Source: http://stopforeclosurefraud.com/tag/tro/
Timestamp: 2019-04-23 18:36:10+00:00

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and RECONTRUST COMPANY, N.A., Defendants.
Because of the alleged imminent foreclosure sale, and because the presence of MERS demonstrates a high probability that defendants did not comply with the recording requirements of the Oregon Trust Deed Act, I grant plaintiff’s request for a temporary restraing order (#3).
On May 9, 2011, LSI recorded a Notice of Trustee’s Sale for the Property.
Because of the alleged imminent foreclosure sale, and because the presence of MERS demonstrates a high probability that defendants did not comply with t recording requirements of the Oregon Trust Deed Act, I grant plaintiff’ request for a temporary restraining order.
Defendants BAC Home Loans Servicing, L.P. (sued erroneously as Bank of America (BAC) Home Loans Servicing, L.P.), Mortgage Electronic Registration Systems, Inc., and ReconTrust, N.A. move to dismiss all of plaintiff Pamela Staton’s claims pursuant to Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 8(a). Defendants’ motion is granted in part and denied in part.
In addition, plaintiff moves for partial summary judgment pursuant to Fed. R. Civ. P. 56, seeking an injunction. Plaintiff’s motion is denied.
In 2005, plaintiff took out a loan from Countrywide Home Loans, Inc. (“Countrywide”) in the amount of $735,500. Pursuant to this transaction, plaintiff executed a promissory note in favor of Countrywide. The note was secured by a Deed of Trust, which lists Countrywide as the lender, Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary, “acting solely as a nominee for Lender and Lender’s successors and assigns,” and Fidelity National Title Insurance as the trustee. The Deed of Trust was filed in Lane County, Oregon on November 29, 2005.
In September 2009, plaintiff stopped making payments required under the loan agreement. On October 19, 2009, Countrywide’s loan servicer, BAC Home Loans Servicing, L.P. (“BAC”), sent a Notice of Intent to Accelerate to plaintiff. The Notice of Intent to Accelerate advised plaintiff that she was required to make a payment of $8,915.61, plus other regular payments, by November 18, 2009, otherwise the default would not be considered cured and the mortgage payments would be accelerated with the full amount becoming due and payable. Plaintiff made a partial payment, but failed to fully cure the default.
On November 10, 2009, BAC sent plaintiff another Notice of Intent to Accelerate, relating to a home equity line of credit loan secured by the property. The second Notice of Intent to Accelerate advised plaintiff that she was required to make a payment of $719.61, plus other regular payments, by December 15, 2009, otherwise the default would not be considered cured and the mortgage payments would be accelerated with the full amount becoming due and payable. Plaintiff failed to cure the default.
Sometime prior to initiating foreclosure proceedings in 2010, Countrywide securitized, bundled and sold, or “tranched,” plaintiff’s promissory note. As a result of the “tranching,” one or more parties, including CWALT, Inc. (“CWALT”), gained a beneficial interest in the note.
The Bank of New York (“BNY”), as trustee for certificate holder CWALT. On January 11, 2010, the Assignment of the Deed of Trust was recorded in the official records of Lane County.
On January 6, BNY by BAC appointed ReconTrust to serve as successor trustee for the Deed of Trust. This appointment was executed on January 6, 2010, and recorded in the official records of Lane County on January 11, 2010.
On January 6, 2010, ReconTrust executed a Notice of Default and Election to sell plaintiff’s property. On January 11, 2010, the Notice of Default and Election to Sell was recorded in the official records of Lane County. On June 1, 2010, ReconTrust recorded the following documents in the official records of Lane County: Affidavit of Mailing of Notice of Sale, Affidavit of Publication of Notice of Sale, Affidavit of Service, and a copy of the Notice of Sale.
On September 17, 2010, plaintiff filed a claim against defendants in Lane County Circuit Court. On September 25, 2010, plaintiff filed an amended complaint, alleging the following: 1) declaratory judgment, pursuant to Or. Rev. Stat. § 28.010, that the actions of defendants are void pursuant to Oregon’s Trust Deed Act and enjoining defendants from foreclosing plaintiff’s property; 2) fraud; 3) breach of the covenant of good faith and fair dealing; 4) breach of fiduciary duty; 5) declaratory judgment, pursuant to Or. Rev. Stat. §§ 28.010, 28.020, defining the rights and duties between plaintiff, defendants, and mortgage pass-through certificate holders; 6) quiet title; 7) remove cloud on title; and 8 statutory claim for invalid encumbrance. Plaintiff also seeks economic damages of $1,135,000, non-economic damages of $150,000, and “actual” damages in the amount of $1,060,000. On October 20, 2010, defendants removed this action to this Court.
On November 1, 2010, ReconTrust executed a new Notice of Default and Election to Sell the Property. On November 4, 2010, the Notice of Default and Election to Sell was recorded in the official records of Lane County. The Notice stated that the foreclosure sale was set to occur on March 16, 2011, at the Lane County Courthouse. A foreclosure sale has not yet occurred.
Where the plaintiff “fails to state a claim upon which relief can be granted,” the court must dismiss the action. Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 For the purpose of the motion to dismiss, the complaint is liberally construed in favor of the plaintiff, and its allegations are taken as true. Rosen v. Walters, 719 F.2d 1422, 1424 (9th Cir. 1983. However, bare assertions that amount to nothing more than a “formulaic recitation of the elements” of a claim “are conclusory and not entitled to be assumed true.” Ashcroft v. Igbal. 129 S. Ct. 1937, 1951 (2009.
Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitles to a judgment as a matter of law.” Fed. R. Civ. P. 56(c) . Substantive law on an issue determines the materiality of a fact. T.W. Electrical Serv., Inc. v. Pacific Electrical Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987. Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of a dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986.
Defendants contend that all of plaintiff’s claims fail to state a claim as a matter of law, and therefore should be dismissed. Defendants also assert that plaintiff’s declaratory relief claims should be dismissed because defendants had the authority to commence and prosecute a nonjudicial foreclosure action.
To support their motion to dismiss, defendants request that this Court take judicial notice of MERS’ Terms and Conditions. The agreement outlines the relationship between MERS and its members, such as Countrywide or BNY, and permits MERS to initiate a foreclosure sale on behalf of a lender.
Plaintiff argues that this Court should not take judicial notice “for the purpose of determining whether defendants’ actions were permissible under Oregon law because plaintiff disputes the authenticity of the documents.” Plf.’s Resp. to Defs.’ Mot. For S.J. at pg. 8. The Court assumes that, by referring to “documents,” plaintiff is objecting to more than just the Terms and Conditions. The Court surmises from plaintiff’s response that plaintiff does not want this Court to take judicial notice of the Assignments of the Deed of Trust and Appointment of Successor Trustee, because plaintiff believes they were fraudulently executed.
Additionally, plaintiff requests that this Court take judicial notice of ReconTrust’s “debt collection activity.” In her response, plaintiff reprints a portion of a Notice of Sale issued by ReconTrust, which states that “[t]his is an attempt to collect a debt.” Id. at 15. Plaintiff seeks judicial notice of this document to support her claim that ReconTrust must be licensed with Oregon as a debt collector.
Review of a Rule 12(b)(6) motion is generally limited to the complaint. U.S. v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003. However, a court may consider extrinsic documents if they are integral to the plaintiff’s claims and their authenticity is undisputed. Parrino v. FHP, Inc. , 146 F.3d 699, 706 & n. 4 (9th Cir. 1998). Under the Federal Rules of Evidence, a “judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201; see also Ritchie, 342 F.3d at 909. Facts subject to judicial notice may be considered on a motion to dismiss. Mullis v. U.S. Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987.
Despite plaintiff s statement that she “disputes the authenticity” of MERS’ Terms and Conditions, plaintiff has alleged no facts suggesting that this agreement is counterfeit or false in any way. I find, however, that the Terms and Conditions are not integral to plaintiff’s claims, and therefore, defendants’ request for judicial notice is denied.
Further, regarding documents recorded with Lane County, the Court must take judicial notice if plaintiff intends on using these documents to establish that defendants fraudulently foreclosed on her property. Therefore, these documents are integral to plaintiff’s claims and should have been attached to her complaint. Plaintiff seems to implicitly recognize this fact, as she references these documents in great detail in her complaint, arguably incorporating them by reference. Since plaintiff now attaches these documents to her response, the Court presumes that plaintiff would like the Court to consider them, if only for the sake of establishing defendants’ fault. These documents are also part of the public record. Defendants make no objection to these documents. Thus, even though plaintiff disputes their validity, the Court takes judicial notice of documents recorded with Lane County, including the Assignments of the Deed of Trust and Appointment of Successor Trustee.
Finally, the Court declines to take judicial notice of plaintiff’s document relating to ReconTrust’s “debt collection activity.” The language that plaintiff incorporated into her response was an excerpt from a Notice of Sale for a property other than plaintiff’s. Here, plaintiff has provided no evidence that ReconTrust sent her a similar notice. Thus, the fact that ReconTrust sent a notice to another person in which it identified itself as a debt collector is not integral to plaintiff s claim. Further, the Court has no way to confirm the authenticity of this Notice, since the parties bound by it are not now before this Court. As such, plaintiff’s request for judicial notice is denied.
Plaintiff’s first claim for relief is unclear. It consists of a convoluted list of allegations and facts, supported by “information and belief.” Plaintiff seems to allege that any action of BAC, MERS and ReconTrust are void because they were not licensed under Oregon law. Further, plaintiff is seeking a declaration that defendants Recontrust and MERs are not qualified to act as trustees pursuant to Oregon’s Trust Deed Act, such that defendants’ foreclosure proceedings are invalid. Plaintiff, however, misconstrues the law and facts surrounding this case.
BAC, MERS, or ReconTrust are not required to be licensed by the Oregon Secretary of State with respect to foreclosing the Deed of Trust. Moreover, ReconTrust is not required to be registered with the Oregon Department of Business and Consumer Services as a debt collector. As defendant correctly points out, Oregon law excludes corporations that engage in certain corporate business activities from state licensing requirements, and provides that the corporate acts of unlicensed foreign corporations are not invalid. See Or. Rev. Stat. §§ 60.701, 60.704.
Generally, a “foreign corporation may not transact business” in Oregon “until it has been authorized to do so by the Secretary of State.” Or. Rev. Stat. § 60.701(1). However, defendants argue that certain activities, even if conducted in Oregon, do not subject a foreign corporation to licensing requirements. Specifically, defendants cite to § 60.701(2), which states: “[t]he following activities among others, do not constitute transacting business . . . (g) Creating or acquiring indebtedness, mortgages and security interests in real or personal property; (h) Securities or collecting debts or enforcing mortgages and security interests in property securing the debts.” Or. Rev. Stat. § 60.701(2).
Here, defendants’ actions fall expressly within this exception, as they initiated foreclosure proceedings by enforcing plaintiff’s mortgage. Accordingly, I find that defendants were not required to receive a license from the Secretary of State in order to foreclose on plaintiff’s property.
Finally, contrary to plaintiff’s contentions, ReconTrust need not be qualified to act as a debt collector under Oregon law. Plaintiff cites to no authority that imposes such a requirement on an entity such as ReconTrust. Thus, plaintiff’s assertion that ReconTrust must be licensed as a debt collector is conclusory, and as such, this Court must not presume the statement to be true. Iqbal, 129 S.Ct. at 1951. In fact, upon the allegations contained in the complaint, ReconTrust’s conduct is merely that of a trustee seeking foreclosure and sale pursuant to a Deed of Trust, which is not a debt collecting activity. Hulse v. Ocwen Fed. Bank, FSB, 195 F.Supp.2d 1188, 1203-4 (D.Or. 2002). As such, defendants’ motion to dismiss is granted in part in regard to these aspects of plaintiff s first claim.
ReconTrust, the only defendant who actually did act as a trustee in this case, does meet the definition of “trustee” under Oregon’s Trust Deed Act. The Act defines trustee as “a person, other than the beneficiary . . . [who] is qualified to be a trustee under ORS 86.790.” Or. Rev. Stat. § 86.705(6). Under § 86.790, a “financial institution or trust company, as defined by ORS 706.008, that is authorized to do business under the laws of Oregon or the United States” is qualified to be a trustee. Or. Rev. Stat. § 86.790 (1) (b) .
Here, all defendants conceivably could meet the definition of a “trustee,” because all are financial institutions authorized to do interstate business. See Or. Rev. Stat. § 706.008 (defining a “financial institution” as “insured institutions . . . and federal credit unions” including “the trust department of a bank”). Specifically, ReconTrust is a subsidiary of Bank of America, an FDIC insured, federally chartered bank. Therefore, as a matter of law, ReconTrust is qualified to act as a trustee.
In addition, plaintiff contends that Oregon’s Trust Deed Act does not permit MERS to be designated as beneficiary as nominee for the lender. Plaintiff relies on a number of cases outside of this district, the majority of which are factually distinct, in support of her claim. See MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 861 N.E.2d 81 (2006; Landmark Nat’l Bank v. Kesler, 289 Kan. 528, 216 P.3d 158 (2009), etc. Plaintiff contends that these cases hold that MERS can never acquire a beneficial interest in a promissory note or Deed of Trust, because MERS is merely an entity which tracks and records the sale of mortgage instruments. As such, plaintiff argues that MERS’ lacks authority to assign trust deeds, promissory notes, appoint successor trustees or institute foreclosure.
Further, plaintiff alleges that someone other than the holder of the note is proceeding against the security. Accordingly, plaintiff argues that, to the extent that MERS’ assignment had any effect, it is void, because the “assignment of a security interest without the assignment of the debt that it secures yields the assignee nothing.” Schleef v. Purdy, 107 Or. 71, 78, 214 P. 137 (1923) .
Oregon’s Trust Deed Act defines “beneficiary” as “the person named or otherwise designated in a trust as the person for whose benefit a trust deed is given.” Or. Rev. Stat. § 86.790(1)(d). Thus, nothing in the statute expressly prohibits MERS from being designated as a “beneficiary” under a trust deed.
Defendants argue that, under the broad language of Or. Rev. Stat. § 86.790(1)(d), MERS is an appropriate beneficiary as listed on the Deed of Trust. They contend that courts, both within and outside the Ninth Circuit, have recognized that MERS, acting as nominee for a lender, can serve as a beneficiary, and as such, has the authority to assign its interest under a Deed of Trust. See Vawter v. Quality Loan Serv. Corp. Of Wash., 707 F.Supp.2d 1115 (W.D.Wash., 2010); Stewart v. MERS, 2010 WL 10655131, *12 (D.Or. Feb. 9, 2010) ; In re Huacrins, 357 B.R. 180 (Bkrtcy. D.Mass. 2006); etc.
While neither party cites to it, this Court is aware of authority within this district that has questioned MERS’ authority to assign its beneficial interest under a Deed of Trust. See In Re Allman, 2010 WL 3366405, *9-10 (Bkrtcy.D.Or. Aug. 24, 2010). While not directly on point, Allman held that the relationship of MERS to the lender “is more akin to that of a straw man than to a party possessing all the rights given a buyer,” and accordingly the true “beneficiary” under the Deed of Trust remained the lender. Id.
Regardless, I find that it is inappropriate to resolve this issue at this stage in the proceedings. In the last several months, “a veritable tsunami of investigation into and litigation over mortgage foreclosure practices broke loose on a national scale.” Bertrand v. Suntrust Mortgage, Inc., Civ. No. 09-857, Opinion and Order at 2 (D.Or. Nov. 1, 2010) . Until case law within this jurisdiction is developed regarding MERS’ role as beneficiary, it is impossible to conclude whether plaintiffs’ complaint states a claim.
Moreover, plaintiff is correct that a foreclosure may be invalid where the entity commencing foreclosure is not the holder of the note. Despite plaintiff’s requests, defendants have failed to provide proof that the foreclosing bank owned the promissory note or can trace its assignment. Therefore, the foreclosure may have been improper independent of MERS’ general authority to assign the Deed of Trust.
Therefore, plaintiff’s claim for a judgement declaring that defendants’ actions are void for failure to be licensed by the state of Oregon or to comply with Oregon’s Trust Deed Act fail as a matter of law and are dismissed.
However, to the extent that plaintiff is seeking a declaration that MERS lacks the general authority to assign the Deed of Trust as beneficiary, or that the foreclosure was improper because the foreclosing bank did not own the underlying note or failed to track its assignment, defendants’ motion to dismiss is denied.
Finally, as an equitable matter, I find that it is necessary to enjoin defendants from completing foreclosure proceedings until all issues regarding the disputed property are resolved. As such, this Court finds it unnecessary to address plaintiff’s motion for partial summary judgment, since the result sought therein has now been reached.
Plaintiff’s second claim alleges that BAC and ReconTrust made misrepresentations to plaintiff regarding ReconTrust’s authority to act as trustee under Oregon law. Further, plaintiff contends that BAC made material misrepresentations about a negotiated short sale, a forbearance, and its status as a holder in due course entitled to payment.
As discussed above, ReconTrust is qualified to act as a trustee under Oregon’s Trust Deed Act. Accordingly, any representations that were allegedly made by BAC or ReconTrust relating to ReconTrust’s role as trustee were not false and cannot support a claim for fraud. Therefore, defendants’ motion to dismiss is granted in part in regard to this aspect of plaintiff’s second claim.
Moreover, I find that the remainder of plaintiff’s fraud claim fails to meet Fed. R. Civ. P. 9(b)’s heightened pleading requirements. To satisfy Rule 9(b)’s standard, “the pleader ‘must state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'” Schreiber Distrib. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). A plaintiff must also “‘set forth what is false or misleading about a statement, and why it is false.'” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003. Additionally, “Rule 9(b) does not allow a complaint to merely lump multiple defendants together but ‘require[s] plaintiffs to differentiate their allegations . . . and inform each defendant separately of the allegations surrounding his alleged participation in fraud.'” Swartz v. KPMG LLP, 476 F.3d 756, 764-5 (9th Cir. 2007) .
Here, plaintiff failed to identify the time, place, specific content, and the parties that allegedly made false representations. Furthermore, if plaintiff is alleging fraud based in part on an agreement between the parties that BAC would accept payment of a lesser amount in full satisfaction of the loan, plaintiff needs to provide evidence of this agreement to the Court. I will, however, grant plaintiff leave to amend her First Amended Complaint to add pleadings sufficient to meet Fed. R. Civ. P. 9(b).
Finally, while not included in the second claim for relief, plaintiff alleges that defendants fraudulently recorded documents with Lane County. Specifically, plaintiff alleges that defendants impermissibly used a “robo-signer,” who was not authorized to act on defendants’ behalf, in order to endorse the Assignments of the Deed of Trust and the Notice of Default. Plaintiff seeks relief for this alleged wrongdoing in her eighth claim for invalid encumbrances. However, because the basis of that claim is defendants’ fraud, the Court suggests that plaintiff include these allegations instead in her second claim for relief, and plead them in accordance with Fed. R. Civ. P. 9(b).
Plaintiff’s third claim for breach of the covenant of good faith and fair dealing appears to be asserted only against defendant BAC. Plaintiff’s claim must be dismissed for two reasons. First, the factual allegations supporting the claim are conclusory. The entirety of plaintiff’s third claim states merely that “BAC had a common law duty of good faith and fair dealing to plaintiff by virtue of the contract between defendant BAC and plaintiff. Defendant BAC breached its covenant of good faith and fair dealing as set forth above.” Amended Complaint ¶ 30-1. Because the pleadings amount to nothing more than bare assertions of the elements of a claim, they are not entitled to the presumption of truth. Ashcroft, 129 S.Ct. at 1951.
Second, plaintiff again misconstrues the law and facts surrounding this case. The basis of plaintiff’s claim appears to be that BAC breached its contract with plaintiff in bad faith. In fact, plaintiff first breached the contract by failing to pay her mortgage in accordance with the terms of the promissory note. Therefore, to the extent that defendants proceeded to foreclose pursuant to the express terms of the contract, there can be no claim for breach of the covenant of good faith and fair dealing. Uptown Heights Assocs. Ltd. P’ship v. Seafirst Corp., 320 Or. 638, 645, 891 P.2d 639 (1995) (“if a written contract between the parties expressly allows for a particular remedy by one of the parties, in the face of a specified breach, the parties’ objectively ‘reasonable expectations’ under the contract include the invocation of that remedy in the face of that breach. The party invoking its express, written contractual right does not, merely by so doing, violate its duty of good faith”).
Accordingly, defendants’ motion to dismiss is granted in part, and plaintiff’s third claim is dismissed.
Plaintiff withdraws her claim for breach of fiduciary duty against defendant BAC, acknowledging that BAC s relationship with plaintiff is not fiduciary in nature. Uptown Heights, 320 Or. At Page 18 649-50. Therefore, plaintiff’s fourth claim is dismissed.
Plaintiff’s fifth claim is for a declaratory judgment defining the rights of the parties. Plaintiff alleges that the securitization of her loan was in direct violation of the parties’ lending agreement. However, as stated above, plaintiff has failed to provide this Court with any documentation of the loan or its terms. Further, plaintiff’s allegations in the complaint regarding the terms of the agreement are unspecific and conclusory. Thus, it is impossible for this Court to determine whether defendants could have acted impermissibly in regard to selling investor certificates in plaintiff’s underlying note.
As stated above, if the foreclosing bank cannot show that they own the underlying note or cannot trace its assignment, in part or wholly due to the securitization of the note, plaintiff may have a right to a declaratory judgement. However, plaintiff’s fifth claim for relief currently fails to state a claim, and is therefore, dismissed. Defendants’ motion to dismiss is granted in that regard.
Plaintiff’s six claim seeks a decree from this Court that the property is free and clear of all encumbrances, including the Deed of Trust and promissory note. Here, the factual allegations supporting the complaint are once again conclusory. The entirety of plaintiff’s sixth claim states that ” [p]laintiff is the owner in possession of real property . . . Defendants . . . are not in possession of plaintiff’s real property . . . Defendants claim an interest adverse to plaintiff’s.” Amended Complaint ¶ 4751.
Plaintiff is merely alleging the elements of a claim to quiet title. See Or. Rev. Stat. § 105.605 (“Any person claiming an interest or estate in real property not in the actual possession of another may maintain a suit in equity against another who claims an adverse interest”). However, plaintiff has failed to allege any particular facts entitling her to relief.
In addition, even if plaintiff’s complaint did state a claim to quiet title, it would not be an appropriate remedy here. In general, a person may bring an equitable quiet title action to obtain resolution of a dispute relating to adverse or conflicting claims to real property. Spears v. Dizick, 235 Or. App. 594, 598, 234 P.3d 1037 (2010). While it is possible that defendants may have failed to follow the proper foreclosure procedures, it is undisputed that defendants had the right to foreclose based upon plaintiff’s default under the loan. Thus, because plaintiff is unable to cure the default, she no longer has a valid claim for entitlement to the property. As such, there are no conflicting claims to the property for this Court to resolve.
Further, “[e]quitable relief does not lie if there is an adequate remedy at law.” Alsea Veneer, Inc. v. State of Oregon, 318 Or. 33, 43, 862 P.2d 95 (1993). Here, plaintiff is seeking several other remedies, including over $2 million in monetary damages, an injunction against defendants from foreclosing on her property, and a declaration that she owns the property free of any mortgage. Based on her complaint, plaintiff clearly believes that there are other adequate remedies available at law. Further, this Court is enjoining defendants from commencing foreclosure proceedings until this matter is resolved. As such, plaintiff has failed to show that she is not entitled to further equitable relief.
Accordingly, plaintiff’s claim fails as a matter of law and defendants’ motion to dismiss is granted in part. plaintiff’s sixth claim is dismissed.
Plaintiff’s seventh claim seeks the removal of cloud on title. Plaintiff’s claim fails for two reasons. First, the factual allegations supporting the complaint are conclusory. The entirety of plaintiff’s seventh claim states only that defendants “claim a lien or other encumbrance adverse to plaintiff’s interest in real property. The encumbrance is invalid because the beneficiary under the deed of trust is not entitled to payment on the note, as set forth above.” Amended Complaint SI 52-3. Once more, plaintiff is merely asserting the bare elements of a claim. Ashcroft, 129 S.Ct. at 1951. Further, because plaintiff “incorporates by reference [all] paragraphs,” it is difficult to even discern what relief plaintiff is seeking and the purported basis for that relief.
Second, as discussed above, MERS, the listed beneficiary under the deed of trust, is not seeking payment on the note. Rather, MERS’ role was limited to essentially recording the transfer of the Deed of Trust. Accordingly, plaintiff is not entitled to relief on that basis.
Therefore, plaintiff’s seventh claim for relief fails as a matter of law. Defendants’ motion to dismiss is granted in part and plaintiff’s seventh claim for relief is dismissed.
Plaintiff’s final claim is for invalid encumbrances pursuant to Or. Rev. Stat. § 205.450 et seq. The factual allegations supporting the claim are again conclusory. Plaintiff’s eighth claim states only that “[d]efendant BAC knowingly filed, or directed defendants MERS and ReconTrust to file, an invalid claim of incumbrance against plaintiff’s real property.” Amended Complaint St 56. Plaintiff then goes on to list documents that were recorded in the Lane County Clerk’s Office. Amended Complaint SI 57. However, the fact that these documents were recorded in Lane County does not establish that they were in anyway invalid, much less that defendants knew that they were invalid. Thus, plaintiff is again merely asserting the elements of a claim, without identifying any particular facts entitling her to relief. See Or. Rev. Stat. 205.470 (“[a]ny person who knowingly files, or directs another to file, an invalid claim of encumbrance shall be liable to the owner of the property”). Accordingly, plaintiff fails to state a plausible claim upon which relief can be granted. Ashcroft, 129 S.Ct. at 1951.
Therefore, defendants’ motion to dismiss is granted in part, and plaintiff’s eighth claim for relief is dismissed.
For the reasons stated above, defendants’ motion to dismiss (doc. 10) is GRANTED in part and DENIED in part as follows: defendants’ motion is GRANTED as to plaintiff’s claims for fraud, breach of covenant of good faith and fair dealing, breach of fiduciary duty, fifth claim for declaratory judgment, quiet title, remove cloud on title, and invalid incumbrance; defendants’ motion is DENIED as to plaintiff’s’ first claim for declaratory judgment.
This Court, however, GRANTS plaintiff leave to amend her First Amended Complaint in order to allege facts sufficient to state a claim for relief, and to replead her fraud claim, such that it complies with Fed. R. Civ. P. 9(b)’s heightened pleading requirements. The parties’ requests for oral argument are DENIED as unnecessary.
Further, because this Court is enjoining defendants from foreclosing until the underlying dispute regarding the property is resolved, plaintiff’s motion for partial summary judgment (doc. 32), seeking an injunction, is DENIED.
Finally, this Court encourages the parties to pursue mediation via the U.S. District Court of Oregon’s Foreclosure Mediation Panel.
In re: JAMES L. MACKLIN, Debtor(s).
DEUTSCHE BANK NATIONAL TRUST CO., Defendant(s).
Case No. 10-44610-E-7, Adv. Pro. No. 11-2024, Docket Control No. HSB-3.
United States Bankruptcy Court, E.D. California, Sacramento Division.
a. April 14, 2006: $532,000.00 Note. James Macklin Borrower, Accredited Home Lenders, Inc., Lender. Macklin Exhibit 1, Deutsche Bank Exhibit A.
b. April 28, 2006 (recorded) Deed of Trust. James Macklin Borrower/Trustor, Accredited Home Lenders, Inc. Lender, Financial Title Company Trustee, and Mortgage Electronic Registration Systems, Inc. (“MERS”) Beneficiary solely as the nominee of Lender.
The Deed of Trust states that “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this [Deed of Trust], but, if necessary to comply with law or custom, MERS (as nominee of Lender and Lender’s successors and assigns) has the right to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and cancelling this Security Instrument.” Macklin Exhibit 2.
c. December 8, 2008 (recorded) Notice of Default and Election to Sell under Deed of Trust(dated December 4, 2008). By Windsor Management Co., as agent for MERS. Deutsche Bank Exhibit E.
d. March 10, 2009, 9:31 a.m. (recorded) Substitution of Trustee (dated January 30, 2008, by MERS, notarized March 4, 2009, San Diego, California notary). By MERS, Windsor Management, Co. identified as new trustee under Deed of Trust. Deutsche Bank Exhibit F.
e. March 10, 2009, 9:32 a.m. (recorded) Notice of Trustee’s Sale (dated March 9, 2009). By Windsor Management Co. Deutsche Bank Exhibit G.
f. November 25, 2009 (recorded) Notice of Trustee’s Sale (dated November 12, 2009). By Quality Loan Service Corp. Deutsche Bank Exhibit I.
g. November 25, 2009 (recorded) Substitution of Trustee (dated August 21, 2009, notarized August 21, 2009, Dakota, Minnesota notary). Deutsche Bank, substituting Quality Loan Service Corporation as the trustee under the Deed of Trust. Deutsche Bank Exhibit H.
h. November 30, 2009 (recorded) Assignment of Deed of Trust (dated November 17, 2-[illegible], notarized November 17, 2-[illegible], Salt Lake City, Utah notary) to Deutsche Bank. Deutsche Bank Exhibit J.
i. December 21, 2009 (recorded) Trustee’s Deed Upon Sale. By Quality Loan Service Corporation as grantor/trustee, Deutsche Bank as grantee. Deutsche Bank Exhibit K.
Civil Code § 2932.5 provides that, where a power of sale for real property is given to a mortgagee or other encumbrancer to secure an obligation, such power of sale may be exercised by the assignee who is entitled to receive payment of the obligation “if the assignment is duly acknowledged and recorded.” If the assignment has not been recorded, then the power cannot be exercised. The application of Civil Code § 2932.5 to all encumbrances, including deeds of trust, works to protect the borrower (trustor), lender (beneficiary), trustee, purchaser at a foreclosure sale, and subsequent owners of the property. Before persons purport to take action and exercise rights under a Deed of Trust, the assignment documenting the acquisition of those rights is recorded with the county recorder. This results in the real property records clearly and unambiguously stating who held the rights and who asserted the rights. This minimizes title disputes years later as to whether a notice of default or notice of sale was given by a properly authorized party and whether the purported sale under the Deed of Trust is void. This imposes the minimalist of burdens on the beneficiary acquiring a Note secured by a Deed of Trust — recording the notice of assignment before purporting to change the trustee or authorize a foreclosure.
In the present case, Macklin and Deutsche Bank have demonstrated that the recording of the assignment of the Deed of Trust post-dated Deutsche Bank recording documents purporting to change the trustee to Windsor Management and then Windsor Management purporting to give a notice of sale. Though there are only days by which Deutsche Bank, 2006-2 failed to record the assignment of the trust deed, a record has been created that someone not of record title purported to take action on a Deed of Trust prior to compliance with Civil Code § 2932.5. Issues of title and the record upon which future generations of owners will reply cannot be subject to a would-you-believe-I-missed-it-by-that-much implied waiver of this statutory requirement.
Macklin has shown a likelihood of prevailing on the issue of the purported foreclosure sale not having been properly conducted, thereby resulting in a void deed. The court issues the preliminary injunction on this ground.
In re: WALTER RALPH PINEDA, Debtor(s).
BANK OF AMERICA, N.A., et al, Defendant(s).
Case No. 10-91936-E-7, Adv. Pro. No. 10-9060, Docket Control No. WRP-5.
United States Bankruptcy Court, E.D. California, Modesto Division.
The court has been presented with a Motion for Injunctive Relief and Ex Parte Application for a Temporary Restraining Order filed by Walter R. Pineda, a pro se plaintiff in this adversary proceeding. The Motion was presented the court at 4:00 p.m. on March 14, 2011. In the Motion Mr. Pineda asserts that Bank of America Corp, LP, a defendant, intends to conduct a non-judicial foreclosure sale at 3:00 p.m. on March 15, 2011, for real property commonly known as 22550 Bennett Road, Sonora, California (“Bennett Road Property”). The Bennet Road Property is listed on Schedule A as real property owned by the Debtor and his unnamed spouse, with a value of $210,000.00 Schedule A, Docket Entry No. 16, Case No. 10-91936.
The Debtor commenced a voluntary Chapter 7 case on May 20, 2010. The petition lists the Bennett Road Property as his street address. The nature of the Debtor’s business is listed as “Law.” The petition further states that the Debtor has not filed any prior bankruptcy cases within the last 8 years. Petition, Docket Entry No. 1, Case No. 10-91936.
On Schedule D filed by the Debtor on June 14, 2010, the Debtor lists the Bank of New York Mellon as his only creditor having a secured claim. He states under penalty of perjury that there is a codebtor, that the date the claim was incurred, nature of the lien, and description of collateral is “Unknown,” the value of the unknown collateral is $10.00, and the amount of the claim is $10.00. Docket Entry No. 18. In the original Schedule D filed on June 3, 2010, the Debtor stated under penalty of perjury that Bank of America had a claim for a debt incurred on August 13, 2002, secured by a deed of trust against the Bennett Road Property, that the Bennett Road Property had a value of $300,000.00, and that the Bank’s disputed claim was for $477,894.27. Nothing in the court’s file indicates which statement under penalty of perjury is true and correct.
The Motion asserts that by proceeding with a trustee’s sale under the deed of trust, Bank of America Corp., LP is attempting to usurp the court’s authority with respect to this adversary proceeding, and is in violation of Rule 7001, Federal Rules of Civil Procedure (which states the matters for which an adversary proceeding is required), and Rule 65, Federal Rules of Civil Procedure, and Rule 7065, Federal Rules of Bankruptcy Procedure, (injunctive relief). The Motion does not assert how a non-judicial foreclosure sale usurps the court’s power relating to adversary proceedings and injunctive relief. The court construes this contention to be that if the foreclosure sale is allowed to proceed, the court will be unable to grant the relief requested by the Debtor in the Complaint.
The Debtor next contends that he will suffer immediate, irreparable injury, loss or damage in that Plaintiff/Debtor’s “current poor, physical condition will worsen and Plaintiff will become homeless balanced against adding another vacant home to Defendant’s hundreds of thousands of vacant homes inventory.” Motion, pg. 2:17-20. The Debtor/Plaintiff further alleges that a non-judicial foreclosure will impair the administration of the Chapter 7 case, but does not identify the potential impairment.
The Debtor has filed a document titled affidavit in support of the Motion in which he states that he is currently under treatment for a deteriorating transplanted liver and will become homeless in the event of a sale. Further, that failure to grant the restraining order will result in the Debtor/Plaintiff being denied the protection of the injunctive relief rules, as well as frustrating (in an unstated way) the administration of the Chapter 7 case. The “Affidavit” further states that he called the law office for Bank of America’s attorneys and advised them that he was seeking a temporary restraining order. Though this document is not in the proper form or notarized as an affidavit and does not state that it is under penalty of perjury so as to be a declaration, the court takes into account that the Debtor is representing himself in pro se, and for purposes of this ex parte Motion will consider the statements as being made under penalty of perjury.
On January 25, 2010, Bank of America, N.A., as the alleged beneficiary under the deed of trust, instructed ReconTrust Company, N.A. to file a notice of default. The deed of trust, Exhibit 4, names PRLAP, Inc. as the trustee and not ReconTrust Company, N.A. On February 9, 2010, Bank of America an assignment of trust deed and a substitution of trustee, naming ReconTrust Company as the trustee. It is alleged that this assignment was for the purpose of misrepresenting who is the owner of the note and deed of trust. Debtor/Plaintiff further contends that Bank of America, N.A. and ReconTrust Company improperly commenced the nonjudicial foreclosure in violation of California Civil Code Sections 2924a et. seq.
Debtor/Plaintiff further alleges that on May 2, 2010, he was notified that a nonjudcial foreclosure sale would be conducted at 3:30 p.m. pursuant to the deed of trust. It is contended that such sale was improper because Bank of America and ReconTrust Company did not have the authority to conduct a nonjudical foreclosure sale.
The court has reviewed the First Amended Complaint filed in this Adversary Proceeding, Docket Entry No. 57. The Debtor/Plaintiff first asserts a series of claims against Bank of America, N.A. and other Defendants arising under the Real Estate Settlement Procedures Act (RESPA, 12 U.S.C. 2601 et seq.), Truth in Lending Act (15 U.S.C. § 1600 et. seq.), Fraud (California Civil Code § 1709), California Unfair Business Practices Act (California Civil Code § 17200 et seq.), and breach of contract. The gist of the complaint is that various improper conduct has existed with respect to loan foreclosures throughout the country. This is commonly referred to as the Robo-Signing investigations. It is alleged that the Defendants have refused to provide the Debtor/Plaintiff with an accounting as required under 12 U.S.C. § 2605(a)(1)(A), (f), which has caused Debtor/Plaintiff unstated pecuniary damages. Much of this part of the complaint appears to focus on default swaps, obtaining funds from investors, credit obtained by Defendants, securitized loan pools into which the note was transferred. These allegations do not go to the question of whether the Debtor/Plaintiff has defaulted on his particular loan. At no point in the Complaint or present motion does the Debtor/Plaintiff assert that he is current on the obligations secured by the Deed of Trust. Rather, the contention appears to be that based upon the post-loan financial transactions of the Defendants, monies they received from third-parties from the sale and brokering of the note should be treated as payments on the Note.
It is also asserted that neither Bank of America, N.A. or ReconTrust Company are authorized as agents of the Bank of New York Mellon, the alleged trustee of the trust in which the Debtor/Plaintiff’s note has been transferred to initiate the nonjudical foreclosure process. It is further contended that the nonjudical foreclosure process is an attempt to swindle the property from the Debtor/Plaintiff. Through this second cause of action the Debtor/Plaintiff seeks a determination of the rights of the respective parties.
The Debtor/Plaintiff has attached as Exhibit 2 an April 6, 2010 letter from Bank of America to the Debtor/Plaintiff which states that a copy of the complete loan history is attached. (The Debtor/Plaintiff did not include the loan history as part of the exhibit.) This letter states that “The Bank of New York Mellon, fka The Bank of New York, as trustee for the certificate holders of GSR 2003-9…” is the owner of the Note. This appears to conflict with the May 7, 2010 letter stating to the Debtor/Plaintiff that the note has never been sold. Additionally, the letter identifies the Bank of New York Mellon as the trustee for the “certificate holders” of the trust, and not as a trustee of the trust itself.
The Debtor/Plaintiff also contends that the Substitution of Trustee and Assignment of Deed of Trust recorded by Bank of America on February 9, 2010, Exhibit 8 is false as there is no basis for showing that it had the authority to do so at that time. The document purports to assign all beneficial interest in the deed of trust from Bank of America, N.A. to Bank of America, N.A., as servicer for GSR Mortgage Loan Trust 2003-9. This purported assignment was made three months prior to the May 7, 2010 letter in which Bank of America advised the Debtor/Plaintiff that Bank of America never sold the loan at any time.
The Debtor/Plaintiff has attached as Exhibit 10 the notice of default issued with respect to the Note and Deed of Trust. This notice was recorded on January 25, 2010 and states that ReconTrust Company is acting as the agent for the beneficiary under the Deed of Trust. At this juncture, based upon the allegations in the complaint, Bank of New York Mellon was the owner of the Note, as the trustee of the GSR Mortgage Loan Trust 2003-9 (the court is presuming that the reference by Bank of America to Bank of New York Mellon being the trustee for the certificate holders actually means the trustee of the trust for which the beneficiaries are certificate holders). The purported assignment of the Deed of Trust to Bank of America, as servicer did not occur until February 2010, after the notice of default was issued and recorded.
From the court’s survey of California law, an assignment of the note carries the mortgage with it, while an assignment of the mortgage alone is a nullity. Carpenter v. Longan, 83 U.S. 271, 274 (1872); accord Henley v. Hotaling, 41 Cal. 22, 28 (1871); Seidell v. Tuxedo Land Co., 216 Cal. 165, 170 (1932). If one party receives the note and another receives the deed of trust, the holder of the note prevails regardless of the order in which the interests were transferred. Adler v. Sargent, 109 Cal. 42, 49-50 (1895). “Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.” California Civil Code § 2932.5.
The Debtor/Plaintiff also alleges that the Defendants have breach their contractual obligations arising under the Note and Deed of Trust. The alleged breaches include instructing ReconTrust to file the notice of default; failure to advise the Debtor/Plaintiff of the transfer of the Note; failing to account for the monies received in the transfers, securitization, and credit default swaps; and using the note in the GSR Trust. Debtor/Plaintiff asserts that his damages include the drop in real estate values due to the Defendants “reckless, irresponsible, and greedy conduct” in the home mortgage market in the 2000’s.
In light of the Debtor/Plaintiff’s pro se status, it also appears that the Complaint seeks to enjoin the Defendants from proceeding with a non-judicial foreclosure sale peding a determination of who owns the note and who is the beneficiary of under the Deed of Trust.
The Adversary Proceeding was filed August 20, 2010. No answer has been filed, with the Defendants having filed several motions attacking the complaint. These have been denied without prejudice. On January 28, 2011 the Debtor/Plaintiff, Bank of America, N.A., ReconTrust Company, N.A., Bank of New York Mellon, N.A., Inc., and Goldman Sachs, Inc. (GSR Mortgage Loan Trust 2003-9) filed a stipulation extending the deadline for Debtor/Plaintiff to file a first amended complaint. The First Amended Complaint was filed on February 4, 2011, and the Defendants have filed a Motion to Dismiss which is set for hearing on April 6, 2011. It appears that the Motion to Dismiss directly attacks the issues raised in the Complaint and are inexorably tied to the issuance of injunctive relief in this case.
Though the Debtor/Plaintiff appears to have staked his case on contentions and allegations which have nothing to do with his performance on the Note — making the payments promised for the monies borrowed, he does raise a credible issue as to who owns the note, and under California law, who is the beneficiary entitled to enforce the Note. At this early juncture, it appears that by the time Bank of America sought to “assign” the beneficial interest to itself as servicer, the Note had been transferred to The Bank of New York Mellon, as Trustee. Since the obligation was owed to the Bank of New York Mellon, as Trustee, it appears that it is this bank that holds the beneficial interest.
The parties must properly address who holds the note and has the right to enforce the beneficial interest. The court issues the Temporary Restraining Order to maintain the status quo pending the hearing on the motion to dismiss. If the parties elect to extend the term of the Temporary Restraining Order so as to allow the hearing on the preliminary injunction to April 6, 2011, the court will do so for the convenience of the parties.
Pursuant to Rule 65, Federal Rules of Civil Procedure, and Rule 7065, Federal Rules of Bankruptcy Procedure, the court may issue a temporary restraining order without notice if there is a clear showing of immediate and irreparable harm. As stated above, the court accepts the pro se Debtor/Plaintiff’s statements in the Motion for Temporary Restraining Order as being stated under penalty of perjury. The court shall not grant the Debtor/Plaintiff shall liberties in the future, and even the pro se plaintiff must comply with basic requirements for pleadings and evidence.
In balancing the hardships, there appears to be little hardship for the Defendants as they have been litigating this case since August 2010, and are operating under a stipulated time line. Further, it appears that the automatic stay continues in full force and effect in this case as to property of the estate, even though the Debtor/Plaintiff has been discharged. The bankruptcy case has not been closed and the property has not been abandoned by the Chapter 7 Trustee. 11 U.S.C. § 362(c)(2). If the automatic stay does not apply, then there is potential significant harm to the Debtor/Plaintiff by clouding title to the property through a purported valid non-judicial foreclosure sale or a potential third-party purchasing the property at the sale. The potential loss of his interest in the real property is potential irreparable harm sufficient for the issuance of this preliminary injunction.
At this juncture and given that the parties are already in the process of addressing the issues in the Motion to Dismiss of whether there are even valid claims pled, the court finds that no bond is required pending the hearing on the preliminary injunction. In granting this Temporary Restraining Order, the Debtor/Plaintiff should not be misled into thinking that the court has determined that the various claims and assertions attacking the home mortgage market in the 2000’s, Robo-Signing, and post-Pineda loan transactions by financial institutions are meritorious with respect to the obligations owed by the Debtor/Plaintiff on the Note that is secured by the Deed of Trust. Debtor/Plaintiff shall have to carry his burden for any such claims at the hearing on the motion for preliminary injunction, as well as the facts at his for his specific loan, payments made by him on his specific loan, the balance due on his loan, and why the holder of the note, whomever it is, should not be allowed to foreclose based on the borrower’s (Pineda’s) failure to make payments for the monies borrowed.
The court shall issue a Temporary Restraining Order and set the hearing on the Preliminary Injunction for 10:30 a.m. on March 23, 2011, at the United States Bankruptcy Court, 1200 I Street, Modesto, California.
questions going to the merits with respect to his fraud claim.
receive actual notice of [the TRO] by personal service or otherwise.” Fed. R. Civ. P. 65(d)(2).
Accordingly, Plaintiff shall forthwith serve a copy of this Order upon all Defendants.
This matter comes before the Court on Plaintiff’s Motion (#3) for a Temporary Restraining Order Pursuant to FRCP 65. For the reasons that follow, the Court GRANTS Plaintiff’s Motion and temporarily RESTRAINS Defendants from proceeding with the February 16, 2011, foreclosure sale of Plaintiff’s property.
On November 21, 2006, Plaintiff David Ekerson entered into a promissory note secured by property located at 622 S.E. 71st Street, Hillsboro, Oregon, pursuant to one or more deeds of trust recorded December 5, 2006. According to title records, Citibank was the original mortgagee.
At some point, it appears Defendant Mortgage Electronic Resolution System (MERS) became an assignee of the original lender under the Notes, and on October 12, 2010, MERS “grant[ed], assign[ed], and transfer[red]” to Defendant Citimortgage, Inc., “all beneficial interest under” the November 21, 2006, deed of trust. Decl. of Alex Golubitsky, Ex. D. Also on October 12, 2010, MERS evidently issued a Notice of Default to Plaintiff. MERS’s assignment to Citimortgage, however, was not recorded in Washington County’s records until two days later on October 14, 2010.
In his Complaint, Plaintiff alleges he believes Citimortgage is the “current servicer or owner of the loan, having been assigned the loan by Freddie Mac.” Plaintiff also believes Defendant Cal-Western Reconveyance (CWR) is the trustee in charge of the foreclosure sale.
Plaintiff’s property is scheduled to be sold at public auction on February 16, 2011, based on the Notice of Default that Plaintiff contends was improperly issued by MERS.
On February 10, 2011, Plaintiff filed a Complaint in this Court alleging Defendants violated Oregon’s Unfair Trade Practices Act, Or. Rev. Stat. §§ 646.608(1)(k) and 646.608(2)(n). Plaintiff seeks damages and a declaration as to (1) whether Defendants have standing to foreclose; (2) whether MERS “duly and appropriately recorded all assignments of the beneficial interest in the trust deeds” pursuant to Oregon Revised Statute § 86.735 and whether a nonjudicial foreclosure is allowed by statute; and (3) whether the right of the lender to impose a delinquency charge was properly disclosed in the initial loan agreement pursuant to the Truth in Lending Act (TILA), 15 U.S.C. § 1601, Regulation Z, Part 266.18.
On February 10, 2011, Plaintiff also filed a Motion for Temporary Restraining Order in which Plaintiff moves for the entry of an order preventing Defendants from proceeding with the proposed foreclosure sale of Plaintiff’s property on February 16, 2011.
A party seeking a temporary restraining order or preliminary injunction must demonstrate (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. Winter v. Natural Res. Def. Council, 129 S. Ct. 365, 374 (2008). “The elements of [this] test are balanced, so that a stronger showing of one element may offset a weaker showing of another. For example, a stronger showing of irreparable harm to plaintiff might offset a lesser showing of likelihood of success on the merits.” Alliance For The Wild Rockies v. Cottrell, No. 09-35756, 2011 WL 208360, at *4 (9th Cir. Jan. 25, 2011)(citing Winter, 129 S. Ct. at 392). Accordingly, the Ninth Circuit has held “‘serious questions going to the merits’ and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Id., at *7.
“An injunction is a matter of equitable discretion” and is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter, 129 S. Ct. at 376, 381.
Plaintiff seeks an order preventing Defendants from proceeding with the proposed foreclosure sale of Plaintiff’s property as scheduled because, among other things, Defendants “have not followed the appropriate procedures for recording all the deeds and assignments for this property, and therefore lack standing to foreclosure [sic] this property.” Specifically, Plaintiff contends MERS assigned its apparent beneficial interest in the property “to other parties who were not recorded in violation” of Oregon Revised Statute § 86.735.
[T]he interest of MERS, and those for whom it was a nominee, in question here was recorded and known to Plaintiff when it received the litigation guarantee document prior to starting this action.
The Statutes do not prohibit liens to be recorded in the deed of records of counties under an agreement where an agent will appear as a lienholder for the benefit of the initial lender and subsequent assignees of that lender-even where the assignments of the beneficial interest in the record lien are not recorded. It is clear that such unrecorded assignments of rights are permissible under Oregon’s trust deed statute because ORS 86.735 provides if foreclosure by sale is pursued all prior unrecorded assignments must be filed in connection with the foreclosure. The trust deed statutes therefore clearly contemplate that assignments of the beneficial interests in obligations and security rights will occur and may, in fact, not have been recorded prior to foreclosure. The legislature was clearly aware such assignments occurred and nowhere provided that assignments needed to be recorded to maintain rights under the lien statutes except where foreclosure by sale was pursued.
Letter Decision in Parkin Electric, Inc. v. Saftencu, No. LV08040727, dated March 12, 2009 (attached as Exhibit C to the second declaration of David Weibel (# 60)).
(1) The trust deed, any 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.
Id., at *2-*3. Judge Hogan noted Oregon Revised Statute § 86.735 requires any assignments of the trust deed by the trustee or the beneficiary and any appointment of a successor trustee to be recorded. The record in Burgett, however, did not reflect all transfers to the subsequent lenders/servicers had been recorded.
Pursuant to ORS 86.790, the beneficiary may appoint a successor trustee. However, only “[i]f the appointment of the successor trustee is recorded in the mortgage records of the county or counties in which the trust deed is recorded” is the successor trustee “vested with all the powers of the original trustee.” ORS 86.790(3). Accordingly, unless the appointment of LSI Title Company of Oregon, LLC was recorded, the purported successor trustee has no “power of sale” authorizing it to foreclose Rinegard-Guirma’s property. See ORS 86.710 (describing trustee’s power of sale); ORS 86.735 (permitting foreclosure by advertisement and sale but only if “any appointment of a successor trustee [is] recorded in the mortgage records in the counties in which the property described in the deed is situated”).
Similarly, she is likely to experience irreparable harm if her home is foreclosed upon.
Plaintiff also contends this foreclosure proceeding is defective because there has not been established any basis in law for Defendants to have assessed a $77,000.00 delinquency charge which far exceeds the actual loan balance. Plaintiff contends this is a violation of TILA.
The Court finds persuasive the reasoning in Burgett and Rinegard-Guirma as to MERS status in the case on this record. The Court, therefore, concludes Plaintiff has established he is likely to succeed at least as to his request for declaratory judgment related to Defendants’ failure to comply with Oregon Revised Statute § 86.735. Plaintiff also has established MERS, who was the recorded beneficiary of the trust deed, assigned successor trustees to the trust deed but failed to record the appointment of any successor trustee as required before a nonjudicial foreclosure sale may be conducted under Oregon law.
The Court also finds there is a legitimate basis to be concerned that the alleged $77,000.00 delinquency has been assessed improperly. Plaintiff also has established he is likely to experience irreparable harm if the scheduled foreclosure proceeds unabated. The Court, therefore, concludes the balance of hardships tips sharply in Plaintiff’s favor, and there are at least serious questions as to the merits of Plaintiff’s request for declaratory judgment.
Defendants from proceeding with the February 16, 2011, foreclosure sale of Plaintiff’s property.
Here the Court issues the order temporarily restraining Defendants from proceeding with the proposed foreclosure sale of Plaintiff’s property without notice to Defendants because there is insufficient time before the scheduled foreclosure sale to compel Defendants to appear and to respond to the Motion. In addition, Plaintiff’s counsel has made reasonable efforts to notify Defendants and has been unsuccessful in securing the presence of a responsive party.
Finally, the Court concludes the risk of irreparable harm to Plaintiff is significant when weighed against the temporary delay authorized by this Order.
Pursuant to Rule 65(c), the Court requires Plaintiff to post a $500.00 bond by 4 p.m., Monday, February 14, 2011, as a reasonable security for any costs or damages sustained by any party found to have been wrongfully restrained.
For these reasons, the Court GRANTS Plaintiff’s Motion (#3) for a Temporary Restraining Order and hereby RESTRAINS Defendants from proceeding with the February 16, 2011, foreclosure sale of Plaintiff’s property. The Court DIRECTS Plaintiff to post a $500.00 bond by 4 p.m., Monday, February 14, 2011.
DATED this 11th day of February, 2011.
This order is issued on February 11, 2011, at 5:00 p.m., and expired on February 25, 2011, at 5:00 p.m., unless extended by order of the Court.
In re: JOSE D CRUZ, Chapter 13, Debtor.
HACIENDA ASSOCIATES, LLC and WELLS FARGO BANK, N.A., Defendants.
Case No. 10-43793-MSH, Adv. Pro. No. 11-04006.
Before me is the emergency motion of the plaintiff, Jose D. Cruz, for a preliminary injunction barring defendant Wells Fargo Bank, N.A. from foreclosing its mortgage on the plaintiff’s residence at 73 Bolton Street, Marlborough, Massachusetts. After a preliminary hearing on the motion on January 18, 2011, I entered a temporary restraining order enjoining the foreclosure sale, which had been scheduled for that day, but permitted Wells Fargo to postpone the sale by public proclamation to a date after January 25, 2011. On January 25th, I held an evidentiary hearing on the motion. After reviewing the complaint and the evidence submitted by the parties, and for the reasons stated below, I will grant the plaintiff’s motion and enter a preliminary injunction subject to certain conditions.
In accordance with Fed. R. Civ. P. 65, made applicable to this proceeding by Fed. R. Bankr. P. 7065, my decision whether or not to grant a preliminary injunction must be based on the evidence before me, including the verified complaint and affidavits submitted by the parties. I consider the plaintiff’s complaint to be a verified complaint because the plaintiff filed an affidavit dated January 13, 2011 in which he verified the facts alleged in the complaint. The plaintiff also filed the affidavit of Joseph Molina of GIM Services, Inc., who averred that his office submitted a loan modification application to Wells Fargo on behalf of the plaintiff on November 29, 2011. According to Mr. Molina’s affidavit, after several inquiries regarding the status of the loan modification application, his office was informed by telephone on January 19, 2011 (after the complaint had been filed) that the plaintiff’s loan modification application had been denied, and that the reason given for the denial was the approaching foreclosure sale. Mr. Molina also averred that Wells Fargo has not yet communicated this denial to the plaintiff in writing. Lastly, the plaintiff submitted the affidavit of his attorney, Michael Shepsis, who averred that he had contacted Wells Fargo’s foreclosure counsel on several occasions regarding the status of the loan modification and as of January 18, 2011, he had not received any notice that the application had been denied.
In order to obtain a preliminary injunction, the requesting party must demonstrate that (i) there is a likelihood of success on the merits of his claim; (ii) that he will suffer irreparable harm if the injunction is not granted; (iii) that the harm to the requesting party if the injunction is not granted is greater than the harm to the opposing party if it is granted; and (iv) that the public interest would not be adversely affected by the issuance of the injunction. See Sunshine Development, Inc. v. F.D.I.C., 33 F.3d 106, 110-11 (1st Cir. 1994).
On the issue of irreparable harm, the plaintiff seeks in Counts I (breach of contract) and V of his complaint (breach of duty of good faith and reasonable diligence) judgment canceling the pending foreclosure sale of his home. Accordingly, I find that absent an injunction the plaintiff will be irreparably harmed because a foreclosure sale will effectively deprive him of the relief requested in those counts of his complaint.
The question of whether the plaintiff is likely to succeed on the merits of his complaint is really the critical factor to be determined here. See Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 6 (1st Cir. 1991). The plaintiff argues that Wells Fargo, which is a participant in the federal government’s Home Affordable Modification Program (“HAMP”), breached its obligation under the program by scheduling a foreclosure sale of the plaintiff’s property while the plaintiff’s application for a loan modification was under consideration by it. HAMP arose out of the Emergency Economic Stabilization Act of 2008, and is administered by the Federal National Mortgage Association (“Fannie Mae”) as the agent of the Department of the Treasury. Speleos v. BAC Home Loans Servicing, L.P., 2010 WL 5174510, *1 (D. Mass. 2010). The program requires that all mortgage loans owned or guaranteed by Fannie Mae or the Federal Home Loan Mortgage Corporation (“Freddie Mac” and together with Fannie Mae, the government-sponsored agencies or “GSEs”) that meet certain requirements be evaluated by the loan servicers for loan modifications. If a borrower qualifies, then the servicer is obligated to modify the loan in accordance with a predefined formula that reduces the borrower’s monthly payment to 31% of his gross income for the first five years. In addition, many servicers of mortgage loans not owned by the GSEs have executed so-called Servicer Participation Agreements (“SPAs”) with Fannie Mae, as agent for the Treasury Department, by which they agree to review and modify loans on similar terms. The Treasury Department, through Fannie Mae, has established guidelines that servicers must follow in evaluating and approving loan modification requests by borrowers. These guidelines are binding on each servicer by way of its servicing agreements with the GSEs or the SPA to which it was a party. I take judicial notice of the fact that Wells Fargo has executed an SPA, and is thus obligated to follow the HAMP requirements with respect to evaluating a loan modification application.
The plaintiff points to Supplemental Directive 09-01, the first of the Treasury Department’s HAMP guidelines, to support his allegation that servicers such as Wells Fargo are prohibited from foreclosing on mortgages that are under review for loan modification. This directive also requires servicers to seek alternatives to foreclosure in the event that a loan modification is denied. The plaintiff alleges that Wells Fargo scheduled the foreclosure sale of his property while his loan was being reviewed for a HAMP modification, and that this alleged violation of the HAMP guidelines constituted a breach of contract and of Wells Fargo’s duty to act in good faith and with reasonable diligence, justifying, among other things, cancellation of the foreclosure.
The plaintiff’s breach of contract claim in Count I of the complaint is premised on the proposition that he is a third party beneficiary of the Wells Fargo’s SPA or its servicing agreements with the GSEs. While the HAMP program was intended to benefit homeowners by helping them avoid foreclosure, the majority of courts considering the issue have held that consumers have no private cause of action as third party beneficiaries to enforce HAMP violations by their servicers. See McKensi v. Bank of Am., N.A., 2010 WL 3781841, *5-6 (D. Mass. 2010) (“the existing case law weighs decisively in favor of defendant: numerous district courts have interpreted identical HAMP agreements and have come to the conclusion that a borrower is not a third party beneficiary.”) (quoting Hoffman v. Bank of Am., N.A., 2010 WL 2635773 (N.D. Cal.) and citing additional cases); but see Reyes v. Saxon Mortgage Services, Inc., 2009 WL 3738177, *2 (S.D. Cal.) (plaintiff’s complaint alleging a third party beneficiary status with respect to a HAMP violation was “sufficient to state a plausible claim for breach of contract under a third party beneficiary theory”). Very recently, Judge Gorton of the U.S. District Court in Massachusetts cited the proposition in Restatement (Second) of Contracts § 311(b) that one must look to a contract itself to determine whether the parties intended to give rights to third party beneficiaries. Speleos, 2010 WL 5174510 at *5. He held that although the various SPAs and servicing agreements related to HAMP serve to benefit borrowers, nothing in the contracts themselves indicate an intent to create a private right of action in favor of borrowers. I agree with the majority view that the plaintiff is not a third party beneficiary of Wells Fargo’s SPA or other relevant HAMP servicing agreements and, therefore, I find that the plaintiff is not likely to succeed on Count I of the complaint.
In Count V of his complaint, the plaintiff alleges that Wells Fargo breached its duty to act in good faith and with reasonable diligence by attempting to foreclose its mortgage on the plaintiff’s property. Massachusetts courts have consistently held that in addition to complying with the statutory requirements governing mortgage foreclosure set forth in Mass. Gen. Laws ch. 244, a mortgagee must act in good faith and must use reasonable diligence to protect the interests of the mortgagor. Williams v. Resolution GGF OY, 417 Mass. 377, 382-83 (1994). In Snowden v. Chase Manhattan Mortgage Corp., 2003 WL 22519518 (Mass. Super.), the court held that a lender breached this duty by foreclosing a mortgage the day after receiving notice that the borrower had negotiated an agreement to sell the property at a price beneficial to the lender. The court noted that mortgagees in Massachusetts must act as a “trustee for the benefit of all persons interested.” Id. at *2 (quoting Taylor v. Weingartner, 233 Mass. 243, 247 (1916)).
The plaintiff argues that by scheduling a foreclosure sale while the plaintiff’s loan modification request was pending, Wells Fargo breached its duty to act in good faith and with reasonable diligence to protect the plaintiff’s interests. The plaintiff’s argument finds support in Speleos, which concluded that even though the borrowers had failed to state a claim for relief under third party beneficiary theory, they could state a claim for negligence on the theory that the defendants had a duty under the HAMP guidelines not to proceed with a foreclosure sale while evaluating the borrowers for a loan modification. Speleos, 2010 WL 5174510 at *6. The plaintiff’s allegation in Count V of the complaint that Wells Fargo breached its duty of good faith and reasonable diligence is comparable to the negligence claim in Speleos.
The evidence thus far indicates that Wells Fargo scheduled and intended to conduct a foreclosure sale of the plaintiff’s property while the plaintiff’s request for a loan modification was pending before it. Even if the modification was denied on January 19, 2011, eight days prior to the rescheduled foreclosure sale, the plaintiff was not given written notice of the denial nor was he offered other foreclosure mitigation options as required under HAMP guidelines. I find, therefore, that there is a substantial likelihood that the plaintiff will prevail on Count V of his complaint.
In addition, I find that the plaintiff has satisfied the remaining requirements for injunctive relief. While it is possible that the value of the plaintiff’s property may depreciate as this case proceeds (although Wells Fargo offered no evidence on this point), I find that any potential detriment to Wells Fargo from depreciation is outweighed by the enormity of the harm to the plaintiff from a foreclosure sale. Further, my order that the plaintiff make payments to the Chapter 13 trustee will protect Wells Fargo from depreciation and unpaid real estate taxes in the event it ultimately prevails in this action. Finally, I find that it is in the public interest to ensure that lenders foreclose on properties only when they are entitled to do so. Also, the neighbors surrounding the plaintiff’s property will likely benefit if foreclosure can be avoided.
Under Fed. R. Bankr. P. 7065 the court may require a party who benefits from a preliminary injunction to post security to protect the enjoined party in the event that the injunction turns out to have been wrongly issued. Here, the plaintiff’s first and second amended Chapter 13 plans filed in the main case, dated September 24 and October 11, 2010 respectively, each contained provisions in which the plaintiff agreed to make monthly payments to Wells Fargo while his loan modification application was under review. At the evidentiary hearing on the plaintiff’s motion, the plaintiff’s counsel conceded that these payments have not been made to date. The Chapter 13 trustee noted that the plaintiff’s amended Schedule J accompanying his bankruptcy petition lists a total of $1800 in expenses to be dedicated to home mortgage and real estate tax payments. In his memorandum of law in support of his motion for injunctive relief, the plaintiff indicates that his current monthly income is $5829, plus $1,200 in rental income from a tenant. Based on these amounts, a hypothetical HAMP loan modification would involve an initial monthly payment of $1806.99, equal to 31% of total income, after subtracting 25% of the rental income to account for vacancy risk. Accordingly, the preliminary injunction will be conditioned on the plaintiff’s making monthly payments of $1800 to the Chapter 13 trustee. This payment requirement shall be retroactive to October 1, 2010 (the first month after the plaintiff proposed to make these payments in his September 24, 2010 amended Chapter 13 plan). Payments shall be held by the trustee for the benefit of Wells Fargo and paid to Wells Fargo in the event it prevails in this action.
The plaintiff shall make payments of $1800 per month to the Chapter 13 trustee on the first day of each month beginning on February 1, 2011, with a ten day grace period for late payment. In order to catch up on payments due for October through January, the plaintiff shall make a double payment of $3600 on the first day of March, April, May and June. The failure of the plaintiff to make any payment when due will be grounds for vacating the injunction.
A separate order shall enter.
 See, e.g., Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 3.0 (hereinafter “HAMP Handbook”) at 65, available at https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_30.pdf.
 See Wells Fargo Servicer Participation Agreement, available at http://www.treasury.gov/initiatives/financial-stability/housing-programs/mha/Documents_Contracts_Agreements/093010wellsfargobanknaSPA(incltransmittal)-r.pdf; see also HAMP Handbook, supra note 1 at 17 (explaining the role of the SPA).
 Each of the GSEs has its own version of this directive, but all contain the prohibition against foreclosure while loans are under review for modification.
A JPMorgan Chase & Co. branch in El Paso, Texas, may have furniture and computers seized by the sheriff unless the bank complies with a judge’s order to pay the legal bills of a single mother whose eviction case he dismissed.
The manager of the Chase branch was served on Jan. 26 with court papers that instructed the New York-based company to pay attorney Richard A. Roman’s $5,000 in fees, according to Detective Hector Lara, an El Paso County sheriff’s officer. The manager, Jose Gomez, told Lara that the branch’s gear is protected by the Federal Deposit Insurance Corp. and that he would contact the bank’s security staff and the Federal Bureau of Investigation, Lara said today in a telephone interview.
Lara said he’s waiting for an opinion from the county attorney on whether the bank’s property can be seized.
The Court has considered the pleadings, evidence and the arguments of the parties’ counsel and/or representative in this cause and is of the opinion that judgment should be rendered for defendants.
The Foreclosure sale was conducted irrespective of the Order of the 448th Judicial District Court and title is presently at issue.
Attorney/Firm For Defendant: STEVEN J. BAUM, P.C.
NOW, IT IS ORDERED THAT EXECUTION OF ANY PUBLIC SHARES OF PLAINTIFF’S PROPERTY, LOCATED AT 135 OCEAN PARKWAY, UNIT 16-D, BROOKLYN, NEW YORK, 11218, SHALL BE STAYED PENDING THE HEARING OF THIS MOTION, AND SPECIFICALLY THAT DEFENDANT HSBC BANK USA, N.A. BE STAYED FROM EXECUTING A PUBLIC SALE OF PLAINTIFF’S SHARE OF STOCK ON JANUARY 13, 2011 at 2:OO P.M.
A Bank of America Corp. unit, ReconTrust Co. N.A., was ordered by a Nevada judge to temporarily stop foreclosures in the state that aren’t approved by a court order.
Judge Robert W. Lane in Nye County, Nevada, issued a preliminary ruling that blocks ReconTrust from conducting nonjudicial foreclosures until he holds a hearing Feb. 28 on whether to make the ban permanent, according to a Jan. 20 order provided by the court. The injunction was sought in a Nevada homeowner’s lawsuit against Bank of America and ReconTrust.
Stopping the foreclosures is necessary to prevent the “irreparable injury” that would result from “unlawful” seizure of the plaintiff’s home by ReconTrust Co., the judge wrote. The ruling applies to any real estate or personal property in Nevada.
IMPORTANT NOTICE: On January 24, 2011 the plaintiffs, on behalf of the potential Class applied for and received another Temporary Restraining Order and Order to Show Cause against the defendants in this action. If you are a potential class member, please call this office at 714-372-2264 NOW!
GMAC offers loan modification, accepts payments, and forecloses on homeowners, 5 months into the modification, despite GMAC representative admitting that homeowner was not at fault. Listen to the bank admit to missapplying payments, while foreclosing on Los Angeles, CA homeowners.
Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and “the money trust” have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.
Many thanks to Foreclosure Fraud Fighter MIKE DILLON!
A couple in Sandwich who nearly lost their home to foreclosure is gaining traction in their fight against what they said is fraudulent action by the companies trying to take their home.
In March, a last-minute court order forced a foreclosure auctioneer to drive away on auction day without selling the home of Porter and Angie Moore.
While many foreclosures are a legitimate result of a down economy, lost jobs and homeowners taking on more debt than they can manage, the Moores said that’s not the case for them. They said they may have enough proof that their home shouldn’t be foreclosed to get them their day in court.
The Moores said one problem with the foreclosure proceedings is that it’s unclear who owns their bank note. The confusion has made it difficult to appeal, and they had almost given up before they met Mike Dillon.
Dillon, of Manchester, said he’s no expert in foreclosures, but he’s an angry homeowner in the middle of a 10-year battle to keep a bank from foreclosing on his home. He heard the Moores’ story and gave them some advice on how to fight back.
“I was able to share some information with Porter as far as what was going on with his case, just based on his paperwork, on his assignment of mortgage filed at the Registry of Deeds,” Dillon said.
Could New Filing Persuade Judge Waddoups to Set Aside Restraining Order on Bank of America Utah Foreclosures and Remand Case to State Court?
My friends with the latest articles I posted…take note momentum is starting to build!
(Salt Lake City, UT) – The Bank of America’s motion for dismissal filed July 2, 2010 in US District Court of Utah may have opened the way for Judge Clark Waddoups to set aside his order halting foreclosures in Utah by ReconTrust Company and remand the case to state court. Attorneys John Christian Barlow and E. Craig Smay, in their plaintiff’s response filed Friday, July 8, 2010 say “the defendant’s motion to dismiss re-opens the issue of preemption of State law which previously arose in the analysis of the courts jurisdiction. There, the court analyzed and relied upon the wrong statute, producing an erroneous conclusion of preemption. That conclusion should now be corrected,” the attorneys said.
While, the judge ponders his response to the filing, the plaintiff has moved the case to the 10th Circuit Court of Appeals in Denver (Appeal) The Bank of America has become the symbol of what’s wrong in America where homeowners (taxpayers) want less federal control and more accountability. The plaintiff Peni Cox has become a symbol of homeowners everywhere caught in the financial meltdown fighting faceless – paperless financial giants of Wall Street and their legal brain trusts.
Shareholders and mortgage investment portfolio managers are beginning to quietly caution banks about their foreclosure policies. Most of the financial institutions with foreclosures have received TARP TARP (Troubled Asset Relief Program) was designed to get so-called toxic assets off the books of major banks. These assets included mortgage-backed securities deemed impossible to value. Because banks could not buy and sell these securities, they were becoming increasingly illiquid, and a credit crunch began to emerge as lending between banks ground to a halt. TARP funds were utilized to purchase these assets, injecting banks with liquidity.
Barlow continues to champion his client’s rights contending remedies were taken away from her by faceless lenders who continue to overwhelm homeowners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “Mortgage lenders are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary companies which apparently are above the law in Utah,” Barlow said. “The Bank of America and other financial institutions, under the guise of mortgage lenders are trampling the rights of citizens,” he said.
Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust, the bank has over 1162 Utah homeowners in foreclosure as of July 10, 2010.
Next week KCSG News will report on Utah court cases in which the plaintiffs (homeowners) claim neither the lender, MERS (Mortgage Electronic Registration System), nor the Bank of America, nor any other defendant in the case, has any remaining interest in the mortgage promissory note bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Last month the Florida Supreme Court issued a ruling protecting homeowners from losing their homes to foreclosure mills hired by the lenders to foreclose using bogus documents created for lenders in which the lender had no secured interest. Similar cases are now making there way through Utah courts.

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