Roger Singha v. BAC Home Loans Servicing, L
564 F. App'x 65
| 5th Cir. | 2014Background
- Roger and Amarjit Singha bought a home in Texas in 2007; Amarjit signed the note and both signed a deed of trust listing MERS as beneficiary nominee; MERS later assigned the deed to BAC.
- The Singhas defaulted in May 2009 and entered a six-month forbearance agreement with BAC beginning September 1, 2009; they made six reduced payments and an additional seventh payment at the forbearance amount.
- BAC later rejected a subsequent forbearance payment, requested full reinstatement, and the Singhas submitted a partially completed modification application very near the October 5, 2010 foreclosure sale; BAC denied modification and the property was sold to Fannie Mae at foreclosure.
- The Singhas sued in Texas state court asserting breach of contract, TDCA claims, quiet title/trespass to try title, waiver, and related tort theories; BAC removed, the district court dismissed or granted summary judgment on all claims, and the Singhas appealed.
- On appeal the Fifth Circuit considered (1) whether BAC was a proper mortgagee with foreclosure authority, (2) whether BAC waived its foreclosure rights via the forbearance/modification process, (3) TDCA liability for BAC’s communications, and (4) whether genuine issues precluded summary judgment on quiet title/trespass claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BAC was a proper mortgagee entitled to foreclose | BAC could not foreclose because it did not hold the promissory note and MERS’s assignment was invalid | MERS assignments are valid; a mortgagee may be a beneficiary or a book-entry system and need not possess the note to foreclose | BAC was a proper mortgagee; foreclosure authority upheld |
| Whether BAC waived its right to declare default/foreclose by entering forbearance and discussing modification | Forbearance, acceptance of reduced payments, and representations about modification amounted to waiver or estoppel | Forbearance agreement expressly disclaimed modification/release and did not unequivocally relinquish foreclosure rights | No genuine issue of material fact: no clear, unequivocal waiver shown; summary judgment for BAC |
| Whether BAC violated the Texas Debt Collection Act (TDCA) by threatening unlawful foreclosure or making deceptive misrepresentations | If BAC lacked foreclosure rights or waived them, notices of sale and foreclosure threats violated TDCA §§392.301(a)(8) and 392.304(a)(19) | BAC was a proper mortgagee and TDCA excepts exercising or threatening contractual rights; modification negotiations are not TDCA debt-collection communications | TDCA claims fail: foreclosure threats permitted here; modification negotiations not shown to be TDCA collection activity |
| Whether Singhas retained superior title (quiet title / trespass to try title) after foreclosure | Foreclosure was invalid so Singhas retained title superior to Fannie Mae | Foreclosure was valid and extinguished Singhas’ interest; Fannie Mae holds superior title | Quiet title and trespass claims fail because foreclosure validly extinguished plaintiffs’ interest; summary judgment for BAC/Fannie Mae |
Key Cases Cited
- Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013) (recognizing validity of MERS assignments and that mortgagee can be beneficiary or book-entry system)
- Reinagel v. Deutsche Bank Nat’l Trust Co., 735 F.3d 220 (5th Cir. 2013) (standing/third-party beneficiary rules for challenging assignments)
- Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773 (Tex. 2008) (elements of waiver under Texas law)
- Motor Vehicle Bd. v. El Paso Indep. Auto. Dealers Ass’n, Inc., 1 S.W.3d 108 (Tex. 1999) (implied waiver requires clear demonstration of intent)
- Fricks v. Hancock, 45 S.W.3d 322 (Tex. App. 2001) (quiet title requires plaintiff to prevail on strength of own title)
- Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004) (elements for trespass to try title and requirement to prove superior title)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (standards for de novo review of dismissal under Rule 12(b)(6))