Plaintiff filed its unverified Complaint on January 23, 2012, pursuant to G. L. c. 240, §§6-10, attempting to determine the validity of a foreclosure sale by Defendant Wells Fargo Bank, N.A., as Trustee under Pooling and Servicing Agreement dated as of April 1, 2005 Asset-Backed Pass Through Certificates Series 2005-WHQ2 ("Wells Fargo") of property located at 19-21 Rhodora Street, Lowell, Massachusetts ("Locus"), and to quiet title to Locus. On February 10, 2012, Defendant Jonathan Goldsmith, Chapter 7 Bankruptcy Trustee ("Goldsmith"), filed his Answer. A case management conference was held on February 23, 2012. Wells Fargo filed its Answer on March 19, 2012. [Note 1]
Plaintiff filed its Motion for Summary Judgment on August 17, 2012, together with supporting memorandum, Statement of Material Facts, Affidavit of Jeffrey B. Loeb, and Declarations of Denise Apicella (two). On August 27, 2012, Wells Fargo filed its Notice of No Opposition. Plaintiff filed Declaration of Denise Apicella (third) on September 10, 2012. On October 15, 2012, Goldsmith filed his Opposition, together with supporting memorandum, Statement of Additional Material Facts, Affidavit of Jonathan Goldsmith, and Appendix. A hearing was held on the motion on March 13, 2013, and the matter was taken under advisement.
I find that the following material facts are not in dispute:
1. Argent Mortgage Company, LLC ("Argent") as seller and Ameriquest Mortgage Company ("Ameriquest") as buyer entered into a Mortage Loan Purchase and Warranties Agreement (the "Mortgage Purchase Agreement"), dated January 2, 2003. Pursuant to the Mortgage Purchase Agreement, Argent was to sell and Ameriquest was to buy certain mortgages originated by Argent that met various underwriting requirements. Section 2(a) of the Mortgage Purchase Agreement required Argent to execute an Assignment and Conveyance Agreement for each mortgage loan that was being transferred to Ameriquest.
2. Sopheap Nuon ("Nuon") purchased Locus from Linda J. Spengler and Mark K. Spengler by deed dated February 2, 2005, and recorded with the Middlesex North District Registry of Deeds (the "Registry") in Book 18378, Page 32. Nuon gave a mortgage (the "Nuon Mortgage") to Argent on Locus dated February 2, 2005, and recorded with the Registry at Book 18378, Page 34.
3. By Assignment of Mortgage dated February 2, 2005 (the "Ameriquest Assignment"), and recorded with the Registry on January 16, 2007, at Book 20888, Page 249, Ameriquest assigned the Nuon Mortgage to Wells Fargo Bank, NA as Trustee. [Note 2]
4. The cover page of a Pooling and Servicing Agreement dated as of April 1, 2005, between HomEq Servicing Corporation ("HomeEq"), Master Servicer, and Wells Fargo (the "Pooling Agreement") is in the summary judgment record.
5. On May 15, 2006, Nuon filed for Chapter 7 bankruptcy (Case No. 06-40781) in the United States Bankruptcy Court, District of Massachusetts (the "Bankruptcy Case").
6. On May 31, 2006, HomEq filed a Motion for Relief from Stay in the Bankruptcy Case (the "Motion for Relief"). The Motion for Relief stated that HomEq (as agent for Argent) was the current holder of the Nuon Mortgage. By Order dated June 15, 2006, the judge in the Bankruptcy Case granted a relief from stay (the "Relief From Stay"), finding that "HomEq and its Successors and/or Assigns be and hereby are permitted to proceed with a foreclosure of [the Nuon Mortgage]."
7. Wells Fargo filed a Complaint to Foreclose Mortgage under the Servicemembers Civil Relief Act on June 30, 2006, relative to the Nuon Mortgage. Judgment in that case issued on November 29, 2006.
8. Wells Fargo commenced publication relative to the foreclosure in the Lowell Sun on November 16, 2006.
9. By Certificate of Entry to Foreclose dated January 16, 2007, Wells Fargo made an entry on Locus for the purpose of foreclosing the Nuon Mortgage. The Certificate of Entry was recorded with the Registry at Book 21169, Page 153. By Foreclosure Deed dated March 6, 2007 (the "Foreclosure Deed"), Wells Fargo Bank, NA as Trustee, conveyed Locus to Wells Fargo. The Foreclosure Deed was recorded with the Registry at Book 21169, Page 154.
10. By Special Warranty Deed dated May 29, 2007, and recorded with the Registry at Book 21322, Page 145, Wells Fargo conveyed Locus to the Flanagans. By Mortgage dated June 13, 2007, and recorded with the Registry at Book 21322, Page 148 (the "Flanagan Mortgage"), the Flanagans mortgaged Locus to Mortgage Electronic Registration Systems, Inc. ("MERS").
11. By Assignment of Mortgage dated September 20, 2010, MERS assigned the Flanagan Mortgage to BAC Home Loans Servicing, L.P. ("BAC"). By Certificate of Merger dated June 28, 2011, BAC was merged into Bank of America, National Association ("Plaintiff").
12. By Confirmatory Assignment of Mortgage dated August 6, 2012 (the "Confirmatory Assignment"), and recorded with the Registry at Book 26299, Page 105, Argent confirmed the assignment of the Nuon Mortgage to Ameriquest on February 2, 2005. The Confirmatory Assignment of Mortgage contained a copy of Declaration of Denise Apicella dated July 5, 2012 (the "July Declaration").
The central issue in this case is the assignment of the Nuon Mortgage from Argent to Ameriquest. Plaintiff argues that the Foreclosure Deed was valid because Wells Fargo was the owner of the Nuon Mortgage at the time of the foreclosure sale. [Note 3] In this regard, Plaintiff relies on several factors. Working backwards, Plaintiff argues that the Ameriquest Assignment is a recorded assignment of the Nuon Mortgage from Ameriquest to Wells Fargo and is dated the same day as the granting of the Nuon Mortgage to Argent (even though the Ameriquest Assignment was not recorded until January of 2007). Plaintiff states that prior to the Ameriquest Assignment, Argent validly assigned the Nuon Mortgage to Ameriquest. Goldsmith argues that the Foreclosure Deed was not valid because there is no proof that the Nuon Mortgage was assigned by Argent to Ameriquest and as a result the assignment from Ameriquest to Wells Fargo was void.
In asserting the existence of an assignment of the Nuon Mortgage from Argent to Ameriquest, Plaintiff relies on U. S. Bank National Association v. Ibanez, 458 Mass. 637 , 654 (2011), which states, "[a] valid assignment of a mortgage gives the holder of that mortgage the statutory power to sell after a default regardless whether the assignment has been recorded. Where the earlier assignment is not in recordable form or bears some defect, a written assignment executed after foreclosure that confirms the earlier assignment may be properly recorded." However, Ibanez goes on to state, "[a] confirmatory assignment, however, cannot confirm an assignment that was not validly made earlier or backdate an assignment being made for the first time."
There is no assignment (either recorded or unrecorded) from Argent to Ameriquest until the Confirmatory Assignment in August of 2012. As evidence that Argent assigned to Ameriquest, Plaintiff relies on a Declaration of Denise Apicella ("Apicella") dated June 19, 2012 (the "June Declaration"), the July Declaration, and a Declaration of Apicella dated September 6, 2012 (the "September Declaration"). The September Declaration states that all mortgages originated by Argent "were sold to Ameriquest in the normal course of business," and Apicella relies on the Mortgage Purchase Agreement to support this statement. There is no evidence, however, that the Nuon Mortgage was subject to the Mortgage Purchase Agreement or that it was actually sold by Argent to Ameriquest. Plaintiff has not submitted to this court any Assignment and Conveyance Agreement from Argent to Ameriquest as required by the Mortgage Purchase Agreement.
Furthermore, Apicella has very limited credibility before this court. Plaintiff has submitted three Declarations of Apicella that are all inconsistent with each other. For example, the June Declaration states that Argent assigned the Nuon Mortgage to Ameriquest on April 28, 2005; however, the July Declaration and the September Declaration state that this transaction occurred on February 2, 2005. [Note 4] These inconsistent statements illuminate the shoddy record keeping of Argent and/or Ameriquest. Indeed, Apicella, allegedly the keeper of the records for the parent company of both Argent and Ameriquest, was unable to provide any documentation to support an assignment from Argent to Ameriquest. [Note 5]
Moreover, Argent has taken actions which are inconsistent with its alleged transfer of the Nuon Mortgage to Ameriquest. Nuon filed for bankruptcy on May 15, 2006. On May 31, 2006, HomEq, servicing agent for Argent (rather than as agent for Wells Fargo), filed the Relief From Stay in the Bankruptcy Case so that it could proceed on foreclosure, in which it stated that it held the Nuon Mortgage. On June 15, 2006, the bankruptcy court issued an order "that HomEq and its Successors and/or Assigns be and hereby are permitted to proceed with a foreclosure of [the Nuon Mortgage]." There is no evidence before this court that HomEq had any relationship with either Ameriquest or Wells Fargo relative to the Nuon Mortgage to allow Ameriquest, and ultimately Wells Fargo, to proceed with foreclosure. To again quote from Ibanez, pp. 650-51,
Where a plaintiff files a complaint asking for a declaration of clear title after a mortgage foreclosure, a judge is entitled to ask for proof that the foreclosing entity was the mortgage holder at the time of the notice of sale and foreclosure, or was one of the parties authorized to foreclose under G. L. c. 183, § 21, and G. L. c. 244, § 14. A plaintiff that cannot make this modest showing cannot justly proclaim that it was unfairly denied a declaration of clear title . . . Where a pool of mortgages is assigned to a securitized trust, the executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder. However, there must be proof that the assignment was made by a party that itself held the mortgage. (Emphasis supplied)
The first (and only) page of the Pooling Agreement that Plaintiff attached as an exhibit not only has no reference to the Nuon Mortgage, but it also has no reference to Ameriquest, who was the assignor under the Ameriquest Assignment. Pursuant to the foregoing discussion, there is no evidence that Ameriquest was the holder of the Nuon Mortgage at the time it purported to assign the same to Wells Fargo. As such, there is no evidence that Wells Fargo was the holder of the Nuon Mortgage at the time of the foreclosure. Finally, the Relief From Stay only gave HomEq (and Argent) the right to foreclose under the Nuon Mortgage, and not Wells Fargo, who was not a successor in title at the time of the foreclosure sale.
As a result of the foregoing, I find that Plaintiff has not carried its burden to show that Wells Fargo had title to the Nuon Mortgage at the time it commenced the foreclosure proceedings on November 16, 2006; as a result, the Foreclosure Deed is not valid.
As a result of the foregoing, Plaintiff's Motion of Summary Judgment is DENIED.
Judgment to enter accordingly.
[Note 1] Defendants Sreu Nuon, Stephan J. Flanagan ("Stephan") and Deborah J. Flanagan ("Deborah") (together, the "Flanagans") have not filed an Answer. Sreu Nuon has never appeared. Stephan and Deborah appeared at a number of conferences but did not file an Opposition to the summary judgment motion.
[Note 2] It is unclear from the record as to whether Wells Fargo Bank, NA as Trustee is the same entity as Wells Fargo Bank, N.A., as Trustee under Pooling and Servicing Agreement dated as of April 1, 2005 Asset-Backed Pass Through Certificates Series 2005-WHQ2. The Complaint treats the two as the same. Such distinction is not relevant to the outcome of this case.
[Note 3] The foreclosure sale took place before the decision in Eaton v. Federal National Mortgage Association, 462 Mass. 569 (2012) was issued, so that the ownership of the note secured by the Nuon Mortgage is not an issue.
[Note 4] In fact, the July Declaration was attached to the Confirmatory Assignment as the basis for the contention that there had been an earlier assignment of the Nuon Mortgage from Argent to Ameriquest.
[Note 5] There are several other issues pertaining to the Ameriquest Assignment. The June Declaration states that Argent transferred its interest in the Nuon Mortgage to Ameriquest on April 28, 2005, but the Ameriquest Assignment was dated February 2, 2005. If the June Declaration is correct, then Ameriquest had nothing to assign on February 2, 2005, when it purported to assign the Nuon Mortgage to Wells Fargo. The July Declaration and the September Declaration attempted to correct this error, as they stated that Argent assigned to Ameriquest on February 2, 2005. A second issue, however, is that the September Declaration stated: "On February 2, 2005, Ameriquest executed and dated an assignment of the [loan underlying the Nuon Mortgage] without inputting the name of an assignee into the assignment." This statement is inconsistent with the language in Ibanez "that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void." Id. at 652.