Editor: David Reiss
Brooklyn Law School

April 12, 2013

United States District of Georgia Rejects Wrongful Foreclosure Claim

By Gloria Liu

In Nicholson v. OneWest Bank,1:10-CV-0795-JEC/AJB, 2010 WL 2732325 (N.D. Ga. Apr. 20, 2010) , the court rejected homeowner’s wrongful foreclosure claim. Homeowners  argued that OneWest Bank was not entitled to foreclose on property because there had been no assignment of the original note from American Mortgage Express Corporation to any other party. They did acknowledge that MERS “purported” to make an assignment of the security deed to IndyMac Federal Bank FSB, but argued that there is no other transfer of record. They also argued that the splitting of the mortgage and the note rendered the mortgage a nullity. The court found that the evidence demonstrates that American Mortgage was granted a security deed and under this deed homeowners “grant[ed] and convey[ed] to MERS (solely as nominee of Lender and Lender’s successors and assigns) and the successors and assigns of MERS, with power of sale,” the property. MERS, in a document entitled “Assignment of Note and Security Deed,” conveyed to IndyMac Federal Bank FSB the Security Deed and the Note.  Afterwards, the FDIC, as receiver for IndyMac, in an Assignment of Security Deed, assigned to OneWest that certain Security Deed or Deed to Secure Debt executed by the homeowners. This document was found to demonstrate strong evidence that OneWest holds both the Security Deed under which it may exercise the power of sale and the Note. Therefore, the court held that OneWest is lawfully entitled to foreclose on Plaintiff’s property because the homeowner did not demonstrate that OneWest was not entitled to foreclose.

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