Ocwen Loan v. Rehm
2017 MT 96N
| Mont. | 2017Background
- In 2006 James and Lori Rehm obtained a mortgage from Fremont and executed a note and deed of trust on their home. A successor trustee was substituted in 2009 and the deed of trust was assigned to Wells Fargo (as trustee for a securitized trust) in 2010.
- The Rehms defaulted in March 2009. They sent a notice of intent to rescind under the Truth in Lending Act (TILA) on October 2, 2009; Fremont did not respond.
- A non-judicial trustee’s sale was held November 7, 2011; Wells Fargo purchased the property. The Rehms recorded lis pendens notices and filed various suits, including a 2010 suit later dismissed for failure to prosecute.
- Wells Fargo initiated a quiet title action (and to expunge the Rehms’ lis pendens). The Rehms asserted rescission under TILA and challenged assignments and Wells Fargo’s authority to transact business in Montana.
- The District Court granted Wells Fargo summary judgment on June 28, 2016 and denied the Rehms’ cross-motion. The Rehms appealed.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Rehm) | Held |
|---|---|---|---|
| Did the district court have jurisdiction over the quiet-title/TILA claims? | State court has jurisdiction over quiet-title and concurrent jurisdiction over TILA claims | Court lacked subject-matter jurisdiction | Held: District court had jurisdiction |
| Did Rehm validly rescind the loan under TILA? | Rescission was untimely and therefore ineffective | Rehm claimed he rescinded by sending notice Oct. 2, 2009 | Held: Rescission was time-barred by §1635(f); notice was after the 3-year limit |
| Did Wells Fargo have standing to bring quiet title? | Wells Fargo purchased at a valid trustee’s sale and owns the property | Rehm disputed assignments and title, arguing assignments violated Montana law | Held: Wells Fargo had standing as owner from the trustee’s sale |
| Were the deed assignments invalid or was Wells Fargo unlawfully transacting business? | Assignments were not governed by the insolvent-debtor statute; Wells Fargo may acquire and enforce mortgage interests | Rehm argued assignments violated §31-2-201 et seq. and Wells Fargo lacked a Montana certificate of authority | Held: Assignments did not violate §31-2-201 scheme and statutory powers permitted Wells Fargo’s actions; no material factual disputes |
Key Cases Cited
- Pilgeram v. GreenPoint Mortg. Funding, Inc., 313 P.3d 839 (Mont. 2013) (standard of review for summary judgment)
- Roe v. City of Missoula, 221 P.3d 1200 (Mont. 2009) (summary judgment standard)
- Pinnow v. Montana State Fund, 172 P.3d 1273 (Mont. 2007) (de novo review of jurisdictional questions)
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (U.S. 2015) (TILA rescission notice timing and statutory limitations)
- R.G. Fin. Corp. v. Vergara-Nunez, 446 F.3d 178 (1st Cir. 2006) (concurrent state/federal jurisdiction over TILA claims)
- Getter v. Beckman, 769 P.2d 714 (Mont. 1989) (Montana courts’ jurisdiction over quiet title)
- Geil v. Missoula Irrigation Dist., 59 P.3d 398 (Mont. 2002) (standing to seek adjudication of title issues)