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Lundy v. Selene Finance, LP

United States District Court, N.D. California

June 20, 2017

JOHN F. LUNDY, Plaintiff,
SELENE FINANCE, LP, et al., Defendants.


          JON S. TIGAR United States District Judge

         The Court does not reach the merits of the motion because it concludes that Plaintiff is not the real party in interest and lacks standing to bring this case. If Plaintiff's wife, Nancy Lundy, does not “ratify, join, or be substituted into the action” within 10 days, the Court will dismiss the case.


         The Court must first resolve Defendants' pending request for judicial notice. ECF No. 118. Except for the Purchase and Assumption Agreement, ECF No. 118 at 31, the documents in question were publicly recorded in Marin County. These public records are properly subject to judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001) (“[U]nder Fed.R.Evid. 201, a court may take judicial notice of matters of public record.”) (internal quotations and citation omitted). The Purchase and Assumption Agreement, though not recorded, is also a public record and has been judicially noticed several times in this district. Eng v. Dimon, No. 11-3173, 2012 U.S. Dist. LEXIS 1206942012 (N.D. Cal. Aug. 24, 2012). The Court grants Defendants' request.


         On December 21, 2005, Plaintiff John Lundy obtained a mortgage loan secured by a Deed of Trust (“DOT”) from Defendant Washington Mutual Bank, FA (“WAMU”) in the amount of $1, 134, 000.00 (“Mortgage”), in order to purchase a single family home in San Rafael, California. ECF No. 130-2 at 6-7. The DOT was recorded in Marin County on December 30, 2005. Id. The DOT identifies WAMU as the lender and loan servicer, and conveys title and power of sale to California Reconveyance Corporation (“CRC”) as the trustee. Id. It also lists a loan number of 3060169236 on the upper right-hand corner. Id.

         Lundy claims that, on or before March 29, 2007, WAMU sold the Mortgage to RESI Finance Limited Partnership 2007-B Trust (“RESI 2007-B Trust”). ECF No. 130-3 ¶ 17. Lawrence Asuncion, Plaintiff's subject matter expert on the secondary mortgage market involving securitization structure and transaction, and . . . Chief Forensic Securitization Audit and Mortgage Fraud Analyst for Certified Securitization Analysis, ” located Plaintiff's loan in the search engine ABSNet. Id. Asuncion describes ABSNet as a database maintained by Lewtan Technologies, a Moody's Analytic Company, that is “utilized by financial analysts and institutional investors to monitor and analyze real-time performance of a portfolio of asset and mortgage-backed instruments.” ECF No. 130-3 ¶ 16. Using ABSNet, Asuncion identified a loan with the same loan amount, loan number, and zip code as Plaintiff's WAMU loan. Id. ¶ 17; ECF No. 130-2 at 63-64. Asuncion summarized his findings as follows:

My audit therefore verified with complete accuracy that Plaintiff's mortgage loan was, in fact, sold and securitized to the RESIF 2007-B Trust, a private placement mortgage securitization trust. Wells Fargo Bank, N.A. serves as the fiduciary owner of the mortgage loans in the trust fund as the “trustee” of the RESIF 2007-B Trust for the benefit of its certificateholders (investors).

Id. ¶ 18.

         Defendant JPMorgan Chase Bank, National Association (“Chase”) then acquired assets of the defunct WAMU on September 25, 2008 though a Purchase and Assumption Agreement (“PAA”). ECF No. 118 at 32. Plaintiff received monthly statements from Chase and discussed modification and foreclosure prevention options with Chase representatives. ECF No. 116 at 269-70.

         As successor in interest to WAMU, Chase recorded on November 4, 2010 an Assignment of Deed of Trust dated November 3, 2010 (“Assignment 1”) in Marin County, transferring the DOT to Defendant Bank of America, National Association (“BANA”). ECF No. 118 at 29. On the same date Chase recorded Assignment 1, CRC recorded in Marin County a Notice of Default and Election to Sell (“NOD 1”). ECF No. 130-2 at 39. On January 29, 2014, Chase, as attorney-in-fact for BANA, recorded a Substitution of Trustee dated January 16, 2014 (“SOT 1”) in Marin County, under which ALAW substituted CRC as trustee of the DOT. ECF No. 118 at 77. On March 11, 2015, BANA recorded in Marin County an Assignment of Deed of Trust dated February 5, 2015 (“Assignment 2”), transferring all beneficial interests in the DOT to Wilmington Savings Fund Society, FSB, doing Business as Christiana Trust, not in its individual capacity, but solely as trustee for BCAT 2014-12TT (“Wilmington”). ECF No. 118 at 82. On July 10, 2015, Selene Finance LP (“Selene”), as servicer and attorney-in-fact for Wilmington, recorded a Substitution of Trustee dated July 2, 2015 (“SOT 2”) in Marin County. ECF No. 118 at 85. Under SOT 2, MTC Financial Inc. dba Trustee Corps (“MTC”) substituted ALAW as trustee under the DOT. Id. On August 14, 2015, MTC recorded a Notice of Default dated August 13, 2015 (“NOD 2”) with the Marin County Recorder's Office. Id. at 87.

         On June 7, 2016, a notice of trustee's sale was recorded on the property. Id. at 95. The property was sold on August 4, 2016 to Wilmington, and a deed upon sale was recorded on August 10, 2016. Id. at 98.

         The gist of Lundy's argument is that Chase had no interest in the DOT to assign to BANA or anyone else in 2010 because WAMU had transferred all beneficial interests in the DOT to RESI before Chase acquired any assets from WAMU. Therefore, Assignment 1 and all documents stemming therefrom are fatally defective, null, and void, and Defendants did not have standing to initiate foreclosure proceedings. ECF No. 130 at 8. Plaintiff claims he was damaged by the loss of his real property, “damage to his creditworthiness and moneys paid to the wrong defendant.” Id. at 15.

         Also relevant is the fact that, on August 8, 2014, Plaintiff transferred title of the property to his wife, Nancy A.M. Lundy as her “sole and separate ...

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