Foster Lee Brown v. CMG Mortgage, Inc. (d/b/a CMG Financial), ET AL.

CourtDistrict Court, D. Hawaii
DecidedNovember 20, 2025
Docket1:25-cv-00335
StatusUnknown

This text of Foster Lee Brown v. CMG Mortgage, Inc. (d/b/a CMG Financial), ET AL. (Foster Lee Brown v. CMG Mortgage, Inc. (d/b/a CMG Financial), ET AL.) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foster Lee Brown v. CMG Mortgage, Inc. (d/b/a CMG Financial), ET AL., (D. Haw. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

FOSTER LEE BROWN, CIV. NO. 25-00335 JMS-RT

Petitioner, ORDER DISMISSING IN PART SECOND AMENDED COMPLAINT, v. ECF NO. 12, AND DIRECTING SERVICE AS TO CMG CMG MORTGAGE, INC. (d/b/a CMG MORTGAGE, INC. FINANCIAL), ET AL.,

Respondents.

ORDER DISMISSING IN PART SECOND AMENDED COMPLAINT, ECF NO. 12, AND DIRECTING SERVICE AS TO CMG MORTGAGE, INC.

I. INTRODUCTION This is the court’s third screening of pro se Petitioner Foster Lee Brown’s (“Brown”) Complaint regarding a mortgage secured by real property.1 On September 5, 2025, the court dismissed Brown’s original Complaint, with leave to amend. ECF Nos. 1, 7. Brown then filed an Amended Complaint, which the court screened and dismissed with further leave to amend on October 9, 2025. ECF Nos. 9, 11. On October 28, 2025, Brown filed the Complaint presently before the court—a “Second Amended Complaint for Quia Timet, Quiet Title, and Injunctive Relief” against Defendants CMG Mortgage, Inc. (d/b/a CMG Financial)

1 The court granted Brown in forma pauperis (“IFP”) status on September 5, 2025. ECF No. 7. (“CMG Mortgage”), Freedom Mortgage Corporation (“Freedom Mortgage”), and Government National Mortgage Association (“Ginnie Mae”). ECF No. 12

(“SAC”). For the reasons stated below, a Truth in Lending Act (“TILA”) claim against CMG Mortgage survives the screening process. All other claims are DISMISSED. Because Plaintiff has been granted IFP status, the court directs

service of process as to the TILA claim against CMG Mortgage as set forth below. See Fed. R. Civ. P. 4(c)(3). II. BACKGROUND The SAC alleges the following facts:

• On February 7, 2024, Plaintiff executed a promissory note in favor of CMG Mortgage, Inc. for the purpose of securing real property.

• Plaintiff was not advised that his note would be sold, pledged, or securitized into any trust or instrument backed by federal guarantees.

• The note was allegedly transferred into Ginnie Mae REMIC Trust 2024-043 without Plaintiff’s knowledge, consent, or legal notice.

• Plaintiff never signed, reviewed, or consented to any Pooling and Servicing Agreement (PSA) or related documentation placing the note into any REMIC trust. • On June 4, 2024, Plaintiff received a copy of the alleged note from Freedom Mortgage.2 The document lacked proper endorsement, assignment, or proof of lawful transfer.

• Between April and July 2025, Freedom Mortgage issued repeated foreclosure threats, made harassing calls, and failed to respond to Plaintiff’s Qualified Written Requests (QWRs).

• The above actions violated federal statutes (TILA, RESPA, FDCPA) and failed to comply with lawful debt collection procedures and disclosure requirements.

• No defendant has produced the original wet-ink note, nor any proof of a perfected security interest.

• Plaintiff's security instrument has been monetized, traded, and profited upon without his consent or judicial oversight.

• These acts amount to a taking of property and rights secured under the Constitution and common law.

ECF No. 12 at PageID.178–179. Plaintiff alleges TILA violations against all Defendants; a Real Estate Settlement Procedures Act (“RESPA”) violation against Freedom Mortgage; a Fair Debt Collection Practices Act (“FDCPA”) violation against Freedom Mortgage; state law claims titled “Fraud in the Factum” and “Quia Timet and Quiet Title” against all Defendants; and United States constitutional claims against all Defendants. Id. at PageID.179–180.

2 Freedom Mortgage is the loan’s servicer. According to a letter from Freedom Mortgage to Plaintiff attached to the SAC, “[t]he loan was originally originated by CMG Mortgage Inc on February 7, 2024. . . . Subsequently, the servicing responsibilities were transferred from CMG Mortgage Inc. to Freedom Mortgage, effective April 1, 2024.” ECF No. 12-6 at PageID.257. In screening the SAC, the court may consider any exhibits attached to it. See Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007). The SAC seeks a declaratory judgment that the mortgage is “void ab initio and unenforceable,” a permanent injunction barring “foreclosure or

collection without the production of the original, properly endorsed note,” an accounting and disgorgement of profits, and monetary damages. Id. at PageID.180.

III. STATUTORY SCREENING The court must screen each civil action commenced under 28 U.S.C. § 1915(a) and order the dismissal of any complaint that is “frivolous or malicious; . . . fails to state a claim on which relief may be granted; or . . . seeks monetary

relief against a defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B); see also Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (stating that § 1915(e) “not only permits but requires” the court to dismiss

sua sponte an IFP complaint that fails to state a claim). In considering whether a complaint fails to state a claim, the court must set conclusory factual allegations aside, accept non-conclusory factual allegations as true, and determine whether these allegations state a plausible claim

for relief. Ashcroft v. Iqbal, 556 U.S. 662, 677–80 (2009). A complaint that lacks a cognizable legal theory or alleges insufficient facts under a cognizable legal theory fails to state a claim. See UMG Recordings, Inc. v. Shelter Cap. Partners LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (citing Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)).

Plaintiff is appearing pro se; consequently, the court liberally construes the SAC and resolves all doubts in Plaintiff’s favor. See Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010); see also Erickson v. Pardus, 551 U.S. 89, 94

(2007) (explaining that “a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers”). IV. DISCUSSION A. Loan Securitization and Failure to Provide a “Wet-Ink” Note

As an initial matter, the central focus of the SAC—that “[n]o defendant has produced the original wet-ink note” or “any proof of a perfected security interest,” and that Brown’s “security instrument has been monetized,

traded, and profited upon without his consent or judicial oversight,” ECF No. 12 at PageID.179—cannot give rise to any cause of action as a matter of law. “[S]ecuritization in general does not give rise to a cause of action” and various courts, including this one, have “rejected that securitization of a mortgage

loan provides the mortgagor a cause of action.” Duarte v. Bank of Am., 2011 WL 1399127, at *7 (D. Haw. Apr. 12, 2011); see also Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 898 (D. Haw. 2011) (rejecting the claim that securitization of a

loan renders the note and mortgage unenforceable); Vitale v. Wells Fargo Bank Nat’l Ass’n, 2024 WL 3012810, at *5 (N.D.

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