Patricia Breggia v. Mortgage Electronic Registration Systems, Inc.
102 A.3d 636
| R.I. | 2014Background
- Patricia and Frank Breggia executed a $300,000 note to American Mortgage Network in 2007 to buy property at 21 Tabor Dr., Johnston, RI.
- The mortgage named MERS as mortgagee (nominee for lender) with power of sale; Breggias granted MERS the right to foreclose if in default.
- AmNet later transferred the note through several entities; IndyMac became servicer for Fannie Mae after FDIC receivership events.
- On May 15, 2009, MERS assigned the mortgage to OneWest; OneWest then serviced the note for Fannie Mae and possessed the mortgagee role.
- OneWest foreclosed after notice of default; sale occurred January 20, 2010 and Fannie Mae became the purchaser; foreclosure deed recorded thereafter.
- Breggias filed suit seeking to invalidate the MERS→OneWest assignment and to quiet title; trial court granted summary judgment for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Could MERS be mortgagee with power of sale while not holder of the note? | Breggias contend MERS cannot have both power of sale and hold the note. | OneWest argues MERS’s language as nominee grants the power of sale to MERS and assigns that right on transfer. | Yes; MERS had statutory power of sale as mortgagee/nominee. |
| Validity of the MERS→OneWest assignment and OneWest’s foreclosing authority? | Breggias challenge MERS’s authority to assign and foreclose. | OneWest, as assignee, acquired MERS’s rights including power of sale and authority to foreclose. | Assignment and foreclosure authority were valid. |
| Whether foreclosure notice and conduct complied with law? | Foreclosure notice should have originated from AmNet as the original lender. | MERS/assigns may foreclose and notice properly given; AmNet not required. | Foreclosure notice and sale were lawfully noticed and conducted. |
Key Cases Cited
- Bucci v. Lehman Brothers Bank, FSB, 68 A.3d 1069 (R.I. 2013) (MERS as mortgagee with power of sale where language shows nominee relationship)
- Mruk v. Mortgage Electronic Registration Systems, Inc., 82 A.3d 527 (R.I. 2013) (assignee of MERS acquires MERS’s rights including power of sale)
- Wilson v. HSBC Mortgage Services, Inc., 744 F.3d 1 (1st Cir. 2014) (mortgagor standing limited; void contracts vs voidable)
- Moura v. Mortgage Electronic Registration Systems, Inc., 90 A.3d 852 (R.I. 2014) (addresses standing/limitations in MERS context)