Tag Archives: assignment

Michigan Court Finds MERS Had Capacity to Assign Mortgage, and Bank of New York Mellon Had Capacity to Accept MERS’s Assignment of the Mortgage

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The court in Maslowski v. Mortgage Elec. Registration Sys., 2013 U.S. Dist. LEXIS 155970, 2013 WL 5876608 (W.D. Mich. Oct. 31, 2013) found that dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate.

The plaintiff in this case [Maslowski] challenged a foreclosure and foreclosure sale. Essentially, the plaintiff claimed that the foreclosure proceedings were invalid because defendant MERS lacked capacity to assign the mortgage, and defendant Bank of New York Mellon lacked capacity to accept MERS’s assignment of mortgage.

The court rejected the plaintiff’s reasoning and noted that once the redemption period has expired, a plaintiff must meet a high standard for a federal court to invalidate or set aside a mortgage foreclosure by advertisement in Michigan. In particular, a plaintiff must show both fraud related to the foreclosure process itself and that he or she was prejudiced by the defendant’s failure to comply with the foreclosure statute’s requirements. The Court agreed with the lower court and found that the plaintiff had made no allegations or showing of prejudice, and that therefore, dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate.

Georgia Court Affirms That The Holder of a Deed to Secure Debt is Authorized to Exercise the Power of Sale in Accordance With the Terms of the Deed

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The court in deciding Sanford v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 156084, 2013 WL 5899238 (N.D. Ga. Oct. 31, 2013), found that each of the plaintiff’s arguments lacked merit and subsequently granted defendant’s motion to dismiss.

Plaintiff’s claim for wrongful foreclosure against BANA was based on three theories: (1) invalid assignment of the security deed; (2) improper notice under O.C.G.A. § 44-14-162.2; and (3) BANA’s lack of authority to foreclose as a non-secured creditor.

The court rejected plaintiff’s second and third arguments based on previous case law. The court cited a previous holding, noting that “the holder of a deed to secure debt is authorized to exercise the power of sale in accordance with the terms of the deed even if it does not also hold the note or otherwise have any beneficial interest in the debt obligation underlying the deed.”

Furthermore, the court noted that the notice requirement is satisfied if the notice identifies the individual or entity with full authority to negotiate, amend, and modify the terms of the mortgage, regardless of whether that entity is a secured creditor, note holder, deed holder, or none of the above.

Michigan Court Dismisses Plaintiff’s State Law Based Claims of Wrongful Foreclosure

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The United States District Court for the Eastern District of Michigan, Southern Division after considering the arguments in Ashford v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 156159, 2013 WL 5913411 (E.D. Mich. Oct. 31, 2013), dismissed the plaintiff’s complaint, with prejudice.

Plaintiff alleged claims against Defendant BANA for breach of contract (Count I), wrongful foreclosure/declaratory judgment (Count II), wrongful foreclosure (Count III), and violation of the Michigan Mortgage Brokers, Servicers, and Lenders Licensing Act, Mich. Comp. Laws § 445.1651 et seq. (Count IV). Defendant BANA filed the instant Motion.

Defendant argued that Plaintiff’s complaint should be dismissed because there is no valid basis to overturn the sale of the Property after the redemption period terminated. The Court agreed and found the rest of the plaintiff’s claims lacking or without merit.

Massachusetts Land Court Finds Defendant Was Not Entitled to Service Member Relief Act

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The Massachusetts Land Court in deciding Suntrust Mortg., Inc. v. Forsberg, 2013 Mass. LCR LEXIS 159 (Mass. Land Ct. 2013) found that defendant (Alfred Forsberg) was not entitled to the protection of the Servicemembers Civil Relief Act, 50 U.S.C. §§ 510 et seq., at the time of foreclosure; and that service and publication of the notice naming SunTrust Mortgage LLC rather than SunTrust Mortgage Inc. did not invalidate the foreclosure sale.

Michigan Court Finds Assignment From MERS to Bank of New York Was Valid

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The United States District Court for the Western District of Michigan, Southern Division in Maslowski v. Mortg. Elec. Registration Sys., 2013 U.S. Dist. LEXIS 156299 (W.D. Mich. Sept. 26, 2013) granted defendants’ motion to dismiss.

The crux of plaintiff’s claim is that the state foreclosure proceedings should be invalidated because MERS lacked the capacity to assign the Mortgage and BONY could not accept the MERS’ Assignment of Mortgage. Defendants successfully sought dismissal pursuant to Fed. R. Civ. P. 12(b)(6).

The court reasoned even if the assignment from MERS to BONY was invalid, thereby creating a defect in the foreclosure process under M.C.L. § 600.3204(1)(d), the plaintiff had not alleged that he was prejudiced.

While plaintiff claimed various damages, which arose from the alleged fraudulent assignment, plaintiff did not allege that he suffered any prejudice due to the alleged fraudulent assignment. Plaintiff failed to show that he would be subject to liability from someone other than BONY (i.e., double liability) or that he would have been in any better position to keep the Property absent the assignment Accordingly, the court granted the defendants’ motion to dismiss.

The Superior Court of New Jersey, Appellate Division, Finds That Wells Fargo Had Standing to File Foreclosure Action

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The Superior Court of New Jersey, Appellate Division, in deciding Wells Fargo Bank, N.A. v. Garner, 2013 N.J. Super. LEXIS 2648, 2013 WL 5827033 (App.Div. Oct. 31, 2013) affirmed the lower court’s decision and dismissed motions to vacate the judgment of foreclosure.

Defendant argued that plaintiff, Wells Fargo Bank, N.A., lacked standing to file the foreclosure action. The defendant claimed that Wells Fargo did not own the note and mortgage on the date it filed the complaint. For the same reason, the defendant maintained that plaintiff improperly issued the notice of intent to foreclose.

The court found defendant was not entitled to relief under any subsection of Rule 4:50-1, and subsequently dismissed her complaint.

Alabama Court Dismisses Plaintiff’s Insufficiently Plead Quiet Title Claim

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The United States District Court for the Northern District of Alabama, Western Division, in deciding Orton v. Matthews, 2013 U.S. Dist. LEXIS 156870 (N.D. Ala. Nov. 1, 2013), granted [defendant] Bank of America’s motion to dismiss plaintiff’s claims pursuant to Rule 12(b)(6) of the FRCP for failure to state a claim.

Plaintiff’s complaint represented an attempt to quiet title to the underlying property in the case. The theory behind plaintiff’s quiet title action was that, as a result of the separation of the note and the mortgage at the time of their execution, the defendant’s alleged security interest in the property was invalidated.

Defendant attacked the plaintiff’s complaint on multiple grounds, asserting that 1) it was devoid of the factual allegations necessary to maintain an action to quiet title, and 2) its only cause of action is almost wholly dependent on a theory of law, the so-called “split the note” theory, that contravenes established Alabama law.

Defendant successfully argued that such deficiencies prevented plaintiff’s complaint from meeting Rule 8’s pleading standard, and require dismissal of this action under Rule 12(b)(6). The court agreed.