Fed. Court Grants TRO After Homeowner Alleges Violation Of Loan Mod Agreement; Goal Is To Slam Brakes On All Nonjudicial Hawaiian F'closures: Attorney

In Maui, Hawaii, The Maui News reports:

• Amid the many foreclosure actions and auctions on Maui, one has come to a halt, after a federal judge in Honolulu granted a temporary restraining order. The order itself does not address the borrower's big argument - which is that the bank pursuing her cannot prove it has any real ownership interest in her Kihei home(1) - but the restraining order was temporary. Since it expired a week ago, the lenders have not yet made any effort to resume the process of taking Watoshina Lynn Compton's house.
• Compton's lawyer, James Fosbinder, said Thursday that the significance of the case is not about Compton herself, but that "there is a very similar fact pattern" with the experience of many other borrowers in trouble. Fosbinder said he has about 300 clients with mortgage troubles, "and about 70 percent" are in the same boat as Compton.

***

• On April 4, U.S. District Judge Susan Oki Mollway granted a temporary injunction against U.S. Bank, the supposed trustee of her mortgage after it was engrossed in a mortgage-backed security; and BAC Home Loans Servicing. [...] Mollway found that a scheduled sale of Compton's property would breach the [loan] modification agreement "and cause Compton irreparable harm."
• "The big question," said Fosbinder, is whether a similar strategy would work in the hundreds of other cases he is prepared to file.
• He said he believes that once the court hears the evidence, "it would support stopping all nonjudicial foreclosures in Hawaii, and that is our ultimate goal."

For more, see Judge halts foreclosure; others vulnerable? (Loss of woman’s home prevented — for now — in modification struggle).

(1) The main gist of the homeowner's lawsuit yet to be addressed by the court, according to the story, is that the original loan, made by Countrywide, was purportedly transferred into a trust for the purpose of bundling it with other mortgage loans and selling bonds based on those assets. U.S. Bank is supposed to be the receiving bank for the asset. Fosbinder, through discovery, learned that the mortgage documents were never physically transferred, as he believes the law requires, but - as related by a Countrywide representative - were kept with the servicer: Countrywide/BofA, not U.S. Bank, the story states. Furthermore, he said, Hawaii trust law requires that assets in a trust be put there before a closing date, which, he alleges, was missed by years. Therefore, he said, there is a question of whether U.S. Bank has the legal authority to foreclose.

A third argument implicates the involvement of Mortgage Electronic Registration System, the alleged racket by which the big banks assign mortgages without recording them at the Bureau of Conveyances in the usual way.