Tag Archives: MERS

California Court Dismisses Plaintiff’s Action Alleging Violations of RESPA, HOEPA, UCL & Negligent Misrepresentation

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The court in deciding Monreal v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 151731 (S.D. Cal. Oct. 22, 2013) granted the defendants’ motion to dismiss plaintiff’s claims arising under federal law with prejudice, and declined to exercise supplemental jurisdiction over the plaintiff’s remaining state-law claims. Therefore, the remaining state-law claims are dismissed without prejudice.

Plaintiff alleged four causes of action against Deutsche Bank, GMAC, ETS, and MERS, including: (1) violation of the UCL; (2) negligent misrepresentation; (3) violation of RESPA; and (4) violation of HOEPA. In total plaintiff alleged two claims arising under federal law, RESPA and HOEPA, and two claims arising under state law, negligent misrepresentation and violation of the UCL.

In deciding the matter at hand, the court decided that their subject matter jurisdiction was premised on federal question jurisdiction over the claims arising under federal law, and supplemental jurisdiction over the pendent state-law claims.

Accordingly, because the court found that plaintiff failed to state a viable cause of action under either RESPA or HOEPA, the court dismissed the federal causes of action with prejudice, and declined to exercise supplemental jurisdiction over the remaining state-law claims.

As a result, the Court did not address the merits of the plaintiffs’ state-law causes of action.

Texas Court Finds Plaintiff’s “Split-the-Note” Theory Without Merit

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The court in deciding Morlock, L.L.C. v. JPMorgan Chase Bank, N.A., 2013 U.S. Dist. LEXIS 153386 (S.D. Tex. Oct. 25, 2013) ultimately dismissed plaintiff’s bifurcation theory based complaint.

Plaintiff alleged that the deed of trust had been “executed and delivered . . . to secure MERS” and that it “was allegedly assigned to defendant Chase by MERS.” Plaintiff further alleged, the deed of trust and assignment, although appearing valid on its face, was invalid and of no force or effect because, MERS was not the holder of the original note that was secured by the deed of trust.

Accordingly, the plaintiff argued, the assignment by MERS was not valid and defendant Chase was not the owner and holder of the note. Therefore, Chase had no right or authority to post the property for a trustee’s Sale.

Chase alleged that the plaintiff’s argument against the validity of the assignment came from the theory that the ‘bifurcation’ of the note and deed of trust renders the deed of trust invalid. Chase argued that Texas courts have rejected the “bifurcation theory” and that plaintiff had therefore failed to state a claim.

The court ultimately granted Chase’s Rule 12(b)(6) motion to dismiss and dismissed the action with prejudice.

California Court Denies Petition for Preliminary Injunction on Foreclosure Proceeding

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The court in deciding Vazquez v. Select Portfolio Servicing, 2013 U.S. Dist. LEXIS 152454 (N.D. Cal. Oct. 23, 2013) denied the plaintiff’s petition for a preliminary injunction prohibiting defendants from proceeding with the foreclosure sale of his home.

Plaintiff alleged that MERS claimed to have a legal and effective lien on the property, and that it owned the note and mortgage without providing the plaintiff proof of those claims. Plaintiff asserted that he had the right to inspect the original note and deed of trust, pursuant to the Truth in Lending Act, 15 U.S.C. §§ 1601–1667f, and U.C.C. § 3-501.

The plaintiff further alleged that he had proof that the foreclosing entities did not have standing to foreclose. Id. Plaintiff asserted that defendants did not hold any instrument, note, or deed that would entitle them to foreclose.

The court denied the plaintiff’s verified petition for injunction, concluding that plaintiff failed to establish a likelihood of success on the merits of any of his potential claims.

California Court Dismisses Plaintiff’s Claims of Federal and State Law Violation

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The court in deciding Brashears v. Bank of Am. Home Loans, 2013 U.S. Dist. LEXIS 152478 (C.D. Cal. Oct. 22, 2013) dismissed the plaintiff’s complaint, which alleged violations of federal and state law in connection with the issuance of a mortgage loan.

Plaintiff filed a complaint against defendants Bank of America, Countrywide Home Loans, The Bank of New York Mellon, ReconTrust Company, CWALT, Inc., and MERS alleging violations of federal and state law in connection with the issuance of a mortgage loan and the subsequent foreclosure of plaintiff’s property.

Plaintiff’s complaint alleged: (1) slander of title; (2) violation of California Penal Code § 470(b), (d); (3) violation of the California Civil Code §§ 2923.55, 2924.12 and 2924.17;  (4) intentional and negligent misrepresentation; (5) fraud, deceit and concealment; (6) violation of California Civil Code § 1572; (7) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692g; (10) quiet title; (11) violation of California Business and Professions Code § 17200; (12) violation of the Unruh Civil Rights Act, California Civil Code § 51; and (13) declaratory relief.

After considering the arguments alleged by the plaintiff, the court ultimately granted the defendants’ motion to dismiss.

Dirty REMICs: A Debate

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Brad, Joshua Stein and I have posted Dirt Lawyers and Dirty REMICs: A Debate to SSRN (also on BePress). Brad and I had posted our side of the debate at various points, but the entire back and forth is contained in this one handy download. The abstract reads:

In mid-2013, Professors Bradley T. Borden and David J. Reiss published an article in the American Bar Association’s PROBATE & PROPERTY journal (May/June 2013, at 13), about the disconnect between the securitization process and the mechanics of mortgage assignments. The Borden/Reiss article discussed potential legal and tax issues caused by sloppiness in mortgage assignments.

Joshua Stein responded to the Borden/Reiss article, arguing that the technicalities of mortgage assignments serve no real purpose and should be eliminated. That article appeared in the November/December 2013 issue of the same publication, at 6.

Stein’s response was accompanied by a commentary from Professors Borden and Reiss, which also appeared in the November/December 2013 issue, at 8.

California Court Finds That the Plaintiff’s Complaint Should be Dismissed as Defendant Owed no Fiduciary Duty

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The court in deciding Lawrence v. Sadek, 2013 U.S. Dist. LEXIS 153074 (C.D. Cal. Oct. 21, 2013) dismissed the plaintiff’s claims.

The plaintiff’s complaint alleged that defendant breached a fiduciary duty by allowing the plaintiff to enter the loan agreement knowing that she would default.

Plaintiff claimed, defendant owed her a fiduciary duty because Quick Loan, plaintiff’s lender, was a “client” of Peterson’s employer and co-defendant ETS Services. Peterson in response, argued that (1) she did not owe a fiduciary duty to plaintiff because neither she nor her employer ETS Services were parties to the loan transaction, and (2) even if she or her employer were parties to the transaction, lenders generally do not owe a fiduciary duty to borrowers.

Defendant Peterson filed a motion to dismiss pursuant to FRCP 12(b)(6). The Court held a hearing and after considering the parties’ arguments, the court found that the plaintiff’s claim should be dismissed because Peterson did not owe a fiduciary duty to plaintiff.

California Court Dismisses Plaintiffs Suit Brought for Wrongful Foreclosure Defendants Bank of America & Freddie Mac

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The court in deciding Bergman v. Bank of Am., N.A., 2013 U.S. Dist. LEXIS 153173 (N.D. Cal. Oct. 23, 2013) dismissed the plaintiff’s complaint.

Most of plaintiffs’ claims were based on one of two legal theories.

First, the plaintiffs based their arguments on the alleged sale of the DOT from Bank of America to the Securitized Trust, the plaintiffs argued that the sale divested Bank of America of its beneficial interest in the DOT. Plaintiff also alleged that because the DOT was never properly assigned, the Securitized Trust also did not hold the beneficial interest. They alleged that, accordingly, the true beneficiaries are the Securitized Trust’s certificate holders.

Second, the plaintiffs based their argument on the alleged involvement of PK Properties in illegal bid-rigging activities, including activities that allegedly tainted the trustee’s sale for the Property.

The court, after considering the arguments provided by the plaintiff, granted the defendants’ motion and dismissed the complaint.