TO THE HONORABLE ROBERT E. GERBER,
UNITED STATES BANKRUPTCY JUDGE:

Diana G. Adams, the United States Trustee for the Southern District of New York (the “United States Trustee”), respectfully submits this memorandum of law in support of the request of Silvia Nuer (the “Debtor”) for sanctions against J.P. Morgan Chase Bank, National Association (“Chase”) in connection with Chase’s Motion for Relief from Stay (the “Motion For Stay Relief”) as servicer for Deutsche Bank National Trust Company (“Deutsche”), as Trustee for Long Beach Mortgage Trust 2006-2 (“Long Beach Trust”), with respect to a mortgage (the “Mortgage”) as to property located at 1651 Metropolitan Avenue, 7C, Bronx, NY 10462 (the “Property”).

I. SUMMARY OF ARGUMENT

The United States Trustee supports the Debtor’s request for sanctions. Chase has filed documents that appear to be either patently false or misleading in connection with the Motion For Stay Relief. In the Motion For Stay Relief, Chase took the position that it was acting only as the servicer of the Mortgage. Chase at the same time attached documents which supported a different position. Specifically, an assignment showed that Chase held the Mortgage and was assigning that Mortgage to Deutsche. Not only was the assignment dated post-petition, but it was signed only a few days before Chase filed the Motion For Stay Relief. The assignment was also prepared several years after the last actual assignment of the Mortgage. When afforded opportunities to correct this matter, Chase, through supplemental filings, continued to produce documents that were confusing and contradictory, and presented an affirmation submitted by a witness who apparently had no direct or personal knowledge of the facts or the chain of ownership of the Mortgage. However, what is clear is that, whether created through inadvertence or a deliberate act, the assignments created by Chase in connection with the Motion For Stay Relief appear to be false or misleading.

This is not the first time that Chase’s conduct with regard to motions for relief from the stay has been questioned in a bankruptcy case. Although Chase has recently taken remedial steps to address concerns expressed by courts in connection with other cases, based on Chase’s past and current conduct, the United States Trustee supports the Debtor’s request for sanctions in order to deter further conduct such as that seen in this case.

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Memorandum of Law of the United States Trustee in Support of Sanctions Against J.P. Morgan Chase Bank National Association

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