PORTLAND, Ore. (Legal Newsline) -- A federal judge ruled last month that an Oregon homeowner could not sue following a completed trustee sale of his property.
Though MERS, the national mortgage registry, was not a party to the action, the plaintiff in the case -- Alan Chen -- alleged that the foreclosure was wrongful based, in part, on MERS' role in his deed of trust.
The named defendants in the suit included: Bank of America N.A., ReconTrust Company N.A. and Federal National Mortgage Association, also known as Fannie Mae.
In Chen v. Bank of America N.A., Judge Owen M. Panner for the U.S. District Court for the District of Oregon dismissed the complaint with prejudice.
He found that, in accordance with the Oregon Trust Deed Act, Chen received proper notice of the sale, which barred his post-sale challenges to the foreclosure.
"Although plaintiff here had sufficient time to raise any of the current challenges before the sale, he chose instead to raise such challenges after the trustee's sale and recording of the trustee's deed," Panner wrote in his five-page order, filed July 25.
The judge further held that "plaintiff's challenges to the trustee's sale are barred, as plaintiff's interest in the property was 'foreclosed and terminated.'"
In both cases, the state's high court ruled MERS did not meet the statutory definition of trust deed "beneficiary" under Oregon law.
Panner denied the request, finding an amended complaint "would be futile" because Brandrup and Niday dealt with pre-sale challenges to non-judicial foreclosure sales as opposed to Chen's post-sale challenges, which are barred under state law.
"As Judge Panner made clear here, and in his Mikityuk decision, when a borrower is properly notified of the foreclosure sale of their property and they fail to stop the sale, they cannot seek to void a completed sale with allegations against MERS and its role in the borrower's trust deed," MERSCORP Holdings' Vice President for Corporate Communications Janis Smith said in a statement Monday.
MERSCORP and Mortgage Electronic Registration Systems Inc. were formed in 1995 to facilitate the growing mortgage finance market.
The privately-held electronic registry is designed to track servicing rights and ownership of mortgage loans in the United States.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.