Antonio and Kathlene Mareno obtained a home mortgage from Dime Savings Bank. The terms of the mortgage required them to pay their property taxes directly to the local tax collector. However, if they failed to do so, the mortgage allowed the lender to pay the property taxes, add the property tax amount to the mortgage balance, and adjust the monthly mortgage payment.

The borrowers allegedly failed to pay their property taxes for 2002 and 2003. As a result, Dime Savings paid the property taxes and increased the monthly mortgage payment from $754 to $1,268. The Marenos made one payment of $754 after the increase and then stopped making any mortgage payments.

Purchase Bob Bruss reports online.

In 2004, Dime Savings filed a complaint against the Marenos to foreclose on the mortgage. The state court then granted a summary judgment allowing the foreclosure.

The Marenos made several state court appeals of the foreclosure, which were denied.

Then in November 2005 the Marenos sued Dime Savings in U.S. District Court, alleging the state trial court’s handling of their case violated their federal due-process rights. Dime Savings argued the foreclosure issue was already decided in the state court and the homeowners don’t have a right to litigate the same issue again in federal court.

If you were the U.S. District Court judge would you rule the Marenos can challenge the state trial court foreclosure judgment in federal court?

The judge said no!

The jurisdiction of U.S. District Courts is strictly original and there is no right to appeal state court due-process claims except to the U.S. Supreme Court, the judge began.

Furthermore, a federal due-process claim under the 14th Amendment of the U.S. Constitution can only be brought against a defendant acting under authority of state law, and there was no such evidence here because Dime Savings is a private business corporation, the judge explained.

The Marenos already had their right to litigate and appeal the foreclosure judgment in state courts, the judge ruled. They failed to prove a federal denial of due-process claim, so this case is dismissed for lack of jurisdiction, and the foreclosure may proceed, the judge concluded.

Based on the 2006 U.S. District Court decision in Mareno v. Dime Saving Bank, 421 Fed.Supp.2d 722.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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