Tag Archives: standing

Oregon Court Stops Foreclosure Pending Clarification in State Court as to MERS Stating Borrower Has “Likelihood of Success Against MERS…”

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The court in Rinegard-Guirma v. Bank of America, et al., Civil Case No. 10-1065-PK, (2010) enjoined the defendants [Bank of America, et al.] from foreclosing on the plaintiff’s [Rinegard-Guirma] property.

The plaintiff, Natache D. Rinegard-Guirma, filed a Motion for a temporary restraining order and preliminary injunction seeking to enjoin a foreclosure sale of her residence. The court granted the plaintiff’s motion for preliminary injunction and continued to enjoin the foreclosure of her property until the claim regarding MERS was resolved by the state court.

Court Rules MERS is Not Required to Register With the Secretary of State Because Enforcing Deeds of Trust Does Not Qualify as “Doing Business” in California

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The court in Sulak v. Mortgage Electronic Registration Systems, Inc., et al., DCA No. E039775, (2004) found that the lower court properly denied the preliminary injunction and that the orders denying the TRO were proper.

instant money

In this case, the plaintiffs-borrowers stopped making payments on their loan and initiated a suit for damages and injunctive relief against MERS. The plaintiff claimed that stoppage of payment was proper as they alleged that MERS could not enforce or collect the note and deed of trust [1] without holding a Certificate from the Secretary of State, [2] without responding to multiple requests for validation of the debt under the Fair Debt Collection Practices Act (FDCPA), and [3] without having endorsements on the note or recorded assignments to successors in interest to the original lender.

The court rejected the plaintiff’s contentions and went further to characterized the plaintiff’s approach as “[e]ssentially, plaintiffs called ‘Olly-olly oxen free’ on the note and deed of trust, and stopped making payments.”

MERS’ Assignments are Recognized as Valid as New York Appellate Court Overturns ‘N.Y. v. Alderazi’ & ‘LaSalle v. Lamy’

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In the case of Bank of New York v. Eddie Sachar, et al., 95 A.D.3d 695 (2012), the court found the Bank of New York Mellon had standing to foreclose based on a MERS assignment and the delivery of the note.

The court’s ruling granted the plaintiff’s [Bank of New York Mellon] motion for summary judgment on its complaint against defendant [Sachar]. The plaintiff-bank proved its standing to commence the foreclosure action by demonstrating that it was both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action was commenced.

Although the defendant correctly alleged that, although Mortgage Electronic Registration System [MERS] validly assigned the mortgage to plaintiff, and the assignment was properly recorded in the public records, MERS had not been given any interest in the underlying note by the lender (see Bank of N.Y. v Silverberg, 86 AD3d 274, 283 [2011]).

However, the complaint and the documents annexed to plaintiff’s motion establish that an assignment of the note had been effectuated by physical delivery of the note before the current action was commenced.

Bankruptcy Court Rules MERS Has Standing and the Customary Rights of a Mortgagee Under a Mass. Mortgage and May Act Under the Mortgage

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The Massachusetts bankruptcy court hearing In re Sonya D. Huggins f/k/a SONYA D. HICKS, Debtor Chapter 13, Case No. 05-18826-RS overruled the Huggins’ objection to the standing of the nominee to seek relief from the automatic stay and ordered an evidentiary hearing on the motion for stay relief.

After Huggins commenced her Chapter 13 case, the court denied a motion by a nominee mortgagee for relief from stay to foreclose a mortgage on the debtor’s residence but ordered monthly adequate protection payments. The nominee filed a second stay relief motion under 11 U.S.C.S. § 362(d), and the debtor objected.

Huggins maintained that the nominee could not stay relief in bankruptcy because it had no rights to enforce the mortgage outside bankruptcy. The court disagreed, finding that the nominee was acting for a lender that held the note, thus there was no disconnection between the note and the mortgage. The nominee was the record mortgagee under the terms of the mortgage with its powers expressly set forth, and Mass. Gen. Laws Ch. 244, § 14 expressly authorized the exercise of sale powers by a mortgagee or a person authorized to sell, which was precisely the position of the nominee.

The court concluded that the denial of the nominee’s foreclosure right as mortgagee could lead to anomalous and perhaps inequitable results, such as the lender being able to foreclose despite the fact that it was not named as mortgagee or that no one could foreclose. Thus, as the court concluded, the nominee had standing to foreclose on the lender’s behalf. As to relief from stay, the court concluded that there was no irrefutable presumption that the property was necessary for an effective reorganization under 11 U.S.C.S. § 362(d)(2)(b). The debtor was required to proffer evidence on those issues.

Arkansas Court Rules That MERS Did Not Violate the State’s Statutory Foreclosure Act

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The court in Coley et al v. Accredited Home Lenders Inc et al (E.D. Ark. 2011) dismissed the homeowner-plaintiff’s claims against MERS pursuant to Federal Rules of Civil Procedure 12(b)(6). In granting MERS’ motion to dismiss the court considered, then rejected the plaintiff’s contentions.

First, the plaintiff alleged that the defendants failed to comply with the notice requirements of 12 U.S.C. 1701x(c)(5), a provision of National Housing Act that requires private lenders servicing non-federally insured home loans to advise borrowers of any home ownership counseling that they of the US Department of Housing and Urban Development may offer. The court however, reasoned that regardless of whether the defendants were in compliance with the act or not, the act does not create a private right of action.

Next, the plaintiff alleged that the defendants violated the state Statutory Foreclosure Act concerning non-judicial foreclosures, and they sought to enjoin the defendants from proceeding with the foreclosure sale. They also sought an order declaring the mortgage’s notice of default and intention to sell, the limited power of attorney, and the corporate assignment of mortgage to be fatally defective and invalid. The court however rejected this contention.

Third, the plaintiffs argued that even if the assignment was valid, the subsequent notice of default and intention to sell was invalid because it was prepared and filed by the Law Offices of Shapiro & Kirsch more than two weeks before HSBC executed a limited power of attorney giving Shapiro & Kirsch the power to act on its behalf. The court rejected this argument, as they noted that whether the notice of default was valid was moot because the non-judicial foreclosure described in the notice was cancelled. Thus, Shapiro & Kirsch would be required by law to file a new notice of default and intention to sell before a sale could take place.

Nevada Court Finds MERS Lacked Standing to Bring Foreclosure Action as it Failed to Establish Itself as a Real Party in Interest and Failed to Provide Sufficient Evidence of it Authority

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In MERS v. Chong, No. 09-661 (D. Nev. 2011) the court affirmed the order from the bankruptcy court holding that MERS lacked standing to bring an action. In the underlying bankruptcy action, MERS filed its motion for relief from stay, seeking to have the automatic stay lifted so that MERS could conduct a non-judicial foreclosure sale.

The court affirmed the bankruptcy court’s determination that MERS was not a beneficiary as MERS failed to present sufficient evidence showing it was a real party in interest. The court found that MERS might have had standing to prosecute the motion in the name of its members as a nominee.

However, in this case there was no evidence that the named nominee was entitled to enforce the note or that MERS was the agent of the note’s holder. As such the court found that MERS lacked standing.

MERS Has Standing to Bring Foreclosure Action as Court Ruled There Was No Question That the Defendant-Homeowner Was the Correctly Named Party

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In the case of Mortgage Elec. Registration Sys., Inc. v. Ventura, No. CV 054003168S, 2006 WL 1230265 (Conn. Super. Ct. April 20, 2006) the plaintiff-lender moved for summary judgment against defendants, a husband and wife, as to liability only. After review of the lender’s complaint and allegation that the husband was indebted to the lender, the court found that because the husband and quit claimed his interest in the property to the wife, she was the owner of the equity of redemption. Consequently, the wife was properly named as a party to the litigation as a defendant.

Moreover, there was no question that the named lender was the correct party to bring the action. Consequently, the lender was entitled to summary judgment as to the husband’s and the wife’s liability only.

The defendants first claimed there was a question of fact as to whether the defendant Tina Galka-Ventura was liable to MERS. However, the court determined this was not a question of fact as the plaintiff properly alleged that the defendant Joseph Ventura quitclaimed his interest to Gina. Thus, the court determined she was the owner of the equity of redemption.

Second, the defendants claimed that there was a genuine issue of material fact as whether a debt was owed to the plaintiff. The court determined that this was not a material fact. Thirdly, the defendants claimed there was material fact as to what entity is the holder of the note securing the property. The court also determined that this was not a material question.