26 Oct Judge cancels mortgage when holder of note unproven
I was wrong: I’ve routinely told clients intrigued by the “lost note” defense to foreclosure that, however the court rules on ownership of the note, they don’t get a free house. According to Sunday’s New York Times article, If Lenders Say ‘The Dog Ate Your Mortgage, at least one judge has held differently.
After the lender, or the servicer for the lender, presented the court with ever changing stories, but no writings, about who currently owned the mortgage on David Shaev’s client’s home, Judge Drain voided the mortgage on the property. The decision is on appeal.
Courts in Northern California have become increasingly sensitive to the issue of whether the party that has filed a motion for relief from stay before the bankruptcy court has standing to ask the court for a remedy with respect to a client’s house, but none has yet said that the penalty for being the wrong party is to void the debt.
Do you suppose the mortgage industry can be scared straight?
The case is Olga Paredes, SD NY, 09-22261.
Cathy Moran, Esq.
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