Tag Archives: Downstream Litigation

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.

Texas Court of Appeals Finds That Plaintiff’s Claim – That the Note and Deed of Trust Became “Split” – Has No Basis in Law

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The Court of Appeals of Texas, Ninth District in deciding Townsend v. Barrett Daffin Frappier Turner & Engel, LLP, 2013 Tex. App. LEXIS 13515, 2013 WL 5874607 (Tex. App. Beaumont Oct. 31, 2013) affirmed the lower court’s decision holding that Tex. Prop. Code Ann. § 51.0025 permitted the company to administer the foreclosure proceedings.

Plaintiff alleged conspiracy to commit fraud due to the fact that the promissory note was “split” from the deed of trust when the deed of trust was assigned through MERS. Further, the plaintiff alleged that the local clerk’s office did not have a record of an assignment into Bank of America, as successor “by merger” to BAC Home Loans Servicing, LP.

However, the court found that the plaintiff’s allegation that the note and deed of trust “split” had no basis in law. The court reasoned that the alleged agreement between the persons conducting the foreclosure accomplished neither an unlawful purpose nor a lawful purpose by unlawful means. Thus, the assignment would be binding on both plaintiff, who had notice of it, and the parties to the assignment.

Eastern District of California Dismisses Plaintiff’s Action, Thus Upholding Decision That Possession of Original Note is Unnecessary

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The United States District Court for the Eastern District of California in Candelo et al v. NDEX West, LLC et al., No. CV F 08-1916 LJO DLB (E.D.Cal. 2008) dismissed the plaintiff’s action.

In dismissing the plaintiff’s claims, the court upheld the decision that there was no requirement under the statutory framework for the mandatory production or possession of the original note, by the foreclosing party, to initiate non-judicial foreclosure.

Eastern District of California Court Dismisses Plaintiff’s Claims of Federal Statutory Violations, Unlawful Foreclosure, Fraud, Equitable Estoppel & Accounting

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The United States District Court for the Eastern District of California in deciding Herrejon v. Ocwen Loan Servicing, LLC, 2013 U.S. Dist. LEXIS 157126 (E.D. Cal. Nov. 1, 2013) dismissed the plaintiff’s complaint as it failed to allege cognizable claims. The plaintiff’s complaint purported to allege claims for federal statutory violations, unlawful foreclosure, fraud, equitable estoppel and accounting.

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The plaintiffs (Ricardo G. Herrejon and Rosa E. Navarro-Herrejon) filed this action, which challenged the foreclosure of their property. The plaintiffs also sought to enjoin a November 4, 2013 property foreclosure sale. Plaintiffs’ complaint accused defendants of “unlawful foreclosure.” However, the court dismissed the plaintiff’s action in the absence of viable claims, the court also denied plaintiffs’ requested injunctive relief, and entered judgment on dismissal of plaintiffs’ claims.

Central District of California Court Finds Plaintiff Lacks Standing as There Was No “Injury in Fact”

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The United States District Court for the Central District of California in deciding Ellis v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 157173 (C.D. Cal. Oct. 28, 2013) concluded that plaintiff did not have standing to challenge defendants’ initiating foreclosure proceedings.

Plaintiff brought a complaint with a litany of claims. The claims included (1) dissemination of false advertising pursuant to 15 U.S.C. § 52; (2) violation of the Fair Debt Collection Practices Act (“FDCPA“), 15 U.S.C. § 1692 et seq.; (3) violation of the Real Estate Settlement Procedures Act (“RESPA“), [2] 12 U.S.C. § 2601 et seq.; (4) violation of California Civil Code §§ 2923.5 et seq., 2924 et seq., 2932.5, and 1095; (5) violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.; (6) false advertising pursuant to Cal. Bus. & Prof. Code § 17500; and (7) Quiet Title.

On September 12, 2013, MERS filed a motion to dismiss. The court, as an initial matter, noted that plaintiff failed to explain how she had been injured by defendants’ conduct. The court also noted that the previous foreclosures were rescinded, and plaintiff did not allege a pending foreclosure proceeding. Thus, to have standing to bring her claims, the court noted, “the plaintiff must have suffered an ‘injury in fact.'” Accordingly, the court dismissed the plaintiff’s claims granting the defendant’s motion.

Michigan Court Concludes that the Servicer of the Loan Was Not in Violation of the Notice or Loan-Modification Requirements of Michigan’s Foreclosure-by-Advertisement Statute

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The Michigan court in deciding the home mortgage foreclosure case of Pettey v. CitiMortgage, Inc., 2013 U.S. App. LEXIS 22299, 2013 FED App. 0936N (6th Cir.), 2013 WL 5832535 (6th Cir. Mich. 2013), concluded that the servicer of the loan was not in violation of the notice or loan-modification requirements of Michigan’s foreclosure-by-advertisement statute, Mich. Comp. Laws § 600.3204, because the mortgagors failed to take action under the statute that would have triggered the servicer’s notice and loan-modification obligations.

In doing so, the court affirmed the district court’s rejection of the mortgagors’ unjust-enrichment and deceptive acts and unfair practices claims. Moreover, the court was persuaded that the district court’s grant of the servicer’s motion to dismiss and denial of the mortgagors’ motion for reconsideration were proper. The court relied on the reasoning handed down by the lower court in their opinion, with the caveat that defects or irregularities in a foreclosure proceeding resulted in a foreclosure that was voidable, not void ab initio.

Washington Court Dismisses Plaintiff’s Truth in Lending Act (TILA) Complaint

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The court in deciding Pruss v. Bank of Am. Na, 2013 U.S. Dist. LEXIS 157286 (W.D. Wash. Nov. 1, 2013) found that the plaintiff’s claims were barred by time and or otherwise inadequately pleaded. Therefore, the court granted the defendants’ motion to dismiss.

Pruss, the plaintiff, alleged he had been injured financially by unfair and deceptive lending practices, and brought a complaint with five causes of action. The 5 causes included: (1) predatory lending; (2) violations of the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”); (3) slander of title; (4) breach of duty; and (5) Consumer Protection Act violations. Defendants subsequently filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), which the court granted.

In regards to the plaintiff’s predatory lending claim, the court noted that the plaintiff failed to present any case law or Washington state statute recognizing a claim for “predatory lending.” Further, because all of plaintiff’s other claims were time-barred or were deemed by the court as failing to state a claim, the court granted the defendants’ motion, thus dismissing the plaintiff’s claims.