Tag Archives: nominee

Georgia Court Finds that MERS Was Within Its Right in Transferring and Assigning Deed, Along with Power of Sale, to Another Party

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The court in deciding Brannigan v. Bank of Am. Corp., 2013 U.S. Dist. (N.D. Ga., 2013) found that MERS could transfer and assign the deed, along with the power of sale, to another party.

After Plaintiffs defaulted on their mortgage, U.S. Bank initiated non-judicial foreclosure proceedings. Plaintiffs Wade and Angelina Brannigan initiated this action and requested that the court set aside a foreclosure sale on the grounds of wrongful foreclosure.

Plaintiff asserted that U.S. Bank, Bank of America, the Albertelli Firm, and MERS conspired to file an alleged ‘Transfer and Assignment,’ whereby MERS purported to transfer, sell, convey and assign to U.S. Bank all of its right, title and interest in and to the security deed. Plaintiffs argued, “MERS retained no interest in their security deed to transfer, and said transfer and assignment were not only fraudulent but a legal nullity” as plaintiffs’ mortgage loan had already been assigned to LaSalle Bank.

In regards to the plaintiff’s claim against MERS, the court found that the plaintiffs executed a security deed listing MERS as grantee and nominee for the lender and its successors and assigns. By the terms of the security deed, MERS could transfer and assign the deed, along with the power of sale, to another party, and did so by transferring it to U.S. Bank. Moreover, the court noted that under Georgia law, the security deed assignee “may exercise any power therein contained,” including the power of sale in accordance with the terms of the deed. O.C.G.A. § 23-2-114.

Therefore, even if Plaintiffs had standing to challenge the assignment, by the terms in the security deed U.S. Bank was within its authority to foreclose after Plaintiffs’ default.

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The court in deciding Brannigan v. Bank of Am. Corp., 2013 U.S. Dist. (N.D. Ga., 2013) agreed with the defendants that the plaintiffs’ complaint failed to state a claim upon which relief could be granted and was to be dismissed under Rule 12(b)(6).

Plaintiffs filed an action asserting several state-law claims related to wrongful foreclosure. The claims against the defendants also included: fraud, intentional misrepresentation, and deceit (Count One); negligent misrepresentation (Count Two); negligence (Count Three); wrongful foreclosure (Count Four); and violations of the Fair Credit Reporting Act (Count Six).

Plaintiffs contended that the defendants wrongfully foreclosed on their property.
Plaintiffs challenged the assignment of the security deed from MERS to U.S. Bank as wholly void, illegal, ineffective and insufficient to transfer any interest to anyone.

Defendants argued that the plaintiffs lacked standing to challenge the validity of the assignment. The court ultimately agreed. The court noted that the plaintiffs could not challenge the assignment’s validity because they were not parties to the assignment or intended third-party beneficiaries.

Next, the plaintiffs argued that the assignment from MERS to U.S. Bank was invalid because after the mortgage loan was assigned to LaSalle Bank, MERS retained no interest in the plaintiff’s security deed to transfer.

The court noted that the plaintiffs executed a security deed listing MERS as grantee and nominee for the lender and its successors and assigns. By the terms of the security deed, MERS could transfer and assign the deed, along with the power of sale, to another party, and did so by transferring it to U.S. Bank. Therefore, the court reasoned that even if the plaintiffs had standing to challenge the assignment, by the terms in the security deed, U.S. Bank was within its authority to foreclose after the plaintiffs’ default.

Finally, the plaintiffs claimed that the defendant Albertelli Firm’s notice of default was inadequate because it “failed to properly identify the secured creditor, note holder and loan servicer.” The court found that the defendants complied with Georgia’s notice requirements. Therefore, the plaintiff could not state a claim for wrongful foreclosure.

Alabama Court Reverses Lower Court’s Decision Granting Summary Judgment to Foreclosing Entity

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The court in deciding Sturdivant v. BAC Home Loan Servicing, LP, 2013 Ala. Civ. App. (Ala. Civ. App., 2013) reversed the lower court’s ruling that granted summary judgment to a foreclosing entity with respect to its complaint in ejectment against a mortgagor under Ala. Code § 6-6-280(b).

The court’s decision was based on the fact that the foreclosing entity presented no evidence that it was either the assignee of the mortgage or the holder of the note at the time it foreclosed, it failed to present a prima facie case that it had the authority to foreclose and, thus, had valid title to or the right to possess the property–one of the elements of its claim in ejectment.

California Court Denies Claims that Deficiencies Rendered any Security Interest in the Deed of Trust Invalid

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The court in deciding Sollenne v. United States Bank Nat’l Ass’n, 2013 U.S. Dist. (S.D. Cal., 2013) ultimately found that the plaintiffs’ claims premised upon the securitization of the loan and violations of the PSA were to be dismissed. The court also found that the plaintiffs could not require the defendants to take any actions to prove their authority unless such factual allegations are presented.

Plaintiffs alleged three causes of action: 1) quiet title; 2) declaratory relief to determine the validity of the deed of trust on the date the note was assigned and to determine if any defendant has authority to foreclose; and 3) injunctive relief to stop further collection activity, including the sale of the property. Plaintiffs’ desired remedies also included a request for an order compelling the defendants to transfer or release legal title and any alleged encumbrances, and possession of the property to plaintiffs.

Plaintiffs also alleged that the procedures in the pooling and services agreement (PSA) for the trust had not been followed. They alleged that the note and the mortgage, the debt or obligation evidenced by the note and deed of trust were not properly assigned and transferred from CMG (the originator) to USBNA (the trustee of the Trust) in accordance with the PSA. Plaintiffs claimed the PSA was violated by a failure to complete the assignment before the closing date, and a failure to provide a complete and unbroken chain of transfers and assignments. Plaintiffs claimed that no perfected chain of title exists transferring the mortgage loan from CMG to the Trust.

In the alternative, Plaintiffs claimed that Nationstar alleged to be the holder and owner of the note and beneficiary of the deed of trust, but that the note identified the originator as the holder, and there is no perfected chain of title between CMG and Nationstar. Plaintiffs claimed that no documents or records have been produced to demonstrate the note or deed of trust was properly transferred prior to the closing date, and that any documents  transferring it after the closing date are void under the PSA.

Plaintiffs listed the following deficiencies which they contended render invalid any security interest in the deed of trust: 1) the separation of title, ownership and interest in the note and deed of trust; 2) the lack of assignments to or from the intervening entities when the loan was sold; 3) the failure to assign and transfer the beneficial interest in the DOT to Defendants in accordance with the PSA; 4) the failure to endorse, assign, and transfer the note to USBNA in accordance with the PSA and California law; 5) that there were no assignments of beneficiary or endorsements of the note to each intervening entity; and 6) Defendants violated terms of the PSA.

Ultimately, the court determined that the plaintiffs’ claims premised upon the securitization of the loan and violations of the PSA were to be dismissed. The court also found that the plaintiffs could not require the defendants to take any actions to prove their authority unless such factual allegations were presented.

Michigan Court Rejects TILA and RESPA Claims in Granting Summary Judgment

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The court in deciding Morton v. Bank of Am., N.A., 2013 U.S. Dist. (W.D. Mich., 2013) ultimately concluded that the moving defendants are entitled to judgment on all plaintiff’s claims as a matter of law.

Plaintiff asserted that none of the defendants had standing to foreclose on the mortgage. He also alleged that defendants were liable for violations of the Truth In Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Defendants Bank of America, MERS, and Crain had moved for judgment on the pleadings, but supported their motion with documents beyond the pleadings. Therefore, this court elected to treat the motion as one for summary judgment under Rule 56.

Plaintiff’s complaint identifies two federal claims, in addition to claims arising under Michigan law. The complaint mentions the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601-1667f. Plaintiff also purports to assert a claim under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601-2617. The court determined that neither the TILA claim nor the RESPA claim had merit. Plaintiff also asserted three purported state-law claims, which the court deemed to be both redundant and lacking merit. Accordingly, the court recommended that the entry of a summary judgment in favor of the defendants.

California Court Rejects Improper Pooling and Servicing Agreement Argument Brought by Plaintiffs

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The court in deciding Sollenne v. United States Bank Nat’l Ass’n, 2013 U.S. Dist., (S.D. Cal., 2013) dismissed the plaintiffs’ claims.

Plaintiffs alleged three causes of action: 1) quiet title; 2) declaratory relief to determine the validity of the deed of trust on the date the note was assigned and to determine if any defendant has authority to foreclose; and 3) injunctive relief to stop further collection activity, including the sale of the property.

Plaintiffs’ desired remedies also include a request for an order compelling the defendants to transfer or release legal title and any alleged encumbrances, and possession of the property to plaintiffs.

The plaintiffs listed the following deficiencies which they contended rendered invalid any security interest in the deed of trust: 1) the separation of title, ownership and interest in the note and deed of trust; 2) the lack of assignments to or from the intervening entities when the loan was sold; 3) the failure to assign and transfer the beneficial interest in the DOT to Defendants in accordance with the PSA; 4) the failure to endorse, assign, and transfer the note to USBNA in accordance with the PSA and California law; 5) that there were no assignments of beneficiary or endorsements of the note to each intervening entity; and 6) Defendants violated terms of the PSA.

After considering the plaintiffs’ arguments, this court dismissed the claims premised upon the securitization of the loan and violations of the PSA as well as the plaintiffs’ remaining claims.

Since Bank was the Note-Holder it was a Person Entitled to Enforce the Note Pursuant to R.C. 1303.31(A)(1)

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The court in deciding Bank of Am., N.A. v. Pasqualone, 2013-Ohio-5795 (Ohio Ct. App., Franklin County, 2013) affirmed the decision of the lower court.

The court found 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.

Further, the court found that since the bank was the holder of the note it was a person entitled to enforce the note pursuant to R.C. 1303.31(A)(1). 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.

Lastly, 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.