Tag: holder of the note

N.C. Ct. of Appeals: U.S. Bank v. Pinkney- Chain of Indorsements of Note

Summary:

The Pinkneys executed a mortgage note (“the Note”) in favor of Ford Consumer Finance, secured by a Deed of Trust. The Note was later indorsed to Credit Based Asset Servicing and Securitization (“CBASS”), which, in turn, assigned the Note to U.S. Bank, as Indenture Trustee, and lastly to U.S. Bank, without recourse.

When U.S. Bank later sought to foreclose and a judgment for money owed, the Pinkney moved to dismiss that action on the basis that U.S. Bank was not the holder of the Note, which did not contain the “magic words” denoting a that it was, under the Uniform Commercial Code, N.C.G.S.… Read More

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N.C. Court of Appeals: In re Clouse- Requirement for De Novo Foreclosure Hearing

Summary:

On October 21, 1998, the Clouses granted a Deed of Trust against their home originally to Homecomings Financial, later assigned to Deutsche Bank and serviced by GMAC. On June 22, 2012, Turnip Investments, following its suit against the Clouses, purchased the property at a judgment execution sale for $1,000. Subsequently, Deutsche Bank commenced foreclosure against the property and Turnip Investments appealed the foreclosure authorization by the Clerk first to the Superior Court, where Turnip Investments raised no objections to any evidence, and then a further appeal to the Court of Appeals.

There Turnip Investment argued that the Superior Court failed to conduct a proper de novo hearing and had insufficient evidence to show that Deutsche Bank was the holder of the Note.… Read More

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N.C. Ct. of Appeals: In re Perry- Rights of Holder and Owner of Mortgage Note Indistinguishable

Summary:

Perry executed a note and Deed of Trust in favor of American Home Mortgage (AHM), with two individuals named as Trustees and MERS named as the beneficiary and “solely as nominee” for AHM. Citimortgage acquired the mortgage through an endorsement by AHM. Following default by Perry, Trustee Services of Carolina (TSC) was appointed as the substitute trustee and a foreclosure was ultimately allowed by the Clerk of Court.

Perry filed a motion for stay of the foreclosure order pursuant to Rule 60(b), arguing that new evidence showed Fannie Mae had previously acquired the note and that Citimortgage was not the real party in interest.… Read More

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N.C. Supreme Ct.: In re Bass- Stamped Indorsement is Sufficient for Transfer

Summary:

The first indorsement in a chain of transfers of a mortgage note was simply a stamp, without an accompanying signature or initials. After falling behind on mortgage payments, Bass, relying on Econo-Travel Motor Hotel Corp. v. Taylor, 301 N.C. 200 (1980), challenged the standing of U.S. Bank as the holder of the note, arguing that it had not been properly indorsed.

The North Carolina Supreme Court rejected this argument relying on the broad definition of “signature” in the Uniform Commercial Code (UCC), at N.C.G.S. § 25-3-201(b)(37), as “any symbol executed or adopted with present intention to adopt or accept a writing.” As the official comment to the UCC includes that such symbol can be “printed, stamped or written; it may be by initials or by thumbprint”, the term “signature” is not limited to “a long-form writing of an individual person’s name.” Bass at 7.… Read More

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Bankr. S.D.N.Y.: In re Idicula- Standing to Seek Relief from the Automatic Stay

Summary:

The Debtors filed Chapter 7 and indicated on their Statement of Intentions they intended to retain the real property, with an estimated value of $430,000. U.S. Bank sought relief from the automatic stay, asserting that the Debtors owed $639,365.25 in total, with a delinquency of $145,703.92.

Sua sponte, the bankruptcy court held that U.S. Bank (and/or its servicer, Select Portfolio Services) had failed to establish that it owns or has the right to enforce the promissory note secured by the Property. The bankruptcy court noted that while the Motion for Relief asserted, by way of two Affidavits, that U.S. Bank was “ a creditor by virtue of the fact that the note was transferred by way of allonge.”, neither of the Affidavits actually includes such an allonge.… Read More

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N.C. Court of Appeals: TD Bank v. Mirabella- Judicial Notice Inappropriate to Show Merger as Basis for Establishing Holder of a Note

Summary:

TD Bank filed suit against Mirabella (rather than foreclosing) for amounts owed on a promissory note, originally entered into by Mirabella and Carolina First Bank (CFB).  TD Bank contended that, following its merger with CFB, it stood in the place of CFB.  No evidence, however, was presented at trial of the merger, instead TD Bank argued that the court should take judicial notice of the merger.

The Court of Appeals rejected this argument, finding that judicial notice is appropriate for “facts generally known with the territorial jurisdiction.”  While the merger between Wachovia and Wells Fargo could rise to the level of judicial notice, the same could not be said of the merger of TD Bank and CFB. … Read More

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N.C. Court of Appeals: In re Yopp- Holder of the Note through Corporate Merger; Evidence Allowable in a Foreclosure

Summary:

Capital One commenced a foreclosure against the Debtors on a Deed of Trust, originally granted to Chevy Chase Bank, which later merged with Capital One.  The foreclosure was allowed in part based on, among other documents, an Affidavit from James Cox, Vice President of Capital One.  This Affidavit stated that “to the best of [his] knowledge” Capital One was the servicer and holder of the mortgage note.

The Debtors objected to this affidavit, arguing that it denoted only Mr.  Cox’s personal opinion and was not made upon personal knowledge as required by Rule 56(e).  The Court of Appeals rejected this argument, holding instead that when an Affiant puts a “self-imposed limitation to the affiant’s personal knowledge” See Faulk v. Read More

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