United States District Court, D. Maryland
CHARLES A. POWELL and JANIS P. POWELL, Plaintiffs,
COUNTRYWIDE BANK, FSB et al., Defendants.
Xinis United States District Judge
in this consumer lending case is a motion to dismiss for
failure to state a claim filed by Bank of America, N.A.,
individually and as successor by merger to Countrywide Bank,
FSB and Countrywide Home Loans Servicing, LP; Countrywide
Home Loans Inc.; and Mortgage Electronic Registration
Systems, Inc. (“MERS”). ECF No. 25. Janis and
Charles Powell (collectively, “Plaintiffs”) have
also requested leave to amend their Amended Complaint. ECF
No. 28 at 3-4. The issues are fully briefed and the Court now
rules pursuant to Local Rule 105.6 because no hearing is
necessary. For the following reasons, the Defendants'
motion to dismiss is granted and Plaintiffs' motion to
amend is denied.
facts outlined here are taken from the Plaintiffs'
Amended Complaint and public records attached to the
Defendants' motion to dismiss. Unless otherwise noted, all
facts are construed in the light most favorable to the
Plaintiffs as the nonmoving parties.
January 10, 2008, the Plaintiffs appear to have executed a
loan in favor of Countrywide Bank, FSB (“Countrywide
Bank”) for $638, 600 for real property located at 11404
North Star Drive, Fort Washington, Prince George's
County, Maryland. ECF No. 25-2. The loan is evidenced by a
promissory note (“Note”) and secured by a Deed of
Trust, executed on the same date as the Note, and which was
recorded among the Land Records of Prince George's
County, Maryland. Id. The Deed of Trust named
Mortgage Electronic Registration Systems, Inc.
(“MERS”) the beneficiary under the security
interest as the nominee for the lender, Countrywide, its
successors, and assigns. Id.
executing the security instrument, the Plaintiffs agreed that
“MERS holds only legal title to the interests granted
by Borrower in this Security Instrument, but, if necessary to
comply with law or custom, MERS (as nominee for Lender and
Lender's successors and assigns) has the right: to
exercise any or all of those interests, including, but not
limited to, the right to foreclose and sell the Property; and
to take any action required of Lender including, but not
limited to, releasing and canceling this Security
Instrument.” Id. at 3.
Deed of Trust states that “[t]he Note or a partial
interest in the Note (together with this Security Instrument)
can be sold one or more times without prior notice to
Borrower.” Id. at 8. The Deed of Trust also
clearly states that Plaintiffs' obligations remain the
same, regardless of whether the Note is sold: “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.” Id.
February 2012, MERS, acting as nominee for Countrywide Bank,
executed and recorded a Corporate Assignment of Deed of Trust
in the Land Records for Prince George's County, Maryland,
which granted all beneficial interest under the Deed of Trust
to Defendant Bank of America, N.A. ECF No. 25-3. In September
2015, Plaintiffs' Note was pooled with several other
notes in a residential mortgage-backed securitization trust,
LSF9 Master Participation Trust. ECF No. 25-4. An Assignment of
Mortgage/Deed of Trust from Bank of America to the Trust was
recorded in the Prince George's County Land Records on
November 4, 2015. ECF No. 25-4. As the Maryland Court of
Appeals has explained:
[s]ecuritization starts when a mortgage originator sells a
mortgage and its note to a buyer, who is typically a
subsidiary of an investment bank. The investment bank bundles
together the multitude of mortgages it purchased into a
“special purpose vehicle, ” usually in the form
of a trust, and sells the income rights to other investors. A
pooling and servicing agreement establishes two entities that
maintain the trust: a trustee, who manages the loan assets,
and a servicer, who communicates with and collects monthly
payments from the mortgagors.
Deutsche Bank Nat. Trust Co. v. Brock, 430 Md. 714,
718 (2013) (quoting Anderson v. Burson, 424 Md. 232,
allege that these assignments were improperly executed by
“robo signing agents” and thus the Defendants
“do not have lawful ownership or a security interest in
Plaintiff's [sic] home.” ECF No. 24 at 4.
Plaintiffs also maintain that their loan was not properly
securitized and that the Defendants have no standing to
institute a foreclosure action because “none of the
Defendants have an executed true original copy of the
Note.” Id. at 6.
to the Plaintiffs, one of the Defendants issued a Notice of
Intent to Foreclose in December 2015. ECF No. 24 at 10.
Although Plaintiffs have defaulted on the Loan, no
foreclosure has occurred or is currently pending. On January
21, 2016, Plaintiffs filed a Complaint in the Circuit Court
for Prince George's County against Countrywide Bank; Bank
of America; Bank of New York as Trustee for Securitized Trust
CWABS Asset-Backed Certificates Trust 2007-13; Countrywide
Home Loans; CWABS, Inc.; Countrywide Home Loans Servicing LP;
Mortgage Electronic Registration System (“MERS”);
and Does 1 through 100 inclusive (collectively,
“Defendants”). The original complaint alleged ten
causes of action: (1) Lack of Standing/Wrongful Foreclosure;
(2) Fraud in the Concealment; (3) Fraud in the Inducement;
(4) Intentional Infliction of Emotional Distress; (5) Slander
of Title; (6) Quiet Title; (7) Declaratory Relief; (8)
violations of Truth in Lending Act (“TILA”) and
Home Ownership and Equity Protection Act
(“HOEPA”); (9) violations of the Real Estate
Settlement Procedures Act (“RESPA”); and (10)
Rescission. ECF No. 2. Defendants timely removed the case to
this Court pursuant to 28 U.S.C. §§ 1331, 1367,
1441, and 1446. ECF No. 1.
17, 2016, Plaintiffs filed an Amended Complaint. ECF No. 24.
The Amended Complaint eliminates claims regarding lack of
standing and intentional infliction of emotional distress.
Also, Plaintiffs attached to the Amended Complaint a
“Property Securitization Analysis Report”
prepared for the Plaintiffs which details the alleged
transfers and assignments of the Plaintiffs' Deed of
Trust. ECF No. 24-1. Lastly, Plaintiffs newly allege that
while they executed a Deed of Trust and Note, the documents
they executed did not involve Countrywide Bank or Bank of
America. See, e.g., ECF No. 24 at 5.
Plaintiffs filed their Amended Complaint, Defendants filed a
motion to dismiss under Rule 12(b)(6) of the Federal Rules of
Civil Procedure. ECF No. 25. Plaintiffs opposed
Defendants' motion to dismiss and requested leave to file
a second amended complaint. ECF No. 28. In their opposition,
Plaintiffs allege that they never saw the Deed of Trust
before Defendants attached it to their motion to dismiss.
Id. at 3. After reviewing the Deed of Trust,
Plaintiffs are convinced that their signatures on the
document are forged and “that they did not originate
any note or refinance any note with Defendant's [sic]
Countrywide Bank.” Id. To buttress this
allegation, they provide personal affidavits attesting that
the Deed of Trust was forged by “some third
party.” ECF No. 29; ECF No. 29-2. Plaintiffs also
request leave to amend their Complaint to add additional
counts against Countrywide Bank for the alleged
STANDARD OF REVIEW
ruling on a motion under Rule 12(b)(6), the court must
“accept the well-pled allegations of the complaint as
true, ” and “construe the facts and reasonable
inferences derived therefrom in the light most favorable to
the plaintiff.” Ibarra v. United States, 120
F.3d 472, 474 (4th Cir. 1997). “The mere recital of
elements of a cause of action, supported only by conclusory
statements, is not sufficient to survive a motion made
pursuant to Rule 12(b)(6).” Walters v.
McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To
survive a motion to dismiss, a complaint's factual
allegations “must be enough to raise a right to relief
above the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact).” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007) (internal citations omitted). A pro se
plaintiff is held to a “‘less
stringent'” standard than a lawyer, and the Court
must liberally construe a pro se plaintiff's complaint.
Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting
Estelle v. Gamble, 429 U.S. 97, 106 (1976)).
motion to dismiss tests the sufficiency of a complaint,
” Occupy Columbia v. Haley, 738 F.3d 107, 116
(4th Cir. 2013), and a court's evaluation is thus
generally limited to a review of the allegations of the
complaint itself. Goines v. Valley Cmty. Servs. Bd.,
822 F.3d 159, 166 (4th Cir. 2016). However, the court may
also consider documents that are explicitly incorporated into
the complaint by reference, Tellabs, Inc. v. Makor Issues
& Rights, Ltd., 551 U.S. 308, 322 (2007), and those
attached to the complaint as exhibits. See Fed. R.
Civ. P. 10(c); Goines, 822 F.3d at 166 (“[T]he
Court may consider any and all exhibits attached to
plaintiff's complaint.”). The court may also
properly take judicial notice of matters of public record.
Sec'y of State For Defence v. Trimble Navigation
Ltd., 484 F.3d 700, 705 (4th Cir. 2007).
individual claims arise from a set of common legal theories.
Plaintiffs argue, for example, that the securitization of
their mortgage loan amounts to fraud because it effectively
“changed the character” of Plaintiffs' Note.
ECF No. 24 at 10. Plaintiffs allege that the securitization
had “an adverse effect on the value of Plaintiff's
[sic] home, ” without providing any more specificity.
But it is well-established in this Court and others that
“[a]s a matter of law, securitization alone does not
render a note or deed of trust unenforceable and does not
alter a borrower's obligation to pay back his or her
loan.” Howes v. Wells Fargo Bank, N.A., No.
ELH- 14-2814, 2015 WL 5836924, at *26 (D. Md. Sept. 30, 2015)
(internal quotation marks omitted) (citing cases); see
also Benson v. Ocwen Loan Servicing, LLC, No.
2:14-CV-02495-TLN, 2014 WL 6775262, at *4 (E.D. Cal. Dec. 1,
2014). “[S]ecuritization merely creates a separate
contract, distinct from [Plaintiffs'] debt obligations
under the note and does not change the relationship of the
parties in any way.” Reyes v. GMAC Mortgage
LLC, No. 2:11-CV-100 JCM RJJ, 2011 WL 1322775, at *3 (D.
Nev. Apr. 5, 2011) (citations and internal quotation marks
omitted). It is “not some sort of illicit scheme that
taints the underlying debt.” Thompson v. Bank of
Am., N.A., 773 F.3d 741, 749 (6th Cir. 2014). Therefore,
as a matter of law, the securitization process cannot have
harmed Plaintiffs, or, more pointedly, amount to fraud.
also argue throughout their Amended Complaint that the
Defendants do not have an interest in the property because
the assignments of their Deed of Trust were not properly
executed for a variety of reasons. This Court has
consistently held that plaintiffs lack standing to challenge
the propriety of the assignment of a mortgage loan. See,
e.g., Henry v. Aurora Loan Servs., LLC, No.
TDC-14-1344, 2016 WL 1248672, at *3 (D. Md. Mar. 25, 2016);
Pruitt v. Bank of Am., N.A., No. TDC-15-1310, 2016
WL 337531, at *2 (D. Md. Jan. 28, 2016); Danso v. Ocwen
Loan Servicing, LLC, No. PX 16-1396, 2016 WL 4437653, at
*4 (D. Md. Aug. 23, 2016). In the consumer lending context, a
party “generally must assert his own legal rights and
interests, and cannot rest his claim to relief on the legal
rights or interests of third parties.” Wolf v. Fed.
Nat'l Mortgage Ass'n, 512 F. App'x 336, 342
(4th Cir. 2013) (per curiam) (citation and internal quotation
Plaintiffs were not a party to the assignment from MERS to
Bank of America, or from Bank of America to the Trust. Nor
were they an intended beneficiary of either of these
assignments. Thus, Plaintiffs cannot challenge their
validity. See Id. (holding that a mortgagor lacks
standing to challenge the propriety of the assignment of the
note); Quattlebaum v. Bank of Am., N.A., No. CIV.A.
TDC-14-2688, 2015 WL 1085707, at *4 (D. Md. Mar. 10, 2015)
(“What the lender chooses to do with that
entitlement-whether to keep it or to sell it to another
financial institution-is a decision [the plaintiff] has no
standing to challenge.”). The intervening assignments
do not ...