Cranmore v. Wells Fargo Bank, N.A. et al

Filing 88

Judge William G. Young: ORDER entered. MEMORANDUM OF DECISIONFor the foregoing reasons, this Court granted judgment forthe Defendants Wells Fargo and U.S. Bank as Trustee for Series2006-EMX9. (Sonnenberg, Elizabeth)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
WELLS FARGO BANK, N.A., d/b/a
)
AMERICAN’S SERVICING CO. a/k/a
)
BERKSHIRE HATHAWAY INC. & U.S.
)
BANK, N.A., AS TRUSTEE FOR
)
RESIDENTIAL ASSET SECURITIES CORP. )
a/k/a HOME EQUITY MORTGAGE
)
ASSET-BACKED PASS-THROUGH
)
CERTIFICATES, SERIES 2006-EMX9,
)
)
Defendants.
)
___________________________________)
DENISE D. CRANMORE,

YOUNG, D.J.

CIVIL ACTION
NO. 16-10504-WGY

October 18, 2019
MEMORANDUM OF DECISION

I.

INTRODUCTION
This matter came before this Court as a case stated, see

United Paperworkers Int’l Union, Local 14 v. International Paper
Co., 64 F.3d 28, 31 (1st Cir. 1995) (citing Equal Employment
Opportunity Comm’n v. Steamship Clerks Union 1066, 48 F.3d 594,
603 (1st Cir. 1995)), to resolve the one count remaining after
another session of the court twice denied summary judgment.

See

ECF Nos. 26 (denying summary judgment on all counts), 60
(denying summary judgment on part of count III).

The plaintiff

Denise Cranmore (“Cranmore”) contends that Wells Fargo Bank,
National Association (“Wells Fargo”) and U.S. Bank, National
Association, as Trustee for Residential Asset Securities
Corporation, Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-EMX9 (“U.S. Bank as Trustee for Series
2006-EMX9”) violated chapter 93A of Massachusetts General Laws
by initiating foreclosure proceedings on her property without
possession of both the note and the mortgage as required by
Massachusetts law.

The Defendants argue, among other things,

that Cranmore cannot prove that the holder of the mortgage did
not hold the note when it noticed foreclosure or that they met
the scienter requirement of her chapter 93A claim.
A. Stipulated Facts 1
Cranmore borrowed $331,500 from Mortgage Lenders Network
USA, Inc. (“Mortgage Lenders Network”) on June 29, 2006 to
purchase a property in Milton, Massachusetts (“the Property”).
See Stipulated Facts ¶ 1.

Cranmore’s promissory note on this

debt was secured by a mortgage on the Property and listed
Mortgage Lenders Network as the lender.

1

As is customary in
stipulated to most of the
Court’s resolution of the
Stipulated Facts, ECF No.

See id. & Ex. A,

a case stated, the parties have
relevant facts to facilitate the
central disputed issue. See
74.
[2]

Adjustable Rate Balloon Note (“Note”) 2, ECF No. 74-1. 2

The

mortgage designated Mortgage Electronic Registration Systems,
Inc. (“MERS”) as the nominee for the lender.

See Stipulated

Facts ¶ 5 & Ex. B, Mortgage 10, ECF No. 74-1.
On October 17, 2011, MERS assigned the Mortgage to U.S.
Bank, National Association, as Trustee for RASC 2006-EMX9 (“U.S.
Bank as Trustee for RASC 2006-EMX9”).

Stipulated Facts ¶ 6 &

Ex. C, Corporate Assignment Mortgage (“First Assignment”) 35,
ECF No. 74-1.

On February 17, 2015, U.S. Bank Trustee RASC

2006-EMX9 assigned the mortgage to U.S. Bank as Trustee for
Series 2006-EMX9.

Stipulated Facts ¶ 7 & Ex. D, Corporate

Assignment Mortgage (“Second Assignment”) 38, ECF No. 74-1.
Wells Fargo has been the servicer of the mortgage loan on
behalf of U.S. Bank since at least 2009. 3

See Stipulated Facts

¶ 8; Statement Material Facts Supp. Defs.’ Mot. Summ. J.

Since the document at ECF number 74-1 -- which includes
Exhibits A through U to the parties’ stipulated facts -- spans
over 93 pages, the page numbers in this opinion’s citations
reference the relevant page number out of the total of 93 pages.
2

It is not clear from the record at what point MERS
transferred loan servicing responsibilities to Wells Fargo, as
this transfer seems to have occurred prior to the mortgage’s
assignment to U.S. Bank in 2011. See First Assignment. The
parties aver, however, that “Defendant Wells Fargo acts as loan
servicer for Defendant U.S. Bank with respect to Plaintiff’s
loan” and that “[p]resently and at all relevant times prior to
commencing foreclosure, Defendant Wells Fargo or its legal
counsel has had possession of the Note.” Stipulated Facts ¶ 8
(citing Decl. Stephanie Bradford Supp. Def. Wells Fargo’s Mot.
Summ. J. ¶ 2, ECF No. 19).
3

[3]

(“Statement Facts Defs.’ First Mot. Summ. J.”), Ex. E, Special
Forbearance Plan, ECF No. 10-5.
The Note was endorsed multiple times since 2006.
Stipulated Facts ¶¶ 2-4.

See

As explicated in Judge Wolf’s

memorandum and order:
The Note contains three undated assignments: (a) from
“Mortgage Lenders Network USA” to “EMAX Financial Group,
LLC”; (b) from “EMAX Financial Group, LLC” to
“Residential Funding Company, LLC”; and (c) from
“Residential Funding Company LLC” to “U.S. Bank National
Association as Trustee.” The last assignment does not
specify the trust for which U.S. Bank acts as trustee.
Moreover, the last assignment is crossed-out in
handwriting, next to a handwritten date of January 26,
2016. Finally, the Note also contains an Allonge, which
purports to assign the note from “Residential Funding
Company, LLC” to U.S. Bank, as Trustee for Series 2006EMX9.
Mem. & Order (“Wolf Mem. & Order”) 9, ECF No. 60 (internal
citations omitted).
Cranmore defaulted on the loan in 2008.
¶ 9.

Stipulated Facts

She and Wells Fargo attempted unsuccessfully to modify

her loan between 2008 and 2016.

Id. ¶ 10.

A January 20, 2016 letter notified Cranmore that U.S. Bank
as Trustee for Series 2006-EMX9 intended to conduct a
foreclosure sale of the Property on February 19, 2016.
¶ 11 & Ex. E, Notice of Intention to Foreclose and of
Deficiency After Foreclosure of Mortgage (“Notice of
Foreclosure”) 42-44, ECF No. 74-1.

[4]

Id.

Attached to the Notice of Foreclosure was a document,
dated December 8, 2015, entitled “Certification Pursuant to
Massachusetts 209 C.M.R. 18.21A(2)(c).”

See Pl.’s Opp’n Defs.’

Mot. Summ. J. (“Opp’n Defs.’ First Mot. Summ. J.”) 5-6, ECF No.
13; Stipulated Facts, Ex. E, Certification Massachusetts 209
C.M.R. 18.21A(2)(c) (“Certification”) 51-52, ECF No. 74-1.

The

Certification -- written and signed by Deitrice Hemphill, Vice
President of Loan Documentation at Wells Fargo, “pursuant to
[her] review of the relevant business records, the records of
the county recorder where the subject property is located, the
title report, and/or information obtained from a title insurer
or agent” -- purports to document the chain of title for the
mortgage on the Property and its promissory note.

The

Certification indicates that an assignment from U.S. Bank as
Trustee for RASC 2006-EMX9 to U.S. Bank as Trustee for Series
2006-EMX9 was recorded on February 25, 2015.
¶ 8.

Certification

Further, the Certification attests that U.S. Bank as

Trustee for Series 2006-EMX9 “is the owner of the Promissory
Note [].”

Id. ¶ 4.

Indeed, Deitrice Hemphill’s signature

indicates her affiliation with “Wells Fargo Bank, N.A., DBA
America’s Servicing Company as sub servicer agent for U.S. Bank
National Association, as trustee, for residential asset
securities corporation, Home Equity Mortgage Asset-backed passthrough certificates, series 2006-EMX9.”
[5]

Certification 52.

On the date this Certification was completed, the Note
itself indicated that it had been endorsed to “U.S. Bank as
Trustee,” but did not specify a trust.

See Wolf Mem. & Order

9, 12; Note 7.
After a state court enjoined this foreclosure on February
17, 2016, see Wolf Mem. & Order 2; State Court Record 132, ECF
No. 6, no foreclosure has occurred nor is one presently
scheduled.
On September 29, 2017, Cranmore served a chapter 93A
demand letter on the Defendants, to which they responded on
October 25, 2017.
B.

Stipulated Facts ¶¶ 13-14.

Procedural History

On February 17, 2016, very soon after receiving the
January 2016 notice of foreclosure, Cranmore obtained a
preliminary injunction in state court that prevented the
Defendants from foreclosing on the Property.

See Wolf Mem. &

Order 2; Stipulated Facts ¶ 15; State Court Record 132.
In addition to seeking an injunction, Cranmore alleged that
(1) U.S. Bank as Trustee for Series 2006-EMX9 did not hold the
note at the time it initiated foreclosure proceedings and (2)
Wells Fargo failed to make a good faith attempt to consider loan
modifications.

See Pl.’s Opening Br. Trial Case Stated

(“Cranmore’s Br.”) 3-4, ECF No. 75.

[6]

Wells Fargo and U.S. Bank as Trustee for Series 2006-EMX9
removed the case to the District Court for the District of
Massachusetts on the basis of diversity jurisdiction.
Mem. & Order 2.

See Wolf

Judge Wolf denied the Defendants’ first motion

for summary judgment in September 2017, allowing Cranmore to
amend her complaint and the parties to develop the record
further.

See id.

Cranmore’s second amended complaint sought an injunction of
the foreclosure (count I), a judgment declaring that the
Defendants could not foreclose on the Property (count II), and
damages for alleged violations of chapter 93A of Massachusetts
General Laws (“Chapter 93A”).

See id.

Cranmore alleged that

U.S. Bank as Trustee for Series 2006-EMX9 did not possess the
Note at the time it initiated foreclosure proceedings and Wells
Fargo communicated in a confusing and misleading manner and
failed appropriately to consider loan modifications.

See id. at

2-3.
On March 29, 2019, Judge Wolf granted summary judgment for
the Defendants on counts I and II, ruling those claims “not ripe
for judicial determination” as they “concern[ed] a hypothetical,
future foreclosure that defendants ha[d] not yet noticed.”
at 3.

Id.

Judge Wolf also granted partial relief to the Defendants

on count III, holding that Cranmore had failed to demonstrate a
genuine dispute of material fact as to her claims regarding
[7]

Wells Fargo’s communications and loan modification efforts.

See

id. at 3-4.
The case, then consisting only of the remaining Chapter 93A
claim, was transferred to this session of the Court pursuant to
Local Rule 40.1(i) on July 5, 2019.
ECF No. 67.

Electronic Clerk’s Notes,

The parties agreed to proceed as a case stated,

Electronic Clerk’s Notes, ECF Nos. 71-72, and filed stipulated
facts, trial briefs, and responses.

See Stipulated Facts;

Cranmore’s Br.; Defs.’ Opening Br. Supp. Defs.’ Mot. J. Case
Stated (“Defs.’ Br.”), ECF No. 77; Pl.’s Resp. Defs.’ Opening
Br. Trial Case Stated (“Cranmore’s Resp.”), ECF No. 79; Defs.’
Opp’n Pl.’s Opening Br. Trial Case Stated (“Defs.’ Opp’n”), ECF
No. 80.
On September 24, this Court heard argument and then granted
judgment for the Defendants.

ECF Nos. 85-87.

This memorandum

explains that decision.
II.

ANALYSIS
A.

Standard of Review

A case stated is appropriate upon the parties’ consent
where, as here, “the basic dispute between the parties concerns
only the factual inferences that one might draw from the more
basic facts to which the parties have agreed.”

United

Paperworkers Int’l Union, 64 F.3d at 31 (citing Equal Employment
Opportunity Comm’n, 48 F.3d at 603).
[8]

When presiding over a case stated, the Court “may engage in
a certain amount of factfinding, including the drawing of
inferences.”

Id.

In this exercise, “the Court need not draw

all inferences against each moving party but, with the entire
case stated before it, may instead draw such inferences as are
reasonable to resolve the case.”

Cosme v. Salvation Army, 284

F. Supp. 2d 229, 234-35 (D. Mass. 2003) (quoting United Cos.
Lending Corp. v. Sargeant, 20 F. Supp. 2d 192, 195 (D. Mass.
1998)).
B.

Massachusetts Consumer Protection Act

Chapter 93A declares unlawful “unfair or deceptive acts or
practices in the conduct of any trade or commerce.”
Gen. Laws § 2(a).

93A Mass.

An individual injured by any such “method,

act or practice” may seek damages and equitable relief as
appropriate.

Id. § 9(1).

As Judge Wolf explained in his summary judgment decision:
To prevail on her claim, Cranmore must prove that: (a)
defendants “committed an unfair or deceptive act or
practice”; (b) “the unfair or deceptive act or practice
occurred in the conduct of any trade or commerce”; (c)
she “suffered an injury”; and (d) defendants’ “unfair or
deceptive conduct was a cause of [her] injury.”
Wolf Mem. & Order 18-19 (quoting Rafferty v. Merck & Co., 479
Mass. 141, 161 (2018)).
The parties do not dispute that -- if Wells Fargo and U.S.
Bank as Trustee for Series EMX9 did commit an unfair or

[9]

deceptive act or practice -- that act or practice occurred in
the conduct of trade or commerce, or that Cranmore suffered a
sufficient injury.

See generally Cranmore’s Br.; Defs.’ Br.;

Cranmore’s Resp.; Defs.’ Opp’n.
The central issue is thus whether Wells Fargo and U.S. Bank
as Trustee for Series 2006-EMX9 committed an unfair or deceptive
act or practice.
Any violation of chapter 18 of title 209 of the Code of
Massachusetts regulations is per se “an unfair or deceptive act
or practice” under Chapter 93A.

209 C.M.R. § 18.22(1).

Chapter

18 requires a “third party loan servicer” to comply with, among
other provisions, section 35C of Massachusetts General Laws
chapter 244.

209 C.M.R. § 18.21A(1)(c).

Section 35C, in turn,

mandates that “[a] creditor shall not cause publication of
notice of foreclosure . . . when the creditor knows or should
know that the mortgagee is neither the holder of the mortgage
note nor the authorized agent of the note holder.”
Gen. Laws § 35C(b).

244 Mass.

That section also specifies that “[a]

creditor violates this chapter if the creditor makes statements
to a state or federal court related to foreclosure or compliance
with this chapter . . . that it knows or should know are false.”
Id. § 35C(d).

The Massachusetts legislature adopted these

requirements after the Supreme Judicial Court in Eaton v.
Federal Nat’l Mortg. Ass’n held that a mortgagee must either
[10]

hold the underlying note or be the authorized agent of the note
holder to carry out a nonjudicial foreclosure.

See 462 Mass.

569, 571, 584-86 (2012).
The key issue here is whether Wells Fargo and U.S. Bank as
Trustee for Series 2006-EMX9 4 noticed a foreclosure on the
Property when they knew or should have known that U.S. Bank as
Trustee for Series 2006-EMX9, the mortgagee, did not hold the
Note, thereby violating chapter 18 of title 209 of the Code of

4

The Defendants dispute whether Cranmore may sue U.S. Bank
as Trustee for violating this provision of the Massachusetts
regulations. Defs.’ Br. 6 n.4.
Section 35C of chapter 244 of Massachusetts General Laws
applies to “a creditor,” defined as:
a person or entity that holds or controls, partially,
wholly, indirectly, directly or in a nominee capacity,
a mortgage loan securing a residential property,
including, but not limited to, an originator, holder,
investor, assignee, successor, trust, nominee holder,
Mortgage Electronic Registration System or mortgage
servicer . . . The term creditor shall also include
any servant, employee or agent of a creditor.
244 Mass. Gen. Laws § 35C(a). The requirements in section
35C thus apply to both of the defendants in this case.
Section 18.21 of title 209 of the Code of Massachusetts
regulations, for its part, however, applies only to “third
party loan servicer[s].” 209 C.M.R. § 18.21A(1). This may
indicate that while both loan servicers and other creditors
are subject to the requirements of section 35C, only
violations of such provisions by loan servicers are per se
unfair and deceptive practices under Chapter 93A.
Because this Court concludes that Cranmore has failed
to prove liability for both parties even under the
§ 18.21A(1) per se standard, it declines to consider what
is required for Chapter 93A liability for a non-loan
servicer’s violation of section 35C.
[11]

Massachusetts regulations and committing an unfair or deceptive
act under Chapter 93A.

Cranmore’s Br. 5-11; Def.’s Br. 6-13;

Cranmore’s Resp. 4-9; Defs.’ Opp’n 3-10.
C.

Burden of Proof

Each party argues that the other has the burden of proof on
the dispositive issue here.

Cranmore’s Br. 2-4; Defs.’ Br. 6-8.

The burden of proof is key to resolution of this case as both
parties argue that the other side has failed to provide evidence
supporting its theory.

Compare Cranmore’s Resp. Defs.’ Br. 10,

with Defs.’ Opp’n 2.
Cranmore points to multiple cases in the Massachusetts
Court of Appeals that have required a mortgagee to set forth
evidence to prove its compliance with the requirements of a
nonjudicial foreclosure.

See Cranmore’s Br. 5-6.

These

opinions suggest that “once the mortgagor makes a plausible
showing that the mortgagee does not hold the note and is not
acting on behalf of the note holder, the mortgagee should carry
the burden of proving that the foreclosure is valid under
Eaton.”

Khalsa v. Sovereign Bank, N.A., 88 Mass. App. Ct. 824,

829 n.7 (2016)); see also Carroll v. Bank of New York Mellon,
2017 Mass. App. Unpub. LEXIS 378, at *17-18 & n.24 (2017)
(recognizing that “the Supreme Judicial Court has yet to address
whether, at trial in an action . . . challenging the validity of
a foreclosure under Eaton, the plaintiff-mortgagor or the
[12]

defendant-mortgagee would bear the burden of proof,” but
suggesting that the “mortgagee should carry the burden of
proving that the foreclosure is valid” after the mortgagor “sets
forth a plausible claim to the contrary.”).
This standard applies when a mortgagor “challeng[es] the
validity of a nonjudicial foreclosure under Eaton.”

Id.

In

this case, however, no party contends that a valid foreclosure
took place; the issue of the foreclosure has been mooted.
Wolf Mem. & Order 3.

See

Instead, Cranmore seeks to hold the

Defendants liable for damages under Chapter 93A.

See id.

Accordingly, she bears the burden of proving that they committed
an unfair or deceptive trade practice.

See Schaffer v. Weast,

546 U.S. 49, 56-57 (2005) (recognizing the “ordinary default
rule that plaintiffs bear the risk of failing to prove their
claims”).
The Defendants cite a First Circuit case for the
proposition that a Chapter 93A claim requires more than an
allegation “that defendants foreclosed . . . in violation of
Massachusetts foreclosure law,” and indeed requires “[s]omething
more . . . to establish that the violation has an extortionate
quality that gives it the rancid flavors of unfairness and
deceptiveness.”

Defs.’ Opp’n 3 (quoting Juarez v. Select

Portfolio Servicing, Inc., 708 F.3d 269, 281 (1st Cir. 2013)).

[13]

This standard does not apply here, at least as to Wells Fargo, 5
because, as discussed above, the Massachusetts Code of
Regulations explicitly defines a violation of chapter 18 of
title 209 as per se “an unfair or deceptive act or practice”
under Chapter 93A.
D.

209 C.M.R. § 18.22(1).

Cranmore Does Not Meet her Burden of Proof

Residential Funding Company’s endorsement of the Note to
U.S. Bank as Trustee is a “special indorsement” under the
Uniform Commercial Code (“UCC”).

See Galvin v. U.S. Bank, N.A.,

852 F.3d 146, 159 (1st Cir. 2017) (citing 106 Mass. Gen. Laws
§ 3-205(a)).

Chapter 106 of section 3-110 of Massachusetts

General Laws governs such an instrument as follows:
The person to whom an instrument is initially payable is
determined by the intent of the person, whether or not
authorized, signing as, or in the name or behalf of, the
issuer of the instrument. The instrument is payable to
the person intended by the signer even if that person is
identified in the instrument by a name or other
identification that is not that of the intended person.
106 Mass. Gen. Laws § 3-110(a) (see also Galvin, 852 F.3d
at 159).

Therefore, whether U.S. Bank as Trustee for

Series 2006-EMX9 held the Note at the time the Defendants
initiated foreclosure proceedings depends on the intent of
the signer of the endorsement.

5

See id.

See supra 11 n.4.
[14]

In resolving the Defendants’ first summary judgment motion
in 2016, Judge Wolf held that there was a “genuine dispute of
material fact as to who owned the note,” concluding that “the
failure to identify the specific trust in the first endorsement
. . . raise[d] a factual issue as to which trust the note is
endorsed to.”

Wolf Mem. & Order 20-21 (quoting Summ. J. Hr’g

Tr. at 23:18-22).

He further explained that the Defendants

would prevail if discovery showed that “the original assignment
was intended to be to the Defendant in this case and that the
second endorsement was merely intended to clarify that or the
second endorsement is evidence that the original assignment was
intended to be to the Defendant in this case.”

Wolf Mem. &

Order 21 (quoting Summ. J. Hr’g Tr. at 24:6-12).
When the Defendants once again sought summary judgment in
2018, Judge Wolf noted that they did “not provide additional
evidence as to who owns the Note.”

Wolf Mem. & Order 21.

As a

result of this failure, Judge Wolf denied summary judgment and
held that “a genuine dispute of material fact remain[ed] as to
whether U.S. Bank, as Trustee for Series 2006-EMX9, held the
Note when defendants attempted to foreclose on Cranmore’s
property in February 2016.”

Id. at 24.

Although Cranmore had yet another opportunity to prove that
the Defendants did not hold the Note and knew or should have
known as much when they published a foreclosure notice on the
[15]

Property, she has failed to prove either one of these required
elements of her Chapter 93A claim.

See 209 C.M.R.

§ 18.21A(1)(c); id. § 18.22(1); 244 Mass. Gen. Laws § 35C(b)(d).
In Galvin, the First Circuit held that a claim that a
foreclosure was invalid because the mortgagee did not hold the
note failed because the plaintiffs failed to allege that the
signer of the note’s endorsement to “U.S. Bank as Trustee” did
not intend to endorse it to the bank as trustee for the specific
trust that held the mortgage.

852 F.3d at 159 (citing 106 Mass.

Gen. Laws § 3-110(a)).
A vice president of Residential Funding Company signed the
latest endorsement on the Note at the time of the foreclosure
notice.

Note 8.

Cranmore suggests that the hand-written

allonge to the Note, which is dated January 26, 2016 and
purports to endorse the Note from Residential Funding Company to
U.S. Bank as Trustee for Series 2006-EMX9, demonstrates that the
latter did not hold the Note when the Defendants published the
notice of foreclosure.
Defs.’ Br. 4-5.

Cranmore’s Br. 9-10; Cranmore’s Resp.

If the first endorsement to U.S. Bank as

Trustee before January 2016 was valid, Cranmore reasons,
Residential Funding Company would no longer have been able to
nor would they have had a need to endorse the Note to U.S. Bank
as Trustee for Series 20060-EMX9 on January 26, 2016.
[16]

Id.

Wells Fargo and U.S. Bank as Trustee for Series 2006-EMX9
contend that the allonge was added merely to specify “the
intended payee of the Original Endorsement” as Series 2006-EMX9.
Defs.’ Br. 3-4.

Thus, the Defendants argue, U.S. Bank as

Trustee for Series 2006-EMX9 already held both the Note and the
mortgage when it published the foreclosure notice.

Id. at 7.

Wells Fargo and U.S. Bank as Trustee for Series 2006-EMX9
point to the Certification, which states that U.S. Bank as
Trustee for Series 2006-EMX9 is the noteholder and which
Cranmore received at the same time as the notice of foreclosure,
as evidence that U.S. Bank as Trustee for Series 2006-EMX9 owned
the Note when the Defendants noticed foreclosure. 6

7

Defs.’ Br.

9-10.

6

Cranmore disputes the Defendants’ characterization of the
Certification as an “affidavit.” Cranmore’s Resp. 6 (citing
Defs.’ Br. 9-10).
7

Wells Fargo completed the Certification in compliance with
209 C.M.R. § 18.21A(2)(c), which provides as follows:
A third party loan servicer shall certify in writing the
basis for asserting that the foreclosing party has the
right to foreclose, including but not limited to,
certification of the chain of title and ownership of the
note and mortgage from the date of the recording of the
mortgage being foreclosed upon.
The third party loan
servicer shall provide such certification to the
borrower with the notice of foreclosure, provided
pursuant to M.G.L. c. 244, § 14 and shall also include
a copy of the note with all required endorsements.
[17]

Massachusetts courts and other sessions of the District
Court of Massachusetts have, in similar cases, found that
similar documentation can serve as sufficient proof of a note
endorsement that will meet the requirements of section 18.21A of
title 209 of the Code of Massachusetts Regulations.

In Culley

v. Bank of America, N.A., for example, the court held that a
loan servicer sufficiently met the requirements of section
18.21A when it initiated foreclosure proceedings even though the
note did not contain an explicit endorsement to the mortgagee,
Bank of America.

See Civ. A. No. 18-40099-DHH, 2019 U.S. Dist.

LEXIS 53709, *25-29 (D. Mass. 2019) (Hennessy, M.J.).

There,

the court held that the note’s endorsement in blank paired with
the certification stating that Bank of America owned the note at
the time foreclosure was noticed were “sufficient to prove
ownership and enforceability.”

Id. at *29 (citing Urbon v. J.P.

Morgan Chase Bank, N.A., No. 1:17-CV-11302-DJC, 2017 WL 6379555,
at *2 (D. Mass. Nov. 30, 2017) (recognizing that the entity that
possesses a note endorsed in blank is the entity that holds
it)). 8

8

The Defendants also suggest that U.S. Bank as Trustee for
Series 2006-EMX9 held the note at the time it published the
foreclosure notice because Wells Fargo, the servicer of the
mortgage, possessed the note. See Defs.’ Br. 10-11. This
argument does not hold water.
While it is true that a mortgage servicer may foreclose on
a property when the mortgagee lacks physical possession of the
note, see O’Neil v. Bank of N.Y. Mellon, 90 Mass. App. Ct. 1121,
[18]

While Residential Funding Company’s endorsement to U.S.
Bank as Trustee does not make eminently clear that it intended
to endorse the Note to U.S. Bank as Trustee for Series 2006-EMX9
(emphasis added), Cranmore has failed to prove that the assignor
affirmatively did not intend to endorse it to the mortgagee.
Cf. Galvin, 852 F.3d at 159.

But see Galvin v. EMC Mortg.

Corp., 50 F. Supp. 3d 70, 81 (D.N.H. 2014) (holding that
endorsement to a bank as trustee without specifying a trust gave
rise to a “genuine dispute as to the meaning of the
endorsement.”).

Moreover, as Cranmore has failed to prove that

the Defendants did not hold the Note when they noticed
foreclosure, she cannot prove that they violated section 35C(d)
when they asserted to the Court that they did.

1121 (Dec. 20, 2016) (recognizing that the holder of the
mortgage and the note could foreclose on a property when another
entity had actual possession of the note on its behalf), such an
arrangement requires that the note holder have authorized the
servicer to initiate foreclosure on its behalf. Likewise,
“[w]here the mortgage holder and note holder are not the same,
the mortgage holder can demonstrate that it was authorized to
act as the note holder’s agent” by “produc[ing] an instrument
executed by the note holder prior to the foreclosure proceedings
that expressly authorizes the mortgage holder to foreclose on
the loan” or by “produc[ing] a document from the note holder,
predating the foreclosure, generally authorizing the mortgage
holder to act in its discretion as the note holder’s agent for
the purpose of foreclosing on a series of mortgages that
included the borrower’s.” Khalsa, 44 N.E.3d at 866. The
Defendants have introduced no evidence of such a document here
so there is no indication that U.S. Bank as Trustee for Series
2006-EMX9 authorized Wells Fargo to act as its agent on the
Note.
[19]

The Defendants’ sloppy recordkeeping here -– including
employing different names for what appears to be the same trust
in different documents and the very broad and undated assignment
of the Note to “U.S. Bank as Trustee” -- have led to years of
unnecessary and expensive litigation for both parties.

As Judge

Talwani recently lamented and as applies equally here:
Much of the dispute in this case could have been avoided
if Defendants had ensured properly that its third-party
loan servicer had the correct documents needed to meet
its obligations under Massachusetts law. A third-party
loan servicer must "certify in writing the basis for
asserting that the foreclosing party has the right to
foreclose, including . . . certification of the chain of
title and ownership of the note and mortgage." 209
C.M.R. 18.21A(2). This regulation further mandates that
"the third party loan servicer shall provide such
certification to the borrower with the notice of
foreclosure, provided pursuant to M.G.L. c. 244, §
14[,] and shall also include a copy of the note with all
required endorsements." Id. (emphasis added).
. . . As this case bears out, sloppy record keeping and
the failure to double-check such copies against the
original documents prior to initiating foreclosure
proceedings may result in the use of incorrect and
outdated information. The use of such information
hampers the mortgagors' ability to be fully informed of
the foreclosure proceedings as well as the courts'
ability to efficiently resolve any related disputes.
Rather than relying on potentially obsolete copies
pulled from files of a loan servicer or other third party
and engaging in a close review of documents in
connection with a motion for a preliminary injunction,
Defendants should have reviewed these documents prior to
asserting a right to foreclose.
Whitehead v. HMC Assets, LLC, 2014 U.S. Dist. LEXIS 144369, *1617 (D. Mass. 2014) (Talwani, J.).

[20]

Nonetheless, as this case is before the Court on Cranmore’s
Chapter 93A claim, it is her burden to show not only that the
Defendants did not hold the Note when they noticed foreclosure
(which may well be the case though the matter is unclear) but
also that they knew or should have known as much.
failed to prove either element.
judgment for the Defendants.

She has

Therefore, this Court entered

ECF No. 87.

III. CONCLUSION
For the foregoing reasons, this Court granted judgment for
the Defendants Wells Fargo and U.S. Bank as Trustee for Series
2006-EMX9.

/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE

[21]