Wells Fargo is suing to overturn a judgment it claims wrongly voided its lien — a dispute that could affect trustees managing securitized mortgages
Wells Fargo is heading to federal court to undo a quiet title ruling that, it says, erased its lien on a California property without warning.
Filed July 24, 2025, in the Northern District of California, the complaint stems from a state court judgment that voided a $500,000 deed of trust and awarded borrower Arthur Mungaray $5 million in damages against GreenPoint Mortgage Funding. Wells Fargo, serving as trustee for a securitized mortgage trust, says it was never told about the case despite holding a recorded interest in the property.
The bank traces the dispute to a 2005 loan originated by GreenPoint and later placed into a mortgage-backed securities trust. In 2020, Mungaray filed a quiet title action naming only GreenPoint, claiming the mortgage had been fully paid. According to Wells Fargo’s filing, those claims were false, and the borrower knew the trust still held the lien from prior bankruptcy proceedings where both sides had agreed to protect the bank’s position.
When Mungaray secured a default judgment in 2024, the deed of trust was declared void and removed from public records. Wells Fargo’s new suit argues that California’s quiet title laws require any adverse claimant — like the trustee of record — to be named in such actions. The bank also claims its constitutional right to due process was violated by being excluded.
For mortgage professionals, the case highlights a procedural hazard: liens tied to securitized trusts can be jeopardized if borrowers target only defunct originators in court. The bank is asking the federal judge to declare the quiet title judgment void or confirm that its lien still attaches to the property.
No decision has been issued yet. But the case could signal how courts treat securitized mortgage interests when quiet title actions proceed without notice to trustees — an outcome servicers and compliance teams will be watching closely.
Note: The details described in this article are drawn from allegations contained in Wells Fargo’s complaint. No findings or rulings have been made in the case.
