Texas Couple Asks Judge To Stop Non-Judicial Foreclosure; Says MERS Was Out Of Line In Attempted Note Transfer; Demands Loan, Lien Docs, PSA

In Sherman, Texas, The Southeast Texas Record reports:

• In an attempt to stop a non-judicial foreclosure on their property, Collin County residents Alan and Kelley Anderson filed a lawsuit against CitiMortgage Inc. and Mortgage Electronic Registration Systems, also known as MERS, on July 23 in Collin County District Court.(1)

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• The home owners state that they executed a loan to purchase real property located in Lucas, Texas, with lender WR Starkey Mortgage on Aug. 26, 2005. The Andersons claim the promissory note was improperly transferred by MERS to CitiMortgage on June 23 in an attempt to foreclose on their property. Defendant MERS is assigned to act only as a nominee for the lender and cannot act on its own, according to court documents.

• "CitiMortgage is attempting to assume the role of Mortgagee Servicers and Beneficiary in a deceptive and fraudulent attempt to foreclose on Plaintiffs real property," the lawsuit states.

• Causes of action filed against the defendants include deception and fraud, bifurcation of security instrument and negotiable instrument, violations of the Real Estate Settlement Procedures Act and breach of contract, violation of the Fair Debt Collection Practices Act and unjust enrichment.

• The plaintiffs are asking the court for a temporary injunction stopping the foreclosure, to require the defendants to produce the original promissory note, all lien documents and pool servicing agreements,(2) and require the defendants to remove all detrimental credit history regarding the mortgage.

Source: Lawsuit filed to stop wrongful foreclosure of property.

(1) Possibly in an attempt to shop for a friendlier litigation forum, or possibly to impose an additional cost in time and money on the homeowners, the defendants reportedly removed the case from state court to the U.S. District Court in Sherman, Texas on Aug. 6.

(2) See Max Gardner’s Top Reasons for Wanting a Pooling & Servicing Agreement for 20 reasons to ask for these documents. See also, The Alphabet Problem and the Pooling and Servicing Agreement.