Hylton v. J.P. Morgan Chase Bank, N.A., 17 Civ. 9539 (PGG)

• Decision Date: 19 September 2018
• Docket Number: 17 Civ. 9539 (PGG)
• Citation: 338 F.Supp.3d 263
• Parties: Andrea HYLTON, Plaintiff, v. J.P. MORGAN CHASE BANK, N.A. and Government National Mortgage Association, as trustee for Ginnie Mae Remic Trust 2010-127, Defendants.
• Court: U.S. District Court — Southern District of New York

338 F.Supp.3d 263

Andrea HYLTON, Plaintiff,

v.J.P. MORGAN CHASE BANK, N.A. and Government National Mortgage Association, as trustee for Ginnie Mae Remic Trust 2010-127, Defendants.

17 Civ. 9539 (PGG)

United States District Court, S.D. New York.

Signed September 19, 2018

Andrea Hylton, Marlton, NJ, pro se.

Evan Maxwell Sampson, Buckley Madole, P.C., Iselin, NJ, Richard P. Haber, Buckley Madole, P.C., New York, NY, for Defendants.

ORDER

Paul G. Gardephe, United States District Judge

In this action, pro se Plaintiff Andrea Hylton challenges a mortgage foreclosure in favor of J.P. Morgan Chase Bank, N.A. ("Chase"). Prior to the instant case, Chase brought a foreclosure action in New Jersey state court and obtained a final judgment against Plaintiff on September 7, 2017, after Plaintiff's default. Plaintiff alleges that the underlying promissory note and mortgage she signed may have been securitized and sold to Government National Mortgage Association ("Ginnie Mae"), sued here as the Trustee for Ginnie Mae Remic Trust 2010-127. The Complaint asserts claims for (1) wrongful foreclosure, premised on a lack of standing; (2) fraud in the concealment; (3) fraud in the inducement; (4) unconscionable contract; (5) breach of contract; (6) breach of fiduciary duty; (7) quiet title; (8) slander of title; and (9) declaratory relief.

Defendants have moved to dismiss under Fed. R. Civ. P. 12(b)(1) and (6) for lack of subject matter jurisdiction and for failure to state a claim. As discussed below, the Court concludes that the Rooker-Feldman doctrine bars Plaintiffs' claims for wrongful foreclosure, unconscionability, quiet title, slander of title, and declaratory relief; Plaintiff lacks standing to bring her fraud claims; res judicata bars the remaining claims against Chase; and Plaintiff does not state a claim against Ginnie Mae. Accordingly, Defendants' motion to dismiss will be granted.

BACKGROUND ¹

I. FACTS

Plaintiff Andrea Hylton is a New Jersey resident. (Cmplt. (Dkt. No. 1) at 2, ¶ 4)²

Defendant Government National Mortgage Association – "Ginnie Mae" – is sued as the Trustee for Ginnie Mae Remic Trust 2010-127, a "securitized trust organized and existing under the laws of New York." (Id. at 2, ¶ 5) Defendant Chase's corporate headquarters are in Manhattan. (Id. at 2, ¶ 6)

On September 3, 2010, Plaintiff executed a promissory note in favor of Aurora Financial Group, Inc., in the amount of $190,673.00. (Cmplt. (Forensic Report) (Dkt. No. 1) at 39; see Sampson Decl., Ex. D (Note) (Dkt. No. 15-4) ) Plaintiff used the proceeds to purchase property located at 97 Dorchester Circle, Marlton, New Jersey (the "Property"). (Cmplt. (Dkt. No. 1) ¶ 41; id. Ex. 1 (Hylton Aff.) (Dkt. No. 1) at 25, ¶ 11) That same day, Plaintiff entered into a mortgage on the Property – once again in favor of Aurora Financial Group, Inc. – in the amount of $190,673.00 (the "Mortgage"). The Mortgage served as security for repayment of the Note. (Sampson Decl., Ex. A (Mortgage) (Dkt. No. 15-1) at 4-5) )³ The Mortgage lists the "Lender" as Aurora Financial Group, Inc., and states that Mortgage Electronic Registration Systems, Inc. – or "MERS" – is the mortgagee, and is acting "solely as a nominee for Lender and Lender's successors and assigns." (Id. at 2)

Attached to the Complaint is a November 29, 2017 affidavit from Plaintiff. In her affidavit, Plaintiff states that Chase purchased her loan from Aurora Financial Group in approximately October 2010. (Cmplt. Ex. 1 (Hylton Aff.) (Dkt. No. 1) at 25, ¶ 4) Plaintiff also states that in November 2014, she lost a significant portion of her income, and soon after contacted Chase to apply for a loan modification. (Id. ¶ 5) Plaintiff submitted four applications for a loan modification over the next three years, but Chase denied all her applications. (Id. ¶ 6) After the last denial, a law firm representing Chase notified Plaintiff that a foreclosure action would be filed 40 days after her "denial date." (Id. ¶ 9) Plaintiff alleges that on "November 14, 2017, a Sheriff's Sale notification was placed on [her] front door with a sale date of November 7, 2017." (Id. ¶ 10)⁴ Plaintiff complains that Chase "had no intention of giving me a loan modification and while I was in the process of what I believed to be another loan modification, they filed for foreclosure on the property." (Id. ¶ 11)

Although Plaintiff asserts in her affidavit that Chase purchased the Note in October 2010, the Complaint suggests that the Note may have been sold to the Ginnie Mae Trust in October 2010 and securitized. (See Cmplt. (Dkt. No. 1) ¶¶ 9, 41; id. Ex. 1 (Hylton Aff.) at 25, ¶ 4; id. Ex. 3 (Forensic Report) at 32, 39, 42, 51, 53) Plaintiff further alleges that an assignment of the Mortgage to Chase in February 2015 was defective or fraudulent. (Id. ¶¶ 9, 11, 24-25; id. Ex. 3 (Forensic Report) at 38-39, 42, 58)

The Complaint contains other attachments, including an affidavit from Michael Carrigan⁵ – who represents that he is a "Certified Mortgage Securitization Auditor" (Id. Ex. 2 (Carrigan Aff.) at 27; id. Ex. 3 (Forensic Report) at 55) – and a "Property Securitization Analysis Report" performed by "Certified Forensic Loan Auditors, LLC."⁶ (Id. Ex. 3 (Forensic Report) at 31)

Carrigan's affidavit states that Plaintiff's loan

was not identified in any publicly reporting trust. "Guarantor – Ginnie Mae" is stated on the Mortgage Electronic Registration Systems, Inc. web site as "Investor", which indicates a past or current purported ownership interest of the [Federal Housing Administration] loan. A qualifying trust formed shortly after the execution of the loan on September 3, 2010 is the Ginnie Mae Remic Trust 2010-127 with a closing date of October 29, 2010. The underwriters are Nomura Securities International, Inc. and Loop Capital Markets LLC, the Sponsor is Ginnie Mae and Trustee is Wells Fargo Bank, NA. There is no known connection between the original lender, Aurora Financial Group Inc and JPMorgan Chase Bank, N.A., NA, to whom the Assignment of Mortgage was assigned.

(Id. Ex. 2 (Carrigan Aff.) at 28, ¶ 7; id. Ex. 3 (Forensic Report) (Dkt. No. 1) at 56, ¶ 7) (emphasis in original)

Carrigan's forensic report further states that "[t]he MORTGAGE and the Note have taken two distinctly different paths. The MORTGAGE was never transferred. The $190,673.00 note may have been however pooled, sold, transferred with other loans and mortgages and this pool of loans and mortgages in this security offering of $434,791,274." (Id. Ex. 3 (Forensic Report) (Dkt. No. 1) at 32; see id. at 39 ("The NOTE may have been sold, transferred, assigned and securitized into the GINNIE MAE REMIC TRUST 2010-127 with a Closing Date of October 29, 2010." (emphasis in original) ) ) In his affidavit and report, Carrigan states that he "researched [the Property on] the Bloomberg online Database," and did not find a loan that matched the characteristics of Plaintiff's loan. Carrigan "did, however, locate a REMIC TRUST that matches the characteristics for securitizing this loan, namely the GINNIE MAE REMIC TRUST 2010-127 issued October 29, 2010." (Id. at 42; see also id. Ex. 2 (Carrigan Aff.) at 28) (emphasis in original)

Carrigan's forensic report also states that Plaintiff's loan is a "Federal Housing Administration (FHA) loan. Most of the loans Ginnie Mae insures are FHA or Veterans Administration (VA) loans.... GINNIE MAE guarantees principal and interest of the securitized trusts that it formed. This is an indication that the loan is securitized with Ginnie Mae as the sponsor of the mortgage backed securities (MBS) mortgage pool." (Id. ) The report goes on to state that "[a]lthough Aurora Financial Group Inc[.] originated the loan, any subsequent purchaser may not have properly endorsed the subject note nor perfected the security interest in the note pursuant to the New Jersey Uniform Commercial Code. There is no known connection between the original lender and [Chase]." (Id. (emphasis in original) ) An attached printout of a "MERS Servicer ID" page for Plaintiff's loan shows that the "servicer" of the loan is Chase, and that the "Investor" is "Guarantor – Ginnie Mae." (Id. at 51)

Carrigan's Forensic Report also includes a copy of an "Assignment of Mortgage" dated February 3, 2015, stating that MERS has assigned the Mortgage to Chase. (Id. at 40) The Assignment is signed by Ashley J. Collins, Assistant Secretary of MERS. The Forensic Report asserts that

Ashley Collins signs for Mortgage Electronic Registration Systems, Inc., as Assistant Secretary of MERS while admitting she is an Assignee employee. This is an indication that Ashley Collins attempted to assign the Mortgage to client JPMorgan Chase Bank, N.A. without an Assignor. Document is an Assignee-signed document and is invalid. This position of unilateral transfer is further strengthened by the fact that [t]here is no evidence of verified proof of funds; a note endorsement; a bill of sale; a declaration of value; or transfer taxes as having been paid to Burlington County, New Jersey "For Good and Valuable Consideration[.]"

(Id. ) The Complaint claims that the "Ashley Collins" endorsement on the Assignment of Mortgage is "a likely forgery." (Cmplt. (Dkt. No. 1) ¶ 9)

The Complaint also purports to quote from a declaration by Carrigan, which has not been provided to the Court. (Id. at 4, ¶ 6) The Complaint states that Carrigan performed a search for Plaintiff's loan on " ‘Freddie Mac's’ loan look-up tool" – available on the Freddie Mac website – and that his search yielded results indicating that "Ginnie Mae owns [Plaintiff's] mortgage and ... note." (Id. ¶¶ 12-13) The Complaint further represents that Carrigan had concluded,

[w]ithin a reasonable degree of investigative certainty, ... that contrary to the chain of assignments, and [Chase's] position that it owns the Hylton Mortgage, evidence shows the subject Mortgage and Note is owned by Ginnie Mae. The facts surrounding the sale of the subject Mortgage to Ginnie Mae have not been

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