OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

NATACHE D. RINEGARD-GUIRMA, Civil Case No. 10-1065-PK

v.

BANK OF AMERICA, NATIONAL ASSOCIATION
AS SUCCESSOR BY MERGER TO LA SALLE BANK
NATIONAL ASSOCIATION, AS TRUSTEE UNDER
THE POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 2006, GSAMP TRUST
2006-HE5, MERS, LITTON LOAN SERVICING LP,
and the ORIGINAL AND PURPORTED SUCCESSOR
TRUSTEES, LSI TITLE COMPANY OF OREGON, LLC,
AND QUALITY LOAN SERVICING CORPORATION
OF WASHINGTON,

Excerpts:

On April 15, 2008, at 4:56 a.m., Marti Noriega, acting as Vice President for “Mortgage Electronic Registration Systems, Inc as nominee in favor of Mortgage Lenders Network USA, Inc.” signed an assignment of the Deed of Trust to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of August 1, 2006, GSAMP Trust 2006-HE5 (“LaSalle Bank National Association”). The assignment was recorded on April 29, 2008. On April 21, 2008, LaSalle Bank National Association, acting through Litton Loan Servicing LP as attorney in fact, appointed LSI Title Company of Oregon, LLC as successor trustee.

The Court, however, is aware of contrary authority. In In re Allman, a case from the United
States Bankruptcy Court for the District of Oregon, the court described MERS as “more akin to that of a straw man than to a party possessing all the rights given a buyer.” Bankr. No. 08-31282-elp7, 2010 WL 3366405, at *10 (Bankr. D. Or. Aug. 24, 2010) (quoting Landmark Nat’l Bank, 289 Kan. at 539). The court considered the meaning of “beneficiary” under Oregon’s trust deed statute as “the person named or otherwise designated in a trust deed as the person for whose benefit the trust deed is given . . . .” ORS 86.705(1). The court then concluded, after examining language of the trust deed that is almost identical to the language contained in the Deed of Trust here, that MERS was not “in any real sense of the word, particularly as defined in ORS 86.705(1), the beneficiary of the trust deed.” Id. Instead, MERS was a nominee and the trust deed was for the benefit of the lender.

Additionally, other courts have held that MERS does not have authority to transfer the note,
even though it has authority to transfer the trust deed. Those courts have noted that when the note and deed of trust are split, the transfer of the deed of trust is ineffective. Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623-24 (Mo. Ct. App. 2009) (in spite of deed language purporting to transfer the promissory note, MERS never held the note and the lender never gave

MERS the authority to transfer the note; thus MERS’ transfer of the deed of trust, separate from the note, was ineffective and the successor lender lacked a legally cognizable interest in the property); Saxon Mortg. Serv., Inc. v. Hillery, No. C-08-4357 EMC, 2008 WL 5170180, at *5 (N.D. Cal. Dec. 9, 2008) (same as Bellistri); In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (successor lender had no standing to seek relief from bankruptcy stay and move forward with foreclosure because MERS had no authority to transfer the note).

Oregon cases support the notion that the security, here the Deed of Trust, is “merely an incident to the debt.” West v. White, 307 Or. 296, 300, 766 P.2d 383 (1988); see also U.S. Nat’l Bank of Portland v. Holton, 99 Or. 419, 428, 195 P. 823 (1921) (“The assignment of a mortgage, independent of the debt which it is given to secure, is an unmeaning ceremony.”). Federal courts are bound by pronouncements of the state’s highest court on applicable state law. If the state’s highest court has not decided an issue, and there is no relevant precedent from an intermediate appellate court, the federal court is to predict how the state high court would resolve it. “In assessing how a state’s highest court would resolve a state law question– absent controlling state authority–federal courts look to existing state law without predicting potential changes in that law.” Ticknor v. Choice Hotels International, Inc., 265 F.3d 931, 939 (9th Cir. 2001); see also Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007).

Absent a decision from the Oregon Supreme Court or the Oregon Court of Appeals, and absent further briefing from the parties on this specific issue, I am at least initially persuaded that Rinegard-Guirma has a likelihood of success on the merits.

As for irreparable harm, loss of a home is a grievous injury.

[…]

CONCLUSION

For the foregoing reasons, Rinegard-Guirma’s Motion for a Temporary Restraining Order and Preliminary Injunction (#18) is GRANTED. The defendants are enjoined from foreclosing Rinegard-Guirma’s property described as: Lot 2, Block 16, Highland Park, in the City of Portland,County of Multnomah and State of Oregon, Assessor’s Parcel Number R180361, commonly known as 5731 NE 10th Ave., Portland, OR 97211 until the claims against MERS are resolved.

IT IS SO ORDERED.

Dated this 6th day of October, 2010.
/s/ Garr M. King
Garr M. King
United States District Judge

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

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6 Responses to “OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON”

  1. leslie says:

    SUBJECT: GOLDMAN SACHS LOAN EMBEZZLEMENT SCHEME

    Anyone needing some investigative information regarding the following lenders, brokers, servicers, foreclosure mills, Title Companies, officers and notaries:
    Goldman Sachs
    Litton Loan Servicing
    HSBC
    Fremont Reorganizing
    LPS Title Company
    The Wolf Firm, A Law Corp
    Marti Noriega
    Debra Lyman
    John Crandall
    Brenda Mckinzy
    Leigh Blackwell
    Daniella Marie Garrett
    Melissa Bell
    Go to the link below:
    https://fdaaccount.box.net/shared/a1pjz9sz5c

  2. larry says:

    I bet this case is a great deal of the reason why B of A stopped foreclosures in all 50 states

  3. Tara Nagelhout says:

    After 35 months of trying to get a loan modification with Litton, round and round of asking for the same documents again, hiring a lawyer, having them FORCE me to disclose income which is stated on their own forms to be irrelevant….well we still don’t have a modification. I was turned down for HAMP, as my payment was already under 31% of my income (in fact it was MORE). Then add to that they were using my child support as income, which they are not allowed to. I have called, faxed, done everything> Well now I am $54,000 behind in payments, so I owe just that much more on my home and they are still doing NOTHING!! I am a Realtor, I know the business. I am doing well now, financially and can make a reasonable payment, but this $54,000 delinquency which is THEIR fault for taking so long is going to kill it for me.

  4. Tara Nagelhout says:

    Leslie, that link no longer works.

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  2. […] states, MERS (as “nominee” for the banks) has foreclosed homes in its own name.  Some federal court judges have challenged MERS’ standing to do so.  Secondly, the robo-signing of documents that […]


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