Culik Law Prevails in Motion Against Wells Fargo For Faulty Assignment
In a recent decision in Massachusetts federal court, Culik Law successfully fended off a motion to dismiss the case filed by the bank that claimed to service and own a homeowner’s mortgage, Wells Fargo.
The basis of the lawsuit was that Wells Fargo had foreclosed illegally, and that its assignment of the mortgage was improper.
This was because, according to the terms of the trust document for the trust that claimed to own the mortgage (called a pooling and servicing agreement), the mortgage had to be assigned by a certain date, but was not. This, Culik Law argued, made the assignment void.
The type of trust the claimed to own the mortgage, called a Real Estate Mortgage Investment Conduit (REMIC), receives special tax treatment so long as all the applicable rules are complied with. One of these rules is that the mortgage must be assigned by a cut-off date in order to be part of the trust. In this case, the mortgage was not transferred by the cut-off date, but Wells Fargo nevertheless claimed to be entitled to foreclose. Culik Law argued that the assignment was invalid.
The homeowner will now be allowed to proceed with his case against Wells Fargo.