Wolf v. Federal National Mortgage Ass'n
830 F. Supp. 2d 153
W.D. Va.2011Background
- Wolf seeks rescission of her mortgage under TILA and related damages and fees.
- May 14, 2007 refinancing through MetroCities; deed of trust with MERS as nominee; note secured by the home.
- March 30, 2010 assignment of deed of trust from MERS to BAC; PFC appointed substitute trustee; foreclosure scheduled for May 5, 2010 and conducted in July 2010; Fannie Mae purchases at foreclosure.
- March 2010 rescission notice mailed to BAC; Wolf files amended complaint alleging TILA and other claims including fraud, defamation, and implied covenant.
- Court granted motions to dismiss the amended complaint; claims found time-barred or lacking governing elements; MERS/BAC assignment and substitute trustee appointment challenged but rejected on standing and validity.
- concludes that defendants' motions to dismiss are granted andWolf's TILA rescission and related claims are dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TILA rescission timeliness | Wolf argues three-year period might apply; timely notice within three years. | Court should apply absolute three-year limit or a shorter period; rescission claim barred. | TILA rescission claim time-barred; three-year period applies and expires before filing. |
| Damages timing under TILA | Damages linked to failure to honor rescission notice; asserted within one year after violation. | Damages claim relates to rescission and is barred as time-barred. | Damages claim barred by one-year limitations period. |
| Validity of MERS assignment | MERS lacked authority to assign note; assignment invalid; Wolf has standing to challenge. | MERS validly assigned its interests in the deed of trust; Wolf lacks standing to challenge. | Assignment valid; Wolf lacks standing to challenge it. |
| Validity of substitute trustee appointment | Appointment document potentially defective; second page not attached; possible ultra vires appointment. | BAC had authority to appoint PFC; appointment supported by documents; procedural irregularities insufficient. | Appointment valid; no actionable defect established. |
Key Cases Cited
- Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011) (MERS assignment authority to transfer its interests; note vs. deed distinctions)
- Horvath v. Bank of New York, N.A., 641 F.3d 617 (4th Cir. 2011) (follows the note; both deed of trust and note pass together; assignment of security interests)
- Bridge v. Aames Capital Corp., 2010 WL 3834059 (N.D. Ohio 2010) (borrower cannot attack assignment where not a party to assignment)
- Williams v. Gifford, 139 Va. 779 (1924) (equity treats deeds of trust and mortgages as securities for the debt)
- Richmond Metro. Auth. v. McDevitt Street Boris, Inc., 256 Va. 553 (1998) (economic loss rule; contract damages limitations in tort claims)