Tag Archives: stay foreclosure

Georgia Court Authoritatively Recognizes MERS’ Right to Foreclose

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The court in American Equity Mortgage, Inc. and Mortgage Electronic Registration Systems, Inc. v. Chattahoochee National Bank, # 05-cv-1951 (Forsyth Cty. Sup. Ct., Dec. 29. 2005) authoritatively recognized the right of MERS to foreclose. This case involved an action to enjoin an immediate judicial sale due to equitable subrogation in which the court recognized the validity of a lien held by MERS and MERS’ ability to enforce it.

After considering arguments and an evidentiary hearing, the court concluded that “MERS, in its capacity as grantee in the deed to secure debt and as nominee for American, or its successor in interest as the holder of the note, is the entity that would suffer irreparable harm if [Chatahoochee] foreclosed on its judgment lien and is the entity entitled to seek an injunction in this case. MERS is entitled to enforce the American Deed to Secure Debt per its terms.”

The court awarded MERS a permanent injunction precluding Chatahoochee or its successors or assigns from selling or foreclosing on the property as long as the deed held by MERS remained in effect.

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.”

Arizona Court Holds That MERS is the Beneficiary With the Authority to Foreclose

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The court in Ciardi v. The Lending Company, Inc. et al., 2010 WL 2079735 (D. Ariz. 2010) held that that MERS is the beneficiary with the authority to foreclose. In doing so the court granted the defendant’s motion to dismiss and motion to vacate temporary restraining order.

In December 2005, plaintiff [Bianca Ciardi] borrowed $270,500 from ‘The Lending Company’ for the purpose of purchasing real property. Plaintiff also executed a promissory note and a deed of trust. Soon after, the plaintiff’s note was sold.

Plaintiff eventually defaulted on their note and their home was nearing auction in a non-judicial trustee’s sale. A lower court granted the plaintiff’s temporary restraining order (“TRO”) without notice. Defendants removed to this court, and sought to have the TRO dissolved and Plaintiffs’ first amended complaint dismissed pursuant to FRCP 12(b)(6).

In their analysis, the court noted, that the Plaintiff’s amended complaint was not the model of clarity and that the plaintiff did not allege any specific causes of action, rather much of their amended complaint was simply a narrative concerning the mortgage securitization industry.

In reaching their conclusion, the court, reviewed the plaintiff’s amended complaint. And concluded that even considering the plaintiff’s pro se status and, in so doing, construing plaintiff’s amended complaint liberally, the court found that the plaintiff failed to state a claim upon which relief may be based. Plaintiff also sought a preliminary injunction to halt the planned foreclosure of their home. However, the court reasoned, in order to obtain preliminary injunctive relief, the moving party must show a likelihood of success on the merits.

Accordingly, because the court found the plaintiff’s amended complaint failed for a failure to state a claim, the court found that the plaintiff failed in showing a likelihood of success on the merits. As such, the Court denied the plaintiff’s request for a preliminary injunction.

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.