Foley v. Wells Fargo Bank, N.A
In this case, Foley sued Wells Fargo Bank in connection with the 2009 amendment to the Truth-in Lending Act (TILA). The TILA amendment requires a transferee or assignee of a mortgage loan to send a new, specific notice to the borrower, and was a part of President Obama’s 2009 Helping Families Save Their Homes Act.
On January 22, 2007, the borrower executed a promissory note and mortgage. American Brokers was the original lender, and Mortgage Electronic Registration Systems, Inc. (MERS) was shown as mortgagee on the mortgage. On February 7, 2007, American Brokers transferred the beneficial ownership of the note to the defendant, Wells Fargo, through a special endorsement. On March 13, 2007, Wells sold the note and mortgage to Freddie Mac, which was reflected by an endorsement to the note in blank, pursuant to Freddie Mac’s document procedures handbook. In addition, the sale of the loan from Wells to Freddie Mac was evidenced by business entries into Wells’ system showing that as of March 20, 2007, Freddie Mac was the investor for this loan.
Wells remained the servicer and the custodian of the note. The note remained in Wells Fargo’s possession in Wells’ secured vault pursuant to Freddie Mac’s document custody manual, and MERS remained mortgagee under the mortgage. In July 2010, the borrower defaulted on the loan and Wells hired a Freddie Mac approved attorney to file the foreclosure action in the name of Wells Fargo pursuant to Freddie Mac’s guidelines. On October 7, 2010, MERS, through a designated signing officer, executed and delivered a mortgage assignment to Wells Fargo. This mortgage assignment stated that the mortgage and the debt were being transferred from MERS to Wells Fargo. The foreclosure firm sent two letters to the borrower. The first was a notice required under the FDCPA, stating that 11the plaintiff, Wells Fargo Bank, N.A. is the creditor to whom the debt is owed by those individuals who are obligated under the promissory note and mortgage.” The second letter identified Wells Fargo Bank, N.A. as a creditor and Wells Fargo Home Mortgage as a servicer. The court acknowledged that the foreclosure firm’s letters were misrepresentations, but the law firm’s misrepresentations did not necessarily prove that Wells Fargo was the owner of the loan when the letters were sent, nor that a change in ownership of the loan had actually occurred.
In April 2011, Wells Fargo filed a foreclosure complaint in Broward County. The borrower subsequently filed the instant case alleging that Wells Fargo violated the Truth-in-Lending Act by failing to send a notice of transfer as defined by 15 USC § 1641(g)(l) within 30 days of October 7, 2010 (the date of the mortgage assignment assigning the mortgage out of MERS into Wells Fargo). This provision of TILA requires a lender to send a notice to a borrower within 30 days after /Ia mortgage loan is sold or otherwise transferred or assigned to a third party.” The obligation requires the new owner or assignee to send the notice and it must contain, among other items, the name of the new owner of the loan as well as its contact information.
The court concluded that since Wells Fargo had not owned the loan since March 2007, it could not have violated this provision of TILA which came into effect in May 2009. The court acknowledged that interest in the mortgage was conveyed to Wells Fargo by the October 7, 2010 assignment from MERS into Wells, but this assignment was insufficient to trigger the notice requirements, even though the mortgage assignment stated that it was assigning both the mortgage and the note. The court also rejected the borrower’s claim that Wells Fargo was liable under TILA because the mort gage assignment made it the “apparent owner.” The court held that there was no reference whatsoever in the TILA amendment about apparent ownership,” and that the language of the statute refers only to the “owner or assignee of the debt.” For these reasons, the court dismissed the borrower’s complaint.