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Weeks v. Bank of America, N.A.

Court of Appeals of Texas, Second District, Fort Worth

January 30, 2014






This is an appeal from a summary judgment for appellee Bank of America, N.A.[2] in a suit to recover amounts due on a real property note and for foreclosure of the deed of trust securing the note. In one issue that contains several subissues, appellants Brooke A. Weeks and Candi Weeks contend that the trial court erred by granting the summary judgment. We affirm.

Background Facts

In 2004, Brooke purchased real property in Wise County and received a warranty deed, which included a vendor's lien in favor of GreenPoint Mortgage Funding, Inc., from whom he had received a loan to purchase the property. Brooke executed a note payable to GreenPoint, and Brooke and Candi jointly executed a deed of trust naming GreenPoint as the lender and designating Mortgage Electronic Registration Systems, Inc. (MERS) as GreenPoint's nominee and the beneficiary. The deed of trust was recorded in Wise County.

Appellants admit they stopped making payments on the note in 2008 and have not made any payments since then. In 2008 and 2009, they recorded several documents in the Wise County property records purporting to discharge MERS as a beneficiary under the deed of trust, including a quitclaim deed, a special warranty deed, a "Release of Trust Deed, " and two UCC financing statements. Appellants concede that these documents were ineffective.[3]

In September 2010, MERS filed a document in the Wise County property records stating that it had assigned the note and deed of trust to BAC as of July 23, 2010. The document, which was signed by MERS's assistant secretary, Stephen C. Porter, states, "[F]or value received, Holder of the Note and Deed of Trust does hereby evidence and memorialize its transfer and assignment of the Note and Deed of Trust to Assignee on the date of assignment indicated above."

A month later, BAC sued appellants seeking (1) a declaratory judgment that the note and deed of trust created a valid, unreleased lien on the property, (2) a declaratory judgment expunging all documents "published" by appellants that "putatively [a]ffect, encumber or cloud" its interest in the property, and (3) a nonjudicial foreclosure, or in the alternative, a judicial foreclosure.

In September 2012, appellee filed a traditional motion for summary judgment. In the motion, appellee contended that it was the holder of the note, that it had been assigned the deed of trust, and that appellants had engaged in a "scheme" to eliminate its lien against the property by recording false documents. Appellee attached to its motion an affidavit from Jodi Zook, an assistant vice president with Bank of America. Zook averred that Bank of America had merged with BAC in 2011 and was therefore the lawful holder of the note and the beneficiary of the deed of trust. A copy of the certificate of merger filed with the Texas Secretary of State is attached to the motion. Zook also averred that appellants had not made any payments on the loan since August 1, 2008 and that as of February 17, 2012, they owed $427, 874.86 on the note.

Appellants filed a pro se response to appellee's motion, in which they argued that appellee did not have standing to enforce the note and deed of trust because it had not shown it was a holder in due course. They also contended that as a result of GreenPoint's securitizing the loan the note and deed of trust had been split and could no longer be enforced. Appellants further argued that appellee had not produced an original, "wet ink" note, that the blank endorsement on the note is invalid, that MERS is not a valid agent of GreenPoint and could not validly assign the note and deed of trust, and that the only way appellee could prove a proper chain of title is to produce GreenPoint's pooling and security agreement by which it initially securitized the debt.

Appellants attached an affidavit from Joseph Esquivel, who averred that he is "experienced in Securitization Analysis, " that he researches "the Corporate/Trust Documents which are officially filed with the Securities and Exchange Commission, " and that he uses licensed software to "see each Note that is held by [a] 'named Trust-Entity' . . . and . . . its current status in real time." He also stated that his experience is based on "many hours of study[, ] research[, ] and formal training." Esquivel averred that GreenPoint had sold the "intangible payment stream" from the loan as part of a securitized pool soon after it was executed, that this transfer "stripped" the note and deed of trust from the intangible payment stream and from each other rendering them unenforceable together, that the note was not properly endorsed to the purchaser of the securitized loan and thus could not have been validly assigned to appellee by

MERS, and that the note and deed of trust are now a nullity and cannot be enforced against appellants.

The trial court granted appellee's motion for summary judgment. The judgment includes a declaration that appellee has "a valid and subsisting lien" against the property and additional declarations purging and expunging the Release of Trust deed, quitclaim deed, financing statements, and "any other instrument purporting to cloud title to the Property now filed or in the future" in the "Official Records of Wise County." The judgment also ordered that appellee could enforce the deed of ...

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