This looks like a fairly lucrative scheme -- some might say scam, but I know nothing beyond what's in the opinion. The lawsuit isn't about what the borrower did, and involves instead who's left holding the bag at the end of the whole thing. But if you're in need of a half million dollars or so, here's apparently one way to go:
"This action deals with a parcel of property located at 9800 South 5th Avenue in Inglewood, California (the property). In February 2007, Cassandra Celestine (Celestine) borrowed $448,000 from CIT Group/Consumer Financing (CIT Group); CIT Group secured its loan with a deed of trust in the property that was recorded on February 28, 2007 (CIT Deed of Trust). Celestine paid the first three monthly payments on the loan, and then stopped making payments.
In early September 2012, CIT Group assigned the CIT Deed of Trust to U.S. Bank, N.A. as trustee on behalf of SASCO Mortgage Loan Trust 2007-RNP1 (SASCO). (Footnote: Prior to this assignment, a false grant deed was recorded that purported to convey the CIT Deed of Trust back to Celestine. Celestine later agreed to set aside the false grant deed.) The assignment was recorded on September 26, 2012. In early June 2014, SASCO assigned the CIT Deed of Trust to DLJ Mortgage Capital, Inc. (DLJ Mortgage). The assignment was recorded on June 13, 2014.
On July 3, 2014, which was less than a month after the assignment to DLJ Mortgage, DLJ Mortgage recorded—and mailed to Celestine—a notice of default setting forth the outstanding balance Celestine owed to DLJ Mortgage and giving her 90 days to pay. Before the 90-day deadline expired, Celestine on September 11, 2014, filed a lawsuit (the Celestine Action). Proceeding as a self-represented litigant, Celestine alleged 12 claims, including a claim under the Act to invalidate the CIT Deed of Trust. She filed a notice of lis pendens regarding her lawsuit on September 23, 2014.
Although SASCO and DLJ Mortgage had recorded their assignment of the CIT Deed of Trust and although Celestine had exchanged letters with the loan servicers reaffirming that SASCO and then DLJ Mortgage had acquired the CIT Deed of Trust from CIT Group, Celestine did not name SASCO or DLJ Mortgage as defendants. Instead, she named only (1) CIT Group, and (2) “All Persons Known & Unknown Claiming Any Legal Or Equitable Right, Title, Estate, Lien, or Interest In The Property Described In The Complaint Adverse To Plaintiff Title Or Any Cloud On Plaintiff Title Thereto.” What is more, Celestine did not properly serve CIT Group with the complaint.
As a result, no one with an interest in the property was ever served with Celestine’s complaint and, consequently, no one ever appeared. On October 29, 2014, Celestine obtained a default. On May 28, 2015, the trial court entered a default judgment quieting title to the property against CIT Group and permanently enjoining CIT Group and its “successors in interest” from “[a]sserting . . . any interest or ownership” in the property, including through the CIT Deed of Trust (2015 Quiet Title Judgment). The 2015 Quiet Title Judgment was recorded on July 22, 2016. On August 4, 2016, the trial court issued an order expunging the CIT Deed of Trust and declaring it to be “Reversed, Cancelled, Set Aside and made Null and Void, Ab Initio, for all purposes” (2016 Expungement Order). The 2016 Expungement order was recorded on August 10, 2016. . . .
On September 2, 2016, Celestine borrowed $285,000 from Tsasu, LLC (Tsasu); Tsasu secured its loan with a deed of trust against the property that was recorded on September 15, 2016 (Tsasu Deed of Trust). . . . Celestine [] stopped making payments to Tsasu."
Sure, the property eventually gets foreclosed upon. But in the midst of these false deeds and the like, Celestine retains possession of the thing for around a decade, plus gets the $700,000+ in loan proceeds without making virtually any payments at all on the things.
Works out well for her. The lenders: Not so much.
