Tag Archives: holder of the note

Alabama Court Reverses Lower Court’s Decision Granting Summary Judgment to Foreclosing Entity

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The court in deciding Sturdivant v. BAC Home Loan Servicing, LP, 2013 Ala. Civ. App. (Ala. Civ. App., 2013) reversed the lower court’s ruling that granted summary judgment to a foreclosing entity with respect to its complaint in ejectment against a mortgagor under Ala. Code § 6-6-280(b).

The court’s decision was based on the fact that the foreclosing entity presented no evidence that it was either the assignee of the mortgage or the holder of the note at the time it foreclosed, it failed to present a prima facie case that it had the authority to foreclose and, thus, had valid title to or the right to possess the property–one of the elements of its claim in ejectment.

Ohio Appeals Court Reverses Summary Judgment in Favor of Bank as Genuine Issue of Fact Existed as to Whether the Bank held the Note

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The court in deciding U.S. Bank N.A. v. Kamal, 2013-Ohio-5380 (Ohio Ct. App., Mahoning County, 2013) reversed and remanded the lower court’s ruling. The court decided that there were genuine issues of material fact as to whether U.S. Bank was the holder of the note or mortgage when the complaint was filed and as to whether U.S. Bank complied with the default provisions in the note and mortgage. Therefore, the grant of summary judgment in U.S. Bank’s favor was reversed and the matter was remanded for further summary judgment proceedings.

Defendants-appellants appealed the decision of the lower court, which granted summary judgment and issued a decree of foreclosure for U.S. Bank National Association. Three issues were raised; the first was whether there was a genuine issue of material fact as to whether U.S. Bank complied with the notice of default provisions in the note and mortgage. The second issue was whether U.S. Bank was a real party in interest when the foreclosure complaint was filed. The third issue was whether the trial court should have struck certain evidence that U.S. Bank used to support its request for summary judgment.

This court ultimately held that a genuine issue of fact existed as to whether the bank was the holder of the note when the complaint was filed, as the record was devoid of any evidence proving the date on which the bank became the holder. There was also a genuine issue of fact as to when the mortgage was assigned, as the assignment contained information not known on the date the mortgage was executed and the only other logical date was the date the assignment was recorded, which occurred after the complaint was filed. Additionally a genuine issue of fact existed as to whether the bank complied with the notice of default and acceleration provision, as there was no evidence as to how the bank notified the debtor as the acceleration.

Ultimately, the lower court’s grant of summary judgment was reversed and the matter was remanded for further summary judgment proceedings.

Court Finds that BAC Home Loans did not Have Standing to File Suit

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The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s decision and found that appellee had not established that it was the current holder of the note and mortgage, thus, appellee did not have standing to file suit.

Appellant Walter J. Blythe appealed the Columbiana County Common Pleas Court’s decision granting summary judgment in favor of BAC Home Loans Servicing, L.P., in a foreclosure action.

Blythe challenged the trial court’s finding that BAC had standing to foreclose in the absence of evidence that BAC was the holder of the note that created the obligation. Blythe relied on the material submitted by BAC in support of this claim.

This court held that the note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by the loan servicing company (LSC) that was not the transferee or successor in interest of the bank. The LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). The LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

The court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. The note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, here the bank was the real party in interest in the foreclosure action, thus the LSC lacked standing to foreclose.

Since Bank was the Note-Holder it was a Person Entitled to Enforce the Note Pursuant to R.C. 1303.31(A)(1)

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The court in deciding Bank of Am., N.A. v. Pasqualone, 2013-Ohio-5795 (Ohio Ct. App., Franklin County, 2013) affirmed the decision of the lower court.

The court found that the promissory note was a negotiable instrument subject to relevant provisions of R.C. Chapter 1303 because it contained a promise to pay the lender the amount of $100,000, plus interest, and did not require any other undertakings that would render the note nonnegotiable.

Further, the court found that since the bank was the holder of the note it was a person entitled to enforce the note pursuant to R.C. 1303.31(A)(1). Based on the authorization, the note became payable to the bank as an identified person and, because the bank was the identified person in possession of the note, it was the holder of the note.

Lastly, as the property owner’s defenses to the mortgage foreclosure did not fit the criteria of a denial, defense, or claim in recoupment under R.C. 1303.36 or R.C. 1303.35, the bank’s right to payment and to enforce the obligation was not subject to the owner’s alleged meritorious defenses.

Court Finds that Bank was Entitled to Enforce the Instrument Under R.C. 1303.31

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The court in deciding M & T Bank v. Strawn, 2013-Ohio-5845 (Ohio Ct. App., Trumbull County 2013) affirmed the lower court’s decision and found that appellant’s argument was without merit.

Appellant framed three issues for this court’s review. First, appellant contended that the trial court erred in relying upon the affidavit of Mr. Fisher to demonstrate that appellant had possession of the promissory note and that the copies were true and accurate. Second, appellant questioned whether appellee fulfilled the condition precedent of providing notice of the default and notice of acceleration. Third, appellant argued that there was a genuine issue of material fact as to whether appellee was the real party in interest possessing an interest in the promissory note and mortgage.

The court found that the bank’s possession of the note was shown by an affidavit, along with attached copies of the note endorsed to the bank, and one in possession of a note endorsed to that party was a holder, for purposes of R.C. 1301.201(B)(21)(a), and thus entitled to enforce the instrument under R.C. 1303.31.

The court also found that the affidavit for the bank clearly stated that the bank had been in possession of the original promissory note, and the affidavit was sufficient for the trial court to have held that the affiant had personal knowledge. Lastly, the court found that nothing suggested that voided endorsements affected the bank’s status as a holder, and thus it did not create an issue of fact and that the bank acquired an equitable interest in the mortgage when it became a holder of the note, regardless of whether the mortgage was actually or validly assigned or delivered.

Ohio Court of Appeals Finds that BAC had Failed to Demonstrate that it had Standing to Accelerate the Note and Foreclose the Mortgage

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The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s judgment.

Appellant Walter J. Blythe appealed the lower court’s decision granting summary judgment in favor of Appellee, BAC Home Loans Servicing, L.P., in this foreclosure action.

Blythe challenged the lower court’s finding that BAC Home Loans Servicing had standing to foreclose in the absence of evidence that BAC was the holder of the note creating the obligation. Blythe relied on the material submitted by BAC in support of this claim. Because the copy of the note filed by BAC was specifically indorsed to Countrywide Bank, FSB, not BAC, and there was nothing to indicate otherwise, BAC had failed to demonstrate that it had standing to accelerate the note and foreclose the mortgage. Thus this court reversed the judgment of the lower court and dismissed the suit for lack of standing.

This court held that a note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by a loan servicing company (LSC) that was not the transferee or successor in interest of the bank. This court also held that the LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). Further, the LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

This court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. Lastly, the court held that the note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, as such the bank was the real party in interest in the foreclosure action. Thus the LSC lacked standing to foreclose.