Home MICHAEL F. GERMANO v. U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE, Successor in Interest to Bank of America National Association, as Trustee, Successor by Merger to LaSalle Bank National Association, as Trustee for Morgan Stanley Mortgage Loan Trust 2007-7AX; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.

SBQ 17-36138-12-001

August 10, 2018

Suffolk, ss.



Plaintiff Michael F. Germano filed this action against defendants U.S. Bank National Association ("U.S. Bank") and Mortgage Electronic Registration Systems, Inc. ("MERS") on December 29, 2017. Plaintiff seeks a declaratory judgment that U.S. Bank did not have the right to foreclose on the plaintiff's mortgage because it did not demonstrate that at the time of the scheduled foreclosure it was the holder of both the note and the mortgage; and the plaintiff seeks to expunge three mortgage assignments from the certificate of title for his property, a condominium unit in the North End neighborhood of Boston. Plaintiff contends that defendant U.S. Bank's affidavit establishing possession of the note and mortgage is not sufficient to demonstrate its ownership of either, and that the defendant needs to establish a chain of title for the promissory note, as well as MERS's capacity to assign the mortgage. Plaintiff previously requested a preliminary injunction against an imminent foreclosure sale of his property. The court denied plaintiff's motion for a preliminary injunction on January 2, 2018. [Note 1]

On May 4, 2018, defendants filed a motion to dismiss for failure to state a claim upon which relief can be granted under Mass. R. Civ. P. 12(b)(6). Defendants contend that the undisputed facts, as alleged in the Verified Complaint and the documents attached as exhibits to the complaint, show U.S. Bank properly to have held the note and to have established a proper chain of title to the mortgage. Plaintiff filed his opposition to the defendants' motion on June 5, 2018, and a hearing on the matter was held on July 3, 2018.

For the reasons set forth below, defendants' motion to dismiss is ALLOWED.


The following allegations of the plaintiff's complaint are accepted as true for purposes of this motion. See Nader v. Citron, 372 Mass. 96 , 98 (1977):

1. Plaintiff Michael F. Germano as of the filing of the Verified Complaint was the owner of Unit 1R of the Howe & Bainbridge Condominium, located at 220 Commercial Street in Boston. ("Property")

2. On December 7, 2006, plaintiff granted a mortgage for the Property to MERS. The mortgage was recorded in the Suffolk County Registry District of the Land Court as Document No. 729945, in Book 55, Page 145 and was noted on Certificate of Title No. U1001154.

3. On November 7, 2007 MERS assigned the mortgage encumbering the Property to Lasalle Bank National Association as Trustee for MSM 2007-7AX. ("LaSalle")

4. On August 30, 2011, MERS purported to again assign the mortgage, this time to Morgan Stanley Capital Holdings, LLC. This assignment was described on the Certificate of Title as "ineffective assignment."

5. On February 11, 2016, U.S. Bank National Association, Trustee, Successor in interest to Bank of America, National Association, as Trustee, Successor by Merger to LaSalle, assigned the mortgage to U.S. Bank National Association, as Trustee, Successor in interest to Bank of America, National Association, as Trustee, Successor by Merger to LaSalle, as Trustee for Morgan Stanley Mortgage Loan Trust 2007-7AX. ("U.S. Bank")

6. In an affidavit registered on April 28, 2017, an officer of an entity identified as the servicer of the plaintiff's loan represented under the pains and penalties of perjury that U.S. Bank is "the holder of the promissory note secured by the above mortgage," and listed the chain of title of assignments of the mortgage, as noted above, showing U.S. Bank to be the then-current holder of the mortgage. The affidavit further states that "[t]he requirements of G. L. c. 244, section 35B have been complied with."


A. Standard of Review for a Motion to Dismiss.

On a motion to dismiss for failure to state a claim, the plaintiff is required to plead "factual 'allegations plausibly suggesting (not merely consistent with)' an entitlement to relief." Iannacchino v. Ford Motor Co., 451 Mass. 623 , 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). 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), (c). The court may also 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. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43 , 45 n.4 (2004); Schaer v. Brandeis Univ., 432 Mass. 474 , 477 (2000); Reliance Ins. Co. v. Boston, 71 Mass. App. Ct. 550 , 555 (2008). Accordingly, the court has taken into account as part of the pleadings, the note, mortgage, affidavit, and other documents attached to the Verified Complaint as exhibits.

B. Defendant's Affidavit is Sufficient to Establish U.S. Bank's Position as Holder of the Note and the Mortgage.

Taking into account that the second assignment noted on the Certificate of Title is correctly listed as an "ineffective assignment," the chain of title for the mortgage is simple, clear and unbroken. Plaintiff does not offer any facts or allegations to suggest otherwise. Rather, the plaintiff argues that where the affidavit setting forth the chain of title for the mortgage is offered with respect to a proposed foreclosure of registered land, more should be required than the ordinarily dispositive affidavit. Plaintiff relies for this argument only on dicta in a footnote in Eaton v. Federal Nat. Mtg. Ass'n, 462 Mass. 569 , 589 n. 28 (2012), in which the Supreme Judicial Court noted, "It would appear that at least with respect to unregistered land, a foreclosing mortgage holder…may establish that it either held the note or acted on behalf of the note holder at the time of a foreclosure sale by filing an affidavit in the appropriate registry of deeds pursuant to G. L. c. 183, § 5B." Plaintiff alleges the footnote signals an intent by the Supreme Judicial Court that such an affidavit is insufficient in the case of registered land. Plaintiff has pointed to no authority holding that such an affidavit is insufficient to establish the chain of title for mortgage assignments pertaining to registered land. Moreover, since the record title shows that the chain of title of assignments of the mortgage is exactly as is stated in the affidavit, it is unclear what the plaintiff hopes to accomplish, other than delay, by suggesting that the court should not rely on the affidavit.

Contrary to plaintiff's argument, the Eaton court made no such holding that a G. L. c. 183, § 5B affidavit, or one filed pursuant to G. L. c. 183, § 54B, that is sufficient to establish the prerequisites to a foreclosure for recorded land, would be an insufficient basis upon which to establish the same for registered land. In other contexts, courts have held affidavits to be sufficient with respect to representations concerning registered land. See Zullo v. HMC Assets, LLC, 88 Mass. App. Ct. 1119 (Rule 1:28 Decision) (2015) (affirming that a "lost note" affidavit affirming ownership is sufficient to satisfy Eaton's standards). The affidavit, attached as Exhibit G to plaintiff's complain, sufficiently (and correctly) demonstrates both the unbroken chain of title to the mortgage, and that U.S. Bank is the holder of the promissory note securing the mortgage.

C. U.S. Bank Is Not Required to Show a Chain of Title for the Promissory Note.

Plaintiff contends that under 209 C.M.R. § 18.21A(2)(c), [Note 2] and G. L. c. 183, § 21 and G. L. c. 244, § 14, U.S. Bank must show not only that it held the note at the time of foreclosure, but that it must also demonstrate the chain of title for the promissory note in order to have the legal authority to foreclose. With respect to the mortgage, as opposed to the promissory note, a mortgagee must show "a complete chain of assignments linking it to the record holder of the mortgage, or a single assignment from the record holder of the mortgage." U.S. Bank Nat'l Assn. v. Ibanez, 458 Mass. 637 (2011). However, there is no such requirement to show a full chain of title for the promissory note secured by the mortgage. In Sullivan v. Kondaur Capital Corp., the court held, "nothing in Massachusetts law requires a foreclosing mortgagee to demonstrate that prior holders of the record legal interest in the mortgage also held the note at the time each assigned its interest in the mortgage to the next holder in the chain." 85 Mass. App. Ct. 202 , 210 (2014). Moreover, accepting plaintiff's argument would represent a "significant expansion of the Eaton rule, insofar as [it would] suggest that a 'mortgagee' must hold both legal and equitable interest in the loan not only at the time of foreclosure but at the time of any previous transfers of the recorded mortgage interest." Id. at 209-210.

Plaintiff argues that 209 C.M.R § 18.21A, 2C, which contains language requiring "certification of the chain of title and ownership of the note and mortgage," requires that a chain of title must be demonstrated for both the note and mortgage. However, "certification of the chain of title" and "ownership of the note and mortgage" are two separate concepts; chain of title is necessarily a reference to showing the chain of title only to the mortgage, because only mortgage assignments are recorded, and showing the chain of title of assignments of the mortgage is the only way to demonstrate that the foreclosing entity is the current holder of the mortgage. Promissory notes, on the other hand, are never recorded, and ownership of a note is demonstrated by an endorsement on the note itself; it is not necessary to demonstrate a chain of title or to even identify past holders of a note in order to provide evidence that one is the current holder of the note, because the chain is demonstrated by the endorsements on the note itself and are self-evident. Physically holding the note, along with an endorsement of the note either in blank or to the holder, is sufficient. The Eaton court noted the impractibility of requiring disclosure of a chain of title for promissory notes, by pointing out that "there are no…provisions for recording mortgage notes; and as a result, clear record title cannot be ascertained because the validity of any prior foreclosure sale is not ascertainable by examining documents of record." Eaton, supra, 462 Mass. at 586. In its holding, the Eaton court did not change this reality or the rules relating to proof of ownership of a promissory note. Accordingly, the provision in 209 C.M.R § 18.21A(2)(c) for "certification of the chain of title and ownership of the note and mortgage," cannot be construed reasonably to require demonstration of a chain of title for a promissory note where the Supreme Judicial Court has acknowledged that under our system no such requirement is required or even possible, let alone necessary. The court thus construes the regulation as requiring, consistent with Eaton, certification of the chain of title of mortgage assignments, and certification of ownership of the note. To the extent the regulation could be construed to require more than that with respect to the note, it would be ultra vires. See Massachusetts Federation of Teachers, AFT, AFL-CIO v. Bd. of Education, 436 Mass. 763 , 773 (2002) (noting that in promulgating regulations, "the agency may not exceed those powers and obligations expressly conferred on it by statute or reasonably necessary to carry out the purposes for which the statute was enacted").

D. MERS Had the Capacity to Assign the Mortgage.

It is undisputed that MERS was the original holder of the mortgage and that there are no explicit terms in the mortgage restricting MERS's ability to assign in the mortgage. Plaintiff instead argues that because MERS was acting as nominee for the original lender, it did not have the capacity to assign the mortgage; therefore, the first assignment of the mortgage was void as a matter of law. Plaintiff's argument has been explicitly rejected by Massachusetts courts on more than one occasion. In a case where MERS, as in the present case, held the mortgage as nominee for the lender, the court held, "[u]nder Massachusetts law, MERS may hold and assign mortgages." FNB1, LLC. v. De Oliveira, 93 Mass. App. Ct. 1111 (2018) (Rule 1:28 Decision). FNB1 is reflective of other cases in which the courts have recognized MERS's authority, even when acting as nominee, to assign mortgages. See Sullivan v. Kondaur Capital Corp., 85 Mass. App. Ct. 202 , 210 (2014) (noting that the "[Sullivan's] challenge is without merit to the extent that it suggests that MERS's interest in the mortgage was inherently invalid because it was separated from ownership of the underlying debt"); Shea v. Federal Nat'l Mortgage Assn., 87 Mass. App. Ct. 901 , 903 (2015) (holding that "MERS's interest as mortgagee was not 'inherently invalid because it was separated from ownership of the underlying debt.'"). In Sullivan and Shea, the mortgages contained language identifying MERS as the nominee, just as in the mortgage in the present case. Accordingly, MERS had the authority to assign the mortgage in this case.


For the foregoing reasons, the defendants' motion to dismiss is ALLOWED.

Judgment declaring the parties' rights under Count I of the Verified Complaint, seeking a declaratory judgment, and dismissing Count II of the Verified Complaint, will be entered accordingly. See Whitehouse v. Town of Sherborn, 11 Mass. App. Ct. 668 , 676 (1981) (when granting motion to dismiss in declaratory judgment action, court's judgment should declare rights of the parties rather than dismiss complaint).


[Note 1] There is nothing in the present record to indicate whether the foreclosure went forward following the denial of the plaintiff's motion for preliminary injunctive relief.

[Note 2] 18 C.M.R. 21A(2)(c) provides as follows:

A third party loan servicer shall certify in writing the basis for asserting that the foreclosing party has the right to foreclose, including but not limited to, certification of the chain of title and ownership of the note and mortgage from the date of the recording of the mortgage being foreclosed upon. The third party loan servicer shall provide such certification to the borrower with the notice of foreclosure, provided pursuant to M.G.L. c. 244, § 14 and shall also include a copy of the note with all required endorsements.