http://caselaw.lp.findlaw.com/data2/californiastatecases/D057005.PDF

A February 18, 2011 Fourth Appellate District decision upheld a San Diego trial court's decision to throw out a lawsuit alleging that Mortgage Electronic Registration Systems, Inc. ("MERS") lacked the right to foreclose under California's non-judicial foreclosure statute.  The decision, Gomes v. Countrywide Home Loans, Inc., Recon Trust et al.  can be viewed at http://caselaw.lp.findlaw.com/data2/californiastatecases/D057005.PDF. 

This decision affects situations where no assignment of the deed of trust has been filed and the foreclosure is brought in the name of MERS.  Lenders have backed off this process since 2006 and usually file an assignment and foreclose in the name of a mortgage backed security trust, not MERS. This decision may result in Robosigners changing their business practice filing more foreclosures in the name of MERS.  As pled, the lawsuit had some flaws.  To attempt to state a claim as in Ohlendorf, Gomes would have to plead that the specific party who initiated the foreclosure process was not the proper party to do so because assignments of the deed of trust were improperly backdated.  To attempt to state a claim as in Ohlendorf, Gomes would have to plead that the specific party who initiated the foreclosure process was not the proper party to do so because assignments of the deed of trust were improperly backdated. (Ohlendorf, supra, 2010 U.S. Dist. Lexis 31098 at *22-23.)  To conform to the theory pled in Weingartner, of assignments. A " '[p]laintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true' " (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550, italics added), and thus a pleading made on information and belief is insufficient if it "merely assert[s] the facts so alleged without alleging such information that 'lead[s] [the plaintiff] to believe that the allegations are true.' " (Id. at p. 551, fn. 5.).  Because Gomes has conceded that he has no specific information about assignments of the Note, he would not be able to plead on information and belief, based on facts leading him to believe they were true, the theories alleged in Ohlendorf and Weingartner.

For more details on how this decision affects California homeowners in financial distress, contact the Law Office of J. Arthur Roberts.