United States District Court, E.D. Louisiana
ORDER AND REASONS
L. C. FELDMAN UNITED STATES DISTRICT JUDGE
the Court is Ocwen Loan Servicing, LLC's motion for
rehearing, pursuant to Federal Rule of Bankruptcy Procedure
8022, of this Court's Order affirming the Bankruptcy
Court's ruling that the property description in the
Original Ocwen Mortgage was insufficient to encumber Lot 47.
For the reasons that follow, the motion is DENIED.
issue in this bankruptcy appeal is whether a property
description in a conventional mortgage is sufficient to
encumber a residential lot located in a subdivision in
Slidell, Louisiana. The Court assumes familiarity with the
facts of the case as summarized in the Court's June 3,
2019 Order and Reasons.
August of 2001, Maureen Philips LeBlanc purchased adjacent
Lots 46 and 47, situated in Section 1 of Bayou Bonfouca
Estates in Slidell, Louisiana. Three years later, on May 5,
2004, LeBlanc sold Lot 46. The following year, on July 25,
2005, she executed a promissory note in favor of Quicken
Loans, Inc., secured by a mortgage in favor of Mortgage
Electronic Registration Systems, Inc. Recorded in the St. Tammany
Parish mortgage records on August 15, 2005 as Instrument No.
1512016, the “Original Ocwen Mortgage” describes
the mortgaged property as follows:
situated in the Parish of St. Tammany, State of Louisiana is
described as follows:
All that certain Lot or Parcel of Land, together with all the
buildings and improvements thereon, and all the rights,
privileges, servitudes, appurtenances and advantages
thereunto belonging or in anywise appertaining, situated in
BAYOU BONFOUCA ESTATES, SECTION 1, Slidell, Street.
[sic] Tammany Parish, to-wit: Lot
46 of said subdivision and more fully described
as follows: Said Lot 46 has a frontage of 50.00 feet on
Middlebrook Drive, with a depth on the East of 123.9 feet, a
depth on the West of 121.6 feet, with a width in the rear of
100.00 feet, more or less, which is varied by the traverse of
Bayou Bonfouca. All as will be seen by reference to plat of
Survey No. 2028 by John Sollberger, dated August 12, 1958.
Further in accordance with survey by Ivan M. Borgen, C.E.,
dated February 14th, 1978, Survey No. 14, 174, copy of which
is attached to Act No. 382991.
known as: 161 Middlebrook Dr., Slidell, LA 90458
added. LeBlanc intended to place the mortgage on Lot 47 of
Bayou Bonfouca Estates, Section 1, which bears the stated
municipal address of 161 Middlebrook Drive and the tax ID
number listed in the mortgage property description. However,
the Original Ocwen Mortgage erroneously refers to “Lot
46” and contains the metes and bounds description for
the lower-numbered lot.
after, LeBlanc executed three additional mortgages. First,
she issued a multiple indebtedness mortgage in favor of
Hibernia National Bank, which is currently assigned to Real
Time Resolutions, Inc. Recorded in the St. Tammany Parish
mortgage records on November 22, 2005, the Real Time Mortgage
references 161 Middlebrook Drive and contains the same tax ID
number as that included in the Original Ocwen Mortgage, but
it refers to “Lot 47” and contains the metes and
bounds description for the higher-number lot.
on December 13, 2005, LeBlanc executed a mortgage in favor of
the U.S. Small Business Administration, which was recorded in
the St. Tammany Parish mortgage records on January 11, 2006.
Finally, LeBlanc executed another mortgage in favor of MERS
nearly identical to the Original Ocwen Mortgage, except that
it identifies the mortgaged property as Lot 47, rather than
Lot 46, and contains the metes and bounds for Lot 47.
Although the “Corrected Ocwen Mortgage” is
ostensibly dated July 25, 2005, it was not recorded in the
St. Tammany Parish mortgage records until March 8,
on June 7, 2006, the Clerk of Court for St. Tammany Parish
cancelled the Original Ocwen Mortgage from the mortgage
records, at the request of MERS. Contrary to its
representations, MERS did not hold the promissory note
secured by the Original Ocwen Mortgage at that time, and the
note had not been satisfied.
decade later, on August 31, 2017, Maureen LeBlanc filed for
bankruptcy under Chapter 13. Contending that the Original
Ocwen Mortgage ranks as the first of three mortgages recorded
against Lot 47 in Section 1 of Bayou Bonfouca Estates, Ocwen
moved the Bankruptcy Court for an order: (1) annulling the
erroneous cancellation of the Original Ocwen Mortgage; and
(2) declaring the property description in that mortgage
sufficient to encumber Lot 47 and rank ahead of all mortgages
recorded after August 15, 2005.
conducting a trial and entertaining witness testimony, the
Bankruptcy Court issued an Order on October 30, 2018,
granting in part and denying in part Ocwen's motion. In
its ruling, the Bankruptcy Court annulled the cancellation of
the Original Ocwen Mortgage but held that the property
description in that mortgage was insufficient to encumber or
alert a third party that it affects Lot 47. Accordingly, the
Bankruptcy Judge determined that Ocwen's interest in Lot
47 dates from the recordation of the Corrected Ocwen Mortgage
on March 8, 2006, and therefore, ranks behind the Real Time
Mortgage and the SBA Mortgage.
promptly appealed that Order to this Court, contending that
the Bankruptcy Court erred in holding that the Original Ocwen
Mortgage lacked a sufficient property description to encumber
Lot 47. In the alternative, insofar as the Bankruptcy Court
was correct regarding the insufficiency of the Original Ocwen
Mortgage's property description, Ocwen argued that it
erred in finding that the SBA Mortgage ranks ahead of the
Corrected Ocwen Mortgage when there is no evidence regarding
the validity or rank of the SBA Mortgage in the record.
3, 2019, this Court affirmed the Bankruptcy Court's
ruling that the property description in the Original Ocwen
Mortgage was insufficient to encumber Lot 47 but remanded the
matter for a determination on the merits as to the validity
and rank of the SBA Mortgage. ...