Federal judges toss foreclosures, say “Prove you own the mortgage”

(c/p CCD)

Courtesy of The Daily Bellwether:

A federal judge in Cleveland tossed out 32 foreclosure cases in a mass dismissal today because banks and other lenders failed to file a complete set of documents showing their claims were legitimate. U.S. District Judge Kathleen M. O’Malley said the cases could be refiled if the proper paperwork was filed with each lawsuit. Her ruling means the courts are going to give foreclosures increased scrutiny…

O’Malley said she was enforcing a specific requirement of the federal court rules that demand detailed information about the identities of lenders — and the history of a loan — involved in foreclosure actions. She said a review of cases pending before her showed that some of the plaintiffs seeking foreclosure have not been directly named in the loan documents that are at the heart of the cases filed in Cleveland. O’Malley said she wanted to see the complete history of a loan.

TDB doesn’t say what bank or banks were thrown out of court. I can hardly wait for the rest of the story.

By a strange coincidence, I just ran across this by way of the Mortgage Servicing Fraud blog:

The Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed.

Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.

The Court’s amended General Order No. 2006-16 requires Plaintiff (Deutsche Bank) to submit an affidavit along with the complaint, which identifies Plaintiff as the original mortgage holder, or as an assignee, trustee or successor-interest.

Apparently Deutsche bank submitted several affidavits that claim that Deutsche was in fact the owner of the mortgage note, but none of these affidavits mention assignment or trust or successor interest.

Thus, the Judge ruled that in every instance, these submissions create a “conflict” and they “do not satisfy” the burden of demonstrating at the time of filing the complaint, that Deutsche Bank was in fact the “legal” note holder.

Gee, it seems the Federal District Court judges are sharing ideas. Not good news for some bankers and their lawyers… especially if the ideas spread to county Common Pleas Court, where most foreclosures are filed, presumably with the same kind of documentation O’Malley and Boyko rejected.

Update 11/15: The Boyko/Deutsche Bank story made it into the New York Times today. Nothing yet in the PD about either case.

Update 11/15: TDB:

Here are the plaintiffs, along with the number of foreclosures that were tossed out of court [by Judge O’Malley yesterday]. Deutsche Bank National Trust, 24; Wells Fargo Bank NA, 3; KMO Liquidation Properties Inc. , 2; LaSalle Bank Nat’l Assn, 1; HSBC Mortgage Services, 1, Speciality Mortages LLC, 1.


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