Wilson v. HSBC Mortgage Servs., Inc.

Plaintiffs granted a mortgage on their property in Massachusetts to Ameriquest Mortgage Company, which assigned its interest in the mortgage to Mortgage Electronic Registration System, Inc. (MERS). MERS later purported to assign Plaintiffs’ interest to HSBC Mortgage Services, Inc. (HSBC). HSBC subsequently began foreclosure proceedings on Plaintiffs’ property. Plaintiffs filed an eight-count complaint against HSBC, claiming the assignment was void, and therefore, HSBC never acquired the mortgage to their property and had no right to initiate foreclosure proceedings. The district court dismissed Plaintiffs’ complaint for failure to state a claim, concluding that Plaintiffs did not have standing to challenge the assignment because they were not a party to the assignment, nor were they third-party beneficiaries of the assignment. The First Circuit Court of Appeals affirmed, holding (1) under Massachusetts law, homeowners in Plaintiffs’ position have standing to challenge a prior assignment of their mortgage on the grounds that the assignment was void, but because Plaintiffs did not set forth a colorable claim that the mortgage assignment in question was void, Plaintiffs lacked standing to raise certain claims; and (2) Plaintiffs failed to state a claim for promissory estoppel with respect to a loan modification. View "Wilson v. HSBC Mortgage Servs., Inc." on Justia Law