United States District Court, D. Rhode Island
NANCY A. BOYNTON and PATRICIA BEEKES, Plaintiffs,
FEDERAL HOUSING FINANCE AGENCY, FEDERAL NATIONAL MORTGAGE ASSOCIATION, and SANTANDER BANK N.A., Defendant.
MEMORANDUM AND ORDER
J. McConnell, Jr. United States District Judge.
case presents the issue of whether a mortgagee must comply
with the notice conditions in Paragraph 22 of the mortgage
before it files suit seeking a judicial foreclosure. The
simple answer to this question is, yes.
A. Boynton and Patricia Beekes executed a promissory note in
favor of Sovereign Bank for $165, 000 on July 18, 2007. A
mortgage on the property secured repayment of the note.
Sovereign transferred and assigned its right, title, and
interest in the note and mortgage to Federal National
Mortgage Association ("Fannie Mae") by an
assignment recorded in the land evidence records for the town
of North Providence, Rhode Island.
Ms. Boynton and Ms. Beekes failed to make monthly principal
and interest payments as required under the terms of the
22 of the mortgage contains notice provisions, and reads, in
pertinent part, as follows:
Acceleration; Remedies. Lender shall give notice to Borrower
prior to acceleration following Borrower's
breach of any covenant or agreement in this Security
Instrument... The notice shall specify-' (a) the
default; (b) the action required to cure the default, '
(c) a date, not less than 30 days from the date the notice is
given to Borrower, by which the default must be cured; and
(d) that failure to cure the default on or before the date
specified in the notice may result in acceleration of the
sums secured by this Security Instrument and sale of the
Property. The notice shall further inform Borrower of the
right to reinstate alter acceleration and the right to bring
a court action to assert the non-existence of a default or
any other defense of Borrower to acceleration and sale.
If the default is not cured on or before the date specified
in the notice, Lender at its option may require immediate
payment in full of all sums secured by this Security
Instrument without further demand and may invoke the
STATUTORY POWER OF SALE and any other remedies permitted by
Applicable Law. Lender shall be entitled to collect all
expenses incurred in pursuing the remedies provided in this
Section 22, including, but not limited to, reasonable
attorneys' fees and costs of title evidence.
the default, on October 8, 2013, a law firm acting for the
mortgagee, sent written notice to Ms. Boynton and Ms. Beekes
of the default. A non-judicial foreclosure then took place.
Fannie Mae purchased the property at foreclosure auction and
recorded a foreclosure deed.
filed a complaint for declaratory judgment, injunctive
relief, and damages against Federal Housing Finance Agency,
Fannie Mae, and Santander Bank, N.A (f/k/a/ Sovereign Bank).
Three months after Plaintiffs filed their complaint, Fannie
Mae filed an assented to Motion to Set Aside the Foreclosure
and to Rescind Foreclosure Deed (EOF No. 11), which this
Court granted. ECF No. 13. The Court later dismissed
Plaintiffs' complaint against Defendants as moot because
the parties assented to the revocation of the non-judicial
Mae then filed a counterclaim for judicial foreclosure
against Plaintiffs pursuant to R.I. Gen. Laws § 34-27-1.
ECF No. 15. Santander, on behalf of Fannie Mae, then issued a
second Notice of Default to Plaintiffs. Both sides filed
motions for Summary Judgment on the counter-claim. Arguing
that the second notice was proper, Defendants seek a judicial
foreclosure under Rhode Island law through an order from this
Court, instead of non-judicial means. ECF No. 32. Countering
that the notice was untimely in violation of Paragraph 22 of
the mortgage, Plaintiffs seek to dismiss the counterclaim for
judicial foreclosure. ECF No. 33.
Court may grant summary judgment only if it determines that
the moving party shows that there is "no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(a);
AGA Fishing Group Ltd. v. Brown & Brown, Inc.,
533 F.3d 20, 23 (1st Cir. 2008).
Court has ruled, as have many other courts, that mortgagees
must comply with Paragraph 22 of the mortgage, i.e. they are
required to give the mortgagor the notice that they agreed to
give. Martins v. Fed. Hous. Fin. Agency, 214
F.Supp.3d 163, 169 (D.R.I. 2016) ("Simply put, if a
mortgagee agrees to give a certain notice before a
foreclosure, it does not matter whether it ...