November 21, 2012
In a very well-reasoned opinion, a Michigan Federal Court has granted a homeowner’s Motion for Leave to Amend his Complaint to challenge a non-judicial foreclosure on the grounds that the alleged assignment of the loan by MERS as “nominee” from the bankrupt original lender to US Bank as “trustee” of a securitized mortgage loan trust violated the provisions of the PSA governing transfers of mortgage loans into the trust, thus enabling the homeowner to seek relief under Michigan Comp. Laws sec. 600.3204(1)(d) as US Bank was not the “owner of the indebtedness” at the time it submitted its credit bid at the sale. This opinion follows prior Michigan Federal opinions which permit an attack on an assignment in general, but goes much further as it expressly permits such an attack through a claimed violation of the PSA.
The homeowner claimed that because the original lender filed and was approved for a Chapter 11 bankruptcy on January 16, 2008 that it was doubtful that MERS, as the claimed “nominee” for the bankrupt original lender, could have assigned the loan to US Bank on June 30, 2011. The homeowner also claimed that the assignment of the note was improper as it violated the PSA by not including all intervening endorsements showing a complete chain of title from the original lender to the Sponsor, then to the Depositor, and then physically received by the Custodian of the Trust.
The Court held that the homeowner may seek relief under section 600.3204(d)(1) “if it is true that the PSA governs the assignments of the Property’s mortgage and note and those assignments violated the PSA’s provisions.” The case is Christopher v. Ownit Mortgage Solutions et al, U.S. District Court for the Eastern District of Michigan (Southern Division) Case No. 12-11872, opinion filed October 31, 2012. We thank one of our dedicated followers for bringing this opinion to us yesterday afternoon.
This ruling is in line with the Hendricks v. US Bank case where Jeff Barnes, Esq. obtained summary judgment in favor of the homeowner in the Washtenaw County, Michigan state court where the court found that the alleged transfers to the US Bank securitized mortgage loan trust did not comply with the mortgage loan conveyance provisions of the PSA.
The Christopher opinion reflects the rational and common-sense approach to challenges to assignments which do not comport with the PSA: if the securitized mortgage loan trust is claiming to have come into possession of and the ability to enforce a mortgage, and it agreed, by contract, that mortgage loans conveyed into the trust must be so conveyed by specific procedures, then the foreclosing securitized trustee must prove that it complied with the very documents by which it agreed to be bound in order to establish that it owns the alleged indebtedness.
Bravo to the Hon. Robert H. Cleland, the United States District Judge who authored the opinion.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com