Burton v. Ocwen Loan Servicing, LLC, Civil Action No. 3:14-cv-00118-MPM-SAA
| Decision Date | 10 September 2015 |
| Docket Number | Civil Action No. 3:14-cv-00118-MPM-SAA |
| Court | U.S. District Court — Northern District of Mississippi |
| Parties | W.C. BURTON and BARBARA BURTON PLAINTIFFS v. OCWEN LOAN SERVICING, LLC, NATIONSTAR MORTGAGE, LLC, and FEDERAL HOME LOAN MORTGAGE CORPORATION DEFENDANTS |
This matter comes before the Court for consideration on the Motion for Summary Judgment [33], filed in the above-styled case on behalf of defendants Nationstar Mortgage, LLC, ("Nationstar") and Federal Home Loan Mortgage Corporation ("Freddie Mac")(collectively, the "Defendants").1 The Motion for Summary Judgment and accompanying Memorandum in Support of Nationstar Mortgage, LLC and Federal Home Loan Mortgage Corporation's Motion for Summary Judgment (collectively with the Motion for Summary Judgment, the "Motion") were filed on May 14, 2015. On June 11, 2015, W.C. and Barbara Burton (the "Plaintiffs") filed their Plaintiffs' Response to Defendants Nationstar Mortgage, LLC and Federal Home Loan Mortgage Corporation's Motion for Summary Judgment [38] and Plaintiffs' Memorandum in Opposition to Defendants Nationstar Mortgage, LLC and Federal Home Loan Mortgage Corporation's Motion for Summary Judgment [39] (collectively, the "Response"). The Defendants filed Nationstar Mortgage, LLC and Federal Home Loan Mortgage Corporation's Rebuttal to Plaintiff's Response to Motion for Summary Judgment (the "Rebuttal")[43] on June 22, 2015. Upon consideration of the Motion, Response, Rebuttal, related filings, evidentiarysubmissions, and relevant law, the Court concludes that no hearing on the matter is necessary. The Court is prepared to rule.
Plaintiffs are Mississippi residents and the subject property is located in Mississippi. Defendant Nationstar Mortgage, LLC is a Delaware corporation registered to do business in the state of Mississippi. Defendant Federal Home Loan Mortgage Corporation is a government-sponsored enterprise with principal offices located in McLean, Virginia. The original loan amount was $387,000.00, and there appears to be no question that the value of the property (whether it is gauged by purchase price, market value, or outstanding principal and interest) exceeds $75,000.00. Accordingly, jurisdiction is appropriate pursuant to 28 U.S.C. § 1332(a). See e.g. Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977) (); Waller v. Prof'l Ins. Corp., 296 F.2d 545, 547-48 (5th Cir. 1961) ().
Plaintiffs filed the Complaint [1] on May 31, 2015, alleging that their real property had been wrongfully foreclosed upon. In 2007, the Plaintiffs purchased a piece of real property with financing provided by Taylor, Bean & Whitaker Mortgage Corp ("TBW"). As part of that transaction, the Plaintiff signed a promissory note and executed a deed of trust, secured by the property. The parties do not dispute that the following language is contained in the original deed of trust:
"MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender [TBW] and Lender's successors and assigns. MERS is the beneficiary under this Security Instrument.
....
The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS. This Security Instrument secures to Lender (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note.
....
Borrower [Plaintiffs] understands and agrees that MERS holds only legal title to the interests granted by the Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) as the right: to exercise any or all of those interest, 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 canceling this Security Instrument.
[34; Ex. B]. The Deed of Trust was filed in the land records of DeSoto County, Mississippi, on July 27, 2007. Id.
On July 20, 2012, the Deed of Trust was assigned to Ocwen Loan Servicing, LLC, by MERS. MERS assigned to Ocwen [31; Ex. D]. On June 10, 2013, Ocwen assigned to Nationstar, "the described Mortgage/Deed of Trust with all interest secured thereby, all liens and any rights due or to become due thereon..." [31; Ex. E]. The Plaintiffs eventually defaulted on the loan, and on March 11, 2014, Nationstar's substitute trustee conducted a foreclosure sale of the property. At the sale, Nationstar was the highest bidder. Nationstar thereafter assigned and transferred its winning bid to Freddie Mac.
It is the Plaintiffs' contention that the first assignment by MERS to Ocwen was invalid, as MERS did not have the authority to assign the Deed of Trust. According to the Plaintiffs, TBW never assigned the Deed of Trust to any third party, and that, upon information and belief, TBW is still the holder of the Note. Plaintiffs further assert that because this first assignmentwas allegedly invalid, so too was the subsequent assignment from Ocwen to Nationstar on June 10, 2013. By the Plaintiffs' logic, it would follow that the foreclosure undertaken by Nationstar would be invalid as well.
Further, the Plaintiffs claim that even if the assignments had been validly conducted, Nationstar violated certain provisions of the Home Affordable Modification Program ("HAMP") (which Plaintiffs assert are supplementary to Mississippi foreclosure law), thereby rendering the foreclosure invalid. More specifically, the Plaintiffs allege that at the time of the foreclosure, their home loan modification application was still pending, and that "a foreclosure can not occur while a homeowner is under consideration for assistance through the HAMP program." [1]. Both the invalid assignment claim, as well as the HAMP claim, go to the Plaintiffs' overarching assertion that their residence was wrongfully foreclosed upon.
Defendants counter Plaintiffs' claims by asserting that the language contained in the Deed of Trust grants MERS the authority to transfer the Deed of Trust through assignment as a matter of law. The first assignment being valid, all subsequent transfers (and eventual foreclosure by Nationstar) would have also been valid. Defendants further assert that the evidence and Plaintiffs' own depositions directly contradict the claim that any HAMP application was pending which might have prevented the foreclosure from taking place.
For the reasons set forth in greater detail below, the Court finds that as a matter of law, the Plaintiffs' claims are unsustainable and summary judgment is due to be granted.
Summary judgment is appropriate when the movant can show that there is "no genuine issue of material fact and the movant is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(a). "A dispute about a material fact is 'genuine' if the evidence is such that a reasonable jurycould return a verdict for the non-moving party." Burfield v. Brown, Moore & Flint, Inc., 51 F.3d 583, 588 (5th Cir. 1995). When deciding a motion for summary judgment, the facts and evidence are taken in a light most favorable to the non-moving party. LeMaire v. La. Dep't of Transp. & Dev., 480 F.3d 383, 386 (5th Cir.2007). The court must "refrain from making credibility determinations or weighing the evidence." Coury v. Moss, 529 F.3d 579, 584 (5th Cir. 2008).
Although a movant is charged with "identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact," the movant need not also negate the elements of the nonmovant's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Once the moving party meets its burden, the non-movant must then go beyond the pleadings and designate specific facts to show an issue for trial. Id. at 325. The nonmoving party cannot rely on metaphysical doubt, conclusive allegations, or unsubstantiated assertions but rather must show that there is an actual controversy warranting trial. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). Although factual controversies are resolved in favor of the non-movant, that is only the case where there are actual controversies, each partying having submitted evidence of contrary facts. Id. In the absence of proof of a genuine issue of material fact, the court does not "assume that the nonmoving part could or would prove the necessary facts." Id.
As a preliminary matter, it is necessary to address the issue of wrongful foreclosure in general. It is well established that "[u]nder Mississippi law, a wrongful foreclosure occurs when a foreclosure is attempted solely for a malicious desire to injure the mortgagor or the foreclosureis conducted negligently or in bad faith to the mortgagor's detriment." Teeuwissen v. JP Morgan Chase Bank, N.A., 902 F. Supp. 2d 826, 833 (S.D. Miss. 2011). A wrongful-foreclosure claim may also be based on "procedural shortcomings in the foreclosure process." Id. at 834.
Although the Plaintiffs do not fully clarify under which theory they are traveling, it is ...
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