Tag Archives: Mortgage Electronic Recording System

Court Dismisses Plaintiff’s Wrongful Foreclosure, Fraud, Quiet Title and Declaratory Relief Claims

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The plaintiff in Cuddeback v. Bear Stearns Residential Mortg. Corp., 2013 U.S. Dist. LEXIS 152989 (W.D. Wash. Sept. 10, 2013) brought claims against Bear Stearns, EMC, Wells Fargo (collectively, “Defendants”) for wrongful foreclosure, fraud, quiet title and declaratory relief pursuant to Washington law. The plaintiff also sought damages arising from violations of the Real Estate and Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607, and the Truth in Lending Act (“TILA”), 15 U.S.C. § 1641(g).

Defendants filed a motion to dismiss plaintiff’s complaint pursuant to Fed. R. Civ. P. 12(b)(6). The court granted the defendants’ motion to dismiss as they found that plaintiff failed to state a claim for which relief could be granted.

Texas Court Finds That MERS Had Authority to Assign, Thus Defendant Could Enforce Note

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The plaintiff in Hines v. Wells Fargo Bank, N.A., 2013 U.S. Dist. LEXIS 153895 (S.D. Tex. Oct. 28, 2013), contended that defendants could not show an unbroken chain of title to enforce the note because MERS had no authority to assign the note to Deutsche Bank. However, the court eventually dismissed the plaintiff’s claims with prejudice.

The plaintiff sought a declaration from the court that any foreclosure of her home would be wrongful because none of the defendants had standing to foreclose. The plaintiff claimed that this was due to defects in the assignment and securitization process.

The plaintiff’s wrongful foreclosure allegations could be grouped into two categories: (1) MERS lacked authority to assign the deed and note from First NLC to Deutsche Bank; and (2) defendants did not comply with the securitization requirements of the applicable Pooling and Servicing Agreement (“PSA”). However, the court found that under recent Fifth Circuit case law, both of the plaintiff’s grounds for her claims failed. Thus, the court decided that her wrongful foreclosure claim must be dismissed.

Michigan Dissmisses Plaintiff’s Action Seeking to Set Aside Sale of His Residence

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The court in deciding Liddell v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 153897 (E.D. Mich. Oct. 28, 2013) granted the defendants’ motion to dismiss plaintiff’s complaint.

Plaintiff commenced the action seeking to set aside a sheriff’s sale of his residential property. Plaintiff’s Complaint raised the following claims: Count I, Fraudulent Misrepresentation; Count II, Estoppel; Count III, Negligence; Count IV, Violation of Michigan’s Occupational Code, Mich. Comp. Laws §§ 339.915 and .918; and Count V, Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692k.

Defendants maintained that all of plaintiff’s claims challenging the foreclosure sale were subject to dismissal because plaintiff failed to redeem the property within the redemption period. Defendants further argued that even if plaintiff’s claims were not barred by the expiration of the statutory redemption period, his claims were subject to dismissal because he failed to state any valid claims upon which relief can be granted.

The Court agreed that plaintiff’s complaint failed to allege any claims upon which relief may be granted.

Texas Court Dismisses Plaintiff’s Wrongful Foreclosure Action, as MERS was Authorized to Assign the Note and Deed of Trust to Defendant

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The court in deciding Perez v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 153947, 2013 WL 5781208 (W.D. Tex. Oct. 25, 2013) dismissed the plaintiff’s wrongful foreclosure.

Plaintiff alleged that the defendant’s foreclosure action was wrongful. Also plaintiff alleged that the deed of trust was not enforceable due to that lack of ownership in the note by the defendants.

Plaintiff asserted that First NLC, rather than MERS, was the only party authorized to assign the note and deed of trust to the defendant; she asserted that assignment is only complete upon recording, and recording has not been effectuated; and she asserted that the deed of trust and the transfer of lien document were fraudulently created, and therefore ineffective as a security instrument and assignment, respectively. Additionally, plaintiff asserted that the note and deed of trust were not enforceable because they had been split.

Defendant filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendant argued that plaintiff has not stated a claim for wrongful foreclosure because she has not alleged that her home had been foreclosed.

Ultimately, the court rejected the plaintiff’s claims and the broader legal theories she asserted; however, the court granted the plaintiff leave to amend to allow her an opportunity to assert a valid claim.

California Court Determines Plaintiff’s Claims are Barred by Res Judicata

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The court in deciding Maxwell v. Deutsche Bank Nat’l Trust Co., 2013 U.S. Dist. LEXIS 155930, 2013 WL 5882457 (N.D. Cal. Oct. 30, 2013) concluded that the plaintiff’s claims were barred by res judicata and therefore granted [with prejudice] the defendant’s motion to dismiss.

Plaintiffs brought this action against defendants Deutsche, OneWest, and MERS. Plaintiff alleged various violations of California and federal consumer protection statutes. The plaintiff asserted a claim for an invalid transfer of a trust deed, and sought declaratory and injunctive relief.

The defendants moved to dismiss the proceedings, arguing that the claims were barred by res judicata. The court, after considering the evidence presented, concluded that the plaintiff’s claims were barred by res judicata. Accordingly, the court granted the defendant’s motion to dismiss.

Northern District of California Court Dismisses Plaintiff’s Claims for Lack of Subject Matter Jurisdiction

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The court in deciding Murphy v. Bank of N.Y. Mellon, 2013 U.S. Dist. LEXIS 155923, 2013 WL 5883675 (N.D. Cal. Oct. 29, 2013) dismissed the plaintiff’s action without prejudice.

The plaintiff in this case brought this action against defendants [Bank of New York Mellon and MERS] for (1) violations of 18 U.S.C. § 1001; (2) violations of 18 U.S.C. § 1341; (3) violations of the Fair Debt Collection Practices Act (“FDCPA”); (4) violations of California’s Business and Professions Code Section 17200; (5) slander of title; (6) cancellation of void instruments; (7) quiet title; and (8) wrongful foreclosure. Compl., ECF No. 1.

The plaintiff’s complaint revolved around the main theory that the defendants lacked the authority to execute any foreclosure proceedings. After considering the plaintiff’s arguments, the court first concluded that the plaintiff’s action must be dismissed for lack of subject matter jurisdiction. Second, the court found that the federal claims in the operative complaint failed as a matter of law.

Michigan Court Finds MERS Had Capacity to Assign Mortgage, and Bank of New York Mellon Had Capacity to Accept MERS’s Assignment of the Mortgage

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The court in Maslowski v. Mortgage Elec. Registration Sys., 2013 U.S. Dist. LEXIS 155970, 2013 WL 5876608 (W.D. Mich. Oct. 31, 2013) found that dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate.

The plaintiff in this case [Maslowski] challenged a foreclosure and foreclosure sale. Essentially, the plaintiff claimed that the foreclosure proceedings were invalid because defendant MERS lacked capacity to assign the mortgage, and defendant Bank of New York Mellon lacked capacity to accept MERS’s assignment of mortgage.

The court rejected the plaintiff’s reasoning and noted that once the redemption period has expired, a plaintiff must meet a high standard for a federal court to invalidate or set aside a mortgage foreclosure by advertisement in Michigan. In particular, a plaintiff must show both fraud related to the foreclosure process itself and that he or she was prejudiced by the defendant’s failure to comply with the foreclosure statute’s requirements. The Court agreed with the lower court and found that the plaintiff had made no allegations or showing of prejudice, and that therefore, dismissal under Fed. R. Civ. P. 12(b)(6) is appropriate.