A New York judge who invalidated a mortgage is now calling the parties back to court, while a Massachusetts judge agreed to leave a mortgage lien as invalid. Meanwhile, Wells Fargo & Co.'s banking subsidiary appears to have won the judge's sympathy in a Maryland foreclosure case.
The National Law Journal reported that a bankruptcy court ruling which allowed the trustee to treat a mortgage as an unsecured claim was upheld by U.S. District Court Judge Patti Saris. Mortgage Electronic Registration Systems Inc., the plaintiff, wanted the state to determine whether the omission of a borrower's name on an acknowledgement form is a material defect that voids the Massachusetts mortgage.
The July 2005 foreclosure on a $292,500 loan made in August 2004 was overturned by a New York judge who, upset with the conduct of a lender in an action foreclosing an underwater residential mortgage loan, ordered that the promissory loan note is "canceled, voided, avoided, nullified, set aside and is of no further force and effect."
The court described the lender's bungled attempt at a forbearance agreement, refusal of a short sale, refusal of a modification with no principal forgiveness and equivocation over the borrower's offer to provide a deed in lieu.
Now the judge, New York Supreme Court Justice Jeffrey Spinner, has ordered the bank and the borrowers back to court to discuss a recent letter from IndyMac Mortgage Services that says $474,936.78 still is owed, Newsday reported.
MTGLQ Investors, a subsidiary of Goldman Sachs, filed an unusually high 55 lawsuits in Nevada's Clark County District Court as of month-to-date Nov. 23, the Las Vegas Business Press reported. In what was cited as a possible trend, the cases were filed against second-lien borrowers who had already lost their homes to first mortgage foreclosures.
The City of Baltimore filed a lawsuit last year against Wells Fargo Bank, N.A., claiming that the lender is responsible for "tens of millions of dollars" in lost tax revenues to the city because of a few hundred foreclosures during the past seven years.
But the Baltimore Sun reported that a new judge might dismiss the lawsuit. U.S. District Judge J. Frederick Motz reportedly said the case might cost taxpayers "a lot of money."
Mortgage Electronic Registration Systems Inc. (MERS) v. Warren E. Agin, trustee.
(U.S. District Court)
IndyMac Bank F.S.B. vs. Dian Yano-Horoski, Wells Fargo Bank Minnesota National Association as Trustee for Soundview Home Equity Loan Trust 2001-1 and Kimberly Horoski.
Nov. 19, 2009 (Supreme Court, Suffolk County, State of New York).
Mayor and City Council of Baltimore v. Wells Fargo Bank, N.A.
Case No. 08-00062-BEL, January 2008 (U.S. District Court for the District of Maryland).