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OHLENDORF CASE - Court Denies Motion to Dismiss and Holds Backdated Mortgage Assignments May Be

OHLENDORF CASE - Court Denies Motion to Dismiss and Holds Backdated Mortgage Assignments May Be

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Published by 83jjmack


ORDER

This case involves the foreclosure of plaintiff’s mortgage. His First Amended Complaint (“FAC”) names thirteen defendants and enumerates ten causes of action. Defendants American Home Mortgage Servicing, Inc. (“AHMSI”), AHMSI Default Services, Inc. (“ADSI”), Deutsche Bank National Trust Company (“Deutsche”), and Mortgage Electronic Registration Systems, Inc. (“MERS”) move to dismiss all claims against them, and in the alternative, for a more definite statement of plaintiff’s second and seventh causes of action. These defendants also move to expunge a Lis [*2] Pendens recorded by plaintiff on the subject property and request an award of attorney fees. Defendant T.D. Service Company (“T.D.”) separately moves to dismiss all claims against it. The court concluded that oral argument was not necessary in this matter, and decides the motions on the papers. For the reasons stated below, the motions to dismiss are granted in part and denied in part, and the motion to expunge is denied. Because the court grants plaintiff leave to file an amended complaint, the alternative motion for a more definite statement is denied.

I. BACKGROUND

A. Refinance of Plaintiff’s Mortgage 1

1 These facts are taken from the allegations in the FAC unless otherwise specified. The allegations are taken as true for purposes of this motion only.

On or about February 1, 2007, plaintiff was approached by defendant Ken Jonobi (“Jonobi”) of defendant Juvon, who introduced plaintiff to defendant Anthony Alfano (“Alfano”), a loan officer employed by defendant Novo Mortgage (“Novo”). FAC P 24. Defendant Alfano approached plaintiff, representing himself as the loan officer for defendant Novo, and solicited refinancing of a loan currently secured by plaintiff’s residence in New Castle, [*3] California. FAC P 25. Defendant Alfano advised plaintiff that Alfano could get plaintiff the “best deal” and “best interest rates” available on the market. FAC P 26.

In a loan brokered by Alfano, plaintiff then borrowed $ 450,000, the loan being secured by a deed of trust on his residence. FAC P 28. Alfano advised plaintiff that he could get a fixed rate loan, but the loan sold to him had a variable rate which subsequently adjusted. Id. At the time of the loan, plaintiff’s Fair Isaac Corporation (“FICO”) score, which is used to determine the type of loans for which a borrower is qualified, should have classified him as a “prime” borrower, but Alfano classified plaintiff as a “sub-prime” borrower without disclosing other loan program options. FAC P 29. Plaintiff was advised by Alfano that if the loan became unaffordable, Alfano would refinance it into an affordable loan. FAC P 31. Plaintiff was not given a copy of any loan documents prior to closing, and at closing plaintiff was given only a few minutes to sign the documents and, as a result, could not review them. FAC P 32. Plaintiff did not receive required documents and disclosures at the origination of his refinancing loan, including [*4] the Truth in Lending Act (“TILA”) disclosures and the required number of copies of the notice of right to cancel. FAC P 43. This new loan was completed on or about May 16, 2007.

The deed of trust identified Old Republic Title Company as trustee, defendant American Brokers Conduit as lender, and defendant Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for the lender and beneficiary. FAC PP 34-35. MERS’s conduct is governed by “Terms and Conditions” which provide that:

MERS shall serve as mortgagee of record with respect to all such mortgage loans solely as a nominee, in an administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shall have no rights whatsoever to any payments made on account of such mortgage loans, to any servicing


ORDER

This case involves the foreclosure of plaintiff’s mortgage. His First Amended Complaint (“FAC”) names thirteen defendants and enumerates ten causes of action. Defendants American Home Mortgage Servicing, Inc. (“AHMSI”), AHMSI Default Services, Inc. (“ADSI”), Deutsche Bank National Trust Company (“Deutsche”), and Mortgage Electronic Registration Systems, Inc. (“MERS”) move to dismiss all claims against them, and in the alternative, for a more definite statement of plaintiff’s second and seventh causes of action. These defendants also move to expunge a Lis [*2] Pendens recorded by plaintiff on the subject property and request an award of attorney fees. Defendant T.D. Service Company (“T.D.”) separately moves to dismiss all claims against it. The court concluded that oral argument was not necessary in this matter, and decides the motions on the papers. For the reasons stated below, the motions to dismiss are granted in part and denied in part, and the motion to expunge is denied. Because the court grants plaintiff leave to file an amended complaint, the alternative motion for a more definite statement is denied.

I. BACKGROUND

A. Refinance of Plaintiff’s Mortgage 1

1 These facts are taken from the allegations in the FAC unless otherwise specified. The allegations are taken as true for purposes of this motion only.

On or about February 1, 2007, plaintiff was approached by defendant Ken Jonobi (“Jonobi”) of defendant Juvon, who introduced plaintiff to defendant Anthony Alfano (“Alfano”), a loan officer employed by defendant Novo Mortgage (“Novo”). FAC P 24. Defendant Alfano approached plaintiff, representing himself as the loan officer for defendant Novo, and solicited refinancing of a loan currently secured by plaintiff’s residence in New Castle, [*3] California. FAC P 25. Defendant Alfano advised plaintiff that Alfano could get plaintiff the “best deal” and “best interest rates” available on the market. FAC P 26.

In a loan brokered by Alfano, plaintiff then borrowed $ 450,000, the loan being secured by a deed of trust on his residence. FAC P 28. Alfano advised plaintiff that he could get a fixed rate loan, but the loan sold to him had a variable rate which subsequently adjusted. Id. At the time of the loan, plaintiff’s Fair Isaac Corporation (“FICO”) score, which is used to determine the type of loans for which a borrower is qualified, should have classified him as a “prime” borrower, but Alfano classified plaintiff as a “sub-prime” borrower without disclosing other loan program options. FAC P 29. Plaintiff was advised by Alfano that if the loan became unaffordable, Alfano would refinance it into an affordable loan. FAC P 31. Plaintiff was not given a copy of any loan documents prior to closing, and at closing plaintiff was given only a few minutes to sign the documents and, as a result, could not review them. FAC P 32. Plaintiff did not receive required documents and disclosures at the origination of his refinancing loan, including [*4] the Truth in Lending Act (“TILA”) disclosures and the required number of copies of the notice of right to cancel. FAC P 43. This new loan was completed on or about May 16, 2007.

The deed of trust identified Old Republic Title Company as trustee, defendant American Brokers Conduit as lender, and defendant Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for the lender and beneficiary. FAC PP 34-35. MERS’s conduct is governed by “Terms and Conditions” which provide that:

MERS shall serve as mortgagee of record with respect to all such mortgage loans solely as a nominee, in an administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shall have no rights whatsoever to any payments made on account of such mortgage loans, to any servicing

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Published by: 83jjmack on Jan 05, 2011
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06/01/2013

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Court denies Motion to Dismiss and holds backdatedmortgage assignments may be invalid 
On March 30, 2010, in the case of Ohlendorf v. Am. Home Mortg. Servicing, (2010 U.S. Dist. LEXIS31098) on Defendants 12(B)(6) Motion, United States District Court for the Eastern District of Californiadenied the motion to dismiss Plaintiffs wrongful foreclosure claim on grounds that the assignment of mortgage was backdated and thus may have been invalid. (See case below for the opinion)On or about June 23, 2009, defendant T.D. Service Company [(a foreclosure processing service)] filed anotice of default in Placer County, identifying Deutsche Bank as beneficiary and AHMSI as trustee. In anassignment of deed of trust dated July 15, 2009,MERSassigned the deed of trust to AHMSI. Thisassignment of deed of trust purports to be effective as of June 9, 2009
.
A second assignment of deed of trust was executed on the same date as the first, July 15, 2009, but the time mark placed on the secondassignment of deed of trust by the Placer County Recorder indicates that it was recorded eleven secondsafter the first. In this second assignment of deed of trust, AHMSI assigned the deed of trust to Deutsche.This assignment indicates that it was effective as of June 22, 2009
.
Both assignments were signed byKorell Harp. The assignment purportedly effective June 9, 2009, lists Harp as vice president of MERS andthe assignment purportedly effective June 22, 2009, lists him as vice president of AHMSI. Six days later,on July 21, 2009, plaintiff recorded a notice of pendency of action with the Placer County Recorder. In asubstitution of trustee recorded on July 29, 2009, Deutsche, as present beneficiary, substituted ADSI astrustee.The court stated that while California law does not require beneficiaries to record assignments, seeCalifornia Civil Code Section 2934, the process of recording assignments with backdated effective datesmay be improper, and thereby taint the notice of default.Plaintiffs argument was interpreted by the court to be that the backdated assignments were not validor at least were not valid on June 23, 2009, when the notice of default was recorded. As such the courtassumed Plaintiff argued that MERS remained the beneficiary on that date and therefore was the onlyparty who could enforce the default.Judge Lawrence K. Karlton invited Defendants to file a motion to dismiss as to plaintiffs wrongful foreclosure claiminsofar as it is premised on the backdated assignments of the mortgage.
 
O
hlendorf v. Am. Home Mortg. Servicing 
OPINION
 
ORDER
 This case involves the foreclosure of plaintiffs mortgage. His First Amended Complaint (FAC) namesthirteen defendants and enumerates ten causes of action. Defendants American Home MortgageServicing, Inc. (AHMSI), AHMSI Default Services, Inc. (ADSI), Deutsche Bank National Trust Company(Deutsche), and Mortgage Electronic Registration Systems, Inc. (MERS) move to dismiss all claimsagainst them, and in the alternative, for a more definite statement of plaintiffs second and seventhcauses of action. These defendants also move to expunge a Lis [*2] Pendens recorded by plaintiff on thesubject property and request an award of attorney fees. Defendant T.D. Service Company (T.D.)separately moves to dismiss all claims against it. The court concluded that oral argument was notnecessary in this matter, and decides the motions on the papers. For the reasons stated below, themotions to dismiss are granted in part and denied in part, and the motion to expunge is denied. Becausethe court grants plaintiff leave to file an amended complaint, the alternative motion for a more definitestatement is denied.
I
. BACKGR
OUN
D
 
A. Refinance of 
P
laintiffs Mortgage
1
 1 These facts are taken from the allegations in the FAC unless otherwise specified. The allegations aretaken as true for purposes of this motion only.On or about February 1, 2007, plaintiff was approached by defendant Ken Jonobi (Jonobi) of defendant Juvon, who introduced plaintiff to defendant Anthony Alfano (Alfano), a loan officeremployed by defendant Novo Mortgage (Novo). FAC P 24. Defendant Alfano approached plaintiff,representing himself as the loan officer for defendant Novo, and solicited refinancing of a loan currentlysecured by plaintiffs residence in New Castle, [*3] California. FAC P 25. Defendant Alfano advisedplaintiff that Alfano could get plaintiff the best deal and best interest rates available on the market.FAC P 26.In a loan brokered by Alfano, plaintiff then borrowed $ 450,000, the loan being secured by a deed of trust on his residence. FAC P 28. Alfano advised plaintiff that he could get a fixed rate loan, but the loansold to him had a variable rate which subsequently adjusted.
Id 
.
At the time of the loan, plaintiffs FairIsaac Corporation (FICO) score, which is used to determine the type of loans for which a borrower isqualified, should have classified him as a prime borrower, but Alfano classified plaintiff as a sub-prime borrower without disclosing other loan program options. FAC P 29. Plaintiff was advised byAlfano that if the loan became unaffordable, Alfano would refinance it into an affordable loan. FAC P 31.Plaintiff was not given a copy of any loan documents prior to closing, and at closing plaintiff was givenonly a few minutes to sign the documents and, as a result, could not review them. FAC P 32. Plaintiff didnot receive required documents and disclosures at the origination of his refinancing loan, including [*4]
 
the Truth in Lending Act (TILA) disclosures and the required number of copies of the notice of right tocancel. FAC P 43. This new loan was completed on or about May 16, 2007.The deed of trust identified Old Republic Title Company as trustee, defendant American Brokers Conduitas lender, and defendant Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for thelender and beneficiary. FAC PP 34-35. MERSs conduct is governed by Terms and Conditions whichprovide that:MERS shall serve as mortgagee of record with respect to all such mortgage loans solely as a nominee, inan administrative capacity, for the beneficial owner or owners thereof from time to time. MERS shallhave no rights whatsoever to any payments made on account of such mortgage loans, to any servicingrights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.MERS agrees not to assert any rights (other than rights specified in the Governing Documents) withrespect to such mortgage loans or mortgaged properties. References herein to mortgage(s) andmortgagee of record shall include deed(s) of trust and beneficiary under a deed of trust and any otherform of [*5] security instrument under applicable state law.FAC P 10. MERS was not licensed to do business in California and was not registered with the state atthe inception of the loan. FAC P 35.On or about April 17, 2009, a letter was mailed to defendant AHMSI which plaintiff alleges was aqualified written request (QWR) under the Real Estate Settlement Procedures Act (RESPA),identifying the loan, stating reasons that plaintiff believed the account was in error, requesting specificinformation from defendant, and demanding to rescind the loan under the Truth in Lending Act (TILA).FAC P 36. Plaintiff alleges that AHMSI never properly responded to this request.
Id 
.
 
B. Events Subsequent to Refinance of 
P
laintiffs Loan
 On or about June 23, 2009, defendant T.D. filed a notice of default in Placer County, identifyingDeutsche as beneficiary and AHMSI as trustee. FAC P 46. In an assignment of deed of trust dated July 15,2009, MERS assigned the deed of trust to AHMSI. Defendants Request for Judicial Notice in Support of Motion to Dismiss Plaintiffs First Amended Complaint and Motion to Expunge Notice of Pendency of Action (Defs. RFJN) Ex. 4. This assignment of deed of trust purports to [*6] be effective as of June 9,2009.
Id 
.
A second assignment of deed of trust was executed on the same date as the first, July 15, 2009,but the time mark placed on the second assignment of deed of trust by the Placer County Recorderindicates that it was recorded eleven seconds after the first. Defs.RFJN Exs. 4-5. In this secondassignment of deed of trust, AHMSI assigned the deed of trust to Deutsche. Defs. RFJN Ex. 5. Thisassignment indicates that it was effective as of June 22, 2009.
Id 
.
Both assignments were signed byKorell Harp. The assignment purportedly effective June 9, 2009, lists Harp as vice president of MERS andthe assignment purportedly effective June 22, 2009, lists him as vice president of AHMSI. Defs.RFJN Exs.4-5. Six days later, on July 21, 2009, plaintiff recorded a notice of pendency of action with the PlacerCounty Recorder. Defs. RFJN Ex. 6. In a substitution of trustee recorded on July 29, 2009, Deutsche, aspresent beneficiary, substituted ADSI as trustee. Defs. RFJN Ex. 7.

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