Tag Archives: Bank of America

Michigan Court Finds Plaintiff’s Argument to Prevent Removal Lacked Merit

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The court in Ordway v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 145228 ( E.D. Mich. Oct. 8, 2013) granted defendants’ motion and denied plaintiff’s motion.

This was a case challenging foreclosure proceedings. Plaintiff named Bank of America, N.A. (BOA); Bank of New York Mellon (BNYM), as Trustee for the benefit of the CWABS Inc. Asset-Backed Certificates, Series 2007-9 (the Trust); and unknown holders of the trust as defendants.

The complaint asserts multiple claims, as follows:

Count I Declaratory Relief that the foreclosure violated MCL 600.3204(1) and (3); Count II Declaratory Relief that the foreclosure violated MCL 600.3204(4), 600.3205a, and 600.3205c; Count III Breach of Contract; Count IV Intentional Fraud; Count V Constructive Fraud; Count VI Tortious Interference with Contractual Relations; Count VII Civil Conspiracy; Count VIII Michigan’s Regulation of Collection Practices Act; and Count IX: Accounting.

BOA and BNYM removed the case to federal court on the grounds of diversity jurisdiction under 28 U.S.C. § 1332. Before the court was the plaintiff’s motion to remand and defendants’ motion to supplement the notice of removal. The court denied plaintiff’s motion and granted defendants’ motion.

Plaintiff contended that removal was improper because (1) the unknown Trust holders did not consent to removal; (2) defendants did not attach the TRO with the removal papers; and (3) defendants had not established that diversity jurisdiction exists because they have not stated in their removal papers the citizenship of the unknown trust holders. The court found that the plaintiff’s arguments lack merit.

California Court Finds That Defendants Complied With Statutory Mandate That the Notice of Default Include Sufficient Contact Information

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The court in deciding Wagma Safi v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 147005 (E.D. Cal. Oct. 9, 2013) ultimately granted defendant’s motion to dismiss.

In her first cause of action, the plaintiff asked for declaratory relief in the form of a judicial declaration that the plaintiff had the right to reinstate the loan for which the deed of trust was collateral, and that the defendants were required to provide her with the information necessary to do so.

The court dismissed the plaintiff’s first cause of action for declaratory relief. Despite defendants’’ alleged refusal to provide plaintiff with information regarding the loan, their compliance with the notice requirements of section 2924c(b)(1) provided plaintiff with sufficient information to exercise her right to reinstate the loan.

In her second cause of action, plaintiff asked for declaratory relief, contending that “Bank of America was the sole beneficiary under the deed of trust and that MERS had no authority to transfer or assign any rights under the deed” Plaintiff alleged that MERS signed the deed of trust “solely as nominee” and thus lacked the authority to assign its interest to a third party.

The court found that plaintiff made no showing that would call into question the validity of MERS’ assignment. The court found that she failed to state a claim and the second cause of action was dismissed.

Individual Liability for RMBS Misrepresentations

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Judge Cote (SDNY) issued an Opinion and Order in Federal Housing Finance Agency v. HSBC North America Holdings Inc, et al., 11-cv-06201 (Dec. 10, 2013).  The opinion relates to the potential liability of individuals who signed various documents containing alleged misrepresentations that were filed with the Securities and Exchange Commission. These misrepresentations, if true, may violate the Securities Act of 1933. Individuals who signed off on the alleged misrepresentations could be liable as “control persons” or other key individuals under the Act. The alleged misrepresentations were contained in offering materials for RMBS purchased by Fannie Mae and Freddie Mac.

The issue in the case is a pretty technical one: “the motion requires the Court to decide whether the SEC radically altered Section 11 liability for individuals who sign registration statements in the context of the shelf registration process when the SEC promulgated Rule 430B in 2005.” (5) Less technically, the motion requires that the Court decide the scope of potential liability for individuals for misrepresentations made in documents that they DID NOT sign that were supplemental to documents that they DID sign. The Court found that individuals could be held liable for such misrepresentations as had been the case before Rule430B had been promulgated.

I am not a securities law expert, so I assume that Judge Cote is right in stating that the defendants were arguing for a radical change to  the Securities Act of 1933 liability regime. I am also on the record in support of liability for individuals who are responsible for material aspects of the financial crisis. But I have also expressed concern about incredibly broad liability provisions. As a non-expert in this area, I was surprised that individuals could be held liable for misrepresentations that were made after they signed off on the preliminary documentation for securitizations.

Texas Court Found That There Was no Gap in Chain of Title

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The court in deciding Acosta v. Fannie Mae, 2013 U.S. Dist. LEXIS 148066 (S.D. Tex. 2013) found that Under Section 51.0025 of the Texas Property Code, BOA had standing to foreclose as servicer of the loan.

Plaintiff asserted numerous claims arising from the foreclosure of his property.

The court found that the plaintiff had offered no summary judgment proof of any defect in the foreclosure proceedings. Acosta had also offered no summary judgment proof that BOA made any false or reckless statement to him upon which he relied to his harm; therefore, his claim for fraud or misrepresentation failed.

The court also found that BOA effectively became the “original lender” of Acosta’s loan by virtue of the merger with Countrywide. MERS, in its capacity as nominee, assigned the loan to BOA, as successor of the merger. Hence, there is no cognizable “gap in the chain of title” and BOA, therefore, had standing to foreclose.

The court ultimately granted summary judgment in favor of the defendants.

Michigan Court Dismisses MCPA & HOEPA Claims

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The court in deciding Huff v. Fannie Mae, 2013 U.S. Dist. LEXIS 148053 (E.D. Mich. Oct. 2013) granted Bank of America’s motion to dismiss.

Plaintiff advanced a claim against defendants for quiet title (Count I) and alleged that defendants violated the Michigan Consumer Protection Act (“MCPA”) (Count II). In response plaintiff filed a motion to dismiss for failure to state a claim.

Defendants asserted that all of the plaintiff’s claims should be barred either by res judicata or by the expiration of the applicable statute of limitations. Additionally, defendants argued that plaintiff’s quiet title claim; claims under the MCPA, and HOEPA lacked the factual allegations required for the court to find in plaintiff’s favor.

Plaintiff asserted that his complaint adequately plead claims against defendants for quiet title and violations of state and federal law. The court ultimately found that plaintiff failed to state a claim upon which relief may be granted.

Illinois Court Finds Statute of Limitation Barres TILA & Fraud Claims

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The court in deciding Gater v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 149872 (N.D. Ill. 2013) granted Bank of America’s motion to dismiss.

Plaintiff alleged violations of Truth-in-Lending Act (TILA), 15 U.S.C. §§ 1601, et seq. claim (Count I), and an Illinois Consumer Fraud and Deceptive Business Practices Act (Fraud Act), 815 ILCS 505/1, et seq. claim (Count II). Bank of America moved to dismiss the action.

The court found that the statute of limitations periods barred plaintiff’s claims, thus the court granted the motion to dismiss.

North Carolina Court Dismisses Plaintiff’s Claims of Fraud Against MERS, Bank of America, & Trustee Services of Carolina

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The court in deciding Porterfield v. JP Morgan Chase Bank, Nat’l Ass’n, 2013 U.S. Dist. LEXIS 152318 (E.D.N.C. 2013) dismissed plaintiff’s claims and granted the defendant’s motion to dismiss.

Plaintiff asserted the following claims: (1) wrongful foreclosure; (2) fraud; (3) fraudulent misrepresentation; (4) fraud by use of MERS; (5) fraud through securitization; (6) promissory fraud; (7) unfair and deceptive trade practices; (8) violations of the Fair Debt Collections and Practices Act; (9) violations of the Real Estate Settlement Procedures Act; (10) slander of title; and (11) a quiet title action.

JPMorgan Chase Bank, N.A. and MERS motioned to dismiss pursuant to FED. R. CIV. P. 12(b)(6) and defendant Trustee Services of Carolina motioned to dismiss to Fed. R. Civ. P. 12(b)(6).

The court ultimately granted the defendants’ motions. Plaintiff’s claims against JPMorgan Chase Bank, MERS, and Trustee Services of Carolina, LLC were dismissed with prejudice.