Ohio S. Ct: Standing is jurisdictional at the beginning of the foreclosure


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In a well-reasoned and well-written opinion, the Supreme Court of the State of Ohio analyzed the questions of standing and real party in interest — two doctrines that are all too often used interchangeably. They lead to different results. You can fix “real party in interest” but you can’t fix standing, which is a jurisdictional issue. And standing applies at the moment the foreclosure is started — if they don’t have it they must be dismissed.

The question of wrongful foreclosure based upon standing is interesting because the normal doctrine is that jurisdiction can be raised at any time. But at some point the issue of “finality” comes into play. But it would be wise to consider an action where you believe that jurisdiction was lacking even though the case went all the way through foreclosure and eviction. If jurisdiction was lacking, then any orders for or against either party would be void.

Among the interesting parts of this decision is the concept of “injury,” and by that they mean financial injury. If the party attempting to foreclose has not suffered financial damage, they have no right to sue. They lack standing at the commencement of the action and if they try to correct that by showing up with a new assignment AFTER the action was started, that does NOT cure the issue of standing.

The reason is simple, if the court lacked jurisdiction at the beginning of the action because the party starting the foreclosure had not YET suffered any injury than the case MUST be dismissed. The fact that it wasn’t dismissed by the trial judge does not mean that the court had any right to hear the case. The trial court cannot confer jurisdiction upon itself.

If they want to come back in and go for it again, they could conceivably use the new assignment and pass the threshold for the jurisdictional requirement of standing.  BUT that doesn’t mean you should admit or accept the assignment as having any validity. This is where an inquiry into the assignment, why it wasn’t done before and whether any money was paid for the assignment. If there was no money exchanging hands (which in 99% of cases is true) then even the new forecloser fails the financial injury test.

The deeper you dig the more you will find that the assignment is defective either on its face or that the recitations in the assignment are untrue (“for value received”) or that the person signing the assignment lacked authority or even knowledge as to what he or she was signing.

Once you prove the assignment is materially defective YOU (following Stopa’s strategy) should move for summary judgment in favor of the homeowner or file a renewed motion to dismiss for lack of jurisdiction because the document upon which they rely is fabricated, forged, robo-signed and false.

The Achilles heal of the foreclosures is that virtually none of the pretenders can show actual financial injury. It is presumed to be true by borrowers, their lawyers, opposing counsel and the judge.

But in most cases it is not true. The initial closing was funded by investors whose money was commingled and mangled by the investment banks. The documents from closing and the so-called assignments, endorsements and allonges are neither supported y consideration nor is their any evidence of ACCEPTANCE of the assignment by the assignee.

So you have a financial transaction for which there are virtually no documents and you have a set of documents that are used to trade, buy insurance, make claims on credit default swaps and federal bailouts — none of which are based upon any transaction in which money exchanged hands.

If you can prove that none of the documents were supported by consideration then you have proven that there is no financial injury — which means that you could demand either dismissal on standing, a jurisdictional issue or summary judgment that relies on both the jurisdictional issue and the lack of other evidence.

Schwartzwald opinion

38 Responses


  2. JG,

    I detect discouragement in your post and I don’t agree with it. Historically and geographically, standing has been an ever-evolving argument. Standing was, if I recall, the first argument originally invoked by homeowners facing foreclosure and many homeowners lost in most states. In the past couple of years, however, states have ruled on MERS (and recall that MERS was the biggest hurdle since it allegedly conferred standing by transfer or assignment of the note).

    Once MERS was dealt with, the playing field became much clearer. Recall also that directions were issued by Merscorp about 2 years ago to stop, pretty much nationwide, foreclosing in MERS’ name.

    In the states where MERS standing has been disavowed, the issue of “who does, then, have standing?” has resurfaced. Likewise in those where “MERS not being a payee, it cannot transfer the note”. It is a state-by-state issue and it is regularly argued, but with increasing success to homeowners’ advantage, nationwide.

    Look at the recent case law posted by msfraud and you’ll see undeniable progress. As I keep saying, this mess wasn’t created overnight. It was, at least, 30 years in the making. We ought to give it that long for it to be cleared up.

    That link gives you a whole list of recent cases won on standing and also goes state by state. That should perk you up a little.


  3. The truth is….THE FED doesn’t ever pay US back….& THE TRUTH IS…..THE FED BROKE THE LAW WITHOUT OUR KNOWLEDGE…..THEREFORE……It is time the American people told the FED to go boink themselves.

  4. Admission against interest……..? After the FED crooks defaulted on their mortgages ……& we handed them TRILLIONS……and then committed a quadrillion dollars in credit/investment/insurance fraud by forging & counterfeiting our signatures with uncertificated securities …….? Like Romney said…..now we have to pay back the principal….! OH HELL NO…..! IM NOT PAYING FOR THESE CROOKS AT THE FED’s DEFAULT….! Tell the FED TO PAY THE TREASURY BACK FOR THEIR CRIMINAL DEFAULT….OUT OF THEIR OWN POCKETS…..IN GOLD …….THEN WE WILL ISSUE OUR OWN CURRENCY….VIA STATE BANKS….. & BORROW FROM THE TREASURY DIRECT AT A NOMINAL INTEREST RATE & SEND THE FED STRAWMAN ……FOR THE RICH COMMIES PACKING..!

  5. Funny isn’t it, that there needs to be an assignment & delivery & confirmation of the note & there can also be a separate assignment of the mortgage when the Supreme Court ruled that the two are inseparable…….? The RULE OF LAW says the assignment and the delivery & çonfirmation of the note & mortgage are to be one transaction…..the mortgage follows the note. The latter is null & void without the former……The FED INVESTORS are the epitome of lawlessness……..

  6. You know, I’m thrilled for those in Ohio, truly, but this isn’t news outside
    Ohio (and maybe not even news in that jurisdiction – I couldn’t know without a blankload of research at least of my own files). “After-acquired interest” hasn’t cut it for some time now.
    AAI is the name for when a bankster acquires the interest it needed to have had when it went after someone. I don’t know if this ruling or the others like it are of benefit to those who already lost their homes to parties with no evident interest. Wish I did. What I do believe is that when a case like this comes up which says X and X was based on the same law in place when (as applicable here) someone lost his home, one at least has a chance. The distinction is reliance on law in place at the time of the act (I’ll call it ‘old law’) against one’s home, as opposed to reliance on new law. (One can’t rely on new law for a diff outcome of a past act, but one may rely, I believe, on the same law in place at the time AND new rulings made according to that ‘old’ law). So it seems to me that to the extent this is a new ruling in Ohio, Ohio citizens might be able to rely on the decision to try to get their homes back. I’m not an attorney, but even as such, I think this is all such an uphill battle, hate to encourage it. Only responded to a question here. Might only get damages and not the home.

    PS – One of the cases which made this determination was WF v Byrd, oddly also Ohio SC (2008):

    “Wells Fargo did not have standing at the time the complaint was filed. The record unequivocally indicates that WMC did not assign its rights under the mortgage to Wells Fargo until March 2, 2007. Under these circumstances, there was nothing left for the trial court to address. We overrule Wells Fargo’s second assignment of error.”

    Courts imo will dismiss without prejudice (bankster buffs up its act and comes back) unless one gives them a good reason to grant summary judgment (NG says this is what Stopa does). Res judicata applies to SJ because a summary judgment is seen as an adjudication on the merits. Ask a lawyer.

  7. ‘Admission against interest’ is the name for what NG is trying to do away with in his deny and discover strategy.

  8. Well, Neil, my man, the problem with some of what you say is that money wouldn’t actually be paid for an assignment of the collateral interest. Why would it? An assgt of the coll instrument is worthless without the assignment of the note. It’s the note that gets paid for.
    That money wouldn’t be paid for an assgt of the coll instrument
    was admitted in a case I posted at scribd and probably linked here, just like the case wherein it was admitted that notes are regulated and transferred by article 9, not 3. Both of these are admissions which go outside the training received by the bankster network attorneys and they no doubt regret the admissions. Bad news is they are resting assured no one paid any attention or cares because it’s just 2 cases out of millions.* The banksters who made those particular admissions, however, should at least be stuck with them and this isn’t happening
    imo because homeowners aren’t seeing to it. We have to grab what we can.
    Reciting a consideration (“ten dollars and other good and valuable consideration”) in an assgt of the dot is, for one, an improper attempt to give unwarranted cred to the assgt. Since MERS is allegedly the nominee for everyone and his brother and MERS premise is that it stays that way til they feel like doing something else, under that m.o., an assgt already occured and we just don’t know about it: that’s their story, not mine. Still, if one is interested and think it will lead to something, I guess one could try to show it’s bs. Yes, actually that may be a good idea. But any you slice it, since MERS says it only holds “legal title” to the dot and not an economic interest, WHY would MERS, of all people, be getting paid for an assgt of the dot? It’s all just one big, fat lie.
    Banksters are claiming the coll instrument follows the note ( I don’t agree, we know this). But if they really believed that, why the assignments? Because what they are really attempting is Art 9
    assignment of the notes in those assignments by the only party they can come up with to get away with it – “MERS”. (they’re getting away with it, aren’t they?) They use the “MERS” assignment of the note in the assgt of the coll instrument to enable the infamous credit bid by the assignee, now that they can’t get away with it in MERS’ name. Another bankster, beside the two ref’d above, when called on the assgt of the note in the dot claimed it was merely “surplusage”, i.e., nothing because the note had already been transferred. Bull.
    In my lay opinion, all three of these admissions are something called “admission(s) against interest”.

    “Admission against interest:. an admission of the truth of a fact by any person, but especially by the parties to a lawsuit, when a statement obviously would do that person harm, be embarrassing, or be against his/her personal or business interests. (*) A third party can quote in court an admission against interest even though it is only hearsay.”

  9. SC,

    Thank you. Doesn’t do me, personally, one bit of good (I attacked and in a different venue) but it is huge nevertheless. One more sign that things are heading in the right direction.

  10. What about the folks in Ohio who were already duped……? That will be the sticky wicked….. This could be the crooks biggest fear coming to fruition….the day they are forced, by the RULE OF LAW to give back what they stole…..!

  11. Looks like the majority of citizens of Ohio are not believing the b.s….Congratulations on this. This is what I call progress. The RULE OF LAW…..NOT THE LAW OF THE JUNGLE BEING FOLLOWED. Now as long as the FED doesn’t start manufacturing a bunch of b.s. assignments & affadavits that will be considered acceptable by these judges then, you might just have something here. Best of Luck Ohioans….!

  12. LOL@Enraged, I am sooo Happy for You, DCB and the Rest of Ohio!

  13. SC,

    Sometimes, your brand of humor really flies way over my head… Well, Federal Home Loan v. Schwarzwald was what I was waiting for. Got it. Happy as a lark, horns and all.

  14. Thanks Mr. Garfield, this works for me, saves a lot of litigation

  15. Enraged Eye See Your Horns Tonight, Where Did
    You Get Them? *Grins* Truth Hurts! Ouch!

  16. Jim,

    I misread you by mentioning NC and i apologize for it. True, VA has been very unfair to homeowners. I’ll keep an eye out for any case you may possibly use to get adequate compensation.

  17. Jim and indigo
    of course, you cant sue a judge, but you can complain to the appropriate chief judge, look at your state it will tell you how to complain if you feel your due process and right to a jury trial has been prevented or there is any bias conduct or conflicts of interest, however make sure you can show the clear evidence too , research the particular judge, i think the website is called judicial watch and also wiki it, there is case law regarding the appearance of bias, thats all you need , but you must have good cause to complain because you do not want to appear vexacious. i am over judges not being fair, it tears me up everytime they try to pull lateral moves, thing is , im very good at getting back up for the next round-( make no mistake about it :)).so apart from the US is ruined by greed and power and people in high places that just will never do their job with a pure heart , and i have no problem with a fair exchange Neil , but i say this, these are our courts people, step into your power claim the right darn it with or without an attorney do your part because otherwise as some one on here already said there will be hell to pay AKA Karma, ignorance is forgivable but if you know and you do nothing then you whine…well go buy cheese to go with it.

  18. Enraged

    Thanks for your thoughts

    As I saw it I could not do anything until I was “damaged”, ie, until the banksters created a justiciable controversy with a foreclosure notice. Unfortunately I was away as I said and was learned of the sale too late

    Virginia is extremely hostile to debtors. See Horvath (4th Cir). “assignments are unnecessary”, etc etc “thief can enforce the note” and other pearls. I have THE most bogus of assignments: linda Green and tywanna thomas. Document expert opined the notary signed as everyone but so what ? As I said. Horvath says the assignment isn’t necessary to foreclose. Only noteholder status.

    Each state is different in its approach. Don’t you think I wish my property was in new York. You bet I do

    I continue to follow the blogs, hoping against hope a case will emerge that rips this mess open but I don’t think it will happen. Especially as I am getting glimmers that Fannie and Freddie are totally in league with the banksters.

    Its the world turned upside down where the institutions created to promote the interests of the middle class do an about face and seem intent on destroying it.

  19. This case is much more important than many of you, non Ohio residents, realize. The same way that Judge Boyko opened the door for many BK judges, this opens the door for many Appeals courts nationwide to right 10 years of wrongs. It articulates the major roadblock homeowners face everywhere and it gives the proper arguments to raise when contesting foreclosure. What I find incredibly disingenuous on the part of Livinglies is to refer to it while:

    1) Failing to quote its caption for anyone to review;
    2) Attempting to peddle a $500/hr consultation fee.

    I won’t begrudge Neil Garfield for trying to make a living but decency demanded that he come clean with the specifics of the case rather than generalities on standing in Ohio. Disingenuous and very self-serving. Disappointing at best.

    Ohio Supreme Court rules for homeowners in foreclosure case
    Reginald Fields, The Plain Dealer By Reginald Fields, The Plain Dealer
    on October 31, 2012 at 7:00 PM, updated October 31, 2012 at 8:14 PM

    ap-stock-ohio-supreme-court-chamber.jpg Ohio Supreme Court Associated Press file

    COLUMBUS, Ohio – The Ohio Supreme Court on Wednesday unanimously ruled that a third-party mortgage company cannot foreclose on a property that it did not have a connection to at the time of the initial complaint.

    The ruling, considered a victory for homeowners, stemmed from a 2009 situation in which a couple in Xenia, in Southwest Ohio, attempted to sell their home through a short sale after falling behind on mortgage payments, only to be forced into foreclosure by a company that later bought their home at a sheriff’s sale.

    Duane and Julie Schwartzwald bought their house in November 2006 for $251,250. The lender was Legacy Mortgage, which then sold the promissory note and mortgage to Wells Fargo Bank.

    Duane Schwartzwald lost his job in September 2008 and the couple fell behind in payments. They went into default in January 2009 and in March 2009 Wells Fargo listed the property for a short sale. Within a month the Schwartzwalds were in a contract to sell their home for $259,900.

    But then another company, Federal Home Loan Mortgage Corporation, filed a complaint for foreclosure even though the corporation did not yet have any entitlement to the property.

    In May 2009, the corporation was able secure the promissory note and mortgage from Wells Fargo, and a lower court allowed the foreclosure.

    The corporation then purchased the home at a sheriff’s sale. A state appeals court upheld the lower court’s ruling. The Ohio Supreme Court on Wednesday, however, overturned the lower court’s ruling and dismissed the foreclosure decree, saying the law clearly requires an entity to have legal standing to a property when a foreclosure complaint is first filed.

    By its own admission, the corporation did not, according to court records.

    “Federal Home Loan concedes that there is no evidence that it had suffered any injury at the time it commenced this foreclosure action,” Justice Terrence O’Donnell wrote for the court. “Thus, because it failed to establish an interest in the note or mortgage at the time it filed suit, it had no standing to invoke the jurisdiction of the common pleas court.”

    The high court said it does not matter that the company a month after filing its foreclosure complaint secured the promissory note.

    “The lack of standing at the commencement of a foreclosure action requires dismissal of the complaint,” the court wrote.


  21. Jim,

    Sorry about your tribulations. E. ToLLe has consistently talked about how nasty NC is to homeowners and, if I recall, he chose the same path I did (I’m not in NC though): attack first. Or, at least, that’s what I inferred from his harping on Respa, Tila, etc. Those are statutes one invokes when attacking. The problem is that too few people knew about the extent of the fraud and too many got suckered into the Obama “foaming of runway for the banks”.

    From where you stand, can you file for a review (I know… the compensation if they do find a problem is almost insulting… Not worth the time and the effort.)

  22. Oh my, bragging…the end is NEVER guaranteed. But many of us do have information that has helped us…who gives a hoot what you think! Antagonistic…? WOW…Unbelievable….this site is going crazy. Everything is out of context…have a nice day and really, good luck in court, we all need it. Please don’t address me again. You’ve got this thing figured out….

  23. Poppy

    You don’t need to get antagonistic

    I spoke ONLY of my own experience. You have not explained your own procedural history excerpt to brag about how you’re on top of them all

    Apparently you take everything as a personal attack. I’d love to read your papers. I’ll bet they’re wild

  24. @ Jim

    Don’t know what to say to you…we have come from foreclosure, non-judicial to District Court, Federal Court (2) in different States. And we dodged summary judgments, foreclosure, etc…were are gaining some headway. There is no point in telling you, because you have your mind made up. Everything I say is in Pacer, court files and evidencary hearings in Delaware and NC.

    We may not ultimately be successful, but it has been quite a ride and we must be doing something better than most. If my input is not needed, which I guess it is not, so be it. Why do I need to share the upside here, when all of the people here still have their homes and don’t need assistance, particularly from a person who has kept them at bay for years. What would I know. I wish you well, you’re going to need it.

  25. @ Jim

    Oh yes there are…if I knew you personally, I would send them to you…wrong again!

  26. Enraged

    Don’t disagree

    Timing is the issue. I was out of town when the first class NOD was mailed. By the time I got it the “sale” was over by a week.

    It’s unrealistic to think that people are sitting around waiting for these controversies to become ripe for litigation with a two week window to respond. Even deadbeats have things they gotta do

  27. Jim,

    That’s why Tnharry and many others (myself included) always advise people to turn their case into a judicial one by attacking first. People can either play a defensive card by waiting for the bank to start foreclosure or they can do their homework, find the irregularities in their paperwork, consult and attorney, see if they have a cause of
    action, and then and only then, go on the attack and stop paying (can’t pay both a mortgage and an attorney).

    Once homeowners have gone on the attack, they can then go through discovery and uncover the evidence they were still missing. Much easier to get what you want when you file first and court’s presumption is that no one files when he/she doesn’t have grounds to file. Why have so many judges ruled in favor of the servicers? Because the servicers are those who, in 99% of the cases, filed first. The presumption was in their favor right off the bat.

  28. No one holds the courts accountable

    C’mon folks. Look at this country. All institutions are shams anymore. The federal government is a revolving door for banksters to make sure wall street prevails; the judiciary for whatever reason is either ineffectual or corrupt, judge Shack notwithstanding

    No prosecutions of banksters but a hapless homeowner or two has been locked up.

    Judges are the LEAST likely to feel anyone’s wrath when most everyday types CONTINUE to blame the homeowner for being a deadbeat and defaulting on a mortgage he or she “shouldn’t have qualified for in the first place”

  29. Forget the motion to dismiss and summary judgment.
    If there is no jurisdiction the judge is a trespasser and liable for damages and whatever else you can think of.

    Judicial immunity is for judicial acts. Dismissing a case because there is no right of action with the plaintiff is mandatory. It is a ministerial act with no room for discretion.

    This crap will only stop when we get aggressive and hold the judge’s accountable for law breaking.

  30. Poppy. There are no “pleadings” in a nonjudicial foreclosure

  31. Hey Jim,

    I am in NC and it is non-judicial. You are incorrect. They forged my name at the special proceeding, as I never got notice of. Procedure in the pleadings is tantamount to the win.


    “…Here is what we are discovering:

    Those “refinances” can be traced back to Freddie/Fannie charge-offs — where collection rights were sold, and purchased by stated Mortgagee and/or Servicer — with insurance funds.

    Those refinances are NOT secured loans.

    They are only reaffirmation of the debt collection rights.

    I am even finding this in PURCHASE of home — whereby the new purchaser took on the default debt (false or otherwise) of the prior owner (without knowing that this was the case). We are finding that this is HUGE. No one is discussing because no one is aware.

    Freddie/Fannie have all records, but refuse to divulge. This is why people are dealing with debt buyers. With each refinance, only servicing to the collection rights changed.

    However, refinances were PRESENTED as a valid mortgage refinance, which it was NOT. The actual debt buyer, for whom the servicer services — is undisclosed.

    Why BK is important, is to show that the debt is unsecured. Nothing more than credit card charge-offs, which can be discharged in BK.

    What you are challenging in BK is the status of the “debt” — secured v unsecured.

    In addition, there are actions for fraud in the origination of the false refinance. This is not discovered until the COMPLETE money trail is traced — including all charge-offs, insurance collected, and that pay of all REFINANCES, were fraudulent.

    No money in any refinance ever reached the prior party.

    This is what happens in debt collection.

    Only servicing of collection rights changes.

    Once people get this, the consequence is BIG.”

  33. The trouble with these postings is they usually consider the procedurally more straightforward judicial foreclosure. In Virginia you are foreclosed upon within a week or two of receiving the all in one notice of default and sale.

    The scenarios and theories habitually described here for only the minority of jurisdictions that require judicial foreclosure are positively luxurious time wise.

    Worse, Virginia doesn’t give a hoot about assignments. Santa Claus could sign the assignment and it wouldn’t compromise the sale one little bit

    Virginia is the real world. The cold cruel world that doesnt give a rip about Yankee liberalism. You owe the money. You “didn’t pay”. You’re GONE.

  34. There was no funding by investors…the commingling was the lines of credit, not designating the property the money was supposed to be used for. Honestly folks, I have the paperwork, directly from discovery…of course they didn’t intentionally give it up…they did not know what much of it meant and what I had. It is all tied together on paper.

  35. “Posted on October 31, 2012 by Neil Garfield


    Click Now to Consult with Neil Garfield”

    Click on that link and you’ll see that it will cost you $500 for one hour of consultation. If you’re in Ohio, you’d be better off reviewing the cases that were dismissed to homeowner’s advantage and contacting his attorney directly. Many of them will give you the first hour free of charge and start billing only once they have taken the case.

  36. Mortgage v note!! Losing the ability to enforce the mortgage does not create a loss(?) to the Bankster. The note might be able to be enforced. The Bankster suffers no injury by losing on the mortgage!(?)

  37. “…The initial closing was funded by investors whose money was commingled and mangled by the investment banks…”


  38. Exactly.

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