Tag Archives: mortgage

Vermont Court Rejects Homeowners’ Request to Dismiss Complaint for Lack of Standing

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The court in deciding Deutsche Bank National Trust v. Merritt, 2013 Vt., 225 (Vt. Oct. 1, 2013) ultimately

Defendant homeowners sought to appeal the lower court’s order, which granted substitute plaintiff bank’s motion to dismiss the foreclosure action.

The homeowners raised several arguments regarding the bank’s standing to enforce homeowners’ promissory note, and sought an order dismissing the case. The defendant specified the bank’s lack of standing as the basis for the dismissal request, ordering that any legal charges, assessments and fees assessed by a bank against homeowners in connection with this action be removed from their mortgage debt, and ordering that initial plaintiff OneWest return all mortgage payments received from homeowners with statutory interest.

After considering the defendant’s claim, this court followed the lower court in dismissing the case.

Georgia Court Dismisses Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq Claim

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The court in deciding Morrison v. Bank of Am., N.A., 2013 U.S. Dist. (N.D. Ga. Dec. 16, 2013) eventually granted Bank of America, N.A.’s motion to dismiss.

Plaintiff defaulted on her loan obligations after taking a loan from bank of America. Plaintiff asserted that she “suspended” payments because the defendant failed to properly identify the person that was the holder in due course of legal title or the ability to enforce the note under O.C.G.A. § 11-3-309.

Plaintiff asserted that foreclosure would be wrongful because the defendant lacked standing to foreclose on the property, also that the defendant violated the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq (“FDCPA“), and Georgia law by failing to validate the debt and provide an accounting of plaintiff’s mortgage. Lastly, plaintiff asserted that the defendant failed to obtain Secretary of U.S. Department of Housing and Urban Development approval to be designated as Foreclosure Commissioner, in violation of 12 U.S.C. § 3754.

Plaintiff also sought to have the security deed and note declared fully satisfied, to enjoin foreclosure of the property, to compel production of the plaintiff’s note and any assignments, and to require the defendant to validate the alleged debt. Bank of America moved to dismiss Plaintiff’s Complaint for failure to state a claim.

The court considered the plaintiff’s assertions, and categorically dismissed them in granting the defendant’s motion to dismiss.

New York Court Denies Defendant’s Cross-Move to Dismiss Plaintiff’s Complaint Pursuant to CPLR 3211(a)(3)

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The court in deciding Waterfall Victoria Master Fund, Ltd. v Hayle, 2013 N.Y. Misc. (N.Y. Sup. Ct. Dec. 11, 2013) denied the defendants’ cross-motion to dismiss the complaint based upon the plaintiff’s lack of standing is denied. The court granted the motion proffered by the plaintiff.

Plaintiffs brought an action to foreclose on the defendant’s property, and sought summary judgment in its favor against the defendant’s affirmative defenses and counter claims. Defendants, Parkers, opposed the plaintiff’s motion and cross-moved to dismiss the complaint pursuant to CPLR 3211(a)(3), asserting that plaintiff lacked standing to maintain the action.

The court found that the plaintiff’s well documented motion which included a copy of the note endorsed in blank, the written assignment of the mortgage by MERS, the subsequent assignments of the mortgage and note to Waterfall Victoria Master Fund, and the assignment of the mortgage and note Waterfall Victoria Master Fund, established its entitlement to summary judgment, including its standing. As such the court granted the plaintiff’s motion.

California Court Holds that the Securitization of Mortgage Loan did not Nullify Rights Granted Under Deed, Including the Right to Foreclose

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The court in deciding Rivac v. Ndex West LLC, 2013 U.S. Dist. (N.D. Cal. Dec. 17, 2013) granted the motion to dismiss tendered by the defendant.

Plaintiffs filed a complaint that alleged eight causes of action including; (1) breach of contract, (2) breach of implied agreement, (3) slander of title, (4) wrongful foreclosure, (5) violation of § 17200, (6) violation of 15 U.S.C. § 1601, et seq. (TILA) (7) violation of 12 U.S.C. § 2605 (RESPA), and (8) violation of 15 U.S.C. § 1692, et seq. (FDCPA).

After considering the plaintiff’s contentions, the court granted the defendant’s motion to dismiss. The court then held that the securitization of borrowers’ mortgage loan did not nullify any rights granted under a deed of trust, including the right to foreclose against the borrowers’ real property upon the borrowers’ default.

Further, the absence of the original promissory note in the nonjudicial foreclosure did not render the foreclosure invalid. Moreover, the court held that mere allegations that documents related to the deed of trust were robo-signed by persons who had no authority to execute the documents had no effect on the validity of the foreclosure process.

Lastly, the court held that there was no breach of the deed of trust since the beneficiary was expressly authorized to sell the underlying note, and the borrowers themselves did not perform under the deed of trust.

Texas Court Dismisses Claims of Texas Debt Collection Act and Texas Property Code Violations

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The court in deciding Katz v. JP Morgan Chase Bank N.A., 2013 U.S. Dist., (S.D. Tex. Dec. 18, 2013) granted the motion to dismiss put forth by the defendant.

Plaintiff Katz alleged that defendant JP Morgan: (1) violated the Texas Property Code by failing to give proper notice because all transfers of the lien were not recorded timely; (2) was unjustly enriched because Katz may have been paying the wrong lender or account and that foreclosure would yield value above the amount owed; (3) violated or will violate the Texas Business and Commerce Code because defendants had failed to produce the original note with all transfers and assignments, thus the defendant could not enforce the mortgage without the promissory note; and that the defendant (4) violated the Texas Debt Collection Act by taking actions to collect on the note despite having no authority to collect on the note.

After methodically considering the plaintiff’s assertions, the court categorically dismissed them.

Illinois Court Rejects “Show Me the Note” Argument

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The court in Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380 (Ill. App. Ct. 1st Dist. 2013) rejected show-me-the-note argument proffered by the defendant.

Defendants claimed that Parkway did not demonstrate proper standing to foreclose because it did not establish the fact that it was the true holder of its own loan. The basis of this argument was the contention that the defendants requested Parkway to produce the “original title” or original notes on numerous occasions but Parkway failed to do so.

The court easily resolved the first part of this argument by finding that the defendants did not explain what an “original title” was. Even so, the court found that the defendants also failed to cite any authority as to why such a document would be a necessary element of proof in a foreclosure case, or why it might be relevant.

The court found that the mortgagors were personally served and that was all that was necessary in this case. With regard to the mortgagors’ claim that the mortgagee did not establish that it was the true holder of the loan, the court held that production of the original note in open court was not a required element of proof in a foreclosure case under 735 ILCS 5/15-1506(b) (2010).

Defaulting Mortgagor Lacked Standing Under 11 U.S.C.S. § 1109(b)

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The court in deciding In re Residential Capital, LLC, 2013 Bankr. (Bankr. S.D.N.Y., 2013) held that the plaintiff Scott was not a party in interest and therefore lacked standing to assert a violation of the automatic stay. The court thus denied his motion.

Before this court was Phillip Scott’s motion to (1) determine that bankruptcy estate owns title to the note, (2) void state court title transfer, and (3) enjoin post petition state court prosecution.

Through his Motion, Scott sought: (1) declaratory relief determining that the bankruptcy estate owns title to the note; (2) injunctive relief enjoining, restraining, and prohibiting the mortgage foreclosure action in the Supreme Court of New York, County of Westchester; and (3) judgment for costs, including attorneys’ fees.

This court held that a mortgagor who defaulted on a note he executed in 2005 did not have standing under 11 U.S.C.S. § 1109(b) to seek a ruling from the bankruptcy court that a business that declared Chapter 11 bankruptcy after it acquired and transferred a mortgage he executed with the note held title to real property that secured the note, and an order enjoining a foreclosure action which a bank filed against the property in a New York court. The court also held that the mortgagor was not a creditor in the debtors’ bankruptcy estate, the note and mortgage were not owned or serviced by any of the debtors, and none of the debtors was a party to the foreclosure action.

Thus this court denied the mortgagor’s motion for an order declaring that the debtors’ bankruptcy estate owned title to the note, voiding a state court title transfer, and enjoining the foreclosure action that was filed in state court.