Kebasso v. BAC Home Loans Servicing, LP
813 F. Supp. 2d 1104
D. Minnesota2011Background
- Plaintiffs Kebassos defaulted on their 2006 mortgage and seeking to halt foreclosure.
- Mortgage identifies MERS as mortgagee nominee for Lender and successors; WMC was lender, BAC serviced the loan.
- On 3/19/2010, MERS assigned its interest to BAC; recording occurred 5/14/2010.
- Arch Bay recorded ownership transfer of the loan to Arch Bay in mid-2010; servicer would change to Quantum Servicing.
- Foreclosure by advertisement occurred 7/23/2010 with BAC as highest bidder; Kebassos sue state court asserting various defects and TILA claim.
- Court dismissed all claims, finding BAC valid mortgagee of record and Arch Bay ownership did not defeat BAC’s foreclosure rights; dismissal included TILA grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the MERS-to-BAC assignment was valid | Kebassos contend Bruns had no authority and assignment defective | BAC argues MERS authority and Beecroft-limitation defeat | Assignment valid; BAC mortgagee of record. |
| Whether sheriff’s sale was properly foreclosed by advertisement | BAC had no interest as Arch Bay owned the loan | BAC mortgagee of record; Arch Bay ownership not controlling | Sale valid; BAC had title for foreclosure. |
| Whether Kebassos have standing to challenge foreclosure | Kebassos seek declaratory relief | Disputes between legal/equitable title do not affect mortgagor’s standing | Kebassos lack standing; claims fail. |
| Whether TILA claim survives | BAC violated TILA by notice могли | Servicer not creditor; notice obligations do not run to servicer | TILA claim dismissed on merits and as to defendant. |
Key Cases Cited
- Jackson v. Mortgage Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn. 2009) (foreclosure-by-advertisement; title and recording rules for assignments)
- Benison v. Markoe, 42 N.W. 787 (Minn. 1889) (recording requirements for assignments)
- Soufal v. Griffith, 198 N.W. 807 (Minn. 1924) (title evidence in foreclosure disputes must be on record)
- Beecroft v. Deutsche Bank Nati. Trust Co., 798 N.W.2d 78 (Minn. Ct. App. 2011) (authority to execute assignment; Beecroft distinguished)