Eviction delayed again in challenge to Diamond Bar foreclosure
Zeenat "Zee" Ali, who dropped out of medical school to contest the foreclosure of her mother’s Diamond Bar home, won another round in court this week when a judge in Pomona put the eviction on hold at least until November.
In an order filed Tuesday, Los Angeles County Superior Court Judge R. Bruce Minto said the family had "shown a probability of success" in its claim that fouled-up paperwork invalidated the transfer of the mortgage in 2006 when it was sold in a bundle of loans that were used to create mortgage-backed securities.
If that's true, Deutsche Bank -- the trustee for the pool of loans where the Ali mortgage wound up -- might not have been legally entitled to foreclose on the Ali loan, as the big German bank did last December.
An attorney for the bank didn't respond to a request for comment, but the company that handled the paperwork said nothing improper had occurred (more on that below).
Minto scheduled a Nov. 8 hearing on whether to extend his stay of the eviction, which has been put on hold repeatedly since the foreclosure took place last December.
The ruling stems from a lawsuit filed on behalf of Zeenat Ali’s mother, Shahida Ali, who took out the mortgage to help finance a business that has since closed.
The defendants are now-defunct Downey Savings of Newport Beach, which wrote the loan; Deutsche Bank; and Central Mortgage Co., a subsidiary of Arkansas' Arvest Bank Group that handled customer service on the loan.
Nicholas A. Brutocao, an Irvine attorney representing the banks, didn’t respond to a request for comment Wednesday.
The suit, alleging that the home was foreclosed on improperly after the Alis applied for a loan modification, was filed by Zee Ali. Her lengthy battles with the banks in state and federal courts, conducted without benefit of an attorney, were described in a Times article and blog post in early August.
At that time, Ali, 23, had just retained a lawyer, Kenneth T. Zwick of Costa Mesa. Zwick filed the request for a temporary restraining order that Minto granted this week.
Zwick's grounds for requesting the order included the allegation that a document transferring customer-service rights on the Ali mortgage had been signed improperly by Crystal Moore, identified in the papers as a Downey vice president.
Citing stories in the St. Petersburg (Fla.) Times, the request said Moore in fact worked for Nationwide Title Clearing Inc.in Palm Harbor, Fla., where she and another employee had been "robo-signing" thousands of mortgage documents as though they were officers of banks, when in fact they were not.
"A few people in Florida pretended to be vice presidents of dozens of banks," Zwick said in an interview.
Jeremy Pomeranz, a Nationwide Title Clearing senior vice president, said Moore works for his company but denied that anything improper had occurred.
Nationwide Title Clearing employees such as Moore are often appointed vice presidents by lenders for the limited purpose of allowing them to sign transfer papers when pools of loans are sold, Pomeranz said. He said that in the case of the Ali loan, Downey’s board had named Moore a vice president for that purpose.
Earlier this month, Judge Minto ordered Deutsche Bank to answer Ali’s complaint, which it had not previously done, and told the parties to submit to mediation.
Zee Ali said she found the developments encouraging.
"I feel good," she said, "because it solidifies the fact that I do have merit to my case."
--E. Scott Reckard
Photo: Zeenat Ali. Credit: Los Angeles Times