New filing targets HSBC, PHH and ACE trust over foreclosure and standing
A New York homeowner is taking HSBC and PHH to federal court over a contested foreclosure tied to an ACE home equity loan trust.
On February 4, 2026, Sandra D. Bell filed a verified lawsuit in the US District Court for the Southern District of New York against HSBC Bank USA, N.A., as trustee for ACE Securities Corp. Home Equity Loan Trust 2005-HE1, PHH Mortgage Corporation d/b/a PHH NewRez LLC, McCabe, Weisberg & Conway, LLC, and unnamed defendants. She represents herself and describes herself as the lawful property owner of 29 South Aspen Road in Middletown, New York.
At the heart of Bell's filing is a challenge to the defendants' right to foreclose. She asserts that the note and mortgage on her home were never properly placed into the ACE 2005-HE1 trust, even though foreclosure actions proceeded as if the trust and its agents held enforceable rights. She points to what she says are inconsistencies and name discrepancies in endorsements, assignments and other loan documents, and claims those materials do not line up with her actual loan.
Bell's narrative leans heavily on earlier state court litigation. She cites a 2020 Orange County Supreme Court order in a prior foreclosure case involving the same property, which she says vacated a foreclosure judgment, canceled a notice of pendency and referenced the phrase "NO NOTE MADE – WRONG BANK." In her view, that history undercuts any later effort to foreclose based on the same loan.
She also takes aim at how the foreclosure case was presented in court. According to her filing, a Certificate of Merit was submitted in state court representing that key documents such as the note, mortgage and assignments had been reviewed and supported the claims. Bell alleges that, at the time, those documents were incomplete, inconsistent or not in proper form, yet were nonetheless used to move the foreclosure forward.
The lawsuit goes beyond a documentation fight and ventures into how the underlying securitization is structured. Bell describes ACE 2005-HE1 as a home equity loan trust operating under pooling and servicing arrangements that involve credit enhancements and various insurance and reserve mechanisms. She alleges that defendants have access to protection such as title insurance, hazard insurance, force-placed coverage, and pool or bond insurance, along with reserve or custodial accounts, while still pursuing her directly through foreclosure and related fees. She characterizes this as an improper layering of recoveries tied to the same loan.
Bell brings a broad set of legal claims, including lack of standing and fraudulent concealment, civil rights theories under federal statutes, racketeering allegations, securities-related claims tied to ACE 2005-HE1, Fair Debt Collection Practices Act claims, wrongful foreclosure, abuse of process, fraud on the court, unjust enrichment, slander of title, accounting, constructive trust and civil conspiracy under state law. Her requested relief includes declarations that the defendants lack any valid interest in the property, quiet title, cancellation of recorded documents, injunctive relief halting foreclosure and collection activity, a range of damages and a jury trial.
For mortgage lenders, servicers and foreclosure firms, the filing zeroes in on familiar pressure points: how standing is shown, how loans are documented into securitized trusts, how certificates and affidavits are used in court, and how insurance and fees interact with foreclosure recoveries. Whether those allegations gain any traction remains to be seen. So far, no federal judge has ruled on Bell's claims, and the case is at an early stage with no determination on the merits.
