for that of the importer, enabling the importer to borrow in the money market. On or before the maturity date, the importer pays the bank the face value of the acceptance. If the bank rediscounted the acceptance in the market, the bank pays the holder of the acceptance the face value on the maturity date. 24. The matter of the plaintiff and defendant can be referenced in public filing information under Corbitt vs. Aurora Inc whereby the parties are in dispute for the terms and condition for a loan the plaintiff received on or about _________. 25. The premise for a party to be considered guilty until proven innocent is acceptable under a narrow or more binding set of civil rules and codes governing civil conduct and which is seen in many countries throughout the world. The United States and the State of California set forth laws and civil codes to ensure protections to consumers and homeowners. Enforceable codes of procedures should not include a category of presumed innocence by virtue of the overwhelming financial condition and “what is at risk” to that condition when negotiating relief and levering time against a borrower. 26. Principal deduction for the party offering the loans maintains a name brands and long standing tradition in the market place or by its association with others in the market place it cannot be found as a participant in negligent and unethical lending practices. 27. Bringing an action against a lender for failing to follow a promise enacted by the President of the United States and amended laws according to the California constitution is unacceptable. 28. A dispute will assume some harm is unnecessarily brought to one another parties to the suit. A party or attorney certifies that the filing pleading, motion or other document is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. Likewise a attorney certifies that the claims, defenses, and other legal positions taken in the pleading, motion or other document are warranted by existing law or by a nonfrivolous argument for the extension, modification or reversal of existing law or the establishment of new law. The mechanism used for foreclosure in a non judicial setting are none the less supposed to include the likelihood for litigation necessary to protect ones rights when violated. There must not exist an unfair advantage afforded a party to a foreclosure as offered by the state for which the other party has domicile and whereby the beneficiary seeks to leverage the advantage. 29. Furthermore a deceptive and clandestine means of circumventing the law cannot be furthered from a reliance on a opaque set of circumstances seen to include collective parties of interest who by assignment and transfer as successors and assigns creates an unfair advantage. That advantage can exist under a timeline for foreclosure involving a swift and conclusive right to remedy a situation by employing a lenders recovery of the plaintiff’s home. 30. Yet on numerous occasions, lenders have enforced their rights through draconian policies under subjective interpretations’ of civil code that are considered clandestine and secretive solely to obtain a distinct advantage. 31. Domestic lending is no longer assumed to be exclusive to American financial institutions. American based lending and loans made for parties licensed to operate in this state have exhibited a serious propensity to employ unethical and deceptive business practices (California Civil Code §3-301) that can be evidenced against the consumer beyond the presumption of a “knee jerk reaction. 32. A lender offering no willingness for compromise under the state’s authority can rely on the imbalances obvious with the economies of scale to leverage a banks capacity to bring to market significant capital necessary for both acceptance and to enforce its right to recovery under a power of sale with less regards fr the breach of any contractual the terms and conditions for establishing an ethical means to determine default. 33. CREDIT WORTHINESS 34. Lenders will trade off the cost/benefits of a loan according to its risks and the interest charged. But interest rates are not the only method to compensate for risk. Protective covenants are written into loan agreements that allow the lender some controls. These covenants may limit the borrower's ability to weaken their financial condition (balance sheet ) voluntarily e.g., by buying borrowing further. Lenders first seek to understand the debt to income ratios of a borrower that allow the lender to decide acceptance or grounds for making a safe loan. 35. Lenders must be prepared to can recall the loan based on specific events or when financial ratios like debt/equity or interest coverage deteriorate. Credit scoring models also form part of the framework used by banks or lending institutions grant credit to clients. For borrowers, these models generally have qualitative and quantitative sections outlining various aspects of the risk including, but not limited to, experience, historical data , asset (Home) quality, and leverage and personal liquidity ratios, respectively. 36. Once this information has been fully reviewed by credit officers and credit committees, the lender provides the funds subject to the terms and conditions presented within the contact (as outlined above). Employing a strong arm tactic for a cash strapped borrower suffering delinquency is accomplished through a collection agency is not really a tool to manage credit risk; rather, it is an extreme measure closer to a write down in that the creditor expects a below-agreed return after the collection agency takes its share (if it is able to get anything at all). 37. Consumers may face credit risk in a direct form as depositors at banks or as investors/lenders. 38. A '''PRIVATE PLACEMENT''' 39. A private placement (or non-public offering) is a funding round of securities which are sold without a initial public offering, usually to a small number of chosen private investors.[1] In the United States, although these placements are subject to the Securities Act of 1933, the securities offered do not have to be registered with the Securities and Exchange Commission if the issuance of the securities conforms to an exemption from registrations as set forth in the Securities Act of 1933 and SEC rules promulgated there under. Private placements may typically consist of stocks, shares of common stock or preferred stock or other forms of membership interests, warrants or promissory notes (including convertible promissory notes), and purchasers are often institutional investors such as banks, insurance companies or pension funds. 40. “Private placements” using accredited investors to formulate various indentured Trusts and Trust assets. The trust structure is seen as an opportune means to protect the investors while it methods of operating can establish the for the lender its own private bank. If such manipulation of the private placement can be evidenced it would show where a trust is allowing them to conduct business, especially in a foreclosure, again as if it were their own personal bank. 41. The Defendant is not actually a bank but a collection of parties of interest who arbitrarily are seen avoiding the need for classifying and reclassifying their indebtedness to banking and accounting auditors. Their operation is somewhat non transparent secretive and lack integrity for any real disclosure while using arguments for concealing the conduct of the lenders collections effort and servicing departments. This is further exasperated by the disposition services of a foreclosure trustee. 42. The Sarbanes–Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002), also known as the 'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate and Auditing Accountability and Responsibility Act' (in the House) and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. 43. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation's securities markets. Named after sponsors U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH), the act was approved by the House by a vote of 423-3 and by the Senate 99-0. Former President George W. Bush signed it into law, stating it included "the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt."[1] 44. The legislation set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It does not apply to privately held companies. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Harvey Pitt, the 26th chairman of the Securities and Exchange Commission (SEC), led the SEC in the adoption of dozens of rules to implement the Sarbanes–Oxley Act. 45. Debate continues over the perceived benefits and costs of SOX. Supporters contend the legislation was necessary and has played a useful role in restoring public confidence in the nation's capital markets by, among other things, strengthening corporate accounting controls. Opponents of the bill claim it has reduced America's international competitive edge against foreign financial service providers, saying SOX has introduced an overly complex regulatory environment into U.S. financial markets.[2] 46. The act creates a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies. The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. 47. Lender is subject to strenuous accounting and auditing, internal control that is defined as a process effected by an organization's structure, work and authority flows. 48. Designed to help the organization accomplish specific goals or objectives.[ , are trained people and management information systems, 1] It is a means by which an organization's resources are directed, monitored, and measured. It plays an important role in preventing and detecting fraud . This notion of control is for protecting the organization's resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks). 49. At the organizational level, internal control objectives relate to the reliability of financial reporting, timely feedback on the achievement of operational or strategic goals, and compliance with laws and regulations. 50. Borrower are evaluated on a specific transaction level whereny, internal control refers to the actions taken to achieve a specific objective (e.g., how to ensure the organization's payments to third parties are for valid services rendered.) Internal control procedures reduce process variation, leading to more predictable outcomes. 51. Internal control is a key element of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act of 2002, which required improvements in internal control in United States public corporations. Internal controls within business entities are called also business controls. 52. Companies carry credit risk when, for example, they do not demand up-front cash payment for products or services.[1] By delivering the product or service first and billing the customer later - if it's a business customer the terms may be quoted as net 30 - the company is carrying a risk between the delivery and payment. 53. Significant resources and sophisticated programs are used to analyze and manage risk. Some companies run a credit risk department whose job is to assess the financial health of their customers, and extend credit (or not) accordingly. They may use in house programs to advise on avoiding, reducing and transferring risk. They also use third party provided intelligence. Companies like Standard & Poor's, Moody's, Fitch Ratings, and Dun and Bradstreet provide such information for a fee. 54. For example, a distributor selling its products to a troubled retailer may attempt to lessen credit risk by tightening payment terms to "net 15", or by actually selling fewer products on credit to the retailer, or even cutting off credit entirely, and demanding payment in advance. Such strategies impact sales volume but reduce exposure to credit risk and subsequent payment defaults. 55. Credit risk is not really manageable for very small companies (i.e., those with only one or two customers). This makes these companies very vulnerable to defaults, or even payment delays by their customers. 56. They may also face credit risk when entering into standard commercial transactions by providing a deposit to their counterparty, e.g., for a large purchase or a real estate rental. Employees of any firm also depend on the firm's ability to pay wages, and are exposed to the credit risk of their employer. 57. In some cases, governments recognize that an individual's capacity to evaluate credit risk may be limited, and the risk may reduce economic efficiency; governments may enact various legal measures or mechanisms with the intention of protecting consumers against some of these risks. Bank deposits, notably, are insured in many countries (to some maximum amount) for individuals, effectively limiting their credit risk to banks and increasing their willingness to use the banking system. 58. [edit] Counterparty risk 59. Counterparty risk, otherwise known as default risk, is the risk that an organization does not pay out on a credit derivative, credit default swap, credit insurance contract, or other trade or transaction when it is supposed to.[2] Even organizations who think that they have hedged their bets by buying credit insurance of some sort still face the risk that the insurer will be unable to pay, either due to temporary liquidity issues or longer term systemic issues.[3] 60. Large insurers are counterparties to many transactions, and thus this is the kind of risk that prompts financial regulators to act, e.g., the bailout of insurer AIG. 61. On the methodological side, counterparty risk can be affected by wrong way risk, namely the risk that different risk factors be correlated in the most harmful direction. Including correlation between the portfolio risk factors and the counterparty default into the methodology is not trivial, see for example Brigo and Pallavicini[4]   63. The Public Company Accounting Oversight Board (or PCAOB) is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act, a 2002 United States federal law, to oversee the auditors of public companies. Its stated purpose is to 'protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports'. Although a private entity, the PCAOB has many government-like regulatory functions, making it in some ways similar to the private Self Regulatory Organizations (SROs) that regulate stock markets and other aspects of the financial markets in the United States.   65. LENDERS GONE WILD 66. Lenders have gone unchecked while conducting business under an exclusive set of unregulated contradictions to federal laws governing business state civil code for protections afforded the consumer. This includes enforcement of the laws set forth prohibiting a lender to act unlawful when intending to foreclose. Lenders acts and implementation of their programs actually mirror one another and solely based upon a premise of “loan to own”. 67. A reality if the current market is really a loan repurchase program and recapture method of circumventing losses. The lender efforts are without any regard for the legitimate and authorized purposes of the various programs in place and set forth by the California assembly and United States of America. 68. Case History 69. Enron Corporation (former NYSE ticker symbol ENE) was an American energy company based in Houston, Texas. Before its bankruptcy in late 2001, Enron employed approximately 22,000[1] and was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, with claimed revenues of nearly $101 billion in 2000.[2] Fortune named Enron "America's Most Innovative Company" for six consecutive years. 70. At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal". Enron has since become a popular symbol of willful corporate fraud and corruption. The scandal also brought into question the accounting practices of many corporations throughout the United States, resulted in the creation of the Sarbanes-Oxley Act of 2002. 71. Enron filed for bankruptcy protection in the Southern District of New York in late 2001 and selected Weil, Gotshal & Manges as its bankruptcy counsel. It emerged from bankruptcy in November 2004 after one of the biggest and most complex bankruptcy cases in U.S. history. On September 7, 2006, Enron sold Prisma Energy International Inc., its last remaining business, to Ashmore Energy International Ltd. Following the scandal, lawsuits against Enron's directors were notable because the directors settled the suits by paying very significant sums of money personally. The scandal also caused the dissolution of the Arthur Andersen accounting firm, affecting the wider business world.[3] 72. In early 2007, Enron changed its name to Enron Creditors Recovery Corporation, reflecting its status as a predominantly asset-less shell corporation. Its current goal is to liquidate all remaining assets of the company. For most of 2007, Enron continued to operate under the name Enron Corp. by filing a Doing Business As, or "dba" certificate in Harris County, Texas. 73. The Defendant has repurchased (estimated) over 1,000 loans a month or more funded solely under the deceptive and clandestine foreclosure and credit back to lender program. Amazingly, there public disclosure under 10K SEC reporting shows a remarkable zero percent delinquency. (See Enron for SPV, SPE generous accounting allowances). It’s a fraud that uses a loophole in Generally Accepted Accounting Rules (GAAP) under the Federal Accounting Standards board or (FSAB) over sight. The lenders like Enron ran a sham purchase and sale program in complete violation of accounting rules. Had it not been for the Troubled Assets Relief Program and Ca CC 2923.5, their ability to take homeowners homes from them would be undiscoverable under a rouse of giving a borrower nothing in exchange for a modification or work out alternatives would likely never have been unveiled. Only five percent of all Countrywide Home Loan modifications are verified as approved. This is a highly contestable deceptive nationwide program by FDIC member banks facilitating the following: The Pretender lender Purchase and Sale and Repurchase Program. 74. Defendants program has researched and employed for various ways and means to circumvent recording accounting guidelines while seeking to meet the criterion for Generally Accepted Accounting Principles. The return on investment is dependent on side stepping the law and domestic and overseas recognized rules of accounting and more importantly a business financial term referred to as “Recognition”. 75. Defendant conducted its servicing shared business responsibilities never forgetting its loyalty to the client, the lender at settlement or successor and assigns. The business of making new loans was dead by mid 2007 with the onset of “steal the home from a delinquent borrower” programs shared by all lenders. Defendants are the Lenders who originate the loan, shift their liability onto a nominee than place the loan cleverly with a member bank in complete violation of FIERRA. What this all translates into is a secret financing arrangement allowing banks to offer divisions from leveraged debt and stacked after stack of more bordered funds. 76. Defendants’ must book and record all qualified income and expenses which affect the subject loans accounting which fails in accordance with FAS 140- 3 under FASB authority applied to GAAP. The ability to shift the lenders ownership rights and contingent liability to another entity in Trust is the sole cause for the Trust to coexist with a Member Bank. 77. Defendants then will repurchase the dwelling and subject property almost immediately after assigning the loans to the trust right before the trustee sale. Borrowers delinquent loans will either be paid early “prepayment speed” prepay over a mandated minimum calculated term which is typically five years. The debtor are cash strapped homeowners seeking a genuine resolution that could never be forth coming under the “No to Loan Mods” reality for conflicts with Generally Accepted Accounting Rules. The clandestine and cruel effort was culminated with a Go to Sale” and “Cash for keys” relocation loan program. To what extent these member bank perpetrators subsequently reclassified the entire amount of bad debt ending with each quarter is unknown. Over time periods defendants timed for various reasons their activities targeting the homeowners. This was done while using the accrual as an advantage in an orchestrated foreclosure sometimes 12 or more months after the fact. 78. Defendants, barring a chance for any hope of home retention are left to fend in the civil “lower” courts system whereby a debtor can argue the eviction and protest their removal from the home. This is attended by the about to be displaced homeowner and lender, pretender lender and back to lender upon “Deed on Sale”. Leaving the consumer only a long shot and an outside chance of saving a home. Approaching a recovery and California Trustee Sale must take into account the successors, assigns and transferor. The Indebtedness is actually incurred b y the lender also called an Obligor That indebtedness to the TRUST. Similarly, Defendant initially funded the purchase of each mortgage loan and deed of trust under the Trust Indenture and subsequently was required to classify each loan that fell in arrears. It is not unusual for an entity such as a member bank, Trust of LLC or corporation’s foreclosure recovery records to show omissions or procedural defects raising questions as to the valid authorization of some of the transfer instruments. In California the Notices, of default and sale are critical for ensuring timely recording of the Substitution of trustee and recorded assignments. Most corporate lawyers if confronted with such irregularities, would likely attempt to cure the defect through lender and, if necessary, Trustee ratification. 79. However, the facts are a security instrument determined to be defect from errors and willful deception should look at the remedies similar to the issuance of stock. The statutory formalities for a lender recovery are in fact substantive prerequisites to the validity of the final deed upon sale and transfer of real property. The issuance of corporate assignment of the security or deed is a fundamental legal theory of significance that has a direct bearing upon questions of corporate governance, control and the capital structure of the enterprise. The law properly requires certainty in such matters.” 80. There is little talk about the various kinds of omissions and defects which I opine are limitless. Citing infrequently found examples include the absence of a live signature, altered document, failure to maintain a chronological order for recording purposes and board resolutions authorizing the activity shown by the transfer books to have been issued, the absence of evidence that issuances were properly authorized by the requisite votes of the board or, if required, for the loan program and delivery method in place. 81. As for the shareholders, in an indentured Trust offering claims by certificate holders, the absence of evidence that the consideration due to the corporation in exchange for the stock was in fact received, the issuance of more shares than were authorized by the certificate of incorporation at the time, the issuance of stock prior to the fi ling of the charter amendment or certificate of designations authorizing or creating the stock, and similar procedural and substantive irregularities. Not infrequently, these defects occurred some time ago, and the stock in question may have changed hands multiple times since issuance. 82. Corporate lawyers will likely attempt to correct the defect by offering a rescission or by arguing counter to the claim of defective recorded instruments. The expectations are aside a best business practices remedy while allowing all parties in the positions they thought they were in prior to discovering the irregularity. 83. Delaware courts have not always viewed defects in stock issuances as being curable by ratification. In a number of leading cases, the Delaware Supreme Court has treated the statutory formalities for the issuance of stock as substantive prerequisites to the validity of the stock being issued, and the court has deter-mined that failure to comply with such formalities renders the stock in question void. 84. A finding that security instrument or “Deed” is void means that defects in it cannot be cured, whether by ratification or otherwise. Thus, defects where found to exist in the collateral documents and instruments may render unenforceable the lenders right to a power of sale or acceleration. Practitioners cannot avoid some review for evaluating a lenders recovery and he or she should attract the best investigative research to determine the defect. Also, to opine whether the defect is one that renders the deed or mortgage instrument void. If the case, ratification may not be an option, or voidable, in which case ratification is an option. 85. Unfortunately, the decisions issued by the Delaware courts have not afforded certainty in this critical area. Indeed, the Court of Chancery acknowledged in a recent decision that although “Delaware law is replete with cases” discussing the void-voidable distinction, the law as to when and whether a defective stock issuance is curable “is not as clear as it could be.”5This Article analyzes the reasons for this lack of clarity and proposes some solutions that would benefit buyers and sellers of corporate stock. We begin by examining the legal requirements applicable to stock issuances. Next, we discuss the foundation of the doctrinal distinction between void and voidable stock. We then discuss the cases where courts have found stock to have not been issued in accordance with the legal requirements applicable to stock issuances, and whether such fi ending has resulted in the stock being found void or voidable. We also consider the purposes, principles, and policies of certain provisions of Article 8 of the 2 86. Where corporations comply with such formalities, the law affords certainty that he stock is valid. Where corporations do not comply with such formalities, however, the consequences can be far less certain. With regards to registrants and stock issuance the court has determined that failure to comply with similar formalities renders the stock in question void, i.e., not curable by ratification. Unfortunately, the securities cases and decisions issued by the courts have not afforded the necessary certainty to allow practitioners to decide whether a particular defect in a transfer and assignment or proper notice is a substantive defect that renders stock void or a mere technical defect that renders deed voidable. 87. This Article analyzes the cases giving rise to this lack of clarity and proposes that the Delaware courts apply the policy underlying Article 8 of the Delaware Uniform Commercial Code to validate stock in the hands of innocent purchasers for value in determining whether stock is void or voidable 88. DEFENTIONS AND FACTS a) "Association" or "savings association" means a mutual or stock savings association, savings and loan association or savings bank subject to the provisions of this division, but excluding federal association. (b) "Federal association" means a savings and loan association or federal savings bank that is chartered by the Office of Thrift Supervision under Section 5 of the Home Owners' Loan Act of 1933 (12U.S.C. Sec. 1464), as amended. 89. For purposes of this division: (a) Any reference to regulations of the federal Office of Thrift Supervision or the Federal Deposit Insurance Corporation shall also be deemed to include and refer to regulations adopted by the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation, to the extent these regulations have been continued in effect and made enforceable by the Office of Thrift Supervision or Federal Deposit Insurance Corporation, respectively, pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989(Public Law 101-73). (b) Any reference to charters issued by the Office of Thrift Supervision shall also be deemed to include and refer to charters issued by the Federal Home Loan Bank Board. 90. The borrower’s original security instrument was executed on September 22, 2005 and recorded on September 28, 2005. The mortgage obligation is actually a “deed of trust” and is a security instrument common for securing the obligation secured in the State of California. The deed of trust is recorded in favor of the alleged lender and beneficiary Country Home Loans. The deed in favor of the beneficiary names Mortgage Electronic Registry Systems as a nominee. Therefore the lender is assigning its security interest to the nominee. A notice of default is dated April 14th 2009 which is the date of the instrument having been prepared on a bank approved software computer system. The NOD is recorded on April 15th 2009 and the recording was requested by a party unknown as the document is altered. The document is to be mailed when recorded to Recon Trust Company; NA. 91. At risk to a beneficiary is exposure from claims when selling a whole loan as an asset into a special purpose entity or other qualified investment such as an indentured trust. The obligation and security or deed constitutes the integrity of the collateral and are subject to any “lawful” assignments and a notarized properly endorsed jurat or attachment. 92. See where the notices show ReconTrust as agent for the beneficiary by LandSafe title as attorney in fact. The companies acting as nominee, agent and attorney in fact require the person’s name and signature to appear thereupon all transfer instruments and must have proper standing in order to do so. Their capacity to sign and execute recorded instruments through a registrar of the county and recorder is subject to the law and minutes of the corporation authorizing their authority. Critical notarized endorsements are subject to verification. It seems likely that a case will be made for the subject loan falling into default due to predatory lending allegations brought by the trustor. The trustor will in fact bring an action against the interested parties. 93. The action should include arguments for why the loan is represented to be a wholly owned asset of the originating lender as beneficiary who has transferred its rights to a nominee. The nominee is MERS who is the beneficiary of record for Bank of America BAC who recently acquired Countrywide a public company. The company was alleged to having transferred its assets which are servicing to the current beneficiary BAC. 94. No servicing transfer letter required to borrower 95. No Assignment from one entity to the other 96. The request for an assignment is not affected by a claim of MERS 97. The witness is an expert in the sector of non agency mortgage lending and secondary activities. The real owner of the assets must evidence its ownership of the obligation and protect its rights in a recovery provided by the security. The holder in due course must maintain the show the proper capacity to provide ownership by producing collateral as many courts in America have conceded The expert believes the proper method for ensuring the beneficiaries rights. The fact the NOD requires an attorney in fact (LandSafe) for a trustee (ReconTrust) who is already listed on the original deed of trust which raises a specter of doubt for the integrity for the securities enforceability. 98. The fact a “stamp” for the agent in fact is required is in question. Therefore, was it to accomplish some unknown objective or indications of subsequent events? Therein it shows no evidence of when the stamp occurred and purpose for its endorsement requirement. 99. A substitution of trustee is required to transfer the rights afforded the benefeficiary in a deed of trust to the substituted party. The party being substituted in recognized under an agency agreement and may be recorded in public records. The parties of interest includes those known or unknown and should be clearly transparent as required to rely upon a proper recording or evidence of the agent having been duly authorized and appointed. 100. The beneficial interest or its agents are critical to the timely and rightfully appointed authority to execute the instruments necessary to conduct a non judicial foreclosure which includes a right to acceleration and a "Power of Sale". The substation of trustee is absent from the file suggesting the use of an attorney in fact is inconsequential. Otherwise was the original trustee in any way unauthorized to endorse or prepare and record these documents? 101. The documents are generated from approved software applications offered by various recognized documents providers as vendors. Trust accounting module automates the task of handling, controlling and accounting). These systems feature a sophisticated "documents "module”, tracking module, processing and tracking module offered to all Trusts and mortgage banking participants acceptable to FSB and NA member institutions. 102. The instruments are generated and must be received in a way that meets or exceeds currently established legal standards by the California Department of Real Estate and the Business and Professions Code*.Therefore we can assume the industry mandates maintaining tight regulatory control ensured by approved software and dedicated documents system where certain instruments consisting of assignment, substitution and deed of trust are all printed with consistency and timeliness. Altering a document raises concerns for integrity and subjecting the trustor to unfair business practices and deceptive dealings causing the security to be disturbed. If the Trustor can show in a court of law where the Deed is violated and rendered defect there cannot be any conveyance of the title for real property. 103. It is not unusual for a Delaware corporation’s stock records to have omissions or procedural defects raising questions as to the valid authorization of some of the outstanding stock. 104. Confronted with such irregularities, most corporate lawyers would likely attempt to cure the defect through board and, if necessary, stockholder ratification. However, in a number of leading cases, the Delaware Supreme Court has treated the statutory formalities for the issuance of stock as substantive prerequisites to the validity of the stock being issued, and the court has determined that failure to comply with such formalities renders the stock in Question void, i.e., not curable by ratification. Unfortunately, the decisions issued by the Delaware courts have not afforded the necessary certainty to allow practitioners to decide whether a particular defect in stock issuance is a substantive defect that renders stock void or a mere technical defect that renders stock voidable. This ISSUEIS analyzes the cases giving rise to this lack of clarity and proposes that the Delaware courts apply the policy underlying Article 8 of the Delaware Uniform Commercial Code to validate stock in the hands of innocent purchasers for value in determining whether stock is void or voidable. 105. CONCLUSION 106. A proper assignment from Countrywide to Bank of America is required regardless of the acquisition of one another company. A servicing agent was or is still a separate entity acting as a combination or subsidiary. Therefore the servicer must include a servicing transfer’s document and deliver such evidence to the trustor before the trustor can release good funds. *Escrow trust accounts, property management REO management for investors Real estate transactions (purchase/sale, lease deposits, etc.)Funds deposited by lenders for payment of advances to senior liens, insurance, etc. Funds deposited by borrowers for such things as credit reports, appraisals, etc. Law offices client trust accounts 107. The repo used in a indentured trust structure is in our view a collateralized loan. The legal title to the collateral is held by the lender for the term of theloan. What must happen in a Repo structure is the asset transfers on three occaisions under the FSP FAS140-3 according to GAAP. Its a genrous allowance and cause for much debate. The initial transfer from lender to transferee is not part of a repo. It's the subsequent transfers that allow for a repo to act in an inverse manner. therefor if the initial transfer appears to lack a clear business purpose, which it does, by comparison to the subsequent transfers, it is arguable that the accounting for the initial transfer fails or can be seperated. FSP guidence is reis needed because FAS 140 does not directly address this point, and it provides that the first transaction could be eligible for sale accounting--if the criteria in FAS 140 for sale accounting is also met. 108. Thus, the FSP provides "guidance" (i.e., the hoops the lawyers and financial engineers have to jump through) for determining whether an initial transfer of a financial asset and a "repurchase financing" (the last two transfers) can be de-linked. The first hoop is the most important, and the one that will cause accountants, both young and old, to have acid reflux: does the arrangement have a valid business purpose? 109. A valid business purpose? Ha! Prior to SEC rules restricting revenue recognition for bill and hold sales, did these arrangements have a valid business purpose? Maybe one percent of them. The other 99 percent were mere schemes concocted to end-run pesky revenue recognition criteria. I can't vouch for this, but my strong suspicion is that the arrangement subject to FSP 140-3 springs from the same primeval instincts as the bill and hold sale. In other words, the presumption of a "valid business purpose" would be a fiction 99 percent of the time. No matter what the bells and whistles of the arrangement are (if you can understand them from reading the contracts), the motivation is the accounting result. 110. Never mind the judgment exercised by the FASB in publishing what amounts to a user's manual for yet another off-balance sheet scheme, one must ask whether the FASB is tone deaf or indifferent to the recently inflamed ire of investors and politicians with off-balance sheet accounting. And, while financial services are the targeted beneficiary of FASB largess, you never know when some Fastow-type CFO is going to apply it by "analogy" to their own nefarious machinations involving power plants, energy contracts, leases or what have you. Maher Soliman Expert Witness Expert.Witness@live.com