Real Estate – Foreclosure – ‘Quiet Title’ Claim – Amendment

A borrower who sues under the Fair Debt Collection Practices Act and to quiet title in his home, which has been foreclosed upon, should not be allowed to file an amended complaint, recommends a magistrate judge for the Alexandria U.S. District Court.

Plaintiff’s count I of his amended complaint is virtually identical to count I of his initial complaint, with the exception of certain deleted parties and issues. Plaintiff attempts to substantiate his amendment with an alleged new legal theory that securitization of the underlying note as a mortgage backed security renders the deed of appointment void, and thus, the note unenforceable. In actuality, plaintiff’s legal theory is quite similar to his original complaint, where he questioned OneWest’s standing to enforce the note because of legitimacy of ownership over the note. In dismissing the original complaint, the court found this theory to be erroneous and expressly ruled that plaintiff’s legal theory contradicts Virginia’s well-established status as a non-judicial foreclosure state. Count I also proves to be futile because this court already has ruled that declaratory judgments are inappropriate when a foreclosure already has occurred. In this case, as in Horvath v. Bank of N.Y. N.A., [VLW 010-3-058], plaintiff’s home has already been foreclosed upon, and thus, seeking a declaratory judgment as to defendants’ title and interest in the property is inapposite to the underlying purpose of declaratory relief.

Likewise, plaintiff’s amended count for breach of fiduciary duty does not meet the Iqbal/Twombly requirements.

Plaintiff’s claim to “remove cloud on title” essentially recasts his earlier “quiet title” argument. His obligation under the note did not vanish simply because his original lender sold and assigned the note to other entities.

Finally, plaintiff has failed to state a claim for violation of the FDCPA. Creditors, mortgagors and mortgage servicing companies are not debt collectors and are statutorily exempt from liability under the FDCPA. Also, plaintiff’s FDCPA count is based on an unfounded accusation that OneWest did not acquire a valid right, title or interest in the deed, or the note. Similar to other counts, plaintiff makes blanket statements without including sufficient facts as a basis.

Upperman v. Deutsche Bank Nat’l Trust Co. (Hilton, J.) No. 1:10cv00149, Aug. 13, 2010; USDC at Alexandria, Va. VLW 010-3-489, 13 pp.