January 4, 2013
Arizona 9th Circuit Bankruptcy Appellate Proceeding Finds Lack of Standing with Absence of Mortgage Note
In In re Veal, 450 B.R. 897 (B.A.P. 9th Cir. 2011) the court held that a party has standing to prosecute a proof of claim involving a negotiable promissory note secured by real property if, under applicable law, it is a “person entitled to enforce the note” as defined by the Uniform Commercial Code. Here, Wells Fargo Bank lacked standing because the purported assignment from Option One Mortgage Corporation to Wells Fargo did not contain language effecting an assignment of the Note. The reference in the Note served only to identify the Mortgage and once the Note is separated from the Mortgage, the Note becomes unsecured.
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