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Denault v. Federal National Mortgage Association

Alabama Court of Civil Appeals

April 5, 2019

Thomas Denault and Carol Denault
v.
Federal National Mortgage Association and Seterus, Inc.

          Appeal from Jefferson Circuit Court (CV-14-901195)

          EDWARDS, JUDGE.

         Thomas Denault and Carol Denault have appealed from separate September 18, 2017, orders entered by the Jefferson Circuit Court ("the trial court") that (1) entered a summary judgment in favor of Federal National Mortgage Association ("FNMA") regarding its claim against the Denaults "in the nature of an action in ejectment," Ala. Code 1975, § 6-6-280(b); (2) entered a summary judgment in favor of Seterus, Inc., regarding the Denaults' third-party claims against Seterus alleging, among other things, wrongful foreclosure; and (3) entered a summary judgment in favor of Bank of America, N.A., regarding the Denaults' third-party claims against Bank of America alleging, among other things, wrongful foreclosure. While the appeal was pending, the Denaults entered into a pro tanto settlement with Bank of America, and the appeal has been dismissed with regard to the third-party claims against Bank of America.

         We dismiss the Denaults' appeal from the September 2017 orders in favor of FNMA and Seterus because a final judgment has not been entered in this case.

         Facts and Procedural History

         On February 17, 2006, Thomas Denault executed a promissory note in the principal amount of $156, 000 ("the promissory note") to America's Wholesale Lender. America's Wholesale Lender is allegedly a trade name of Countrywide Home Loans, Inc. The promissory note was to be repaid in monthly installments of $947.87, due on the first day of each month beginning on April 1, 2006, with the final payment due on March 1, 2036. The promissory note specifically states that it would be secured by a mortgage dated the same date as the promissory note.

         Also on February 17, 2006, the Denaults executed a mortgage ("the mortgage") on their home in Trussville as security for the promissory note. The mortgage was recorded in the Jefferson Probate Court, and the mortgage states that, after recording, it was to be returned to "Countrywide Home Loans, Inc." Also, the mortgage states that Mortgage Electronic Registration Systems, Inc. ("MERS"), was the mortgagee, but that MERS was acting solely as nominee for America's Wholesale Lender and its successors and assigns. The mortgage granted MERS, its successors and assigns, a power of sale in conjunction with its right to foreclose the mortgage. The mortgage also stated that the promissory note and mortgage could be sold without prior notice to the Denaults and that such a sale might result in a change in the entity servicing the Denaults' loan.

         The loan servicer for Countrywide Home Loans, Inc., eventually merged into Bank of America. It is undisputed that Bank of America, or its predecessors in interest, was the servicer of the Denaults' loan from its inception until October 1, 2012.

         The Denaults made each monthly installment payment due under the terms of the promissory note and mortgage until July 6, 2012. The Denaults did not make any monthly installment payments after July 6, 2012.[1] On July 17, 2012, MERS executed an assignment purporting to assign the mortgage "together with the note(s) and obligations therein described" to Bank of America. The assignment reflected America's Wholesale Lender as the original lender and referenced the Denaults and the original loan principal amount of $156, 000. The assignment to Bank of America was recorded in the Jefferson Probate Court.

         Effective October 1, 2012, Bank of America transferred servicing of the Denaults' loan to Seterus. The Denaults did not have any contact with Bank of America after October 1, 2012.

         On October 4, 2012, Bank of America executed an assignment purporting to assign the mortgage "together with the note(s) and obligations therein described" to FNMA. The assignment reflected America's Wholesale Lender as the original lender and referenced the Denaults and the original principal loan amount of $156, 000. The assignment further states: "Contact [FNMA] for this instrument c/o Seterus ..., which is responsible for receiving payments." The assignment to FNMA was recorded in the Jefferson Probate Court.

         On May 13, 2013, Seterus contacted Thomas Denault to discuss the status of the loan, but Seterus and Thomas Denault were unable to agree on any payment arrangement for the loan.

         On August 29, 2013, Seterus sent a letter to the Denaults that stated:

"RE: Loan number ... serviced by Seterus.
"Your loan is in default, due to the non-payment of the following amount:
"Amount Due: $15, 744.72
"Amount Due By: October 03, 2013 ('Expiration Date')
"We hereby demand that you bring your loan up-to-date ('cure this default') by payment of the amount shown above. In addition, your regular payment may become due by the Expiration Date. The delinquent amount of principal continues to accrue interest.
"....
"IF THE DEFAULT IS NOT CURED ON OR BEFORE THE EXPIRATION DATE, THE LOAN OWNER AND WE INTEND TO ENFORCE THE LOAN OWNER'S RIGHTS AND REMEDIES AND MAY PROCEED WITHOUT FURTHER NOTICE TO COMMENCE FORECLOSURE PROCEEDINGS. ADDITIONAL FEES SUCH AS FORECLOSURE COSTS AND LEGAL FEES MAY BE ADDED PURSUANT TO THE TERMS OF THE LOAN DOCUMENTS.
"....
"If you have any questions, please contact us at [telephone number omitted]. For borrowers having difficulty making their payments, we have loan specialists available Monday-Thursday 5 a.m. to 9 p.m., Friday 5 a.m. to 6 p.m., and Saturday 9 a.m. to 12 p.m. (Pacific time). Saturday hours may vary."

         According to the trial court's orders, the August 2013 letter complied with the pre-foreclosure requirements of the mortgage and informed the Denaults of the availability of assistance for borrowers who were having difficulty making their payments.

         On January 14, 2014, Seterus's counsel sent the Denaults a "Notice of Acceleration of Promissory Note and Mortgage." The January 2014 notice states, in pertinent part:

"RE: ....
"Our Client: Seterus, Inc., as servicer for [FNMA] "Loan No. ....
"YOU ARE HEREBY NOTIFIED that the terms of the Promissory Note and Mortgage for the above referenced loan dated the 17th day of February, 2006, are in default. By virtue of default in the terms of said Note and Mortgage, [FNMA] hereby accelerates to maturity the entire remaining unpaid balance of the debt, including attorney's fees, accrued interest, and other lawful charges. The amount due and payable as of the date of this letter is $160, 441.97. This payoff amount will change on a daily basis. If you wish to pay off your mortgage, please call our office at [telephone number omitted] to obtain an updated figure. Additionally, if you are interested in foreclosure alternatives, please contact your servicer, Seterus, Inc. at [telephone number omitted].
"We are at this time commencing foreclosure under the terms of the Mortgage, and enclosed is a copy of the foreclosure notice. Please note that the foreclosure sale is scheduled for February 26, 2014. For further information regarding this matter, please call [telephone number omitted]."

         Also on January 14, 2014, Seterus's counsel sent the Denaults an additional letter and a copy of the publication notice for the foreclosure sale, which was to be published on January 15, January 22, and January 29, 2014. It is undisputed that the notice was properly published on those dates. The additional letter from Seterus's counsel states, in pertinent part:

"RE: Loan Number: ....
"Your mortgage loan servicer, Seterus, Inc., has referred your loan to us for foreclosure. However, you may still have foreclosure prevention alternatives available to you.
"If you are interested in avoiding foreclosure, you should contact your servicer about your situation so that they can determine whether you qualify for temporary or long-term relief. Your servicer may have previously sent you a letter advising you of possible alternatives to foreclosure, along with the documents for you to complete and return to them to be evaluated for these alternatives. If you did not receive or no longer have the documents, ...

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