February 18, 2015
Federal National Mortgage Association & others. 
Thomas B. Vawter for the plaintiff.
Marissa I. Delinks for Federal National Mortgage Association.
Scott C. Owens for Harmon Law Offices, P.C.
[31 N.E.3d 1123] At issue is whether a judge properly dismissed the plaintiff's claims attacking the validity of a mortgage foreclosure to which Eaton v. Federal Natl. Mort. Assn., 462 Mass. 569, 969 N.E.2d 1118 (2012), does not apply. The plaintiff contends tat the foreclosure was void because the mortgage was not validly assigned to OneWest Bank FSB (OneWest), the foreclosing mortgagee. He argues that the assignment was invalid because (1) the assignor never held the underlying note, and (2) the assignment was not specifically authorized by the owner of the debt. We affirm.
The plaintiff (and another person who is not a party to this case) purchased the property at issue in April, 2005. In 2007, as part of a
refinancing of the property, the plaintiff granted a mortgage to IndyMac Bank, FSB (IndyMac), to secure a loan in the amount of $281,600. In pertinent part, the 2007 mortgage contained the following provisions.
The mortgage defines IndyMac, which is the owner of the debt, as the " Lender." The mortgage defines Mortgage Electronic Registration System, Inc. (MERS), as " a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument " (emphasis in original).
A section entitled " TRANSFER OF RIGHTS IN THE PROPERTY" provides that the mortgage secures both the repayment [31 N.E.3d 1124] of the loan and the borrower's performance of covenants and agreements to the Lender. That section continues as follows:
" Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS, with power of sale ... .
" Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument." (Emphasis supplied.)
On November 11, 2009, MERS assigned the mortgage to OneWest, which, after other events we set out in the margin, foreclosed the property under its power of sale. OneWest then assigned its successful bid to the Federal National Mortgage Association (Fannie Mae) and conveyed the property to Fannie Mae by foreclosure deed on October 21, 2011.
The plaintiff argues that the assignment from MERS to OneWest was void for two reasons. First, he contends that, despite the fact that the mortgage provides that " MERS is the mortgagee under this Security Instru-
ment" and that MERS holds " legal title to the interests granted by Borrower in this Security Instrument," MERS did not obtain the status of mortgagee because MERS never held the note. We have recently rejected this precise argument in Sullivan v. Kondaur Capital Corp., 85 Mass.App.Ct. 202, 210, 7 N.E.3d 1113 (2014), where we stated that " [n]othing in Massachusetts law requires a foreclosing mortgagee to demonstrate that prior holders of record legal interest in the mortgage also held the note at the time each assigned its interest in the mortgage to the next holder in the chain." MERS's interest as mortgagee was not " inherently invalid because it was separated from ownership of the underlying debt." Ibid.
Second, we are equally unpersuaded by the plaintiff's argument that the assignment to OneWest was void because MERS did not receive specific authorization from IndyMac (the note holder) before [31 N.E.3d 1125] executing the assignment. Under our law, " a mortgage and the underlying note can be split." Eaton v. Federal Natl. Mort. Assn., supra at 576. Although the note holder possesses an equitable right to demand and obtain an assignment of the mortgage, U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637, 652, 941 N.E.2d 40 (2011), " [a]bsent a provision in the mortgage instrument restricting transfer[,] ... a mortgagee may assign its mortgage to another party." Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 292 (1st Cir. 2013). In other words, despite IndyMac's right (as note holder) to demand and obtain an assignment of the mortgage in order to enforce its security interest and collect the debt, MERS (as mortgagee) retained the right to assign the mortgage unilaterally absent any restriction in the mortgage document. No restriction appears in the mortgage at issue here.
The motion to dismiss was properly allowed.