Editor: David Reiss
Brooklyn Law School

March 18, 2013

Plaintiff Denied Summary Judgment in Foreclosure Proceedings Due to Factual Dispute

By Jeffrey Lederman

In Bayview Loan Servicing v Sanchez, CV 09 5004156 S, 2009 WL 1874180 [Conn Super Ct June 10, 2009], an unpublished opinion, Plaintiff Bayview Loan Servicing moved for summary judgment against non-appearing Defendant Pedro Sanchez in a foreclosure action. The town of Windham (Defendant), holder of two mortgages on the property, objected – claiming a factual dispute as to whether its mortgages were subordinate to Plaintiff’s mortgages.

In July 2006, Mr. Sanchez delivered an executed note to USMoney Source Inc. doing business as Soluna First (US Money) for a loan and secured the note through a mortgage delivered to MERS as nominee for USMoney. Plaintiff claimed that its mortgage was prior in right to two granted to Sanchez, recorded in 2001, via a subordination agreement.

The burden in summary judgment proceedings is on the moving party to prove both that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. Curry v. Allan S. Goodman, Inc. 286 Conn. 390, 402, 944 A.2d 925 (2008).  Plaintiff submitted into evidence “… copies of the subordination agreement, certified copies of the note, the mortgage, the assignment of mortgage, and the default letter…”

Defendant claimed its mortgages were not subordinate to the mortgage being foreclosed by Plaintiff because it only agreed subordinate its mortgages to an entity known as “US Money Source DBA Soluna First Mortgage, its successors and assigns” and not to a mortgage “granted by Sanchez to MERS as a nominee for USMoney.”

The court described that the term nominee “connotes the delegation of authority to the nominee in a representative capacity only, and does not connote the transfer or assignment to the nominee of any property or ownership rights…” Mortgage Electronic Registration Systems, Inc. v. Rees, Superior Court, Judicial District of Ansonia-Milford, Docket no, CV 03 081773 (September 4, 2003, Curran, J.T.R.). As such, the court ruled that USMoney was the “true lender.”

However, as there was a factual discrepancy between the mortgage deed (listing lender as USMoney Source, Inc. d/b/a Soluna First) and the subordination agreement (listing mortgagee as US Money source dba Soluna First Mortgage), the court found that a genuine issue of material fact existed. Plaintiff failed to meet its burden and the court denied summary judgment.

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