Woods v. Wells Fargo Bank, N.A.
2013 U.S. App. LEXIS 20570
| 1st Cir. | 2013Background
- Woods signed a $228,000 promissory note to Fremont with MERS named as nominee and mortgagee of record in Hadley, MA, giving MERS power of sale.
- Multiple recorded MERS-to-Wells Fargo assignments occurred (2007, 2009) as owner/servicer interests evolved; recordings occurred in the Hampshire County Registry.
- Massachusetts Land Court authorized sale in 2010; Wells Fargo later notified Woods of foreclosure in 2011.
- Woods amended complaint after removal to federal court, asserting Wells Fargo lacked possession of the note and challenged the assignments and Fremont consent decree.
- District court dismissed all claims in 2012 for lack of plausible relief; Woods appealed claiming standing and various violations.
- Court held Wells Fargo validly possessed both note and mortgage after transfers; Woods had standing to challenge the assignments under Culhane.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge assignments | Woods has standing because she challenges the assignment's validity. | Wells Fargo argues Woods lacks standing as a non-party to the trust and assignments. | Woods has standing to challenge validity of assignments. |
| Validity of MERS assignments | MERS never possessed a transferable interest; assignments void. | MERS, as mortgagee of record, could transfer the mortgage; assignments valid. | Assignments valid; MERS could transfer the mortgage. |
| Consent agreement compliance | Foreclosure violated Fremont consent decree requiring AG notice/approval. | Consent decree requires AG input; silence is sufficient if no objection; private right of action denied. | No private right of action; no violation proven; notice not required to be returned. |
| Fraud claim sufficiency | Wells Fargo knowingly misrepresented its holder status to foreclose. | Complaint lacks specifics and scienter; no pleaded facts showing illegality. | Fraud claim dismissed for lack of particularity and scienter. |
| Mass. 93A claim viability | Foreclosure conduct constitutes unfair/deceptive acts; 93A violation is pleaded. | Pre-suit notice and factual specificity lacking; no substantive 93A acts pleaded. | 93A claim dismissed; pre-suit notice lacking and facts insufficient. |
Key Cases Cited
- Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282 (1st Cir. 2013) (standing may rest on privity and mortgagee status to challenge assignments)
- Ibanez v. U.S. Bank Nat'l Ass'n, 458 Mass. 637 (Mass. 2011) (mortgagee must possess the mortgage to foreclose; transfer chain evaluated)
- Eaton v. Fed. Nat'l Mortg. Ass'n, 462 Mass. 569 (Mass. 2012) (requires possession of both note and mortgage to foreclose)
- McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207 (1st Cir. 2012) (mortgagee may possess both note and mortgage; transferability of interest)
- Rosa v. Mortg. Elec. Sys., Inc., 821 F. Supp. 2d 423 (D. Mass. 2011) (MERS as mortgagee per record; electronic tracking of note transfers)
- In re Marron, 462 B.R. 364 (Bankr. D. Mass. 2012) (Mass. bankruptcy court on MERS and note-mortgage dynamics)