July 24, 2014
Georgia Court Finds that the Assignment of the Security Deed from MERS to Ocwen Permitted it to Exercise the Power of Sale Under the Security Deed Even Though Ocwen did not Hold the Note
The court in deciding Thompson v. Fed. Home Loan Mortg. Corp., 2013 U.S. Dist. (N.D. Ga., 2013) granted defendant’s motion to dismiss.
Plaintiff filed this complaint challenging the defendants’ right to foreclose on his property and alleged the following: (1) the defendants failed to provide plaintiff with statutory notice of the foreclosure sale thirty days prior to November 6, 2012, in violation of O.C.G.A. § 44-14-162.2(a); (2) the defendants violated O.C.G.A. § 44-14-162.2(a) by failing to identify Freddie Mac as the secured creditor and failing to indicate Ocwen as an agent on Freddie Mac’s behalf; and (3) Ocwen lacked the authority to institute foreclosure proceedings because it only possessed the security deed while Freddie Mac was in possession of the note.
Defendants moved to dismiss plaintiff’s complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.
In regards to the failure to record the security deed, the plaintiff further alleges that Ocwen lacked the authority to institute foreclosure proceedings because the security deed was improperly assigned and recorded in its favor. According to the plaintiff, the security deed should have been recorded in favor of Freddie Mac, the note holder and “true secured creditor.”
The court found that the assignment of the security deed from MERS to Ocwen permitted it to exercise the power of sale under the Security Deed even though Ocwen did not also hold the note. Thus the court decided that the plaintiff was unable to state a claim for wrongful foreclosure, and the defendants’ motion to dismiss was granted. The court likewise rejected the plaintiff’s remaining claims.
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