Editor: David Reiss
Brooklyn Law School

March 26, 2013

District Court of Illinois Grants Ocwen Loan Servicing’s Motion for Summary Judgment, Finding MERS had Authority to Assign Mortgage & Note

By Joseph Kelly

In Ocwen Loan Servicing LLC v. Kroening, 10 C 4692, 2011 WL 5130357 (N.D. Ill. Oct. 28, 2011), the District Court for the Northern District of Illinois granted Ocwen Loan Servicing’s motion for summary judgment to foreclosure.

Defendant/homeowner, Victoria Kroening had originally executed a note and mortgage with Taylor Bean & Whitaker Mortgage Corporation (“TBW”) in 2007.  The mortgagee of the mortgage was MERS, which acted as nominee for TBW. In 2009, MERS assigned the rights associated with the mortgage and the note to Ocwen Loan Servicing LLC (“Ocwen”). After defaulting, Ocwen issued a notice of default to Ms. Kroening. When she did not cure her default, Ocwen initiated this suit.


The court found that this case was essentially a contract dispute. After discussing various provisions in the mortgage, the court concluded the “clear language unambiguously grants MERS the power to assign the mortgage and the note.” Further, since Illinois law defines “mortgagee” more broadly than just the holder of a note to include “any person designated or authorized to act on behalf of such holder,” the court concluded MERS had the legal authority to assign the mortgage.


The court also rejected Ms. Kroening’s argument that Ocwen didn’t actually possess the note. The court found that the note itself is a negotiable instrument, endorsed in blank, and thus subject to assignment by transfer and possession. Further, the contract’s clear language unambiguously gave MERS the ability to assign the right to foreclose. Finally, the court rejected Ms. Kroening’s claims that she never received notice of the default as “unsupported by record evidence.” Since Ms. Kroening had not “put forth any evidence upon which a reasonable jury would find for her,” the court granted Ocwen’s motion for summary judgment and entered a judgment of foreclosure and order of sale.

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