## Facts

- Ned and Charlotte Boyce obtained a mortgage loan from Wonder Mortgage Company.
- The note provided an initial interest rate of 6.3% that was fixed for the first two years.
- Beginning in the third year, the interest rate became adjustable based on the U.S. Treasury’s one-year Treasury index (the index).
- At origination, the index was 5.05%.
- Freddie Farmer, the mortgage broker, told the Boyces that their interest rate would increase only if the index increased.
- The promissory note instead stated that each adjustment would be calculated by adding seven percentage points to the then-current index and rounding up to the nearest one-fourth of a percentage point.
- Wonder sold the loan to Maximum Finance Company.
- Maximum sold the loan into a securitization in which Planetary Bank N.A. served as trustee.
- A pooling and servicing agreement (PSA) governed the securitization.
- At the Boyces’ first rate adjustment, the index had dropped to 0.62%, which—using the note’s formula—produced a new rate of 7.75%.
- The Boyces defaulted, and Amerihome, Inc., acting as Planetary’s servicer, commenced foreclosure proceedings.
- The Boyces asserted that Farmer committed fraud by misrepresenting the ARM’s adjustment operation, because (as they framed it) the rate would rise after the first two years regardless of whether the index rose or fell.
- The Boyces also contended that Amerihome breached the PSA; Amerihome conceded a PSA breach.
- The Boyces argued that the PSA breach voided the transfer of the loan into the securitization trust and, as a result, defeated Planetary’s ability to enforce the loan through foreclosure.
- The trial court denied the Boyces’ motion for summary judgment, and the Boyces appealed.

## Issues

1. Whether the Boyces could defeat foreclosure based on alleged fraud or misrepresentation where the broker’s oral statements about the ARM adjustment conflicted with the promissory note’s written adjustment formula.
2. Whether an admitted breach of the PSA could void the transfer of the loan into the securitization trust and thereby eliminate the trustee’s (and servicer’s) enforcement and foreclosure authority against the borrowers.
3. Whether the trial court properly denied the Boyces’ motion for summary judgment in the foreclosure proceeding.

## Decision

- The trial court denied the Boyces’ motion for summary judgment.
- The Boyces appealed the denial.
- Beyond the foregoing procedural step and the fact summary available from published case-brief sources, the appellate court’s disposition and reasoning are not available from the publicly visible materials for this citation.

## Legal Principles

- Fraud or misrepresentation defenses in lending disputes commonly turn on whether the borrower’s reliance on a broker’s statements is legally supportable when the promissory note and loan documents set out different terms in writing.
- When a borrower challenges foreclosure based on securitization defects, a recurring question is whether the borrower may invoke or enforce terms of a PSA to which the borrower is not a party.
- Where a servicer or trustee seeks to foreclose after an alleged PSA breach, another recurring question is whether the asserted breach would make the transfer void (affecting enforcement rights) or only create a dispute among securitization parties that does not change the borrower’s payment obligations under the note.
- Because the full appellate opinion for this teaching-case citation is not publicly available, any case-specific rule statement or definitive holding cannot be confirmed from open materials.

## Conclusion

Boyce v. Amerihome, Inc. and Planetary Bank N.A. arises from a foreclosure dispute in which the borrowers argued that they were misled about how their adjustable rate would reset and separately argued that an admitted PSA breach voided the securitization transfer and defeated the trustee’s enforcement authority; the publicly visible sources report the trial court’s denial of summary judgment and the borrowers’ appeal but do not provide the appellate court’s final disposition or reasoning.


Boyce v. Amerihome, Inc. and Planetary Bank N.A., 366 E.W.3d 489 (2014)