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Koenig v. The Bank of New York Mellon

United States District Court, D. Minnesota

July 14, 2015

Paul Koenig, Plaintiff,
v.
The Bank of New York Mellon as Trustee for the certificate holders CWALT, Alternative Loan Trust 2006-9TI Mortgage Pass-through Certificates, Series 2006-9TI; and Mortgage Electronic Registration Systems, Inc., Defendant.

MEMORANDUM AND ORDER

PAUL A. MAGNUSON, District Judge.

This matter is before the Court on the Bank's Motion to Dismiss. For the reasons that follow, the Court grants the Motion.

BACKGROUND

As a last resort, Paul Koenig brings this pro se action against The Bank of New York Mellon and Mortgage Electronic Registration Systems, Inc. (MERS) in an attempt to save his home from foreclosure.[1]

In 2004, Koenig and his wife bought their home in Afton, Minnesota. (Goerlitz Aff. (Docket No. 9) Ex. 1.)[2] Then in 2006, they obtained a loan from Countrywide Home Loans, Inc. for $1.9 million. (Compl. (Docket No. 1, Ex. 1) ¶ 5, Ex. 3; Goerlitz Aff. Ex. 2.) As part of the loan transaction, they signed both a note promising to repay the loan and a mortgage securing the loan with the home. (Id.) Countrywide assigned the mortgage to MERS, and MERS assigned the mortgage to the Bank. (Compl. ¶¶ 6-7, Exs. 1, 3; Goerlitz Aff. Ex. 3.) Residential Credit Solutions, Inc. (RCS) serviced the loan. (Compl. ¶ 9, Ex. 3.)

In 2009, Koenig defaulted on the loan. (Id. Ex. 2.) Two years later, he filed for Chapter 7 bankruptcy and received a discharge of the debt. (Id. ¶ 8, Ex. 4.) The Bank initiated a foreclosure by advertisement (Goerlitz Aff. Ex. 4), and notified Koenig that the foreclosure sale would occur on August 7, 2014 (Compl. Ex. 3). At the foreclosure sale, the Bank bought the property. (Goerlitz Aff. Ex. 4.) Koenig and his wife appear to have lived in the home since, without making any mortgage or other payments.

Koenig then filed a pro se Complaint against the Bank and MERS, asking the Court to invalidate the foreclosure sale, direct the deletion of all accounts related to the loan from his credit reports, and award him title to the property. (Compl. ¶¶ 1-4.) In support of his requested relief, Koenig asserted seven claims:

1. "Defendant Relinquished Its Rights": MERS, which was listed as the mortgagee on the notice of the foreclosure sale, relinquished its right to foreclose on the mortgage when it assigned the mortgage to the Bank (id. ¶¶ 18-20);
2. "Fraud and Misrepresentation": MERS, though it held the mortgage on the property, did not have the authority to foreclose on the mortgage because it did not prove at the time that it held the corresponding note (id. ¶¶ 21-26);
3. "Violation of Fair Debt Collection Practices Act": RCS did not respond to Koenig's letter demanding information on the loan and disputing its validity, thereby barring RCS from reporting loan data to credit bureaus and Defendants from proceeding with the foreclosure (id. ¶¶ 27-35);
4. "Incorrect Data": Countrywide and RCS continued to collect on the loan and report it to credit bureaus after it was discharged in bankruptcy, thus causing the notice of the foreclosure sale to indicate an incorrect redemption amount (id. ¶¶ 36-39);
5. "Trespass": The process server trespassed on Koenig's property when serving him with the notice of the foreclosure sale (id. ¶¶ 40-47);
6. "Violation of Automatic Bankruptcy Stay": Countrywide and RCS continued to report the loan to credit bureaus as verified and Defendants continued to report the mortgage to credit bureaus as foreclosed, even though the debt was discharged in bankruptcy (id. ¶¶ 48-52); and
7. "Defendant Precluded Commencing from Sale": Because the Bank scheduled a foreclosure sale in 2011 against the same property and did not properly cancel that sale, and because Koenig attended the canceled sale and purportedly made a $1 bid for the property, the foreclosure sale ...

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