Cocroft v. HSBC Bank USA, NA et al

Filing 204

MEMORANDUM Opinion and Order written by the Honorable Matthew F. Kennelly on 2/24/2014. All claims against RM Appraisal Services, Inc. and Ray Mishal are dismissed for want of prosecution. The Court grants the remaining defendants' motion for summary judgment [docket nos. 180 and 183] and terminates as moot defendants' motion to compel the deposition of Veynelcia Cocroft [docket no. 172]. The Court directs the Clerk to enter judgment in favor of all defendants and against plaintiffs.(pjg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DAVID COCROFT and
VEYNELCIA COCROFT,

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Plaintiffs,
vs.
HSBC BANK USA, N.A., as Trustee
of the Deutsche ALT-A Mortgage
Loan Trust Series 2007-OA3,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
COUNTRYWIDE BANK, FSB,
BAC HOME LOANS SERVICING,
RM APPRAISAL SERVICES, INC.,
and RAY MISHAL,
Defendants.

No. 10 C 3408

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
David and Veynelcia Cocroft have sued HSBC Bank USA, N.A. (HSBC);
Mortgage Electronic Registration Systems, Inc. (MERS); Countrywide Bank, FSB
(Countrywide); BAC Home Loans Servicing (BACHLS), formerly known as Countrywide
Home Loans Servicing, L.P.; RM Appraisal Services, Inc.; and Ray Mishal. The lawsuit
concerns a loan that Countywide made to the Cocrofts, secured by a mortgage on their
home. Bank of America, N.A. (BANA) is the successor in interest to Countrywide.
After the Cocrofts filed their third amended complaint, BANA, BACHLS, HSBC,
and MERS moved to dismiss the claims against them. The Court granted the motion in
part and denied it in part, leaving the following claims: a Truth in Lending Act (TILA)
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claim against BANA, BACHLS, HSBC, and MERS (Count 1); a Real Estate Settlement
Procedures Act (RESPA) claim against BANA, BACHLS, HSBC, and MERS (Count 2);
a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA)
against BANA and HSBC (Count 5); a trespass claim against BANA, BACHLS, HSBC,
and MERS (Count 8); and a quiet title claim (Count 3). Cocroft v. HSBC Bank U.S.A.,
N.A., No. 10 C 3408, 2012 WL 1378645 (N.D. Ill. Apr. 20, 2012).
The Cocrofts never served RM Appraisal or Mishal with summons and did not
seek an extension of time for service. The Court dismisses the Cocrofts' claims against
those defendants (Count 4 of the third amended complaint) for want of prosecution.
BANA, BACHLS, HSBC, and MERS have now moved for summary judgment on
the remaining claims against them. The Court grants the motion for the reasons stated
below .
Background
On April 17, 2007, the Cocrofts obtained a loan from Countrywide Bank, FSB in
the amount of $386,750. The loan refinanced a mortgage on a home in Illinois that the
Cocrofts had purchased in 2006. The mortgage instrument identified MERS as the
mortgagee, "acting solely as a nominee for [Countrywide] and [its] successors and
assigns." Defs.' Ex. 35 at 2. The Cocrofts allege that their note was assigned to
Countrywide Home Loans, Inc., which then indorsed it in blank. 3rd Am. Compl., p. 8.
The note and mortgage were later pooled into a trust, pursuant to a Pooling and
Servicing Agreement (PSA) that established HSBC as trustee. The PSA established
May 1, 2007 as the cut-off date for accepting mortgage loans into the trust and May 31,
2007 as the closing date.

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The Cocrofts allege that in or about June 2009, a little over two years after they
obtained the loan, they learned that Countrywide had made misrepresentations in
connection with the loan. As a result, they tried to rescind the loan pursuant to TILA,
mailing a rescission demand to BANA (which by then had taken over for Countrywide)
and to BACHLS, which was apparently servicing the loan. Neither of those entities took
action based on the rescission demand. On September 29, 2009, HSBC's lawyers
informed the Cocrofts that HSBC would be foreclosing on the home. The Cocrofts sent
HSBC's lawyers cease and desist letters stating that the couple had rescinded the loan.
Nevertheless, on January 19, 2010, HSBC brought a foreclosure action against the
Cocrofts in Illinois state court. The Cocrofts filed this suit on June 3, 2010.
Discussion
As stated earlier, BANA, BACHLS, HSBC, and MERS have moved for summary
judgment on all of the remaining claims against them. Summary judgment is
appropriate when "the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
"Summary judgment is the put up or shut up moment in a lawsuit, when a party must
show what evidence it has that would convince a trier of fact to accept its version of the
events." Diadenko v. Folino, ___ F.3d ___, No. 12-3091, 2013 WL 6680930, at *6 (7th
Cir. Dec. 19, 2013). "We must assume the truth of the non-moving party's evidence on
summary judgment, but that duty 'does not extend to drawing inferences that are
supported by only speculation or conjecture.'" Swetlik v. Crawford, 738 F.3d 818, 829
(7th Cir. 2013) (internal quotation marks omitted).

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1.

Admissibility of Jenkins affidavit
The Court first addresses the Cocrofts' request to strike the affidavit of BANA

representative Lanisa Jenkins on the ground that at least some of her statements are
not based on her personal knowledge and contradict testimony that she provided during
an earlier deposition. But Jenkins testified under oath that her statements are based on
her knowledge as a BANA employee as well as the BANA business records attached to
her affidavit, which she says she was responsible for maintaining. As for the claim of
contradictory testimony, the Cocrofts have not identified specific inconsistencies in their
summary judgment briefs. The Court acknowledges that the party that Jenkins
identifies in her affidavit as the holder of the Cocrofts' loan is not the same party that
she named during her deposition. None of the Court's rulings, however, involve this
particular inconsistency. Because the Cocrofts have not pointed to any other
inconsistencies, the Court overrules their objection to the Jenkins affidavit.
2.

TILA claim
TILA imposes disclosure requirements in connection with consumer credit

transactions. "Congress passed [TILA] to improve information in credit transactions and
thus enhance the efficiency of credit markets, relying on meaningful disclosure of credit
terms so that the consumer will be able to compare more readily the various credit
terms available to achieve this goal." Hamm v. Ameriquest Mortg. Corp., 506 F.3d 525,
528 (7th Cir. 2007). The statute requires specified items of information to be disclosed
in specified ways. "If a lender does not disclose one such piece of information in the
specified way, leaving the borrower to make assumptions, then TILA has been violated."
Id. at 529. TILA provides for actual or statutory damages in the event of a disclosure

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violation. See 15 U.S.C. § 1640(a)(1) & (2). It also provides debtors with a right of
rescission in certain credit transactions, "a process in which the creditor terminates its
security interest and returns any payments made by the debtor in exchange for the
debtor's return of all funds or property received from the creditors (usually, the loan
proceeds)." Andrews v. Chevy Chase Bank, 545 F.3d 570, 574 (7th Cir. 2008).
The Cocrofts allege that TILA was violated in three ways in connection with the
making of the loan. They contend that the finance charges were understated, the
identity of the actual lender was withheld, and they were provided with only one copy
each of a Notice of the Right to Cancel (NORTC), a notice describing their rescission
rights, rather than the required two copies. The Cocrofts do not appear to seek
damages for these alleged violations. Rather, they rely on the disclosure violations for
their impact on the right of rescission. Under TILA, a borrower who obtains a loan
secured by a mortgage on his principal dwelling can rescind the loan for three days after
closing or the delivery of the TILA disclosures, whichever is later. 15 U.S.C. § 1635(a);
Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998). Thus in the event of an
improper disclosure or failure to provide rescission forms, the period to rescind is
effectively extended. Even in this situation, however, the right of rescission expires
three years after the date of consummation of the transaction. 15 U.S.C. § 1635(f).
The Cocrofts attempted to exercise their right to rescind in or about July 2009,
after they claim to have discovered the alleged TILA violations. They allege that the
defendants did not take the necessary steps to rescind the transaction, thus rendering
them liable for damages under TILA for failure to honor the right to rescind. See 15
U.S.C. § 1635(g). The Cocrofts also seek an order rescinding the transaction.

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The first question is whether there was a TILA violation when the loan was made,
such that the time for exercising the right to rescind was extended. The Cocrofts first
argue that the finance charge was understated in the TILA disclosures. They have not,
however, offered any admissible evidence of this. Their only support for this contention
is a "forensic report" prepared at the request of their former counsel. The report is
completely lacking an evidentiary foundation that would make it admissible. See Marr v.
Bank of Am., N.A., 662 F.3d 963, 966 (7th Cir. 2011) (party opposing summary
judgment must "point to evidence that can be put in an admissible form at trial, and that,
if believed by the fact-finder, could support judgment in his favor"). Specifically, the
Cocrofts have offered no evidence regarding whether the data relied on in the report are
accurate or how the figures in the report are calculated.
Next, the Cocrofts contend that the disclosures did not accurately identify the
lender; they seem to contend that Countrywide Bank did not fund the loan. The
evidence they offer does not support this; the fact that the loan proceeds came from an
account at a bank other than Countrywide does not mean the funds were not
Countrywide's funds. That aside, to support this allegation in their complaint the
Cocrofts cite Regulation Z, TILA's implementing regulation, but what Regulation Z
requires is disclosure of "[t]he identity of the creditor making the disclosures." 12 C.F.R.
§ 226.18(a). Countrywide Bank was the obligee on the promissory note and thus was
"the creditor making the disclosures." The disclosure was accurate.
The Cocrofts' third and final allegation of a disclosure violation at the time of
making the loan is that they were not given two copies of the NORTC, as required.
See 12 C.F.R. § 226.23(b)(1). Defendants cite the fact that at the loan closing, the

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Cocrofts signed a written acknowledgment that they had received two copies.
Defendants also rely on an affidavit of the closing agent, who does not recall the
particular transaction but says that her standard practice was to provide two copies. In
response, the Cocrofts rely on the statement and testimony of David Cocroft that he did
not receive two copies and that when, much later, he looked at his file regarding the
loan, there was only one copy of the NORTC (and, inferentially at least, no one else had
access to the file in the interim).
Under Marr, the evidence offered by the Cocrofts is enough to give rise to a
genuine factual dispute regarding this alleged disclosure violation. The
acknowledgment that the Cocrofts signed at the closing provides only a rebuttable
presumption of receipt of the requisite copies of the NORTC. See 15 U.S.C. § 1635(c).
The presumption is overcome by a plaintiff's offer of admissible evidence from which a
jury reasonably could find that he did not receive two copies, see Fed. R. Evid. 301
(effect of presumption), and Mr. Cocroft's affidavit meets that requirement. See Marr,
662 F.3d at 967-68. Marr did not directly address whether a borrower's affidavit by itself
is enough in these circumstances to create a genuine factual dispute, but the court's
reasoning strongly indicates that it does. See id. at 968 (so-called "'uncorroborated,
self-serving testimony, if based on personal knowledge or firsthand experience, may
prevent summary judgment against the non-moving party, as such testimony can be
evidence of disputed material facts'") (quoting Montgomery v. Am. Airlines, Inc., 626
F.3d 382, 389 (7th Cir. 2010)); see also Cappuccio v. Prime Capital Funding LLC, 649
F.3d 180, 190 (7th Cir. 2011).
Because a reasonable fact finder could determine that there was a TILA

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disclosure violation at the time of the closing that was not cured thereafter, the Court
takes it as a given for present purposes that the Cocrofts' right to rescind extended for
the full three years provided in 15 U.S.C. § 1635(f).
Defendants argue that the Cocrofts did not adequately or properly exercise their
right to rescind, for three reasons: they did not tender the loan proceeds at the time they
sought to rescind; they did not rescind in timely fashion because they did not file this
lawsuit within three years of the loan closing; and their rescission was ineffective
because they had no intention to, and could not as a practical matter, return the loan
proceeds.
The first of these arguments is unavailing, as the Court concluded in denying
defendants' motion to dismiss the TILA claim in the Cocrofts' third amended complaint.
See Cocroft, 2012 WL 1378645, at *3. The analysis begins and ends with the language
of the statute and the governing regulation, Regulation Z. Both make it clear that all a
debtor is required to do is send a notice of rescission, which the Cocrofts did in July
2009. Specifically, TILA says that "the obligor shall have the right to rescind the
transaction . . . by notifying the creditor, in accordance with regulations of the Bureau, of
his intention to do so." 15 U.S.C. § 1635(a). The statute clearly and unambiguously
sets forth that within twenty days after exercise of an obligor's right to rescind under
section 1635(a), the creditor "shall," within twenty days, return any property (such as a
down payment) provided by the obligor and "shall" take any action necessary to
terminate its security interest. Id. § 1635(b). It is only after the creditor does this–in the
words of TILA, "[u]pon the performance of the creditor's obligations under this section"–
that the obligor is required to "tender the property" that the creditor previously provided.

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Id. The applicable provisions of Regulation Z are worded in similar fashion. See 12
C.F.R. § 226.23(a)(2) & (d) (providing that the borrower may retain any amounts
received from the creditor until the creditor meets its obligation to return any money or
property received and take action to terminate it security interest, unless a court orders
otherwise).
The Court also reaffirms its earlier decision that an obligor need not file suit to
effectively exercise his right to rescind. (This is an issue here because the Cocrofts did
not file suit until a bit outside TILA's three year expiration period.) Again, this is a simple
matter of the text of TILA and Regulation Z. Both of these provisions, quoted above,
make it clear that to exercise the right to rescind, the obligor need only send written
notice. And as long as the obligor does this within the three year period, he has met the
requirements of the statute and regulation. It is not the appropriate role of a court to
add requirements beyond those that Congress imposed. Accord, Sherzer v. Homestar
Mortg. Servs., 707 F.3d 255, 258-67 (3d Cir. 2013); Gilbert v. Residential Funding, LLC,
678 F.3d 271, 277 (4th Cir 2012). Contra, Keiran v. Home Capital, Inc., 720 F.3d 721,
728 (8th Cir. 2013); Rosenfield v. HSBC Bank, USA, 681 F.3d 1172, 1183 (10th Cir.
2012); McOmie-Gray v. Bank of Am. Home Loans, 667 F.3d 1325, 1328 (9th Cir. 2012).
The Cocrofts' rescission claim founders, however, on the last argument made by
defendants. A rescission notice is ineffective if the obligor actually received all of the
necessary TILA disclosures. And as the Third Circuit stated in Sherzer, a TILA
rescission notice "may also be ineffective because it is fraudulent–if, for example, the
obligor does not have the intent or the ability to return the loan proceeds that he has
received from the lender." Sherzer, 707 F.3d at 265. Cf. Marr, 662 F.3d at 966

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(requirement of returning loan principal "often has the practical effect of ruling out
rescission, if the borrower has already used the money to cover urgent financial
obligations"). In their rescission notice, the Cocrofts stated that the rescission not only
canceled the security interest in the property, "but also relieve[d] the borrower of any
financial liability," and authorized them to "retain the proceeds of the transaction." Pls.'
Ex. 18 at 11. Thus they made it clear that they had no intention to return the loan
proceeds. And in any event, there is no indication that they had the ability to repay the
proceeds. The Cocrofts' last payments on the note were made by check in July and
August 2008 (covering the months of May and June 2008), and even those payments
were returned for insufficient funds. See Defs.' LR 56.1 Stat. ¶¶ 9-10. In short, the
Cocrofts' purported rescission notice was not truly an attempt to exercise the right to
rescind, but rather an attempt to keep what they had received (the loan proceeds) and,
at the same time, get back everything they had given (the security interest in the
property, and their payments). See Pls.' Ex. 18 at 10-11. Thus it was ineffective to
exercise their right to rescind.
Finally, because the Cocrofts did not effectively exercise their right to rescind,
their claim for damages based on defendants failure to honor the rescission demand
fails
For these reasons, the Court need not address defendants' remaining
arguments. They are entitled to summary judgment on the Cocrofts' TILA claim.
3.

RESPA claim
RESPA is a consumer protection statute that regulates the real estate settlement

process, including the servicing and assignment of real estate loans. Among other

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things, RESPA obligates a loan servicer to respond to a borrower's "qualified written
request" (QWR) for "information relating to the servicing of [the] loan." 12 U.S.C. §
2605(e)(1)(A); Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 680 (7th Cir. 2011). The
statute defines a QWR as:
a written correspondence . . . that—(i) includes, or otherwise enables the
servicer to identify, the name and account of the borrower; and (ii)
includes a statement of the reasons for the belief of the borrower, to the
extent applicable, that the account is in error or provides sufficient detail to
the servicer regarding other information sought by the borrower.
12 U.S.C. § 2605(e)(1)(B).
The Cocrofts assert that BANA, BACHLS, HSBC, and MERS violated RESPA by
failing to respond to a document they sent in November 2009 that was labeled "Debt
Collector Disclosure Statement," which they say was a QWR. Defs.' Ex. 25. This
document sought information regarding who was seeking to collect the debt from the
Cocrofts, the account number, the amount owed, who the original creditor was, when
the debt was transferred and the circumstances of the transfer, and so on.
Defendants argues that the Cocrofts' communication did not constitute a QWR
because it contained no questions about the servicing of the loan. RESPA obligates a
servicer to respond to a QWR only if it seeks "information relating to the servicing of the
loan." 12 U.S.C. § 2605(e)(1)(A). A reasonable trier of fact could conclude, however,
that the Cocrofts' communication contained questions about the servicing of the loan
and thus obligated the servicer to respond, for example, the questions regarding the
amount owed and the date the debt became payable.
The next question is whether the recipients of the Cocrofts' communication
responded as required by RESPA. RESPA requires a mortgage loan servicer to take

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one of three actions within sixty days of receiving a QWR: 1) correct the borrower's
account and notify the borrower in writing of any corrections, 2) review the borrower's
account and clarify in writing why the account is correct, or 3) review the borrower's
account, providing any requested information or explaining why such information is
unavailable. 12 U.S.C. § 2605 (e)(2)(A)-(C). The Cocrofts' communication did not
identify or suggest any errors in the account; it only sought information. Thus it
obligated the servicer only to provide information.
Defendants say that BACHLS sent the Cocrofts a communication dated
December 18, 2009, which was within sixty days after it received the alleged QWR,
specifically, a letter that enclosed a copy of the note, mortgage, and settlement
statement, as well as a copy of the loan payment history. See Defs.' Ex. 4 (Jenkins
Affid.) ¶ 32; Defs.' Ex. 27. The letter also stated that the loan had been referred to
foreclosure as of September 2009. Defendants have provided a copy of the FedEx
waybill showing that the letter was sent by overnight delivery to the Cocrofts on
December 21, 2009. Defendants are entitled to a rebuttable presumption of delivery.
See Godfrey v. United States, 997 F.2d 335, 338 (7th Cir. 1993) (presumption of
delivery from evidence of mailing); Gordon v. Merit Systems Protection Bd., 225 Fed.
App'x 871, 874 (Fed. Cir. 2007) (applying presumption of delivery to a letter sent via
FedEx).
The Cocrofts do not contend in their response to defendants' motion that the
letter was an insufficient response to their QWR. They argue, however, that they did
not receive it. See Pls.' Resp. to BA's Mot. for Summ. J. at 11 ("However, such alleged
responses were never provided to Plaintiff [sic]."). Their support for this argument

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consists of their sworn affidavits verifying the statement they made in their response to
defendants' Local Rule 56.1 statement to the effect that they "never received the
alleged 20 Day Letter." Pls.' Resp. to Defs.' LR 56.1 Stat. ¶ 33 & Exs. 3 & 3A
(affidavits). Because the presumption of delivery is rebuttable, the Cocrofts' sworn
statements are sufficient to create a genuine factual dispute on that point.
The Cocrofts cannot succeed on their RESPA claim, however, because they
have offered no evidence from which a reasonable finder of fact could award damages.
RESPA says that noncompliance entitles an individual to an award of actual and
statutory damages. 12 U.S.C. § 2605(f)(1). The Cocrofts do not claim any actual
damages from defendants' failure to respond to the QWR. Statutory damages under
RESPA may be awarded "in the case of a pattern or practice of noncompliance with the
requirements" of the statute. Id. § 2605(f)(1)(B). The Cocrofts have offered no
evidence of any noncompliance beyond that alleged in their individual case; in other
words, there is no evidence from which a reasonable fact finder could find a pattern or
practice of noncompliance with RESPA on the part of any defendant.1
For these reasons, defendants are entitled to summary judgment on plaintiffs'
RESPA claims.
4.

ICFA claim
To sustain a claim under ICFA, a plaintiff must prove that: 1) the defendant

committed a deceptive act or practice, 2) the defendant intended for the plaintiff to rely

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The Cocrofts do not respond to defendants' argument that they failed to show
recoverable damages other than to say, without any supporting argument, that they are
seeking only statutory damages and not actual damages. See Pls.' Mem. in Opp. to
Defs.' Bank of America (etc.) Mot. for Summ. J. at 11. This non-response amounts to a
forfeiture of the point.
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on the deception, 3) the deception happened in the course of trade or commerce, and
4) the deception proximately caused the plaintiff's injury. See Connick v. Suzuki Motor
Co., 174 Ill. 2d 482, 501, 675 N.E.2d 584, 593 (1996).
Some of the Cocrofts' claims under ICFA essentially duplicate their federal TILA
claims. Specifically, they contend that Countrywide understated the finance charge on
the loan, withheld the identity of their actual lender, and provided them only one NORTC
copy each. The current defendants, however, were not involved in making the loan.
One or more of them may be an assignee of the note, but:
[a]s the Illinois Supreme Court has held, an assignee cannot be liable
under the ICFA unless the assignee's participation in the deceptive
lending practice was active and direct, or, for the ICFA claims based on
the assignor's violations of the federal Truth in Lending Act, 15 U.S.C. §
1641(a) ("TILA"), unless the assigned documents contained TILA
violations that were apparent on the face of the disclosure statement[.]
Manufacturers & Traders Trust Co. v. Hughes, No. 99 C 5849, 2003 WL 21780956, at
*2 (N.D. Ill. Jul. 31, 2003) (citing Jackson v. S. Holland Dodge, Inc., 197 Ill. 2d 39, 49,
755 N.E.2d 462, 469-70 (2001)). The Cocrofts do not contend that the alleged TILA
violations were apparent on the face of the disclosures, nor could they do so, for none
of them are. Thus there is no basis to impose liability on the current defendants with
regard to these aspects of the Cocrofts' ICFA claim.
The Cocrofts claim several other ICFA violations as well. They contend, for
example, that Countrywide misrepresented the fair market value of the property and the
true terms of the loan to induce them to take the loan, to their detriment. The Cocrofts
do not contend, however, that that BANA had either an active or direct role in the
alleged deception. There is no basis under Illinois law for them to bypass this
requirement.
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The Cocrofts assert further that HSBC tried to deceive them regarding the
identity of the true owner of their loan, by denying its interest in the loan. They refer to a
November 2009 letter, sent by HSBC in response to a "cease and desist notice" from
the Cocrofts, in which HSBC stated that it could not locate the Cocrofts' account with
their account number, name, address, or social security number and asked for any
"information that states the account is serviced by any subsidiary of HSBC." Defs.' Ex.
26. Plaintiffs have offered no evidence that this was deceptive (HSBC may have held
the mortgage as trustee, but it was not servicing the loan), and given the lack of
evidence, no reasonable finder of fact could find in their favor on this allegation.
For these reasons, BANA and HSBC are entitled to summary judgment on
plaintiffs' ICFA claim, and the Court need address their remaining arguments
concerning that claim.
5.

Trespass claim
The Cocrofts' trespass claim arises from actions that took place in August 2008.

The property, which the Cocrofts had rented to a tenant, was vacant at the time and
was a "mess," and the Cocrofts had missed several loan payments. A vendor hired by
the loan servicer, Countrywide Home Loans Servicing (which later became BACHLS),
changed the locks and "winterized" the property. See Defs.' LR 56.1 Stat. ¶¶ 45-47. On
August 29, 2008, Mr. Cocroft tried to enter the home via the front door but could not
enter that way because the locks had been changed. He was able to get in through the
garage door. Id. ¶ 48.
Under Illinois law, "[a] trespass is an invasion of the interest in the exclusive
possession of land, as by entry upon it." In re Chicago Flood Litig., 176 Ill. 2d 179, 204,

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680 N.E.2d 265, 277 (1997) (internal quotation marks omitted). "To sustain a cause of
action for trespass to real property, a plaintiff must allege a wrongful interference with
his actual possessory rights in the property." Loftus v. Mingo, 158 Ill. App. 3d 733, 744,
511 N.E.2d 203, 210 (1987).
Defendants' argument that BACHLS did not interfere with the Cocrofts'
possessory rights is preposterous; its contractor changed the locks on the house!
Virtually any reasonable fact finder would conclude that this was an effort to keep
people out, including the Cocrofts, seeing as how they would not have had a key to the
newly-installed locks. The fact that Mr. Cocroft was nonetheless able to make his way
in does not make BACHLS's action any less an interference with the Cocrofts'
possessory rights.
No reasonable fact finder could conclude, however, that the interference was
wrongful. As defendants argue, the Cocrofts consented to this sort of entry by the
mortgagee in the mortgage instrument itself. Specifically, paragraph 9 of the mortgage,
entitled "Protection of Lender's Interest in the Property and Rights Under this Security
Instrument," stated that if the borrowers failed to perform their obligations under the
mortgage—which included making payments on the note when due—the lender was
entitled to do "whatever is reasonable or appropriate to protect [its] interest in the
Property" and rights under the mortgage, "including . . . securing and/or repairing the
Property," a term defined to "include[ ] entering the Property to make repairs, change
locks, replace or board up doors and windows," and the like. Defs.' Ex. 35 ¶ 9. This
express consent on the part of the Cocrofts is sufficient to defeat a contention that the
entry was wrongful.

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For these reasons, defendants are entitled to summary judgment on the trespass
claim.
6.

Quiet title claim
"An action to quiet title in property is an equitable proceeding in which a party

seeks title to remove a cloud on his title to the property. . . . A cloud on title is the
semblance of title, either legal or equitable, appearing in some legal form but which is,
in fact, unfounded or which it would be inequitable to enforce." Gambino v. Boulevard
Mortg. Corp., 398 Ill. App. 3d 21, 52, 922 N.E.2d 380, 410 (2009). The Cocrofts
challenge the validity of the assignment from MERS to HSBC on the ground that their
loan was transferred to the trust in violation of the PSA governing the trust. They allege
in particular that the loan was transferred after the trust's closing date, May 31, 2007
and that an entity other than the "depositor," MortgageIT Securities Corp., transferred
the loan.
Defendants contend that the Cocrofts lack standing to challenge the assignment
in the first place. The Illinois Appellate Court has stated that third parties generally lack
standing to challenge the validity of assignments, but it also acknowledged that a variety
of jurisdictions have recognized exceptions to this supposed rule. See Bank of Am.,
N.A. v. Bassman FBT, LLC, No. 2-11-0729, 2012 IL App (2d) 110729, ¶¶ 14-17, 981
N.E.2d 1, 7-9 (2012). To determine whether the Cocrofts have standing, the Court
considers whether they have met basic standing requirements, including whether they
have suffered an injury to a cognizable interest and are trying to further their own legal
rights than that of a third party. Id. at 6.
The Court finds that the Cocrofts meet both of the basic standing requirements.

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The assignment imposes a cloud on their title, and HSBC has relied on the assignment
to bring a foreclosure action against them, thereby implicating their economic interests.
And so long as the assignment remains intact, the Cocrofts are at risk of liability to
multiple parties on the same claim. In this sense, by challenging the assignment from
MERS to HSBC, the Cocrofts seek to advance their own interests.
As a result, the Court turns to the validity of the assignment from MERS to
HSBC. An HSBC representative has testified that MortgageIT Securities Corp. placed
the Cocrofts' loan into the loan's trust on May 1, 2007, which the representative terms
the closing date, but the Pooling and Servicing Agreement refers to as the cut-off date.
Defs.' Ex. 32 at 20, 70. The HSBC representative stated that she relied in part on the
mortgage loan purchase agreement and the PSA. The Court is unable to verify this
based on the record. But the only conflicting evidence that the Cocrofts have provided
is the assignment, which concerns the October 8, 2009 assignment of the loan, not its
transfer into the loan trust. See Defs.' Ex. 36. In short, the Cocrofts have not offered
evidence that would allow a reasonable finder of fact to determine that their loan was
improperly transferred into the trust. Defendants are entitled to summary judgment on
the Cocrofts' quiet title claim.
Conclusion
All claims against RM Appraisal Services, Inc. and Ray Mishal are dismissed for
want of prosecution. The Court grants the remaining defendants' motion for summary
judgment [docket nos. 180 and 183] and terminates as moot defendants' motion to
compel the deposition of Veynelcia Cocroft [docket no. 172]. The Court directs the

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Clerk to enter judgment in favor of all defendants and against plaintiffs.

MATTHEW F. KENNELLY
United States District Judge
Date: February 24, 2013

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