Nationstar Mortgage, LLC v. Peper

Summarized by:

  • Court: Oregon Court of Appeals
  • Area(s) of Law: Trusts and Estates
  • Date Filed: 06-02-2016
  • Case #: A157967
  • Judge(s)/Court Below: Garrett, J. for the Court; Ortega, P.J.; & Lagesen, J.

Under Brandrup v. ReconTrust Co., a mortgage or deed of trust will always be attached to the promissory note that it secures. Under Niday v. GMAC Mortgage, LLC, the original lender (or any successor) of a trust deed is the beneficiary, notwithstanding what the trust deed purports to designate.

Defendant Peper appealed a judgment of foreclosure on a loan Peper obtained in 2005 to finance the purchase of a home. The loan was secured by a promissory note and deed of trust. The deed of trust identified Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary. Peper defaulted on the loan in 2010. Through a series of transfers, Nationstar Mortgage, LLC (Nationstar) became the holder of the the promissory note. In April 2013, MERS assigned the deed of trust to Nationstar. When Nationstar brought a foreclosure action against Peper in 2013, the trial court granted summary judgement for Nationstar.

On appeal, Peper argued summary judgment was granted in error because Nationstar was not the “real party in interest,” and therefore lacked authority to foreclose on the deed of trust. The basis of Peper’s argument was that Nationstar did not have the right to foreclose on the deed of trust because MERS--not Nationstar--was the designated beneficiary in the 2005 deed of trust. In assessing Peper’s argument, the Court first noted that a mortgage or deed of trust follows the note that it secures. Brandrup v. ReconTrust Co., 353 Or 668 (2013). Thus, the holder of a promissory note has the right to seek foreclosure of the deed of trust that secures the note. Id. Second, the Court emphasized that the beneficiary in a deed of trust is the person to whom the obligation that the trust deed secures is owed--this can be either the original lender or a successor. Niday v. GMAC Mortgage, LLC, 353 Or 648 (2013). As the lawful successor to the original lender, Nationstar was the beneficiary of the deed of trust, and therefore had the right to judicial foreclosure. And, because Nationstar was the holder of the promissory note and had been assigned the deed of trust that secured the note, Nationstar had the right to seek foreclosure of Peper’s mortgage. Affirmed.

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