Report: #605755
Complaint Review: Metro Funding Corp (David Hecht) - Paramus New Jersey
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- Author Not Confirmed
Why?
- Metro Funding Corp (David Hecht) One Kalisa Way, Suite 310 Paramus, New Jersey United States of America
- Phone: (866) 302-6360
- Web: metrofundingcorp.com
- Category: Credit & Debt Services
Metro Funding Corp (David Hecht) MFC Funding LLC Metro is full of crooks and scam artists led by chief crook David Hecht, accounts frozen by Federal Judge! Paramus, New Jersey
*Consumer Comment: THIS COMPLAINT HAS NOTHING TO DO WITH Loan Officer David Hecht NMLS #368555 also owner of RCM, LLC
*Consumer Comment: This is not David hecht NMLS 368555 or RCM,LLC
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David Hecht and the people at Metro are arrogant (my opinion). They seemingly pretend to conduct due diligence after you pay an enormous due diligence fee and promise a refund if they do not offer a loan. They will make up excuses or expenses not to fund and not to return your due diligence money.
The due diligence they conduct is amateurish at best. It's clear that they do not even bother to read any of the information they request. It appears they conduct one or two "real" deals per year to give them the appearance of legitimacy and probably keep them out of trouble with the FBI. Even the real deals they perform are corrupted.
This week a federal court in New York put a freeze on Metro's assets. This was in response to WestLB's request. Apparently David Hecht and Metro made false reports on the status of its mortgages that were underlying a $50 million facility from WestLB. Worse, the filing by WestLB reads that he misappropriated funds from a lock box, fraudulently sold assets serving as collateral and didn't provide WestLB with documents to allow them to service the underlying loans.
Ladies and Gentlemen, these are bad people. I feel bad for Adi Hecht, David's daughter, who works for him and has this bad example. It must be incredibly embarrassing for her. I hope the young people working for Metro and Mr. Hecht are not tainted by these seemingly illegal and unethical business practices. I hope the shareholders of WestLB can recover some of their assets.
Below is a cut and paste from the filing by WestLB:
MEMORANDUM OF LAW
Plaintiff WestLB AG submits this memorandum of law in support of its motion
for a temporary restraining order and preliminary injunction preventing defendants Metro and
MFC from removing any funds from their bank accounts or transferring any other assets,
requiring Metro and MFC to preserve and turn over to WestLB all documents relating to the
Loan and Mortgage Loans involved herein, and requiring Metro and MFC to provide an
accounting to WestLB with respect to the Loan and the Mortgage Loans.
PRELIMINARY STATEMENT
This Court held in its March 19, 2010 Decision and Order in related action Metro
Funding Corp., et al. v. WestLB AG, 10 Civ. 1383, that WestLB was entitled to terminate its
Servicing Agreement with Metro and was entitled to immediate repayment of a $44.8 million
Case 1:10-cv-02874-CM Document 10 Filed 05/07/2010 Page 1 of 9
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loan WestLB had made to Metros affiliate MFC under their Credit Agreement. Since this
Courts decision, Metro and MFC have prevented WestLB from properly exercising its rights.
Most importantly, Metro and MFC have failed to turn over to WestLB their complete records for
the Mortgage Loans that are collateral for WestLBs Loan to MFC. This has prevented proper
servicing of the Mortgage Loans and recovery by WestLB against its collateral.
WestLB has now learned the reason for Metros and MFCs refusal to turn over
their records. They misappropriated a significant part of WestLBs collateral. In August 2009,
without notifying WestLB, Metro and MFC secretly sold one of the major properties securing a
Mortgage Loan (the Sovereign Marine Mortgage Loan) and pocketed at least $3.34 million in
proceeds. At the same time, Metro has always represented to WestLB that the Sovereign Marine
loan was performing either under its original terms or under modified terms agreed by Metro.
Metro and MFC also appear to have misappropriated an additional $290,000 from the Valley
National Bank lockbox account into which loan payments are made.
MFCs and Metros misconduct, if allowed to continue, will defeat the rights
WestLB seeks to enforce in this action and make any judgment WestLB obtains unenforceable.
WestLB has not previously requested the relief sought herein.
STATEMENT OF FACTS
Pursuant to the Courts March 19th Decision, WestLB terminated its Servicing
Agreement with Metro and appointed TriMont Real Estate Advisors, Inc. (TriMont) as
replacement Servicer. (Declaration of Jon A. Hellbusch, dated May 4, 2010 (Hellbusch Decl.)
5.) TriMont has been hired to service the 39 Mortgage Loans and/or properties that are the
collateral for WestLBs Loan to MFC. The Mortgage Loans were originated by Metro and sold
to MFC. TriMonts responsibilities include collecting amounts paid by borrowers under the
Case 1:10-cv-02874-CM Document 10 Filed 05/07/2010 Page 2 of 9
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Mortgage Loans and remitting proceeds to WestLB and the other participants in such Mortgage
Loans.1 (Hellbusch Decl. 5 & Ex. A.)
Servicing Agreement Section 6.2 obligates Metro upon termination to turn over
all records relating to the Mortgage Loans and to otherwise cooperate with WestLB. WestLB
needs Metros and MFCs records in order to service the Mortgage Loans properly. Without
such records, WestLB cannot determine, among other things, the status of the Mortgage Loans,
whether protective advances or other steps to protect the loans must be made, whether
foreclosure is warranted, the identity of participants in the Mortgage Loans, and how much is
due to (or from) such participant. (Hellbusch Decl. 6.)
Since TriMonts appointment as replacement Servicer, WestLB has made
numerous written demands to Metro for the records relating to the Mortgage Loans. However,
Metro has failed and refused to turn over to WestLB its complete Mortgage Loan records.
(Hellbusch Decl. 7 & Exs. B-F.) WestLB and TriMont need the files relating to the Mortgage
Loans and other participants in the Mortgage Loans in order to protect WestLBs security
interest in the Mortgage Loans, to protect its right to repayment, and to allow it to pay the correct
amounts to participants or seek reimbursement from participants for expenses.
The reason for Metros failure to cooperate with WestLB has now become clear.
Metro and MFC have been engaged in a fraudulent scheme to convert WestLBs collateral and
thereby prevent WestLB from enforcing its rights under the Credit Agreement and the Servicing
Agreement.
1 MFC and Metro funded Mortgage Loans by borrowing from WestLB and from various participants. Senior
participants share in Mortgage Loan proceeds (or losses) on a pari passu basis with WestLB.
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Specifically, WestLB has obtained a receivers motion showing that in August
2009 Metro and MFC misappropriated $3.3 million in proceeds from the sale of the property
underlying a $4 million Mortgage Loan called Sovereign Marine.2 (Hellbusch Decl. 8 & Ex.
G.) The receivers motion shows that the Sovereign Marine property was sold with MFCs
consent on May 27, 2009 at a public action for $3.52 million, that the sale was approved by an
Oklahoma court on June 24, 2009, and closed on August 18, 2009. (Id.) MFC received
approximately $3.14 million in proceeds at the closing on August 18, 2009, and an additional
$200,000.00 post-closing in satisfaction of the first lien on the Property. (Id.)
Credit Agreement Section 2.8 obligates MFC to remit all payments with respect
to a Mortgage Loan to the Valley National Bank lockbox account. (Hellbusch Decl. 9 & Ex.
H.) However, MFC did not deposit the $3.34 million in Sovereign Marine proceeds in the
Valley National Bank lockbox account. The Valley National Bank statements for August 2009
do not show any such deposit having been recorded at any time during that month. (Hellbusch
Decl. 10 & Ex. I.)
The Valley National Bank August 2009 statement does, however, show another
suspicious transfer by Metro. It shows an outbound transfer on August 7, 2009 to an unknown
party in the amount of $290,119.46. (Hellbusch Decl. 10 & Ex. I.)
Metro and MFC actively concealed their fraud from WestLB. Among other
things, Metro reported to WestLB in its July 2009 Loan Term Extension Summaries that Metro
and Sovereign Marine had agreed to a reduced interest payment plan under which Sovereign was
2 The property that secured the Sovereign Marine loan consisted of a 103 acre property comprised of a 117-slip
marina, 14 rental cabins, office buildings, tennis courts, a boat showroom, a swimming pool, a 12,000 square
foot boat service center and a 50-ton travel lift.
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paying $15,000 per month. (Hellbusch Decl. 11.) Metro reported that Sovereign had a
contract to sell the underlying property, with closing scheduled for August 2009. Metro reported
that the Mortgage Loan would be repaid at the closing. Metros Loan Term Extension
Summaries did not disclose that a receiver had been appointed for the property and had sold it at
auction months before for much less than the outstanding loan balance.3 (Hellbusch Decl. 11
& Ex. J.)
Metro reported in its August through October 2009 Monthly Reports to WestLB
that the Sovereign Marine loan was current. Metros November 2009 through February 2010
Monthly Reports to WestLB represented that the Sovereign Marine loan was 120 days overdue
but current as per MFCs payment plan. (Hellbusch Decl. 12 & Ex. K.)
Moreover, on or about August 25, 2009, a week after the Sovereign Marine
property already had been sold, David Hecht told Jon Hellbusch that MFC had received an offer
of $2.33 to purchase the Sovereign Marine Mortgage Loan. Jon Hellbusch advised Hecht that
WestLB would not consent to this sale. (Hellbusch Decl. 13 & Ex. L.) In other words, Hecht
was attempting to obtain WestLBs consent to a purchase of the Sovereign Marine loan for $1
million less than the $3.34 million MFC had already pocketed. (Hellbusch Decl. 13.)
MFC and Metro have also never accounted for the $290,000 Metro transferred
from the Valley National lockbox account. It may be that further fraud will be uncovered when
WestLB obtains Metros and MFCs records. (Hellbusch Decl. 14.)
At the same time that Metro is stone-walling WestLB in its effort to obtain the
Mortgage Loan documents, purported participants are demanding payment under the Mortgage
3 The July 30, 2009 Loan Term Extension Summary is the report that the Court found was materially
misleading in its March 19, 2010 Decision and Order.
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Loans. (Hellbusch Decl. 15 & Ex. M.) WestLB cannot make payments to participants until
Metro has turned over the relevant records that will allow WestLB to determine the identity of
the participants in each Mortgage Loan and the exact amounts such participants are owed. (Id.)
Absent injunctive relief, WestLB will suffer immediate irreparable harm as a
result of Metros and MFCs fraudulent conduct and wrongful refusal to turn over the documents
relating to the Mortgage Loans, because WestLB cannot collect the amounts due to it under the
Credit Agreement and is unable to make payments to participants without Metros complete files
relating to the Mortgage Loans and the underlying properties.
ARGUMENT
I. This Court Should Grant WestLB the Preliminary Injunctive Relief it Seeks Because
WestLB Has Demonstrated that it Will Suffer Immediate Irreparable Harm in the
Absence of an Injunction, and a Likelihood of Success on the Merits or Sufficiently
Serious Questions Going to the Merits to Make them a Fair Ground for Litigation and a
Balance of the Hardships Tipping Decidedly in WestLBs Favor
In the Second Circuit, a party seeking a preliminary injunction must establish:
(1) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to
the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly
in the movants favor, and (2) irreparable harm in the absence of the injunction. Faively
Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 116 (2d Cir. 2009) (internal quotations and
citations omitted); see also Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master
Fund Ltd., No. Civ. 6090, 2010 U.S. App. LEXIS 5025, at *11-23 (2d Cir. Mar. 10, 2010)
(finding no command from the Supreme Court that would foreclose the application of [the
Second Circuits] established serious questions standard as a means of assessing a movants
likelihood of success on the merits, and holding that the standard remains valid).
This Court should grant WestLBs motion for injunctive relief because both
requirements are satisfied.
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II. WestLB Will Suffer Irreparable Harm in the Absence of an Injunction
To satisfy the irreparable harm requirement, WestLB must demonstrate that
absent a preliminary injunction [it] will suffer an injury that is neither remote nor speculative, but
actual and imminent, and one that cannot be remedied if a court waits until the end of trial to
resolve the harm. Faiveley, 559 F.3d at 116 (quoting Grand River Enter. Six Nations, Ltd. v.
Pryor, 481 F.3d 60, 66 (2d Cir. 2007)). An applicant for a preliminary injunction must show
that it is likely to suffer irreparable harm if equitable relief is denied. Borey v. Natl Union of
Fire Ins. Co. of Pittsburgh, 934 F.2d 30, 34 (2d Cir. 1991) (internal quotations omitted)
(emphasis in original).
If Metro and MFC are not enjoined from removing any funds from their bank
accounts, WestLB will be irreparably harmed because Metro and MFC will empty these
accounts, and WestLB will be unable to protect its security interest in the Mortgage Loans and
its right to repayment of the $4.8 million loan it extended to MFC. Likewise, if Metro and MFC
are not compelled to preserve and promptly release to WestLB all files, bank records and other
documents relating to the Mortgage Loans and provide an accounting of the funds flowing in and
out of Metro and MFC, WestLB will be irreparably harmed because it will be unable to
determine the magnitude of the unauthorized sale of collateral and other misappropriation of
funds and fraud perpetrated by Metro and MFC, which may be ongoing. WestLB will be unable
to adequately protect its security interest in the Mortgage Loans and right of repayment of its
loan to MFC. Moreover, WestLB and other participants in the Mortgage Loans will be
irreparably harmed because WestLB cannot determine and pay the correct amounts owed to
participants in connection with the Mortgage Loans or seek reimbursement from participants for
expenses. Without complete access to Metros servicing-related documents, TriMont is at a
standstill in its ability to service the loans.
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III. WestLB Has Demonstrated a Likelihood of Success on the Merits and Sufficiently
Serious Questions Going to the Merits to Make them a Fair Ground for Litigation and a
Balance of the Hardships Tipping Decidedly in WestLBs Favor
WestLB will likely succeed on its claims for MFCs breach of the Credit
Agreement and its claim that it is entitled to collect full payment of the $44.8 million Loan, plus
interest and costs. The evidentiary hearing held on March 10th and March 11th showed and this
Court held that WestLB is likely to succeed in proving that MFC breached the Credit Agreement
by submitting documents to WestLB in which it represented that (i) no payment terms of
Mortgage Loans had been extended, (ii) all Mortgage Loans reported by Metro as being in the
Borrowing Base were Eligible Loans, and (iii) all information delivered to WestLB under the
Credit Agreement and Servicing agreement was materially true and accurate. (WestLB
Complaint 35.)
WestLB is likely to succeed on the merits of its claims against Metro in this
action for breach of contract and declaratory judgment based on Metros breach of the Servicing
Agreement. This Court has held based on the facts adduced at the evidentiary hearing held on
March 10th and March 11th, that WestLB had the right to terminate Metro as Servicer under the
Servicing Agreement because certain Servicer Termination Events have occurred under the
Servicing Agreement, including that Metro breached the Servicing Agreement. (March 19th
Decision & Order at 20, 21, 29-30).)
WestLB has certainly shown sufficiently serious questions going to the merits to
make them fair grounds for litigation and a balance of hardships tipping decidedly in its favor.
The balance of hardships tips in WestLBs favor because only an injunction will permit WestLB
to protect its security interest in the collateral and its right to repayment of the Loan. Metro and
MFC will not be prejudiced because Metro is obligated under section 6.2 of the Servicing
Agreement to cooperate with WestLB and to provide all records reasonably requested by it.
Case 1:10-cv-02874-CM Document 10 Filed 05/07/2010 Page 8 of 9
CONCLUSION
WestLB respectthlly requests that this Court enter a temporary restraining order
and preliminary injunction preventing defendants from removing any funds from their bank
accounts or transferring any other assets, requiring defendants to preserve and turn over to
WestLB all records for the Loan and Mortgage Loans, and requiring defendants to provide an
accounting to WestLB with respect to the Loan and the Mortgage Loans, together with such
other relief as is just and proper.
Dated: New York, New York
May 4, 2010
This report was posted on Ripoff Report on 05/21/2010 11:59 AM and is a permanent record located here: https://www.ripoffreport.com/reports/metro-funding-corp-david-hecht/paramus-new-jersey-07652/metro-funding-corp-david-hecht-mfc-funding-llc-metro-is-full-of-crooks-and-scam-artists-605755. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content
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#2 Consumer Comment
THIS COMPLAINT HAS NOTHING TO DO WITH Loan Officer David Hecht NMLS #368555 also owner of RCM, LLC
AUTHOR: ICG Home Loans - ()
SUBMITTED: Wednesday, October 01, 2014
THIS COMPLAINT HAS NOTHING TO DO WITH Loan Officer David Hecht NMLS #368555 also owner of RCM, LLC
My name matches this individual but I am not licensed to do business in SD nor have I have any any relatiohship with Metro Funding. You can check me out at the offical goverment link http://www.nmlsconsumeraccess.org/ to comfirm the truth. I would not have an active lendign license if my assets were frozen by the courts.
Dave Hecht
NMLS 368555
Respond to this report!
#1 Consumer Comment
This is not David hecht NMLS 368555 or RCM,LLC
AUTHOR: ICG Home Loans - ()
SUBMITTED: Wednesday, October 01, 2014
I would like anyone who reads this, this is another David Hecht and has nothing to do with me
Loan Officer David Hecht NMLS 368555 or business owner of Right Choice Marketing "RCM,LLC"
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