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Chicago Indiana Michigan Washington, D.C.
FINANCE, INSOLVENCY & RESTRUCTURING
November 2007
Mortgage AssignmentRequired Prior to FilingForeclosure Complaint
The United States District Court for the Northern District of Ohio recently dismissed 14foreclosure actions filed by Plaintiff, Deutsche Bank National Trust Company, as Trustee for certainasset-backed pooled mortgage facilities because the Plaintiff failed to establish diversity jurisdictionand standing (i.e. that the Plaintiff “suffered some actual injury”).
1
With respect to diversity jurisdiction, the threshold question of who the proper plaintiff is must be answered before theestablishment of diversity jurisdiction. The Court’s Opinion and Order provides that the Court’sholding does not have retroactive effect.Prior to dismissing the foreclosure actions, the Court issued an Order requiring the Plaintiff toprove that it was the holder and owner of the underlying notes and mortgages that were the basis foreach of the foreclosure actions. More specifically, the Court ordered the Plaintiff to “file a copy of theexecuted Assignment demonstrating Plaintiff was the holder and owner of the Note and Mortgage
as of the date the Complaint was filed 
[.]”
2
The Court was concerned because the underlying notes andmortgages identified the original lending institution as the promisee and mortgagee and not thePlaintiff. The Court also noted that the Preliminary Judicial Report attached to each complaintdescribing the property did not mention the Plaintiff in the recorded chain of title/interest. The Courtstated that real estate matters require greater scrutiny because the contractual relationship must bememorialized in writing and, under Ohio law, assignments of mortgages are subject to recordingrequirements. Therefore, in addition to execution of a mortgage assignment, recording may also berequired to establish standing.In response, the Plaintiff produced Mortgage Assignments dated after the date of the originalforeclosure complaint. These Mortgage Assignments were attached to pleadings in support of thePlaintiff’s position that such Mortgage Assignments were sufficient to establish the Plaintiff’s standingto prosecute the foreclosure actions, even though such Mortgage Assignments were entered into afterthe commencement of the foreclosure actions. The Court did not agree with the Plaintiff’s position.Therefore, since the Plaintiff failed to produce any Assignments as of the date the complaints were
1
See
In re Foreclosure Complaints
, Case Nos. 07CV2282, 07CV2532, 07CV2560, 07CV2602, 07CV2631, 07CV2638,07CV2681, 07CV2695, 07CV2920, 07CV2930, 07CV2949, 07CV2950, 07CV3000 and 07CV3029 (N.D. Ohio, Oct. 31,2007).
2
See
id 
. (emphasis in original).
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