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SettlePou Scores Favorable Appellate Opinions in Mortgage Litigation

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SettlePou has successfully earned favorable rulings from various Texas appellate courts for the firm’s mortgage lending and servicing clients.  These opinions touch on some of the issues currently being litigated most frequently in this field.

First, in Montgomery v. Aurora Loan Services, LLC, 375 S.W.3d 617 (Tex. App.—Dallas 2012, pet. denied), the Dallas Court of Appeals affirmed the summary judgment SettlePou won at the trial court level.  The seminal issues were whether the foreclosing lender was required to file the notice of substitute’s trustee’s sale in the real property records and whether a borrower can challenge the foreclosure in an eviction proceeding.  The Dallas Court of Appeals agreed with SettlePou’s argument in holding that the Texas Property Code does not require the notice of substitute trustee’s sale be filed in the real property records and that alleged foreclosure defects are not relevant to deciding the right of possession in an eviction lawsuit. 

Second, in Santibanez v. Saxon Mortgage, Inc., No. 11-10-00227-CV, 2012 Tex. App. Lexis 7167 (Tex. App.—Eastland August 23, 2012), SettlePou again earned a favorable appellate opinion affirming a summary judgment the firm had won at the trial court level.  In this case, both sides moved for summary judgment in the trial court.  Plaintiff asserted Defendants’ right to foreclose was barred by the statute of limitations.  Defendants contended they were entitled to foreclose, sought an order of foreclosure, and contended the applicable statutes of limitations barred Plaintiff’s claims for fraud, violations of the Texas Deceptive Trade Practices Act, and breach of contract. 

The Eastland Court of Appeals agreed with SettlePou’s argument that limitations had not run on the right to foreclose because the lender had abandoned an acceleration of the loan in 2002 by thereafter accepting a default cure payment to “stop all foreclosure proceedings.”  The lender did not accelerate the loan again until 2005, less than 4 years before filing a Rule 736 action to foreclose the home equity loan.  Further, the Eastland Court found the borrower had failed to challenge on appeal all grounds on which the trial court could have granted summary judgment to the lender on the borrower’s claims for fraud, DTPA violations, and breach of contract, and thus affirmed the trial court’s judgment denying those claims.  Finally, the Eastland Court upheld the trial court’s award of $30,000 in attorneys’ fees against the borrower because all other points in the borrower’s appeal had been denied.

In the third case, Wells Fargo Bank, N.A., as Trustee v. Robinson, No. 05-11-00700-CV, 2012 Tex. App. Lexis 10280 (Tex. App.—Dallas December 11, 2012), SettlePou was not counsel at trial but was retained to appeal the trial court’s judgment awarding a borrower over $59,000.00 in damages and attorney’s for his claim of wrongful foreclosure.  The borrower prevailed by taking advantage of the fact that the foreclosure occurred after the date allowed by the foreclosure order.  Although it was true that the actual foreclosure did not comply with the order of foreclosure, SettlePou was successful on appeal. 

In particular, the Dallas Court of Appeals reversed the judgment in the borrower’s favor and rendered judgment in its place that the borrower take nothing based on SettlePou’s argument that the borrower was not harmed or injured.  Additionally, SettlePou was successful in defeating the borrower’s argument on appeal that his mortgage was unenforceable as a result of the failure of the foreclosure to strictly comply with the foreclosure order. 

Finally, the fourth case involved the issue of the right to enforce the borrower’s note and deed of trust after the original lender transferred them to a new mortgagee.  In Wilner v. Deutsche Bank National Trust Company, as Trustee, No. 02-11-00287-CV, 2012 Tex. App. Lexis 10595 (Tex. App.—Fort Worth December 21, 2012), SettlePou earned an appellate opinion affirming the summary judgment it had won at the trial court level.  On appeal, the borrower raised an issue that is commonly challenged in cases like this, that is, whether Deutsche Bank National Trust Company, as Trustee, could enforce the note and deed of trust because they had been transferred to it by a series of assignments described by the Fort Worth Court of Appeals as ‘convoluted.’  

The Fort Worth Court of Appeals affirmed the trial court’s summary judgment by holding that Deutsche Bank was entitled to enforce based on SettlePou’s argument that Deutsche Bank was in possession of the original note, which was endorsed in blank by the original lender.  The blank endorsement made the note bearer paper enforceable by mere possession, regardless of how the note had been obtained and irrespective of whether Deutsche Bank was also the owner of the note by assignment.