Home DEUTSCHE BANK NATIONAL TRUST COMPANY, As Indenture Trustee for American Home Mortgage Investment Trust 2005-2, Mortgage Backed Notes, Series 2005-2 v. ROBERT F. JEPSON

MISC 11-454552

February 24, 2012


Piper, J.


This case, filed October 12, 2011, is brought to obtain a determination under the Servicemembers Civil Relief Act (“Act”) as to whether or not the defendant is entitled to the benefits of the Act. In these narrowly-confined proceedings, that is the limit of the issues the court is called upon or able to determine. Beaton v. Land Court, 367 Mass. 385 , 388 (1975). Other issues, including those concerning the lending relationship of a mortgagor and mortgagee, are to be brought in another action in a court with the appropriate jurisdiction.

Defendant filed an answer on December 14, 2011. Defendant’s answer asserted that he did not execute a mortgage with Plaintiff, and alleged failure to comply with statutory requirements for default notices. The court issued an order on December 23, 2011. In that order the court noted that defendant’s answer “does not assert that Defendant or any other concerned parties are entitled to the protection of the Act. ... Instead Defendant alleges that Plaintiff is not the current holder of the mortgage at issue or otherwise does not have standing to bring this action under the Act.” The order struck in part defendant’s answer as outside the scope of this proceeding, and directed plaintiff to show cause why this action should not be dismissed for lack of standing.

On January 17, 2012, Plaintiff filed its response to the order to show cause, including affidavits and accompanying copies, including: of loan documents, among which are copies of instruments recorded with the Nantucket Registry of Deeds; of documents filed in or relating to litigation in several courts; and of notices of default. The review made by the court of Plaintiff’s submission establishes that Plaintiff holds of record the subject mortgage (“Mortgage”), which was granted to Mortgage Electronic Registration Systems (“MERS”) as nominee for American Home Mortgage Acceptance, Inc. and recorded with the Registry on May 23, 2005 in Book 957, Page 249, and which was duly assigned by MERS to Plaintiff by assignment (“Assignment”) recorded with the Registry on September 2, 2011 in Book 1291, Page 133.

In light of the evidence that Plaintiff is the holder of the Mortgage by virtue of the recorded Assignment, and given the absence of any evidence suggesting that the Mortgage has been assigned off-record to someone other than the Plaintiff, Defendant’s contention that Plaintiff is not the current holder of the Mortgage utterly lacks factual foundation and is devoid of merit.

To the extent that Defendant’s answer asserts a lack of standing on the part of the Plaintiff based on some possible separation of the ownership of the Mortgage (held of record by Plaintiff all along) and of the promissory note which the Mortgage secures, that contention also fails.

Nothing suggests that any bifurcation of the holding of the note and the Mortgage has taken place here. Even were the court to ignore the absence of any evidence suggestive of a bifurcation of the note and Mortgage, and indulgently assume that the note and Mortgage might no longer be held by the same entity, that would not demonstrate a lack of standing on Plaintiff’s part to bring this action for a determination of Defendant’s entitlement to the benefits of the Act. Particularly given the limited scope of this action, the simple fact that Plaintiff is, without doubt, the record holder of the Mortgage is sufficient to satisfy the general requirements of standing, all that is needed to go forward in cases of this sort. HSBC Bank USA, N.A., v. Matt, No. 10 MISC 421195 at *2 (Memorandum and Order on Defendant’s Motion to Dismiss July 8, 2010)(Long, J.)(appeal pending SJC-11101): “But a plaintiff need not be the current holder of the note or the mortgage to have standing in a Servicemember’s case. It is sufficient if the plaintiff satisfies the general requirements of standing.” In Matt, after considering that the plaintiff in the Servicemembers action “may or may not be the current holder of Ms. Matt’s note and mortgage....” id., at *3, the court, finding that the plaintiff “has a contractual right to become that holder” and that there was no proof that right had been abandoned or lost, found general standing for the plaintiff to obtain judgment that the defendant Matt was not entitled to the benefits of the Act. Id.

In the case now before the court, Plaintiff’s standing is even more firmly established. Plaintiff is the record holder of the Mortgage. Plaintiff has a clear stake in the execution of the power of sale contained in the Mortgage, a remedy, central to the core purpose of the Mortgage Plaintiff holds, which might be constrained or disabled should the Defendant be entitled to the Act’s protections. And it matters not that, under some circumstance not shown at all to be the case here, the note might have come to rest in the hands of someone other than Plaintiff. In Massachusetts our law long has recognized that a mortgage and the note whose obligations it secures might be held separately. U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637 , 652-653 (2011). See Wells Fargo Bank, N.A. v. McKenna, 19 LCR 596 (2011), No. 11 MISC 447455 at *3 and n.1 (Order on Plaintiff’s Response to Order to Show Cause and Directing Entry of Judgment Dec. 8, 2011)(Piper, J.).

Defendant also has asserted that this case cannot proceed to judgment because of claimed inadequacies in the giving of statutory notice of default. This argument is of no help to Defendant. If a mortgagee does not give the requisite notice under the referenced statute, G.L. c. 244, §35A, there are limitations on certain actions a mortgagee may take to realize on its mortgage collateral. But these constraints do not extend to the narrow relief sought in this case, which is nothing more than a request for judicial determination whether or not Defendant enjoys the Act’s protection. See Beaton, supra. The statutory restraint on a mortgagee, absent the giving of the required notice of a right to cure (and the passage of the prescribed number of days thereafter within which the borrower can cure default), is against “accelerat[ing] maturity of the unpaid balance of ... [the] mortgage obligation or otherwise enforc[ing] the mortgage....” G.L. c. 244, §35A(g). The bringing of a case such as this one, solely to obtain judgment as to status under the Act, is not barred by this statute on grounds that a mortgagee has given inadequate notice of a default and of a right to cure. A suit, such as the one now before this court, to determine only whether or not a defendant is protected by the Act, is not a suit to “enforce the mortgage.” Cf. G.L. c. 244, §1. See Deutsche Bank National Trust Co., as Trustee v. Butler, No.11 MISC 447828 at *4 - 5 (Memorandum and Order Directing Entry of Judgment for Plaintiff Dec. 8, 2011)(Long, J.).

In any event, even were the giving of notice and the passage of time under G.L. c. 244, §35A a prerequisite to obtaining judgment in a Servicemembers proceeding--which the court concludes is not the case, given the statute’s language--there is no question that Defendant has received all the notice and opportunity to cure required under the statute. This is so notwithstanding the amendment of section 35A. (Compare the initial version of this section enacted by Chapter 206 of the Acts of 2007, with the amendment by Chapter 258 of the Acts of 2010, effective August 7, 2010.) In December, 2008, Defendant received due notice under §35A as then in effect, and was given ninety days, until March 22, 2009, to cure. The lender on April 7, 2009 commenced in this court an action to determine Defendant’s military status under the Act, see Case No. 09 MISC 398139, and judgment in that Servicemembers case entered January 5, 2010. Faced with a foreclosure sale, Defendant unsuccessfully sought injunctive relief from the Superior Court Department, in an action commenced December 10, 2009. Jepson v. Deutsche Bank National Trust Co., NACV-2009-00087. He then resorted to the protection of the Bankruptcy Court by filing a Chapter 13 petition on January 27, 2010, Case No. 10-10729-WCH, which was dismissed on April 12, 2010. The Superior Court case was dismissed voluntarily on April 15, 2010.

Given this procedural history, and that Defendant’s loan obligations never were brought current, there is no merit to Defendant’s contention that he must receive yet another round of notice and opportunity to cure under §35A as most recently amended. The statute, in its current iteration, guards against a borrower claiming repetitive notice and cure rights, by providing that the right to cure be granted only once during any three year period, regardless of who may hold the mortgage. G.L. c. 244, §35A(b). The case now pending in this court was filed less than three years after the initial notice of default and right to cure in December, 2008. Nothing in the language of the statute, as amended effective August 7, 2010, suggests that the notice and right to cure afforded under the earlier version of the statute, once given, do not suffice under the facts present here. There is nothing in the amendment of §35A which calls for the giving of another notice, and the provision of another right to cure, to those who already received that notice and opportunity under the prior version of that statute. It would be inconsistent with the statute’s careful refutation of any right to multiple notices and opportunities to cure, to read into the amended law a requirement that new notice, and a new right to cure, be given to a borrower who already had received notice under the initial version of the statute.


The court finds, on the submissions Plaintiff has made, that it has standing sufficient to maintain this action. Defendant’s assertions to the contrary lack merit. The court also decides that there is no merit to Defendant’s argument that any failure to give notice of default and of a right to cure stands in the way of issuing a judgment in this Servicemembers case. This case is to proceed to entry of a judgment that Defendant is not entitled to the benefits of the Act.

It is

ORDERED that judgment is to enter for the plaintiff in this action, declaring that the defendant is not entitled to the benefits of the Act.

So Ordered.

By the Court. (Piper, J.).