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Cochran v. Carrington Mortgage Services, LLC

Superior Court of Massachusetts, Hampden

October 3, 2017


          Filed October 3, 2017


          Mark D Mason, Justice

         The plaintiff, Susan Cochran, seeks declaratory and injunctive relief against the defendants, Carrington Mortgage Services, LLC (" CMS"), and Wells Fargo Bank, N.A, as Trustee for Carrington Mortgage Loan Trust Series 2006-NC4 Asset Backed Pass Through Certificates (" Wells Fargo"), alleging violations of G. L. c. 244, § 35B (Count I) and G. L. c. 244, § 35A (Count II), breach of contract (Count III), and violations of G. L. c. 244, § 14 (Counts IV and V) in connection with an intended, but as of yet uncompleted, mortgage foreclosure.

         Particularly, Ms. Cochran alleges that the defendants had no authority to foreclose under G. L. c. 244, § 14, on the basis that defendant Wells Fargo's receipt of the mortgage by assignment was invalid due to the assignor's prior bankruptcy proceedings. She further alleges that the defendants failed to recite proper chain of title in their published notice of sale and that they failed to provide proper statutory notice and notice required by the original mortgage agreement. Both defendants now move for summary judgment.

         For the reasons set forth below, the defendants' motion for summary judgment is DENIED.


         I. Undisputed Facts

         The undisputed facts are summarized as follows. On June 22, 2006, New Century Mortgage Corporation (" NCMC") loaned $169, 800 to Ms. Cochran's husband, Adam Cochran, individually, secured by a mortgage from the Cochran's encumbering their home located at 33 Athens Street, East Longmeadow, Massachusetts (the " property"). In a series of transactions not involving the Cochrans, set forth below, the mortgage was transferred to the defendants, or so defendants argue.

         NCMC was a mortgage loan originating company that regularly engaged in securitization transactions transferring mortgage loans from the originator to the trustee of a mortgage pool.[2] On September 28, 2006, Carrington Securities, LP (" CSLP") sold a collection of mortgages to Stanwich Asset Acceptance Corporation (" Stanwich") under a Mortgage Loan Purchase Agreement (the " purchase agreement"). The purchase agreement named an affiliated entity[3] as the " Responsible Party" for the mortgages and NCMC as the " Servicer." A pooling agreement with a closing date of September 28, 2006 anticipated that Stanwich would serve as the " Depositor" and transfer mortgage loans to trustee Wells Fargo. Under the pooling agreement, NCMC retained servicing rights for the included mortgage loans.

         On April 2, 2007, NCMC's parent company, New Century Financial Corporation, filed for Chapter 11 bankruptcy. In May of 2007, NCMC sold its interests in its servicing rights to CMS in an agreement approved by the United States Bankruptcy Court for the District of Delaware. On June 18, 2007, NCMC granted a Limited Power of Attorney to CMS, including the power to assign both deeds of trust and mortgages. In July 2008, the bankruptcy court confirmed a Chapter 11 plan creating the New Century Liquidating Trust (" liquidating trust") and ordered the parent company to transfer its assets into the Trust as of the Effective Date, August 1, 2008.

         The Cochrans were separated as of 2010, and later divorced in November 2012. At some point in time, they stopped paying their mortgage loan.[4] On February 4, 2011, CMS sent the Cochrans a notice of default. On October 2011, NCMC recorded an assignment of their mortgage to Wells Fargo, signed by CMS as attorney in fact for the liquidating trust. In April 2013, Wells Fargo initiated foreclosure proceedings on the property. Ms. Cochran brought this suit for declaratory and injunctive relief to enjoin foreclosure in the Western Division Housing Court in May 2013. The Housing Court transferred this matter to the Hampden Superior Court on jurisdictional grounds in May 2014.

         II. Disputed Facts

         The parties dispute several factual issues related to the transactions described above. Defendants assert that Ms. Cochran's mortgage transferred to Stanwich through the purchase agreement, then to Wells Fargo through the pooling agreement. Ms. Cochran contends that her mortgage did not transfer to Stanwich or to Wells Fargo. In particular, Ms. Cochran asserts that the record does not detail how CSLP came to be in possession of the mortgages it purportedly transferred in the purchase agreement. It is likewise not clear in the record how New Century Capital Corporation came to play a role in the purchase agreement. Additionally, the parties dispute the ...

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