Home U.S. BANK, NA., as trustee for the certificate-Holders of Banc of America Funding Corporation Mortgage Pass-Through Certificates Series 2007-C v. JOHNNY SAROUFIM

MISC 10-428266

December 27, 2010

ESSEX, ss.

Long, J.



This is a case brought pursuant to the Servicemember's Civil Relief Act to determine, and by statute limited so it only can determine (1) if the defendant is currently in active military service, and (2) if so, if the obligation at issue was incurred before that service began. [Note 1] 50 U.S.C. App. § 501 et seq. ("the Servicemember's Act"); St. 1990, c. 496, § 1 ("Such proceedings shall be limited to the issues of the existence of such persons and their rights [under the Servicemember's Act] if any"); Beaton v. Land Court, 367 Mass. 385 , 388, 390-91 (1975). Judgment entered on September 21, 2010 finding and declaring that defendant Johnny Saroufim was not entitled to the benefits of that act. [Note 2] Mr. Saroufim, who does not claim he is entitled to those benefits (i.e., he does not challenge the judgment on its merits), has nonetheless moved to vacate that judgment on the grounds that the plaintiff U.S Bank N.A., as trustee for the Certificateholders of Banc of America Funding Corporation Mortgage Pass-Through Certificates, Series 2007-C ("U.S. Bank"), lacked standing to bring it. Mr. Saroufim is correct that standing is required. Standing is a matter of subject matter jurisdiction. If the plaintiff does not have standing, the court has no jurisdiction to hear the dispute. Sullivan v. Chief Justice for Admin. & Mgmt. of the Trial Court, 448 Mass. 15 , 21 (2006). But Mr. Saroufim is incorrect when he asserts that U.S. Bank did not have sufficient standing to bring a Servicemember's action. His motion to vacate the judgment is therefore DENIED and the previously-entered judgment that he is not entitled to the benefits of the Servicemember's Act remains. Judgment (Sept. 21, 2010) (Scheier, C.J.).


Mr. Saroufim's mortgage was originally granted to Bank of America, N.A. (Mortgage, Dec. 18, 2006). [Note 3] It remained there of record until April 14, 2010 when it was assigned to plaintiff U.S. Bank. (Assignment of Mortgage, Apr. 14, 2010). [Note 4] This Servicemember's action was commenced on April 23.

Mr. Saroufim argues that the assignment was ineffective, depriving U.S. Bank of standing to bring this case, because Mr. Saroufim's loan was "securitized" and, under the Pooling and Servicing Agreement for that "securitization," the transfer of that loan was required to be accomplished before the trust "closing date" of April 30, 2007. Whatever the merits of that argument with respect to the current holder of the note, i.e. the underlying loan obligation (a question I need not and do not decide), it does not affect the validity of the assignment of the mortgage and thus does not take away U.S. Trust's standing to bring this Servicemember's proceeding. Because all that is at issue is the defendant's entitlement to the benefits of the Servicemember's Act, not the plaintiffs standing to foreclose (a separate question, governed by the specific statutory requirements of G.L. c. 244, § 14), [Note 5] all that is necessary to have Servicemember's standing is "some connection to the mortgagor, the mortgage, the premises conveyed by the mortgage, or their title." Randle v. GMAC Mortgage, 18 LCR 546 , 549-550 (2010) (Piper, J.). See also US Bank v. Hanlon, Land Ct. Case No. 10 Misc.429997, Memorandum and Order on Defendants' Motion to Dismiss (Aug. 20, 2010) (Long, J.); HSBC Bank v. Matt, Land Ct. Case No. 10 Misc. 421195, Memorandum and Order on Defendant's Motion to Dismiss (Jul. 8, 2010) (Long, J.); JP Morgan Acquisition Corp. v. Lord, Land Court Case No. 10 Misc. 427846, Memorandum and Order Denying Defendants' Motion to Vacate Judgment and Dismiss Plaintiff's Complaint (Nov. 29, 2010) (Long, J.); BACHome Loans Servicing LP v. Kay, Land Ct. Case No. 10 Misc. 428719, Memorandum and Order on Defendant's Motion to Dismiss (Dec. 22, 2010) (Long, J.); Bank of America v. Hutchinson, Land Court Case No. 10 Misc. 427950, Memorandum and Order on Defendant's Motion to Dismiss (Dec. 23, 2010) (Long, J.); CitiBank v. Collette, Land Court Case No. 10 Misc. 425412, Memorandum and Order on Defendant's Motion to Dismiss (Dec. 23, 2010) (Long, J.). Thus, a Servicemember's plaintiff can be, among others, the mortgage holder, the note holder, the holder of an option to obtain the mortgage or note, the loan servicer, the trustee of the securitized trust to which the loan has been transferred, or even the servicer or trustee of a securitized trust or other entity with an arguable claim to the mortgage or note, i.e. anyone with a financial stake in the loan or mortgage, and thus a "legally cognizable injury," if the collectability of the loan or enforceability of the mortgage is affected or potentially affected by the Servicemember's Act. See id.

Here, the plaintiff was assigned the mortgage and is its record holder. Whether the assignment of the loan was timely or not, and whether or not Mr. Saroufim (as opposed to the loan originator, the trustee, the trust certificateholders, or anyone else on the "assignment" side) has standing to make that argument, is beside the point in these proceedings. U.S. Bank, as the record holder of the mortgage, holds "the legal title in trust for the purchaser of the debt," Barnes v. Boardman, 149 Mass. 106 , 114 (1889), whomever that may be, and thus has fiduciary responsibilities to that purchaser which include the obligation to obtain a declaration of the debtor's status under the Servicemember's Act. That is sufficient to grant it standing in these proceedings.


For the foregoing reasons, defendant's motion to vacate the previously-entered judgment and dismiss the plaintiff's complaint is DENIED.



[Note 1] If the answer to both questions is "yes," the defendant is entitled to the benefits of the Servicemember's Civil Relief Act. If the answer to either is "no," the benefits of that act do not apply. Those benefits are "special rules regarding debts secured by a mortgage, trust deed, or similar security interest in real or personal property owned by a servicemember. Generally, the act prohibits the sale, foreclosure, or seizure of property, based on a breach of such a secured obligation, during the period of military service or within 90 days thereafter. The prohibition applies only to obligations that originated prior to the servicemember's military service, and for which the servicemember is still obligated." Office of the Comptroller of the Currency, Administrator of National Banks, Advisory Letter No. AL 2004-8 Re: Servicemembers Civil Relief Act at 2 (2004).

[Note 2] The September 14, 2010 allowance of plaintiff's motion for entry of judgment (Scheier, C.J.) erroneously states that the complaint was taken "for confessed," having been entered under the mistaken belief that defendant had failed to appear. Defendant, in fact, had appeared by timely filing a motion to dismiss based solely on plaintiff s alleged lack of standing. What had been "confessed" (or, more accurately, not substantively challenged) was that Mr. Saroufim, on the merits, was not entitled to the benefits of the Servicemember's Act. I thus treat Mr. Saroufim's motion as a motion to vacate that judgment (and to dismiss the plaintiff s complaint) on the grounds of lack of standing. Since this Order rejects that challenge, and since Mr. Saroufim has asserted no other ground to vacate the judgment or dismiss the complaint, the judgment declaring that he is not entitled to the benefits of the Servicemember's Act remains.

[Note 3] The mortgage was recorded at the Essex (South) Registry of Deeds, Book 26440, Page 384 on January 3, 2007.

[Note 4] The assignment was recorded at Book 29399, Page 244 on April 16.

[Note 5] As noted by the Supreme Judicial Court, "[t]he pertinent provision of [the Servicemember's Act] renders the foreclosure of a mortgage after October 6, 1942, invalid is so far as it purports to cut off rights of a person in the military service or recently discharged therefrom unless that person has executed a proper waiver of his rights or the foreclosure is made `upon an order previously granted by the court and a return thereto made and approved by the court.' The point to be made here is that actions taken to comply with [the Act], such as the steps prescribed by St. 1943, c. 57, as amended, are not in themselves mortgage foreclosure proceedings in any ordinary sense. Rather, they occur independently of the actual foreclosure itself and of any judicial proceedings determinative of the general validity of the foreclosure. Statute 1943, c. 57, as amended, simply establishes procedures whereby mortgagees, in addition to taking all steps necessary to foreclose, can make certain that there will be no cloud on the title following the foreclosure as a result of an interested party having been in, or just released from, military service and thus under the protective umbrella of [the Act]. If a foreclosure were otherwise properly made, failure to comply with [the Act] would not render the foreclosure invalid as to anyone not entitled to the protection of that act." Beaton v. Land Court, 367 Mass. 385 ,390 (1975) (emphasis added; internal citations omitted).