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U.S. Bank Trust v. Ray

Superior Court of Maine, Cumberland

July 29, 2017

U.S. BANK TRUST, as Trustee for LSF9 Master Participation Trust Plaintiff,
v.
BONNIE J. RAY Defendant.

          ON PLAINTIFFS COMPLAINT FOR FORECLOSURE AND DEFENDANT'S MOTION FOR SANCTIONS AFTER THE PRESENTATION OF EVIDENCE AT TRIAL

         Before the court is Plaintiffs complaint for foreclosure against Defendant, Bonnie J. Ray. The case came before the court on May 2, 2017. Both parties presented evidence in the form of sworn testimony and exhibits. After the bench trial, the parties filed closing arguments on the issue of "attorney-in-fact, " and any other points the parties wished to raise. Defendant also filed a motion for sanctions.

         Based on the entire record, the court adopts the findings of fact and conclusions of law and renders the judgment as set forth below.

         I. Background

         On November 30, 2006, Defendant Bonnie J. Ray signed a mortgage for property at 26 Stagecoach Lane #12 in Westbrook, Maine, with First Horizon Home Loan Corporation (original lender), listing Mortgage Electronic Registration Systems (MERS) as the sole nominee. The same day she signed a note, secured by the mortgage, for the benefit of First Horizon Home Loan Corporation. A notice of default was sent by self-described debt collector Nationstar Mortgage LLC to Defendant on July 13, 2015. Plaintiff filed a complaint for foreclosure against Defendant on April 21, 2016. Service was properly made on Defendant, and she answered on June 15, 2016. Defendant requested mediation, which was held on July 15, 2016. The parties appeared before this court at a trial on May 2, 2017.

         II. Discussion

         a. Plaintiff's ownership of the mortgage

         1. Validity of the mortgage assignments

         Defendant argues that two purported assignments of the mortgage made by attorneys-in-fact were not shown to effectively transfer any interest where Plaintiff did not produce a power of attorney or other documents to support the agents' authority to perform the assignments. (Def/s Closing Argument 5, 8; Pl.'s Ex. D, F.) Defendant argues that another purported assignment was invalid because the assigner was never the owner of the loan. (Def.'s Closing Argument 5; Pl.'s Ex. E.) Defendant argues that Plaintiff has not proven that it is the owner of the mortgage, and does not have standing (Def.'s Closing Argument 7, 9.) Plaintiff argues that one of the assignments questioned by Defendant is superfluous, and that there has been no action disputing the transfer of interest executed by the second nor did Defendant dispute the authority of any of the signatories to the assignments. (Pl.'s Closing Argument 6.)

         A party has standing to seek foreclosure only if that party can show both an enforceable interest in the note and ownership of the mortgage. Bank of Am., N.A. v. Greenleaf 2015 ME 127, ¶¶ 11-12, 124 A.3d 1122. As a nominee for a lender, MERS possesses no interest in a mortgage other than the right to record it. Greenleaf 2015 ME 127, ¶15, 124 A.3d 1122.

         Here, in 2010, the mortgage was assigned by MERS to "First Horizon Home Loans, a division of First Tennessee Bank National Association." (Pl.'s Ex. C.) In 2014, the mortgage was assigned from "First Tennessee Bank, National Association Successor by Merger To First Horizon Home Loan Corporation" by attorney-in-fact Nationstar Mortgage LLC to Nationstar Mortgage LLC. (Pl.'s Ex. D.) The 2010 assignment by MERS did not transfer ownership of the mortgage and, hence, neither did the subsequent 2014 assignment. See Greenleaf, 2015 ME 127, ¶ 15, 124 A.3d 1122. Therefore, the court declines to consider the attorney-in-fact issue related to this invalid chain in title as it relates to standing for foreclosure, but notes Plaintiff was required to present these assignments to fulfill the statutory requirement for evidence of all assignments. 14 M.R.S. § 6321.

         In 2015, a quitclaim assignment of the mortgage was executed from "First Horizon Home Loans A Division of First Tennessee Bank NA As Successor by Merger To First Horizon Home Loan Corporation" to Nationstar Mortgage LLC. (Pl.'s Ex. E.) On October 28, 2016, the mortgage was assigned from Nationstar Mortgage LLC by Caliber Home Loans, Inc. as attorney-in-fact to "U.S. Bank Trust, N.A., As Trustee for LSF9 Master Participation Trust." (Pl.'s Ex. F.) The 2016 assignment was witnessed and notarized. Cf. Nationstar Mortgage v. Halfacre, No. RE-12-102, 2013 Me. Super. LEXIS 52, at *3, 10 (May 10, 2013). Plaintiff provided a witnessed and notarized Limited Power of Attorney, dated October 11, 2016, appointing Caliber Home Loans, Inc. as an agent with authority to, inter alia, transfer ownership of loans on behalf of "U.S. Bank Trust, N. A., As Trustee for LSF9 Master Participation Trust, " but not Nationstar Mortgage LLC. (Pl.'s Ex. K ¶ 7); (Def.'s Closing Argument 3.) However, Nationstar Mortgage LLC acknowledged the validity of the 2016 assigned made on its behalf by Caliber Home Loans with its December 12, 2016 motion to substitute "U.S. Bank Trust, N.A., As Trustee for LSF9 Master Participation Trust" as the correct party Plaintiff, which was ordered on January 10, 2017. (Nationstar Mortgage LLC's Mot. Substitution of Party ¶ 5.) The court finds that Plaintiff has properly supported a potential chain of title proving ownership that is required for standing. But, Plaintiff has not provided support that "First Horizon Home Loans A Division of First Tennessee Bank N A" succeeded the interest of the original lender (First Horizon Home Loan Corporation.)

         2. Missing assignments of the mortgage

         Defendant argues that Plaintiff has not met the statutory requirement to present evidence of all assignments of the mortgage. (Def.'s Closing Argument 2-3, 5.) Plaintiff argues that "[c]luttering the record" with void or ineffectual assignments is contrary to the legislative intent of the foreclosure statutes. (Pl.'s Closing Argument 6.)

         In order to foreclose, a mortgagee must produce evidence of the mortgage and all assignments. 14 M.R.S. § 6321. As part of any judgment, the court must find that the mortgage is indeed "plaintiff's mortgage" and amounts, if ...


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