Tag Archives: MERS

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.

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.

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.

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.

BAC Not Required to Evidence Holding Note in Texas Fourth Court of Appeals

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In Lowery v. Bank of America, N.A., 2013 Tex. App. LEXIS 13114 (Tex. App. San Antonio Oct. 23, 2013), the Texas Fourth Court of Appeals affirms summary judgment for BAC Home Loan Servicing, LP dismissing homeowner’s claim that without evidence of holding the note, BAC lacked standing to foreclose. The homeowner sought an injunction from the nonjudicial foreclosure initiated by BAC in 2011, alleging wrongful foreclosure as the note did not name BAC or MERS, and further alleging that MERS improperly assigned the note to BAC. The court cites the Reinagel holding that the assignment of mortgage presumptively assigns the note as well, and that BAC is not required to show evidence of holding the note. On these grounds, the court found the homeowner produced less than a scintilla of evidence to show BAC lacked authority to foreclose, and further failed to show the signatory at MERS lacked authority.

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.