United States District Court, D. Massachusetts
GREGG C. MCALLISTER and NATALIE M. MCALLISTER, Plaintiffs,
COUNTRYWIDE HOME LOANS, INC., BANK OF AMERICA, N.A., DITECH FINANCIAL LLC f/k/a GREEN TREE SERVICING LLC, and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.
OPINION AND ORDER
A. O’Toole, Jr. United States District Judge.
se plaintiffs, Gregg C. McAllister and Natalie M.
McAllister, seek a preliminary injunction to stop an
impending foreclosure on their family home. The foreclosure
sale was initially scheduled for June 9, 2016. The Court
granted the plaintiffs’ request to temporarily enjoin
that sale to permit fuller briefing and a hearing on the
matter. Both the plaintiffs and the foreclosing entity,
Ditech Financial LLC f/k/a Green Tree Servicing LLC
(“Ditech”) participated at that hearing.
reasons discussed below, the McAllisters’ request for a
preliminary injunction is denied. Most importantly, they have
failed to show a likelihood of success on the merits of their
Factual Background 
McAllisters refinanced their home with a loan from
Countrywide Home Loans, Inc. (“Countrywide”) in
the spring of 2006. That loan is identified by a note dated
March 27, 2006, payable to Countrywide. (See Aff. of
Stewart Derrick, Ex. 1 (dkt. no. 29-1) [hereinafter Note].)
That loan was secured by a mortgage on the home, also dated
March 27, 2006, and initially with Mortgage Electronic
Registration Systems, Inc. (“MERS”) as the
mortgagee. (See Aff. of Stewart Derrick, Ex. 2 (dkt.
no. 29-2) [hereinafter Mortgage].)
mortgage has been assigned twice in the intervening years.
MERS assigned it BAC Home Loans Servicing, LP
(“BAC”) on April 21, 2011. (See Aff. of
Stewart Derrick, Ex. 3 (dkt. no. 29-3).) Bank of America,
N.A. (“BANA”), the successor in interest through
a merger to BAC, assigned the mortgage to Green Tree
Servicing LLC (“Green Tree”) on June 18, 2013.
(See Aff. of Stewart Derrick, Ex. 5 (dkt. no.
29-5).) These assignments were recorded. After two other
entities merged into Green Tree in August 2015, Green Tree
changed its registered name in Massachusetts to “Ditech
Financial LLC.” (See Aff. of Stewart Derrick,
Ex. 11 (dkt. no. 29-11).)
path of the note is less clear in the documentary record.
Ditech recorded an affidavit with the registry of deeds that
states that it is “the authorized agent of the holder
of said promissory note for purposes, inter alia, of
foreclosing said mortgage on behalf of said note
holder.” (See Aff. of Stewart Derrick, Ex. 12,
at 4 (dkt. no. 29-12).) In what appears to be a letter to the
McAllisters, the same employee who signed the above affidavit
certified that Ditech “has the right to foreclose
because it is the holder of the mortgage and the authorized
agent of the owner of the Note, which is Fannie
Mae.” (See Aff. of Stewart Derrick, Ex.
13, at 6 (dkt. no. 29-13).) Other copies of communications
between Ditech and the McAllisters suggest that Ditech is the
servicer for this loan on behalf of Fannie Mae. (See,
e.g., Aff. of Stewart Derrick, Ex. 9 (dkt. no. 29-9).)
The copies of the note in the record show it has been stamped
with a blank endorsement “without recourse” by
Countrywide. (Note, at 3.)
McAllisters describe difficulty in making their mortgage
payments following the recent economic downturn. At the time,
their servicer was Bank of America. They state that they tried
making payments on their mortgage through a forbearance
agreement, but that Bank of America terminated it.
McAllisters do not deny that they are behind on their
mortgage. A letter sent to the McAllisters in September 2014
by Ditech’s (then Green Tree’s) counsel stated
that the redemption amount, including interest and other
charges, was in excess of $335, 000 on their originally $242,
000 loan. (See Aff. of Stewart Derrick, Ex. 8, at 2
(dkt. no. 29-8).) Ditech represented at the hearing that it
continues to pay property taxes and insurance on the
February 25, 2014, Ditech (then Green Tree) sent the
McAllisters a “150 Day Right to Cure Your Mortgage
Default” letter alerting the McAllisters of the
possibility of loan acceleration and foreclosure.
(See Aff. of Stewart Derrick, Ex. 6, at 2, 5-6 (dkt.
no. 29-6).) As mentioned above, the McAllisters received a
letter in September 2014 stating that their loan was being
accelerated and notifying them of the redemption amount.
Ditech (then Green Tree) obtained a judgment from the
Massachusetts Land Court on October 21, 2014, certifying that
the McAllisters were not entitled to benefits under the
Servicemembers Civil Relief Act. (See Aff. of
Stewart Derrick, Ex. 7, at 2 (dkt. no. 29-7).)
McAllisters next received a letter from Ditech on January 27,
2015, offering a potential mortgage modification. The letter
states that the modification was being offered by Fannie Mae
and was “designed for customers, like you, who for some
reason did not meet all of the eligibility criteria for a
permanent modification under the government’s Home
Affordable Modification Program (HAMP), or were unable to
successfully make payments under a HAMP modification or
another modification.” (See Aff. of Stewart
Derrick, Ex. 9, at 2 (dkt. no. 29-9).) A follow-up letter
from Ditech on June 5, 2015, states that the McAllisters did
not receive a permanent modification for failure to make
payments under that plan. (See Aff. of Stewart
Derrick, Ex. 10, at 2 (dkt. no. 29-10).) The McAllisters
claim that this plan would have required their payment of a
substantial percentage of their average monthly income.
10, 2016, Ditech sent the McAllisters a notice of its intent
to foreclose on June 9 and of the possibility of a deficiency
following the sale. (See Aff. of Stewart Derrick,
Ex. 13, at 2-6 (dkt. no. 29-13).) The McAllisters filed their
Complaint in this Court on May 19. The foreclosure was
postponed pending the outcome of the preliminary injunction
Background Legal Principles
Massachusetts property law, a mortgage and a note may be
separated. See generally Eaton v. Fed. Nat. Mortg.
Ass’n, 969 N.E.2d 1118, 1124-26 (Mass. 2012). The
note represents the debt itself-the promise to pay. See
id. at 1124. The mortgage, by contrast, is the legal
title to the property and “serves as security
for” the obligation of the note. See id. The
mortgage holder’s interest is merely
“technical”; the ...