Montenegro v. Ocwen Loan Servicing, LLC
419 S.W.3d 561
Tex. App.2013Background
- Vinh Nguyen bought the subject property in 2002; Finance America, LLC was the original beneficiary and Wells Fargo later held the note, with Ocwen Loan Servicing as the mortgage servicer.
- Montenegro purportedly purchased the property in 2003; Diem Thi Nguyen acted as Vinh's attorney-in-fact via a durable power of attorney to convey real property, but the POA was not recorded.
- Montenegro recorded a Warranty Deed with Vendor’s Lien and a Deed of Trust on July 8, 2003, while the POA remained unrecorded; Montenegro and his family have resided there.
- Montenegro paid some amounts directly to Ocwen starting in 2006 after requesting authorization to do so; Ocwen accepted an initial cure payment and monthly payments for about a year.
- Ocwen issued Notices and Foreclosure proceedings in 2007, a temporary restraining order was issued, but the foreclosure sale occurred and Wells Fargo purchased the property; Montenegro later sued for wrongful foreclosure and quiet title, leading to a summary judgment in Ocwen’s favor in 2012.
- The court ultimately affirmed the trial court’s summary judgment for Ocwen, addressing standing, power of attorney, wrongful foreclosure, quiet title, and tender grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge foreclosure and quiet title | Montenegro argues he has standing as a third party with an equitable interest. | Ocwen argues Montenegro lacks privity or cognizable interest. | Montenegro has some evidence of notice and interest, but standing ultimately resolved in Ocwen's favor on summary judgment. |
| Effect of the durable power of attorney | POA authorized conveyance of Vinh’s interests to Montenegro. | POA was unrecorded and ineffective to convey; issue not preserved. | POA was unrecorded; not relevant; objected to and excluded; not preserved for appeal. |
| Wrongful foreclosure elements | Defect in foreclosure and failure to provide notice to cure; causation to sale. | No valid defect in proceedings or notice to Montenegro required. | No genuine issue of material fact on defects; summary judgment affirmed for Ocwen. |
| Quiet title validity | Ocwen’s claim obstructed Montenegro’s title; substitute trustee’s deed questioned. | Montenegro failed to raise valid challenges; waived issues by not addressing them in response. | Montenegro waived and failed to present evidence; quiet title affirmed for Ocwen. |
| Tender requirement | Not required to tender before bringing suit. | Not necessary for pre-suit conditions. | Court did not address tender due to meritorious summary judgment grounds. |
Key Cases Cited
- Goswami v. Metro. Sav. & Loan Ass’n, 751 S.W.2d 487 (Tex. 1988) (standing to challenge foreclosure when third party has a cognizable interest)
- Schlotte v. Option One Mortg. Corp., No official reporter available here (Tex.App.—Beaumont 2012) (knowledge of third party ownership did not require notice to nonparties to deed (mem. op.))
- Ogden v. Gibraltar Sav. Ass’n, 640 S.W.2d 232 (Tex. 1982) (notice to accelerate must be given with cure opportunity)
- American Sav. & Loan Ass’n v. Musick, 531 S.W.2d 581 (Tex. 1976) (recognizes third party equity interests)
- King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) (summary judgment standard and standards for appellate review)