Source: Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

January 18, 2010

FDN attorneys Jeff Barnes, Esq. and local NJ counsel Michael Jacobson, Esq. have scored a stunning victory in New Jersey resulting in the reversal of a previously entered summary judgment and where the court made significant findings as to factual issues surrounding what appears to have been a double assignment by MERS first to CitiMortgage and then to IndyMac. Although the 5-page written trial court opinion is unpublished, the decision cites applicable New Jersey Rules of Civil Procedure and decisional law applied to the facts of the case.

Plaintiff IndyMac had alleged that it was the current holder of the note and mortgage. In granting the borrower’s Motion to Vacate the previously entered summary judgment, the court determined that the lack of clarity in the assignment history warranted vacatur of the summary judgment. As the Motion to Vacate was granted under Rule 4:50-1(f), the one-year limitation to file such a motion was found not to apply.

The court found that the plaintiff had still not established the assignment history of the mortgage as required by Rule 4:64-1(b)(10), and this was a “substantial factual issue” because the plaintiff is required, at the very least, to provide proof of standing to foreclose by some evidence that it has a “stake in the outcome of the action”. The court also found that whether MERS, as nominee, is not in a position to assign the mortgage is a “substantial issue in and of itself” which the courts in New Jersey have not yet addressed.

The court held that based on the alleged assignment history recited by the plaintiff in its amended complaint for foreclosure, MERS as nominee for IndyMac assigned the mortgage to the plaintiff approximately 20 months AFTER it had already assigned the mortgage to MERS as nominee for CitiMortgage, Inc. The court thus stated: “How the plaintiff can foreclose on a mortgage ostensibly assigned to it after the assignor had already assigned the mortgage to another assignee is certainly a triable issue”.

The opinion is consistent with the plethora of opinions previously issued by the United States Supreme Court and the state courts of New York, Ohio, California, and other jurisdictions which have repeatedly held that it is the burden of the plaintiff, in a foreclosure action, to demonstrate that it has standing to foreclose by providing evidence that it has a stake in the outcome of the foreclosure action.

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