Tag Archives: Downstream Litigation

Missouri Court Dismisses Predatory Lending & TILA Claims

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The court in deciding Fleming v. Bank of Am., 2013 U.S. Dist. LEXIS 150758 (W.D. Mo. Oct. 21, 2013) found the plaintiff’s argument and complaint to be filled with legal conclusions and disjointed, conclusory allegations. The court noted that the complaint frequently referred simply to “Defendant” or “Defendants” with no indication as to which specific defendant was implicated, and sometimes seemed to confuse “Plaintiff” with “Defendant.”

Plaintiff asserted the following eight claims: (1) predatory lending and violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq.; (2) servicer fraud; (3) violations of the Home Ownership and Equity Protection Act (“HOEPA”)’s amendments to TILA, §§ 1639 et seq.; (4) violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq.; (5) breach of fiduciary duty; (6) identity theft; (7) civil liability under the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1964; and (8) quiet title to real property.

Pursuant to Federal Rule of Civil Procedure 12(b)(6), defendants moved to dismiss Fleming’s complaint for failure to state a claim. After considering the plaintiff’s arguments the court ultimately granted defendants Bank of America and MERSCorp Holdings, Inc.’s motion to dismiss.

Michigan Court Dismisses Claim Seeking $4,500,000.00 in Damages

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The court in deciding Kemp v. Resurgent Capital Servs., 2013 U.S. Dist. LEXIS 150713 ( E.D. Mich. Oct. 21, 2013) ultimately dismissed the plaintiff’s claim and request for $4,500,000.00.

The complaint made the following claims: Count I lack of standing, Count II and III common law fraud and injurious falsehood, Count IV violation of Fair Debt Collection Practices Act, Count V violation of Truth in Lending Act, Count VI violation of UCC 3-302, Count VII negligent undertaking, and Count VIII negligent misrepresentation.

The plaintiff essentially claimed that defendants wrongfully foreclosed on her property. Due to this wrongful foreclosure, she sought a declaration that she was the rightful owner of the property. She further sought a money judgment in the amount of $4,500,000.00.

The court considered the plaintiffs arguments and ultimately dismissed her claim.

As to Count I, the court found that this claim failed against Quicken Loans for the simple reason that Quicken Loans had no interest in either loan and had no role in the foreclosure proceedings. As to the remaining counts, the court found that Quicken Loans was correct in that the plaintiff’s claims were barred by the applicable statute of limitations.

District Court Rejects Claims That MERS Lacked Standing

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The court in deciding Pratt v. Bank of Am. NA, 2013 U.S. Dist. LEXIS 151671 (D. Me. 2013) granted Bank of America’s motion to dismiss.

Plaintiff alleged that the existence of forged documents related to a mortgage loan and that MERS lacked standing to transfer the plaintiff’s deed to Bank of America. The plaintiff wanted his promissory note returned to him along with the deed of trust.

The plaintiff’s assertion revolved around the claim that the separation of the deed of trust from the promissory note by the intervention of MERS as a nominee for Quicken Loans somehow breached the contracts between Pratt and Quicken or Bank of America. Plaintiff claimed that MERS, as nominee, had no “standing” to transfer the note and/or mortgage to Bank of America and that Bank of America has no “standing” to enforce these instruments.

Bank of America filed a motion to dismiss. The court denied the plaintiff’s motion to remand and his motion for entry of default. The court also granted Bank of America’s motion to dismiss.

Lower Court’s Grant of Summary Judgement Affirmed by Nevada Court

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The court in deciding Castro v. Bank of N.Y. Mellon, 2013 Nev. LEXIS 1602 (Nev. 2013) affirmed the lower courts judgment against the plaintiff.

Plaintiff obtained a home loan from Decision One Mortgage Company, LLC and executed a promissory note in favor of Decision One. The note was secured by a deed of trust naming Decision One as the lender and MERS, as the beneficiary and nominee of the lender. The deed of trust authorized MERS, as nominee of the lender, to transfer the deed of trust and appoint a successor trustee.

MERS assigned the deed of trust to defendant, who instituted this action for quiet title seeking to expunge the documents that appellants recorded. Defendant moved for summary judgment, which was not opposed by plaintiff. Plaintiffs provided no evidence of any kind to the district court, and the district court entered summary judgment in respondent’s favor.

The court considered the plaintiff’s assertions, and concluded that the district court properly entered summary judgment in defendant’s favor.

Ohio Court Finds That Plaintiffs Were Not Bona Fide Purchasers

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The Court of Appeals of Ohio, Fifth Appellate District, in deciding Bank of N.Y. Mellon v. Casey, 2013-Ohio-4686 (Ohio Ct. App., Fairfield County Oct. 21, 2013) affirmed the lower court’s judgment and held that the plaintiffs were not bona fide purchasers and the defendants had standing.

The court found that under the doctrine of lis pendens plaintiffs were not bona fide purchasers of a property encumbered by the mortgage because they took title during the pendency of a declaratory judgment action to which they were a party. Consequently, they did not take the property free from unrecorded liens. The claim that the mortgage was invalid was barred by res judicata as the validity of the mortgage was fully litigated in the declaratory judgment action.

Lastly, the court found that the defendant had standing to seek the foreclosure, as it was the current holder of the note and mortgage, and that it had physical possession of the note and mortgage documents.

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.

Michigan Court Finds All Six of Plaintiff’s Claims Without Merit

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The court in deciding McGlade v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 152610 (E.D. Mich. Oct. 24, 2013) granted defendant Bank of America, N.A.’s motion to dismiss.

Plaintiff, McGlade brought six causes of action: Count I-Fraudulent Misrepresentation; Count II-Estoppel; Count III-Negligence; Count IV-Violation of the state Regulation of Collection Practices Act; Count V-Violation of the Fair Debt Collection Practices Act; and Count VI-violation of the Michigan Consumer Protection Act.

The court in granting defendant summary judgment noted that the plaintiff’s factual basis for the fraudulent misrepresentation claim that defendant “knew or should have known that she would not qualify for a loan modification when she inquired about one” was insufficient.

Ultimately, the court found that the misconduct alleged by McGlade did not relate to the foreclosure procedure itself, and therefore she had failed to state a claim for which relief can be granted.