Foreclosure Defense Florida

Foreclosure Fraud Case Law Update- Standing Challenges

Courts across the country are starting to really beat back the lenders on standing grounds….read on good people.   They’re New York Cases, but the judicial groundswell is bubbling.

Mortgage Foreclosure/Standing     ““ Plaintiff commenced an action on September 4,
2007   to   foreclose a mortgage   that was assigned   to   it on September 17, 2007 by an
instrument   which   recited   that   its   effective   date   was   July   29,   2007.   The   Supreme     6
Court,   Kings   County,   denied   the   Plaintiff’s   motion   for   an   Order   of   Reference,
without prejudice to file a renewed motion within ninety days accompanied by proof
that   the Plaintiff owned   the mortgage and note prior   to   the commencement of   the
foreclosure.   Otherwise,   the   action   would   be   dismissed   for   lack   of   standing.
According   to   the   Court,   ” [w]]here   there   is   no   evidence   that   plaintiff,   prior   to
commencing   the   foreclosure action, was   the holder of   the mortgage and note,   took
physical delivery of the mortgage and note, or was conveyed the mortgage and note
by written   assignment,   an   assignment’s   language   purporting   to   give   it   retroactive
effect prior to the date of the commencement of the action is insufficient to establish
the plaintiff’s   requisite   standing”. Washington Mutual Bank   v. Patterson, decided
December 15, 2008, is reported at 21 Misc. 3d 1145 and 2008 WL 5233195.

Mortgage   Foreclosure/Standing   ““ The   Supreme Court, Kings County,   denied   the
foreclosing Plaintiff’s motion for summary judgment and for an Order of Reference,
holding that the Plaintiff   lacked standing. It held that the purported assignment of
the note and mortgage by MERS, as nominee for First Franklin, to the Plaintiff was
invalid. It recited that   it was executed by an attorney on behalf of MERS pursuant
to a corporate resolution. However, neither a corporate resolution nor a power-of-
attorney   was   recorded.   The   Court   granted   the   Plaintiff   leave   to   renew   upon
providing   the Court within   sixty days with   (i) a valid assignment of   the mortgage,
(ii)   an   affirmation   that   the   assignor   and   the   assignee   consented   to   simultaneous
representation   in   connection with   the   assignment,   and   (iii)   an   affidavit   explaining
why   the   Plaintiff   purchased   a   nonperforming   loan.   In   addition,   “if   a   power   of
attorney is used for an agent to act as MERS’ assignor of the instant mortgage and
loan   to Deutsche Bank,   the   power   of   attorney   presented   to   the Court must   be   an
original   or   a   copy   certified   by   an   attorney,   pursuant   to   CPLR   Section   2105”
(“Certification by attorney”). Deutsche Bank National Trust Company, as Trustee,
v. Campbell, decided December 16, 2008, is reported at 2008 WL 5220543.

Mortgage   Foreclosure/Standing   ““   A   mortgage   foreclosure   commenced   by   New
Century Mortgage Corporation (“New Century”) on March 7, 2007 was dismissed
by   the   Supreme   Court,   Kings   County,   for   lack   of   standing.       On May   11,   2007,
MERS, the record holder of the mortgage (which appears to have been intended to
have   held   the mortgage   as   nominee   for   New   Century),   purportedly   assigned   the
mortgage   to New Century by Assignment of Mortgage which   included   the phrase:
“Date of Transfer: March 5, 2007”. According   to   the Court, “[w]here   there   is no
evidence   that plaintiff, prior   to commencing   the   foreclosure action, was   the holder
of   the mortgage and note,   took physical delivery of   the mortgage and note, or was
conveyed   the mortgage and note by written assignment, an assignment’s   language
purporting to give it retroactive effect prior to the date of the commencement of the
action   is   insufficient   to establish   the plaintiff’s requisite   standing”.   In addition, on
April 30, 2007 MERS had assigned the mortgage to a different lender. New Century
Mortgage Corporation v. Durden, decided February 2, 2009, is reported at 22 Misc.
3d 1118 and at 2009 WL 264134.

Mortgage Foreclosure/Standing ““The Defendant in a mortgage foreclosure asserted
that the Plaintiff did not have standing to commence the action on October 11, 2007
since the mortgage being foreclosed and the note it secured were assigned to it by an
assignment dated October 15, 2007 which recited that it was effective on October 8,
2007. The note, endorsed in blank, was delivered to the Plaintiff on October 8, 2007.
According   to   the Supreme Court, Suffolk County, “an   indorsement of a mortgage
note   in blank together with   its delivery by the owner or   its agent to a transferee   is
sufficient   to   transfer   ownership   of   said   note   and   of   a   mortgage   given   to   secure
it”¦.Said   assignment   [on October   15,   2007]   accurately   reflected   that   the   plaintiff
acquired ownership of the note and mortgage on October 8, 2007, by   its receipt of
delivery of the note   indorsed   in blank. The mortgage followed as an   incident to the
transfer of   the note. The plaintiff was   thus   the owner of   the note and mortgage at
the   time   of   the   commencement   of   this   action”.   Deutsche   Bank   National   Trust
Company v. Gillio, dated February 26, 2009,   is reported at 22 Misc.3d 1131 and at
2009 WL 595560.

5 Comments

  • jeff says:

    In Florida, when is an assignment of mortgage effective? Must the assignment be recorded prior to commencement of the foreclosure action for there to be standing in the Plaintiff?

  • annie says:

    Not only are these “assignments” being recorded after the fact, according to Mers website, an assignment made by an “officer” of Mers is valid when it is transferred out of the Mers system. In other words, a mortgage/note can be assigned when it is purchased by a lender/investor who is not registered w/Mers, and it is then removed from the Mers system. Well, looks like Aurora missed the memo, because they seem to think they can transfer or assign anything to themselves. Unfortunately, they are a member, they never remove it from the Mers system, and I highly doubt the intent of Mers was for companies to assign mortgages/notes to themselves. Not to mention, Aurora Loan Services, is just the loan servicer, they are not a lender or investor,,, so FRAUD… FRAUD…. FRAUDULENT.

  • lawrence Bernstein says:

    I read one of the cases you wrote about this past weekend which held that the mortgage in a foreclosure case was no longer considered to be incidental to the note, and that the lender needed to be the holder of both the note and mtge to have standing in a foreclosure action in FL. Can you please provide me with the cite for the case.
    Thank you
    Lawrence Bernstein

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