Frivolous Foreclosure Lawsuit Leads Brooklyn Judge to Order Sanctions Against Bank

A
Brooklyn man being sued for foreclosure was led to a legal victory with
the help of South Brooklyn Legal Services (a program of Legal Services NYC) attorney Sara Manaugh. Not
only did a judge find the suit frivolous, but they ordered $10,000 in
sanctions against the bank for foreclosing on a property they didn’t
even own.

Mr. G bought a home in Bedford-Stuyvesant in 2007
with the assistance of two loans from an organization known as “GE
Money Bank.”

But within two years a foreclosure had been
filed by a bank, U.S. Bank National Association, which claimed it had
acquired the senior mortgage after the mortgage had been assigned first
from GE Money Bank to a trust held by Deutsche Bank National Trust
Company, and then from that trust to a different trust to a different
trust held by U.S. Bank.

SBLS
attorneys dug up online records on a database maintained by Wells
Fargo, the custodian of both trusts, which revealed that Mr. G.’s
mortgage loan was not owned by U.S. Bank — it was still held in the
original trust.

Judge Wayne P. Saitta of Kings County
Supreme Court wrote, “It appears that the plaintiff never owned the
debt which was the subject of the foreclosure action. Plaintiff has
submitted no evidence that the note was ever transferred to it. …
Simple due diligence would have revealed that the plaintiff did not own
the mortgage upon which it sought to foreclose.”

The judge
threw out the foreclosure lawsuit against Mr. G and ordered that U.S.
Bank pay $10,000 in sanctions for this “frivolous litigation.”

The
judge wrote, “The court can only speculate in how many other cases
plaintiffs with no interest in mortgages wrongfully foreclose on them
and collect proceeds to which they are not entitled.”