April 4, 2013
Stand-Offish
Judge Swain (SDNY) issued a Memorandum Opinion and Order in Rajamin v. Deutsche Bank National Trust Co. in which she followed “the weight of caselaw throughout the country” to effectively hold that “a non-party to a [Pooling and Servicing Agreement lacks standing to assert non-compliance with the PSA as a claim or defense unless the non-party is an intended (not merely incidental) third party beneficiary of the PSA.” (6) The Opinion cites a number of cases to that effect.
KeAupuni Akina, Brad Borden and I will be posting a draft of an article on the “Show Me The Note!” foreclosure defense soon. There is a real thicket of cases addressing the extent to which homeowners can raise real and evidentiary problems with the loan documents. The general rule seems to be that courts do not find these problems to be germane to the homeowner’s foreclosure, eviction or bankruptcy proceeding. There are exceptions, however, such as the Eaton v. Fannie Mae case which held that the Show Me The Note defense would apply prospectively in Massachusetts. But more often than not, courts stick closely to the language of their jurisdiction’s foreclosure statute which tend not to touch upon many issues that arise from the complexities of the securitization process through which these mortgages have traveled.
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