February 11, 2013
Pennsylvania Court Holds Bank Has Standing to Bring Mortgage Foreclosure Action Before an Assignment to Bank is Recorded
In US Bank v. Mallory, 982 A.2d 986 (Pa. Super. 2009), the Pennsylvania Superior Court affirmed an order of the Court of Common Pleas of Philadelphia, denying Appellant Mallory’s petition to strike and/or open the default judgment entered in favor of Appellee. Appellant alleged that the default judgment should be stricken because Appellee (1) did not “plead properly an assignment on the face of the record”; (2) did not have standing to bring the mortgage foreclosure action; and (3) “the trial court erred in denying Appellant’s petition to open default judgment.
In 2006, Appellant executed a mortgage with MERS. In 2007, Appellee filed a complaint in mortgage foreclosure against Appellant, and received a default judgment against Appellant. The property was listed for Sheriff’s sale, before which Appellant filed a petition to strike the default judgment. The Court of Common Pleas of Philadelphia denied the petition and Appellant appealed.
The court “conclude[d] that there was not a fatal defect apparent on the record such that the trial court erred in denying Appellant’s petition to strike.” Appellee stated in its mortgage complaint that “Plaintiff is now the legal owner of the mortgage and is in the process of formalizing an assignment of same,” whereby “sufficiently put[ting Appellant] on notice of Appellee’s claim of interest with regard to the subject mortgage.” First, Pa.R.C.P. 1147(a)(1) does not require “a recorded assignment as a prerequisite to filing a complaint in mortgage foreclosure.” Second, Appellee’s statement in the complaint excused Appellee from attaching a copy of the written assignment required under Pa.R.C.P. 1019. Third, the Appellee had standing to bring the foreclosure complaint because it was a real party in interest under Pa.R.C.P. 2002(a) since recordation of the assignment was a not a prerequisite. Regardless, Appellant’s petition to open the default judgment was properly denied, because Appellant’s petition was not promptly filed.
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