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Decided: June 6, 2014

The Fourth Circuit affirmed the district court’s dismissal of a quiet title action.

The Anands obtained a $500,000 mortgage on their home secured by a Deed of Trust (Deed), which provided that (1) ownership of the home would be transferred to a trust, and (2) the trust had the authority to foreclose on the home if the Anands failed to repay the loan according to the terms of the promissory note.  Deutsche Bank National Trust Company (Deutsche Bank) held the rights under the Note and Deed of Trust.  Ocwen Loan Service, LLC (Ocwen) serviced the loan.  After the Anands defaulted on their loan, they brought a quiet title action under Maryland law seeking (1) a declaration that Deutsche Bank and Ocwen (collectively, Appellees) no longer held an interest in their home; (2) an order requiring the Appellees to release their liens; and (3) an order precluding Appellees from foreclosing on the Anands’ home.  The Anands averred that both Appellees had insurance that compensated them in an amount equivalent to what the Anands owed, thus the payments triggered the release provision in the Anands’ Deed of Trust.

With respect to the Anands’ quiet title action, the Court reasoned that the Anands’ reliance on the provision within the Deed that provided “[u]pon payment of all sums secured by this Security Instrument, Lender or Trustee, shall release this Security instrument and mark the Note ‘paid’ and return the Note to Borrower” failed to give “meaning and effect to every part of the contract.”  Instead, the release provision was only triggered when the borrowers, the Anands, paid the amount secured by the Note.  Thus, the Court emphasized that because the Anands indisputably do not own legal title to their home, a quiet title action is inapplicable to their circumstances.

Full Opinion

Amanda K. Reasoner