Cervantes, et al. v. Countrywide Home Loans, Inc., et al., No. 09-17364 (9th Cir. 2011)
Annotate this CaseThis case stemmed from a putative class action challenging origination and foreclosure procedures for home loans maintained within the Mortgage Electronic Registration System (MERS). Plaintiffs appealed from the dismissal of their First Amended Complaint for failure to state a claim. The court was unpersuaded that plaintiffs' allegations were sufficient to support their claims. Although plaintiffs alleged that aspects of the MERS system were fraudulent, they could not establish that they were misinformed about the MERS system, relied on any misinformation in entering into their home loans, or were injured as a result of the misinformation. Although plaintiffs contended that they could state a claim for wrongful foreclosure, Arizona state law did not recognize this cause of action and their claim was without a basis. Plaintiffs' claim depended upon the conclusion that any home loan within the MERS system was unenforceable through a foreclosure sale, but that conclusion was unsupported by the facts and law on which they relied. Therefore, because plaintiffs failed to establish a plausible basis for relief on these and their other claims raised on appeal, the court affirmed the district court's dismissal of the complaint without leave to amend.
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