February 7, 2013
Oregon District Court Holds that MERS could Assign Deed of Trust and Wells Fargo Bank could Initiate Foreclosure Proceedings
In Neilson v. Wells Fargo Bank, NA, CV 10-1516-MO, 2011 WL 3476523 (D. Or. Aug. 9, 2011), the Oregon District Court granted Wells Fargo Bank’s motion for summary judgment because Neilson (homeowner) failed to show a likelihood of success and failed to raise serious questions on the merits.
Neilson moved for preliminary injunction to prevent the foreclosure of his home. The Court noted, however, that a preliminary injunction will only be granted if Neilson could show a likelihood of success on the merits and if Neilson could show that serious questions were raised on the merits. Here, Neilson made three claims against Wells Fargo.
First, Neilson claimed that MERS was not the beneficiary of the deed of trust and thus had no right to assign it. The court noted, however, that MERS was the proper beneficiary as evidenced by the deed of trust, and had the right to exercise steps necessary to recover the debt owed by the lender.
Second, Neilson claimed that Wells Fargo engaged in fraud. But Neilson failed to provide adequate details supporting his claim. Thus, under Rule 9(b) of the Rules of Civil Procedure, Neilson’s claim did not raise serious questions on the merits.
Lastly, Neilson claimed that Wells Fargo violated the Real Estate Settlement Procedures Act (RESPA) by failing to provide him with “information regarding the owner of the note, documentation of ownership of the note and deed of trust, and the role played by MERS in the underlying transaction.” This argument failed as well, however, because RESPA violations are penalized with monetary damages, not by setting aside foreclosure proceedings.
The court ultimately held that Neilson failed to show a likelihood of success on the merits and failed to show that serious questions were raised on the merits. Thus the Court granted Wells Fargo’s motion for summary judgment.
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