Mortgage

Massachusetts Court of Appeals upholds MERS rights

Massachusetts Court of Appeals upholds MERS rights

Massachusetts Court of Appeals upholds MERS rights

By Ben Lane | Housing Wire

Massachusetts Court of Appeals upholds MERS rights

Rules mortgage assignment was valid

MERSCORP’s rights as mortgagee have come under fire in many courtrooms throughout the U.S., but a decision from the Massachusetts Court of Appeals reinforces the company’s right to assign a mortgage.

In a lawsuit entitled Shea v. Federal National Mortgage Association, the borrower appealed the lower court’s decision dismissing his quiet title and related claims.

On appeal, Shea argued that the underlying foreclosure was void because MERSCORP’s Mortgage Electronic Registration Systems never held the underlying note and was never a “true” mortgagee. Additionally, Shea alleged that the MERS assignment was invalid because the note holder did not specifically authorize MERS to execute the assignment.

But the Court of Appeals found that “MERS’s interest as mortgagee was not ‘inherently invalid because it was separated from ownership of the underlying debt.’”

Additionally, the Court ruled that “despite [the noteholder’s] right to demand and obtain an assignment of the mortgage in order to enforce its security interest and collect the debt, MERS (as mortgagee) retained the right to assign the mortgage unilaterally absent any restriction in the mortgage document.”

MERS won in Massachusetts court in June as well.

In Cohen v. The Bank of New York Mellon, the Massachusetts Superior Court concluded that the Bank of New York Mellon, as trustee for the certificate holder CWALT, Inc. Alternative Loan Trust 2006-AO10, had the authority to foreclose as lawful holder of the mortgage that MERS assigned to it.

The Court found that MERS had the authority to assign the mortgage, reasoning that the mortgage, signed by the borrowers, expressly named MERS as the mortgagee and therefore “MERS had an explicit contractual right to assign the mortgage.”

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Posted by Red Pill Reports in Housing News
Judge Denies Dismissal of ResCap Mortgage Lawsuit

Judge Denies Dismissal of ResCap Mortgage Lawsuit

Judge Denies Dismissal of ResCap Mortgage Lawsuit

By Brena Swanson | Housing Wire

Judge Denies Dismissal of ResCap Mortgage Lawsuit

SunTrust Building in Washington DC. Image credit: dIPENdAVE [CC BY-SA 3.0] Wiki

UBS Real Estate Securities, SunTrust Mortgage included in suit

A New York bankruptcy judge on Tuesday did not dismiss four lawsuits brought by the Residential Capital bankruptcy trust, alleging mortgage originators including UBS Real Estate Securities and SunTrust Mortgage sold billions of dollars in defective loans. Per Law360:

The mortgage lenders were accused of selling residential mortgage loans with faulty underwriting that ResCap then packaged and resold, the article said.

“Substitution of the trust as the real party in interest to pursue these adversary proceedings is appropriate,” Judge Glenn wrote in the published opinion. “First, even if RFC lacked standing to file the original complaints against SunTrust and UBS, such defective standing would constitute an honest mistake, since there is no indication that RFC or the plaintiff acted in bad faith.”

The article noted that the judge did dismiss breach of contract claims for loans purchased by RFC before May 2006, ruling they were untimely.

Source

Related: http://www.litigationdaily.com/id=1202717036034/UBS-SunTrust-Lose-Bid-to-Escape-ResCap-Mortgage-Claims

Glenn did throw the banks a bone when he barred ResCap’s breach of contract claims related to loans purchased before May 14, 2006. But even that portion of the decision didn’t go fully in the banks’ favor. While Glenn found that a six-year statute of limitations applied, the banks’ primary argument was that the applicable statute of limitations was three years. That would have created a May 14, 2009, starting date for ResCap’s contract claims, cutting off most of those claims because ResCap bought virtually all the mortgages at issue before that date, according to the decision.

Posted by Red Pill Reports in Housing News
Schneiderman to Target More Banks for Mortgage Securities Fraud

Schneiderman to Target More Banks for Mortgage Securities Fraud

Schneiderman to Target More Banks for Mortgage Securities Fraud

By Brena Swanson | Housing Wire

Schneiderman to Target More Banks for Mortgage Securities Fraud

Banks are not past the days of mortgage fraud cases, according to an article in Reuters. Eric Schneiderman, the New York attorney general, said he plans to bring more fraud cases against the world’s biggest banks for selling shoddy mortgage-backed securities before the financial crisis.

“Obviously there were many more institutions involved,” Schneiderman said in an interview this week. “So there will be more cases.”

The attorney general said that group remains “very active,” while declining to discuss whether he is in settlement talks with Morgan Stanley, the bank that sources say is next in line for a settlement. A spokesman for Morgan Stanley also declined to comment.

Just two months ago, Mega bank JPMorgan Chase (JPM) signed an agreement with government agencies, including Schneiderman’s office, to end all existing legacy mortgage-backed securities issues for $13 billion.

Source

Related: Credit Suisse Will Appeal Mortgage-Backed Securities Fraud Lawsuit
By TheStreet.com Videos

Credit Suisse is up against a $10 billion lawsuit from New York Attorney General Eric Schneiderman over its alleged role in the sale of fraudulent mortgage-backed securities in the years leading up to the financial crisis, but says it will fight the case, according to a Reuters report. The investment bank said on Monday that it will fight the case. Other banks have been sued for fraud involving mortgage-backed securities, including JPMorgan Chase, which agreed to a $13 billion settlement with the Department of Justice last year. Some $613 million of that settlement went to New York State. Citigroup paid $7 billion in fines last summer and Bank of America paid almost $17 billion to federal and state authorities involving fraudulent mortgage back security sales back in August. Shares of Credit Suisse are trading down about 1.3% at $25.62 per share.

Posted by Red Pill Reports in Housing News