WAYNE E. MITCHELL and SHARON MITCHELL v. U. S. BANK NATIONAL ASSOC., as Trustee for RASC 2006-EMX4, U. S. BANK NATIONAL ASSOC., as Trustee, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., WELLS FARGO BANK, N. A. d/b/a AMERICA'S SERVICING COMPANY, MORTGAGE LENDERS NETWORK USA, NATIONAL TRUST COMPANY, as Trustee for INC., RESIDENTIAL ASSET SECURITIES CORP., and RESIDENTIAL FUNDING CORP.

Wayne E. Mitchell and Sharon Mitchell filed their Petition to Try Title Pursuant to G.L. C. 240, S. 1-5 on November 5, 2012, and their First Amended Petition to Try Title Pursuant to G.L. C. 240, S. 1-5 (complaint) on December 12, 2012. In the complaint, the Mitchells allege that they are the record owners of, and reside in, the property at 547 Washington Street, Winchester, Massachusetts (Property), and call for the defendants, various alleged holders of a mortgage the Mitchells gave on the Property, to appear and try their claim to superior title to the Property. Defendants U.S. Bank, National Association, as Trustee for RASC 2006-EMX4 (U.S. Bank), Mortgage Electronic Registration Systems, Inc. (MERS), and Wells Fargo Bank, N.A. d/b/a America’s Servicing Company (Wells Fargo) (collectively, the Respondents) filed Respondents’ Motion to Dismiss on January 4, 2013. [Note 1] The case management conference was held on January 8, 2013. The Mitchells filed Petitioner’s Opposition to Motion of U.S. Bank, National Association, as Trustee for RASC 2006-EMX4, Wells Fargo Bank, N.A. d/b/a America’s Servicing Company, and Mortgage Electronic Registration Systems, Inc. (Opposition) on February 11, 2013. Respondents’ Reply Brief in Support of its Motion to Dismiss was filed on February 19, 2013. The court heard argument on the Motion to Dismiss on February 26, 2013, and took the Motion to Dismiss under advisement. The Petitioners’ Notice of Supplemental Authority was filed on September 6, 2013. On December 17, 2013, the court requested further briefing from the parties on the application of G.L. c. 184, § 25(3). U.S. Bank, MERS, and Wells Fargo filed Respondents’ Supplemental Brief on G.L. c. 184, § 25(3) on January 15, 2014; the same day, the Mitchells gave notice that they opted not to provide further briefing on the issue. For the following reasons, the Motion to Dismiss is ALLOWED, and the Mitchells are given leave to amend their complaint as set forth below within fourteen days of the date of this order.

Background

In considering a motion to dismiss for failure to state a claim, the court accepts as true well-pleaded factual allegations and reasonable inferences drawn therefrom, Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43 , 45 (2004), but does not accept “legal conclusions cast in the form of factual allegations.” Iannacchino v. Ford Motor Co., 451 Mass. 623 , 633 (2008), quoting Schaer v. Brandeis Univ., 432 Mass. 474 , 477 (2000). Generally, if matters outside the pleadings are presented to and not excluded by the court, the motion will be treated as a motion for summary judgment. Mass. R. Civ. P. 12(b), 12(c). The court may, however, take into account matters of public record and documents integral to, referred to, or explicitly relied on in the complaint, whether or not attached, without converting the motion to a motion for summary judgment. Marram, 442 Mass. at 45 n.4; Schaer, 432 Mass. at 477; Reliance Ins. Co. v. City of Boston, 71 Mass. App. Ct. 550 , 555 (2008); Shuel v. DeIeso, 16 LCR 329 , 329 n.2 (2008).

Therefore, the court will accept as true the allegations of the complaint for the purposes of the Motion to Dismiss. The court will consider the various recorded instruments submitted with the complaint and the Motion to Dismiss, and other documents referred to in the complaint. Based on the complaint and these documents, the court accepts as true the following facts.

The Mitchells own the Property by virtue of a deed dated May 18, 2004, and recorded in the Middlesex South Registry of Deeds (registry) at Book 4285, Page 230 (the Deed). The Mitchells reside in the Property with their family as their primary residence and maintain actual possession of the Property.

On or about March 15, 2006, the Mitchells executed a mortgage note in the amount of $698,400 (Note). The same day, the Mitchells gave MERS a mortgage on the Property, which was recorded in the registry at Book 47137, Page 406, on March 21, 2006 (the Mortgage). The Mortgage secures the Note and names MERS as “the mortgagee under this Security Instrument.” The Mortgage further states that MERS is “acting solely as a nominee for Lender and Lender’s successors and assigns.” “Lender” is identified in the Mortgage as defendant Mortgage Lenders Network USA, Inc. (MLN).

After origination, the Note and the Mortgage were sold, assigned, and/or transferred, along with thousands of other mortgage loans, into a complex “securitization” registered with the United States Securities and Exchange Commission and known as “RASC 2006-EMX4.” The Mortgage stayed on the land records in the name of MERS. RASC 2006-EMX4, a Real Estate Investment Conduit (REMIC) under the Internal Revenue Code and an investment product formed and regulated under New York law, involved a number of other parties who, at one time or another, purported to have an ownership interest in the Note and Mortgage. According to the publicly available prospectus for RASC 2006-EMX4, the legal name of the “issuing entity” under the RASC 2006-EMX4 transaction is “Home Equity Mortgage Asset-Back Pass-Through Certificates, Series 2006-EMX4.” Other parties involved in RASC 2006-EMX4 included defendants Residential Assets Securities Corporation (as Depositor) and Residential Funding Corporation (as Master Servicer). At some point after the Note and Mortgage were sold to RASC 2006-EMX4, Wells Fargo succeeded MLN as “Subservicer” to the loans purportedly owned by the investors in RASC 2006-EMX4.

On December 23, 2008, U.S. Bank, by and through counsel, filed a “Complaint to Foreclose Mortgage” in the Land Court pursuant to the Servicemembers Civil Relief Act (SCRA), docket no. 08 MISC 390548 (the SCRA action). U.S. Bank identified itself generally “as Trustee” in the SCRA action, but no trust or beneficiary of any such trust—whether RASC 2006-EMX4 or otherwise—upon whose behalf U.S. Bank “as Trustee” was purporting to act was identified in any of the documentation of the SCRA action. In the SCRA action, U.S. Bank “as Trustee” claimed to be the “owner of a mortgage with the statutory power of sale given by” the Mitchells. There is an assignment of mortgage dated December 23, 2008, assigning the Mortgage from MERS to U.S. Bank, as Trustee (the MERS Assignment). While the MERS Assignment is dated December 23, 2008, it was not recorded in the registry until January 4, 2010, at Book 54094, Page 303.

Filed with the SCRA pleadings was a sworn “Mortgagee’s Affidavit” executed on December 18, 2008, under the penalties of perjury by China Brown, “VP of Loan Documentation” for “U.S. Bank National Association as Trustee” (the Brown Affidavit). Attached to the Brown Affidavit is a letter from America’s Servicing Co. to the Mitchells. According to the Brown Affidavit, this letter was sent to the Mitchells “in compliance with Massachusetts General Laws, Chapter 244, Section 35A, as amended” (the § 35A letter). The date of the § 35A letter is redacted. It states “[u]nless the payment on your loan can be brought current by December 1, 2008,” suggesting that the date of the § 35A letter was likely on or about September 1, 2008, and was certainly prior to December 18, 2008, the date of the Brown Affidavit.

The § 35A letter states that the “current mortgagee is GMAC-RFC, Burbank, CA 91504-3120.” “GMAC-RFC, Burbank, CA 91504-3120” does not appear as a mortgagee anywhere in the publicly recorded chain of title of the Mortgage, and the § 35A letter makes no mention of MERS, U.S. Bank, or any other entity appearing in the recorded chain of title of the Mortgage. Between September 1, 2008, and December 23, 2008, MERS was the mortgagee of record of the Mortgage.

The § 35A letter states that “[t]he name of the person that originated your loan is N/A.” At the time the § 35A letter was sent, Wells Fargo had actual knowledge of the person or persons who originated the Mitchells’ loan, but did not include that information in the § 35A letter.

The MERS Assignment was executed by Andrew S. Harmon, Assistant Secretary and Vice President of MERS. Between December 1, 2009, and January 31, 2010, at least 45 assignments of mortgage executed by Harmon as a purported “Assistant Secretary and Vice President” of MERS were recorded in the registry alone. Some of these assignments have disparate and unique signatures indicating a pattern and practice of “robo” or “surrogate” signing wherein various parties other than the named signer unlawfully and fraudulently executed the document or documents. The handwritten insertion of various execution dates on these MERS assignments is evidence of a pattern and practice of fraudulently inserting dates of execution on the documents wherever and whenever necessary to make it appear as if the assignment was validly executed within a certain time period (for example, to appear as if a MERS assignment was executed prior to the commencement of an SCRA action), when, in fact, the document was executed many months or years later. Several of these MERS assignments were purportedly executed on the same day by the same person (i.e., Harmon), but nonetheless display notary stamps from a range of different notaries public, evidence of a pattern and practice wherein the signer did not appear personally before the notary to execute the document despite attestation from the notary that that he did so appear.

A Corporate Assignment of Mortgage dated May 10, 2012, purporting to assign the Mortgage from U.S. Bank National Association, as Trustee, to U.S. Bank, National Association, as Trustee for RASC 2006-EMX4, was recorded in the registry at Book 59090, Page 542, on May 15, 2012 (the U.S. Bank Assignment). The address of both parties to the U.S. Bank Assignment is listed as 60 Livingston Ave., St. Paul, MN 55107. It was executed by Leah Brown, who is described as “Vice President Loan Documentation,” and her signature was notarized before a notary public in Polk County, Iowa.

U.S. Bank, by and through Harmon Law Offices (HLO), noticed a foreclosure sale of the Mitchells’ home for August 28, 2012. That auction was not held, and it was not postponed publicly in accordance with the requirements of Massachusetts law. On September 30, 2012, the Mitchells, by and through counsel, sent a 19-page, detailed demand letter to HLO pursuant to G.L. c. 93A, identifying defects in title to the Property known at that that time based on the information in the Mitchells’ possession and a series of unlawful and deceptive acts associated with the foreclosure process and warning HLO not to proceed to foreclosure without addressing these issues. HLO did not respond to the 93A demand prior to proceeding with a purported foreclosure sale.

On October 2, 2012, U.S. Bank, by and through HLO, purportedly conducted a non-judicial foreclosure sale of the Property. The winning bidder of the purported foreclosure sale is unknown to the Mitchells and has not been identified to them or on the public land records for the Property. The Mitchells never executed a deed or mortgage or conveyed any other interests to U.S. Bank.

Discussion

To survive the Motion to Dismiss, the complaint must set forth factual allegations which, if true, plausibly suggest that the Mitchells are entitled to the relief they seek. Iannacchino, 451 Mass. at 636. The Mitchells’ complaint sets forth a variety of factual allegations and legal grounds which, they argue, state a claim under the try title statute, G.L. c. 240, §§ 1-5, and require U.S. Bank, MERS, and Wells Fargo to appear and try their title. [Note 2] Specifically, the Mitchells allege that they have title to the Property by virtue of the Deed and are in possession of the Property, and that U.S. Bank, MERS, and Wells Fargo claim a superior title. They further allege that U.S. Bank’s, MERS’s, and Wells Fargo’s title is defective because the Mortgage, the MERS Assignment, the U.S. Bank Assignment, and the foreclosure are each invalid, on a variety of grounds. U.S. Bank, MERS, and Wells Fargo, in the Motion to Dismiss, argue that the various grounds on which the Mitchells challenge the Assignment do not, as a matter of law, state a claim that the Assignment is invalid.

1. Motion to Dismiss under the try title statute.

Actions in this court are governed by the Massachusetts Rules of Civil Procedure. Mass. R. Civ. P. 1. These include try title actions, over which the court has exclusive jurisdiction. G.L. c. 185, § 1(d). Thus, a defendant in a try title action may exercise its right, when appropriate, to bring a motion to dismiss for failure to state a claim. Mass. R. Civ. P. 12(b)(6). The Mitchells argue in the first instance that the Motion to Dismiss must be denied because they have pled all the essential elements of a claim under the try title statute, G.L. c. 240, §§ 1-5. Specifically, they have stated that they are in possession of the Property, hold record title under the Deed, and are threatened by a claim of superior title to the Property arising out of the foreclosure. G.L. c. 240, § 1 (“a person in possession . . . claiming an estate of freehold therein” may bring try title action “[i]f the record title of land is clouded by an adverse claim, or the possibility thereof”). Having so alleged, they argue, they have satisfied all the elements necessary to bring a try title action and have now put U.S. Bank, MERS, and Wells Fargo to the test of bringing an action to try their claim to title, G.L. c. 240, § 3, [Note 3] and the Motion to Dismiss must be denied.

The Mitchells have explicitly pled that they are in possession of the Property and the court accepts the allegation as true, drawing the favorable inference that they are “person[s] in possession” as required by G.L. c. 240, § 1. Bevilacqua v. Rodriguez, 460 Mass. 762 , 767 (2011); Marram, 442 Mass. at 45. The Mitchells have also explicitly pled the existence of a claim to superior title by the parties in the chain of title of the Mortgage, including U.S. Bank, MERS, and Wells Fargo, based on the purported foreclosure. Before foreclosure, a lender’s mortgage is not a claim of superior title giving rise to a try title claim, because a mortgage estate and the underlying equitable estate, in the form of the equity of redemption, “are prima facie consistent with each other.” Dewey v. Bulkley, 1 Gray 416 , 417 (1854). Once the mortgagor’s equity of redemption has purportedly been foreclosed upon, however, the mortgagor faces a claim by the mortgagee that it has eliminated the mortgagor’s equity of redemption and now holds a title in the property superior to the mortgagor’s. Abate v. Freemont Inv. & Loan, 20 LCR 630 , 632 (2012) (appeal pending, No. SJC-11638); see Lemelson v. U.S. Bank Nat’l Ass’n, 721 F.3d 18, 23-24 (1st Cir. 2013); Bevilacqua, 460 Mass. at 775-776; but see Varian v. Bank of N.Y. Mellon, 21 LCR 490 , 492-493 (2013) (disagreeing with court’s holding in Abate and holding that mortgagors may bring try title action before foreclosure).

As discussed in Abate, the Mitchells’ allegation that they hold record title, on the other hand, requires more than the bare assertion that there is a recorded instrument giving them title. Bevilacqua, 460 Mass. at 770-771; Abate, 20 LCR at 633. Rather, what determines if the Mitchells have the record title required to have standing under the try title statute is whether the document purporting to give them title is effective to do so. Bevilacqua, 460 Mass. at 771; Abate, 20 LCR at 633. If it is not, then they have no claim. U.S. Bank, MERS, and Wells Fargo therefore have the right to challenge whether the Mitchells have effective record title. They may do so by bringing a motion to dismiss for failure to state a claim under Rule 12(b)(6), which they have done. Id. Of course, the Motion to Dismiss must be evaluated under the standards for such motions, whereby allegations of the complaint are credited, inferences are drawn in the plaintiff’s favor, and the court looks at the complaint, attached documents, and other public instruments. Marram, 442 Mass. at 45 & n.4 (2004); Schaer, 432 Mass. at 477; Reliance Ins. Co., 71 Mass. App. Ct. at 555; Shuel, 16 LCR at 329. If, based on that standard, as a matter of law the Mitchells do not have effective record title, then the complaint may be dismissed.

U.S. Bank, MERS, and Wells Fargo claim that because of the foreclosure, the Mitchells no longer have any title to the Property. In the complaint, the Mitchells allege that for a variety of reasons, the Mortgage, the MERS Assignment, and the U.S. Bank Assignment were not valid, and therefore MERS, Wells Fargo, and U.S. Bank never held the Mortgage and none of them could foreclose. The Mitchells further allege that the foreclosure itself was invalid. As a result, the Mitchells allege, they still hold effective record title and the defendants should have to prove their claim to superior title. In the Motion to Dismiss, U.S. Bank, MERS, and Wells Fargo argue that even applying the standard under Rule 12(b)(6), none of the grounds on which the Mitchells claim that they hold effective record are legally valid. The court examines those claims in turn.

2. Paragraph 20 of the Mortgage bars the splitting of the Note and Mortgage. Paragraphs 10-14 of the complaint allege that the “‘split’ in the ownership interests in Petitioners’ [N]ote and [M]ortgage breached the plain terms of the [Mortgage] at paragraph 20.” The “split” to which the Mitchells refer is MERS’s holding of the Mortgage while the Note was sold “into RASC 2006-EMX4.” In other words, the Mitchells claim that the Mortgage itself requires, in paragraph 20, that the Note be assigned along with the Mortgage and that bifurcation of the two is prohibited. The Mitchells allege in paragraph 57 of the complaint that, for the same reasons, the MERS Assignment was not legally effective. Paragraph 20 of the Mortgage is entitled “Sale of Note; Change of Loan Servicer; Notice of Grievance.” It provides in relevant part:

The Note or partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the “Loan Servicer”) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser.

The court addressed this identical provision in Abate, and found nothing ambiguous about it. Abate, 20 LCR at 637. No “terms are inconsistent on their face,” and the phraseology cannot “support reasonable difference of opinion as to the meaning of the words and the obligations undertaken.” Suffolk Constr. Co. v. Lanco Scaffolding Co., 47 Mass. App. Ct. 726 , 729 (1999), quoting Fashion House, Inc. v. K Mart Corp., 892 F. 2d 1076, 1083 (1st Cir. 1989). Construed according to its “plain terms” and its “usual and ordinary sense,” id., paragraph 20 does not require that the Note and Mortgage be conveyed together. It simply addresses the question of what notice is to be provided to the borrower upon sale of the Note and/or the Mortgage. It provides that the Note can be transferred, along with the Mortgage, without prior notice to the borrower. On the other hand, if the “Loan Servicer” changes, then the borrower is entitled to written notice of that change. Paragraph 20 does not require that the Note and Mortgage be assigned together. The assignment of the Note to another entity while MERS held the Mortgage did not breach the Mortgage. Abate, 20 LCR at 637.

3. Servicemembers Civil Relief Act.

In paragraphs 26-31 of the complaint, the Mitchells allege that there were defects in the SCRA action, including identifying the plaintiff as “U.S. Bank National Association, as Trustee” and issues with the mortgagee’s affidavit filed with the action. To the extent that the Mitchells allege that defects in the SCRA action itself make the foreclosure invalid, they do not state a claim. “Servicemember proceedings ‘occur independently of the actual foreclosure itself and of any judicial proceedings determinative of the general validity of the foreclosure.’” HSBC Bank USA, N.A. v. Matt, 464 Mass. 193 , 196 (2013), quoting Beaton v. Land Court, 367 Mass. 385 , 390 (1975). A foreclosure is not invalid simply because of a failure to comply with the Servicemembers Civil Relief Act or because an action under the act was flawed. Id.; Randle v. GMAC Mtge., LLC, 18 LCR 546 , 549 (2010).

4. Applicability of Massachusetts General Laws, c. 244, § 35A.

Paragraphs 32 through 46 of the complaint allege that the foreclosure sale of the property is void because U.S. Bank did not provide proper notice pursuant to G.L. c. 244, § 35A. On May 1, 2008, G.L. c. 244, § 35A, became law when the Legislature passed An Act Protecting and Preserving Home Ownership. St. 2007, c. 206, §§ 11, 21 (Enabling Act). [Note 4] Section eleven of the Enabling Act provides a mortgagor owning a one to four-family home used as the mortgagor’s primary residence with a ninety-day right to cure period [Note 5] in which the mortgagor may pay any amounts due, in full, without acceleration of the maturity of the unpaid balance of the mortgage. The ninety-day right to cure period, set forth in § 35A, commences when a written notice satisfying the requirements of § 35A(c) is delivered to the mortgagor. In paragraphs 32-46 of the complaint the Mitchells allege that the foreclosure sale was void because they did not receive notice compliant with § 35A before the foreclosure process began. The Respondents argue that they were not required to deliver the Mitchells notice under § 35A.

Section 21 of the Enabling Act states that while § 35A shall take effect on May 1, 2008, its provisions “shall not apply to such mortgages accelerated or whose statutory condition has been voided under the terms of the mortgage to secure the note, prior to” May 1, 2008. St. 2007, c. 206, § 21. The statutory condition referred to in § 21 of the Enabling Act is codified at G.L. c. 183, § 20. [Note 6] Initially enacted in 1912 as section six of An Act to Shorten the Forms of Deeds, Mortgages and Other Instruments Relating to Real Property, St. 1912, c. 502, § 6, the statutory condition “may be incorporated in any mortgage by reference.” G.L. c. 183, § 20. The statutory condition is breached upon a mortgagor’s failure to perform any of the basic duties embodied in it. Id. Included among the basic duties of a mortgagor, embodied in the statutory condition, are the duties to pay principal and interest on the note secured by the mortgage, to perform any obligations provided in the note or mortgage instrument, to pay real estate taxes, to keep the buildings on said premises insured against fire, not to commit waste of the mortgaged premises, and not to breach any covenant contained in the mortgage. See id.; Maglione v. BancBoston Mtge. Corp., 29 Mass. App. Ct. 88 , 90 (1990) (“the mortgagor retains an equity of redemption, and upon payment of the note by the mortgagor or upon performance of any other specified obligation in the mortgage instrument, the mortgagee’s interest in the real property comes to any end. These principals are enshrined in the mortgage conditions described in G.L. c. 183, § 20, as the ‘Statutory Condition’ [internal citations omitted].”). A mortgagor’s failure to make principal and interest payments according to the terms of the mortgage instrument has been held, on several occasions, to breach the statutory condition set forth in G.L. c. 183, § 20. See Negron v. Gordon, 373 Mass. 199 , 205 (1977) (“in this case there has been a breach of the statutory condition in that the mortgagor did not make the required mortgage payments.”); Natick Five Cents Sav. Bank v. Bailey, 307 Mass. 500 , 500 (1940) (“For breach of condition the plaintiff foreclosed the mortgage under the power of sale . . . there ‘was due to the plaintiff on the note which the mortgage secured, the principal amount of $6,000 and $235 interest, making a total of $6,235.’”); Randle v. GMAC Mortgage, LLC, 18 LCR 546 , 550 (2010) (“The ‘statutory condition’ is that found in G.L. c. 183, § 20, and failure to make required payments is a breach of the statutory condition.”).

Whether U.S. Bank was obligated to deliver a statutorily compliant notice to the Mitchells pursuant to G.L. c. 244, § 35A, before conducting a foreclosure sale of the Property depends on whether the Mortgage is a mortgage “whose statutory condition [had] been voided under the terms of the mortgage to secure the note, prior to” May 1, 2008. St. 2007, c. 206, § 21. [Note 7] The Mitchells argue that the Mortgage is not such a mortgage because it does not contain the statutory condition. The statutory condition is neither recited in the Mortgage, nor incorporated into the Mortgage by reference. Conversely, the Respondents argue that the statutory condition is incorporated into the Mortgage because the terms and conditions of the Mortgage serve the same function as and use language similar to G.L. c. 183, § 20.

It is instructive to consider the application of the statutory power of sale, G.L. c. 183, § 21, to assist in the analysis of whether the Mortgage incorporated the statutory condition of G.L. c. 183, § 20. The statutory condition and the statutory power of sale share similar legislative histories. Both were initially passed under St. 1912, c. 502, § 6 (“An Act to Shorten the Forms of Deeds, Mortgages and Other Instruments Relating to Real Property”), and both were included again in St. 1913, c. 369, An Act to Shorten the Forms of Co-Operative Bank Mortgages. [Note 8] “[T]he common source of these two sections, their language and structure demonstrate that they are meant to be read together.” Eaton v. Federal Nat’l Mtge. Ass’n, 462 Mass. 569 , 585 n.23 (2012).

In light of the connection between the statutory condition and the statutory power of sale, the test for whether the statutory power of sale has been incorporated into a mortgage should also be applied to determine whether the statutory condition has been incorporated into a mortgage. “It is well-settled law that the statutory power, as defined in [G.L. c. 183, § 21] may be incorporated into a mortgage in three ways: (1) incorporating the exact language that defines the Statutory Power of Sale of § 21 into the text of the mortgage; (2) referring to this definition, generally by the term ‘Statutory Power of Sale’; or (3) language in the mortgage substantially similar to that of the statutory power.” Norton v. Joseph, 17 LCR 40 , 41 (2009); see Massachusetts Co. v. Midura, 3 LCR 138 (1995) (finding that language with the same meaning as the words “statutory power of sale” should be interpreted to be the equivalent of the words “statutory power of sale” as contained in G.L. c. 183, § 21).

Even though the Mortgage does not contain the exact language of G.L. c. 183, § 20, or use the phrase “statutory condition,” it does contain language similar to, and that serves the same function as, the statutory condition set forth in G.L. c. 183, § 20. The statutory condition of G.L. c. 183, § 20, requires that the mortgagor pay principal and interest secured by the mortgage; the Mortgage, in paragraph one, on page four, also requires the mortgagor to pay principal and interest secured by the mortgage. The statutory condition requires the mortgagor to pay real estate taxes; the Mortgage, in paragraph four, on page five, also requires the mortgagor to pay real estate taxes. The statutory condition requires the mortgagor to keep the secured property insured against fire; the Mortgage, in paragraph five, on page six, also requires the mortgagor to keep the secured property insured against fire. The statutory condition requires the mortgagor not to commit waste of the mortgaged premises; the Mortgage, in paragraph seven on page seven, also requires the mortgagor not to commit waste. The Mortgage instrument, in different words, states the terms of the statutory condition as set forth in G.L. c. 183, § 20.

In Randle, this court found that the statutory condition was incorporated into a mortgage, and that therefore notice under § 35A was not required after the statutory condition was breached. Randle, 18 LCR at 551 (holding that “Randle was not entitled to the ninety-day right to cure, or the notice required by G.L. c. 244, § 35A, because that section does not apply to ‘such mortgages . . . whose statutory condition has been voided . . . prior to’ May 1, 2008.”). The mortgage instrument in Randle, like the Mortgage in this case, did not contain the phrase “statutory condition,” nor did it contain the exact language of G.L. c. 183, § 20. [Note 9] However, the mortgage in Randle, like the Mortgage, and like the statutory condition of G.L. c. 183, § 20, required the mortgagor to pay principal and interest secured by the mortgage, pay real estate taxes, keep the secured property insured against fire, and not to commit waste of the mortgaged premises.

General Laws c. 183, § 21, may be incorporated into a mortgage by language in the mortgage that is substantially similar to, or that serves the same function as the language in the statute. See Norton, 17 LCR at 41; Midura, 3 LCR at 138. This rule is applicable to G.L. c. 183, § 20, as well as G.L. c. 183, § 21, because § 20 and § 21 are meant to be read together. Eaton, 462 Mass. at 585 n.23. Because the language in the Mortgage serves the same function as the statutory condition, set forth in § 20, it incorporates the statutory condition.

Although the statutory condition is incorporated into the Mortgage, the Respondents have failed to demonstrate as a matter of law that the Mitchells breached the statutory condition before May 1, 2008. As evidence that the Mitchells failed to make mortgage payments, the Respondents cite a “cure letter” from ASC to Wayne Mitchell, dated August 13, 2007, stating “[o]ur records indicate your loan is in default.” In considering a motion to dismiss for failure to state a claim, the court must “take as true the allegations of the complaint, as well as such inferences as may be drawn therefrom in the plaintiff’s favor.” Marram, 442 Mass. at 45. The court may also take into account documents integral to, referred to, or explicitly relied on in the complaint and matters of public record, such as documents recorded in the registry of deeds. See Schaer, 432 Mass. at 477. The “cure letter” that the Respondents rely on was not referred to or specifically relied on in the complaint, nor is it a matter of public record. To dismiss the Mitchells’ allegation that the Property was foreclosed upon without requisite notice under § 35A on the basis of the unsubstantiated statements in the “cure letter” would require this court to draw impermissible inferences against the Mitchells. Because the Respondents have failed to show the Mitchells were in arrears prior to May 1, 2008, the court finds that the Mitchells’ claim in paragraphs 32-46 of the complaint that the foreclosure sale was void for failure to give notice compliant with § 35A survives the Respondents’ argument that the § 35A letter was not required because the statutory condition was breached before May 1, 2008.

5. Section 35A letter claim after U.S. Bank Nat’l Ass’n v. Schumacher.

Assuming that U.S. Bank was required to send the § 35A letter, the Mitchells’ claim that the § 35A letter’s alleged failure to comply with the requirements of § 35A rendered the foreclosure sale void is, as stated, barred by the recent decision in U.S. Bank Nat’l Ass’n v. Schumacher, No. SJC-11490, slip op. (Mar. 12, 2014). Paragraph 45 of the complaint alleges: “A failure to send a valid and compliant default/right to cure letter under s. 35A prevents U.S. Bank, as Trustee, or any other Respondent, from accelerating the mortgage and exercising the right of the non-judicial statutory power of sale under the terms of the mortgage contract.” Paragraph 46 alleges: “Any non-judicial foreclosure under a power of sale in a mortgage that involves a non-compliant, defective and/or invalid s. 35A letter is invalid and void as a matter of Massachusetts law.” Neither of these is a correct statement of the law after the Schumacher decision.

The statutory power of sale, codified at G.L. c. 183, § 21, states that “upon default in the performance of the [statutory condition], the mortgagee . . . may sell the mortgaged premises . . . by public auction . . . first complying with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by exercise of a power of sale.” In Schumacher, the SJC held that § 35A is not one of “the statutes relating to foreclosure of mortgages,” referred to in G.L. c. 183, § 21, and that a mortgagee’s failure to strictly comply with § 35A is not grounds to void a foreclosure conducted under the statutory power sale. Schumacher, slip op. at 5. Rather, the SJC held, G.L. c. 244, §§ 11-17C, are “the statutes relating to the foreclosure of mortgages” referred to in G.L. c. 183, § 21, and a mortgagee’s failure to strictly comply with these statutes is grounds to void a foreclosure. Id. Because the alleged defect in the § 35A letter does not render the foreclosure void, it does not provide a basis for calling the title arising out of the foreclosure into question such that the Respondents may be required to appear and try that title. G.L. c. 240, §§ 1-3.

Schumacher does not, however, foreclose the Mitchells from claiming that the alleged failure to comply with § 35A compels the setting aside of the foreclosure sale. In a concurring opinion which the Schumacher court found “accurately reflects the practical consequences of our decision today,” Schumacher, slip op. at 8 n.12, Justice Gants stated that a foreclosed-upon mortgagor may contest a violation of § 35A by asserting a “defense or counterclaim in Housing Court challenging whether the bank or other party that purchased the property at the foreclosure auction lawfully holds title to the property.” Id., slip op. at 6 (Gants, J. concurring), citing Bank of America, N.A. v. Rosa, 466 Mass. 613 , 612-625 (2013). The mortgagor must “prove that the violation of § 35A rendered the foreclosure so fundamentally unfair that she is entitled to affirmative equitable relief, specifically the setting aside of the foreclosure sale ‘for reasons other than failure to comply strictly with the power of sale provided in the mortgage.’” Id., citing Rosa, 466 Mass. at 624. In other words, under Schumacher, failure to comply with § 35A does not create a title defect in a foreclosure; rather, it creates the potential for a claim in equity to set aside an otherwise valid foreclosure. Id.

The Land Court has jurisdiction, under G.L. c. 185, § 1(k), to decide an equity claim by the Mitchells contesting the foreclosure. In Schumacher, the SJC specifically acknowledges the Housing Court’s jurisdiction to decide equitable claims arising under § 35A. Like the Housing Court, the Land Court has statutory jurisdiction to hear equitable claims arising under § 35A. The Housing Court’s equitable jurisdiction to enjoin or set aside a foreclosure is derived from G.L. c. 185C, § 3, which gives the Housing Court concurrent jurisdiction with the District and Superior Courts in all civil actions under the provisions of common law and of equity related directly or indirectly with the health, safety, or welfare, of any occupant of any place used, or intended for use, as a place of human habitation. G.L. c. 185C, § 3; see Rosa, 466 Mass. at 622-623. While G.L. c. 185C, § 3, gives the Housing Court concurrent jurisdiction of equitable claims related to housing, G.L. c. 185, § 1(k), gives the Land Court concurrent jurisdiction with the Superior Court of “[a]ll cases and matters cognizable under the general principles of equity jurisprudence where any right, title or interest in land is involved.” G.L. c. 185, § 1(k). The Mitchells’ claim that the alleged defect in the § 35A letter requires the setting aside of the foreclosure involves right, title, or interest in land, namely the Property. The Land Court has jurisdiction to hear an equitable § 35A claim, properly pled by the Mitchells under the fundamental unfairness standard set forth in Schumacher.

Paragraphs 32 through 46 of the Mitchells’ complaint do not allege that the purported flaws in the § 35A letter render the foreclosure so fundamentally unfair that the Mitchells are entitled to equitable relief, specifically the setting aside of the foreclosure. Because the fundamental unfairness standard for pleading equitable relief under § 35A was set forth in Schumacher, after the Mitchells filed their complaint, paragraphs 32 through 46 of the complaint are dismissed without prejudice. The Mitchells have leave to file an amended complaint bringing a claim under the Land Court’s jurisdiction over matters of equity jurisprudence, G.L. c. 185, § 1(k), that the Respondent’s failure to comply with G.L. c. 244, § 35A “rendered the foreclosure so fundamentally unfair that [the Mitchells] are entitled to equitable relief, specifically the setting aside of the foreclosure, for reasons other than to comply strictly with the power of sale provided in the mortgage.” Schumacher, slip op. at 6 (Gants, J. concurring). If the Mitchells do not file such an amended complaint within fourteen days of the date of this order, this claim will be dismissed with prejudice.

6. Validity of the MERS Assignment.

Paragraph 65.a of the complaint alleges that the MERS Assignment, purportedly executed on December 23, 2008, is invalid because Andrew Harmon did not personally appear before a notary to execute it. By statute, no deed shall be recorded unless it has been acknowledged. G.L. c. 183, § 29. The acknowledgment, if made within the commonwealth, must be made before a justice of the peace or notary public. G.L. c. 183, § 30. The Mitchells allege that Andrew Harmon did not appear before a notary public to execute the Assignment. As evidence of Harmon’s alleged notary fraud, the Mitchells filed with their complaint at least forty-five assignments of mortgage executed by Harmon as Assistant Secretary and Vice President of MERS and recorded at the registry between December 1, 2009, and January 31, 2010. The Mitchells allege that some of these assignments have disparate and unique signatures indicating a pattern and practice of “robo” or “surrogate” signing wherein various parties other than the named signer unlawfully and fraudulently executed the documents. The Mitchells also allege the fraudulent insertion of inaccurate dates into these assignments.

The circumstances of fraud must be stated with particularity. Mass. R. Civ. P. 9(b). The Mitchells do not allege that the signature on the MERS Assignment is not that of Andrew Harmon or that the notarization is forged. The allegations in the complaint of “disparate and unique signatures” and “robo-signing,” do not state with particularity how the large volume of assignments produced suggests that the particular assignment involved in this case is invalid because of notary fraud. The claim that the MERS Assignment is void because Andrew Harmon allegedly did not execute it before a notary public is therefore dismissed without prejudice, with leave granted the Mitchells to amend the complaint. If the Mitchells do not file an amended complaint stating with particularity that the signature or notarization of the MERS Assignment was fraudulent, within fourteen days of the date of this order, this claim will be dismissed with prejudice.

7. Andrew S. Harmon was not duly authorized to execute the Assignment.

In paragraph 65.b of the complaint, the Mitchells allege that the MERS Assignment is invalid because the corporate resolution referred to in the Assignment was not authorized, and that therefore it could not authorize Andrew Harmon to execute on behalf of MERS. This allegation fails because G.L. c. 183, § 54B, merely requires that an assignment of mortgage be executed by a person “purporting to hold the position of . . . vice president, . . . secretary, . . . or assistant to any such position.” [Note 10] Id.; see Abate, 20 LCR at 636. Whether or not the corporate resolution referred to in the Assignment was authorized does not affect the validity of the Assignment. The Assignment contains a signature and Andrew S. Harmon’s name, followed by the words “Assistant Secretary and Vice President.” The Assignment was executed by Andrew Harmon, purporting to be the Assistant Secretary and Vice President of MERS. Andrew Harmon’s purported authority is sufficient to make his execution of the Assignment binding against the Mitchells under § 54B. See id. (“§ 54B makes an assignment that satisfies its requirements valid and binding upon the assignor, the assignee, and third parties to the extent provided by law”).

8. Andrew S. Harmon was an employee and/or attorney of ASC and Leah Brown was an employee and/or agent of ASC. In paragraph 65.c of the complaint, the Mitchells allege that the MERS Assignment is invalid because Andrew Harmon was acting as an employee, agent, and/or attorney for the loan servicer, ASC, when he executed the MERS Assignment. Similarly, in paragraph 73.c of the complaint, the Mitchells allege that the U.S. Bank Assignment is invalid because Leah Brown was acting as an employee, and/or agent for the loan servicer, ASC, when she executed the U.S. Bank assignment. This court addressed this same issue in Abate, and found that, under § 54B, it does not matter that a person, purporting to be an authorized signatory of the mortgage holder, is an employee of the loan servicer at the time of execution of an assignment. See id. What matters under § 54B is whether such person purports to be an authorized signatory for the mortgage holder. Harmon purported to be an Assistant Secretary and Vice President of MERS, and the Mitchells cannot look behind that statement of authority. Brown purported to be Vice President of Loan Documentation for U.S. Bank National Association, as Trustee, and the Mitchells cannot look behind that statement of authority. Paragraphs 65.c and 73.c fail to state a claim.

9. MERS’s authority to assign the Note.

Paragraph 65.d of the complaint alleges that the MERS Assignment of December 23, 2008, is invalid because MERS never owned, possessed, or otherwise maintained any beneficial interest in the Note. Whether or not MERS had the authority to assign the Note is irrelevant to the validity of the MERS Assignment both under Massachusetts law and by the terms of the Mortgage instrument. Under Massachusetts law, the mortgage and note may travel separately and it is not necessary for the assignee of a mortgage also to hold the note for the assignment of the mortgage to be valid. Eaton, 462 Mass. at 576. As explained supra, the Mitchells’ allegation in paragraphs 10-14 of the complaint that the “split” in ownership interests in the Note and Mortgage breached paragraph 20 of the Mortgage fails. In Massachusetts a mortgage and the underlying note can be split, and paragraph 20 of the Mortgage does not require that the Note and Mortgage be assigned together. Paragraph 65.d of the complaint fails to state a claim.

10. Failure to list consideration.

In paragraph 65.e of the complaint, the Mitchells allege that the MERS Assignment is invalid for lack of consideration under G.L. c. 183, § 6. In paragraph 73.d of the complaint, the Mitchells allege that the U.S. Bank Assignment is invalid for the same reason. General Laws c. 183, § 6, provides:

Every deed presented for record shall contain or have endorsed upon it the full name, residence and post office address of the grantee and a recital of the amount of the full consideration thereof in dollars or the nature of the other consideration therefor, if not delivered for a specific monetary sum. The full consideration shall mean the total price for the conveyance without deduction for any liens or encumbrances assumed by the grantee or remaining thereon. All such endorsements and recitals shall be recorded as part of the deed. Failure to comply with this section shall not affect the validity of any deed. No register of deeds shall accept a deed for recording unless it is in compliance with the requirements of this section. (Emphasis added).

As explained in Abate, “[s]ection 6 applies only to deeds, not assignments, and makes clear that non-compliance does not affect the validity of any deed.” Abate, 20 LCR at 635. The claim that non-compliance with § 6 affects the validity of the MERS Assignment or the U.S. Bank Assignment, thereby invalidating U.S. Bank’s status as mortgage holder at the time of the foreclosure, fails.

11. Failure to list the mortgage broker or originator.

Paragraph 65.f of the complaint alleges that the MERS Assignment is invalid because it fails to comply with G.L. c. 183, § 6D, by failing to list the mortgage broker or originator. Paragraph 73.e of the complaint alleges that the U.S. Bank Assignment is invalid for the same reason. General Laws c. 183, § 6D provides:

Every mortgage and assignment of mortgage . . . presented for record, in which a mortgage broker . . . is involved shall contain or have endorsed upon it the name, post office address and license number of the mortgage broker and, if applicable, the mortgage loan originator . . . responsible for placing the mortgage loan with the mortgagee. This endorsement, or notation that no mortgage broker or mortgage loan originator was involved in the mortgage, if known, shall be recorded as part of the mortgage or assignment of mortgage. Failure to comply with this section shall not affect the validity of any mortgage or the recording of any mortgage or assignment of mortgage. (Emphasis added).

As this court explained in Abate, 20 LCR at 635, it can be argued that § 6D should be interpreted to mean that while non-compliance does not affect the validity of any mortgage, it does affect the validity of an assignment. This is a misreading of the statute.

Read fairly, § 6D provides that a mortgage is not affected by non-compliance, and non-compliance does not affect the validity of recordation of a mortgage assignment. The legislature’s intent in § 6D was to ensure that an entity’s status as holder of a mortgage cannot be challenged because the mortgage instrument or instrument transferring the mortgage fails to list the broker or originator or lacks a notation that neither one was involved in the transaction.

Id. Therefore, failure to list the mortgage broker or originator in compliance with § 6D neither affects the validity of the MERS Assignment, nor the U.S. Bank Assignment.

12. The Assignment fails to identify the principal and MERS has no authority from its principal MLN to assign the Mortgage.

In paragraph 65.g of the complaint, the Mitchells allege that the MERS Assignment is invalid because, at the time of the MERS Assignment, “MERS had no lawful authority from its original principal, MLN or some other party not identified on the face of the MERS Assignment, to assign the Petitioners’ note and mortgage to U.S. Bank, as ‘Trustee.’” With regard to the Note, “in Massachusetts a mortgage and the underlying note can be split.” Eaton, 462 Mass. at 576, citing Lamson & Co. v. Abrams, 305 Mass. 238 , 245 (1940). “The holder of the mortgage and the holder of the note may be different persons.” Id. Furthermore, as explained, supra, paragraph 20 of the Mortgage does not require that the Note and Mortgage be assigned together. It is therefore of no consequence whether or not MERS had authority to transfer the Note on the date of the MERS Assignment.

The issue is whether MERS had lawful authority to assign the Mortgage on the date of the MERS Assignment. The Mortgage provides “MERS is a separate corporation that is acting solely as nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument.” [Note 11] Mortgage, at 1. As it did in Abate, MERS had authority to assign the Mortgage, with or without the demonstration of its principal’s assent. Abate, 20 LCR at 635, citing Deutsche Bank Nat’l Trust Co. v. Butler, 20 LCR 147 , 147-148 (2011). By the terms of the mortgage, MERS was acting on behalf of the lender’s assignee in executing the MERS Assignment and was within its authority to do so as nominee for the lender. See id., citing Deutsche Bank Nat’l Trust Co. v. Cicchelli, 19 LCR 461 , 463 (2011). In Massachusetts, MERS generally may assign mortgages for which MERS is the mortgagee, as holder of legal title, and may do so despite not holding the note. Id.; see Kiah v. Aurora Loan Servs., LLC, No. 10-40161-FDS, 2011 WL 841282, at *4 (D. Mass. Mar. 4, 2011); In re Lopez, 446 B.R. 12, 18-19 (Bankr. D. Mass. 2011); Randle v. GMAC Mtge., LLC, 18 LCR 546 , 550 (2010). MERS had the authority to assign the Mortgage without identifying its principal or further demonstrating its authority. Paragraph 65.g of the complaint does not state a claim.

13. MLN was not a MERS member.

In paragraph 65.h of the complaint the Mitchells allege that the MERS Assignment is invalid because, at the time the Mitchells’ loan was originated, MLN was not a MERS member. Whether paragraph 65.h states a claim is governed by the Massachusetts common law rules of standing that have been clarified in a series of cases dealing with the mortgage securitization process in general, and the modus operandi of MERS in particular. See generally Wilson v. HSBC Mtge. Servs., Inc., No. 13-1298, 2014 U.S. App. LEXIS 2798, at *11-*31 (1st Cir. Feb. 14, 2014); Woods v. Wells Fargo Bank, N.A., 733 F.3d 349, 354-355 (1st Cir. 2013); Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 289-292 (1st Cir. 2013); Abate, 20 LCR at 634. [Note 12] A mortgagor “may challenge any assignment on the grounds that it is void, or that it has been voided [but he] may challenge an assignment on the grounds that it is voidable, . . . only if he is a party entitled to void the assignment.” Id.; see also Wilson, 2014 U.S. App. LEXIS 2798 at *14-*16, and Woods, 733 F.3d at 354, both citing Culhane, 708 F.3d at 291 (holding that in Massachusetts a mortgagor has standing to challenge a mortgage assignment as void but “does not have standing to challenge shortcomings in a mortgage assignment that render it merely voidable.”).

The issue of whether or not the Mitchells have standing to challenge the validity of the MERS Assignment as alleged in paragraph 65.h of the complaint therefore depends on whether the alleged flaw would render the MERS Assignment void, or merely voidable. If the Mitchells’ complaint alleges facts that, if true, would render the MERS Assignment void, then the Mitchells have standing. If, on the other hand, the Mitchells allege facts that that, if true, would render the MERS Assignment merely voidable, then the Mitchells only have standing if they have the right to void the Assignment. If they do not, they have no standing and paragraph 65.h of the complaint fails to state a claim.

The distinction between “void” and “voidable” comes from contract law and is applicable to assignments because an assignment of a contract is, itself, “a contract to be interpreted according to ordinary rules of contract interpretation.” Spellman v. Shawmut Woodworking & Supply, Inc., 445 Mass. 675 , 681 (2006). In Wilson, the First Circuit analyzed this distinction as expressed in Massachusetts case law. “‘Void’ contracts or agreements are ‘those . . . that are of no effect whatsoever; such as are a mere nullity, and incapable of confirmation or ratification.’” Wilson, 2014 U.S. App. LEXIS 2798 at *17, quoting Allis v. Billings, 6 Met. 415 , 417 (1843). Thus, in Culhane, the plaintiff challenged an assignment of mortgage from MERS to Aurora Loan Services on the basis that MERS never properly held the mortgage and, thus, had no interest to assign. Culhane, 708 F.3d at 291. If that were so, the assignment would be void (not merely voidable). Id. Consequently, the First Circuit held that the plaintiff had standing to challenge the validity of the assignment. Id.

“By contrast, ‘voidable’ refers to a contract or agreement that is ‘injurious to the rights of one party, which he may avoid at his election.’” Wilson, 2014 U.S. App. LEXIS 2798 at *17, quoting Ball v. Gilbert, 12 Met. 387 , 404 (1847). “[A] mortgagor does not have standing to challenge shortcoming in an assignment that render it merely voidable at the election of one party but otherwise effective to pass legal title.” Culhane, 708 F.3d at 291, citing Service Mtge. Corp. v. Welson, 293 Mass. 410 , 413 (1936); Murphy v. Barnard, 162 Mass. 72 , 77 (1894). Thus, in Woods, the plaintiff alleged that the assignments of mortgage at issue were invalid because, among other things, they violated the trust’s Pooling and Servicing agreement. Woods, 733 F.3d at 344 n.4. The First Circuit found the plaintiff had no standing to assert the claims regarding the Pooling and Servicing Agreement, “which would render the assignments only voidable.” Id.

The Mitchells allege that at the time their loan was originated, MLN was not a MERS member, and the court assumes this allegation to be true for the purposes of the Motion to Dismiss. That MLN was not a MERS member at the time of the mortgage origination would not render the MERS Assignment void, with no effect whatsoever. On the contrary, it might, depending on the circumstances, render the MERS Assignment voidable by either MERS or MLN. The Mitchells, as non-parties to any agreement between MERS and its members, would have no right to void the MERS Assignment on those grounds. The Mitchells’ claim is similar to that of the plaintiff in Woods that the assignment in that case had violated the trust’s Pooling and Servicing Agreement, and is distinguishable from the plaintiffs’ claim in Culhane that MERS had no interest in the mortgage to assign. The Mitchells have no standing to assert the claim set forth in paragraph 65.h.

14. The parties to the transfer of the Mortgage to RASC 2006-EMX4 were not MERS members.

In paragraph 65.i of the complaint, the Mitchells allege that the MERS Assignment is invalid because, at the time the Mitchells’ loan was sold to RASC 2006-EMX4, all parties purportedly involved in the transfer were not MERS members. In paragraph 19 of the complaint, the Mitchells state that “[b]ecause all information and documentation related to the sale, assignment and transfer of [the Note to RASC 2006-EMX4] is in the possession, custody and control of various respondents who have refused to provide complete copies thereof, it is impossible to determine” many details regarding the transfer, including its date. [Note 13]

The Mitchells’ standing to challenge the MERS Assignment on this basis also turns on whether the alleged fact that the parties to the MERS Assignment were not MERS members renders the Assignment void or voidable. Despite the lack of information regarding the specifics of the RASC 2006-EMX4 transfer, it is undisputed that the Mitchells were neither parties to, nor third-party beneficiaries of the RASC 2006-EMX4 transfer. If parties to the RASC 2006-EMX4 transfer were not MERS members, that would not make the RASC 2006-EMX4 transfer void. Depending on the facts, it might make it voidable, but the Mitchells, as non-parties to RASC 2006-EMX4 or any relevant agreement with MERS, would have no right to void the transfer. Thus, the Mitchells lack standing to challenge the transfer and paragraph 65.i of the complaint fails to state a claim.

15. Indefinite Reference.

The MERS Assignment does not identify the trust for which the assignee is trustee. The MERS Assignment identifies the assignee merely as US Bank National Association, as Trustee. The U.S. Bank Assignment appears to have been executed for the sole purpose of correcting this error because the assignment purports to transfer the Mortgage from US Bank National Association, as Trustee, to U.S. Bank, National Association, as trustee for RASC 2006-EMX4. Paragraph 65.j of the complaint alleges that “U.S. Bank as a bare ‘Trustee’ is not a valid assignee of [the Mortgage] insofar as U.S. Bank acts as the ‘Trustee’ for hundreds if not thousands of securitized trusts.” Paragraph 73.f of the complaint alleges that “U.S. Bank as a bare ‘Trustee’ is not a valid assignor of [the Mortgage] insofar as U.S. Bank acts as the ‘Trustee’ for hundreds if not thousands of securitized trusts.” Paragraph 73.i of the complaint alleges that “U.S. Bank as a bare ‘Trustee’ has no authority, under Massachusetts law to assign mortgages or act as a lawful ‘mortgagee’.” The allegations of paragraphs 65.j, 73.f, and 73.i of the complaint all turn on the issue of whether the MERS Assignment’s and the U.S. Bank Assignment’s identifications of the assignee and assignor as US Bank National Association, as Trustee, somehow voids the MERS Assignment or the U.S. Bank Assignment.

Applying G.L. c. 184, § 25, the MERS Assignment and the U.S. Bank Assignment would each appear to contain an indefinite reference. “An indefinite reference means . . . a description of a person as trustee or an indication that a person is acting as trustee, unless the instrument containing the description or indication either sets forth the terms of the trust or specifies a recorded instrument which sets forth its terms and the place in the public records where such instrument is recorded.” G.L. c. 184, § 25(3). The MERS Assignment identifies the assignee as US Bank National Association, as Trustee, and the U.S. Bank Assignment sets forth the name of the assignee trust, but neither sets forth the terms of a trust nor specifies a recorded instrument which sets forth a trust’s terms.

The indefinite reference statute provides:

No indefinite reference in a recorded instrument shall subject any person not an immediate party thereto to any interest in real estate, legal or equitable, nor put any such person on inquiry with respect to such interest, nor be a cloud on or otherwise adversely affect the title of any such person acquiring the real estate under such recorded instrument if he is not otherwise subject to it or on notice of it.

G.L. c. 184, § 25. It is not clear from this language whether the statute is intended to protect mortgagors from assignments to or from trustees that do not refer to a recorded trust. At least one court has held that failure to comply with § 25 does not void an assignment. “Section 25 protects people who are not immediate parities [sic] to a transaction by not making them bound to indefinite references in recorded instruments. See 28 Mass. Prac., Real Estate Law § 2.16 (4th ed.). Section 25 does not make an assignment void, only perhaps unenforceable under some circumstances, different from those in the present case.” Payne v. U.S. Bank Nat. Ass’n, 2013 WL 1282235, at *2 (D. Mass. March 28, 2013). Moreover, a subsequently enacted statute provides that a recordable instrument from a person appearing to be a trustee “shall be binding on the trust in favor of a purchaser or other person relying in good faith on such instrument.” G.L. c. 184, § 34, as enacted by St. 1973, c. 199. Read together, §§ 25(3) and 34 seem to provide protection to buyers and subsequent buyers in the chain of title of the deed or assignment, not to mortgagors.

The court does not need to resolve this issue. Assuming without deciding that § 25(3) applies to the two Assignments, the general rule is that a deed to “X, Trustee” without more vests title to X individually. See A.L. Eno, Jr., & W.V. Hovey, Real Estate Law § 2.19 (4th ed. 2004). Under this rule, the MERS Assignment to US Bank National Association, as Trustee assigned the Mortgage to U.S. Bank, individually. The U.S. Bank Assignment transferred the Mortgage from U.S. Bank individually to itself. Ultimately, U.S. Bank held the Mortgage. The Mitchells cannot claim that these Assignments were void by failure to identify the trust or otherwise by operation of G.L. c. 184, § 25. For the foregoing reasons, paragraphs 65.j, 73.f, and 73.i. of the complaint fail to state a claim.

16. MERS’s authority to assign mortgage or act as mortgagee.

In paragraph 65.l of the complaint, the Mitchells argue that the MERS Assignment is invalid because MERS has no authority under Massachusetts law to assign mortgages and to act as a lawful mortgagee. The Mitchells also argue that the MERS Assignment is invalid because it contains no reference to any principal. This court specifically stated in Abate that MERS has authority to assign mortgages, with or without the demonstration of its principal’s assent. Abate, 20 LCR at 635; see also BAC Home Loans Servicing LP v. Kay, Land Court Case No. 10 MISC 428719, Mem. and Order on Def. Mot. to Dismiss at 2 (Dec. 22, 2010) (holding that “MERS had the authority to assign the mortgage without need to demonstrate the direction of its principal, and its assignee had the right to rely on that authority. Any objection to MERS’ exercise of those powers . . . can only come from the principal itself.”).

This court has no reason to disagree with the First Circuit’s observation in Culhane that “MERS’ role as mortgagee of record and custodian of the bare legal interest as nominee for the member-noteholder, and the member-noteholder’s role as owner of the beneficial interest in the loan, fit comfortably with each other and fit comfortably within the structure of Massachusetts mortgage law.” Culhane, 708 F.3d at 293. The Mitchells’ allegation that MERS has no authority, under Massachusetts law, to assign mortgages or act as a mortgagee is incorrect and fails to state a claim upon which relief can be granted. The allegation that the MERS Assignment is invalid because it contains no reference to any principal similarly fails to state a claim. Paragraph 65.l of the complaint is dismissed.

17. Whether there is a break in the chain of recorded title to the Mortgage

The Mortgage was recorded at the registry on March 21, 2006. The § 35A letter’s date is redacted, and identifies “GMAC-RFC, Burbank, CA 91504-3120” as the current mortgagee. The Brown affidavit filed with the § 35A letter suggests that the § 35A letter was executed between September 1 and December 18, 2008. An assignment of mortgage from MERS to GMAC-RFC, Burbank, CA 91504-3120, has not been recorded at the registry. The MERS Assignment, recorded on January 4, 2010, documents an assignment of the Mortgage from MERS to “US Bank National Association, as Trustee.” The U.S. Bank Assignment, recorded on May 15, 2012, documents an assignment of the Mortgage from “US Bank National Association, as Trustee” to “U.S. Bank, National Association, as Trustee for RASC 2006-EMX4.”

Paragraphs 71 and 72 of the complaint allege that the break in the chain of recorded title to the Mortgage, caused by an unrecorded assignment to GMAC-RFC, invalidates the MERS Assignment and the U.S. Bank Assignment. Whether the alleged unrecorded assignment from MERS to GMAC-RFC voids either the MERS Assignment or the U.S. Bank Assignment is governed by G.L. c. 183, § 4. “A conveyance of an estate in fee simple . . . shall not be valid against any person, except the grantor . . . and persons having notice of it, unless it . . . is recorded in the registry of deeds.” Id. General Laws c. 183, § 4, makes Massachusetts what is commonly referred to as a “race-notice jurisdiction,” meaning that the subsequent purchaser of property, who records the deed, will prevail over a prior buyer, who did not record, unless the subsequent purchaser has actual notice of the unrecorded transfer. Richardson v. Lee Realty Corp, 364 Mass. 632 , 634-635 (1974). Actual notice has been strictly construed. Id. at 635, citing General Builders Supply Co. v. Arlington Co-op. Bank, 359 Mass. 691 , 697 (1971). “A person claiming that another is not a bona fide purchaser has the burden of proof.” Id. at 634.

If there was an unrecorded prior assignment of the mortgage to GMAC-RFC, Burbank, CA 91504-3120, that U.S. Bank had actual notice of at the time of either the MERS or U.S. Bank Assignments, then that assignment is void. A mortgagor may challenge an assignment on the grounds that it is void. Abate, 20 LCR at 634. Therefore, the Mitchells have standing to challenge the validity of the U.S. Bank and MERS assignments on the grounds that an unrecorded assignment to GMAC-RFC, rendered MERS and U.S. Bank unable to convey title on the dates of the MERS and U.S. Bank Assignments. In paragraph 71, the Mitchells allege that there was an unrecorded transfer of title to GMAC-RFC, but they fail to plead that U.S. Bank had notice of this transfer. Absent that allegation of notice, paragraphs 71 and 72 of the complaint fail to state a claim and are dismissed without prejudice. The Mitchells are granted leave to amend the complaint to allege that U.S. Bank had notice of a prior unrecorded transfer of the Mortgage to GMAC-RFC. If the Mitchells do not file an amended complaint within fourteen days of the date of this order, this claim will be dismissed with prejudice.

18. Whether the U.S. Bank Assignment violates G.L. c. 183, § 30.

The U.S. Bank Assignment is signed by “Leah Brown, Vice President Loan Documentation.” Page two of the U.S. Bank Assignment contains a notary block signed and stamped by “Sarah Bryan, a Notary Public in and for the County of Polk, in the State of Iowa.” Paragraph 73.a of the complaint alleges that the U.S. Bank Assignment is invalid because it was not executed in accordance with G.L. c. 183, § 30, and that Leah Brown did not appear personally before the notary, Sarah Brown.

In Massachusetts, no deed shall be recorded unless it has been acknowledged, G.L. c. 183, § 29, and an acknowledgment made outside the Commonwealth is valid in Massachusetts if “such acknowledgement [has been] made . . . before a . . . notary public.” G.L. c. 183, § 30(b). The U.S. Bank Assignment was acknowledged before an Iowa notary public, and is valid in Massachusetts.

To the extent the Mitchells are alleging that Brown’s alleged failure to appear before a notary voids the U.S. Bank Assignment, they also fail to state a claim. The acknowledged U.S. Bank Assignment is presumptively valid under G.L. c. 183, § 54B. Abate, 20 LCR at 636. Section 54B provides that an assignment executed before a notary by a person purporting to be an officer of the assignor is binding. Id. By the terms of the U.S. Bank Assignment, Leah Brown purports to be Vice President of Loan Documentation (an officer) of U.S. Bank, Trustee (the assignor). Therefore, the assignment is presumptively valid and binding under § 54B.

The Mitchells’ allegation that Brown did not personally appear before a notary to execute the assignment is, in essence, an allegation of fraud. Under Mass. R. Civ. P. 9(b), the circumstances of fraud must be stated with particularity. Paragraph 73.a does not allege with particularity that the execution of the U.S. Bank Assignment by Leah Brown is fraudulent. Furthermore, because G.L. c. 183, § 29, only requires acknowledgement before a notary public as a condition precedent to recordation, even if Leah Brown did not appear before the notary, the U.S. Bank Assignment served to assign the Mortgage to U.S. Bank, National Association, as Trustee for RASC 2006-EMX4. See Abate, 20 LCR at 636. Paragraph 73.a fails to state a claim.

19. Leah Brown was not duly authorized to execute the U.S. Bank Assignment.

In paragraph 73.b, the Mitchells allege that the U.S. Bank assignment is invalid because there is no evidence that Leah Brown was a person duly authorized to execute the U.S. Bank Assignment on behalf of U.S. Bank as Trustee and because the U.S. Bank Assignment does not state where a “POA” [Note 14] referenced in the assignment is recorded. As discussed supra, this claim is fully foreclosed by G.L. c. 183, § 54B. Leah Brown is a person purporting to hold the position of Vice President of Loan Documentation for U.S. Bank National Association, as Trustee. The Mitchells cannot look behind that authority. The incomplete description of the location of the POA in the U.S. Bank Assignment does not change the analysis.

20. Whether U.S. Bank as Trustee for RASC 2006-EMX held the Note does not affect its authority to assign the mortgage.

Paragraphs 73.g and 73.h of the complaint allege that the U.S. Bank Assignment is invalid because U.S. Bank as Trustee for RASC 2006-EMX did not hold the Note when it received and assigned the Mortgage. “In Massachusetts a mortgage and the underlying note can be split.” Eaton, 462 Mass. at 576, citing Lamson & Co. v. Abrams, 305 Mass. 238 , 245 (1940). “The holder of the mortgage and the holder of the note may be different persons.” Id. Furthermore, as explained, supra, paragraph 20 of the Mortgage does not require that the Note and Mortgage be assigned together. Therefore, it is of no consequence whether or not U.S. Bank as Trustee for RASC 2006-EMX held the Note on the date of the U.S. Bank Assignment. Paragraphs 73.g and 73.h of the complaint fail to state a claim.

Conclusion

For the foregoing reasons, the Respondents’ Motion to Dismiss is hereby ALLOWED as follows. The claims set forth in paragraphs 32-46, 65.a, 71, and 72 of the complaint are DISMISSED WITHOUT PREJUDICE. The Mitchells are hereby given leave to file an amended complaint appropriately addressing the claims set forth in paragraphs 32-46, 65.a, 71, and 72. If the Mitchells do not file such an amended complaint within fourteen days of the date of this Order, then a Judgment will issue dismissing these claims with prejudice. The remaining claims set forth in the complaint are DISMISSED WITH PREJUDICE.

SO ORDERED