The filing alleges a missing note, a suspect declaration, and no valid chain of title
A federal lawsuit filed this week accuses A&D Mortgage of pushing a foreclosure forward without proving it has the legal right to do so.
The case, filed on February 17, 2026, in the U.S. District Court for the Eastern District of California, names A&D Mortgage, LLC, Affinia Default Services, LLC, ServiceLink, and Mortgage Electronic Registration Systems as defendants. The borrower, Cary Bryan Felix, is seeking emergency court intervention to block a trustee's sale on his South Lake Tahoe property, arguing that none of the entities involved have demonstrated they hold, own, or are entitled to enforce the underlying promissory note.
At the heart of the dispute is a familiar but persistent problem for the mortgage industry: documentation gaps in the foreclosure chain. According to court filings, no defendant has produced the original note, a chain of endorsements, or any allonge showing the note was lawfully transferred. The recorded assignments reference only the Deed of Trust — not the note — raising what the borrower calls a fatal "note/mortgage divergence."
The case also targets MERS, alleging it is named as a nominee on the Deed of Trust but has never held or owned the note, and therefore cannot transfer an interest it does not possess under the Uniform Commercial Code.
Perhaps more pressing for servicers is the allegation that the Declaration of Compliance attached to the Notice of Default — a document required under California's Homeowner Bill of Rights — was signed by an individual who lacked personal knowledge of the borrower's file and never made the pre-foreclosure outreach the declaration certifies. If true, that alone could void the foreclosure under California Civil Code Section 2923.55.
The filing also alleges that no recorded Substitution of Trustee naming Affinia Default Services existed before the Notice of Default was recorded in June 2025, calling into question whether Affinia had authority to initiate the process at all. On the servicing side, the borrower claims escrow statements contained inconsistent figures and artificially created shortages, and that force-placed insurance was imposed without proper notice, inflating monthly payments and accelerating the path to default.
The case raises ten causes of action, spanning RESPA, TILA, the Fair Debt Collection Practices Act, the California Homeowner Bill of Rights, wrongful foreclosure, slander of title, quiet title, and unfair business practices. The borrower is asking the court for a temporary restraining order, a preliminary injunction, declaratory relief, a full loan accounting, production of the original note and all supporting documents, and damages.
No court ruling has been issued, and the defendants have not yet responded.
For mortgage servicers and foreclosure professionals operating in California, the case is a pointed reminder that procedural shortcuts — especially around Declarations of Compliance, trustee substitutions, and note documentation — remain fertile ground for litigation. Whether or not the claims ultimately hold up, the filing underscores the cost of gaps in the foreclosure paper trail.
