Martins v. BAC Home Loans Servicing, L.P.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013)
- Court
- United States Court of Appeals for the Fifth Circuit
- Decided
- 2013-06-26
- Docket
- 12-20559
- Cited by later opinions
- 217
What happened
Mr. Martins refinanced his Texas home, later fell behind, and the servicer foreclosed. He argued the servicer could not foreclose without holding the original note, that he never got notice of the sale, and that the servicer had orally agreed to modify his loan.
What the court decided
The Fifth Circuit rejected the "show-me-the-note" and "split-the-note" theories under Texas law: a mortgage servicer acting for a properly assigned mortgagee may foreclose without possessing the note. An oral promise to modify a loan over $50,000 is unenforceable under the statute of frauds.
In the court's words
“The party to foreclose need not possess the note itself.”
Why it may matter to you
It tells you which arguments Texas courts will not accept, so you can spend your limited time on ones that can work — and why every modification promise must be in writing.
Why it might not apply
It does not excuse a servicer from Texas notice rules or from showing a real chain of assignments. It binds federal courts in Texas; Texas state courts treat it as persuasive, though many agree with it.
Most useful when
- You plan to argue the company foreclosing has to show you the original note
- A servicer promised you a loan modification only by phone
How to cite it
The full citation for the first time you mention it, a short form for later, and a sample sentence you can adapt.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013)Short formMartins, 722 F.3d 249Draft — check it with free legal aid before you file or say it in court.
In Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013), the court held that a mortgage servicer acting for a properly assigned mortgagee may foreclose in Texas without possessing the original note, and an oral promise to modify a large loan is not enforceable. Here, [say in one sentence what happened in your case]
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Related cases
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Milton v. U.S. Bank National Ass'n
508 F. App'x 326 · Decided 2013
Mr. Milton applied for a HAMP modification. Servicer staff told him different things — that the sale was stopped, or that it had happened. His home was sold.
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Ogden v. Gibraltar Savings Ass'n
640 S.W.2d 232 · Decided 1982
Mr. Ogden owned a house in Corpus Christi. After he fell behind, the savings association posted a trustee's sale and sold the house. He sued for wrongful foreclosure and lost in the lower courts.
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Yvanova v. New Century Mortgage Corp.
62 Cal. 4th 919 · Decided 2016
After her home was sold, Tsvetana Yvanova sued for wrongful foreclosure, alleging the assignment to the foreclosing trust was void. Lower courts said she had no standing to challenge it.
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