Comptroller of the Currency
Administrator of National Banks
Administrator of National Banks
Washington, DC 20219
VIA FIRST CLASS MAIL
January 14, 2005
Anthony J. Sylvester
Riker, Danzig, Scherer, Hyland & Perretti, LLP
Headquarters Plaza
One Speedwell Avenue
Morristown, NJ 07962-1981
Riker, Danzig, Scherer, Hyland & Perretti, LLP
Headquarters Plaza
One Speedwell Avenue
Morristown, NJ 07962-1981
Madeline L. Houston
Houston & Totaro
56 Broad Street, Suite 1
Bloomfield, N.J. 07003
Houston & Totaro
56 Broad Street, Suite 1
Bloomfield, N.J. 07003
Subject:
Wells Fargo Bank, Minnesota, N.A. v. Alberta Harris, et al.
Wells Fargo Bank, Minnesota, N.A. v. Alberta Harris, et al.
Docket No. ESX-L-4676-02
and
Bank One National Association v. Feinstein
Docket No. F-11450-00
Dear Mr. Sylvester and Ms. Houston:
This letter is in response to your letter dated December 13, 2004, seeking the views of the Office
of the Comptroller of the Currency (“OCC”) concerning preemption of certain state laws in
connection with claims and defenses asserted by the parties in the above-named cases. You
requested the OCC’s views at the direction of the Honorable Kenneth S. Levy, J.S.C., presiding
judge in this litigation. For the reasons stated below, based on the facts presented in the
materials provided to us, we believe that neither 12 C.F.R. § 34.4 nor the National Bank Act
preempts application of the state laws at issue here to loans simply because they were purchased
and held by national banks acting as trustees in connection with issuance of the mortgage-backed
securities involved in this case.
of the Comptroller of the Currency (“OCC”) concerning preemption of certain state laws in
connection with claims and defenses asserted by the parties in the above-named cases. You
requested the OCC’s views at the direction of the Honorable Kenneth S. Levy, J.S.C., presiding
judge in this litigation. For the reasons stated below, based on the facts presented in the
materials provided to us, we believe that neither 12 C.F.R. § 34.4 nor the National Bank Act
preempts application of the state laws at issue here to loans simply because they were purchased
and held by national banks acting as trustees in connection with issuance of the mortgage-backed
securities involved in this case.
Background
According to the materials provided with the December 13th letter addressed to me, Delta
Funding made a mortgage loan to Alberta Harris in December 1999 (Wells Fargo Complaint,
First Count ¶1), and subsequently assigned the mortgage to Wells Fargo “as Trustee for Delta
Funding Home Equity Loan Trust 2000-1” (Wells Fargo Complaint, First Count ¶4). Delta
Funding made a mortgage loan to Dequilla Robinson in November 1999 (Bank One Statement of
Material Facts Not in Dispute ¶3), and subsequently assigned the mortgage to Bank One
National Association “as Trustee in Trust for the Registered Holders of Delta Funding Home
Equity Loan Asset-Backed Certificates Series 1999-3” (Certification of Harold L. Kofman, Esq.
¶¶1, 3). There is no indication that either Wells Fargo or Bank One made the original mortgage
loans to Alberta Harris or Dequilla Robinson, nor does any party assert that Wells Fargo or Bank
One has any other interest in these transactions except as trustees for investors in the mortgage-
backed securities.
Funding made a mortgage loan to Alberta Harris in December 1999 (Wells Fargo Complaint,
First Count ¶1), and subsequently assigned the mortgage to Wells Fargo “as Trustee for Delta
Funding Home Equity Loan Trust 2000-1” (Wells Fargo Complaint, First Count ¶4). Delta
Funding made a mortgage loan to Dequilla Robinson in November 1999 (Bank One Statement of
Material Facts Not in Dispute ¶3), and subsequently assigned the mortgage to Bank One
National Association “as Trustee in Trust for the Registered Holders of Delta Funding Home
Equity Loan Asset-Backed Certificates Series 1999-3” (Certification of Harold L. Kofman, Esq.
¶¶1, 3). There is no indication that either Wells Fargo or Bank One made the original mortgage
loans to Alberta Harris or Dequilla Robinson, nor does any party assert that Wells Fargo or Bank
One has any other interest in these transactions except as trustees for investors in the mortgage-
backed securities.
As trustee acting on behalf of the investors in Home Equity Loan Trust 2000-1, Wells Fargo
filed suit against Ms. Harris alleging that she had defaulted on the loan made by Delta and sought
to foreclose on the real estate she had pledged as collateral for that loan (Wells Fargo Complaint,
First Count ¶¶1-14). As trustee acting on behalf of the investors in Delta Asset-Backed
Certificates Series 1999-3, Bank One filed suit against Jack Feinstein, as Administrator Ad
Prosequendum for the estate of Ms. Robinson, seeking to foreclose on the real estate she had
pledged as collateral for the loan made by Delta (Memorandum of Law in Support of Plaintiff
Bank One National Association’s Motion for Summary Judgment at 3-4). Ms. Harris and Mr.
Feinstein (“Defendants”), through counsel, opposed the foreclosure actions. They alleged in
counterclaims against the Banks (and third-party claims against Delta and others) defenses based upon alleged violations of the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56.8-2,
which, among other things, proscribes unconscionable practices in real estate transactions.
N.J.S.A. 56.8-2. See Defendant’s Brief in Opposition to Plaintiff Wells Fargo’s Motion for
Partial Summary Judgment at 3; Defendant’s Brief in Opposition to Plaintiff Bank One’s Motion
for Summary Judgment at 4. Asserting that federal law authorizing national banks to make and
purchase real estate loans preempted the Defendants’ state law defenses under the CFA, Wells
Fargo and Bank One, as trustees acting on behalf of the investors, sought partial summary
judgment on the cross-claims.
filed suit against Ms. Harris alleging that she had defaulted on the loan made by Delta and sought
to foreclose on the real estate she had pledged as collateral for that loan (Wells Fargo Complaint,
First Count ¶¶1-14). As trustee acting on behalf of the investors in Delta Asset-Backed
Certificates Series 1999-3, Bank One filed suit against Jack Feinstein, as Administrator Ad
Prosequendum for the estate of Ms. Robinson, seeking to foreclose on the real estate she had
pledged as collateral for the loan made by Delta (Memorandum of Law in Support of Plaintiff
Bank One National Association’s Motion for Summary Judgment at 3-4). Ms. Harris and Mr.
Feinstein (“Defendants”), through counsel, opposed the foreclosure actions. They alleged in
counterclaims against the Banks (and third-party claims against Delta and others) defenses based upon alleged violations of the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56.8-2,
which, among other things, proscribes unconscionable practices in real estate transactions.
N.J.S.A. 56.8-2. See Defendant’s Brief in Opposition to Plaintiff Wells Fargo’s Motion for
Partial Summary Judgment at 3; Defendant’s Brief in Opposition to Plaintiff Bank One’s Motion
for Summary Judgment at 4. Asserting that federal law authorizing national banks to make and
purchase real estate loans preempted the Defendants’ state law defenses under the CFA, Wells
Fargo and Bank One, as trustees acting on behalf of the investors, sought partial summary
judgment on the cross-claims.
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