Culhane v. Aurora Loan Services of Nebraska

Summarized by Andrea O'Connor , Hendel & Collins, P.C.
13 years 2 weeks ago

Citation:

Culhane v. Aurora Loan Services of Nebraska, Case No. 12-1285 (February 15, 2013 1st Cir.)

Tag(s):

Ruling:

In the circumstances of this case, a mortgagor in Massachusetts has standing to contest the validity of the mortgage assignment made from MERS to the foreclosing entity. However, the Court held that the Note and Mortgage were properly assigned here and, therefore, the foreclosure was not unlawful.

Procedural context:

The plaintiff filed an action in state superior court to prevent the imminent foreclosure of her home. The defendant removed the case to federal district court and immediately moved for summary judgment on the issue of whether the mortgage was properly assigned from MERS (the original mortgagee) to the defendant and, if so, whether the defendant otherwise had standing to foreclose under the statutory power of sale. The District Court ruled in favor of the defendant and held that there was no flaw in the assignment procedure and that the defendant had standing to foreclose.

Facts:

On April 4, 2006, Oratai Culhane ("Culhane"), the plaintiff/appellant herein, executed a promissory note to Preferred Financial Group, Inc. ("Preferred") in the amount of $548,000.00 ("Note") and a mortgage on the subject property to MERS as nominee for Preferred ("Mortgage"). The Note was transferred to Deutsche Bank Trust Company ("Deutsche") as trustee for Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QO5 Trust ("Trust"). Effective April 1, 2008, Aurora Loan Services, LLC ("Aurora"), as Deutsche's agent, services the loans held by the Trust. On April 7, 2009, the Mortgage was assigned from MERS to Aurora, the defendant/appellee herein. The assignment was executed before a notary public, who was an employee of Aurora but acting as a vice president of MERS at the time of the assignment. The assignment was recorded on April 24, 2009. On April 30, 2009, Aurora initiated a foreclosure proceeding. After a series of attempts by Culhane to stop the foreclosure, on December 8, 2011, Aurora foreclosed the Mortgage. At all relevant times, Culhane was in default under the terms of the Mortgage.

Judge(s):

Lynch, Chief Judge Souter*, Associate Justice Selya, Circuit Judge *Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation.

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