Tag Archives: Mortgage Electronic Recording System

Tennessee Court Dismisses TILA, RICO, and RESPA Claims

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The Tennessee court in deciding Mhoon v. United States Bank Home Mortg., 2013 U.S. Dist. (W.D. Tenn., 2013) dismissed the complaint of the plaintiff pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii).

Plaintiff [Mhoon] filed a complaint against defendant U.S. Bank. This case was an action to prohibit a non-judicial foreclosure of real property. The complaint alleged that U.S. Bank was engaged in efforts to illegally foreclosure on Mhoon’s home. The complaint also alleged that U.S. Bank acted with gross negligence and violated its duty of good faith.

In addition, the complaint alleged breach of contract because U.S. Bank failed to send any and all acceleration, default, and foreclosure notices to Mhoon in the manner required by the deed of trust.

The complaint further alleged U.S. Bank violated Truth in Lending Act (“TILA”); violated Real Estate Settlement Procedures Act (“RESPA”) by failing to provide a good faith estimate; violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) statute and engaged in fraud; and lacked standing to initiate foreclosure proceedings on the Property.

The court ultimately held (1) plaintiff has not sufficiently plead a breach of contract claim; (2) plaintiff’s claims for gross negligence and violation of the duty of good faith fail as a matter of law; (3) plaintiff’s allegations based on violations of the TILA and the RESPA were barred by the applicable statute of limitations and failed to state a claim because U.S. Bank was not the originating lender; and (4) plaintiff’s claims for fraud violations of the RICO, and lack of standing all failed as a matter of law.

For those reasons, this court dismissed the plaintiff’s complaint pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii).

Ohio Court Held That the Promissory Note was a Negotiable Instrument Subject to Relevant Provisions of R.C. Chapter 1303

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The court in deciding Bank of Am., N.A. v. Pasqualone, 2013-Ohio-5795 (Ohio Ct. App., Franklin County, 2013) ultimately decided that the motion to strike moot, thus this court affirmed judgment of the lower court.

This court held that the promissory note was a negotiable instrument subject to relevant provisions of R.C. Chapter 1303 because it contained a promise to pay the lender the amount of $100,000, plus interest, and did not require any other undertakings that would render the note nonnegotiable. Moreover, because Bank of America was the holder of the note it was a person entitled to enforce the note pursuant to R.C. 1303.31(A)(1).

The court noted that based on the authorization, the note became payable to the bank as an identified person and, because the bank was the identified person in possession of the note, it was the holder of the note. Further, as the property owner’s defenses to the mortgage foreclosure did not fit the criteria of a denial, defense, or claim in recoupment under R.C. 1303.36 or R.C. 1303.35, the bank’s right to payment and to enforce the obligation was not subject to the owner’s alleged meritorious defenses.

Ohio Court Decided There Was no Basis to Challenge Standing Through a Civ.R. 60(B) Motion

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The court in deciding Deutsche Bank Nat’l Trust Co. v. Santisi, 2013-Ohio-5848 (Ohio Ct. App., Trumbull County, 2013) ultimately denied the motion to vacate and affirmed the lower court’s decision.

Santisi appealed the lower court’s decision and raised the following assignments of error:

1) plaintiff (appellee) failed to present an affidavit or any other record evidence sufficient to meet its burden to establish it had standing to pursue a foreclosure action.

2) Plaintiff (appellee) failed to establish standing as there was no admissible evidence to explain material inconsistencies regarding the promissory note.

The bank asserted its standing to foreclose the mortgage by alleging that it was the holder and owner of a note in its complaint, and that allegation was legally sufficient to establish the bank’s standing to foreclose. The bank also provided evidence of standing by virtue of holding the note. The also bank established its interest in both the note and the mortgage, which was not disputed by the mortgagor prior to judgment and, thus, properly invoked the trial court’s jurisdiction. Based on these facts this court upheld the lower court’s decision.

 

California Court Denies Dismissal of Wrongful Foreclosure Claim

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The California court in Engler v. ReconTrust Co., 2013 U.S. Dist. 179950 (C.D. Cal. 2013) dismissed all but one of the plaintiff’s complaint.

Plaintiff originally filed suit against defendants BAC and MERS on June 6, 2012. On March 1, 2013, the lower court dismissed plaintiff’s complaint with leave to amend.

The plaintiff’s current complaint alleged thirteen causes of action: (1) Declaratory Relief; (2) Violation of RICO; (3) “Common Law Conspiracy;” (4) “Filing of Invalid Lien;” (5) “Fraudulent Conveyance Deceptive Practices Code of Federal Regulations 17 CFR Parts 204-249;” (6) Fraudulent Concealment; (7) Fraudulent Inducement; (8) Wrongful Foreclosure; (9) Violation of the Real Estate Settlement Procedures Act; (10) Violation of the Fair Credit Reporting Act; (11) Violation of the Federal Fair Debt Collection Practices; (12) Violation of the Truth in Lending Act; and (13) Constructive Fraud.

After considering the plaintiff’s contentions the court found that the plaintiff’s first, second, third, fourth, fifth, sixth, seventh, ninth, tenth, eleventh, twelfth, and thirteenth causes of action were rightfully dismissed with prejudice. However, defendants’ motion to dismiss plaintiff’s eighth cause of action was denied. Accordingly, the only cause of action remaining in Plaintiff’s claim was the Eighth Cause of Action.

Ohio Court Dismisses Claims Asserting that MERS Could Not Act as Nominee

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The court in deciding Cline v. Mortg. Elec. Registration Sys., 2013-Ohio-5706 (Ohio Ct. App., Franklin County 2013) overruled appellant’s seven assignments of error, thus this court upheld the judgment of the lower court.

The lower court granted MERS’ motion after concluding that, because appellant voluntarily signed the mortgage and agreed to the existing lien, the mortgage could not constitute a cloud on appellant’s title subject to R.C. 5303.01. On appeal, appellant argued the original loan was originated by CBSK, a company no longer in business; therefore, any agreement between CBSK and MERS that MERS would act as nominee for CBSK is void.

In appellant’s view, because the agreement between CBSK and MERS was void, the note and mortgage were no longer in effect and constituted a cloud upon her title. Appellant argued that, unlike Unger, which concerned mortgage assignments, this matter was different as it concerns the underlying mortgage itself.

Upon review, this court found that the appellant’s complaint failed to state a claim upon which relief can be granted, and, thus, the trial court did not err in dismissing appellant’s complaint pursuant to Civ.R. 12(B)(6). Accordingly, all of the appellant’s claims were overruled.

Washington Court Upholds Dismissal of RESPA Claims

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The court in deciding Bhatti v. Guild Mortg. Co., 2013 U.S. App. 25659 (9th Cir. Wash. 2013) ultimately upheld the lower court’s decision by dismissing the plaintiff’s RESPA claims.

Plaintiffs Nusrat Bhatti and Erfan Semuel filed a complaint in Washington state court against Guild Mortgage Co. and MERS for quiet title, declaratory judgment, and violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601.

Defendants filed a Fed. R. Civ. P. 12(b)(6) motion to dismiss. The lower court granted defendants’ motion to dismiss. Plaintiffs appealed, after considering the plaintiff’s appeal, this court affirmed the lower court.

This court held that the lower court did not abuse its discretion in ruling on defendants’ 12(b)(6) motion. This court also found that defendants did not violate the DTA’s requirement that a deed of trust’s beneficiary hold the note when it appoints a successor trustee

Accordingly, the lower court’s judgment was affirmed.

 

Illinois Court Finds that Assignment was Proper, Thus Wells Fargo Could Foreclose

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The court in deciding Wells Fargo Bank, N.A. v. Abatangelo, 2013 IL App (1st) 130423-U (Ill. App. Ct. 1st Dist. 2013) affirmed the lower court’s ruling in favor of plaintiff Wells Fargo. The court determined Wells Fargo had standing to bring the foreclosure action.

Mr. Abatangelo challenged the lower court’s grant of summary judgment on Wells Fargo’s foreclosure complaint, specifically its finding that Wells Fargo had standing to foreclose on the mortgage. On this appeal, Mr. Abatangelo contended that the lower court erred in granting summary judgment because (1) the mortgage contract did not properly assign the right to foreclose to Wells Fargo; and (2) the trial court improperly considered new arguments raised by Wells Fargo for the first time in a reply brief in support of their motion to dismiss.

After considering the arguments put forward by Abatangelo the court affirmed the lower court decision.