In Re Marron
455 B.R. 1
| Bankr. D. Mass. | 2011Background
- Debtors are David A. Marron and Robin H. Soroko-Marron in a Chapter 7 case in the Bankruptcy Court for the District of Massachusetts.
- HSBC Bank USA, as Indenture Trustee, seeks relief from the automatic stay to foreclose on the Marrons' home.
- The mortgage lists MERS as nominee for the lender and its successors/assigns, with Fieldstone Mortgage Company identified as the lender, and a promissory note originally for $316,000.
- An April 24, 2009 assignment from MERS to HSBC and subsequent confirmatory mortgage actions were involved, including a December 18, 2009 confirmatory assignment and a July 9, 2010 confirmatory assignment by MERS officer Debra Lyman.
- Massachusetts law treats the note and mortgage separately; a mortgagee may foreclose even if not the note holder, and MERS may act as nominee to transfer the mortgage; the Land Court proceedings sought to reform the mortgage to include both spouses as mortgagors.
- The trustee argues lack of standing and invalidity of MERS assignments; HSBC argues valid assignment and colorable interest in the estate; the court overrules the trustee and grants stay relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HSBC has standing to seek relief from the stay. | MERS assignment to HSBC valid; HSBC holds mortgage with power of sale. | MERS lacked authority to assign; no valid chain of assignments. | HSBC has standing to seek relief. |
| Whether the MERS-to-HSBC assignment was valid. | Assignment valid under Massachusetts law and MERS Rules. | Assignment invalid absent express authorization or proper authority. | Assignment valid; HSBC may foreclose. |
| Whether Massachusetts law permits foreclosure by a mortgagee not owning the note via MERS. | Mass. law allows MERS-assigned foreclosures; fiduciary role of mortgagee. | Foreclosure invalid if note owner’s authority is lacking. | Massachusetts doctrine permits foreclosure by mortgagee even when not the note holder. |
| Whether the MERS Rules/Ch. 183§54B effectively authorize recording/assignment of the mortgage. | Assignments executed before notaries are binding under §54B. | Authority to sign not adequately proven. | Assignments binding; no further proof of signatory authority required. |
| Whether the Land Court judgment adjudicated MERS’s authority to foreclose or assign. | Judgment did not resolve MERS’s authority to foreclose/assign. | Judgment binds issues already raised. | Res judicata/Rooker-Feldman not necessary to reach result; not controlling here. |
Key Cases Cited
- U.S. Bank Nat'l Ass'n v. Ibanez, 458 Mass. 637 (Mass. 2011) (mortgage held in trust; note owner; foreclosure rights depend on assignment)
- Agard v. GRP LLC, 444 B.R. 231 (Bankr.E.D.N.Y. 2011) (assignment from MERS may be invalid without express authority)
- Lopez v. Bank of Am., N.A., 446 B.R. 12 (Bankr.D. Mass. 2011) (MERS authority and assignments in Massachusetts context)
- In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006) (MERS had standing to seek relief from stay as nominee for note holder)