Author Archives: Ebube Okoli

Defaulting Mortgagor Lacked Standing Under 11 U.S.C.S. § 1109(b)

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The court in deciding In re Residential Capital, LLC, 2013 Bankr. (Bankr. S.D.N.Y., 2013) held that the plaintiff Scott was not a party in interest and therefore lacked standing to assert a violation of the automatic stay. The court thus denied his motion.

Before this court was Phillip Scott’s motion to (1) determine that bankruptcy estate owns title to the note, (2) void state court title transfer, and (3) enjoin post petition state court prosecution.

Through his Motion, Scott sought: (1) declaratory relief determining that the bankruptcy estate owns title to the note; (2) injunctive relief enjoining, restraining, and prohibiting the mortgage foreclosure action in the Supreme Court of New York, County of Westchester; and (3) judgment for costs, including attorneys’ fees.

This court held that a mortgagor who defaulted on a note he executed in 2005 did not have standing under 11 U.S.C.S. § 1109(b) to seek a ruling from the bankruptcy court that a business that declared Chapter 11 bankruptcy after it acquired and transferred a mortgage he executed with the note held title to real property that secured the note, and an order enjoining a foreclosure action which a bank filed against the property in a New York court. The court also held that the mortgagor was not a creditor in the debtors’ bankruptcy estate, the note and mortgage were not owned or serviced by any of the debtors, and none of the debtors was a party to the foreclosure action.

Thus this court denied the mortgagor’s motion for an order declaring that the debtors’ bankruptcy estate owned title to the note, voiding a state court title transfer, and enjoining the foreclosure action that was filed in state court.

Arizona’s Non-Judicial Foreclosure Statutes do not Require the Beneficiary to ‘Show the Note’ Before Commencing a Non-Judicial Foreclosure

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The court in deciding Famili v. Wells Fargo Bank NA, 2013 U.S. Dist. (D. Ariz., 2013) reaffirmed the holding that “Arizona’s non-judicial foreclosure statutes do not require the beneficiary to prove its authority or ‘show the note’ before the trustee may commence a non-judicial foreclosure.”

All counts alleged in plaintiff’s complaint centered on her assertion that whenever the promissory note was transferred or a change was made to the beneficiary of the deed of trust, the holder or beneficiary was required to demonstrate authority for the transfer or substitution. This court noted that each claim of breach of contract and lack of authority put forth by the plaintiff was an iteration of the “show-me-the-note” argument resolved by the Arizona Supreme Court in Hogan v. Wash. Mut. Bank, N.A., 230 Ariz. 584, 277 P.3d 781, 782 (Ariz. 2012).

Thus, as a matter of Arizona law, the court found the plaintiff’s argument without merit.

Court Rejects Arguments that Mortgage Electronic Registration Systems, Inc. Lacked the Authority to Assign Mortgage

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The court in deciding Jones v. Nationstar Mortg. LLC, 2013 U.S. Dist. (W.D. Mich., 2013) granted defendant Nationstar’s motion for summary judgment.

Plaintiff alleged that the foreclosure of his property was unlawful for the following reasons: (1) Nationstar refused to accept his payment of $1,019.74; (2) Nationstar failed to produce the original note with the red blood signature; (3) Mortgage Electronic Registration Systems, Inc. (MERS) lacked the authority to assign the mortgage; (4) Plaintiff was not afforded sufficient due process; and (5) Nationstar lacked standing to seek foreclosure. Defendants moved for summary judgment.

Plaintiff had responded to defendant’s motion for summary judgment. However, this court found that the plaintiff had failed to submit any evidence challenging, refuting, or otherwise calling into doubt the evidence submitted by the defendant.

Instead, the court found that the plaintiff had submitted several exhibits that supported the defendant’s motion for summary judgment. Plaintiff had also submitted an affidavit in which he asserted irrelevant matters such as the fact that the defendant Nationstar “was not a human being” and defendants “did not have the rights of a natural human being.”

This court found that to the extent that plaintiff had asserted relevant facts, such did not advance plaintiff’s position.

New Jersey Court Finds that Plaintiff had Both Possession of the Original Note and Assignment

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The court in deciding Assets Recovery 23, LLC v. Odoemene, 2013 N.J. Super. (App.Div., 2013) this court affirmed the ruling of the lower court that the plaintiff was permitted to foreclose.

In this foreclosure matter, defendants Emmanuel C. Odoemene and Doris D. Odoemene appealed from a June 11, 2012 Chancery Division order, which granted summary judgment to plaintiff Assets Recovery 23, LLC and dismissed defendants’ answer, and denied defendants’ cross-motion to dismiss the complaint. After considering the plaintiff’s contentions this court affirmed the decision of the lower court.

On appeal, defendants merely reiterated that plaintiff lacked standing because it did not physically possess the note at the time it filed the foreclosure complaint. They also argued that the April 2011 assignment did not properly assign the note; however, the court found this argument to be lacking.

This court also found that the evidence in this case clearly established that plaintiff had standing when it filed the foreclosure complaint. Here, the plaintiff had both possession of the original note and an assignment of the mortgage and note prior to filing the complaint.

Court Dismissed Minn. Stat. § 559.01 Claims

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The court in deciding Lubbers v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. (D. Minn., 2013) dismissed plaintiff’s claims.

Plaintiffs sought to invalidate the foreclosure of the mortgage on their home. Plaintiffs asserted three claims against defendant: (1) quiet-title, to determine adverse claims under Minn. Stat. § 559.01; (2) declaratory judgment; and (3) slander of title.

Plaintiffs alleged the following causes of action:

In count I, plaintiffs asserted a quiet title action pursuant to Minn. Stat. § 559.01, and sought a determination regarding Deutsche Bank’s adverse interest in the Property. According to plaintiffs, in a quiet title action, the burden of proof was on the mortgagee asserting an adverse interest in the property to show that both record title and legal title concur and co-exist at the same time and in the same entity to foreclose by advertisement.

In count II, plaintiffs sought a declaratory judgment under Minn. Stat. § 555.02 that the various assignments of mortgage, notices of pendency, and powers of attorney were all void, and that plaintiffs remain the owner of the property in fee title.

Count III, plaintiff alleged slander of title, plaintiffs asserted that Wilford, acted at direction of Deutsche Bank, drafted and recorded documents that were false and not executed by legally authorized persons, and that Deutsche Bank knew that the documents were false because unauthorized persons executed the power of attorneys and the assignments of mortgage.

As relief, plaintiffs sought: (1) a determination of adverse interest in the Property; (2) a declaration that the sheriff’s certificate of sale, the various assignments of mortgage, notices of pendency, and powers of attorney are all void; (3) a declaration that plaintiffs remain the owner of the Property in fee title; and (4) money damages. Id., Prayer for Relief.

After considering the plaintiff’s claims, this court granted the defendant’s motion to dismiss.

Court Finds that BAC Home Loans did not Have Standing to File Suit

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The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s decision and found that appellee had not established that it was the current holder of the note and mortgage, thus, appellee did not have standing to file suit.

Appellant Walter J. Blythe appealed the Columbiana County Common Pleas Court’s decision granting summary judgment in favor of BAC Home Loans Servicing, L.P., in a foreclosure action.

Blythe challenged the trial court’s finding that BAC had standing to foreclose in the absence of evidence that BAC was the holder of the note that created the obligation. Blythe relied on the material submitted by BAC in support of this claim.

This court held that the note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by the loan servicing company (LSC) that was not the transferee or successor in interest of the bank. The LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). The LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

The court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. The note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, here the bank was the real party in interest in the foreclosure action, thus the LSC lacked standing to foreclose.

Texas Court Dismisses Claims Centered Around FDCPA and TDCPA Violations

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The court in deciding Warren v. Bank of Am., N.A., 2013 U.S. Dist. (N.D. Tex., 2013) granted defendant’s motion to dismiss all of the claims brought by the plaintiff.

Plaintiff alleged that MERS could not assign the note or deed of trust because it was not a party to, and never had a beneficial interest in, the note. Plaintiff further alleged that the note was “securitized”, thus defendant was not the owner of the note or deed of trust and had no right to foreclose on the Property. Plaintiff asserted a claim to quiet title and requested declaratory judgment and injunctive relief to restrain defendant from foreclosing and evicting him from the Property.

Although the complaint did not formally list any substantive claims, plaintiff’s request for injunctive relief contained allegations that may liberally construed as claims for wrongful foreclosure and violations of the Tex. Const. art. XVI, § 50(a)(6)(B), the Fair Debt Collection Practices Act (FDCPA), and the Texas Debt Collection Practices Act (TDCPA).

Plaintiff alleged that the defendant failed to notify him of the pending foreclosure sale, since the foreclosure notice was “returned as undeliverable” by the U.S. Postal Service (USPS). Before filing suit, he sent the defendant a request “for a verification of the debt” pursuant to the federal FDCPA and the TDCPA. Plaintiff believed that pursuant to the FDCPA, the foreclosure could not have been conducted until 30 days had passed after the date he sent his request.

Plaintiff further claimed that the defendant could not foreclose because there were defects in the original loan financing and the original foreclosure order and because defendant failed to “physically post” a copy of the foreclosure sale notice at “the courthouse” where the sale was to take place.

This court considered the plaintiff’s contentions and eventually found them without merit.