EXHIBIT 3

GEORGE N. BOWDENJUDGE

åuperíor @ourt of tl;e St¡rte otWagbíngtonfor ånollornígll [,ounty

SNOHOMISH COUNTY COURTHOUSE3000 Rockef€ller Avenue, M/S #502

Everett, WA 98201-4060

(425) 388-3532

Abraham K, LorberLane Powell, PC1420 Fifth Avenue, Suite 4100Seattle, WA 98101

Scott E. StafneStafne Trumbull, LLC239 North Olympic AvenueAriington, WA98223

January 30,2014

Re: Bradbum v. ReconTrust, et al. lNo. l1-2-08345-2

Dear Counsel:

Enclosed please find copies of my order denying the defendant's motion for summaryjudgment, granting plaintiffs cross motion for partial summary juclgment on his consumerprotection claims, and granting plaintiff s motion for partial summary judgment declaring theforeclosure sale to be void and setting it aside,

I chose not to enter specific findings or conclusions . of law, since they are notrequired. And any appellate court will undoubtedly soft through the record and discuss thosesalient facts which may be pertinent to its decision on review

However, I did want to share my reasoning for the decisions I entered.

Obviously, this is yet another convoluted case in the minefield of morlgage foreclosurelitigation involving MERS, Most of the facts sunounding thç procedural history are not indispute.

While I recognize that the law is well-settled that a borrower like Mr. Bradbum generallydoes not have recourse when he's denied a refinance loan, I was troubled by the allegation thathe was told that he should stop making his mortgage payments so that he could qualify forrefrnancing with Bank of America (BANA) and that once he fell behind he not only wasn'tapproved for that refinance but then found himself unable to bring his mortgage loan cunent orresolve what he believed was a dispute about how much he was beliind. Of course, that's notenough to prevail on a motion for summary judgment. And for puryoses of these motions, it was

accepted that he was in default on his loan, And there's also no question that the loan documentsallowed for the nonjudicial foreclosure sale of his home in the event of default.

FEB 0. 3 2014

I was not concerned with the fact that the saie was ultimately postponed more than 120days by the trustee, since a new notice of foreclosure sale was had been issued. I could findnothing in the Deed of Trust Act (DTA) or case law which required the lender or trustee to startover by filing another notice of default. The Act forbids a sale less than 120 days after thatnotice of default. This sale was well beyond that. I also felt that there was ample pioof that therequired notices were issued and portrd, notwithstanding Mr. Bradburn's claims to thecontrary. That's not to say that the notices were conect or proper under the DTA.

\Vhat seems to have been intended as a fairly simple procedure to avoid the necessity of ajudicial foreclosure, namely the DTA, might be made more complicated and confounding than inthe case at bar but it is difficult for me to see how. The DTA seems to contemplate a borrowerand a lender with an independent trustee having the power to foreclose on the deed of trust in theevent of default by the borrower. The lender would normally hold the underlying note and be thebeneficiary of it. Here matters have been complicated by the sale of the underlying note fromHomeStar Lending to Countrywide, which was later acquired by BANA. Fidelity Title wasidentified as the trustee but then MERS was characterized as the beneficiary "as the nominee" ofthe lender and their assigns. At summary judgment it was claimed that the note was "owned" byFannie Mae although it was "held" by BANA, which was then described as the "servicer" of thenote at the behest of Fannie Mae.

There was no evidence that MERS was ever the owner or holder of the note. Hence,under the Bain decision, MERS could not have been the benefici ary. Bain left open the issue ofwhether MERS could act as an agent of the lender or trustee, and in support of its motion forsummary judgment defendants make that asseftion here, More troubling is the role ofReconTrust. It was ReconTrust which issued the notice of default to the borrower. ReconTrustwas not the trustee when that notice was issued. It's undisputed that ReconTrust was, at alltimes, a wholly owned subsidiary of BANA. There's no reason, or at least none that I could see,that would preclude ReconTrust from issuing a notice of default as an agent of BANA. Butthereafter MERS named ReconTrust as the trustee. Or perhaps ReconTrust named itself as thetrustee, since the signatory "G. Hernandez" was not an employee of MERS but rather wasemployed by ReconTrust, While the DTA appears to have been amended and arguably mightpermit a subsidiary to act as a trustee, the statutory requirement remains that the trustee beindependent and not beholden to the lender or borrower, Acting as an agent of BANA and beinga wholly owned subsidiary of BANA, it seems specious to attempt to argue that ReconTrust wasan independenr ftustee.

And under what authority did MERS have the right to name that trustee? As the agent ofBANA, having been named as the 'onominee" by BANA's predecessors in interest? Theevidence either compels or strongly points to the conclusion that MERS was a separately ownedcorporation and acted independently; it was not owned by BANA, and I do not see where it owedany fiduciary obligation or fealty to BANA (or Fannie Mae fol that matter). While there isevidence to support the claim that the defendants were following the servicing guidelinespromulgated by Fannie Mae, that's not tantamount to a claim that they were acting at thedirection and control of the o\,vner of this note.

Then there are the contradictory statements in the notices that were filed. BANA filed adeclaration with ReconTrust which identifîed Fannie Mae as the owner and beneficiary of thedeed of trust, yet ReconTrust later identifîed BANA as the beneficiary. Was that because ofMERS purported assignment of the note in favor of BANA? What rights did MERS have toassign over to BANA the rights which presumably vested with Fannie Mae at that time? And ifBANA somehow became the beneficiary, under what authority did ReconTrust, acting as thetrustee, accept a credit bid from Fannie Mae at the foreclosure sale? Was that predicated onBANA's assignment of the deed of trust some three weeks after the trustee's satèZ a prÌmaryreason for the requirement that the trustee have evidence to conectly identifu the beneficiary ofthe deed of trust is so the borrower will know who he needs to contact to try to reinstató orresolve disputes about his loan, something which appears underscored by Mr. Bradbum's statedbelief that he had been curent with his payments until advised to fall in arrears and his disputeabout how far behind his loan had fallen.

The case law has consistently held that the DTA must be strictly followed. Absent avalid waiver of the protections under the DTA, the failure to materially comply with that statuterenders a foreclosure sale pursuant to it invalid. V/hile Mr. Bradburn did notavail himself of theability to seek to enjoin the sale, I felt the failure to strictly follow the requirements of the DTArequired setting aside this foreclosure sale, particularly the appointment of a trustee that was notindependent. I could not find that Fannie Mae as the claimed owner of the underlying note was abona fide purchaser for value, even if it was not complicit in the violations of the DTA.

Having found the foreclosure sale to be fatally flawed by defendants' failure to strictlycomply with the DTA, it follows a priori that plaintiff was "injured". I believe plaintiff met hisburden to show that defendants' actions constituted an unfair or deceptive practice, that itoccuned in a trade or commerce, and that those practices impacted the public interest, Insofar asplaintiff s home was wrongfully sold, he was "injured". The measure of his damages will needto be proven at trial. If he was in default in his loan and would have faced the loss of his home,he may yet face the same ultimate resuh. A jury may conchrde that his damages arc deminimus. And if he claims significant monetary damages, it will be up to plaintiff to provecausation, namely that those damages resulted from the wrongful conduct of defendants.

Very truly yours,

d#-6ù.þ",,"--

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,;ii,iil in Open CourtJ 3o-,zol.!*SONYA KRASXI

:

IN TTIE SUPERIOR COURT FOR THE STATE OF WASHINGTONIN AND F'OR THE COUNTY OF SNOHOMISH

Ð'v

JACOB D. BRADBURN, an individual,Plaintiff,

v.

RECONTRUST COMPANY, N,4,, Alimited-purpose national trust bank, et. al.,

Defendants.

No. 11-2-08345-2

ORDER DENYING DEFENDANT'SMOTION FOR SUMMARYJUDGMENT AND GRANTINGPLAINTIFF'S CROSS-MOTIONS FORPARTIAL SUMMARY ruDGMENT

PROCEDURAL BACKGROUNI)

This matter was heard by the Couft on November 1,2013. Plaintiff Jacob Bradbum

("Bradburn") was represented by Scott E. Stafne of Stafne Trumbull, LLC. Defendants Bank

of America, N.A. ("BANA"), ReconTrust Company, N,A, ("ReconTrust"), Mortgage

Electronic Registration Systems, Inc. ("MERS"), and Federal National Mortgage

Association ("Fannie Mae") were represented by Abraham K. Lorber of Lane Powell, PC.

The Plaintiff filed a Motion for Summary Judgment seeking partial summary

judgrnent as to Defendant's liability for violations of the Deed of Trust Act ("DTA") and

related violations of the Consumer Protection Act ("CPA"). The Defendants filed a Cross

Motion for Summary Judgrnent on all claims. Each party responded to the others' motion

and replied to the others' response. Both parties filed declarations in support of its pleadings.

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Additionally, Bradburn filed an objection, Dkt. 46, to porlions of the Defendants' argument,

declarations and exhibits thereto.

The Court considered the following evidence:

1. Declaration of Leticia Duran (entitled Declaration of ReconTrust), Dkt' 34 and

Exhibits thereto.

2. Declaration of Heather Dispenza, Dkt. 35 and Exhibits thereto.

3. Declaration of Abraham K. Lorber, Dkt. 36 and Exhibits thereto.

4. Declaration of Scott E. Stafire, Dkt. 42 and Exhibits thereto.

5. Declaration of Jacob Bradbum, Dkt' 47 and Exhibits thereto'

6, Legislative History of the DTA pursuant to a Motion by Bradburn, Dkt. 48'

7 . Declaration of Scott E. Stafne, Dkt. 49 and Exhibits thereto.

The Court also considered oral arguments of the parties through respective counsèl.

ORDER

Based upon the Court's review of the pleadings and the argument of counsel,

defendant's motion for summary judgment is denied, plaintiffls cross motion for partial

summaïy judgment declaring the nonjudicial foreclosure sale under the Deed of Trust Act

void and setting aside that sale is granted, and plaintiffls cross motion for partial summary

judgment establishing liability under the Consumer Protection Act is gmnted.

DATED this 30th day of January,2}I4.

N. BowdenJudge