Editor: David Reiss
Brooklyn Law School

February 23, 2015

Mortgage Assignment Mayhem

By David Reiss

Judge Drain issued a biting Memorandum of Decision on Debtor’s Objection to Claim of Wells Fargo Bank, NA in the case In re Carrsow-Franklin (No. 10-20010, Jan. 29, 2015). The Court granted the debtor’s claim objection “on the basis that Wells Fargo is not the holder or owner of the note and beneficiary of the deed of trust upon which the claim is based and therefore lacks standing to assert the claim.” (1)

This blog, and many other venues, have documented the Alice in Wonderland world of mortgage assignments in which something is true because the the foreclosing party, like the Red Queen herself, says it is.

Judge Drain adds to the evidence with ALLCAPS, a touch I can’t remember seeing in another judicial opinion that I have blogged about:

Because Wells Fargo does not rely on the Assignment of Mortgage to prove its claim, the foregoing evidence is helpful to the Debtor only indirectly, insofar as it goes to show that the blank indorsement, upon which Wells Fargo is relying, was forged. Nevertheless it does show a general willingness and practice on Wells Fargo’s part to create documentary evidence, after‐the‐fact, when enforcing its claims, WHICH IS EXTRAORDINARY. (17-18, emphasis in the original, footnote omitted)

In retrospect, legal historians will be shocked by the lending industry’s practices which seemed to ignore the law in favor of convenience. MERS, and the practices which arose from it, was an attempt to circumvent clunky laws in favor of efficiency. For many years, many judges went along with this regime. Since the foreclosure crisis began, however, more and more judges are engaging in a more rigorous analysis of the documents in a particular case and the applicable law governing mortgage notes and foreclosures. When these judges find that a transaction does not comply with the relevant law, it is incumbent upon them to deny the relief sought by the foreclosing party as Judge Drain did here.

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