Oral Arguments: Ruiz v. 1st FIDELITY LOAN SERVICING, LLC | Will the Minnesota Supreme Court find that the sale should still be invalidated?

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Oral Arguments: Ruiz v. 1st FIDELITY LOAN SERVICING, LLC | Will the Minnesota Supreme Court find that the sale should still be invalidated?

Oral Arguments: Ruiz v. 1st FIDELITY LOAN SERVICING, LLC | Will the Minnesota Supreme Court find that the sale should still be invalidated?

Via Attorney Jonathan Drewes

Read the Minn Appeals Court Decision: Ruiz v. 1st FIDELITY LOAN SERVICING, LLC, Minn: Court of Appeals “foreclosure by advertisement is void for failure to strictly comply with sections 580.02 and 580.032?

Excerpt:

Recording of the Mortgage Assignment

Minn. Stat. § 580.02 (2010) requires that all assignments of a mortgage be recorded as “a condition precedent to the right to foreclose by advertisement.” Jackson, 770 N.W.2d at 497. “[P]roceedings to foreclose a real estate mortgage by advertisement shall be deemed commenced on the date of the first publication of the notice of sale.” Minn. Stat. § 541.03, subd. 2 (2010).

The mortgage in this case was assigned to respondent in September 2009, and the assignment was recorded on November 17. But this recording inaccurately stated respondent’s legal name. The notice of foreclosure sale was published on May 18, 2010. On May 18, respondent once again recorded the September 2009 mortgage assignment to correct the inaccuracy in the first recording. Appellant argues that because respondent did not accurately record the mortgage assignment prior to publishing the notice of sale, the foreclosure is invalid. Respondent counters that the November 2009 recording was sufficient and that it only re-recorded the assignment “out of an abundance of caution.” But respondent offers no legal argument or authority indicating that the first recording was legally sufficient even though it inaccurately stated the assignee’s legal name. And the second recording was untimely under Minn. Stat. § 580.02. Because respondent failed to strictly comply with section 580.02, “the foreclosure proceeding is void.” Jackson, 770 N.W.2d at 494.

Recording of the Notice of Pendency

A person foreclosing a mortgage by advertisement shall record a notice of the pendency of the foreclosure with the county recorder or registrar of titles in the county in which the property is located before the first date of publication of the foreclosure notice but not more than six months before the first date of publication.

Minn. Stat. § 580.032, subd. 3 (2010).

Appellant argues that respondent failed to satisfy this requirement, because it recorded the notice of pendency on the first date of publication. The district court disagreed, relying on a substantial-compliance standard. The district court reasoned that “[respondent] sent the Notice of Pendency for recording on May 14, 2010 by personal courier and attempted to have the Notice of Pendency recorded prior to the first date of publication.” But the date that respondent attempted to record the notice is irrelevant. See Jackson, 770 N.W.2d at 494 (stating that the supreme court requires “a foreclosing party to show exact compliance with the terms of the statutes” (quotation omitted)). Because respondent failed to strictly comply with section 580.032, subd. 3, “the foreclosure proceeding is void.” Id.

Having concluded that respondent’s foreclosure by advertisement is void for failure to strictly comply with sections 580.02 and 580.032, we reverse the district court’s summary-judgment dismissal of appellant’s claims under these sections. And we remand for entry of judgment for appellant on these claims, as well as on her quiet-title claim. It is therefore unnecessary to review the district court’s dismissal of appellant’s claim that the foreclosure is void because respondent did not provide appellant with a pre-foreclosure counseling notice under Minn. Stat. § 580.021, subd. 2 (2010).

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One Response to “Oral Arguments: Ruiz v. 1st FIDELITY LOAN SERVICING, LLC | Will the Minnesota Supreme Court find that the sale should still be invalidated?”

  1. Charles Reed says:

    What you have in every state when it come to government insured (FHA & VA) that were/are in a Ginnie Mae pool, that has been foreclosed or going through one currently, are all improperly notified because Ginnie Mae is not in title as owner but holds the blank endorse Notes.

    The fraud is clear and it does not take a brain surgeon to figure it out what going on here, were Ginnie Mae not having the ability to own the debt of the Notes, cannot themselves create this instrument that allowing the lenders that have relinquish over to Ginnie Mae blank Notes to remain in title as owner of the Notes.

    Ginnie Mae can hold the blank Notes under UCC 3, but because the law does not allow Ginnie Mae to purchase the debt, they cannot do anything because the Notes are at the point of physical possession are a non-negotiable document because they are blank and cannot ever be unblank!

    If you don’t purchase the debt you cannot call a debt/loan due. Bottomline is that Ginnie Mae is not “holder in due course”!

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