IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

CANDACE IRON HA WK and ROBERT VAN 

PELT, 

Plaintiffs, 

v. 

BANK2 and DOVENMUEHLE MORTGAGE, 

INC., 

Defendants. 

PAPAK, Magistrate Judge: 

3:15-CV-1374-PK 

FINDINGS AND 

RECOMMENDATION 

Plaintiffs Candace Iron Hawk and Robert Van Pelt filed this action against defendants 

Bank2 and Dovenmuehle Mortgage, Inc. ("Dovenmuehle"), on July 22, 2015. Plaintiffs amended 

their complaint effective October 15, 2015, and again effective December 16, 2015. By and 

tln·ough their second amended complaint, plaintiffs allege that Bank2 is a bank specializing in 

mortgage lending to Native Americans, specifically in United States Depa1iment of Housing and 

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Urban Development Section 184 Indian Home Loan Guarantee Program loans to Native 

Americans, and that Dovenmuehle is a subservicer of portfolio mo1tgages for Bank2. Plaintiffs 

further allege that in February 2010, they received a 30-year Section 184 mo1tgage loan on their 

Multnomah County residence from Bank2, with Dovenmuehle acting as the·subservicer of the 

loan. Plaintiffs futther allege that after Van Pelt was injured in a car accident, they experienced 

financial difficulties, with the consequence that they failed to make an approximately $1, 100 

monthly payment on the loan that was due and owing as of the beginning of June 2013. 

Plaintiffs further allege that they subsequently offered to make up the missed payment on at least 

three occasions, only for their offers to be refused on the grounds that defendants would not 

accept any payments until all payments were brought cun-ent, and that defendants refused to 

negotiate a loan modification with them in violation of the provisions of Section 184 

notwithstanding plaintiffs' effo1ts to initiate such negotiations. Plaintiffs futther allege that in 

March 2015, Bank2 issued a Trustee's Notice of Sale by and through which it sought to sell 

plaintiffs' residence via a non-judicial foreclosure. Arising out of the foregoing, plaintiffs allege 

defendants' liability for the violation of the Real Estate Settlement Procedures Act ("RESP A"), 

12 U.S.C. § 2605(1), by failing to respond as required to plaintiffs' loss mitigation (loan 

modification) application, for breach of contract under Oregon common law by failing to accept 

plaintiffs' tendered late payments, for breach of the implied covenant of good faith and fair 

dealing under Oregon common law by failing to negotiate modification of the mortgage and 

failing to accept plaintiffs' tendered payments, and for violation of Oregon's Unfair Trade 

Practices Act ("UTP A"), Or. Rev. Stat. § 646.605 et seq., by failing to negotiate modification of 

the mmtgage, and in addition seek this court's declarations that neither defendant is a beneficiary 

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of the note securing the m01igage on plaintiffs' residence and that the defendants may not proceed 

with a non-judicial foreclosure on plaintiffs' residence, as well as injunctive relief to enjoin any 

such non-judicial foreclosure. Plaintiffs seek monetary damages in the amount of $170,000, 

emotional distress damages in the amount of $250,000, award of their fees and costs, and the 

declarative and injunctive relief discussed above. This comi has federal question jurisdiction 

over plaintiffs' RESP A claim and declaratory judgment claim pursuant to 28 U.S.C. § 1331, and 

may properly exercise supplemental jurisdiction over plaintiffs' state-law claims pursuant to 28 

U.S.C. § 1367; in addition, this court may properly exercise diversity jurisdiction over plaintiffs' 

action pursuant to 28 U.S.C. § 1332, based on the complete diversity of the pmiies and the 

amount in controversy. 

On September 29, 2015, Judge Simon entered a tempormy restraining order to enjoin 

defendants from proceeding with the noticed foreclosure of plaintiffs' residence until October 12, 

2015. On October 5, 2015, Judge Simon extended the TRO until October 23, 2015. On October 

21, 2015, pursuant to defendants' stipulation, Judge Simon extended the TRO a second time, 

until October 29, 2015. On October 29, 2015, Judge Simon entered a preliminary injunction 

enjoining defendants from foreclosing on plaintiffs' residence during the pendency of these 

proceedings. 

On December 14, 2015, plaintiffs filed a motion for paiiial summaiy judgment; that 

motion is cu11"ently before the comi. On Januaty 7, 2016, in support of their opposition to 

plaintiffs' patiial dispositivemotion, defendants requested that the comi take judicial notice of 

cetiain documents promulgated by the Government National Mortgage Association ("GNMA" or 

"Ginnie Mae"). On Januaty 27, 2016, in connection with their reply memorandum in support of 

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their motion, plaintiffs offered, among other materials, the Declaration of Bernard J. Patterson 

("Patterson Deel."), a forensic accountant not previously disclosed to defendants as an expert 

witness; defendants promptly moved to strike Patterson's declaration testimony on Januaty 28, 

2016. Oral argument was held in connection with plaintiffs' pmiial summary judgment motion, 

defendants' request for judicial notice, and defendants' motion to strike the Patterson declaration 

on February 2, 2016. 

At oral argument, I granted defendants' request for judicial notice of Janumy 7, 2016, and 

additionally granted defendants leave to file supplemental briefing in support of their opposition 

to plaintiffs' pmiial dispositive motion by not later than Februmy 18, 2016. On Februaty 18, 

2016, defendants filed supplemental briefing in supp01i of their opposition, and in addition filed 

a second request for judicial notice of GNMA-promulgated documents. 

Now before the court are (i) plaintiffs' motion (#66) for partial summmy judgment as to 

their claim for this comi's declaration that defendant Bank2 is not the beneficiaty of plaintiffs' 

m01igage loan and for this court's declaration that the defendants herein may not lawfully 

proceed with a non-judicial foreclosure on plaintiffs' residence, (ii) defendants' motion (#89) to 

strike the Patterson declaration, and (iii) defendants' request (#99) for judicial notice filed 

Februmy 18, 2016. I have considered the motions, oral argument on behalf of the parties, and all 

of the pleadings and papers on file. For the reasons set forth below, defendants' motion (#89) to 

strike should be denied, defendants' request (#99) for judicial notice should be granted, plaintiffs' 

motion (#66) for pmiial summmy judgment should be granted, and this comi should declare both 

that defendant Bank2 is not the beneficimy of plaintiffs' m01igage loan and that the defendants 

herein may not lawfully proceed with a non-judicial foreclosure on plaintiffs' residence. 

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LEGAL STANDARDS 

I. Motion for Summary Judgment 

Summary judgment is appropriate "if the movant shows that there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 

56(a). A party taking the position that a material fact either "cannot be or is genuinely disputed" 

must support that position either by citation to specific evidence of record "including depositions, 

documents, electronically stored infonnation, affidavits or declarations, stipulations (including 

those made for purposes of the motion only), admissions, inte11'ogat01y answers, or other 

materials," by showing that the evidence of record does not establish either the presence or 

absence of such a dispute, or by showing that an opposing party is unable to produce sufficient 

admissible evidence to establish the presence or absence of such a dispute. Fed. R. Civ. P. 56(c). 

The substantive law governing a claim or defense determines whether a fact is material. See 

1\!lorelandv. Las Vegas 1\!letro. Police Dep'I, 159 F.3d 365, 369 (9th Cir. 1998). 

Summary judgment is not proper if material factual issues exist for trial. See, e.g., 

Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 248 (1986); Warren v. City a/Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995), cert. denied, 116 

S.Ct. 1261 (1996). In evaluating a motion for summary judgment, the district courts of the 

United States must draw all reasonable inferences in favor of the nonmoving party, and may 

neither make credibility determinations nor perform any weighing of the evidence. See, e.g., 

Lytle v. Household iv!fg., Inc., 494 U.S. 545, 554-55 (1990); Reeves v. Sanderson Plumbing 

Products, Inc., 530 U.S. 133, 150 (2000). 

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II. Request for Judicial Notice 

Federal Rule of Evidence 20l(d) provides that "[a] court shall take judicial notice [of an 

adjudicative fact] ifrequested by a party and supplied with the necessary information." An 

adjudicative fact is subject to judicial notice when the fact is "not subject to reasonable dispute in 

that it is either (1) generally known within the tenitorial jurisdiction of the trial court or (2) 

capable of accurate and ready determination by resmi to sources whose accuracy cannot be 

reasonably questioned." Fed. R. Evid. 201(b). 

III. Motion to Strike 

A. Federal Civil Procedure Rule 12(1) 

Federal Civil Procedure Rule 12 provides that the district coutis "may strike from a 

pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter" 

on their own initiative or pursuant to a party's motion. Fed. R. Civ. P. 12(f). The disposition of a 

motion to strike is within the discretion of the district court. See Federal Sav. & Loan Ins. Corp. 

v. Gemini }.fanagement, 921F.2d241, 244 (9th Cir. 1990). Motions to strike are disfavored and 

infrequently granted. See Stabilisierungsfonds Fiir Wein v. Kaiser, Stuhl Wind Distribs. Pty., 

Ltd., 647 F.2d 200, 201, 201 n.1 (D.C. Cir. 1981); Pease & Curren Refining, Inc. v. Spectro/ab, 

Inc., 744 F. Supp. 945, 947 (C.D. Cal. 1990), abrogated on other grounds by Stanton Road Ass'n 

v. Lohrey Enters., 984 F.2d 1015 (9th Cir. 1993). 

B. Inherent Power 

It is well established that the district comts enjoy an inherent power to manage and 

control their own dockets. See, e.g., Landis v. N Am. Co., 299 U.S. 248, 254 (1936) (affirming 

"the power inherent in eve1y comt to control the disposition of the causes on its docket with 

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economy of time and effort for itself, for counsel, and for litigants"). It is clear that this inherent 

power includes the authority to sanction procedural impropriety in an appropriate manner. See, 

e.g., Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991) (noting that "[a] primary aspect" of 

the courts' inherent power "is the ability to fashion an appropriate sanction for conduct which 

abuses the judicial process;" holding that because "outright dismissal of a lawsuit ... is within 

the court's discretion," in consequence less severe sanctions are "undoubtedly within a court's 

inherent power as well"); Atchison, T. & S.F. Ry. v. Hercules Inc., 146 F.3d 1071, 1074 (9th Cir. 

1998) ("well established that district courts have inherent power to control their dockets and may 

impose sanctions, including dismissal, in the exercise of that discretion") (citations, internal 

quotation marks omitted); see also Lamos v. Astrue, 2008 U.S. App. LEXIS 9143 (9th Cir. 2008) 

(unpublished disposition) (affoming inherent power of the courts to strike documents other than 

pleadings from the docket); Centillium Communs., Inc. v. At!. lvfut. Ins. Co., 2008 U.S. Dist. 

LEXIS 20719 (D. Cal. 2008) (striking a procedurally improper motion pursuant to the court's 

inherent power). 

JUDICIAL NOTICE 

As noted above, defendants previously requested that this court take judicial notice of 

ce1tain statements made by GNMA on its website and of certain chapters of the Ginnie Mae 

Handbook 5500.3 (the GNMA "Guide"), specifically Chapters 1, 9, 15, 16, 18, and 23 thereof. 

Also as noted above, at oral argument in connection with the motions now pending, I granted that 

request. The judicially noticed information includes the following relevant statement by GNMA 

regarding its business model: 

Ginnie Mae's business model significantly limits U.S. taxpayers' exposure to risk 

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associated with secondaiy market transactions. Its strategy is to guarantee a 

simple pass-through security to investors rather than buy loans and issue its own 

securities. Because private lending institutions originate eligible loans, pool them 

into securities and issue Ginnie Mae MBS [i.e., mo1igage-backed securities], the 

corporation's exposure to risk is limited to the ability and capacity of its MBS 

Issuer partners to fulfill their obligations to pay investors. By guaranteeing the 

servicing perfo1mance of the Issuer - not the underlying collateral - Ginnie Mae 

insulates itself from the credit risk of the m01igage loans. 

"Ginnie Mae's Role in Housing Finance." Ginnie Mae Consumer Education (Apr. 25, 2016), 

http://www.ginniemae.gov/consumer _ education/Pages/ginnie _ maes _role _in_ housing_ 

finance.aspx. In addition, the noticed chapters of the Guide include the following further 

statement regarding Ginnie Mae's business model: 

The Government National Mortgage Association (Ginnie Mae), through its 

Mortgage-Backed Securities (MBS) Programs, guarantees securities that are 

backed by pools of m01igages and issued by mortgage lenders (Issuers) approved 

by Ginnie Mae. Security holders receive a "pass-through" of the principal and 

interest payments on a pool of m01igages, less amounts required to cover 

servicing costs and Ginnie Mae guaranty fees. The Ginnie Mae guaranty ensures 

that the security holder receives the timely payment of scheduled monthly 

principal and any unscheduled recoveries of principal on the underlying 

mortgages, plus interest at the rate provided for in the securities. If a bonower 

fails to make a timely payment on a mo1igage, the Issuer must use its own funds 

to ensure that the security holders receive timely payment. If an Issuer fails to 

ensure that the funds necessmy to make timely payment are available or otherwise 

defaults in the discharge of its responsibilities, Ginnie Mae, in accordance with its 

guaranty, will make payments to security holders. 

Guide, Ch. 1-1. Chapter 1 of the Guide also establishes that, following submission of mortgages 

to a loan pool, and thereafter " [ f]or the life of the pool or loan package, the Issuer is responsible 

for servicing the [pooled] mo1igages, administering the securities, and submitting periodic 

repo1is to Ginnie Mae .... " Guide, Ch. 1-1 l(C). Issuers must meet the eligibility requirements 

provided in Chapter 2 of the Guide to be approved by GNMA to issue securities backed by 

pooled m01igages. See Guide, Ch. 2. 

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Chapter 15 of the Guide "addresses an issuer's monthly obligation ... to pay security 

holders [i.e., holders of the securitized pooled m01igages] [and/or] to ... make available [to such 

security holders] ... funds in the amount of the monthly payment due on such securities." 

Guide, Ch. 15-1. The issuer is specifically required to make such payments or make such funds 

available for payment to the security holders in the amount of borrowers' "monthly payments of 

principal and interest" less GNMA's guaranty fees and the issuer's servicing fee, Guide, Ch. 15-2, 

15-3, see also Guide, Ch. 1-1, 15-4, and moreover is obligated to make such "payments and 

deposits without regard to whether [it] will be able to recover those payments from liquidation 

proceeds, insurance proceeds, or late payments" from the borrowers. Guide, Ch. 15-2, 15-3. The 

issuer is not entitled to retain funds that cannot be delivered to security holders, and in the event 

the issuer is ultimately unable to deliver such payments to security holders for a six month 

period, they must be remitted to GNMA. See Guide Ch. l 5-2(C). Moreover, the issuer is not 

entitled to withdraw funds representing b01Towers' principal and interest payments on the 

underlying mortgages from the account it has set up to hold such funds; withdrawals of such 

funds from such accounts must be made by the entity responsible for disbursing such funds 

directly to the security holders. See Guide, Ch. 16-4. 

Pursuant to Chapter 18 of the Guide, issuers are obliged to continue servicing pooled 

m01igage loans after borrowers become delinquent on their loan repayment obligations. 

See Guide, Ch. 18-3(A). Chapter 18 governs the right of an issuer to repurchase a loan from the 

mortgage pool in the event borrowers' delinquency continues for a period of months. See Guide, 

Ch. 18-3. It appears to be undisputed that a loan submitted to a GNMA mortgage pool must be 

repurchased from the pool before its terms and conditions may be modified by the parties to the 

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loan agreement. See Plaintiffs' Memorandum (#67) in Suppo1i of their Motion for Pmiial 

Summery [sic] Judgment ("Plaintiffs' Memo"), Exh. 6 ("Watson Depo.") at 71:6-19. 

The Guide further provides that, in the event an issuer defaults on its obligations to make 

the requisite payments to the security holders, GNMA has the right to: 

Extinguish any redemption, equitable, legal, or other right, title, or interest of the 

Issuer, and anyone claiming through the Issuer, in the mmigages in pools and loan 

packages for which the Issuer has Issuer responsibility. Issuers, subcontract 

servicers, creditors, and others should be aware that any and all right, title, and 

interest of the Issuer in and to pooled mmigages, including but not limited to the 

rights of the Issuer (and of any subcontract servicer) to service the pooled 

mmigages and to earn servicing compensation, are forfeited and cease upon 

extinguishment by Ginnie Mae. 

Guide, Ch. 23-3(B). 

Also as noted above, in connection with their supplemental briefing, defendants issued a 

fu1iher request ( #99) for judicial notice, specifically requesting notice of Chapter 6 of the Guide 

and ofGNMA's 2015 Annual Repmi. Federal Rule of Evidence 20l(d) provides that "[a] court 

shall take judicial notice [of an adjudicative fact] if requested by a pmiy and supplied with the 

necessary infmmation." An adjudicative fact is subject to judicial notice when the fact is "not 

subject to reasonable dispute in that it is either (1) generally known within the te1Titorial. 

jurisdiction of the trial court or (2) capable of accurate and ready dete1mination by resort to 

sources whose accuracy cannot be reasonably questioned." Fed. R. Evid. 201(b). Plaintiffs 

opposed defendants' previous request for judicial notice on the ground that any "facts" contained 

in the documents at issue were not adjudicative but rather legislative facts; I presume that 

plaintiffs would offer that same reasoning in opposition to defendants' cu1Tently pending request 

for judicial notice. I find that the documents contain facts fit for judicial notice, and recommend 

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that the request (#99) be granted. 

Chapter 6 of the Guide provides in relevant part that issuers are required to pay a fee 

characterized as a "monthly guaranty fee" to GNMA in connection with each mortgage submitted 

to a GNMA mo1igage pool. Guide, Ch. 6-2(C). GNMA's 2015 Annual Report suggests, 

consistently with the statements quoted above, that GNMA does not own loans submitted to 

GNMA mortgage pools, suggesting instead that the risk of nonpayment of pooled mmigages is 

bome by the investors to whom the pooled and securitized mortgages are sold. See GNMA 2015 

Annual Report, § 1. 

FACTUAL BACKGROUND 

I. The Parties 

Plaintiffs Iron Hawk and Van Pelt are husband and wife. Each is a citizen and resident of 

Oregon. 

Defendant Bank2 is a bank specializing in United States Department of Housing and 

Urban Development Section 184 Indian Home Loan Guarantee Program loans to Native 

Americans. Bank2 is organized under Oklahoma law and is headquaiiered in Oklahoma. 

Defendant Dovenmuehle is a subservicer of portfolio loans for Bank2. Dovenmuehle is 

organized under Delaware law and headquartered in Illinois. 

II. Material Factual History' 

On or around February 11, 2010, plaintiffs executed a Deed of Trust- a security 

instrument memorializing a home mortgage loan in the amount of $158,950 - with plaintiffs 

1 Except where otherwise indicated, the following recitation constitutes my construal of 

the evidentiaiy record in light of the legal standard governing motions for summaiy judgment 

under Federal Civil Procedure Rule 56. 

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named as the "BmTOwer," Bank2 named as the "Lender," "Fidleity [sic] National Title" named as 

the "Trustee," and Mo1igage Electronic Registration Systems, Inc. ("MERS") named as the 

"beneficimy" of the Deed of Trust. See Plaintiffs' Memora!ldum (#67) in Support of their Motion 

for Pmiial Summe1y [sic] Judgment ("Plaintiffs' Memo"), Exh. I ("Deed of Trust"). The loan 

was seemed by plaintiffs' Po1iland, Oregon, residence. See id. 

On or around March 5, 2010, Bank2 "securitized" the mortgage loan memorialized by the 

parties Deed of Trust through a program established by GNMA. See Declaration of Peter J. 

Salmon ("Salmon Deel."), Exh. A at DOOl381, D001387; see also Plaintiffs' Memo, Exhs. 2 

("Certification and Agreement"), 3 ("Electronic Pool Submission"). It is undisputed that 

plaintiffs mortgage loan was included in a "pool" of mortgages enumerated as "718520" and 

assigned "CUSIP number 36202FE69" by GNMA. See id. By and tlu·ough the instrument by 

which the mortgage at issue was submitted to pool number 718520, Bank2 expressly 

"transfer[red], assign[ed], set[] over and otherwise convey[ed] to Ginnie Mae all of[Bank2]'s 

right, title and interest in and to the pooled mo1igages .... " Electronic Pool Submission. In 

addition, the Electronic Pool Submission agreement expressly specified that the interest 

conveyed by Bank2 to GNMA included all scheduled and unscheduled payments due from the 

borrowers under their loan agreements. See id. Moreover, with respect to the mo1igages in pool 

number 718520, Bank2 ce1iified as follows on March 5, 2010: 

No mortgage in the referenced pool or loan package is now subject to any security 

agreement between the issuer and any creditor, and upon the release (delivery) of 

securities backed by the pool or loan package, only Ginnie Mae will have any 

ownership interest in the pooled mo1igages. 

Certification and Agreement. 

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The parties dispute the effect of such "securitization" and ofBank2's express conveyance 

to Ginnie Mae of all of its "right, title, and interest in and to" plaintiffs' mortgage, expressly 

including the right to plaintiffs' payments in connection with their loan. In suppmi of their 

position that, notwithstanding the language quoted above, Bank2 at all times retained all 

ownership interest in plaintiffs' repayment obligations, defendants offer (i) the declaration 

testimony ofBank2's Senior Vice President, Head of Mortgage Lending, Gene Watson, that at 

the time Bank2 decided to initiate a non-judicial foreclosure on plaintiffs' loan, "Bank2 was ... 

the owner of the loan ... ," Declaration of Gene Watson ("Watson Deel. I") dated October 27, 

2015, irir 5, 7, (ii) the declaration testimony ofBank2's controller in charge of accounting and 

financing, Cynthia Delgado, that "Bank2 at all times has been the owner of the loan and the pmiy 

to whom payments are due from Plaintiffs," Declaration of Cynthia Delgado ("Delgado Deel.") 

dated October 27, 2015, if 6, and (iii) the deposition testimony of Watson that Bank2 retained 

ownership of the loan at all material times, see Salmon Deel., Exh. B ("Watson Depo.") at 10:22-

24, 11 :8-10, 12:21 - 13:1. Defendants fmiher rely on the judicially noticed statements regarding 

GNMA's business model set foiih above, and on the Declaration of Nathan Atchison, a CPA who 

offers expert opinion as to financial aspects of the securitization of the plaintiffs' m01igage, see 

Declaration ofNathan Atchison ("Atchison Deel."). Atchison testifies that: 

5. The loan at issue was securitized by Bank2 in 2010. The securitization 

involved Bank2 issuing securities for sale to the public, and receiving cash 

in exchange for the sale of those securities. My understanding is that 

Bank2 was an authorized issuer of GNMA-backed securities at the time of 

the securitization of the loan at issue, and has remained an authorized 

issuer of GNMA-backed securities from that time until the present. 

6. Since the securitization of the loan at issue in 2010, Bank2 has been 

required to make fonds available on a monthly basis for distribution to the 

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holders of the security. Bank2 transfers funds, on a monthly basis, into a 

custodial account at Bank2 that is held in trust for the benefit of the 

GNMA-backed security holders. Bank2 makes the payment required even 

if the bonowers on the underlying loans do not make their monthly 

payments to Bank2. Each month, the Bank of New York, as administrator 

and trustee for the GNMA-backed security program, drafts the full amount 

from that account in order to make the payment to the security holders. 

Atchison Deel., ifil 5-6. Atchison futiher testifies that Bank2 accounted for the securitization of 

the mo1igage loan on its books "for financial accounting purposes as a sale," but only because it 

was required to do so by Financial Accounting Standards Board Accounting Standards 

Codification Topic 860; Atchison testifies that such accounting treatment "is separate from the 

issue of ownership of the loan ... [and] is not in any way dete1minative of the legal 

ownership, or beneficiaiy, of the loan." Id., ilil 9-10. 

In support of their contraiy position that Bank2 conveyed its ownership interest in the 

loan to GNMA when it submitted the mo1igage to the pool, plaintiffs note the plain language of 

the agreements discussed above, and additionally point to (i) Watson's deposition testimony that 

Bank2 received money from GNMA when the mortgage was submitted to its pool, see Plaintiffs' 

Memo, Exh. 4 ("Watson Depo.") at 10: 1-6, (ii) Watson's deposition testimony that Bank2 was 

required to remit payments in satisfaction of plaintiffs' repayment obligations to GNMA even in 

the event that plaintiffs made no such payments themselves, see Plaintiffs' Memo, Exh. 5 

("Watson Depo.") at 19:8-24, (iii) Watson's deposition testimony that in the event Bank2 wished 

to modify a loan submitted to a GNMA pool, it would first be required to "repurchase [the 

mo1igage] from the pool," Plaintiffs' Memo, Exh. 6 ("Watson Depo.") at 71:6-19, and (iv) 

Bank2's intenogat01y response tending to establish that in excess of 90% of plaintiffs' principal 

and interest payments were remitted to GNMA and not retained by Bank2, see Plaintiffs' Memo, 

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Exh. 7. Plaintiffs fmiher rely on the declaration (#88) of Bernard Jay Patterson, a ce1iified fraud 

examiner and plaintiffs' (purp01ied) expert regarding mortgage accounting, filed 

contemporaneously with and in support of plaintiffs' reply memorandum. Patterson testifies to 

his expert opinion that subsequent to the submission of plaintiffs' mortgage to the pool, Bank2 

retained no ownership interest in the loan. See Patterson Deel., iii! 8-20. Patterson futiher 

testifies that in financial documents filed with the FDIC, Bank2 has at all material times rep01ied 

that it does not own any loans either guaranteed by GNMA or pledged as collateral to GNMA. 

See id., i! 17. 

The pmiies do not offer evidence regarding plaintiffs' missed payments on their m01igage 

loan or defendants' decision to initiate non-judicial foreclosure proceedings. However, it appears 

that, for purposes of plaintiffs' motion for partial summary judgment, no pmiy disputes plaintiffs' 

allegations that plaintiffs missed a mortgage payment due and owing in June 2013, that 

defendants thereafter refused to accept plaintiffs' various tenders of pmiial payment of their 

an-ears, or that in March 2015 Bank2 issued a Trustee's Notice of Sale by and through which it 

sought to sell plaintiffs' residence via a non-judicial foreclosure. See Second Amended 

Complaint, iii! 10-29. 

On Januaiy 16, 2015, MERS executed an Assignment of Deed of Trust by and through 

which MERS purpo1ied to assign to Bank2 its purpo1ied interest as the beneficiaiy of the Deed of 

Trust memorializing plaintiffs' m01igage loan. See Plaintiffs' Memo, Exh. 8 ("Assignment of 

Deed of Trust"). On Februaiy 10, 2015, Bank2 in turn appointed Clear Recon Corp.2 as the 

2 It appear that Clear Recon Corp. shares its mailing address and may be co-extensive 

with defendants' counsel. 

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successor trustee in connection with plaintiffs' m01igage loan. See Second Amended Complaint, 

Exh. 2 ("Appointment of Successor Trustee"). It is plaintiffs' position that both the Assignment 

of Deed of Trust and the Appointment of Successor Trustee were recorded in Multnomah 

County, and defendants do not dispute that position, although there appears to be no evidence of 

record supporting it. 

It is plaintiffs' position that on May 29, 2015, Clear Recon Corp. issued a Notice of 

Default and Election to Sell plaintiffs' residence via non-judicial foreclosure. Again, defendants 

do not appear to dispute this position, but, again, there does not appear to be evidence of record 

to suppo1i it. 

ANALYSIS 

I. Defendants' Motion (#89) to Strike the Patterson Expert Opinion Declaration 

Defendants move to strike the Patterson declaration on several grounds, first and 

primarily because Patterson was not disclosed as an expe1i witness prior to plaintiffs' proffer of 

his declaration on Janumy 27, 2016. As defendants correctly note, experts must be disclosed 

pursuant to Federal Civil Procedure Rule 26(a)(2) without need for a discove1y request for such 

disclosure from an opposing party. See Fed. R. Civ. P. 26(a)(2). On that ground, defendants 

argue the court should disregard the declaration in its entirety. In the alternative, to the extent the 

Patterson declaration constitutes new evidence presented in reply, defendants argue they should 

be permitted an opportunity to respond to the declaration, including an opp01iunity to depose 

Patterson, before the evidence may properly be considered by the comi. Defendants concede that 

counsel for plaintiffs was willing to stipulate to a 14-day set-over to permit defendants an 

opportunity to respond to the declaration, but defendants argue that 14 days is insufficient for 

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such an opportunity to be meaningful. 

Second, defendants argue that Patterson's declaration contains improper opinion 

testimony as to matters oflaw, including in particular the ownership of any beneficial interest in 

plaintiffs' mortgage loan following Bank2's submission of the loan to the pool. 

Third, defendants asse1i that Patterson is unqualified to offer expert testimony in this 

matter. 

Defendants have now had a full opportunity to respond to Patterson's declaration, filing in 

response both a supplemental memorandum in supp01i of their opposition and the Declaration 

(#98) of Nathan Atchison. In light of that opp01iunity, no compelling grounds exist for striking 

Patterson's opinion testimony. I therefore recommend that defendants' motion to strike be 

denied. To the extent Patterson offers opinion testimony regarding ultimate legal conclusions, 

such testimony has been disregarded for purposes of the analysis set f01ih herein. 

II. Plaintiffs' Entitlement to Partial Summary Judgment as to their Declaratory 

Judgment Claim 

As noted above, plaintiffs seek summary adjudication of their request for this court's 

declarations that defendant Bank2 is not the beneficiaiy of plaintiffs' m01tgage loan and that 

neither defendant herein may lawfully proceed with a non-judicial foreclosure on plaintiffs' 

residence. Defendants appear to offer two mutually incompatible alternative theories in supp01t 

of their position that Bank2 is in fact the beneficiary of plaintiffs' m01tgage loan, and was so as of 

both February 10, 2015, when Bank2 appointed Clear Recon Corp. as the successor trustee in 

connection with plaintiffs' mortgage loan, and May 29, 2015, when Clear Recon Corp. issued a 

Notice of Default and Election to Sell plaintiffs' residence via non-judicial foreclosure. 

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Specifically, defendants appear to argue both (i) that on January 16, 2015, when MERS executed 

the Assignment of Deed of Trust by and through which MERS purported to assign to Bank2 its 

purported interest as the beneficiary of the Deed of Trust memorializing plaintiffs' mmigage loan, 

MERS had the beneficial interest in question and was empowered to assign it to Bank2, and 

(ii) that MERS was never the beneficiary of plaintiffs' mortgage loan, but rather that Bank2 has 

been the beneficiary at all times continuously since the mortgage loan issued, notwithstanding 

either the provision of the Deed of Trust naming MERS as the beneficiaiy or Bank2's March 5, 

2010, submission of the mortgage loan to the GNMA loan pool. I address each alternative theory 

in tum, below. 

As a preliminaiy matter, I note that pursuant to the OTDA, only a trustee may initiate a 

non-judicial foreclosure. See Or. Rev. Stat. § 86. 764(1 ). Non-judicial foreclosure is only 

available to a trustee as follows: 

A trustee may not foreclose a trust deed by advertisement and sale in the manner 

provided in ORS 86. 764 to 86. 782 unless: 

(1) The trust deed, auy assignments of the trust deed by the trustee 

or the beneficiary and any appointment of a successor trustee 

are recorded in the mortgage records in the counties in which 

the property described in the deed is situated; 

(2) There is a default by the grantor or other person that owes an 

obligation, the performance of which is secured by the trust deed, 

or by the grantor's or other person's successors in interest with 

respect to a provision in the deed that authorizes sale in the event 

of default of the provision; 

(3) The trustee or beneficiaiy has filed for record in the county clerk's 

office in each county where the trust property, or some part of the 

trust prope1iy, is situated, a notice of default containing the 

info1mation required by ORS 86.771 and containing the trustee's or 

beneficiaiy's election to sell the prope1iy to satisfy the obligation; 

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(4) The beneficimy has filed for recording in the official records of the 

county or counties in which the property that is subject to the 

residential trust deed is located: 

(a) A certificate of compliance that a service provider issued to 

the beneficimy under ORS 86. 736 that is valid and 

unexpired at the time the notice of default is recorded; or 

(b) A copy of the affidavit with which the beneficimy claimed, 

under ORS 86.726 (l)(b), an exemption that has not 

expired; 

(5) The beneficiary has complied with the provisions of ORS 86.748; 

(6) The grantor has not complied with the terms of any foreclosure 

avoidance measure upon which the beneficimy and the grantor 

have agreed; and 

(7) An action has not been commenced to recover the debt or any pmi 

of the debt then remaining secured by the trust deed, or, if an action 

has been commenced, the action has been dismissed, except that: 

(a) Subject to ORS 86.010 and the procedural requirements of 

ORCP 79 and 80, an action may be commenced to appoint 

a receiver or to obtain a temporary restraining order during 

foreclosure of a trust deed by advertisement and sale, 

except that a receiver may not be appointed with respect to 

a single-family residence that the grantor, the grantor's 

spouse or the grantor's minor or dependent child occupies 

as a principal residence. 

(b) An action may be commenced to foreclose, judicially or 

nonjudicially, the same trust deed as to any other prope1iy 

covered by the trust deed, or any other trust deeds, 

mortgages, security agreements or other consensual or 

nonconsensual security interests or liens that secure 

repayment of the debt. 

Or. Rev. Stat. § 86.752 (emphasis supplied). Thus, as a matter of Oregon law, non-judicial 

foreclosure on plaintiffs' residence is only available to the defendants to the extent the status of 

Bank2 as the beneficimy and the appointment by Bank2 of any trustee or successor trustee (or in . 

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the alternative the appointment by the actual beneficimy of either Bank2 or Dovenmuehle as the 

trustee or successor trustee) is ascertainable through documents recorded in Multnomah County. 

As to whether Bank2 could be the beneficimy of the loan pursuant to MERS' purported 

assignment of its purpo1ied interest as the beneficiary of the Deed of Trust to Bank2, I note that 

in 2013, the Oregon Supreme court issued two decisions, Brandrup v. ReconTrust Co., 353 Or. 

668 (2013), and Niday v. Glv!AC ,l,Iortgage, LLC, 353 Or. 648 (2013), in which it held that 

(under the facts presented to it) MERS was not and could not be a "beneficimy" for purposes of 

the Oregon Trust Deed Act. The holdings of Brandrup and Niday were recently summarized 

succinctly by the Oregon Court of Appeals in Fannie lvfae v. Goodrich, 275 Or. App. 77 (2015): 

In Brandrup, the Supreme Court answered four questions of law that had been 

certified by the United States District Comi for the District of Oregon, all of 

which arose out of nonjudicial foreclosure proceedings based on trust deeds that 

named MERS as the beneficiary and that purported to authorize MERS to exercise 

the rights of the lender. [Brandrup, 353 Or.] at 681. The first certified question 

posed the [following] question ... : "May an entity, such as MERS, that is neither 

a lender nor a successor to a lender, be a 'beneficimy' as that term is used in the 

(OTDA)?" Id. at 673. 

The Supreme Comt answered that question in the negative: 

"For purposes of former ORS 86.735(1), the 'beneficiary' is the lender to 

whom the obligation that the trust deed secures is owed or the lender's 

successor in interest. Thus, an entity like MERS, which is not a lender, 

may not be a trust deed's 'beneficiary,' unless it is.a lender's successor 

in interest." 

Id. at 673-74. 

The second ce1tified question, as reframed by the court, concerned the effect of 

language in a tiust deed that authorizes MERS to exercise the lender's rights: 

"Is MERS eligible to serve as beneficimy under the Oregon Trust Deed 

Act where the trust deed provides that MERS 'holds only legal title to the 

interests granted by Bo1TDwer in this Security Instrument, but, if necessmy 

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to comply with law or custom, MERS (as nominee for Lender and 

Lender's successors and assigns) has the right: to exercise any or all of 

those interests'?" 

Id at. 67 4 (emphasis omitted). The court answered the second certified question 

in the negative as well: 

Id 

"Because the provision that MERS 'holds only legal title to the interests 

granted by Bonower in this Security Instrument, but, if necessary to 

comply with law or custom, MERS has the right to exercise any or all of 

those interests,' does not convey to MERS the beneficial right to 

repayment, the inclusion of that provision does not alter the trust deed's 

designation of the lender as the 'beneficiary' or make MERS eligible to · 

serve in that capacity." 

The third certified question asked, "Does the transfer of a promissory note from 

the lender to a successor result in an automatic assignment of the securing trust 

deed that must be recorded prior to the commencement of nonjudicial foreclosure 

proceedings under former ORS 86.735(1)?" Id at 673. The comi also answered 

"no" to that question: 

"Fonner ORS 86.735(1) does not require recordation of'assignments' ofa 

trust deed by operation of law that result from the transfer of the secured 

obligation." 

Id at 674. That is, the court held that transfer of a promissory note effects an 

assignment of the trust deed by operation oflaw, but that the OTDA requires 

recordation "only of formal, written assignments." Id at 699 (citations omitted). 

The comi then reframed the fomih certified question as two subquestions. The 

first subquestion asked, "'Does the OTDA allow MERS to hold and transfer legal 

title to a trust deed as nominee for the lender, after the note secured by the trust 

deed is transfened from the lender to a successor or series of successors?"' Id at 

674-75. Thecomianswered: 

"'No.' For purposes of the OTDA, the only pe1iinent interests in the trust 

deed are the beneficial interest of the beneficimy and the legal interest of 

the trustee. MERS holds neither of those interests in these cases, and, 

therefore, it cannot hold or transfer legal title to the trust deed. 1t is 

immaterial whether the note secured by the trust deed has previously been 

'transfened from the lender to a successor or series of successors.'" 

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Id. at 675 (emphasis added). The second subquestion asked, "'Does MERS 

neve1iheless have authority as an agent for the original lender and its successors in 

interest to act on their behalves with respect to the transfer of the beneficial 

interest in the trust deed or the nonjudicial foreclosure process?'" Id The cou1i 

answered: 

Id. [] 

"The power to transfer the beneficial interest in a trust deed or to 

foreclose it follows the beneficial interest in the trust deed. The 

beneficiary or its successor in interest bolds those rights. MERS's 

authority, if any, to perform any act in the foreclosure process therefore 

must derive from the original beneficiary and its successors in interest. We 

are unable to determine the existence, scope, or extent of any such 

authority on the record before us." 

After announcing those legal principles in Brandrup, the Supreme Court applied 

them to the record in Niday, a summmy judgment case. As pe1iinent here, the 

Supreme Court concluded that a genuine issue of material fact existed as to the 

validity of the successor trustee's appointment and, as a result, its authority to 

pursue a nonjudicial foreclosure under the OTDA. Niday, 353 Ore. at 666-67. 

The Supreme Court explained that the trial court had apparently relied on a 

document showing that MERS had appointed Executive Trustee Services as 

successor to the original trustee; but, the Supreme Cotnt held, "appointments of a 

successor trustee may only be made by the trust deed beneficiary, and, as 

discussed, MERS is not, and never has been, the beneficiary of the trust deed 

for purposes of the OTDA." Niday, 353 Ore. at 666 (internal citation omitted). 

In addition, the court addressed whether MERS was the beneficiary's agent for 

purposes of initiating the foreclosure. The coUlt drew heavily on its discussion in 

Brandrup: 

"As this court recognized in Brandrup, 353 Ore. at 705-09, even ifMERS 

lacks authority to act as the trust deed's beneficimy, it may have authority 

to act on behalf of the beneficiary if it can demonstrate that if has an 

agency relationship with the beneficiary and that the agency agreement is 

sufficiently expansive. Although in Brandrup we discussed that possibility 

in connection with the issue of MERS' authority to assign a trust deed, it 

would seem to apply equally to the present issue of MERS's authority to 

foreclose the trust deed. In either case, lv!ERS' authority to act as the 

beneficiary's agent depends on who succeeded to the lender's rights, 

whether those persons manifested consent that 1V!ERS act on their behalf 

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and subject to their control, and whether 1'.IERS has agreed to so act. 

"But as far as we can tell, there is nothing in the summary judgment record 

in this case that identifies the successors to the original lender's interests or 

shows that MERS is authorized, as the agent of the successors to the 

original lender's interests, to initiate or direct a nonjudicial. foreclosure 

proceeding under the OTDA. There is some evidence that the cu!Tent 

owner of the note is Aurora Bank and that Aurora Bank is a member of 

MERS. But there is no evidence as to whether Aurora Bank is a successor 

to the original lender's interests. Nor is there evidence of an agency 

agreement between Aurora Bank and MERS, or between MERS and its 

members as a whole, much less one that authorizes MERS to initiate 

foreclosures on behalf of Aurora Bank. Futiher, there is some suggestion 

that GMACM is the 'holder' of the note. If the note is negotiable, it is 

possible that GMACM is a successor to the original lender's interests or 

that both Aurora Bank and GMACM share that role; however, neither the 

record nor the parties' arguments establish those matters beyond genuine 

dispute." 

(Original emphasis omitted; emphasis added.) Accordingly, the Supreme Court 

concluded that the trial court had erred in granting summmy judgment in Niday. 

Fannie 1vfae v. Goodrich, 275 Or. App. 77, 82-86 (2015) (internal modifications, footnotes 

omitted; italicized emphasis original; bolded emphasis supplied). 

While defendants argue that Brandrup and Niday do not absolutely foreclose the 

possibility that MERS could be a beneficimy, noting that where MERS acts as a lender's 

successor in interest or independently receives authority to act as a beneficiary's agent, it can 

have the powers of a beneficiary under Brandrup, defendants fail to offer any evidence or 

argument that, here, MERS was in fact the successor in interest of the actual beneficia1y of the 

mo1igage loan, or actually received independent authority to act as the actual beneficimy's agent. 

In the absence of any such evidence, a finder of fact could not reasonably conclude that MERS 

could be the loan beneficimy here. Lacking any cognizable beneficial interest in the loan, MERS 

necessarily had no beneficial interest it could convey to Bank2 as of Janumy 16, 2015, when it. 

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purported to do so. It follows that Bank2 cannot be the loan beneficiary pursuant to the 

purported assignment from MERS. 

As to whether Bank2 remained the beneficiary of the loan at all times continuously from 

the date the loan issued, notwithstanding either the provision of the Deed of Trust naming MERS 

as the beneficimy or Bank2's March 5, 2010, submission of the mortgage loan to the GNMA loan 

pool, the chief problem with defendants' position is that it is simply inconsistent with the plain 

language of the Electronic Pool Submission and the Ce1iification and Agreement by and tluough 

which the mmigage was submitted to the loan pool for securitization. As noted above, the 

Electronic Pool Submission expressly provided that Bank2 "transfer[ red], assign[ed], set[] over 

and otherwise convey[ ed] to Ginnie Mae all of [Bank2]'s right, title and interest in and to the 

pooled mortgages" and that the interest conveyed by Bank2 to GNMA included all scheduled and 

unscheduled payments due from the bonowers under their loan agreements, Electronic Pool 

Submission, while Bank2 ce1iified by and through the Certification and Agreement that as a 

result of the submission of the mortgage to the pool "only Ginnie Mae w[ ould] have any 

ownership interest in the pooled mo1igages," Ce1iification and Agreement. 

Moreover, defendants' position is further contravened by other evidence of record -

including some of the judicially noticed statements of GNMA regarding its own business model 

- tending to establish that Bank2 ceased to possess any interest in the loan, other than a loan 

servicer's interest, following submission of the mortgage to the pool. Such evidence includes 

Watson's deposition testimony that Bank2 received money from GNMA when the mmigage was 

submitted to its pool, see Watson Depo. at 10:1-6, Watson's deposition testimony and GNMA's 

consistent statement that in the event Bank2 wished to modify a loan submitted to a GNMA pool, 

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it would first be required to "repurchase [the mo1igage] from the pool," Watson Depo. at 71 :6-19, 

see also Guide Ch. 18-3, Banla's interrogatory response tending to establish that in excess of 

90% of plaintiffs' principal and interest payments were remitted to GNMA and not retained by 

Banla, see Plaintiffs' Memo, Exh. 7, Patterson's testimony regarding Banla's accounting 

treatment of the loan following its submission to the pool, see Patterson Deel.,~~ 8-20, evidence 

of an issuer's obligation, following submission of a loan to the pool, to remit all borrowers' 

principal and interest payments (less a servicer fee to be retained by the issuer and a guaranty fee 

to be paid to GNMA) to the security holders, see Guide, Ch. 15, and evidence that issuers lack 

any right to retain any proceeds from such payments beyond the servicing fee, even in the event 

that payment of such proceeds to security holders proves impossible, see Guide Ch. 15-2(C). 

Defendants counter that it is not GNMA's practice to take ownership of mortgages 

submitted to such pools, supporting that position with the judicially noticed statements 

referenced above that GNMA has made regarding its business model, and invite the court to infer 

therefrom that notwithstanding the express contrary language of the Electronic Pool Submission 

and the Certification and Agreement, Banl<2 never ceased to maintain its ownership interest, and 

therefore beneficial interest, in the plaintiffs' mortgage. However, the judicially noticed 

statements do not in any degree suggest that Banl<2 could never have conveyed away its 

ownership interest in plaintiff's mmigage, but rather are entirely consistent with the proposition 

that Banl<2 conveyed its ownership interest in the mortgage to GNMA upon submission thereof 

to the pool, and that GNMA immediately passed the conveyed ownership therein on to another 

entity or entities, presumably either to the mortgage pool itself, to the administrator, funds 

custodian, document custodian, processing agent, and/or central paying and transfer agent of the 

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mortgage pool, or, perhaps most likely, to the investors/holders of the securities backed by the 

pool. That is, while the proffered and noticed evidence tends to establish that GNMA was not 

the beneficiary of the loan when MERS purpmied to transfer its beneficial interest therein to 

Bank2, when Bank2 appointed Clear Recon Corp. as successor trustee, or when Clear Recon 

Corp. noticed the non-judicial foreclosure on plaintiffs' residence, it has no tendency whatsoever 

to establish that Bank2 was the beneficimy at any of those times; moreover, it is clear that 

plaintiffs' evidentimy proffer in suppmi of their patiially dispositive motion is sufficient to place 

the burden so to establish squarely on defendants (that is, because plaintiffs' proffer tends to 

establish that Bank2 conveyed away the interest requisite to support its purpmied appointment of 

Clear Recon Corp. as successor trustee, it is necessarily defendants' burden to establish either that 

Bank2's express conveyance of its ownership interest was void or that the interest was 

subsequently conveyed back to Bank2 by an entity with authority to do so). 

Similarly, defendants argue, conectly, that GNMA generally extinguishes an issuer's 

interest in a mortgage loan only following the issuer's default of its obligations to make payments 

to GNMA, and then only by affinnatively taking steps to extinguish the issuer's interest therein, 

see Guide, Ch. 23, and that the evidence of record here contains no suggestion either that Bank2 

ever defaulted on its payment obligations or that GNMA ever affirmatively extinguished Bank2's 

interest. On this basis, defendants fmiher argue both that GNMA cannot be the beneficimy of the 

loan and that Bank2 retains an interest - impliedly, in defendants' argument, a full ownership 

interest - in the loan, notwithstanding submission thereof to the pool. Again, however, the fact 

.that GNMA has not foimally extinguished Bank2's interest in the loan does not have any 

tendency to establish that Bank2's interest therein is the crucial beneficial interest, and in any 

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event, the plain language of Chapter 23-3(B) of the Guide (GNMA extinguishment of an issuer's 

interest in a loan means that "any and all right, title, and interest of the Issuer in and to pooled 

mortgages, including but not limited to the rights of the Issuer (and of any subcontract service1) 

to service the pooled mortgages and to earn servicing compensation, are forfeited and cease") 

strongly suggests that, following submission of a loan to the pool, an issuer's residual interest in 

the loan is limited to that of a loan servicer in collecting bolTower payments (and receiving 

compensation for so doing) and in remitting the proceeds therefrom to the person or persons 

possessing the right to retain them (namely, the security holders). Guide, Ch. 23-3(B) (emphasis 

supplied); see also Guide, Ch. 1-11 (C) (establishing that following submission of a mmigage to a 

GNMA pool, the issuer retains a servicer's interest in the mortgage and the obligation to service 

the loan). 

Finally, defendants point to the testimony of Bank2's Senior Vice President and of its 

controller in charge of accounting and financing that at the material times Bank2 owned the loan, 

see Watson Deel. I, iii! 5, 7, Watson Depo. at 10:22-24, 11:8-10,12:21 - 13:1, Delgado Deel., 

i! 6, and to Atchinson's testimony that Bank2's accounting treatment of the loan "is separate from 

the issue of ownership of the loan ... [and] is not in any way dete1minative of the legal 

ownership, or beneficiaiy, of the loan," Atchison Deel., iii! 9-10. However, while Atchison's 

testimony is sufficient to create a question of fact regarding the probative value of Patterson's 

testimony as to Bank2's accounting treatment of the loan, plaintiffs' argument does not depend 

critically on Patterson's testimony; and the testimony of Watson and Delgado as to the ultimate 

issue ofBank2's interest in the loan at the time the foreclosure was noticed is not supported by 

underlying facts and cannot overcome the legal effect of the Electronic Pool Submission or of the 

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Certification and Agreement, which speak for themselves and are enforceable according to their 

own te1ms as a matter of law notwithstanding the testimony of Banl<2's employees. 

Because defendants' evidentiary submissions are insufficient to create any material 

question of fact as to whether Bank2 could have been the beneficiary of the loan at the time it 

purpo1ied to appoint Clear Recon Corp. as the successor trustee (or at any other material time), 

plaintiffs are entitled to the requested declaration that Bank2 is not the beneficiary of plaintiffs' 

mortgage loan. In addition, because defendants have not met their burden to create a question of 

fact as to whether documents recorded in Multnomah County could establish that either of them 

is either the beneficiary or the trustee of the loan (or that either enjoyed such status at the time 

Bank2 purpo1ied to appoint Clear Recon. Corp as the successor trustee), plaintiffs are further 

entitled to the requested declaration that neither defendant herein may lawfully proceed with a 

non-judicial foreclosure on plaintiffs' residence (barring any future assignment of the requisite 

interest to one of the defendants from a pmiy with the authority to make such an assignment). In 

consequence, plaintiffs' motion (#66) for pmiial summary judgment should be granted, and the 

court should issue the requested declarations. 

CONCLUSION 

For the reasons set forth above, defendants' request (#99) for judicial notice should be 

granted, defendants' motion (#89) to strike should be denied, plaintiffs' motion (#66) for partial 

summary judgment should be granted, and this court should declare both that defendant Bank2 is 

not the beneficiary of plaintiffs' mortgage loan and that the defendants herein may not lawfully 

proceed with a non-judicial foreclosure on plaintiffs' residence. 

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SCHEDULING ORDER 

The Findings and Recommendation will be referred to a district judge. Objections, if any, 

are due fomieen (14) days from service of the Findings and Recommendation. Ifno objections 

are filed, then the Findings and Recommendation will go under advisement on that date. 

If objections are filed, then a response is due fourteen (14) days after being served with a 

copy of the objections. When the response is due or filed, whichever date is earlier, the Findings 

and Recommendation will go under advisement. 

l rt I\ 

Dated this)klth day of April, 2016. 

J 

Honorable Paul Pap k 

United States Magistrate Judge 

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