Federal Home Loan Mortgage Corporation v. Pamela Owen
34971-3
| Wash. Ct. App. | May 2, 2017Background
- Pamela Owen purchased a Vancouver, WA property in 2005; deed of trust named MERS as beneficiary.
- After default, MERS-assigned loan to Bank of America; Trustee Corps conducted a nonjudicial trustee's sale on January 16, 2015, and Freddie Mac was the high bidder.
- Freddie Mac recorded the trustee's deed, waited the statutory 20-day period, then served and filed an unlawful detainer complaint; Owen did not timely respond and default judgment and a writ of restitution issued.
- Owen moved post-eviction to vacate the judgment, relying in part on an IRS Form 1099-A and arguing the foreclosure was unlawful (claiming MERS was an improper beneficiary); federal and state courts rejected related claims earlier.
- The trial court reissued an expired writ of restitution; Owen appealed the reissuance, arguing the IRS form and chain-of-title defects rendered the foreclosure invalid.
Issues
| Issue | Plaintiff's Argument (Owen) | Defendant's Argument (Freddie Mac) | Held |
|---|---|---|---|
| Whether unlawful detainer is a proper forum to challenge the validity of the underlying foreclosure sale | Owen: The IRS Form 1099-A and related facts show the foreclosure was unlawful and therefore the writ cannot be reissued | Freddie Mac: Unlawful detainer is a summary proceeding limited to possession; it is not a forum to relitigate title or defects in the foreclosure | Held: Unlawful detainer is limited to possession; challenges to the foreclosure sale and title are not admissible in this proceeding |
| Whether IRS Form 1099-A proves the foreclosure was wrongful | Owen: The 1099-A indicates acquisition/abandonment and supports claims that foreclosure was unlawful | Freddie Mac: The 1099-A is a tax reporting document with no bearing on compliance with the Deeds of Trust Act or validity of the trustee's sale | Held: The 1099-A is irrelevant to the statutory foreclosure requirements and does not demonstrate an unlawful foreclosure |
| Whether Owen may challenge MERS/chain-of-title after the trustee's sale | Owen: MERS was an improper beneficiary, so assignments and foreclosure were void | Freddie Mac: Owen had constructive notice of MERS’s role and a right to sue to enjoin the sale prior to foreclosure; failure to sue waived the defense | Held: Owen waived chain-of-title defenses by not suing to restrain the sale; constructive notice and statutory procedure support waiver |
Key Cases Cited
- Fed. Nat'l Mortg. Ass'n v. Ndiaye, 188 Wn. App. 376 (2015) (unlawful detainer is a summary proceeding limited to possession and not a forum to litigate title)
- Bain v. Metropolitan Mortgage Group, Inc., 175 Wn.2d 83 (2012) (addressing MERS and beneficiary authority issues in deed of trust context)
- Heaver v. Keico Indus., Inc., 80 Wn. App. 724 (1996) (summary nature of unlawful detainer limits counterclaims and unrelated defenses)