Late last week, Bank of America petitioned the California Court of Appeals for a re-hearing of the Glaski case, which the court had recently decided, subsequently publishing its written opinion.
The filing for petition for re-hearing should not have been surprising, as it was based in large part on several fairly obvious flaws related to the written decision, not the least of which was the fact that the trust in question was not one governed by New York’s Estates Powers and Trust Law (“EPTL”), as the court was told and assumed to be the case, but rather was a Delaware trust presumably subject to Delaware’s laws.
Fundamentally, the bank’s petition attempted to make the point that the Uniform Commercial Code (“UCC”) governs the assignment of a mortgage note, but then stating that if state trust law did apply, it would be that of the State of Delaware and not the State of New York.
Bank of America, who inherited this problem when it acquired La Salle Bank, filed a petition claiming that, “Glaski’s entire theory – that his mortgage was belatedly assigned to the trust is wrong. The stated basis for this claim by the bank as trustee is found in Section 2:04 of the Pooling & Servicing Agreement (“PSA”), which Bank of America says a more thorough reading of the PSA shows that Mr. Glaski’s loan was transferred into the trust before the trust’s closing date.”
As stated in the bank’s petition…
Section 2.04 of the PSA states that WaMu “does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Trust, without recourse, all the Company’s right, title and interest in and to the Mortgage Pool Assets. It further states that “it is the express intent of the parties that the conveyance of the Mortgage Pool Assets to the Trust by the Company as provided in this Section 2.04 be, and be construed as, an absolute sale of the Mortgage Pool Assets.”
The remainder of the bank’s petition appears to focus on making the argument that the court should reconsider its holding that “an obligor has standing” to challenge such a breach of assignment, and the bank attempts to support this argument by saying that the court’s decision conflicts with other “well-established California common law rules,” and that it somehow “undermines California’s comprehensive statutory framework for non-judicial foreclosures.”
So, what does all of this, and the fact that the …read more