CASE FILE Texas Declaratory and Injunctive Relief Based on Wrongful Foreclosure, Trespass to Try Title and Quiet Title Miller et al v. Homecomings Financial LLC et al

Analysis

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2. Standing to Challenge Assignment of Security Interest

Defendants’ final (and weakest) argument is that homeowners like plaintiffs “will not be prejudiced” if the chain of assignments from original lender to foreclosing entity were immune to debtor challenge. After all, the argument apparently goes, the Millers owe the money to somebody. In truth, the potential prejudice is both plain and severe foreclosure by the wrong entity does not discharge the homeowner’s debt, and leaves them vulnerable to another action on the same note by the true creditor. Banks are neither private attorneys general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners and take away their homes in satisfaction of some other bank’s deed of trust. MasterCard has no right to sue for debts rung up on a Visa card, and that remains true even if MasterCard has been assigned the rights of another third party like American Express. Unless and until a complete chain of transactions back to the original lender is shown, MasterCard remains a stranger to the original transaction with no claim against the debtor. And that is a fair description of this case in its present posture.

In sum, a standing issue is lurking here , but only as to the defendants, not the plaintiffs. The court concludes that under Texas law homeowners have legal standing to

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challenge the validity or effectiveness of any assignment or chain of assignments under which a party claims the right to foreclose on their property. Accordingly, plaintiffs have properly stated claims for declaratory and injunctive relief based on wrongful foreclosure, trespass to try title and quiet title.