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Nationstar Mortgage LLC v. Kilmer

United States District Court, D. Massachusetts

January 17, 2019

NATIONSTAR MORTGAGE LLC, d/b/a Mr. Cooper Plaintiff,
v.
KIM M. KILMER, Defendant.

          REPORT AND RECOMMENDATION REGARDING NATIONSTAR MORTGAGE LLC'S MOTION FOR DEFAULT JUDGMENT (DKT. NO. 10)

          KATHERINE A. ROBERTSON U.S. MAGISTRATE JUDGE

         I. Introduction

         Plaintiff Nationstar Mortgage LLC ("Nationstar"), doing business as Mr. Cooper, moves pursuant to Fed.R.Civ.P. 55(b)(1) for a default judgment on its complaint against Kim M. Kilmer ("Defendant") for the foreclosure and sale of the property at 31 Arthur Street, Springfield, Massachusetts ("Property") (Dkt. No. 10). Nationstar's verified complaint asserts claims against Defendant to quiet title (Count I) and for breach of contract (Count II). Nationstar asks the court: to certify that Defendant is not a beneficiary of the Servicemembers Civil Relief Act, 50 U.S.C. § 501 et seq. (Count III); to enter a conditional judgment (Count IV); to permit foreclosure by the exercise of the power of sale (Count V); to enter a deficiency judgment (Count VI); and to enter a judgment of possession in its favor if it is the successful bidder at the foreclosure sale (Count VII). Nationstar's Motion for Default Judgment was referred to the undersigned for a report and recommendation by presiding District Judge Mark G. Mastroianni (Dkt. No. 13). See 28 U.S.C. § 636(b)(1)(B). The court held a hearing on the motion on October 9, 2018. Defendant did not appear at the hearing. Having reviewed Nationstar's verified complaint, motion, and notice of supplemental authority, the court recommends granting so much of the motion as seeks to quiet title by assigning Defendant's mortgage to Nationstar and denying the remainder of the motion without prejudice.

         II. Background

         A. Factual Background[1]

         On July 22, 2008, the Property was transferred to Defendant by quitclaim deed, which was recorded in the Hampden County Registry of Deeds on that date (Dkt. No. 1 ¶ 6; Dkt. No. 1-1 at 1-2; Dkt. No. 10-2 ¶ 11(a)). Because the signature page was omitted from the deed, a "Corrective Deed," which included the signature page, was recorded in the registry of deeds on July 28, 2008 (Dkt. No. 1 ¶¶ 7, 8; Dkt. No. 1-1 at 3-5; Dkt. No. 10-2 ¶ 11(b)).[2] On July 22, 2008 Defendant executed and delivered a promissory note ("Note") to Wells Fargo Bank, N.A. ("Wells Fargo") in the amount of $109, 600 (Dkt. No. 1 ¶ 9; Dkt. No. 1-1 at 6-8; Dkt. No. 10-2 ¶ 11(c)). On that date, Wells Fargo assigned the Note to Neighborhood Housing Services of America - Just Price Solutions, LLC ("NHSA-JPS"), which assigned the Note to Neighborhood Housing Services of America ("NHSA"), which, in turn, executed the Note in blank (Dkt. No. 1 ¶¶ 10, 11, 12; Dkt. No. 1-1 at 8-10; Dkt. No. 10-2 ¶ 11(d), (e), (f)).[3] According to the complaint, the Attorney's Affidavit, and the Andrews Affidavit, the Federal National Mortgage Association ("Fannie Mae") "is the true and lawful holder/owner of the . . . Note" (Dkt. No. 1 ¶ 13; Dkt. No. 10-2 ¶ 11(g); Dkt. No. 24 at 2 ¶ 10).

         On July 22, 2008, Defendant also executed a mortgage ("Mortgage") on the Property to Wells Fargo as security for repayment of the Note (Dkt. No. 1 ¶ 14; Dkt. No. 1-1 at 11-26; Dkt. No. 10-2 ¶ 11(h)). The Mortgage was recorded in the Hampden County Registry of Deeds on July 22, 2008 (Dkt. No. 1 ¶ 14; Dkt. No. 1-1 at 11; Dkt. No. 10-2 ¶ 11(h)). Two days earlier, on July 18, 2008, Wells Fargo assigned the Mortgage to NHSA - JPS (Dkt. No. 1 ¶ 15; Dkt. No. 1-1 at 27-29; Dkt. No. 10-2 ¶ 11(h)). The spaces to fill in the "mortgagor," "recorded in book page," "date of mortgage," and "original amount of mortgage" were left blank (Dkt. No. 1 ¶ 18; Dkt. No. 1-1 at 27). The assignment of the Mortgage was recorded in the registry of deeds on the same date the Mortgage was recorded, July 22, 2008 (Dkt. No. 1 ¶ 16; Dkt. No. 1-1 at 27; Dkt. No. 10-2 ¶ 11(i)).

         On August 10, 2010, Nationstar notified Defendant that it was the servicer for the Mortgage account (Dkt. No. 1 ¶ 19; Dkt. No. 1-1 at 30). On February 1, 2011, officers of Fannie Mae executed a limited power of attorney appointing Nationstar as its attorney-in-fact "to execute, endorse, and acknowledge all documents customarily and reasonably necessary and appropriate for: . . . the completion . . . of foreclosure relating to a mortgage . . ." (Dkt. No. 24 at 27). The limited power of attorney was recorded in the Hampden County Registry of Deeds on October 17, 2013 (Book 20061, Pages 163-65) (Dkt. No. 24 at 27-29).

         According to information Nationstar obtained from the California Secretary of State and appended to its complaint, NHSA was dissolved on October 1, 2012 (Dkt. No. 1 ¶ 20; Dkt. No. 1-1 at 31; Dkt. No. 10-2 ¶ 11(k)). Nationstar states that, as Fannie Mae's agent, it "is unable to get an assignment" of the Mortgage from NHSA due to its dissolution (Dkt. No. 1 ¶ 21; Dkt. No. 10-2 ¶ 11(l)).[4]

         On September 6, 2016, Nationstar sent Defendant a notice of the "90 Day Right to Cure Your Mortgage Default," indicating Defendant's failure to make payments that were due on August 1 and September 1, 2016, and a Right to Request a Modified Mortgage Loan (Dkt. No. 1 ¶ 24; Dkt. No. 1-1 at 33-51; Dkt. No. 10-2 ¶ 11(n)). Nationstar claims that Defendant failed to cure the default by December 5, 2016, the expiration of the 90 days (Dkt. No. 1 ¶ 25). On December 29, 2016, Nationstar sent a "35 Day Notice of Right to Cure" thereby notifying Defendant that it was "the mortgage loan servicer for Nationstar Mortgage LLC" and that the Mortgage was past due for the November 1, 2016 payment (Dkt. No. 1 ¶ 26; Dkt. No. 1-1 at 52-55; Dkt. No. 10-2 ¶ 11(o)). The thirty-five days expired on February 2, 2017 (Dkt. No. 1 ¶ 27). According to Nationstar, Defendant failed to cure the default by that date (Dkt. No. 1 ¶ 28; Dkt. No. 10-2 ¶ 11(p)).

         B. Procedural History

         Nationstar filed the verified complaint on November 6, 2017 (Dkt. No. 1). On January 5, 2018, Nationstar filed proof that the summons was served at Defendant's "last and usual place of abode," 31 Arthur Street, Springfield, Massachusetts (the Property), and by first class mailing to that address (Dkt. No. 5). Because no answer or responsive pleading was filed, Nationstar requested a notice of default on April 9, 2018 (Dkt. No. 6). The clerk entered a default and mailed a copy of the notice of default to Defendant on April 11, 2018 (Dkt. Nos. 7, 8). The notice was returned as undeliverable on May 21, 2018 (Dkt. No. 12).

         On May 2, 2018, Nationstar filed the instant motion for default judgment, the supporting Attorney's Affidavit, and a proposed order (Dkt. Nos. 10, 10-2, 11). On June 22, 2018, the copy of the presiding district judge's June 14, 2018 order of referral, which had been mailed to Defendant on the date it was entered, was returned to the court as undeliverable (Dkt. No. 15). "Vacant House" was handwritten above the address on the envelope (id.).

         Defendant failed to appear at the October 9, 2018 motion hearing (Dkt. No. 18). The court instructed Nationstar's counsel to file: supplemental authority to support its request for assignment of the Mortgage to Nationstar as mortgagee; and a proposed order (id.). On October 18, 2018, counsel for Nationstar filed a Notice of Supplemental Authority in ...


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