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O'Sullivan v. Deutsche Bank National Trust Co.

United States District Court, D. New Hampshire

September 14, 2015

Roger and Lisa O’Sullivan, Plaintiffs
v.
Deutsche Bank National Trust Company, as Trustee for GSSA Home Equity Trust 2006-18, Defendant Opinion No. 2015 DNH 175

Roger A. O’Sullivan, pro se

Lisa M. O’Sullivan, pro se

Michael R. Stanley, Esq.

ORDER

Steven J. McAuliffe United States District Judge

Deutsche Bank National Trust Company, as trustee of the GSSA Home Equity Trust 2006-18, holds a mortgage on plaintiffs’ home. Plaintiffs challenge its right to foreclose that mortgage under New Hampshire law. The court has subject matter jurisdiction over plaintiffs’ claim pursuant to 28 U.S.C. § 1332 (diversity of citizenship).

Deutsche Bank moves to dismiss the sole claim in plaintiffs’ complaint, asserting that plaintiffs lack standing to challenge the validity of the assignment by which Deutsche Bank assumed the mortgage at issue. For the reasons discussed, that motion to dismiss is granted.

Background

The relevant facts are largely undisputed. In May of 2006, plaintiffs obtained a $263, 700 loan from Wells Fargo. To secure repayment of that loan, plaintiffs gave Wells Fargo a mortgage deed to their home. The terms of the mortgage included a statutory power of sale, allowing Wells Fargo to foreclose upon the property under certain specified circumstances (including default on the underlying promissory note). In January of 2014, Wells Fargo assigned the mortgage to Deutsche Bank, as trustee for a Real Estate Mortgage Investment Conduit Trust. That trust is governed by a Pooling and Service Agreement.[1]

At some point (the complaint does not specify exactly when), plaintiffs began having difficulty making monthly payments on the loan. They sought, but were unable to obtain, a loan modification from Wells Fargo. With the loan in default, Deutsche Bank sought to foreclose the mortgage and it scheduled a foreclosure auction for March 31, 2015. A few days before that auction, however, plaintiffs obtained an ex parte temporary restraining order from the state court, based upon their assertion that Deutsche Bank lacked authority to foreclose on the mortgage. Deutsche Bank removed the proceeding to this court, invoking the court’s diversity subject matter jurisdiction.

Discussion

Plaintiffs’ argument is a familiar one: they claim that Deutsche Bank is not the lawful holder of their mortgage because it took an assignment of that mortgage after the closing date specified in the applicable pooling and servicing agreement.

As explicitly explained in the attached February 20, 2015 letter, the party foreclosing (i.e., Deutsche Bank, et al.) can not be a valid mortgagee with rights to foreclose since they are a Real Estate Mortgage Investment Conduit (“REMIC”) trust with a closing date in 2006. Wells Fargo alleged to assign our mortgage to Deutsche Bank in 2014, but Deutsche Bank has never substantiated that it is the legal mortgagee.

Complaint (document no. 1-1) at 2. Even crediting all of plaintiffs’ factual allegations as true, it remains plain that they lack standing to challenge the allegedly untimely assignment of their mortgage from Wells Fargo to Deutsche Bank.

Assuming that Wells Fargo assigned plaintiffs’ mortgage to Deutsche Bank after the closing date of the relevant trust (and contrary to the terms of the governing PSA), that flaw merely renders the assignment voidable (at the option of the trust’s beneficiaries). It does not render ...


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