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Real Estate – Foreclosure – Promissory Note – Default

A homeowner who has stopped paying on the $1.2 million promissory note cannot stop a foreclosure on his home with this suit alleging violations of the Fair Debt Collection Practices Act, as well as state law claims for declaratory judgment, quiet title and negligence, says an Alexandria U.S. District Court.
Plaintiff’s now-familiar allegations challenge the authority of the various named defendants to enforce the deed securing the note executed by plaintiff. Despite admitting his inability to make payments on the $1.2 million loan he received after executing the note and agreeing to secure that debt with his residential property by executing the deed, plaintiff argues that none of the named defendants have the authority to foreclose on his home.

Plaintiff’s claims are inconsistent with Virginia law and the commonwealth’s status as a non-judicial foreclosure state. Given the court’s discussion of the transferability of promissory notes and the deeds that secure them, the court simply has no basis to award the declaratory relief sought by plaintiff, nor does plaintiff plead a plausible claim for negligence against any of the defendants.

Nor can plaintiff sue under the Fair Debt Collection Practices Act, which does not apply to creditors.

This district also recently emphasized that mortgage servicing companies and trustees exercising their fiduciary duties enjoy broad statutory exemptions from liability under the FDCPA. To the extent that plaintiff’s FDCPA claim, like his other claims, relies on the specious premise that the named defendants somehow have no right, title or interest in the deed or the note, plaintiff offers no plausible basis on which the court can agree with this premise.

Bolouri v. Bank of America N.A.
(O’Grady, J.) No. 1:10cv225, Aug. 24, 2010; USDC at Alexandria, Va. VLW 010-3-441, 12 pp.

VLW 010-3-441

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