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Hsbc Bank Usa, Na As Trustee For the Registered Holders of Ace v. Terry M. Jones

December 22, 2011

HSBC BANK USA, NA AS TRUSTEE FOR THE REGISTERED HOLDERS OF ACE SECURITIES CORP. HOME EQUITY LOAN TRUST, SERIES 2005-HE2, ASSET BACKED PASS-THROUGH CERTIFICATES PLAINTIFF,
v.
TERRY M. JONES, JR., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR FREMONT INVESTMENT & LOAN,
UNITED STATES OF AMERICA, INTERNAL REVENUE SERVICES, DEFENDANTS.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Before the Court are Plaintiff HSBC Bank USA, NA's ("HSBC") unopposed motion for summary judgment [14] and motion to appoint special commissioner [16]. For the reasons set forth below, the Court grants both motions.

I. Background

None of the Defendants responded to HSBC's statement of undisputed facts.

Accordingly, all facts set forth in HSBC's statement of undisputed facts are deemed admitted. N.D. Ill. L.R. 56.1(b)(3)(C); Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003) ("We have consistently held that a failure to respond by the non-movant as mandated by the local rules results in an admission.").

On December 28, 2004, Fremont Investment & Loan ("Fremont") lent Terry M. Jones $200,000 subject to a note executed in favor of Fremont. Under the terms of the note, Jones agreed to pay 6.65 percent in interest at a yearly rate; to pay taxes, insurance, and any other escrow items that might apply; and to make monthly payments on the first day of every month in the amount of $1,283.93. According to the note, the monthly payment amount was subject to change.

That same day, Fremont secured its interest in the note by entering into a mortgage with Jones, which Fremont recorded with the Cook County Recorder on January 13, 2005. The mortgagee was Mortgage Electronic Registration Systems, Inc. ("MERS"), acting as a nominee for the lender, Fremont. The mortgage stated that it secured to Fremont: "(i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note." Compl., Ex. A.

MERS later assigned the rights associated with the mortgage and the note to HSBC. According to the terms of the assignment, HSBC acquired all of Fremont's interests in Jones's property pursuant to the mortgage. The assignment was recorded on April 29, 2010.

On January 1, 2010, Jones defaulted on his mortgage obligations and has not made a payment since that time. HSBC then sued Jones, seeking a judgment of foreclosure and additional damages and remedies. HSBC also named the United States of America, Internal Revenue Service ("IRS") and MERS as Defendants. HSBC asks the Court to find that the mortgage it now holds is the first lien on the property, superior to all other liens listed in the complaint.

Although HSBC served all of the Defendants, only the IRS has answered the complaint or entered an appearance in this case. HSBC has now moved for summary judgment against all Defendants and for the appointment of a special commissioner to conduct a public foreclosure sale of the property. None of the Defendants responded to HSBC's motions.

II. Standard of Review

Summary judgment is proper if "the movant 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). In determining whether there is a genuine issue of fact, the Court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette, Ind., 359 F.3d 925, 928 (7th Cir. 2004). To avoid summary judgment, the opposing party must go beyond the pleadings and "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (internal quotation marks and citation omitted).

A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is proper against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "The mere existence of a ...


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