Turner v. Wells Fargo Bank (In re Turner)

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
10 years 9 months ago

Citation:

BAP No. NC-14-1139-KiTaD (June 2, 2015) (unpublished)

Tag(s):

Ruling:

Chapter 13 Debtors lacked standing to assert claims against lenders and loan servicer defendants based on alleged violations of a home mortgage trust’s pooling and servicing agreement.

Procedural context:

Chapter 13 Debtors appeals an order of the bankruptcy court dismissing with prejudice their adversary complaint for failure to state a claim against defendants lenders and mortgage servicers. The BAP affirmed the bankruptcy court's decision that the Debtors lacked standing to assert claims against Defendants based on alleged violations of a mortgage trust’s pooling and servicing agreement.

Facts:

The Debtor claimed that defects occurred in the securitization process of their home mortgage in 2005. The loan was transferred on multiple occasions, with alleged procedural defects in the securitization, the subsequent assignments of the deed of trust ("DOT"), and substitutions of trustee. Thus, allegedly the Notice of Default and Notice of Sale were void, and the claimed lender(s) did not hold a beneficial interest in the DOT. There was no dispute that the loan had been made, that the Debtors were in default, and that no non-defendant third party had come forward to claim a beneficial interest in the home mortgage. The Debtors had admitted the basic facts surrounding the creation of the loan and their default under the loan in their Chapter 13 schedules and Plan.

Judge(s):

KIRSCHER, TAYLOR and DUNN, Bankruptcy Judges.

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