The United States District Court for the District of Massachusetts recently dismissed a borrower’s complaint against a lender, finding that the lender did not wrongfully foreclose on the borrower or engage in predatory lending. See Healy v. U.S. Bank, N.A. for LSF9 Master Participation Tr., 2018 WL 3733934 (D. Mass. Aug. 3, 2018). In the case, the borrower executed a loan agreement secured by a mortgage on his house in 2004. In 2013, he defaulted on the loan, and the note and mortgage were assigned to the defendant lender thereafter. After the lender sent the borrower a notice of intention to foreclose, the plaintiff brought this action alleging wrongful foreclosure and predatory lending, among other claims. After discovery, the parties cross-moved for summary judgment.
The Court granted the lender’s motion and dismissed the action. First, the Court dismissed the wrongful foreclosure count arising out of the borrower’s claim that the note and mortgage had been separated. Even if the documents were separated, they were unified before this action was commenced, which is sufficient under Massachusetts law. In that vein, the Court rejected the borrower’s claim that the assignment was invalid because there was robo-signing in the chain of title, holding that the lender had established that it had been assigned the mortgage before commencing the action and that the borrower therefore did not have standing to challenge the assignment. Second, the Court held that any predatory lending claims must be dismissed because the lender was assigned the note and mortgage and did not have any part in the original loan. Finally, the Court held that the lender did not breach any duties to the borrower by initiating the foreclosure after the borrower submitted a modification request.