Author Archives: Ebube Okoli

Texas Court Rejects Break-in-the-Chain Claim

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The court in deciding Martinez v. Wilmington Trust Co., 2013 U.S. Dist., (W.D. Tex. 2013) found that plaintiffs’ petition failed to state a claim to which relief could be granted and dismissed the action.

Plaintiffs argued that the 2005 assignment was “fraudulent and forged,” “manufactured,” and “void and invalid,” constituting a “break in the chain.” Plaintiffs also claimed that defendant had no standing to foreclose on the instrument.

Plaintiffs alleged the 2005 assignment from Washington Mutual to Wells Fargo was “suspicious” due to the five year delay in recordation and because “Washington Mutual was bankrupt in August of 2010 and no longer existed in 2010.” According to plaintiffs, the 2005 assignment was flawed because it was recorded “some twelve years after the original transaction.”

Defendant argued that the plaintiffs’ claims should be dismissed because plaintiffs lacked standing to complain of any alleged defects in the assignments, and, standing aside, plaintiffs’ claims lack viability. Plaintiffs argued that defendant’s motion was moot. This court ultimately found that the defendant’s motion to dismiss had merit and granted it.

Defendants Could Not Show They Were not Debt Collectors as Defined by 15 U.S.C.S. § 1692a(6)(F)

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The court in deciding Dias v. Fannie Mae, 2013 U.S. Dist. LEXIS 181584 (D. Haw., 2013) rejected all but one of the plaintiff’s claims.

The court found that the plaintiff’s Haw. Rev. Stat. § 667-5 defective assignment claims against defendants failed because the mortgage gave the requisite authority.

The court found that a claim that no sale could be held pending a Home Affordable Modification Program (HAMP) modification failed because the mortgagor lacked standing. The false mortgage assignment claim failed because nothing showed a publicly recorded assignment was false. Likewise, the breach of contract claim for violating HAMP guidelines failed because the mortgagor had no such claim, no HAMP trial payment plan supported it, and she was not an intended beneficiary of any HAMP agreement between defendants and the U.S. Treasury.

However, the plaintiff’s Fair Debt Collection Practices Act, 15 U.S.C.S. § 1692, claims survived because a defaulted debt was assigned, so defendants could not show they were not debt collectors, under 15 U.S.C.S. § 1692a(6)(F).

Since Bank was the Note-Holder it was a Person Entitled to Enforce the Note Pursuant to R.C. 1303.31(A)(1)

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The court in deciding Bank of Am., N.A. v. Pasqualone, 2013-Ohio-5795 (Ohio Ct. App., Franklin County, 2013) affirmed the decision of the lower court.

The court found that the promissory note was a negotiable instrument subject to relevant provisions of R.C. Chapter 1303 because it contained a promise to pay the lender the amount of $100,000, plus interest, and did not require any other undertakings that would render the note nonnegotiable.

Further, the court found that since the bank was the holder of the note it was a person entitled to enforce the note pursuant to R.C. 1303.31(A)(1). Based on the authorization, the note became payable to the bank as an identified person and, because the bank was the identified person in possession of the note, it was the holder of the note.

Lastly, as the property owner’s defenses to the mortgage foreclosure did not fit the criteria of a denial, defense, or claim in recoupment under R.C. 1303.36 or R.C. 1303.35, the bank’s right to payment and to enforce the obligation was not subject to the owner’s alleged meritorious defenses.

Court Finds that Bank was Entitled to Enforce the Instrument Under R.C. 1303.31

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The court in deciding M & T Bank v. Strawn, 2013-Ohio-5845 (Ohio Ct. App., Trumbull County 2013) affirmed the lower court’s decision and found that appellant’s argument was without merit.

Appellant framed three issues for this court’s review. First, appellant contended that the trial court erred in relying upon the affidavit of Mr. Fisher to demonstrate that appellant had possession of the promissory note and that the copies were true and accurate. Second, appellant questioned whether appellee fulfilled the condition precedent of providing notice of the default and notice of acceleration. Third, appellant argued that there was a genuine issue of material fact as to whether appellee was the real party in interest possessing an interest in the promissory note and mortgage.

The court found that the bank’s possession of the note was shown by an affidavit, along with attached copies of the note endorsed to the bank, and one in possession of a note endorsed to that party was a holder, for purposes of R.C. 1301.201(B)(21)(a), and thus entitled to enforce the instrument under R.C. 1303.31.

The court also found that the affidavit for the bank clearly stated that the bank had been in possession of the original promissory note, and the affidavit was sufficient for the trial court to have held that the affiant had personal knowledge. Lastly, the court found that nothing suggested that voided endorsements affected the bank’s status as a holder, and thus it did not create an issue of fact and that the bank acquired an equitable interest in the mortgage when it became a holder of the note, regardless of whether the mortgage was actually or validly assigned or delivered.

Tennessee Court Rejected MERS’ Argument that Sale of Property Should be Invalidated

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The court in deciding Mortgage Elec. Registration Sys. v. Ditto, 2014 Tenn. App. (Tenn. Ct. App., 2014) affirmed the judgment of the lower court.

This appeal involved the purchase of property at a tax sale. MERS filed suit against purchaser to invalidate his purchase of property because it had not received notice of the sale even though it was listed as a beneficiary or nominee on the deed of trust.

Purchaser claimed that MERS was not entitled to notice because MERS did not have an interest in the property. Purchaser also alleged that MERS failed to properly commence its lawsuit because it did not remit the proper funds pursuant to Tennessee Code Annotated section 67-5-2504(c).

The trial court refused to set aside the tax sale, holding that the applicable notice requirements were met and that the purchaser was the holder of legal title to the property. MERS appealed the lower court’s decision, however this court affirmed the decision of the lower court.

Since appellant was never given an independent interest in the property, and it did not suffer an injury by the sale of the property at issue, and the only injury suffered by appellant related to the future effect the case could have on its business model, which was not a distinct and palpable injury capable of being redressed by the court, the trial court’s grant of the purchaser’s motion for judgment on the pleadings was properly granted as appellant did not have standing to file suit to set aside the tax sale of the property for lack of notice under Tenn. Code Ann. § 67-5-2502(c) and the Due Process Clause of the Fourteenth Amendment.

The court found that the failure to tender the appropriate funds when filing the petition to set aside the sale under Tenn. Code Ann. § 67-5-2504(c) was not a prerequisite for relief.

North Carolina Court Dismisses FDCPA and RESPA Claims

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The court in deciding Champion v. Bank of Am., N.A., 2014 U.S. Dist. 78 (E.D.N.C., 2014) dismissed the plaintiff’s FDCPA and RESPA claims.

Plaintiff initiated this action asserting claims for violations of the Fair Debt Collection Practices Act (“FDCPA”), the Real Estate Settlement Procedures Act (“RESPA”), and North Carolina statutory and common law. In response, the moving defendants filed the instant motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).

The court first considered plaintiff’s federal claims. The movants’ primary arguments for dismissal of this claim was that plaintiff had failed to sufficiently allege that BANA was a debt collector under the FDCPA. The court agreed with this argument.

Plaintiff’s other federal claim was asserted under RESPA. Plaintiff alleged that defendants collectively violated that act ” through numerous assignments and transfers of the note and deed of trust without having given the proper notice to plaintiff within the proper time frame,” and “by failing to inform Plaintiff of any transfers of the loan servicing of her loan.”

However, the court agreed with the movants that plaintiff had failed to allege any damages flowing from the purported failure to be notified of the change in the entity servicing her mortgage. Accordingly the court dismissed the plaintiff’s remaining claims.

Illinois Court Rejects Plaintiff’s Claims of FDCPA, Fourteenth Amendment, Mortgage Foreclosure Law, and Assignment Violations

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The court in deciding Gonzalez v. Bank of Am., N.A., 2014 U.S. Dist, 67 (N.D. Ill. 2014) granted defendant’s motion to dismiss.

Plaintiff (Gonzalez) filed a four-count complaint against Bank of America and MERS seeking damages arising from alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. (Count I); void assignment of mortgage in violation of the Fourteenth Amendment (Count II); lack of authority to assign mortgage (Count III); and, against Bank of America only, violation of the Illinois Mortgage Foreclosure Law (Count IV).

Defendants moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Ultimately the court granted defendant’s motion.