Federal National Mortgage Ass'n v. Goodrich
275 Or. App. 77
Or. Ct. App.2015Background
- In 2005 defendant borrowed from First Horizon; the recorded trust deed named MERS as “beneficiary”/nominee and Ticor Title as trustee for property in Central Point, Oregon.
- In June 2010 MERS recorded an assignment of the trust deed to EverHome; EverHome recorded a substitution appointing a successor trustee and ultimately became high bidder at a nonjudicial foreclosure sale.
- EverHome received a trustee’s deed after the sale and then conveyed the property by warranty deed to Fannie Mae (plaintiff), which sued in a forcible entry and wrongful detainer (FED) action to recover possession.
- Defendant (pro se) argued the foreclosure was invalid because MERS was not a proper beneficiary under the Oregon Trust Deed Act (OTDA), breaking the chain of title.
- The trial court agreed, finding (1) MERS cannot be a beneficiary under OTDA and (2) the MERS assignment process fails the OTDA/recording requirements; it denied Fannie Mae possession.
- On appeal the Oregon Supreme Court’s Brandrup and Niday decisions (issued while this appeal was pending) held that MERS, if not a lender or successor to a lender, is not a beneficiary under the OTDA and that agency/assignment issues require evidentiary support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MERS may be a “beneficiary” under the OTDA | MERS is a proper beneficiary under OTDA as named in the deed; statute supports that role | MERS is not a lender or lender successor and therefore not a beneficiary; its involvement breaks chain of title | MERS cannot be a beneficiary unless it is a lender or successor to a lender (Brandrup/Niday applied) |
| Whether defendant may challenge validity of a completed trustee’s sale in FED action | Sale should be accorded finality; defendant cannot collaterally attack trustee’s deed in FED (argument raised late) | Foreclosure invalid because chain of title defective; FED challenger may contest plaintiff’s title | Argument forfeited on appeal (raised first in reply); court did not reverse on that basis |
| Whether there were unrecorded assignments that cure the title defect | No unrecorded problematic assignments here; only recorded assignment to EverHome by MERS | The dispositive question is whether EverHome validly acquired the trust deed; only assignment evidence is MERS’s transfer | The recorded MERS assignment cannot transfer the beneficial interest because MERS lacked beneficiary status; lack of other valid assignments fatal to plaintiff’s claim |
| Whether MERS acted as agent for lender and thus validly assigned/authorized foreclosure | MERS acted as agent for First Horizon (or lender successors) when it assigned and facilitated foreclosure | No evidence of an agency agreement, lender consent, or sufficiently expansive authority; trust deed language alone is insufficient | Agency theory not supported by the record; agency could allow MERS to act, but plaintiff failed to prove it here |
Key Cases Cited
- Brandrup v. ReconTrust Co., 353 Or 668 (Or. 2013) (An entity that is neither a lender nor a lender’s successor cannot serve as the trust deed “beneficiary” under the OTDA; MERS cannot hold/transfer legal title separate from the right to repayment)
- Niday v. GMAC Mortgage, LLC, 353 Or 648 (Or. 2013) (Application of Brandrup: factual issues about successor status and agency can preclude summary judgment; beneficiary or successor must authorize trustee appointments/foreclosure)
- Reeves v. Rodgers, 204 Or App 281 (Or. Ct. App. 2006) (FED trial facts are stated in the light most favorable to the prevailing party on appeal)
- United States Nat. Bank v. Holton, 99 Or 419 (Or. 1921) (doctrine that mortgage/trust deed follows the note)