Max Leroy Reed, Jr. v. Chase Home Finance, LLC
723 F.3d 1301
11th Cir.2013Background
- In November 2006, Reed refinanced their mortgage, signing a promissory note to Pensacola Guarantee Mortgage with Pensacola named as lender and MERS named as the lender’s nominee and mortgagee.
- Pensacola transferred the note to SunTrust, which later transferred the note to Fannie Mae; servicing responsibilities also moved from Pensacola to SunTrust to Chase.
- Chase, as loan servicer, gave foreclosure notice after payment delinquencies and, on September 7, 2010, MERS executed an Assignment transferring MERS’ interest to Chase.
- The Assignment stated Chase acquired all right, title, and interest of MERS in the Reed mortgage.
- Reeds argued the Assignment made Chase the debt owner, triggering 1641(g) disclosure duties; Chase argued the Assignment was for administrative convenience in servicing.
- The Eleventh Circuit affirmed, concluding the Assignment was for administrative convenience under 1641(f)(2) and thus exempt from 1641(g) disclosure requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Assignment qualifies as administrative convenience under 1641(f) | Reeds contend Chase must disclose as owner, not merely servicer | Chase argues the Assignment was solely for servicing convenience to foreclose | Yes; exemption applies under 1641(f)(2) |
| Whether the district court properly applied de novo review to the 1641(f) issue | Not necessary to recharacterize ownership; focus on disclosure | Legal determination rests on the meaning of administrative convenience | De novo review affirmed the ruling allowing the 1641(f) exemption |
Key Cases Cited
- United States v. Silvestri, 409 F.3d 1311 (11th Cir. 2005) (defines ordinary meaning of terms for statutory construction)
- Whatley v. CNA Ins. Cos., 189 F.3d 1310 (11th Cir. 1999) (applies de novo standard in reviewing district court decisions)