Saturday, November 2, 2013

Federal District Court Dismisses Fourteen Deutsche Bank Foreclosure Complaints on Securitized Mortgages Due to Lack of Standing

Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055.

On October 31, 2007, the U.S. District Court of the Northern District of Ohio, Eastern Division issued a very important decision in In re Foreclosure Cases, 2007 WL 3232430(N.D.Ohio October 31, 2007)(Boyko, J.) which was a decision issued in fourteen cases combined for decision. The issue involved is extremely important in today's environment involving the foreclosure of securitized mortgages. The importance of the decision is demonstrated by the fact that it received a long write-up in today's New York Times. In the foreclosure cases at bar, the court found that the named plaintiff, Deutsche Bank, lacking standing and dismissed the foreclosure cases without prejudice. Prior to this dismissal, the court had issued an order requiring the plaintiff to file a copy of executed assignments demonstrating that it was the holder and owner of the notes and mortgages as of the date of the filing of the foreclosure complaints.

The court discussed that a party seeking to bring a case in federal court bears the burden of establishing diversity jurisdiction and standing. To satisfy the requirement of Article III, the plaintiff must show that it has personally suffered some actual injury.

In these cases, the plaintiff alleged in its complaints that it was the holder and owner of the notes and mortgages, but the attached notes and mortgages indentified the original lending institution. The exhibits attached to the complaint did not reference the plaintiff in the recorded chain of title or interest. The affidavits sumitted in these cases averred that the plaintiff is the owner of the note and mortgage but did not mention any assignment, trust or successor interest. The court found that the plaintiff did not satisfy its burden of demontrating standing at the time of the filing of the complaints.

The court found that none of the assignments showed the plaintiff to be the owner of the mortgages and notes as of the date of the foreclosure complaints. The court noted that the assignments submitted only expressed a present intent to convey all rights, title, and interest in the mortgages and notes to the plaintiff upon receipt of sufficient consideration on the date of the assignment. The court stated that these documents belied the plaintiff's asserted that it owned the notes and mortgages by means of a purchase that pre-dated the complaint.

The court stressed its independent obligation to preserve the judicial integrity of the federal court and to guard federal jurisdiction. The court stressed that "[n]either the fluidity of the secondary mortgage market, nor monetary or economic considerations of the parties, nor the convenience of the litigants supersede those obligations."

The foreclosure complaints were dismissed without prejudice so it is expected that the plaintiff or the correct parties will refile the foreclosure once they have their documentation in order.