Ofor v. Ocwen Loan Servicing, LLC
2011 U.S. App. LEXIS 16627
| 8th Cir. | 2011Background
- Ofor refinanced two mortgages on his Minnesota home in 2005 via Aames; obtained two loans, a $220,000 first and a $55,000 balloon second, with cash back and a total monthly payment of about $2,200.
- Ofor left Minnesota temporarily; his wife signed papers under a power of attorney (POA) that Ofor later claimed to be valid; the closing occurred October 24, 2005.
- The closing included a POA from Ofor dated September 26, 2005; a second POA was faxed to Ofor in New York and signed, then notarized and added to the closing file.
- Recordings in Ramsey County on November 7, 2005 included the mortgages and the October 24 POA; November 2005 notices informed of a right to cancel the transaction.
- In 2008, after foreclosure by advertisement, Ofor sued challenging the recording/POA under Minnesota law and alleging TILA violations; the district court dismissed with prejudice; on appeal, the Eighth Circuit affirmed.
- The court analyzed (i) whether foreclosure by advertisement was valid given the purported invalid POA and (ii) whether TILA disclosures/rescission were properly served; it held the POA valid for recording and that TILA claims failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Foreclosure by advertisement validity | Ofor: recording failed due to invalid POA (missing original signatures) | U.S. Bank: POA valid; recording compliant; foreclosure proper | Foreclosure valid; recording complied; district court affirmed |
| TILA rescission/disclosures compliance | Ofor: lender failed to deliver Notice of Right to Cancel to him. | Bank: wife, via POA, received notices; no third-party standing; proper delivery presumed | TILA claims fail; notices delivered to wife; no standing to challenge second notice; no rescission right extended |
Key Cases Cited
- Jackson v. Mortgage Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn. 2009) (foreclosure-by-advertisement strict compliance required; recording acts necessary)
- Backus v. Burke, 51 N.W. 284 (Minn. 1892) (recording of mortgage content critical for validity)
- Bengston v. Dzandzara, 2006 WL 538951 (Minn. Ct. App. 2006) (presumptive validity of power of attorney; good-faith reliance protects purchaser)
- Falcon Steel, Inc. v. J. Russell Flowers, Inc., 635 F.3d 369 (8th Cir. 2011) (summary of standard for reviewing district court state-law interpretations)
- Rand Corp. v. Yer Song Moua, 559 F.3d 842 (8th Cir. 2009) (objective standard for evaluating TILA violations)
- Henderson v. GMAC Mortg. Corp., 347 Fed.Appx. 299 (9th Cir. 2009) (delivery of notices under TILA proven by recipient's acknowledgment)
- Taylor v. Domestic Remodeling, Inc., 97 F.3d 96 (5th Cir. 1996) (rebuttable presumption of delivery under TILA)