The much anticipated oral argument in the U.S. Bank v. Ibanez foreclosure case was heard by the Massachusetts Supreme Judicial Court on Friday October 8, 2010. Having watched the webcast here is my summary of what the judges and attorneys discussed:
U.S. Bank as trustee for a REMIC securitization trust had foreclosed on the Ibanez mortgage in July 2007, despite the fact that, at the time, it did not possess a valid assignment of mortgage as required by state statute. Almost 18 months after the foreclosure sale, U.S. Bank had produced a blank confirmatory assignment of mortgage, executed by Option One Mortgage, purporting to confirm a prior assignment, that according to U.S, Bank was memorialized by the trust documents including the pooling and servicing agreement.
The attorney for U.S Bank argued that the pooling and servicing agreement (PSA) was valid evidence of the assignment of mortgage from Option One to a REMIC securitizaion trust. The justices, however, were wondering if the PSA was in compliance with the statute of frauds as the Ibanez mortgage was not specifically referenced therein. They also wanted to know if Option One Mortgage was a signatory to the PSA, which the attorney for the bank contended it was (although the PSA is normally between the Depositor, the Investors and the Trustee). Another question raised by the Court was if there was any evidence in the record suggesting a valid assignment of mortgage from the original lender, Rose Mortgage, to Option One Mortgage. Apparently the record only contained an Alonge evidencing a transfer of the Note from Rose Mortgage to Option One but nothing showing the mortgage was properly assigned.
Justice Cordy, with a clear bias for the bank, wanted to know if there was any doubt that the borrower had borrowed the money and subsequently failed to make the scheduled payments. He also wanted to know which party, if not U.S. Bank, had a right to foreclose. He asked if Rose Mortgage could foreclosure although the Note had been transferred to Option One Mortgage.
Justice Ganz displayed concern for the seemingly innocent folks who have bought foreclosed homes unaware that the titles were defective. Ganz agreed with Chief Justice Marshall that these purchasers could be bona fide good faith purchasers which means under the law they could be immune from claims challenging their title.
Below is the link to the webcast.
http://www.suffolk.edu/sjc/archive/2010/SJC_10694.html
Similar Posts:
- Ibanez Foreclosure Ruling Upheld
- Securitization – The Big Fail
- A Closer Look at Mortgage Securitization
- A Chilling Example of an Illegal Foreclosure in Maryland
- Countrywide Admits Notes Were Not Transferred To Securitization Trusts
