In Washburn v. Bank of America, N.A., 1:11-CV-00193-EJL, 2011 WL 7053617 (D. Idaho Oct. 21, 2011), the Idaho District Court recommended that the Defendants’ Motion to Dismiss be granted. Plaintiff Homeowner had defaulted on her loan and received a notice of default. Plaintiff sought quiet title to the property, challenged the transfer of the loan ownership, and contended that MERS did not have the authority to appoint a successor trustee to the Deed or to carry out a non-judicial foreclosure. The Court found that even though “the right to enforce the mortgage by foreclosure had expired by limitation, the plaintiff was required, in equity, to pay the mortgage debt to obtain relief under a quiet title action. The securitization of the loan and its transfer to another entity did not extinguish the security interest or otherwise impact the ability to foreclose on the trust deed. Also, for the purpose of the quiet title action, “the fact that MERS is named as the beneficiary does not change the rights or obligations of [Plaintiff] with regard to the Property.” Plaintiff’s argument that MERS lacks standing was misplaced since Plaintiff focused on the ability of MERS to enforce the right to payment. “But foreclosing on a trust deed is distinct from the collection of the obligation to pay money.” Additionally, there was no issue with MERS’s initiated foreclosure because foreclosure was initiated in the name of the lenders. MERS was also found to have the ability to appoint a successor trustee because the Deed of Trust expressly allowed MERS to do so.

On January 17, 2012, appeal by the Plaintiff was taken into consideration by the Court. The above Report and Recommendation was Incorporated and Adopted. The Defendants’ Motion to Dismiss was granted and the case was dismissed. Washburn v. Bank of America (January 17 2012).

In Showell v. BAC Home Loans Servicing, L.P., 4:11-CV-00489-CWD, 2012 WL 4105472 (D. Idaho Sept. 17, 2012), the Court granted Defendants’ motions to dismiss. The Court once again held that since Idaho is a nonjudicial foreclosure state, standing, or proof of ownership of the underlying note, is not required before a proceeding is initiated. Plaintiff Homeowners’ quiet title claim failed because a “mortgagor cannot without paying his debt quiet title as against the mortgagee.” Additionally, MERS was found to have authority to foreclose on the defaulted property. MERS was given the authority to exercise the rights described in the Deed on behalf of the lender as the lender’s agent. Additionally, Plaintiffs’ argument that MERS did not have the ability to assigned interests based upon its “nominee” status was dismissed by the Court since “there is no requirement in the Deed of Trust that the original Lender grant MERS permission to assign MERS’s interest in the Deed of Trust to lenders’ successor in interest.” Plaintiffs’ various other claims were dismissed for failure to support their claims, or state a claim at all. The most common of the arguments that were dismissed was that the Note and Deed being split renders them unenforceable. The Court concluded that splitting the Note and Deed does not preclude the proper Defendant from foreclosing on the Deed of Trust.

In Cherian v. Countrywide Home Loans, 1:12-CV-00110-BLW, 2012 WL 2865979 (D. Idaho July 11, 2012), the Court granted Defendants’ motion to dismiss and denied Plaintiff Homeowner’s motion for a temporary restraining order and motion to amend his complaint.

Plaintiff sought to enjoin the foreclosure sale of his property on multiple grounds.

1. The Court held that P could not quiet title. He had “not alleged an ability or willingness to tender the balance due on the loan” which was fatal to his claim. Additionally the court explained that P’s allegations that U.S. Bank failed to follow the applicable non-judicial foreclosure statutes does not excuse his lack of tender or otherwise save his claim.
https://www.openiam.com/docs/idm-2_3/apidocs/com/
2. Plaintiff did not allege any facts to support his claim that Defendants failed to comply with Idaho’s foreclosure statutes
3. Securitization of the Note did not impact the right to foreclose and did not discharge the Plaintiff’s obligation to repay the loan
4. The Court held, consistent with its holding in Trotter v. Bank of New York Mellon, (see earlier post), that proof of Note ownership is not a prerequisite to initiating a non-judicial foreclosure proceeding on a deed of trust.
5. The Court held that splitting the Note and Deed of Trust did not extinguish the right to foreclose. The Court explained that “use of the MERS system does not eliminate a party’s right to foreclose – even accepting the premise that use of MERS splits the note from the deed.
6. The Court concluded that MERS “had the authority to assign its beneficial interest in the deed of trust to the foreclosing bank.”
7. The Court held, as it had done before, that the “activity of foreclosing on [a] property pursuant to a deed of trust is not the collection of a debt within the meaning of the” Fair Debt Collection Practices Act (“FDCPA”), and lenders and mortgage companies are not “debt collectors” within the meaning of the FDCPA. Moreover, “MERS’ role as beneficiary of the Deed of Trust was established at the loan’s origination prior to [Plaintiff’s] default, and therefore it is also exempt under the FDCPA
8. Plaintiff failed to allege a violation of the Idaho Consumer Protection Act.
9. Plaintiff alleged that U.S. Bank violated the Truth in Lending Act (“TILA”), but he did not allege that the Bank’s failure to provide notice “within 30 days after the date on which the mortgage loan was sold or otherwise transferred or assigned by Defendant MERS,” caused him to incur actual damages.

In Ohlsen v. Bank of America, 1:11-CV-00357-BLW, 2012 WL 4139530 (D. Idaho Sept. 18, 2012), Plaintiff Homeowners filed an objection challenging the Report and Recommendation of a Magistrate Judge that their complaint be dismissed. The Court here considered the Plaintiffs’ contentions and conducted a de novo review of the record. The Court agreed with the Magistrate Judge’s conclusion that Plaintiffs are in default on their mortgage obligations, have not tendered payment of their obligation, and thus are not entitled to quiet title. Plaintiffs’ various other theories, one being that MERS is not a valid beneficiary entitled to enforce the note, are not supported by the case law or loan documents. Plaintiffs’ other claims were not supported either.