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Appellate court rebuffs wild-goose Chase

Poway couple loses case to J.P. Morgan Chase

On January 30, the Court of Appeal, Fourth Appellate District, gave a pretty good spanking to a Poway couple who appealed when a Superior Court judge ruled in favor of the big J.P. Morgan Chase Bank.

In 2007, Kirk and Dawn Carmichael borrowed $2.4 million from Washington Mutual Bank for their Poway dream house. In 2008, the bank failed. New York's mammoth J.P. Morgan Chase acquired certain assets and liabilities of Washington, including the Carmichaels' loan.

The Carmichaels defaulted and later substituted an individual as trustee. Chase had not authorized such a move and would not relinquish its status as beneficiary of the loan and accompanying deed of trust.

According to the appellate court, the Carmichaels filed documents "falsely claiming" — the court's words — that the sums secured by the deed of trust had been paid. The Carmichaels also filed a modification of the deed of trust, "falsely claiming" the same thing. Then the Carmichaels filed a warranty deed stating that they had granted title to the property to Running Deer Ministries. They also filed a rescission of the notice of default that Chase had not authorized.

Chase filed to cancel the documents "due to their unauthorized and fraudulent nature," said the appeals court. The Carmichaels filed a cross-complaint and the district court judge ruled in favor of Chase. The Carmichaels appealed.

In essence, the Carmichaels argued that Washington Mutual's assets did not pass to Chase, which therefore lacked standing in the case. Both the trial court and the appellate court disagreed.

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On January 30, the Court of Appeal, Fourth Appellate District, gave a pretty good spanking to a Poway couple who appealed when a Superior Court judge ruled in favor of the big J.P. Morgan Chase Bank.

In 2007, Kirk and Dawn Carmichael borrowed $2.4 million from Washington Mutual Bank for their Poway dream house. In 2008, the bank failed. New York's mammoth J.P. Morgan Chase acquired certain assets and liabilities of Washington, including the Carmichaels' loan.

The Carmichaels defaulted and later substituted an individual as trustee. Chase had not authorized such a move and would not relinquish its status as beneficiary of the loan and accompanying deed of trust.

According to the appellate court, the Carmichaels filed documents "falsely claiming" — the court's words — that the sums secured by the deed of trust had been paid. The Carmichaels also filed a modification of the deed of trust, "falsely claiming" the same thing. Then the Carmichaels filed a warranty deed stating that they had granted title to the property to Running Deer Ministries. They also filed a rescission of the notice of default that Chase had not authorized.

Chase filed to cancel the documents "due to their unauthorized and fraudulent nature," said the appeals court. The Carmichaels filed a cross-complaint and the district court judge ruled in favor of Chase. The Carmichaels appealed.

In essence, the Carmichaels argued that Washington Mutual's assets did not pass to Chase, which therefore lacked standing in the case. Both the trial court and the appellate court disagreed.

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Comments
22

Incredibly inconceivable and implausible. Are these people children or senility demented? My loan was Wahingon Mutual and went to Chase same time. I was at the county building Monday, main floor room 103, getting copy of records and it's all there.

Feb. 4, 2015

When I lived in Portland some years back, I had an account with WaMu. It was a regional bank (originally a savings & loan), serving WA and OR, and had friendly service with its free checking. They later got over-ambitious and greedy, buying up banks, savings & loans, mortgage companies and at least one credit card provider (Providian). It was to be their road to ruin. It became the biggest bank failure in US history.

Feb. 4, 2015

And the executives walked away with millions. White collar crime does pay.

Feb. 5, 2015

AlexClarke: The Justice Department's apparent decision to let the bankers off the hook kept a lot of executives -- of WaMu and other institutions -- out of prison.

Part of the blame for this period belonged with the United States government, which encouraged banks to lend so the maximum percentage of Americans could own a home. Maybe that's why the government didn't try to jail the executives. Too much would come out in court. Best, Don Bauder

Feb. 5, 2015

dwbat: The stories of how WaMu piled up mortgages, whether the borrower was qualified or not, will go down in the ugly history of that era. Employees were rewarded, essentially, to look the other way on whether the borrower could ever pay off the mortgage. Most of the mortgages would be sold -- why worry? Best, Don Bauder

Feb. 5, 2015

shirleyberan: The Carmichaels were rebuked pretty sharply by the appellate court. Best, Don Bauder

Feb. 5, 2015

I'm betting they lost their couple million dollar home. Average Joe can't play against the big boys.

Feb. 5, 2015

shirleyberan: The average Joe should NOT be able to play the game the way the Carmichaels did. Best, Don Bauder

Feb. 5, 2015

And bet they were upside down day one, house not worth what they thought and getting worse. They should take some responsibility for making bad decisions. Maybe they tried to sell and figured it out. Could have rented it out, possibly to a cult, like Heaven's Gate, if there's any of them left.

Feb. 5, 2015

shirleyberan: They defaulted. The house was probably upside down but I don't know that. Best, Don Bauder

Feb. 5, 2015

What's the main point--that they shouldn't have taken out the loan or that the loan officer shouldn't have given it to them?

Feb. 5, 2015

Twister: The main point(s)? They filed papers that the appellate court emphasized were false. They claimed wrongly that Chase had not actually taken over their loan. They claimed they granted title to a religious group. Isn't that enough? Best, Don Bauder

Feb. 5, 2015

Twister - main point, people want what they can't pay for.

Feb. 6, 2015

shirleyberan: Some people do. Wise ones don't. Best, Don Bauder

Feb. 6, 2015

Noblesse oblige.

March 2, 2015

I sure everyone holds the opinion that in the instance one cannot satisfy their obligations to a loan requirement then they have no right to complain about an bank action taken to recovery the property. On the other side of the coin how can anyone provide an opinion in this matter when the article offers so little as to the specifics of the case. Chase Manhattan does not hold any awards for integrity and honesty in their banking practices, in fact if research the subject you'll find a great deal of facts to the contrary.
There are those who believe the bank has no right to claim an attachment to DEBT that they have not and will not suffer a loss on. A debt that is insured by the feds. I could understand if the Government claimed the right to the property, seeings how they represent the taxpayers and the tax payers who are an the hook for it, and not Chase or any other bank. Its you and me ! Wheres there is no NO SILVER OR GOLD backing a back loan, the Federal Reserve should not be able to print money out of thin air for the creation of a mortgage loan. Some people are aware of the fact doing so requires printing money out of thin air to create the financing fees and charges the banks profit from the loan. This is exactly what killed the value of the U.S. Dollar.
What do I Know, Take this challenge........ go to youtube and do a search for "banking and Victory Grant". this 12 year old little girl will explains exactly how debt is loaned, not money, and the banks do not possess any valuable interest in the loan, the tax payers do. go ahead I dare you!

Feb. 8, 2015

SerraMesaBill: I am not a big admirer of J.P. Morgan Chase, either, as well as its cousins on Wall Street. But in this case, Chase was in the right. Best, Don Bauder

Feb. 8, 2015

SerraMesaBill - The little girl might actually grow up to become an honest and influential politically fearless figure. Until so-called-Christian-Right-politicians actually understand enlightenment, we can't develop as the most progressive free country. Helping the rich banks with government cover, avoiding real problems of less fortune(ate) is not religious in reality. But people who know how the cruel system works for now, buy a smaller property, wait a few years till equity accrues, then use that like fake money for a bigger house and more equity. That system was working pretty well, sometimes better than others. Then the lender-liars Created the Great Recession with devastating results that caught an unmentionable amount of citizens off-guard, globally. They bought property (and company stock) assuming American prosperity is always guaranteed. I'd get property now, while value is low and so are interest rates. I had a 7% home loan till a so-so refi with Chase. My parents interest rate in the 60's was 13% but the price of a house was the price a car is now. If you can get together with someone you love and get a property now and if you think you can wait maybe 2-5 years for the growth, I'd do it. When I was married the first time (the 80's) bought a good sized just built house in Santee. 4br, 2ba for 55thousand, we divorced 9 months later and we got 20grand more for it.

Feb. 9, 2015

Don - I think it was actually the mid-70's when I bought my first house in a new home development in new Santee. I graduated high school in 1973 and by 1976 had all the cocktail waitress/bartender work I could find. Those jobs kept me going through most of the recession of the 80's, college classes and disco.

Feb. 9, 2015

More freeloaders. I sincerely hope the house is taken from them and auctioned off. They borrowed money, they owe money... and the taxpayer ultimately took the hit on all of this. Yes, banks did bad deeds too, and we should have let them collapse. But they all had depositors and investors who had done nothing wrong, and those parties have a right to locate assets like loans due and pursue them.

Anyone who believe that they should get a free house because a bank went under is what's wrong with America.

Feb. 9, 2015

Lol.. You my friend are comedy! Your what the banks call ..prime beef. The real problem is ignorance! And you are the poster child! If you even had the slightest clue of what you were talking about you might of saved some kind of face, but instead you chose to flaunt your ignorance, and proudly at that! your stupidity is what's wrong with the world and its what allows criminals to get away scott free! And the very thing you claim you dislike, you actually contribute to it... the free loaders! Yeah! Super intelligent! NOT! Global Stupidity is the real threat to our world. Not poor people in the middle east who cant even afford food let alone a way to come here and harm us, as your free loading banking criminal buddies would have you believe. Just, like they loan you money, too.. right?

jeesus, crime is so easy to get away with when people like you are around to buy the bull.. You want a loan? just sign this promissory note, and I can loan you your own money. But make sure you pay me back for loaning you your own money, plus interest! Oh yeah, and don't worry about the identity theft I commit to make more absurd amounts of money off your own loan that you created for yourself and me, when you moronically signed a promissory note even after seeing "for value received" and not questioning it! I get to free load of your ignorant ass, and you pay me for it on top of that, plus interest. Because, hey... someone borrowed money, right? As long as someone is smarter than other it doesn't really matter who did what.. As long as you believe it, were all good! Just don't default or I'll take even more from you for free... Aint free loading great when people don't understand who the actual lender is? yeah... ever try asking your bank for the identity of the lender? lol haha his name is jack ass!

March 29, 2015

By the way... the free loader ends up with the free house.. not cause a bank went under.. but because people are too lazy and ignorant to care about what they are actually doing and what is actually taking place, and instead will just trust anyone simply because their name is, bank..

But rather than degrade you, I will educate you.. Did you read our agreement? Did you see the part says, I will take your signature and identity and without your knowledge convert and sell those to create money for both us making you believe I lent you something when in fact I sold your information and property for 10x what you think i'm lending you? Giving you 1% and keeping the other 99%, for free! Did you agree to that? Would you agree to that? I doubt it! Thus, exactly why fraud is the only way to do it! Now do you agree to pay me back for that 1% loan plus interest giving me another 10x the amount I made off criminal activity at your expense? Sure you do! Did you know I also sold to 100 other people who are all making absurd amounts of money at your expensive for free while you work your ass off to repay me for money I got from you for free? If your not mad yet just wait till you find out about the trusts pools for tax schemes to get more free money, free loading off the tax payers courtesy of government tax breaks called REMICS... having fun yet? Wait till the DTC is involved.. you have just made free loaders richer than your wildest dreams... and you agreed !! awsome!!

March 29, 2015

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