Md.,2013.
Deutsche Bank Nat. Trust Co. v. Brock
430 Md. 714, 63 A.3d 40, 80 UCC Rep.Serv.2d 232
No. 55, Sept. Term 2012.
March 22, 2013.
Background: Borrower brought action against trustee of trust containing securitized deed of trust, against servicing
agent for deed of trust, and against entities that had been appointed to bring foreclosure proceedings, seeking declar-
Reversed and remanded with instructions.
West Headnotes
[1] Mortgages 266 211
266 Mortgages
266V Assignment of Mortgage or Debt
266k234 Transfer of Debt or Obligation Secured
266k235 k. In general. Most Cited Cases
“Securitization” of mortgages starts when a mortgage originator sells a mortgage and its note to a buyer, who is
typically a subsidiary of an investment bank; the investment bank bundles together the multitude of mortgages it
purchased into a “special purpose vehicle,” usually in the form of a trust, and sells the income rights to other inves-
tors.
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
A deed of trust securing a negotiable promissory note cannot be transferred like a mortgage; rather, the corre-
sponding note may be transferred, and carries with it the security provided by the deed of trust, and thus, once the
note is transferred, the right to enforce the deed of trust follows.
Gary C. Tepper, (Ballard Spahr LLP, Washington, D.C.; Robert A. Scott of Ballard Spahr LLP, Baltimore, MD), on
brief, for Petitioner.
John Hautman, Sterling, VA, (John H. Harman, Rockville, MD), on brief, for Respondent.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA, McDONALD, JJ.
ages and declaratory and injunctive relief, against the Substitute Trustees, Deutsche Bank National Trust Company
(as Trustee for the Certificate Holders of ISAC 2006–5 MTG Pass–Through Certificates) (“Deutsche Bank”), and
BAC Home Loans Servicing LP (“BAC”) (now known as Bank of America, N.A.), for alleged defects in the fore-
closure process and the authority of the named Defendants to foreclose on her property. Deutsche Bank and BAC
(referred to collectively as “Petitioners” FN1) filed a motion for summary judgment in Brock’s action, which motion
the reasons explained below, we determine that BAC is entitled to enforce the Note. Therefore, we reverse the
judgment of the Court of Special Appeals.
FN1. Although the Substitute Trustees were named parties to the action in the Circuit Court and the Court
of Special Appeals, they did not file a petition for certiorari or a brief with this Court. Therefore, they are
not parties to the appeal.
[1][2][3] Although the loan originated with Amerifund Mortgage, it was sold and securitized thereafter. As we
explained in Anderson v. Burson,
[s]ecuritization starts when a mortgage originator sells a mortgage and its note to a buyer, who is typically a sub-
sidiary of an investment bank. The investment bank bundles together the multitude of mortgages it purchased into
a “special purpose vehicle,” usually in the form of a trust, and sells the income rights to other investors. A pooling
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
allonge are not before this Court, we assume, without deciding, that the indorsements are valid.
FN5. The record does not indicate definitively the chronological trail of the loan—specifically, when or to
whom Amerifund Mortgage sold the loan, or when or what entity securitized the loan into the Trust. Ac-
cording to an affidavit by Lindsay Weiss, a litigation specialist for BAC, the Trust was formed “through the
transfer of various mortgage loans to the Trust by IMPAC,” which included the Brock loan. Although Peti-
pendent contractors, but shall not thereby be released from any of its responsibilities as hereinafter set
forth. The authority of the Master Servicer, in its capacity as master servicer, and any Sub–Servicer act-
ing on its behalf, shall include, without limitation, the power to (i) consult with and advise any Sub–
Servicer regarding administration of a related Mortgage Loan; (ii) approve any recommendation by a
Sub–Servicer to foreclose on a related Mortgage Loan; (iii) supervise the filing and collection of insur-
Subject to Section 3.16, the Trustee shall execute, at the written request of the Master Servicer, and fur-
nish to the Master Servicer and any Sub–Servicer such documents as are necessary or appropriate to ena-
ble the Master Servicer or any Sub–Servicer to carry out their servicing and administrative duties here-
under, and the Trustee hereby grants to the Master Servicer a power of attorney to carry out such duties.
Due to personal financial difficulties, Brock fell behind on her loan payments. After she became delinquent,
3 December 2009, which is not included in the record. The Deed of Appointment was signed allegedly by
Darlene Buzzard as “Attorney in Fact” on behalf of BAC, acting as “Servicing Agent” for Deutsche Bank.
BAC does not dispute that it appointed the Substitute Trustees.
On 16 February 2010, Brock filed a Complaint for Injunctive Relief, Breach of Fiduciary Duty, and Fraud in a
separate action in the Circuit Court for Montgomery County, naming as defendants Deutsche Bank, BAC, and the
Substitute Trustees (referred to collectively as “Defendants”). Brock contended that: (1) Deutsche Bank and BAC
lacked authority to appoint the Substitute Trustees; (2) the Substitute Trustees breached their fiduciary duty to Brock
by attempting allegedly to foreclose unlawfully on the property and failing to investigate the authority of Deutsche
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
A deed of trust securing a negotiable promissory note cannot be transferred like a mortgage; rather, the corre-
sponding note may be transferred, and carries with it the security provided by the deed of trust, and thus, once the
note is transferred, the right to enforce the deed of trust follows.
Gary C. Tepper, (Ballard Spahr LLP, Washington, D.C.; Robert A. Scott of Ballard Spahr LLP, Baltimore, MD), on
brief, for Petitioner.
John Hautman, Sterling, VA, (John H. Harman, Rockville, MD), on brief, for Respondent.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA, McDONALD, JJ.
ages and declaratory and injunctive relief, against the Substitute Trustees, Deutsche Bank National Trust Company
(as Trustee for the Certificate Holders of ISAC 2006–5 MTG Pass–Through Certificates) (“Deutsche Bank”), and
BAC Home Loans Servicing LP (“BAC”) (now known as Bank of America, N.A.), for alleged defects in the fore-
closure process and the authority of the named Defendants to foreclose on her property. Deutsche Bank and BAC
(referred to collectively as “Petitioners” FN1) filed a motion for summary judgment in Brock’s action, which motion
the reasons explained below, we determine that BAC is entitled to enforce the Note. Therefore, we reverse the
judgment of the Court of Special Appeals.
FN1. Although the Substitute Trustees were named parties to the action in the Circuit Court and the Court
of Special Appeals, they did not file a petition for certiorari or a brief with this Court. Therefore, they are
not parties to the appeal.
[1][2][3] Although the loan originated with Amerifund Mortgage, it was sold and securitized thereafter. As we
explained in Anderson v. Burson,
[s]ecuritization starts when a mortgage originator sells a mortgage and its note to a buyer, who is typically a sub-
sidiary of an investment bank. The investment bank bundles together the multitude of mortgages it purchased into
a “special purpose vehicle,” usually in the form of a trust, and sells the income rights to other investors. A pooling
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
allonge are not before this Court, we assume, without deciding, that the indorsements are valid.
FN5. The record does not indicate definitively the chronological trail of the loan—specifically, when or to
whom Amerifund Mortgage sold the loan, or when or what entity securitized the loan into the Trust. Ac-
cording to an affidavit by Lindsay Weiss, a litigation specialist for BAC, the Trust was formed “through the
transfer of various mortgage loans to the Trust by IMPAC,” which included the Brock loan. Although Peti-
pendent contractors, but shall not thereby be released from any of its responsibilities as hereinafter set
forth. The authority of the Master Servicer, in its capacity as master servicer, and any Sub–Servicer act-
ing on its behalf, shall include, without limitation, the power to (i) consult with and advise any Sub–
Servicer regarding administration of a related Mortgage Loan; (ii) approve any recommendation by a
Sub–Servicer to foreclose on a related Mortgage Loan; (iii) supervise the filing and collection of insur-
Subject to Section 3.16, the Trustee shall execute, at the written request of the Master Servicer, and fur-
nish to the Master Servicer and any Sub–Servicer such documents as are necessary or appropriate to ena-
ble the Master Servicer or any Sub–Servicer to carry out their servicing and administrative duties here-
under, and the Trustee hereby grants to the Master Servicer a power of attorney to carry out such duties.
Due to personal financial difficulties, Brock fell behind on her loan payments. After she became delinquent,
3 December 2009, which is not included in the record. The Deed of Appointment was signed allegedly by
Darlene Buzzard as “Attorney in Fact” on behalf of BAC, acting as “Servicing Agent” for Deutsche Bank.
BAC does not dispute that it appointed the Substitute Trustees.
On 16 February 2010, Brock filed a Complaint for Injunctive Relief, Breach of Fiduciary Duty, and Fraud in a
separate action in the Circuit Court for Montgomery County, naming as defendants Deutsche Bank, BAC, and the
Substitute Trustees (referred to collectively as “Defendants”). Brock contended that: (1) Deutsche Bank and BAC
lacked authority to appoint the Substitute Trustees; (2) the Substitute Trustees breached their fiduciary duty to Brock
by attempting allegedly to foreclose unlawfully on the property and failing to investigate the authority of Deutsche