Bank Must Produce the Note Before Foreclosure, Says Massachusetts Judge
A federal judge has ordered a bank to provide proof that it holds a homeowner’s note before permitting a foreclosure, in a recent decision from the U.S. District Court for Massachusetts.
Homeowners in Needham sued Bank of New York Mellon (the purported owner of their mortgage and note) and Wells Fargo (the servicer of their mortgage). They had two claims: first, that MERS did not have authority to assign their mortgage, and second, that the Bank of New York Mellon did not hold their note.
As a result, foreclosure was prohibited, said the homeowners. Under Massachusetts law, a foreclosing bank must hold both the mortgage and the note before foreclosure is permissible.
Although the judge dismissed the claim related to MERS, he allowed the second claim to proceed. Specifically, the lawsuit stated that an affidavit filed by Bank of New York Mellon, in which it claimed to hold the note, was false.
In a clear statement requiring proof of the note to be provided, the judge wrote “At this stage, BNYM has not produced the note for inspection, and MERS has not submitted the note’s transaction history. Accordingly, based on the record before the Court, it is at least possible that BNYM is not actually the note holder.”
If the bank is unable to produce the note for inspection, it is unlikely that foreclosure would be allowed. The case will now presumably proceed into discovery, where further investigation will be allowed.
This case gives further proof that many banks still have difficulty providing documentation that they have ownership of homeowners’ mortgage notes.
Culik Law has represented many homeowners against their banks in lawsuits challenging the right to foreclose. Contact us to see if we can help.