This matter was before the court for a two (2) day jury-waived trial held on June 25 and August 2, 2019. This is a summary process action brought by U.S. Bank Trust, N.A., as trustee for LSF8 Master Participation Trust ("Plaintiff") to obtain possession of the premises located at 8 Second Way, Nantucket, Massachusetts (the "Premises") following a foreclosure. Richard Moore and Venessa K. Moore are the former owners of the Premises. They, along with their adult children, Drew Alysse Moore and Kobie Zaire Moore, reside at the Premises (collectively, Richard Moore, Venessa K Moore, Drew Alysse Moore and Kobie Zaire Moore shall be referred to as the "Defendants"). This action was originally filed in the Nantucket District Court on March 21, 2016. Defendants filed an answer, affirmative defenses, counterclaims and jury demand and the parties conducted discovery. Prior to the scheduled jury trial date, Plaintiff transferred the case to this Court. Thereafter, the parties filed a written jury waiver and the case proceeded to a bench trial.
Based upon all the credible testimony and evidence presented at trial, and the reasonable inferences drawn therefrom, the court finds, rules and orders as follows:
FINDINGS OF FACTS AND RULINGS OF LAW
1. The Defendants have resided at the Premises at all times relevant to this action.
2. On February 4, 2005, a deed was recorded with the Nantucket Registry of Deeds (the "Registry") in Book 939, Page 187, which deed conveyed the Premises to Venessa K. Raab a/k/a Venessa Moore and Richard Moore. (Legal Description attached to Joint Exhibit 3 and Defendants' Exhibit 2, Exhibit B).
3. On July 26, 2007, defendants entered into a mortgage loan refinance transaction wherein Venessa K. Moore and Richard Moore (the "Borrowers") executed a promissory note and mortgage in favor of Washington Mutual Bank ("WaMu").
4. The Court finds the mortgage loan closing took place at the Premises. Richard Moore testified that he came home from work on a lunch break to sign the loan documents and did not review them prior to signing.
5. Prior to the July 26, 2007 loan closing, the Borrowers received several Truth-in-Lending Disclosure Statements (collectively, the "Disclosure Statements"): one was prepared by Ascella Mortgage, LLC on or about June 25, 2007 with a fax date stamp of July 6, 2007 wherein the lender was unidentified (the "1st Disclosure Statement"); a second disclosure statement for a conventional fixed rate loan dated July 9, 2007 identifying WaMu as the lender (the "2nd Disclosure Statement"); and a third disclosure statement identifying WaMu as the lender dated July 26, 2007 for a conventional fixed rate loan with balloon (the "Actual Disclosure Statement"). (Defendants' Exhibit 6).
6. Richard Moore testified that the 1st Disclosure Statement, which reflected 359 monthly payments of $2,979.54 and a final payment of $2,977.58 was a payment he "thought maybe we could possibly pull this along, we could pull it off." The 1st Disclosure Statement was unsigned and there was nothing in the record reflecting who the proposed lender was or why the proposed loan was not consummated.
7. Richard Moore testified that the 2nd Disclosure Statement, which reflected 359 monthly payments of $3,120.27 and a final payment of $3,118.49 "wouldn't have been a number that I would have been comfortable with." The 2nd Disclosure Statement was unsigned.
8. The Court finds the Actual Disclosure Statement, which was signed by the parties on July 26, 2007, reflects 359 monthly payments of $2,803.12 and a balloon payment of $370,018.67 due on August 1, 2037.
9. The Court finds Richard Moore's memory of the loan closing and the circumstances leading up to same to be hazy at best. The Court does not credit Richard Moore's testimony that he would not have executed the Note and Mortgage if he understood the Borrowers would have to make a balloon payment. The Court does not credit Richard Moore's testimony that neither he nor his wife were aware that they were signing a balloon note at the time they signed the loan documents.
10. The Court finds the note executed by Borrowers was in the form of a balloon note made payable to WaMu in the principal amount of $478,000.00 (the "Note"). The Note is titled "BALLOON NOTE (Fixed Rate)", has a 30 year repayment term, and requires a balloon payment on the maturity date. The Court finds the Note contains the following statement in all capital letters immediately following the title: "THIS LOAN IS PAYABLE IN FULL AT MATURITY, YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN, OR YOU WILL HAVE TO FIND A LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME LENDER." (Plaintiff's Exhibit 13).
11. The Court finds the mortgage granted by the Borrowers conferred a security interest in the Premises to WaMu to secure repayment of the Note (the "Mortgage"). The Mortgage was recorded with the Registry in Book 1098, Page 142. (Joint Exhibit 3).
12. The Court finds that although the Note was a balloon note, the box for "Balloon Rider" was not checked off on the Mortgage and no Balloon Rider was attached to the Mortgage. (Joint Exhibit 3).
13. The Court finds that on August 8, 2007, 13 days after the Note and Mortgage were executed, WaMu executed an assignment of the Mortgage in blank (the "WaMu Assignment"). (Defendants' Exhibit 2, Exhibit C attached thereto). The Court finds the WaMu Assignment did not set forth the name of the assignee and the trial record is devoid of any evidence that the WaMu Assignment was ever recorded. The record is devoid of any evidence that WaMu executed any other assignment of the Mortgage.
14. The Court finds and rules the blank and unrecorded WaMu Assignment conveyed nothing and is void.
15. After approximately three (3) years from the consummation of the subject loan transaction, the Borrowers defaulted on their mortgage loan. The undisputed evidence showed their last payment toward the Mortgage, real estate taxes and property insurance was posted on August 30, 2010. Richard Moore could not recall the last time a payment was made and did not dispute that the loan has been in default for "quite some time."
16. Tonya Tillman ("Tillman") testified on behalf of Plaintiff. Tillman testified that she is employed as a default servicing officer for Caliber Home Loans, Inc. ("Caliber"). Tillman testified that in her capacity as default servicing officer for Caliber, the current loan servicer of the Note and Mortgage, she had personally reviewed the mortgage loan origination file, payment history, correspondence and other business records electronically maintained by Caliber. The Court credits Tillman's testimony.
17. The Court finds that Caliber began servicing the subject mortgage loan in May 2014 (Defendants' Exhibit 1), that the business records maintained by Caliber incorporate the business records of the prior loan servicer, JPMorgan Chase Bank, N.A. ("JPMC"), and that JPMC's records include business records relative to the Note and Mortgage of JPMC's predecessors, WaMu and the FDIC. The Court finds that the business records obtained from JPMC by Caliber were received in the ordinary course of Caliber's business and maintained in good faith as part of Caliber's business records.
18. The Court finds that the business records maintained by Caliber were made in good faith, made in the regular course of business, made before the action began and/or made in the regular course of Caliber's business at or about the time the transaction or occurrence was recorded.
19. The Court finds that pursuant to a limited power of attorney dated August 5, 2014, Plaintiff appointed Caliber as its attorney-in-fact for purposes of servicing certain mortgage loans, including the subject Mortgage. The Court finds such limited power of attorney was recorded on October 22, 2014 with the Middlesex South Registry of Deeds in Book 64397, Page 142. (Joint Exhibit 9; Plaintiff's Exhibit 9).
20. The Court finds Caliber serviced the subject mortgage loan continuously from May 2014 through the foreclosure sale and up to the time of trial.
21. According to her review of the electronic records maintained by Caliber, Tillman testified that JPMC obtained the original Note in 2009 and held such Note continuously until the loan servicing was transferred to Caliber in May 2014. The Court finds Caliber has held the original Note on behalf of the Mortgage holder of record continuously from May 2014 through the present.
22. Tillman testified that Caliber's records show the Note and Mortgage were transferred in February 2014 as part of a pool of notes and mortgages acquired by Plaintiff. Tillman testified that Caliber is required to send out a change of ownership letter to borrowers after the transfer of the Note and Mortgage but before the loan servicing is transferred. After the change of ownership, but before the servicing is transferred, Caliber sends what it calls a "hello letter" informing the borrower that servicing has been transferred to Caliber and directing that payments be sent to Caliber. The Court finds a "hello letter" dated May 9, 2014 was sent to the Borrowers stating that servicing of their mortgage loan was transferred to Caliber as of May 1, 2014. (Defendants' Exhibit 1).
23. To the extent Caliber misidentified the creditor of record in a letter to the Borrowers dated May 12, 2014 (Defendants' Exhibit 3), the Court finds such misidentification was of no consequence because the error was immediately corrected by a second letter sent to the Borrowers on the same day identifying LSF8 Master Participation Trust as the correct creditor. (Plaintiff's Exhibit 16).
24. On June 16, 2011, JPMC sent a Notice of Intent to Foreclose to each of the Borrowers addressed to the Premises and to PO Box 3392, Nantucket, MA 02584, each by certified mail, return receipt requested, and first class mail. (Plaintiff's Exhibit 14). The Court finds JPMC was the holder of the Note at the time it sent the Notices of Intent to Foreclose. The Borrowers did not deny their receipt of such letters.
25. The Court finds there is no dispute that Borrowers signed a Note and Mortgage on July 26, 2007. A Note and Mortgage, each purportedly displaying wet ink signatures of the Borrowers, were produced by Plaintiff and examined by the Court at trial. Based upon Ms. Tillman's testimony concerning Caliber's practice of maintaining, accessing and tracking the whereabouts of original documents customarily kept in its vault and the Court's review of the ink signatures on the Note and Mortgage, the Court finds the Note and Mortgage produced by the Plaintiff at trial were the original wet ink Note and Mortgage. Defendants were provided the opportunity to view the wet ink Note and Mortgage and declined to do so. Copies were admitted into evidence as Plaintiff's Exhibits 13 and 3, respectively, and the original Note and Mortgage returned to counsel for Plaintiff after the Court's examination of same.
26. The Court finds that even if the original Note and Mortgage were not produced at trial, there is no cognizable legal obligation that Plaintiff do so and no obligation that a foreclosing mortgagee remain in possession of the subject note and mortgage following a foreclosure. Rather, the critical date of inquiry is the time of the foreclosure sale, at which time the foreclosing mortgagee must be then holding the mortgage and also either holding the mortgage note or acting on behalf of the note holder. Eaton v. Fed. Nat. Mortg. Ass'n, 462 Mass. 569 , 571 (2012).
27. The Court finds that Plaintiff held the Mortgage and Caliber held the Note on behalf of Plaintiff at the time the Notice of Default was sent to the Borrowers, and that they continued to hold the Note and Mortgage on behalf of Plaintiff on the date of the foreclosure sale.
28. Based on Tillman's review of Caliber's business records, the Court finds that on July 25, 2014, the Federal Deposit Insurance Corporation (the "FDIC"), acting in its receivership capacity as receiver of WaMu, assigned the Mortgage to JPMC (the "JPMC Assignment"). The JPMC Assignment was recorded with the Registry on September 8, 2014 in Book 1449, Page 137. (Plaintiff's Exhibit 4).
29. The Court finds the JPMC Assignment identifies the "Assignor" as "THE FEDERAL DEPOSIT INSURANCE CORPORATION, A CORPORATION ORGANIZED AND EXISTING UNDER AN ACT OF CONGRESS (FDIC), WHOSE ADDRESS IS 1601 BRYAN STREET, DALLAS, TX 75201, AND ACTING IN ITS RECEIVERSHIP CAPACITY AS RECEIVER OF WASHINGTON MUTUAL BANK."
30. The Court finds the JPMC Assignment identifies the "Assignee" as "JPMORGAN CHASE BANK, NATIONAL ASSOCIATION."
31. The Court finds that the JPMC Assignment states as follows: "This Assignment is intended to further memorialize the transfer that occurred by operation of law on September 25, 2008 as authorized by Section 11(d)(2)(G)(i)(II) of the Federal Deposit Insurance Act, 12 U.S.C. §1821(d)(2)(G)(i)(II)."
32. The Court finds that except for the JPMC Assignment, the record is devoid of any evidence that the FDIC had any interest in the Mortgage, or that WaMu was put into receivership, or that the FDIC took over as receiver of WaMu.
33. The Court finds that on August 1, 2014, JPMC assigned the Mortgage to Plaintiff (the "U.S. Bank Trust Assignment"). The U.S. Bank Trust Assignment was recorded with the Registry on September 8, 2014 in Book 1449, Page 140. (Plaintiff's Exhibit 5).
34. The Court finds the chain of Mortgage assignments is valid to establish Plaintiff as the holder of the Mortgage.
35. The Court finds Plaintiff held the Mortgage from the date of the U.S. Bank Trust Assignment up to the foreclosure auction on October 22, 2015. (Plaintiff's Exhibits 3, 4 and 5).
36. On November 25, 2014, Caliber sent a 150 Day Right to Cure Mortgage Default letter to each of the Borrowers addressed to the Premises and to PO Box 3392, Nantucket, MA 02584, each by certified mail, return receipt requested, and first class mail. (Plaintiff's Exhibit 15). The Court finds Caliber was the holder of the original Note on behalf of Plaintiff at the time it sent these letters. The Borrowers did not deny their receipt of such letters.
37. On November 25, 2014, Caliber sent a Right to Request a Modified Mortgage Loan letter to each of the Borrowers addressed to the Premises and to PO Box 3392, Nantucket, MA 02584, each by certified mail, return receipt requested, and first class mail. (Plaintiff's Exhibit 15). The Court finds Caliber was the holder of the original Note on behalf of Plaintiff at the time it sent these letters. The Borrowers did not deny their receipt of such letters.
38. The Court finds that pursuant to a power of attorney dated November 23, 2015, Caliber, as attorney-in-fact for Plaintiff, appointed the law firm of Orlans Moran PLCC ("Orlans") as Plaintiff's attorney-in-fact for purposes of foreclosing the Mortgage. The Court finds such power of attorney was recorded with the Registry on January 7, 2016 in Book 1518, Page 70. (Joint Exhibit 9; Plaintiff's Exhibit 9).
39. Jamie Welch, Esquire ("Welch") testified that she is employed by and serves as foreclosure counsel for Orlans, and in that capacity she personally reviewed the records electronically maintained by Orlans in connection with the foreclosure of the Borrower's Mortgage. Welch also personally handled the pre-foreclosure notices that were sent to the Borrowers in 2015, and as part of that process she reviewed and confirmed that proper demand and acceleration letters were sent. She also personally oversaw the post-foreclosure sale process, although she did not sign the foreclosure deed or affidavit of sale.
40. Welch testified that on November 22, 2015, Orlans sent a Notice of Intention to Foreclose and of Deficiency After Foreclosure notice to each of the Borrowers addressed to the Premises and to PO Box 3392, Nantucket, MA 02584, each by certified mail, return receipt requested, and first class mail. (Plaintiff's Exhibit 18). The Borrowers did not deny their receipt of such letters.
41. The Court finds that Plaintiff complied with the publication and notification requirements of G.L. c. 244, §14. The mortgagee's Foreclosure Deed and Affidavit of Sale was signed by Jody DiGiacomandrea, Esquire ("DiGiacomandrea"), Employee, Authorized Signatory, Real Property of Orlans, as attorney in fact for Plaintiff and notarized by Phyllis Saglimbene ("Saglimbene") on December 22, 2015. Welch testified that DiGiacomandrea is no longer employed by Orlans, that she has known DiGiacomandrea for eight (8) years, that she is familiar with DiGiacomandrea's signature and also familiar with Saglimbene, the notary, and her signature. The Court credits Welch's testimony that she recognized the signatures on the Foreclosure Deed and Affidavit of Sale as those of DiGiacomandrea and Saglimbene. See Commonwealth v. Ryan, 355 Mass. 768 , 770-771 (1969) ("A witness who is familiar with a person's handwriting may give an opinion as to whether the specimen in question was written by that person").
42. The Affidavit of Sale states that Orlans sent the statutory foreclosure sale notices to the Borrowers by certified mail, return receipt requested, that the foreclosure sale was scheduled for October 22, 2015 at 9:00 A.M., and that notice of the foreclosure sale was published in the Nantucket Inquirer and Mirror, a newspaper with general circulation in Nantucket, on October 1, 2015, October 8, 2015 and October 15, 2015. The Court finds that the Affidavit of Sale was recorded in the Registry with the Foreclosure Deed at Book 1518, Page 74. (Joint Exhibit 6; Plaintiff's Exhibit 19).
43. The Court finds the Affidavit of Sale recorded with the Foreclosure Deed complies with Form 12 of the Appendix to G.L. c. 183. As such, it is sufficient to satisfy the requirements of G.L. c. 244, §15. Deutsche Bank Nat. Tr. Co. v. Gabriel, 81 Mass. App. Ct. 564 , 568 (2012). G.L. c. 244, §15 provides that a recorded affidavit of sale in sufficient statutory form "shall be admitted as evidence that the power of sale was duly executed." Fed. Home Loan Mortg. Corp. v. Bartleman, 94 Mass. App. Ct. 800 , 807, review denied, 482 Mass. 1104 (2019).
44. Luiz Gonzaga ("Gonzaga"), a licensed auctioneer, conducted the foreclosure sale. Gonzaga testified that the auction was delayed by approximately 30 minutes because the bank agent arrived on a later boat, the delay was timely announced to the four (4) or five (5) bidders present, and the auction was conducted within the hour of the designated time. Gonzaga testified that the bank's authorized agent made entry onto the Premises by standing on it and "snapped a piece of grass or a twig." After the certificate of entry was read, Gonzaga conducted the auction on the street in front of the Premises. Gonzaga testified that a person who later identified herself as a paralegal for Mr. Ranney was passing out flyers to stop the auction. The Court credits Gonzaga's testimony.
45. The Court finds that prior to the foreclosure sale, Plaintiff made entry onto the Premises through its authorized agent. (Joint Exhibit 8). Although Gonzaga testified that he was aware the Defendants were opposing entry onto the Premises, the Court finds Plaintiff's representative legally entered the Premises for purposes of conducting the foreclosure in compliance with the terms of the Mortgage and the requirements of Massachusetts statutory law concerning foreclosures pursuant to the statutory power of sale.
46. The Court finds that the foreclosure sale took place on October 22, 2015 between the hours of 9:00 and 10:00 A.M. The Court finds that that there were four (4) or five (5) registered bidders present, but none of them bid. The Plaintiff was the high bidder for the sum of $680,916.69. The Court finds the Plaintiff's purchase did not result in a surplus of funds. (Joint Exhibit 6; Plaintiff's Exhibit 21).
47. The Court finds that on January 7, 2016, Plaintiff recorded the Foreclosure Deed with the Registry in Book 1518, Page 74. (Joint Exhibit 6; Plaintiff's Exhibit 19).
48. The Court finds that on May 15, 2015, Melinda Girardeau, authorized signatory of Caliber, as attorney-in-fact for Plaintiff, executed an Affidavit Regarding Compliance with MGL c. 244 sec. 35B, and said Affidavit was recorded with the Registry on May 26, 2015 in Book 1484, Page 165. (Joint Exhibit 10). The Court finds that this Affidavit provides, in pertinent part: ". . . I certify that: The requirements of M.G.L. c. 244 sec. 35B have been complied with."
49. The Court finds that on July 20, 2015, Melinda Girardeau, authorized signatory of Caliber, as attorney-in-fact for Plaintiff, executed an Affidavit Regarding Note Secured By Mortgage Being Foreclosed MGL c. 244 sec. 35C, and said Affidavit was recorded with the Registry on August 3, 2015 in Book 1494, Page 349. (Joint Exhibit 11). The Court finds that this Affidavit provides, in pertinent part: ". . . I certify that [Plaintiff] is: the holder of the promissory note secured by the above [M]ortgage."
50. The Court finds that on November 23, 2015, Julia Jackson, authorized agent of Caliber, as attorney-in-fact for Plaintiff, executed a Post-Foreclosure Affidavit Regarding Note "Eaton" Affidavit, and said Affidavit was recorded with the Registry on January 7, 2016 in Book 1518, Page 77. (Joint Exhibit 12). The Court finds that this Affidavit provides, in pertinent part: ". . . I certify that [Plaintiff] is: the holder of the promissory note secured by the above [M]ortgage."
51. The Court finds that in the five (5) years between Borrowers' default in 2010 and the foreclosure sale on October 22, 2015, Caliber, on behalf of Plaintiff, made multiple attempts to work out reasonable alternatives to foreclosure with Borrowers. These efforts included numerous solicitation loss of mitigation packets and two (2) pre-approved loss of mitigation packets sent out to Borrowers. The Court finds Borrowers failed to respond to these loss of mitigation packets.
52. The Court finds that: 1) Defendants have never occupied the Premises as a tenant either before or after the foreclosure; 2) Plaintiff never entered into a tenancy with Defendants after the foreclosure; and 3) Defendants never paid Plaintiff any rent for their use of the Premises after the foreclosure.
53. The Court finds that Plaintiff, U.S. Bank Trust, N.A., as Trustee for LSF8 Master Participation Trust, is the record owner of the Premises located at 8 Second Way, Nantucket, Massachusetts. (Plaintiff's Exhibit 19).
54. The Court finds that the Defendants are the former owners and the adult children of the former owners. (Joint Exhibit 1).
55. The Court finds that on February 2, 2016, Plaintiff served each of the Defendants with a legally sufficient 72 Hour Notice to Quit by sheriff. (Joint Exhibit 1).
56. The Court finds that each of the Defendants were served with the summons and complaint by sheriff. (Joint Exhibit 2).
57. The Court finds the Defendants continue to occupy the Premises.
58. "In a summary process action for possession after foreclosure by sale, the plaintiff is required to make a prima facie showing that it obtained a deed to the property at issue and that the deed and affidavit of sale, showing compliance with statutory foreclosure requirements, were recorded." Bank of New York v. Bailey, 460 Mass. 327 , 334 (2011).
59. G.L. c. 244, §15 provides that a recorded affidavit of sale in statutory form "shall be admitted as evidence that the power of sale was duly executed."
60. The Court finds that by virtue of the recording of a Foreclosure Deed and an Affidavit of Sale that meet the requirements of G.L. c. 244, §15, the Defendants' receipt of the notices to quit and their receipt of the summary process summons and complaint, the Plaintiff has established a prima facie case for possession to the Premises. See Federal Nat'l Mortgage Ass'n v. Hendricks, 463 Mass. 635 , 641-642 (2012); Deutsche Bank Nat. Tr. Co. v. Gabriel, 81 Mass. App. Ct. 564 , 568 (2012).
61. The Court finds that following the foreclosure the Defendants became tenants at sufferance. See Carney v. Conveyancers Title Ins. & Mtg. Co., 309 Mass. 197 , 200 (1941).
62. Plaintiff seeks to recover fair market use and occupancy from Defendants from October 22, 2015 to the date of trial.
63. Under Massachusetts law, "[t]enants at sufferance in the possession of land or tenements shall be liable to pay rent therefor for such time as they occupy or detain the same." G.L. c. 186, §3. "A tenant at sufferance is liable for the reasonable worth of its use and occupancy and/or detention of the premises." Dale v. H.B. Smith Co., 136 F.3d 843, 850 (1st Cir. 1998). The measure of damages for a use and occupancy charge is the then current fair rental value of the premises. Kobayashi v. Orion Ventures, Inc., 42 Mass. App. Ct. 492 , 502 (1997). This is true even where there was never any tenancy relationship between the former owner and the party seeking possession of the premises following a foreclosure. See U.S. Bank Trust, N.A. v. Minnehan, 95 Mass.App.Ct. 1123 , *2 (Rule 1:28 unpublished decision August 9, 2019), further appellate review denied 2019 WL 5423316 (October 18, 2019). The statutory term "rent" is broadly defined to encompass "the sum which the trier of fact finds the use and occupation were reasonably worth." Lowell Hous. Auth'y v. Save-Mor Furniture Stores, Inc., 346 Mass. 426 , 431 (1963). The determination of use and occupancy under G.L. c. 186, §3 is a pure finding of fact. Dale v. H.B. Smith Co., 136 F.3d 843, 850 (1st Cir. 1998).
64. Maiza, Eloy ("Eloy"), a licensed real estate broker, testified as to the fair market rental value of the Premises. She testified that the fair rental value of the Premises is $3,000.00 per month. Although Eloy has 18 years of experience in Cape and Islands real estate, she testified that her experience is solely with the purchase and sale of real estate. She admitted that she has never been involved in the rental of real estate and that she has never had a rental listing on Nantucket. She was unable to provide any comparable rental listings to support her opinion as to the fair rental value of the Premises and was unable to identify any rental property on Nantucket that she used to support her opinion of value. Eloy testified that she based her opinion of value on a review of available listings on MLS, conversations with other realtors who handle rentals on Nantucket and an exterior inspection of the Premises. The Court finds Eloy's lack of experience in the rental of real estate renders her testimony not credible, and the Court gives no weight to her opinion as to the fair rental value of the Premises. [Note 1]
65. Defendants filed an answer and counterclaims for declaratory judgment, breach of contract, breach of the implied covenant of good faith and fair dealing, unlawful foreclosure, violation of G.L. c. 93A, intentional and/or negligent infliction of emotional distress, violations of 12 CFR 1024.41, 34 and 35 and violations of 15 USC §1692, the Fair Debt Collection Practices Act. At trial, Defendants stipulated that they are not pursuing their claims for violation of G.L. c. 93A (Count Five of their Counterclaim), intentional and/or negligent infliction of emotional distress (Count Six of their Counterclaim), violations of 12 CFR 1024.41, 34 and 35 (Count Seven of their Counterclaim), and violations of 15 USC §1692, the Fair Debt Collection Practices Act (Count Seven (sic) of their Counterclaim).
66. Defendants assert that based on all of the circumstances, including the conduct of WaMu in originating the subject mortgage loan transaction, there was never a valid and/or enforceable contract created. The Court finds this claim meritless.
67. The Court finds Richard Moore's hazy recollection of the events leading up to the loan closing, even if credible, are not enough to void the loan transaction. The loan documents, including the Actual Disclosure Statement and the Note, clearly disclosed the balloon note structure of the loan. Richard Moore testified that the expected monthly payment reflected on the 2nd Disclosure Statement "wouldn't have been a number that I would have been comfortable with."
68. The Court finds the loan was restructured sometime after the issuance of the 2nd Disclosure Statement to bring the monthly payment down. The Court finds the actual monthly payment under the Note was $176.42 per month less than the monthly payment the Borrowers "thought maybe we could possibly pull this along, we could pull it off" as reflected on the 1st Disclosure Statement [Note 2], and $317.15 less than the monthly payment reflected on the 2nd Disclosure Statement issued by WaMu to the Borrowers. Based on the Disclosure Statements, the Court may reasonably infer that WaMu and the Borrowers were working to structure monthly payments the Borrowers believed they could afford.
69. The Court finds the Defendants failed to satisfy their burden of proof by a preponderance of the evidence that the subject loan transaction was unconscionable or that they were the victim of a bait-and-switch transaction. The Court does not credit the testimony of Richard Moore as to the facts surrounding the loan closing. The Court finds the Borrowers wanted a lower monthly payment they could afford and were not misled into signing the balloon Note and Mortgage. The Court finds the Defendants did not provide sufficient evidence to warrant a finding that the loan transaction was not a valid contract or that there was a breach of the covenant of good faith and fair dealing.
70. Defendants assert that the chain of assignments, beginning with the JPMC Assignment from the FDIC to JPMC, is void on grounds that the JPMC Assignment attempts to memorialize some "transfer" that purportedly happened years before, WaMu is not the assignor, and there was no evidence pertaining to the failure of WaMu, that WaMu was put into receivership, or that the FDIC took over as receiver of WaMu. The Court finds no merits to these arguments.
71. A mortgage assignment that complies with G.L. c. 183, §54B is effective to pass title. The Bank of New York Mellon Corp. v. Wain, 85 Mass. App. Ct. 498 , 503 (2014). A borrower does not have standing to challenge any shortcomings in an assignment that is valid on its face. Woods v. Wells Fargo Bank, N.A., 733 F.3d 349, 354 (1st Cir. 2013) ("claims that merely assert procedural infirmities in the assignment of a mortgage, such as a failure to abide by the terms or a governing trust agreement, are barred for lack of standing") (citing Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 290 (1st Cir.2013)).
72. Furthermore, the validity of the FDIC's assignment to JPMC was addressed in detail by the U.S. District Court for the District of Massachusetts in the case of Cullen v. U.S. Bank Tr., N.A. for LSF9 Master Participation Tr., No. CV 16-12641-PBS, 2017 WL 3634089 (D. Mass. July 12, 2017). In Cullen, the court held:
"[The borrower] claims that U.S. Bank does not validly hold the mortgage because of what he calls an invalid "confirmatory" assignment from the FDIC, as receiver for Washington Mutual, to JPMorgan. That argument is meritless. The assignment of the mortgage from FDIC to JPMorgan was properly documented, as was the later assignment of the mortgage from JPMorgan to U.S. Bank. Docket No. 18-3 at 24-26. To the extent Cullen's argument is that FDIC never properly held the mortgage in the first place, that argument is baseless. See Demelo v. U.S. Bank Nat'l Ass'n, 727 F.3d 117, 125 (1st Cir. 2013) ("[F]ederal law ... specifically authorizes the FDIC to transfer assets of a failed financial institution 'without ... assignment.' ... [A] transfer of a mortgage, authorized by federal law, obviates the need for the specific written assignment that state law would otherwise require." (quoting 12 U.S.C. § 1821(d)(2)(G)(i)(II))); Stehrenberger v. JPMorgan Chase Bank, N.A., No. 2:12-CV-874, 2012 WL 5389682, at *2 (S.D. Ohio Nov. 2, 2012) ("[T]he FDIC transferred all of WaMu's loans and loan commitments to [JP Morgan] Chase pursuant to the September 2008 [Purchase and Assumption Agreement]. Courts have, therefore, consistently held that Chase became the owner of WaMu's loans and loan commitments by operation of law and have rejected any arguments that Chase is not entitled to enforce the acquired WaMu loans.")."
Cullen v. U.S. Bank Tr., N.A. for LSF9 Master Participation Tr., No. CV 16-12641-PBS, 2017 WL 3634089, at *2 (D. Mass. July 12, 2017).
73. The Court finds the Mortgage here was assigned by operation of federal law, which specifically authorizes the FDIC to transfer assets of a failed financial institution "without assignment." 12 U.S.C. § 1821(d)(2)(G)(i)(II). "[A] transfer of a mortgage, authorized by federal law, obviates the need for the specific written assignment that state law would otherwise require." Demelo v. U.S. Bank Nat'l Ass'n, 727 F.3d 117, 125 (1st Cir. 2013).
74. The Court finds direct evidence at trial regarding the failure of WaMu, the appointment of the FDIC as WaMu's receiver, the transfer of WaMu's assets to the FDIC and the subsequent transfer of such assets to JPMC is not required given the repeated acceptance by courts of the validity of the transfer of WaMu's assets to the FDIC and subsequently to JPMC. See, e.g., Healy v. U.S. Bank, N.A. for LSF9 Master Participation Tr., No. CV 16-11996-GAO, 2018 WL 3733934, at *2 (D. Mass. Aug. 3, 2018) ("The First Circuit and the District of Massachusetts have repeatedly accepted the validity of the transfer of Washington Mutual's assets to the FDIC and subsequently to JPMorgan Chase"); Demelo v. U.S. Bank Nat'l Ass'n, 727 F.3d 117, 125 (1st Cir. 2013) (explaining that FDIC was empowered by federal law to transfer any asset or liability of failed bank without approval, assignment, or consent); Lackie v. Deutsche Bank Nat'l Tr. Co., No. 15-30121-MGM, 2016 WL 4076830 at *4 (D. Mass. July 29, 2016) (taking notice of purchase and assumption agreement between FDIC and JPMC and press release concerning JPMC's acquisition of WaMu's assets from FDIC as receiver); Sampson v. U.S. Bank N.A., 115 F. Supp. 3d 191, 194 (D. Mass. 2015).
75. As this series of transactions involving the failure of WaMu, the transfer of WaMu's assets to the FDIC and then to JPMC is not subject to reasonable dispute and also capable of ready determination by resort to sources whose accuracy cannot be reasonable questioned, the Court takes judicial notice of the validity of the transfer of WaMu's assets to the FDIC and subsequently to JPMC. See Rice v. Wells Fargo Bank, N.A., 2 F.Supp. 3d 25, 28 n.7 (D. Mass. 2014) (taking judicial notice of the progression of World Savings Bank to Wells Fargo).
76. The Court finds that the assignments from the FDIC to JPMC and then from JPMC to Plaintiff were properly documented by the JPMC Assignment followed by the U.S. Bank Trust Assignment.
77. The Court finds that the blank WaMu Assignment executed 13 days after the loan closing conveyed nothing. In support of this finding the Court relies on the Supreme Judicial Court's decision in the case of U.S. Bank Nat. Ass'n v. Ibanez, 458 Mass. 637 (2011), which states: "[w]e have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment." Ibanez at 652.
78. The Defendants raised objections concerning the authority of Tillman to testify for the loan servicer on behalf of Plaintiff, the admissibility of business records through Tillman's testimony, and the authority of the signatories to the foreclosure documents admitted into evidence, including, but not limited to, the JPMC Assignment, the U.S. Bank Trust Assignment, the pre and post-foreclosure sale affidavits recorded with the Registry in conjunction with the foreclosure of the Mortgage, and the Foreclosure Deed and Affidavit of Sale. The Defendants protestations are unavailing.
79. The same issue concerning a witness' authority to testify as the loan servicer for U.S. Bank was addressed in the case of Mitchell v. U.S. Bank, Nat'l Ass'n for RASC 2006-EMX4, No. 12 MISC 473427 (RBF), 2017 WL 3707274 (Mass. Land Ct. Aug. 28, 2017), judgment entered, No. 12 MISC 473427 (RBF), 2017 WL 3711877 (Mass. Land Ct. Aug. 28, 2017), and aff'd sub nom, Mitchell v. U.S. Bank Nat'l Ass'n, 95 Mass. App. Ct. 901 (2019). There, the court found:
"[The witness] based her testimony on her knowledge of [the servicer's] usual procedures and on records kept by [the servicer]. These records are contained in the collateral file, the EMB Trust Record, and the ICMP system. Such records include documents and computer entries showing the location of the Note in the original collateral file, the times the collateral file was deposited and removed from [the servicer's] vault, and images of documents within the collateral file that were scanned. To the extent that the [borrowers] argue the admissibility and [the witness'] utilization of any of these documents as not being directly produced by [the servicer], these documents qualify as business records admitted under the business records exception to the hearsay rule. G.L. c. 133, § 78; Beal Bank, SSB v. Eurich, 444 Mass. 813 , 816 (2005). [The servicer], as loan servicer and custodian, routinely accesses and relies on information provided by its clients so that it can effectively service their loans. [The witness] testified that [the servicer] created and maintained such records in the ordinary course of its business for U.S. Bank as trustee as its servicer and document custodian. I find that the original collateral file, the EMB Trust Record, and the ICMP system records are business records, especially in light of the Supreme Judicial Court's admonition that G.L. c. 233, § 78, the codification of the business records exception to the hearsay rule, should be interpreted liberally to permit the receipt of relevant evidence. Beal Bank, SSB, 444 Mass. at 817, quoting Wingate v. Emery Air Freight Corp., 11 Mass. App. Ct. 982 , 983 (1981), rev'd on other grounds, 385 Mass. 402 (1982).
Mitchell v. U.S. Bank, Nat'l Ass'n for RASC 2006-EMX4, No. 12 MISC 473427 (RBF), 2017 WL 3707274, at *10 (Mass. Land Ct. Aug. 28, 2017).
80. The Court finds that the documents that Tillman testified to are properly in evidence as business records, and that these documents are presumed reliable.
81. Many of the same arguments raised by Defendants with respect to the admissibility of the Affidavit of Sale and Foreclosure deed were considered and rejected by the Appeals Court in the case of Fed. Home Loan Mortg. Corp. v. Bartleman, 94 Mass. App. Ct. 800 , review denied, 482 Mass. 1104 (2019). The Court finds them meritless.
82. Defendants' attempts to strike various trial documents, including the Foreclosure Deed and Affidavit of Sale, on grounds that the signatories thereto were not duly authorized, must fail because: 1) the very text of the relevant powers of attorney clearly authorize the actions taken by Caliber, Orlans and/or Plaintiff thereunder; and 2) Defendants lack standing to challenge the validity of such powers of attorney, the Foreclosure Deed and the Affidavit of Sale. Here, Defendants' claims respecting the powers of attorney are not predicated on a plausible argument that Plaintiff had no ownership interest in the Mortgage. Any alleged infirmities in the powers of attorney could only render them voidable, rather than void. Accordingly, Defendants lack standing to challenge them and, as a result, the validity of the Foreclosure Deed and Affidavit of Sale. See Culley v. Bank of Am., N.A., No. 18-CV-40099-DHH, 2019 WL 1430124, at *14 (D. Mass. Mar. 29, 2019).
83. Finally, any violations for reasons other than failure to comply strictly with the power of sale provided in the Mortgage would have had to render the foreclosure so "fundamentally unfair" so as to warrant the setting aside of the foreclosure sale. U.S. Bank Nat'l Ass'n v. Schumacher, 467 Mass. 421 , 433 (2014) (Gants, J., concurring) (quoting Bank of Am., N.A. v. Rosa, 466 Mass. 613 , 624 (2013)). No such showing has been made here. The Defendants have been in default since 2010.
84. For the foregoing reasons, the Court finds the Plaintiff has established its case for possession of the Premises, plus costs. The Court finds Defendants failed to show by a preponderance of the evidence that they have a legally sufficient defense to Plaintiff's claim to possession of the Premises and no credible evidence was presented to support a finding for the Defendants on their counterclaims for declaratory judgment, breach of contract, breach of the implied covenant of good faith and fair dealing and unlawful foreclosure.
ORDER FOR JUDGMENT
Based upon all the credible testimony and evidence presented at trial in light of the governing law, it is ORDERED that:
1. Judgment enter for the Plaintiff for possession as to the Defendants, plus costs.
2. Judgement shall enter for the Plaintiff on the Defendants' counterclaims.
3. Execution shall issue ten (10) days after the date on which judgment enters.
SO ORDERED.
U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF8 MASTER PARTICIPATION TRUST, Plaintiff v. RICHARD MOORE, VENESSA K. MOORE, DREW ALYSSE MOORE and KOBIE ZAIRE MOORE, Defendants