AMERICA’S WHOLESALE LENDER TRADE NAME OF …

AMERICA'S WHOLESALE LENDER TRADE NAME OF COUNTRYWIDE

Posted on September 11, 2010 by Neil Garfield

A contributor writes: "A number of CW cases come up with the Note titled to "Americas Wholesale Lender." Nowhere in the Note is CW actually mentioned. Watch out for these. CW claims to be using the AWL name as a "trade name" but of course you cannot sue or maintain any cause of action in the name of a trade name.

Further complicating these situations is that there actually is a bona-fide New York Corporation with the name "Americas Wholesale Lender Inc."

That has interesting implications. As the Note is made out to them, the payments should go to them. AWL will cooperate with the borrower to resolve these title issues, typically."

We see this a lot with similar situations. The name of a "lender" turns out to be a fictitious name (d/b/a) of some other entity. The use of fictitious names can get complicated and usually requires a lawyer to sort it out. In the above case, which is nearly identical to several dozen I have seen with other parties, the "originating lender" is not even a legal entity. A legal entity is a natural person or a corporation or other business structure formed under the laws of a specific State. These "lenders" do not have a legal existence if they do not conform to state statute.

It is often the case that an unrelated corporation exists in some state with the same name as the originating lender. As out contributor states, the fictitious name "party" has no legal existence and cannot sue or defend any action. The legally formed entity with that name technically could claim the payments or rights under the obligation, note or mortgage (Deed of Trust) but obviously does not want to become embroiled in litigation over a deal with which it knows nothing about.

The proper way for this to be handled is for the title agent to correct it with a corrective instrument filed of record. And while there are a number of ways to do this, the best practice would be to have the borrower sign the corrective instrument so there is no cloud on title. The problem however is that borrowers are going to be loathe to cooperate with such corrective instruments. Legally, the naming of a fictitious entity creates no rights under that instrument so neither the note nor the mortgage or Deed of Trust would be a valid obligation or encumbrance.

But this does not mean the obligation doesn't exist. The fact that it was a table-funded loan (where the source of funding is hidden) may give rise to defenses and claims by the borrower. However, the party who was the source of funds may establish that they were the principal in that transaction and seek to impose an equitable lien or at least a perfected claim under the note. This is one example of why the technicalities matter. Allowing

fictitious entities to initiate foreclosures and sales clouds title further and opens the door for moral hazard on the same scale that produced this mess in the first place.

We seek a stable marketplace instead of the chaotic effects of musical chairs at the point of declaring a default, foreclosure, auction and issuance of new title. That simply can't be done when the identity of the real party in interest is allowed to remain hidden and the accounting for all payments received is allowed to be ignored. The homeowners who were victims of this fraudulent appraisal and loan scheme, as well as parties who believe they are successors in title are going to need help in clearing title. Either the break in the chain of title is going to be routinely ignored, or the procedures allowed in foreclosures are going to be enforced. We hope it is the latter as it leads to a better result for society as a whole. But it is obvious that a lot more work needs to be done to illuminate this problem before anyone concedes it needs to be fixed.

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Responses:

1. "Pagano, supra, 87 Conn.App. 474, 866 A.2d 698 in which we held that the court lacked subject matter jurisdiction because Countrywide had commenced an action solely in its trade name. ? Our decision in that case rested primarily on the mandate that parties not use fictitious names except in the rarest of cases, in which the issues litigated and the interests of the parties demand the use of a fictitious name. Id., at 478, 866 A.2d 698; see also Buxton v. Ullman, 147 Conn. 48, 60, 156 A.2d 508 (1959), appeal dismissed sub nom. Poe v. Ullman, 367 U.S. 497, 81 S.Ct. 1752, 6 L.Ed.2d 989 (1961). We also recognize the heightened interest of the public in knowing who is financially and personally liable for the actions of entities doing business under trade names. America's Wholesale Lender v. Pagano, supra, at 479-80, 866 A.2d 698. These interests are no less important whether the argument is that the initial filing contained a circumstantial error, as in America's Wholesale Lender v. Pagano, supra, at 477, 866 A.2d 698, or that the initial filing was in the name of the "wrong person," as the substitute plaintiff claims on appeal in this case. In reaching this conclusion, we look to the language of ? 52-109, which provides in relevant part that the court may allow the substitution of a party plaintiff "[w]hen any action has been commenced in the name of the wrong person" Such a person, while perhaps not aggrieved in the manner necessary to have standing, possesses the legal capacity to sue. No such person commenced the action in this case, as a trade name is not a recognized legal entity or person.

2.

Anonymous Atlanta, on October 2, 2010 at 10:35 am said:

AMERICA WHOLESALE LENDER v. SILBERSTEIN AMERICA'S WHOLESALE LENDER v. Linda K. SILBERSTEIN et al. No. 24592.

Argued Oct. 15, 2004. -- February 15, 2005 SCHALLER, DRANGINIS and BERDON, Js. Patrick W. Boatman, with whom, on the brief, was John H. Grasso, Glastonbury, for the appellants (named defendant et al.).Peter A. Ventre, Hartford, for the appellee (substitute plaintiff).

This appeal is similar to the appeal in America's Wholesale Lender v. Pagano, 87 Conn.App. 474, 866 A.2d 698 (2005), which we released on the same date as this opinion. The dispositive issue is whether a corporation that brings an action solely in its trade name, without the corporation being named as a party, has standing so as to confer jurisdiction on the court. We conclude that because a trade name is not an entity with legal capacity to sue, the corporation has no standing to litigate the merits of the case. We therefore reverse the judgment of the trial court.

The following facts and procedural history are relevant to our disposition of this appeal. On October 16, 1998, the defendants Linda K. Silberstein and Morton H. Silberstein1 executed and delivered to the original plaintiff in this action, America's Wholesale Lender (America's), a note in the amount of $440,000 and a mortgage on the defendants' real property. America's is the trade name for Countrywide Home Loans, Inc. (Countrywide), a corporation with its principal place of business in California.2 On April 22, 2003, America's commenced this action, alleging that the defendants were in default on the note and seeking to foreclose on the defendants' property. On July 9, 2003, the defendants filed a motion to dismiss, arguing that the court lacked subject matter jurisdiction because America's did not have the legal capacity to sue. On July 28, 2003, America's filed a motion to substitute Mortgage Electronic Registration Systems, Inc. (Mortgage Systems), as the plaintiff to reflect an assignment of the note and mortgage that Countrywide had made to Mortgage Systems on October 16, 1998. The court, on July 28, 2003, denied the defendants' motion to dismiss and granted the motion to substitute Mortgage Systems as the plaintiff. The court concluded that Countrywide had commenced an action in the name of the wrong person and, therefore, substituted Mortgage Systems pursuant to General Statutes ? 52-109. The court ultimately rendered summary judgment in favor of the substitute plaintiff, the defendants' default on the note not being disputed. This appeal followed.

On appeal, the defendants claim that the trial court improperly denied their motion to dismiss challenging Countrywide's standing to bring an action solely in a trade name. The defendants argue that because the action was brought under a trade name, which is a fictitious name, the court lacked subject matter jurisdiction to decide the merits of Countrywide's claim. The defendants further argue that Countrywide could not cure this jurisdictional defect by substituting Mortgage Systems as the plaintiff.

This case is controlled by our decision in America's Wholesale Lender v. Pagano, supra, 87 Conn.App. 474, 866 A.2d 698 in which we held that the court lacked subject matter jurisdiction because Countrywide had commenced an action solely in its trade name. Our decision in that case rested primarily on the mandate that parties not use fictitious names except in the rarest of cases, in which the issues litigated and the interests of the parties demand the use of a fictitious name. Id., at 478, 866 A.2d 698; see also Buxton v. Ullman, 147 Conn. 48, 60, 156 A.2d 508 (1959), appeal dismissed sub nom. Poe v. Ullman, 367 U.S. 497, 81 S.Ct. 1752, 6 L.Ed.2d 989 (1961). We also recognize the heightened interest of the public in knowing who is financially and personally liable for the actions of entities doing business under trade names. America's Wholesale Lender v. Pagano, supra, at 479-80, 866 A.2d 698. These interests are no less important whether the argument is that the initial filing contained a circumstantial error, as in America's Wholesale Lender v. Pagano, supra, at 477, 866 A.2d 698, or that the initial filing was in the name of the "wrong person," as the substitute plaintiff claims on appeal in this case.

In reaching this conclusion, we look to the language of ? 52-109, which provides in relevant part that the court may allow the substitution of a party plaintiff "[w]hen any

action has been commenced in the name of the wrong person " Such a person, while

perhaps not aggrieved in the manner necessary to have standing, possesses the legal capacity to sue. No such person commenced the action in this case, as a trade name is not a recognized legal entity or person.

Mortgage Systems, the holder of the mortgage and the note at the time the action was commenced,3claims, however, that any jurisdictional defect was cured when it was substituted as the plaintiff. An assignee, however, may not commence an action solely in a trade name either, regardless of the entity to which the trade name applies, because a trade name is not an entity with the legal capacity to sue. Nor could Countrywide cure the jurisdictional defect by substituting a party with the legal capacity to sue on behalf of the trade name. The named plaintiff in the original complaint never existed. As a result, there was no legally recognized entity for which there could be a substitute. See Isaac v. Mount Sinai Hospital, 3 Conn.App. 598, 602, 490 A.2d 1024, cert. denied, 196 Conn. 807, 494 A.2d 904 (1985). Furthermore, because America's had no standing to bring an action, no action in this case ever was commenced, as it was void ab initio. In the absence of standing on the part of the plaintiff, the court has no jurisdiction. Golden Hill Paugussett Tribe of Indians v. Southbury, 231 Conn. 563, 570-71, 651 A.2d 1246 (1995).

The judgment is reversed and the case is remanded with direction to grant the defendants' motion to dismiss and to render judgment dismissing the complaint.

For the reasons set forth in my dissent to the companion case of America's Wholesale Lender v. Pagano, 87 Conn.App. 474, 866 A.2d 698 2005), I am unable to distinguish this case from Dyck O'Neal, Inc. v. Wynne, 56 Conn.App. 161, 742 A.2d 393 (1999). Accordingly, I believe we should affirm the judgment of the trial court. I therefore respectfully dissent.

FOOTNOTES 1. The other defendants in the underlying action, Konover Construction Company, Larry M. Loeb and Linda R. Silberstein, did not appeal. We therefore refer in this opinion to Linda K. Silberstein and Morton H. Silberstein as the defendants. 2. America's, in its complaint, alleged that it was incorporated in Texas. On the mortgage, New York is indicated as the state of incorporation. These inconsistencies, however, do not inform our decision in this case, as all parties agree that America's is a trade name by which Countrywide does business and not a corporation organized under the laws of any state. 3. In a foreclosure action, the assignee may commence an action either in its name or in the name of its assignor. See, e.g., Jacobson v. Robington, 139 Conn. 532, 539, 95 A.2d 66 (1953); Dime Savings Bank of Wallingford v. Arpaia, 55 Conn.App. 180, 184, 738 A.2d 715 (1999). In this opinion SCHALLER, J., concurred.

3.

msoliman, on September 19, 2010 at 10:51 pm said:

Folks

NG is a mentor and this is only my view....which is right to date .Yet once in a while LL website and some great attorneys need to get inside the head of a seriel crook and revisit the inner workings of a CRIMINAL empire .. Upfront , close and personal!

Recievers got it. ..not lenders damn it ...receivers are granting title conditioned subsequent on a U.S. backed Government "credit" which is as good as GOLD!

[ Texas tee, set a spell ...take your shoes off! Ya all be sure to not get suckered into suing MER's now, Ya hear!

The Receivers are granted authority by parties who are Hellbent on burning GAAP. . .and these parties have the nerve to suggest FASB should alter accrued interest as an offset to overall earning- representing it as a direct capital expenses ON ASSETS SOLD!

PUKE! Wow I am sorry but Wow! FASB Directors ..your spineless! And yes...I do need to use grammer and spell click . . .LOL...

PEACE! ? - ? A little bit too excited here to share info ... that s all!

MSoliman expert.witness@

msoliman, on September 19, 2010 at 10:29 pm said:

expert.witness@

The fact that it was a table-funded loan (where the source of funding is hidden) may give rise to defenses and claims by the borrower.

Soliman ? no way ... The true source of capital carries a demand to enforce recourse and that's adequate for the credit line provider to obtain an ucc filing on the lender shown on the HUD settlement statement the ucc covers the entire balance sheet.

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However, the party who was the source of funds may establish that they were the principal in that transaction and seek to impose an equitable lien or at least a perfected claim under the note.

Soliman ? -not a chance. Tbw and colonial played that BS and colonial within minutes fails to meet its capital threshold and upon making good it threat to take out tbw ...suckers!

FDIC slams shut the door on colonial and surprise there is boa. B of fights back against its own children and a "rocking horse" bid while by judge buys off on it, then b of a walks like a loser.

Look, smell the coffee...bac is a separate entity whose assets are held in receivership. . .and maybe countrywide, wa mu and Indy Mac bank are . . .well . . .long gone.

Who then are you suing...maybe the judge shared something with us in a matter going to trial (where we beat the possession a year ago. The plaintiff however lost its claim upon our original complaint being dismissed with prejudice. And we are excited ...why? [With a stipulation to amend and come back in thirty days and to name as an indispensible party .....Bingo. . . . We were right!)

Call me...guys .....Please

M.soliman

4.

Marty, on September 14, 2010 at 7:21 am said:

I actually used this very defense in my case, the Judge agreed that Countrywide had no standing, as the note was in AWL name and not the plaintiff. I ended up settling with a Short Sale, I had some personal reasons for not going to Trial, I felt the Judge was very unfairly gunning for me, I beat the first set of lawyers (a high end RI foreclosure mill) they recused themselves and swapped in a very highly skilled litigation attorney in Portland, ME....needless to say, I am practical and my argument would have eventually been simply brushed to the side.

So I short sold, moved on, got a good settlement considering the multiple liens and some relocation money.

...in the end, you need to look at what your fighting and what your fighting for. I decided to take the reins in my own hands, and move on on my terms...and not some corrupt judicial system.

Not to say I dont stand and shout...Dont walk away, fight and stay to alll you you!!

5.

Richard S, on September 11, 2010 at 7:34 pm said:

I find this interesting, because in my mortgage note, it shows on one page, the address of America's Wholesale Lender, and then on another page, the exact same address is Country Wide.

So i think my loan proves the above false for me.

My loan also has several other address's for AWL too.

6.

neidermeyer, on September 11, 2010 at 1:13 pm said:

Alina ,

What a mess ,, intentional undeniable mortgage fraud in Harlem ,, who woulda guessed!

And the foreclosure dismissed for a second time (first in Feb 2008) in part because of the following .. Plaintiff is asking for amounts due on their mortgage and note, as well as a declaration that no defendant has any lien, equitable or otherwise, Qn the property. ... AND ...

I do not find the language or the closing documents, identifying MERS as nominee for America's Wholesale Lender, to sufficiently tie in the real party in Interest.

I like that MERS was asking for (in effect) quiet title and that it was denied because MERS couldn't be found to be tied to the property or the loan.. This judge is great ,, she actually did her job and looked at the evidence.

7. Steve, on September 11, 2010 at 11:36 am said:

"American Home Mortgage" is another example. AHM is a DBA for AHM Corp.

Also, the bankrupt loan originator (not include in the Prospectus but is an affiliate or subsidiary) "American Brokers Conduit" is also DBA for AHM Corp.

When requesting mortgage disclosure records from the loan servicer, the loan servicer under RESPA claims they don't have to release docs and to contact the loan originator if in dispute, while they continue to foreclose in non-judicial states.

What about the master servicer? The one that collects on the default insurance policy and is never mentioned once throughout the loan. Are they not the third party creditor? Doesn't this constitutes unfair or deceptive practices?

8. Alina, on September 11, 2010 at 10:17 am said:

Check out this dismissal by Judge Alice Schlesinger :

9. THE A MAN, on September 11, 2010 at 8:33 am said:

we need attorneys and judges that give a damn. apparently we dont. accept for a hand full like Neil Garfield

we also need banks that give a damn.

neil we need a book for dummies

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