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with Charles Marshall and Bill Paatalo

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Very promising development in a recent judicial foreclosure case out of New York State. A principal issue in the case was whether the foreclosing party (mortgagee, the typical designate in a judicial foreclosure state) possessed the subject note before commencing the foreclosure process, and whether it had complied with serving statutorily required notices prior to initiating the foreclosure process.

The lower court allowed Deutsche Bank National Trust Co. to get away with presenting as evidence of the Note, and the notice requirement of foreclosure, affidavits by corp officers supposedly possessing knowledge about the Note on the one hand, and the notices of foreclosure, on the other hand. The New York Appellate Division appropriately reversed the summary judgment foreclosure, on the basis that Deutsche needed to demonstrate actual evidence of possessing the Note, and actual evidence of having mailed the requisite foreclosure notices. See Neil’s Blog for further details.

The discovery process would further enable the homeowner to pound on the essential not allowing the foreclosing party to get away with affidavits of X documents and events, rather than actual tangible proof of same. Moreover, even where the Note can be shown to be possessed, Neil rightly points out the common sense requirement of UCC Article 9 Section 203 requiring actual possession of the Note is a finesse itself, when same ‘holders’ typically cannot upon discovery and/or in responding to a forensic audit, demonstrate records to show that payment of value, consideration, was made for ownership of the underlying mortgage obligation.

Then Bill will be discussing a deposition transcript whereby a Nationstar deponent testifies in effect that the seller at issue never delievered anything of value, showing only a so-called purchase of the underlying mortgage asset, with no proof of legal consideration; further, that same deponent on money issues, states only that someone in the Financing Dept has those answers. So the best course of action in this case would be to then depose the Financing Dept head or someone equally knowledgeable of the sorts of issues in the particular lawsuit.

Finally, Charles addresses latest legal mess with Covid, and how the foreclosure and eviction moratoriums are more muddled than ever.

Filed under: foreclosure |