United States District Court, S.D. Texas, Houston Division
CHRISTIANA TRUST, A DIVISION OF WILMINGTON SAVINGS FUND SOCIETY, FSB, NOT IN ITS INDIVIDUAL CAPACITY BUT AS TRUSTEE OF ARLP TRUST 5, Plaintiff,
EDWARD A. BUSH, GARY ODOMS AND THE UNKNOWN HEIRS AT LAW OF CHERYL A. BUSH, DECEASED, Defendants.
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge.
Christiana Trust seeks a declaratory judgment that it may
foreclose on a property. It sued Edward Bush and Gary Odoms,
as well as any unknown heirs of one of the property's
original purchasers. After a court-appointed attorney ad
litem determined that there were no unknown heirs, the
Christiana Trust moved for summary judgment, seeking an order
permitting it to foreclose on the property. Neither Mr. Bush
nor Mr. Odoms responded. The court grants the motion, for the
reasons explained below.
exchange for a loan, Cheryl and Edward Bush executed a $64,
000 promissory note in favor of the Bank of America. (Docket
Entry No. 35-1 at 8). The note was secured by their property
at 7715 Whidbey Island Drive, Houston, Texas 77086. The
Bushes also executed a Homestead Lien Contract and Deed of
Trust. (Id. at 12). The Christiana Trust is the
current owner of the note and is the mortgagee of the
security interest in the property. (Id. at 22). The
note required the Bushes to make regular payments; failure to
make scheduled payments was a default. (Id. at 8).
The lien agreement provided that, in the event of a default,
the lienholder could accelerate the entire debt after proper
notice. (Id. at 15).
Bushes stopped making payments on the loan in May 2009.
(Id. at 4). In March 2014, the Christiana
Trust's mortgage servicer sent the Bushes a notice of
default and intent to accelerate. (Id. at 26). The
Bushes did not attempt to cure the default. (Id. at
4). The Christiana Trust's mortgage servicer sent a
notice of acceleration in May 2015. (Id. at 41).
November 2016, Edward Bush sent the Christiana Trust a Notice
of Request to Cure that purported to identify five defects in
the loan process and demanded that the Christiana Trust
rectify them. (Id. at 53). Specifically, Edward Bush
• the loan closed on the same day that the Bushes
received an itemized disclosure of the fees and costs
involved in closing instead of one or more business days
after receipt of such a disclosure;
• the Bushes did not receive a copy of the final loan
• the fair market value of the property identified in
the loan agreements was not based on a legally sufficient
appraisal of the property;
• the Bushes did not receive notice of their right to
rescind the agreement within three days; and
• the parties to the agreement did not execute the
required acknowledgment of the fair market value of the
property as of the date of closing;
violation of Texas law.
Christiana Trust responded to the letter within 60 days.
(Id. at 4, 49). In response to the first
complaint-failure to provide disclosures a business day
before the loan closed-the Trust stated that it could not
prove that the disclosures were provided timely and therefore
offered to cure the defect under Article XVI, §
50(a)(6)(Q)(x)(f) of the Texas Constitution. That
“catch-all” provision allows a lender to cure an
otherwise incurable mortgage defect by paying $1, 000 and
offering to refinance or modify the loan, on its original
terms but with compliant origination procedures, at no cost
to the buyer. E.g., Guthrie v. Bank of N.Y.
Mellon, No. 6:12-CV-290-WSS, 2013 WL 12108605, at *2
(W.D. Tex. June 27, 2013). The Christiana Trust argued that
all of the other alleged defects were meritless. As to the
second objection-failure to provide a copy of the final loan
documents-the Trust provided a copy of all relevant loan
documents, including a form that the Bushes signed stating
that they had received copies of the relevant documents.
(Id. at 70). As to the third objection, about the
alleged absence of a legally sufficient appraisal, the
Christiana Trust provided a copy of an appraisal status
report outlining the steps taken in the appraisal process.
(Id. at 85). The Trust responded to the fourth
objection to the notice of right to cancel by providing the
Bushes' signed acknowledgments of their right to cancel
the transaction. (Id. at 62-63). The Trust similarly
responded to the fifth objection to the required agreement as
to fair market value by providing the Bushes' signed
acknowledgments of the fair market value of the house.
(Id. at 66). Mr. Bush did not respond to the
Trust's letter. (Id. at 5).
Christiana Trust filed this lawsuit seeking a declaratory
judgment permitting it to foreclose on the property. Mr. Bush
filed an answer, but Mr. Odom did not. Neither Mr. Bush nor
Mr. Odom ...