Standing and Diversity Jurisdiction in More Foreclosure Cases Questioned by Ohio Federal District Court Judge

Federal District Court Judge Rose of the Southern District of Ohio issued opinions dismissing more foreclosure cases due to lack of standing. These cases are NovaStar Mortgage., Inc. v. Grooms, 2007 WL 4190796 (S.D.Ohio November 21, 2007), NovaStar Mortgage, Inc. v. Riley, 2007 WL 4190802 (S.D.Ohio November 21, 2007), HBC Bank USA v. Rayford, 2007 WL 4190805 (S.D.Ohio November 21, 2007).

In all of these cases, the court found that there was no evidence of standing and diversity jurisdiction at the time the complaints were filed. The court further found that the complaints were not filed in compliance with the court's General Order 07-03 "procedures for Foreclosure Actions Based on Diversity Jurisdiction." The court allowed the plaintiffs thirty days to submit evidence of its standing and diversity jurisdiction as of the date the complaints were filed or else the cases would be dismissed without prejudice. See In re: Foreclosure Cases, No.1:07CV2282, et al., slip op. (N.D.Ohio Oct. 31, 2007)(Boyko, J.)

The court also made reference to professor Katherne M. Porter's recent article, Misbehavior and Mistake in Bankruptcy Mortgage Claims 3-4 (November 6, 2007), University of Iowa College of Law Legal Studies Research Paper Series Available at SSRN: http:// ssrn.com/abstract-1027961. The court made reference to cited Professor Porter's assertion that "[H]ome mortgage lenders often disobey the law and overreach in calculating the mortgage obligations of consumers.... Many of the overcharges and unreliable calculations ... raise the specter of poor record keeping, failure to comply with consumer protection laws, and massive, consistent overcharging."