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7th Circuit rules against homeowners on quiet title action

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A Hamilton County couple who went into default on their home mortgage loan had the dismissal of their action to quiet title and claims of negligence and unconscionability upheld Friday by the 7th Circuit Court of Appeals.

Phillip and Deborah Jackson received a $282,500 home mortgage refinancing loan with a 30-year fixed interest rate of 5.875 percent from Countrywide Home Loans. They used a mortgage broker to apply for the loan. They made payments on the loan for several years until the loan went into default in March 2010. Foreclosure proceedings were not initiated, but the Jacksons initiated a quiet title on their property in state court. They also alleged the mortgage defendants negligently evaluated their ability to repay the loan and that the loan contract was substantively and procedurally unconscionable.

The action was moved to federal court, where Judge William T. Lawrence dismissed the Jacksons’ claims.

In Phillip Jackson and Deborah Jackson v. Bank of America Corp., et al., 12-3338, the 7th Circuit held that the Jacksons can’t move forward on their negligence claims because they can’t show that the financial institutions actually owed them a duty. Without a duty, there is no cognizable negligence claim, Judge Michael Kanne wrote.

The couple was also unable to allege facts that would support that the loan contract was substantively unconscionable or procedural unconscionable, the judges ruled.

“There is nothing in the record to indicate that the Jacksons did not understand the terms of their loan, or that the mortgage process itself was somehow irregular. The contention that the Jacksons did not understand the potential consequences of defaulting on their loan is similarly unsupported,” Kanne wrote.

And although the Jacksons’ arguments regarding the action to quiet title were novel, the judges were unconvinced that they constitute a valid quiet title action under Indiana law.

“Although there is no pending foreclosure, the Jacksons attempt to construct a quiet title action out of two legal theories that have been used with limited success in other jurisdictions to forestall immediate foreclosure (but have not yet been raised, so far as we can tell, in Indiana under these precise circumstances): (1) that the bifurcation of the mortgage and the note (in order to package the latter into larger securities) prevents any party from claiming strong enough title to foreclose, and (2) that no party could produce the original note, which should be required to properly foreclose,” he continued.

“To the extent that these theories have legs (a question very much in dispute), they might protect a debtor from foreclosure by a particular party at a particular time. … They do not, however, ‘prove that [the plaintiff] was the owner of the land in controversy.’ As such, these theories are not sufficient to support a quiet title action in Indiana.”

 

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  1. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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