FORECLOSURE DEFENSE: OWNERSHIP OF THE MORTGAGE

Mortgage Lender Must Have Ownership Of Loan When Foreclosure Is Filed, Holds Brooklyn Judge

May 21, 2008

The case of Indymac Bank, FSB v. Ross, Supreme Court, Kings County Index No. 24713/07 (January 15, 2008) began normally enough. Indymac filed a summons and complaint on July 6, 2007. The borrower failed to appear or answer, and Indymac asked the court to grant a judgment of foreclosure on default.

What Indymac got was a denial not only of the judgment, but a denial of the entire foreclosure case.

The original lender of the subject October 4, 2006 mortgage was Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Mortgageit, Inc. MERS then assigned the loan to Indymac. But that assignment was not dated until July 11, 2007 – five full days AFTER the foreclosure was filed.

Though the assignment states that “[tjhis assignment is effective on or before June 1, 2007,” the court found such retroactive assignment to be ineffective.

The court stated as follows:

. . . such an attempt to retroactively assign the mortgage is insufficient to establish plaintiff’s ownership interest at the time the action was commenced. See Countrywide Home Loans, Inc. v. Taylor, 17 Misc3d 595 (Sup. Ct. Suffolk Co. 2007). Plaintiffs attempt to foreclose upon a mortgage in which it had no “legal or equitable interest was without foundation in law or fact…” Katz v. East- Ville Realty Co., 249 AD2d 243 (1st Dept 1998). See US Bank Nat. Ass’n v. Merino, 16 Misc3d 209, 212 (Sup. Ct. Suffolk Co. 2007). Moreover, “foreclosure of a mortgage may not be brought by on who has no title to it….” Kluge v. Fugazy, 145 AD2d 537, 538 (2d Dept 1998). See RCR Services Inc. v. Herbil Holding Co.,229 AD2d 379 (2d Dept 1996). Finally, plaintiffs standing to bring the within action goes to the basis of a court’s authority to adjudicate a dispute. See Stark v. Goldberg, 297 AD2 203 (1st Dept 2002) (wherein the court held that sua sponte dismissal of the action was warranted despite the lack of any assertion by defendants of an objection to plaintiffs’ standing) .

So what does this all mean for you, the person going into foreclosure? It means that it’s important for you to fight back and to defend the foreclosure. Don’t think that there’s no hope for you, that an inability to pay the mortgage means you automatically lose. You have powerful rights, and need to be sure to use them.

4 Responses

  1. i want my lender to produce the note what i need to do first before court? qwrs?

  2. Dear Sir -About several weeks ago I saw a report of a plea of title that was used in a foreclosure defense case. I am trying to find that article on your website. Can you tell me what heading do i find it under and who was the attorney that did it. Thank You

  3. I have a case right now in New York in which the borrower is being suied by the bank however the day the summons and complaint was November 10,2007 but the assignment was recorded in kings county records on November 13 2007. Ironically this case in in Brooklyn too and the defendant has not answered as of yet. Truth be told they improperly served him. We are negotiating a shortsale and I waiting until the note is deemed worthless until we negotiate.

    I will have the defendant answer the foreclosure once the courts ask for judicial intervention and for a motion. Then blow their case and time out the water.

  4. I have a loan with Greenpoint Mortgage which is in default . However, My homeowners insurance policy states that GMAC is the loss payee. Could Greenpoint have assigned this loan without notifying me? Also: In the above case had the property been foreclosed would the mortgagor have a case?

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