FAC Federal VA

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA

Lynchburg Division
JOSEPH P VAUGHAN II AND

KATHERINE M VAUGHAN
Plaintiff’s,
Civil Action No. 6:15cv00038
v.
WELLS FARGO BANK N.A, PREMIUM

CAPITAL FUNDING, SAMUEL I. WHITE PC,
THE BANK OF NEW YORK MELLON TRUST CO,
FKA THE BANK OF NEW YORK AS SUCCESSOR IN
INTEREST TO JP MORGAN CHASE BANK NA
AS TRUSTEE FOR BEAR STEARNS ASSET
BACKED SECURITIES TRUST 2006-3, ASSET
BACKED CERTIFICATES, SERIES 2006-3
AND DOES 1-10
Defendants,
FIRST AMENDED VERIFIED COMPLAINT FOR:
1. DECLARATORY RELIEF [28 U.S.C. §§2201,2202]
2. NEGLIGENCE
3. QUASI CONTRACT
4. VIOLATION OF 12 U.S.C. §2605
5. VIOLATION OF 15 U.S.C. §1692 ET SEQ.
6. ACCOUNTING
DEMAND FOR JURY TRIAL
FIRST AMENDED VERIFIED COMPLAINT

TABLE OF CONTENTS
I. STATEMENT OF THE CASE……………………………………………………….3
II. JURISDICTION, VENUE AND PARTIES…………………………………………..4
III. INTRODUCTION……………………………………………………………………..6
IV. THE ROLE OF MERS IN SECURITIZATION AND ITS EFFECOT ON THE CHAIN
OF TITLE TO PLAINTIFFS HOME…………………..………………………………..12
V. THE FABRICATED SUBSTITUTION OF TRUSTEE IS A FRAUDULENT
DOCUMENT THAT CONVEYED NO AUTHORITY TO QUALITY TO ACT AS THE
TRUSTEE………………………………………………………………………………..15
VI. PLAINTIFFS LOAN MODIFICATION AND DEBT VALIDATION EFFORTS…..…17
VII. PLAINTIFFS HAVE SUFFERED AND CONTINUE TO SUFFER SIGNIFICANT
MONETARY AND EQUITABLE DAMAGES………………………………………...17
VIII. FIRST CAUSE OF ACTION-DECLARATORY RELIEF: TO DETERMINE STATUS
OF DEFENDANTS CLAIMS [28 U.S.C. §§2201,2202]………………………………..18
IX. SECOND CAUSE OF ACTION-
NEGLIGENCE……………………………………….20
X. THIRD CAUSE OF ACTION-QUASI CONTRACT………………...…………………22
XI. FOURTH CAUSE OF ACTION-VIOLATION OF 12 U.S.C. § 2605 (RESPA)…...…..23
XII. FIFTH CAUSE OF ACTION-FOR VIOLATION OF 15 U.S.C. § 1692 ET SEQ...……24

XIII. SIXTH CAUSE OF ACTION-ACCOUNTING…………………………………………25
COMPLAINT
COMES NOW Plaintiff’s Joseph P Vaughan II and Katherine M Vaughan by and
through Pro Se, for their First Amended Verified Complaint against Defendants, Wells Fargo
Bank N.A., Samuel I. White PC, Premium Capital Funding, The Bank of New York Mellon
Trust Co., fka The Bank of New York as Successor in Interest to JP Morgan Chase Bank NA as
Trustee for Bear Stearns Asset Backed Securities Trust 2006-3, Asset Backed Certificates, Series
2006-3 and Does 1-10 (collectively Defendants).
I. STATEMENT OF THE CASE
1. Plaintiffs allege that Defendants are third-party strangers to his mortgage loan and
have no ownership interest entitling them to collect payment or declare a default. By hiding
behind the complexities of the mortgage finance system, Defendants brazenly attempt to dupe
Plaintiffs (and millions of other American homeowners) into believing they have a right to
collect on a debt in which Defendants have no ownership interest. In an attempt to further their
fraudulent scheme and create the air of propriety surrounding their debt collection efforts,
Defendants have resorted to “papering the file” by fabricating an “Assignment of Deed of Trust”
employing individuals who have no authority or personal knowledge of the facts to which they
attest, and falsely representing to Plaintiffs and to the Court that they have the right to take the
Plaintiffs property away. Their reliance on fabricated and forged documents undermines the
integrity of the judicial system. Through this action, Plaintiffs seek to stop Defendants’
fraudulent practices, discover the true holder in due course of the Deed of Trust and Promissory
note.

II. JURISDICTION, VENUE, AND PARTIES
2. This Court has original jurisdiction over the claims in this action based on
28 U.S.C. §§1331, 1343, 2201, 2202, 12 U.S.C. §2605, 15 U.S.C. §1692, 42 U.S.C. §1983 which
confer original jurisdiction on federal district courts in suits to address the deprivation of rights
secured by federal law.
3. This Court also has supplemental jurisdiction over the pendant state law claims
because they form a part of the same case or controversy under Article III of the United States
Constitution, pursuant to 28 U.S.C. §1367.
4. This Court has original jurisdiction over the claims in this action based on
28 U.S.C. §1332 which confers original jurisdiction on federal district courts in suits between
diverse citizens that involve an amount in controversy in excess of $75,000.00.
5. The unlawful conduct, illegal practices, and acts complained of and alleged in this
Complaint were all committed in the Western District of Virginia and involved real property
located in the Western District of Virginia. Therefore, venue properly lies in this District,
pursuant to 28 U.S.C. §1391(b).
6. Plaintiffs are now, and at all times mentioned herein, individuals residing in the
County of Appomattox. At all times relevant to this action, Plaintiffs have owned real property
commonly known as Route 1 Box 3118 Spout Springs, VA 24593 (the “Property”), with the
following legal description:
ALL THAT LOT OR PARCEL OF REAL ESTATE, LYING AND BEING IN

SOUTHSIDE MAGISTERAL DTSTRICT OF APPOMATTOX COUNTY
VlRGINIA, ABOUT ONE (1) MILE NORTH OF U.S. HIGHWAY 460 AND A
LITTLE OVER ONE MILE FROM SPOUT SPRING, VIRGINIA, FRONTING ON
STATE SECONDARY ROAD 703, CONTAINING 5-63 ACRESAS SHOWN ON A
PLAT OF SURVEY MADE BY F.T. SEARGENT, CERTIFIED LAND SURVEYOR,
4

BEARING DATE OF APRIL 18,1978, WHICH PLAT SHOWS THE METES AND
BOUNDS OF SAID LOT HEREBY CONVEYED AND IS HEREBY
INCORPORATED IN AND MADE A PART OF THIS DEED THE SAME AS IF
WRITED OUT HEREIN, RECORDED WITH DEED OF RECORD IN DEED
BOOK 136, PAGE 163, SAID LOT ADJOINS THE LANDS OF REYNOLDS AND
THE OTHER LANDS OF CHARLIE R. MCCORMICK, WIDOWER' JOYCE
VAUGHAN, AND FRANKLIN VAUGHAN, HER HUSBAND, AND IS PART OF
TRACT NO. 1 THAT WAS CONVEYED UNTO THE SAME, BY DEED BEARING
DATE OF THE 25TH DAY OF JANUARY, 1977, AND RECORDED ]N THE
CLERKS OFFICE OF THE CIRCUIT COURT OF APPOMATTOX COUNTY,
VIRGINIA, IN DEED BOOK 130, AT PAGE 175, AND REFERENCE TO SAID
DEED AND ALL INSTRUMENTS OF TITLE MENTIONED IN SAID DEED AND
THE AFORESAID PLAT IS HEREBY MADE FOR A BETTER DESCRIPTION OF
THE REAL ESTATE HEREBYCONVEYED.
CHARLIE R. MCCORMICK, WIDOWED, JOYCE VAUGHAN AND FR,ANKLIN
VAUGHAN, HER HUSBAND THEIR HEIRS AND ASSIGNS HEREBY RESERVE
THE RIGHT OF INGRESS, EGRESS AND REGRESS OVERAND ACROSS THE
SAID PROPERTY HEREBY CONVEYED UNTO THEIR BANK FIELD.
PARCEL 2: ALL OF THAT CERTAIN TRACT OR PARCEL OF REAL ESTATE,
WITH ALLIMPROVEMENTS THEREON AND PRIVILEGES AND
APPURTENANGES THEREUNTO APPERTAINING, LYING AND BEING IN
SOUTHSIDE MAGISTERIAL DISTRICT OF APPOMATTOX COUNTY,
VIRGINIA, FRONTING ON STATE ROUTE NO.7O3, CONTAINING 8.48 ACRES,
AND MORE PARTICULARLY SHOWN AND DESCRIBED ON PLAT OF
SURVEY MADE BY WLLIAM W. DICKERSON, JR., L.S., DATED AUGUST 24,
2OOO, WHICH PI.AT IS RECORDED IN THE CLERK'S OFFICE OF THE
CIRCUIT COURT OF APPOMATTOX COUNTY, VIRGINIA, IN PLAT GABINET1,
SLIDE 42G,TO WHTCH PLAT REFERENCE IS HEREBY MADE FOR A MORE
PARTTCULAR DESCRIPTION OF THE REAL ESTATE HEREBY CONVEYED.
THIS CONVEYANCE IS MADE EXPRESSLY SUBJECT TO THE
RESTRICTIONS, CONDITIONS, RIGHT.OF-WAY, AND EASEMENTS' IF ANY'
CONTAINED IN THE INSTRUMENTS CONSTITUTING THE CHAIN OF TITLE
TO THE PROPERTY CONVEYED HEREIN, AND TO MATTERS VISIBLE UPON
INSPECTION.
7. At all relevant times, Defendants are National Associations organized under the
laws of the United States.
8. Plaintiff is ignorant of the true identity and capacity Defendants designated as
Does 1-10, but will amend the Complaint when their identities have been ascertained according
to proof at the time of trial. However, Plaintiffs allege on information and belief, that each and
every Doe Defendant is in some manner responsible for the acts and conduct of the other
Defendants, and were, and are, responsible for the injuries, damages, and harm, incurred by
Plaintiffs. Plaintiffs further allege on information and belief that each such designated Defendant

acted, acts, as the authorized agent, representative, and associate of other Defendants in doing the
things alleged herein.
9. Whenever reference is made in this Complaint to any act of any Defendant(s), that
allegation shall mean that each Defendant acted individually and jointly with the other
Defendants.
10. Any allegation about acts of any corporate or other business Defendant means that
the corporation or other business did the acts alleged through its officers, directors, employees,
agents and/or representatives while they were acting within actual or ostensible scope of their
authority.
11. At all relevant times, Each Defendant committed the acts, caused or directed
others to commit acts or permitted others to commit the acts alleged in this Complaint.
Additionally, some or all of the Defendants acted as the agent of the other Defendants, and all of
the Defendants acted within the scope of their agency if acting as an agent of the other.
12. At all relevant times, each Defendant knew or realized that the other Defendants
were engaging in or planned to engage in the violations of law alleged in this Complaint.
Knowing or realizing that the other Defendants were engaging in or planning to engage in
unlawful conduct, Each Defendant nevertheless facilitated the commission of those unlawful
acts. Each defendant intended to and did encourage, facilitate, or assist in the commission of the
unlawful acts, and thereby aided and abetted the other Defendants in the unlawful conduct.
III. INTRODUCTION
13. During the Mortgage Boom Era of 2002-2007, Wall Street investors looked to
feed their insatiable and reckless greed for profit by tapping directly into the American Dream-
home ownership. Mortgage lenders and investment banks aggressively lured American people

into predatory loans with teaser interest rates and into purchasing homes with inflated appraisals
and under the promise that the booming real estate market would continue to boom. Wall Street
took the soon to be toxic loans and bundled them into “Mortgage Backed Securities” through a
process known as “Securitization.” These “securities” were then sold to investors in the form of
certificates, whereby the investors became the “Certificate holders” of the securities that were
fed by toxic loans.
14. Knowing that the predatory loans would soon default and turn into toxic assets,
Wall Street placed their bets accordingly and bought exotic insurance products in the form of
Credit default swaps. Thus, when the Mortgage Boom turned into a Mortgage Meltdown (which
it did), they would stand to make even more profit when the mortgage insurance paid them out
for their losses.”
15. However, in their rush to “securitize” the predatory loans, Wall Street failed to
actually follow its own rules and regulations, creating the instant situation where the securities
are not actually backed by any mortgages at all. Under the standard model, promissory notes
were supposed to be sold and transferred into a trust pool (“Securitized Trust”) that holds the
promissory notes as collateral on the securities bought by investors (“Certificate holders”).
These “true sales” allow the original lenders to move the notes off of their books, eliminating the
need to maintain capital-adequacy reserves against default. The purpose of securitizing
collateral debt obligations was to provide a large supply of money to lenders for originating
loans, and to provide investment to bond holders-which were expected to be relatively safe.
16. The Securitized Trusts, if ever formed properly, are subject to and governed by
(1) the Pooling and Servicing Agreement; (2) the Mortgage and Loan Agreement; (3) the
424B5 Prospectus; (4) the common law trust rules of Delaware or New York, depending on its

origin, and (5) Internal Revenue Code 860A through 860G, better known as the Real Estate
Mortgage Investment Conduit (“REMIC”) rules.
17. An essential aspect of the mortgage securitization process is that the Trust must
obtain and maintain good title to the mortgage loans comprising the pool for that certificate
offering. This is necessary in order for the Trustee of the purportedly Securitized Trust to be
legally entitled to enforce the mortgage loans in case of default. In addition to other required
documentation to complete Collateral File of any given loan, two documents relating to each
mortgage loan must be validly transferred to the Trust as part of the securitization process-the
promissory note and the security instrument (deed of trust or mortgage). In this case, on
information and belief, neither document was validly transferred.
18. Here, Plaintiffs allege that “true sales” never took place due to the failure to
follow the basic legal requirements for the transfer of a negotiable instrument and thereby,
WELLS FARGO Bank N.A., did not acquire any legal, equitable, and pecuniary interest in
Plaintiffs Note and Deed of Trust. As a result, thereof, WELLS RARGO Bank N.A., which
purports to be the Plaintiffs creditor, actually has no secured or unsecured right, title, or interest
in Plaintiffs Note and Deed of Trust, and has no right collecting mortgage payments, demand
mortgage payments, or report derogatorily against Plaintiffs credit.
19. Nonetheless, Defendants attempt to take advantage of the complex structured
finance system to defraud yet another homeowner. Plaintiffs anticipate that Defendants will seek
a Court-sanctioned bailout by submitting a blatantly fabricated “Assignment” via a Request for
Judicial Notice, thereby committing fraud on the Court, and attempting to mislead Plaintiffs into
believing that WELLS FARGO Bank N.A., is their actual creditor, and is entitled to enforce their
obligation.

20. Plaintiffs do not dispute that they owe money on their mortgage obligation.
Rather, Plaintiffs dispute the amount owed, and seeks the Court’s assistance in determining who
the holder in due course is of their Note and Deed of Trust, and specifically what rights, if any,
WELLS FARGO Bank N.A. has to claim a secured or unsecured interest in Plaintiffs Note or
Deed of Trust.
21. Plaintiffs information and belief is based on the lack of WELLS FARGO Bank
N.A ability to provide the original signed Note and Deed of Trust. Plaintiffs further information
and belief is due to the lack of notice of assignments and lack of notice from WELLS FARGO
Bank N.A. to notify them within thirty days of assignment that they were holder in due course
and would be accepting the mortgage payments.
22. In or about June 1980 M r. & Mrs. Vaughan executed a Note and Deed of Trust in
favor of American Federal, obtaining a loan on the Property.
23. From the time period of 1995-2002 Plaintiffs refinanced and consolidated their
mortgage loan with several other lenders.
24. On or about February 21, 2005 Mr. & Mrs. Vaughan executed a Note and Deed of
Trust in favor of Premium Capital Funding LLC (hereinafter, “Premium Capital”) obtaining a
loan on the Property. MERS was named on the Deed of Trust as the purported “nominee” and
“beneficiary” ¶DEFINITIONS (E) of the Deed of Trust (EXHIBIT “A”).
25. On or about sometime in 2005, Wells Fargo Bank N.A. purchased the loan from
Premium Capital. There is no chain of assignment or transfer of the note or Deed of Trust. As a
matter of fact, Wells Fargo Bank N.A. submitted the Deed of Trust Plaintiffs entered into with
Premium Capital on February 21, 2005 with their Motion to Dismiss with this Court. To date,
Wells Fargo Bank N.A. has failed to prove they are due holder in course of the Note.

26. Plaintiffs continued to make regular mortgage payments during the alleged
transfer or assignment to Premium Capital on time as they thought who owned the Note.
27. On or about sometime in 2006, Wells Fargo Bank N.A., informed Plaintiffs their
account was in arrears and that back mortgage payments were owed. Plaintiffs made repeated
attempts to Wells Fargo Bank N.A, to obtain a full accounting of all mortgage payments made to
previous lenders and subsequently credited to their account with negative results.
28. On or about September of 2006, Plaintiff made lump sum payment of
approximately $16,000 to Wells Fargo Bank N.A., to reinstate the loan and prevent foreclosure.
29. On April 11, 2007, Plaintiffs believed they had no other option to obtain proper
credit for all payments made to previous lenders, and so Plaintiffs paid Wells Fargo Bank N.A.,
approximately another lump sum of $16,300.00 to reinstate the loan.
30. Plaintiffs allege on information and belief that Premium Capital never sold,
transferred, or granted their Note or Deed of Trust to Wells Fargo Bank N.A. and that Wells
Fargo Bank N.A. is merely a third party stranger to the loan transaction. Plaintiffs allege that
none of the Defendants or Doe Defendants can demonstrate or document that the Plaintiffs Note
was ever properly endorsed, and transferred to Wells Fargo Bank N.A. In fact, Plaintiffs have
requested Wells Fargo Bank N.A. verify this debt through a Verification of Proof of Claim
Request in accordance with U.C.C. ARTICLE 3 §3-302 (EXHIBIT “B”) on or about November
12, 2015 to Wells Fargo Bank N.A.
31. To date Wells Fargo Bank N.A. has failed to respond to Plaintiffs request.
32. On or about November 10, 2015, Plaintiffs mailed a R.E.S.P.A. Qualified Written
Request (EXHIBIT “C” hereinafter “QWR”) pursuant to 12 U.S.C. §2605(e) to Wells Fargo
Bank N.A.
10

33. To date Wells Fargo Bank N.A. has not answered the “QWR” but rather sent
letters to Plaintiffs stating they are completing research (EXHIBIT “D”).
34. Plaintiffs relied on Wells Fargo Bank N.A. misrepresentations and have been
damaged in the following ways: (1) title to the home has been clouded and rendered
unmarketable, as any would be buyer of Plaintiffs home will find themselves in legal limbo,
unable to know with any certainty whether they can safely buy Plaintiffs home or get title
insurance; (2) Plaintiffs have been paying the wrong party for an undetermined amount of time;
and (3) Plaintiffs are unable to determine whether they sent monthly mortgage payments to the
right party.
35. On or about July 20, 2012, The Bank of New York Mellon, fka The Bank of New
York as Successor In Interest to JP Morgan Chase Bank NA as Trustee for Bear Stearns Asset
Backed Securities Trust 2006-3, Asset Backed Certificates, Series 2006-3 fraudulently caused
and recorded a Substitution of Trustee naming Samuel I White PC as Substitute Trustee
(EXHIBIT “E”).
36. Plaintiffs information and belief is that The Bank of New York Mellon, fka The
Bank of New York as Successor in Interest to JP Morgan Chase Bank NA as Trustee for Bear
Stearns Asset Backed Securities Trust 2006-3, Asset Backed Certificates, Series 2006-3, had no
interest in the Property whatsoever and therefore could not appoint a Substitute Trustee.
37. On or about April 09, 2015, Samuel I White PC, forced a fraudulent foreclosure
sale on the Property (EXHIBIT “F”).
38. Plaintiffs information and belief is that Samuel I White PC was fraudulently
appointed as Substitute Trustee and wrongfully forced the sale of the Property.
11

39. In addition to seeking compensatory, consequential, punitive, and other damages,
Plaintiffs seek Declaratory Relief as to whether the Deed of Trust and Note secures any
obligation of Plaintiffs in favor of Wells Fargo Bank N.A., such that they can collect Plaintiffs
mortgage payments, demand payment or engage in debt collection activities.
Plaintiffs seek Declaratory Relief as to whether The Bank of New York Mellon, fka The Bank
of New York as Successor in Interest to JP Morgan Chase Bank NA as Trustee for Bear Stearns
Asset Backed Securities Trust 2006-3, Asset Backed Certificates, Series 2006-3 had the right to
appoint a Substitute Trustee while holding no legal interest in the Property.
Plaintiffs seek Declaratory Relief as to whether Samuel I White PC can fraudulently act as a
Substitute Trustee causing the sale of the Property.
IV. THE ROLE OF MERS IN SECURITIZATION AND ITS EFFECT ON THE

CHAIN OF TITLE TO PLAINTIFFS HOME
42. Mortgage Electronic Registration Systems, Inc. (“MERS) is a private corporation
that administers the MERS System, a national electronic registry that purports to track the
transfer of ownership interests and servicing rights in mortgage loans, including the Plaintiff
loan. In 1993, the MERS system was created by several large participants in the real estate
mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and
other entities, known as MERs members, subscribe to the MERD system and pay annual fees for
the electronic processing and tracking of ownership and transfers of Mortgages. Members
contractually agree to appoint MERS as their common agent on all mortgages they register in
the MERS system. In essence, MERS privatized the mortgage recording system, creating a who
their lender actually is at any given point in time.

12

43. MERS is listed as a grantee in the official records maintained at county register of
deeds offices. The lenders were supposed to retain the interest in the promissory notes, as well
as the servicing rights to the mortgages, not MERS.
44. Plaintiffs allege that MERS did not affect an assignment, transfer, negotiation, or
sale of their Note and Deed of Trust to any Defendant or Doe Defendants.
45. The operative document defining MERS and its rights and functions is there Deed
of Trust (“Deed of Trust” or “Trust Deed”). The Trust Deed conveys a security interest and
power of sale in the real estate to the Lender not MERS.
46. Because MERS is merely and electronic registration system and not a true pecuniary
beneficiary, and did not grant, assign, or transfer any true or pecuniary beneficial interest in
Plaintiffs Note and Deed of Trust.
47. MERS’s own membership rules directly prohibit MERS from ever claiming
ownership of any mortgages on negotiable instruments, including Plaintiffs (EXHIBIT “G”)
attached hereto is a true and correct copy of MERS’s Terms and Conditions. A successor-in
interest to the beneficial interest in the Trust Deed may choose to engage MERS as its agent by
execution of a subsequent agreement, but MERS and its members cannot force MERS upon all
other future purchasers simply by claiming such authority in the original deed of trust. In fact, in
a September 2009 deposition, former President of MERS, R.K. Arnold admitted that MERS does
not have a beneficial interest in any mortgage, that it does not loan money, and that it does not
suffer a default if a borrower fails to repay a mortgage loan. Therefore, MERS does not own
Plaintiffs Note and Deed of Trust, and did not “grant, assign or transfer” any interest therein to
Wells Fargo Bank N.A.
48. The purported “assignment” of the Plaintiffs Note and Deed of Trust is a
13

fraudulent lien claim and in direct contravention of the laws and customs of Virginia.
49. Therefore, based on the foregoing, MERS did not, in fact, assign any interest to
Wells Fargo Bank N.A, such that Wells Fargo Bank N.A., can demand mortgage
payments or report Plaintiffs payments as late.
50. The “Assignment” is a fraudulent lien claim, and the execution, filing, and
recordation of the document was created for the purpose of facilitating and aiding and abetting
the illegal, deceptive, and unlawful collection of Plaintiffs mortgage payments, as well as
engaging in other debt collection activities.
51. Plaintiffs further allege that any amount allegedly owed under the Note is subject
to equitable offset by the actual, consequential, special, and punitive damages owed to Plaintiffs
from Defendants, which amount is currently unknown, but will be determined upon conducting
discovery. Plaintiffs believe this will be in excess of the amount of their obligation.
52. Attempting to “assign” or transfer of a Deed of Trust by itself, as Defendants did
here, does not allow enforcement of Plaintiffs Note and Deed of Trust. As alleged herein,
Plaintiffs note was not properly negotiated, endorsed, and transferred to Wells Fargo Bank N.A.,
who seeks to collect mortgage payments and engage in other unlawful collection practices.
53. On information and belief, none of the Defendants were/are at present holders in
due course of Plaintiffs Note such hat they can enforce Plaintiffs obligation and demand
mortgage payments.
54. On information and belief, Defendants were not, and are not, a nonholder in
possession of Plaintiffs Note who has rights of the holder.
55. On information and belief, none of the Defendants are entitled to enforce
Plaintiffs Note.
14

56. Plaintiffs allege that, prior to demanding mortgage payments, none of the
Defendants or Doe Defendants had, or presently have, a secured or unsecured legal, equitable, or
pecuniary interest in Plaintiffs Note and/or Deed of Trust irrespective of who is in actually in
physical possession of Plaintiffs Note.
57. Plaintiffs allege that, on information and belief, Wells Fargo Bank N.A, and/or its
agents are fraudulently enforcing a debt obligation in which they have no pecuniary, equitable, or
legal interest. Thus Wells Fargo Bank N.A., is part of a fraudulent debt collection scheme.
V. THE FABRICATED SUBSTITUTION OF TRUSTEE IS A FRAUDULENT

DOCUMENT THAT CONVEYED NO LEGAL AUTHORITY TO QUALITY TO
ACT AS THE SUBSTITUTE TRUSTEE
58. The Deed of Trust names Andrew H. Goodman Esq. c/o Express Financial
Services as Trustee.
59. On July 20, 2012, The Bank of New York Mellon, fka The Bank of New York as
Successor in Interest to JP Morgan Chase Bank NA as Trustee for Bear Stearns Asset Backed
Securities Trust 2006-3, Asset Backed Certificates, Series 2006-3, caused a document purporting
to be a Substitution of Trustee (“Substitution”) to be recorded with the County of Appomattox
(EXHIBIT “E”).
60. The Bank of New York Mellon, fka The Bank of New York as Successor in
Interest to JP Morgan Chase Bank NA as Trustee for Bear Stearns Asset Backed Securities Trust
2006-3, Asset Backed Certificates, Series 2006-3, recorded a Substitution of Trustee
(EXHIBIT “E”). Plaintiffs allege no such Substitution occurred.
61. Plaintiffs allege that Shannon L. Blizzard is an individual who simply signs
thousands of property record documents without any legal or corporate authority whatsoever.
15

62. Shannon L. Blizzard is not “Vice President Loan Documentation” for The Bank
of New York Mellon, fka The Bank of New York as Successor in Interest to JP Morgan Chase
Bank NA as Trustee for Bear Stearns Asset Backed Securities Trust 2006-3, Asset Backed
Certificates, Series 2006-3.
63. Shannon L. Blizzard was never in any manner whatsoever, appointed as a “Vice
President” by The Bank of New York Mellon, fka The Bank of New York as Successor in
Interest to JP Morgan Chase Bank NA as Trustee for Bear Stearns Asset Backed Securities Trust
2006-3, Asset Backed Certificates, Series 2006-3, or its successors or assigns, to execute the
purported “Substitution”. This was an intentional act undertaken by The Bank of New York
Mellon, fka The Bank of New York as Successor in Interest to JP Morgan Chase Bank NA as
Trustee for Bear Stearns Asset Backed Securities Trust 2006-3, Asset Backed Certificates, Series
2006-3, done knowingly with the specific intent that the consequences of their actions be brought
to fruition, which they have as evidenced by the instant debt collection activities.
64. The “Substitution” is a fraudulent document, and the execution, filing, and
recordation of the document was created for the purpose of facilitating and aiding and abetting
the illegal, deceptive, and unlawful collection attempts to collect on Plaintiffs obligation.
65. Attempting to “substitute” Samuel I White PC under said Deed of Trust, as
Defendants did here, does not allow Samuel I White PC to act as the “substitute” under the Deed
of Trust.
VI. PLAINTIFFS LOAN MODIFICATION AND DEBT VALIDATION EFFORTS
66. Plaintiffs attempted to modify their loan 18 times from the period of 2008-2015 to
no avail.
16

67. As previously stated to date Wells Fargo Bank N.A., has failed to validate any
debt.
VII. PLAINTIFFS HAVE SUFFERED AND CONTINUE TO SUFFER SIGNIFICANT

MONETARY AND EQUITABLE DAMAGES
68. The conduct described above by all Defendants and/or Doe Defendants was
malicious because Defendants and/or Doe Defendants knew they were not acting on behalf of the
current pecuniary beneficiary of the Note and Deed of Trust. However, despite such knowledge,
said Defendants and/or Doe Defendants continued to demand and collect on Plaintiffs mortgage
payments.
69. On information and belief, at all times Defendants and/or Doe Defendants had
and have actual knowledge the Plaintiffs accounts were not accurate, but that Plaintiffs would
continue to make further payments based on Defendants’ and/or Doe Defendants’ inaccurate
accounts.
70. On information and belief, Plaintiffs made payments based on improper,
inaccurate, and fraudulent representations as to Plaintiffs accounts.
71. As a direct and proximate result of the actions of the defendants set forth above,
Plaintiffs credit and credit score has been severely damaged. Specifically, because of the
derogatory credit reporting on their credit report by Defendants and/or Doe DefendantsPlaintiffs
are unable to refinance out the present loan or buy another property.
72. As a direct and proximate result of actions of the Defendants and/or Doe
Defendants set forth above, the title to Plaintiffs home has been slandered, clouded, and its
salability has been rendered unmarketable.
17

73. As a direct and proximate result of the actions of Defendants and/or Doe
Defendants above, Plaintiffs do not know who the current beneficiary of their Note and Deed of
Trust actually is, such that they are now subject to double financial jeopardy.
74. The conduct of Defendants, and/or Doe Defendants, has led to the imminent loss
of Plaintiffs home and to pecuniary damages. The pecuniary damages include, but are not
limited to, the costs of over calculation and overpayment of interest, the costs of repairing
Plaintiffs credit, the reduction and/or elimination of Plaintiffs credit limits and the costs
associated with removing the cloud from their property title to be proven at trial.
75. The conduct of Defendants and/or Doe Defendants was malicious because
Defendants and/or Doe Defendants did not know the identity of the current and true beneficiary
of Plaintiffs Note and Deed of Trust, yet they intentionally and fraudulently covered up this
defect by wrongfully recording a fraudulent Assignment and Substitution, which would enable
them to illegally and fraudulently collect on Plaintiffs debt, and which in essence has rendered
the title to property unmarketable.
76. The title to Plaintiffs Property has been rendered unmarketable and unsalable
because of the possibility of multiple claims being made against Plaintiffs debt and underlying
security (the Subject Property). If the Assignment of Deed of Trust and Substitution of Trustee
is not cancelled and set aside, Plaintiffs will be incurably prejudiced. Plaintiffs will be denied
the opportunity to identify and negotiate with their true creditor and exercise their right to verify
and validate this debt.
77. Plaintiffs have offered to and are ready, willing, and able to unconditionally
tender this obligation.
18

FIRST CAUSE OF ACTION –DECLARATORY RELIEF: TO DETERMINE STATUS
OF DEFENDANTS’ CLAIMS [28 U.S.C. §§2201, 2202]
[Against All Defendants and Doe Defendants]
78. Plaintiffs hereby incorporate by reference each and every one of the preceding
paragraphs as if the same were fully set forth herein.
79. Section 2201 (a) of Title 28 of the United States Code States:
In a case of actual controversy within its jurisdiction, except with

respect to Federal taxes other than actions brought under section
7428 of the Internal Revenue Code of 1986, a proceeding under
Section 505 or 1146 of title 11, or in any civil action involving
an antidumping or countervailing duty proceeding regarding
a class or kind of merchandise of a free trade area country
(as defined in section 516A(f)(10) of the Tariff Act of 1930)
as determined by the administering authority, any court of
the United States, upon filing of an appropriate pleading, may
declare the rights and other legal relations of any interested party
seeking such declaration shall have the force and effect of a final
judgment or decree and shall be reviewable as such.
80. Section 2202 of Title 28 of the United States Code states:
Further necessary or proper relief based on a declaratory judgment or

Decree may be granted, after reasonable notice and hearing, against any
Adverse party whose rights have been determined by such judgment.
81. Plaintiffs allege that neither Defendants nor Doe Defendants have a secured or
unsecured legal, equitable, or pecuniary interest in the lien evidenced by the Deed of Trust and
that its’ purported assignment and substitution of trustee has no value since the Deed of Trust is
wholly unsecured.
19

82. Defendants and Doe Defendants have failed to prove they have a secured
enforceable interest in, and perfected lien against, the Plaintiffs Note, Deed of Trust and
Property.
83. Thus, the competing allegations made by Plaintiffs, above, establish that a real
and actual controversy exists as to the respective rights of the parties to this matter, including
ownership of the Property.
84. Accordingly, Plaintiffs request that the Court make a finding and issue
appropriate orders stating that none of the named Defendants and/or Doe Defendants, have any
right or interest in Plaintiffs Note, Deed of Trust, or the Property which authorizes them, in fact
or as a matter of law, to collect Plaintiffs mortgage payments or enforce the terms of the Note or
Deed of Trust in any manner whatsoever.
85. Plaintiffs will suffer prejudice if the Court does not determine the rights and
obligations of the parties because: (1) Plaintiffs will be denied the opportunity to identify their
true and current creditor/lender and negotiate with them; (2) they will be denied the right to
conduct discovery and have Defendants and/or Doe Defendants claims verified by a custodian of
records who has personal knowledge of the loan and all transactions related to it; and (3) they
will be denied the opportunity to discover the true amount they still owe minus any illegal costs,
fees and charges.
86. Due to the actual case and controversy regarding competing claims and
allegations, it is necessary that the Court declare the actual rights and obligations of the parties
and make a determination as to whether Defendants and/or Doe Defendants claim against
Plaintiffs are enforceable and whether it is secured or unsecured by any right, title, or interest in
Plaintiffs Property.
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87. Furthermore, the conduct of Defendants and Doe Defendants and each of them as
herein described, was so malicious and contemptible that it would be looked down upon and
despised by ordinary people. Plaintiffs are therefore entitled to punitive damages in an amount
appropriate to punish Defendants and Doe Defendants and to deter others from engaging in
similar conduct.
SECOND CAUSE OF ACTION-NEGLIGENCE
89. At all times relevant herein, Premium Capital was acting as purported agent for
Wells Fargo Bank N.A. Defendants are jointly and severally liable for Premium Capital and
Wells Fargo Bank N.A., negligent and reckless conduct.
90. Wells Fargo Bank N.A., as the purported beneficiary of the Note and Deed of
Trust has a duty to exercise reasonable care and skill to follow Virginia law with regard to
enforcement of monetary obligations, and to refrain from taking or failing to take any action
against Plaintiffs that they did not have the legal authority to do. This includes not collecting or
demanding mortgage payments when they do not have the right to enforce the obligation,
causing the Plaintiffs to overpay in interest making derogatory credit reports to credit bureaus,
and failure to keep accurate accounting of Plaintiffs’ mortgage payments, credits and debits (if
Wells Fargo Bank N.A., is in fact the legally authorized mortgage servicer for Plaintiffs).
91. Defendants and Doe Defendants have a duty to exercise reasonable care and skill
to refrain from taking any action against Plaintiffs that they do not have the legal authority to do.
As a direct and proximate result of the reckless negligence, utter carelessness, and blatant fraud
21

Defendants and Doe Defendants set forth above, the Chain of Title to Plaintiffs Property has
been rendered unmarketable and fatally defective and has caused Plaintiffs to lose saleable title
to subject property.
92. Defendants and Doe Defendants breached that duty when they failed to follow
guidelines requiring the transfer of the Note and Deed of Trust.
93. As a direct and proximate result of the negligence and carelessness of the
Defendants and Doe Defendants set forth above, Plaintiffs suffered, and continue to suffer,
general and special damages in an amount to be determined at trial, including costs of bringing
suit to dispute, validate and challenge said Defendants and Doe Defendants purported rights to
enforce the debt obligation against Plaintiffs.
THIRD CAUSE OF ACTION-QUASI CONTRACT
95. Wells Fargo Bank N.A, demanded monthly mortgage payments from Plaintiffs
and continued to collect payments from Plaintiffs. Plaintiffs reasonably relied upon Wells Fargo
Bank N.A., assertion that they were entitled to the benefit of Plaintiffs mortgage payments.
96. Wells Fargo Bank N.A., knowingly accepted payments and retained them for its
own use knowing Wells Fargo Bank N.A. did not acquire an interest in Plaintiffs Note, such that
they could accept or keep Plaintiffs payments. It would be inequitable for Wells Fargo Bank
N.A., to retain the payments it received from Plaintiffs wish it did not have legal authority to
collect. The equitable remedy of restitution when unjust enrichment has occurred is an
22

obligation created by law without regard to the intention of parties, and is designed to restore the
aggrieved party to their former position by return of the thing or its equivalent in money.
97. Plaintiffs seek restitution for any payments they made to Wells Fargo Bank N.A.,
that were not paid to the lender or beneficiary, if any.
FOURTH CAUSE OF ACTION-VIOLATION OF 12 U.S.C. § 2605 (RESPA)
[As Against Wells Fargo Bank N.A.]
99. The Subject Loan is a federally regulated mortgage loan and is subject to the
federal Real Estate Procedures Act (RESPA) and its implementing regulation, Regulation X.
100. On or about November 10, 2015, Plaintiffs sent a Qualified Written Request,
(“QWR”) via U.S. Post Certified mail. See Exhibit “C”.
101. On information and belief Wells Fargo Bank N.A., received the QWR on or about
November 16, 2015.
102. The QWR contained information to enable Wells Fargo Bank N.A., to identify
Plaintiffs loan and also contained requests for information of the loan, specifically the identity
and contact information of the holder in due course of Plaintiffs Note, accumulated late fees and
charges, and requested information to verify the validity of the purported debt owed to Wells
Fargo Bank N.A.
103. Wells Fargo Bank N.A., has not answered the QWR as of this date.
104. Because the Mortgage Loan is subject to RESPA and Regulation X, Wells Fargo
Bank N.A., is required to comply with Section 6 of RESPA appearing at 12 U.S.C. § 2605.
Wells Fargo Bank N.A., violated Section 6 of Regulation X upon receipt of Plaintiffs QWR by
23

their actions including but not limited to: (a) failure to make appropriate corrections in the
account of the borrower, including the crediting of any late charges or penalties, and transmit to
the borrower a written notification of the correction; and (b) failure to protect Plaintiffs credit
rating upon receipt of Plaintiffs QWR by furnishing adverse information regarding payment to
credit reporting agencies as defined in § 603 of the Fair Credit Reporting Act, 15 U.S.C.
§ 1681(a).
105. Thus, Wells Fargo Bank N.A., violated 12 U.S.C. 2605 and is subject to statutory
damages, civil liability, penalties and actual damages. See 12 U.S.C. § 2605. The actual
pecuniary damages include, but are not limited to, the over calculation and overpayment of
interest on Plaintiffs loan, the costs of repairing Plaintiffs credit, the reduction and/or elimination
of Plaintiffs credit limits, costs associated with removing the cloud on their property title and
setting aside the substitute trustee’s sale, in an amount to be proven at trial, but in excess of
$75,000.00.
106. As a direct and proximate result of the violations of RESPA and Regulation X by
Wells Fargo Bank N.A., Plaintiffs have suffered actual pecuniary damages, including but not
limited to statutory damages and civil liability in an amount to be proven at trial.
FIFTH CAUSE OF ACTION-FOR VIOLATION OF 15 U.S.C. § 1692 ET SEQ.
108. Federal law prohibits the use of “any false, deceptive, or misleading
representation of…the character, amount, or legal status of any debt…and the threat to take any
action that cannot legally be taken…”
24

109. In illegally attempting to collect on Plaintiffs debt obligation in the manner
described herein, Defendant Wells Fargo Bank N.A., as the purported assignee, and mortgage
servicer:
(a) falsely represented the status of the debt, in particular, that it was due and
owing to Defendant Wells Fargo Bank N.A., at the time the suit was filed;
(b) falsely represented or implied that the debt was owing to Defendant Wells
Fargo Bank N.A., as an innocent purchaser for value, when in fact, such
an assignment had not been accomplished;
(c) threatened to take action, namely engaging in collection activities that
cannot be legally taken by them; and
(d) attempted to collect on promissory note under false pretenses; namely that
Wells Fargo Bank N.A. was assigned as Plaintiffs debt when in fact they
were not.
SIXTH CAUSE OF ACTION-ACCOUNTING
111. Defendants and/or Doe Defendants and their purported agents, have held
themselves out to be Plaintiffs creditor and mortgage servicer. As a result of this purported
relationship with Plaintiffs, said Defendants and/or Doe Defendants have a fiduciary duty to
plaintiffs to properly account for payments made by Plaintiffs.
112. As a result of the aforementioned fraudulent conduct, Plaintiffs paid Wells Fargo
Bank N.A. their mortgage payments for approximately ten years. However, for the reasons
25

stated herein, none of this money was actually owed to Wells Fargo Bank N.A. For that reason,
those monies are due to be returned to Plaintiffs in full.
113. The amount of money due from Defendants and/or Doe Defendants to Plaintiffs is
unknown to Plaintiffs and cannot be ascertained without an accounting of receipts and
disbursements of the aforementioned transactions. Plaintiffs are informed and believe and
thereon allege that the amount due them exceeds $75,000.00.
WHEREFORE, Plaintiffs pray as follows:
1. For compensatory, special and general damages in an amount according to proof
at trial, but not less than $5,000,000.00, against all Defendants and Doe Defendants;
2. For punitive and exemplary damages in an amount to be determined by the Court
against all Defendants and Doe Defendants;
3. For an order compelling Defendants and Doe Defendants to remove any
instrument which does or could be construed as constituting a cloud upon Plaintiffs title to the
Property, including the purported Assignment of the Deed of Trust;
4. For an order finding that Defendants and Doe Defendants have no legal
cognizable rights as to Plaintiffs, the Property, Plaintiffs Promissory Note, Plaintiffs Deed of
Trust or any other matter based on contract or any of the documents prepared by Defendants and
Doe Defendants, tendered to and executed by Plaintiffs;
5. For the Court to issue an order restraining Defendants and Doe Defendants, their
agents or employees from continuing or initiating any action against the Property and enjoining
Defendants and Doe Defendants, their agents or employees from doing so during the pendency
of this matter;
26

6. For an order compelling Defendants and Doe Defendants to disgorge all amounts
wrongfully taken by them from Plaintiffs and returning the same to Plaintiffs interest thereon at
the statutory rate fro the date funds were first received from Plaintiffs;
7. For costs of suit incurred herein;
8. For such other and further relief as the Court may deem proper.
Dated this day of March, 2016,
s/Joseph P Vaughan II
s/Katherine M Vaughan
Joseph P Vaughan Pro Se
Katherine M Vaughan Pro Se
Plaintiffs
838 Snapps Mill Road
Spout Spring, VA 24593
27

VERIFICATION
We Joseph P Vaughan II and Katherine M Vaughan are the Plaintiffs in the above
entitled action. We have read the above Verified Complaint, and we have personal knowledge of
the matters stated herein except as to those matters stated upon information or belief and, th
those matters, we believe them to be true.
We declare under the penalty of perjury and the laws of the United States, that the
foregoing is true and correct as executed this day of March, 2016 in the County of
Appomattox, Virginia.
s/Kathleen M Vaughan
Kathleen M Vaughan Pro Se
Plaintiffs
28

DEMAND FOR JURY TRIAL
Plaintiffs Joseph P Vaughan II and Katherine M Vaughan demand a trial by jury on all
claims.
Dated March , 2016
Plaintiffs
29

Certificate of Service
I hereby certify that on March , 2016 I electronically filed the foregoing pleading was
filed with the Clerk, United States District Court via electronic delivery using the
Courts CM/ECF system and mailed via U.S. Mail to:
Terry C. Frank, Esq. (VSB No. 74890) Premium Capital Funding

Kaufinan & Canoles, P.C. 125 Jericho Turnpike
Two James Center Ste. 400
1021 East Cary Street, Suite 1400 Jericho, NY 11753
Richmond, VA 23219-4058
Phone: (804) 771-5700
Fax: (888) 360-9092
Counsel for Defendant
Bank of New York Mellon Trust Co. Samuel I White PC
225 Liberty Street 5040 Corporate Woods Drive
New York, NY 10286 Ste. 120
Phone: (212) 495-1784 Virginia Beach, VA 23462
Dated March , 2016
Plaintiffs
30

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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF VIRGINIA

JOSEPH P VAUGHAN II AND

WELLS FARGO BANK N.A, PREMIUM

FIRST AMENDED VERIFIED COMPLAINT FOR:

1. DECLARATORY RELIEF [28 U.S.C. §§2201,2202]

4. VIOLATION OF 12 U.S.C. §2605

5. VIOLATION OF 15 U.S.C. §1692 ET SEQ.

DEMAND FOR JURY TRIAL

FIRST AMENDED VERIFIED COMPLAINT

I. STATEMENT OF THE CASE……………………………………………………….3

II. JURISDICTION, VENUE AND PARTIES…………………………………………..4

OF TITLE TO PLAINTIFFS HOME…………………..………………………………..12

V. THE FABRICATED SUBSTITUTION OF TRUSTEE IS A FRAUDULENT

DOCUMENT THAT CONVEYED NO AUTHORITY TO QUALITY TO ACT AS THE

VI. PLAINTIFFS LOAN MODIFICATION AND DEBT VALIDATION EFFORTS…..…17

VII. PLAINTIFFS HAVE SUFFERED AND CONTINUE TO SUFFER SIGNIFICANT

MONETARY AND EQUITABLE DAMAGES………………………………………...17

VIII. FIRST CAUSE OF ACTION-DECLARATORY RELIEF: TO DETERMINE STATUS

OF DEFENDANTS CLAIMS [28 U.S.C. §§2201,2202]………………………………..18

IX. SECOND CAUSE OF ACTION-

X. THIRD CAUSE OF ACTION-QUASI CONTRACT………………...…………………22

XI. FOURTH CAUSE OF ACTION-VIOLATION OF 12 U.S.C. § 2605 (RESPA)…...…..23

XII. FIFTH CAUSE OF ACTION-FOR VIOLATION OF 15 U.S.C. § 1692 ET SEQ...……24

FIRST AMENDED VERIFIED COMPLAINT

COMES NOW Plaintiff’s Joseph P Vaughan II and Katherine M Vaughan by and

2006-3 and Does 1-10 (collectively Defendants).

I. STATEMENT OF THE CASE

FIRST AMENDED VERIFIED COMPLAINT

secured by federal law.

Constitution, pursuant to 28 U.S.C. §1367.

diverse citizens that involve an amount in controversy in excess of $75,000.00.

pursuant to 28 U.S.C. §1391(b).

following legal description:

ALL THAT LOT OR PARCEL OF REAL ESTATE, LYING AND BEING IN

FIRST AMENDED VERIFIED COMPLAINT

laws of the United States.

8. Plaintiff is ignorant of the true identity and capacity Defendants designated as

FIRST AMENDED VERIFIED COMPLAINT

things alleged herein.

FIRST AMENDED VERIFIED COMPLAINT

fed by toxic loans.

for their losses.”

promissory notes as collateral on the securities bought by investors (“Certificate holders”).

need to maintain capital-adequacy reserves against default. The purpose of securitizing

FIRST AMENDED VERIFIED COMPLAINT

Mortgage Investment Conduit (“REMIC”) rules.

information and belief, neither document was validly transferred.

mortgage payments, or report derogatorily against Plaintiffs credit.

19. Nonetheless, Defendants attempt to take advantage of the complex structured

a Court-sanctioned bailout by submitting a blatantly fabricated “Assignment” via a Request for

FIRST AMENDED VERIFIED COMPLAINT

and would be accepting the mortgage payments.

favor of American Federal, obtaining a loan on the Property.

mortgage loan with several other lenders.

“beneficiary” ¶DEFINITIONS (E) of the Deed of Trust (EXHIBIT “A”).

FIRST AMENDED VERIFIED COMPLAINT

28. On or about September of 2006, Plaintiff made lump sum payment of