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Federal Home Loan Mortage Corp. v. Smith

Court of Appeals of Oregon

July 26, 2017

FEDERAL HOME LOAN MORTAGE CORP., Plaintiff-Respondent,
v.
Roger W. SMITH, and all others, Defendant-Appellant.

          Argued and submitted May 11, 2016

         Washington County Circuit Court C130656EV;

          Ronald R. Heard argued the cause for appellant. With him on the brief was Thomas Cutler.

          John Thomas argued the cause for respondent. With him on the brief was RCO Legal, P. S

          Before Ortega, Presiding Judge, and Lagesen, Judge, and Garrett, Judge.

         Case Summary:

         Defendant appeals from a judgment that awarded restitution of the premises to plaintiff, Federal Home Loan Mortgage Corporation, after plaintiff brought a forcible entry and detainer (FED) action against defendant. Defendant argues that the trial court erred in determining that plaintiff was entitled to possession because there is no evidence in the record that the sale of the premises was conducted by a validly appointed "trustee." Held: Because there is no evidence in the record that a valid foreclosure sale was conducted by a duly appointed "trustee" within the meaning of the Oregon Trust Deed Act (OTDA), and in light of the Court of Appeals' decisions in Wolf v. GMAC Mortgage, LLC, 276 Or.App. 541, 370 P.3d 1254 (2016), and Bank of America, N. A. v. Payne, 279 Or.App. 239, 379 P.3d 816 (2016), the trial court erred when it determined that plaintiff was entitled to possession of the premises.

         Reversed.

          [287 Or.App. 43]

          GARRETT, J.

         This case is yet another in a series of lawsuits pertaining to the nonjudicial foreclosure of trust deeds naming Mortgage Electronic Registration Systems, Inc. (MERS), rather than the lender, as the beneficiary, and purporting to authorize MERS to exercise the rights of the lender. Because there is no evidence in the record that a valid foreclosure sale was conducted by a duly appointed "trustee" within the meaning of the Oregon Trust Deed Act (OTDA), and in light of our decisions in Wolf v. GMAC Mortgage. LLC. 276 Or.App. 541, 370 P.3d 1254 (2016), and Bank of America. N.A. v. Pavne. 279 Or.App. 239, 379 P.3d 816 (2016), we agree with defendant that the trial court erred when it determined that plaintiff was entitled to possession of the premises. Accordingly, we reverse.

         The facts pertinent to this appeal are not in dispute. Defendant took out a loan from Edgewater Lending Group Inc. (Edgewater) that was secured by a trust deed for real property located in Beaverton. The trust deed identified MERS as the beneficiary, acting "solely as nominee" for the lender, Edgewater, and listed Pacific Northwest Title as the trustee.

         On July 13, 2010, MERS executed an "Assignment of Deed of Trust" which purported to assign "all beneficial interest" under the trust deed to BAC Home Loans Servicing, LP (BAC). On that same date, BAC, acting as "the present beneficiary" under the trust deed, appointed ReconTrust Company, N.A. (ReconTrust) as "successor trustee." Defendant subsequently defaulted on his loan obligation, and ReconTrust issued a "Notice of Default and Election to Sell" the Beaverton property. ReconTrust then conducted a sale at which plaintiff, Federal Home Loan Mortgage Corporation, was the highest bidder. ReconTrust executed a trustee's deed conveying the property to plaintiff.

         Plaintiff brought the underlying forcible entry and detainer (FED) action against defendant for possession of the property. Defendant, who appeared pro se, responded that plaintiff was not entitled to possession because the foreclosure was "invalid." Citing our opinion in Niday [287 Or.App. 44] v. GMAC Mortgage. LLC. 251 Or.App. 278, 284 P.3d 1157 (2012), affd. 353 Or. 648, 302 P.3d 444 (2013), defendant argued that MERS was not a valid trust deed beneficiary under the OTDA, and that, consequently, its July 13, 2010, assignment of the trust deed to BAC was also invalid. Defendant further argued that there was no evidence that Edgewater, the lender and true beneficiary under the trust deed, had ever assigned its interest to BAC. Thus, defendant contended that there were "missing assignments" of the trust deed and that the ensuing sale-which was conducted by ReconTrust, the "successor trustee" appointed by BAC-was unlawful.

         The trial court ruled in favor of plaintiff, explaining that "the MERS issue, even though it's a compelling one, doesn't control what happened in this case and I do find that *** [plaintiff] has proven [its] case." The trial court then ...


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