Deutsche Bank National Trust Company, As Trustee for FFMLT 2006-FF13, Plaintiff, v. Terry A. McRae a/k/a Terry McRae, et. al., Defendants.
Decided on January 25, 2010
Supreme Court, Allegany County
Deutsche Bank National Trust Company, As Trustee for FFMLT 2006-FF13, Plaintiff,
Terry A. McRae a/k/a Terry McRae, et. al., Defendants.
By way of the September 8, 2009 Order, this court previously determined that Plaintiff lacked standing, because it failed “to submit evidence of proper assignment/delivery of mortgage and note.” Thereafter, Plaintiff submitted a second copy of the Note, which for the first time contained an endorsement by First Franklin, a Division of National City Bank of Indiana, to First [*4]Franklin Financial Corporation, and an endorsement in blank by First Franklin Financial Corporation. The endorsement in blank, however, is undated. In stark contrast, the copy of the Note attached to the complaint bears no such endorsements. Obviously, the endorsements were made in response to the September 8, 2009 Order, which post-date the commencement of this case (in January 2009), and are ineffective. [MERS v. Coakley, at 674; see also Kluge v. Fugazy, 145 AD2d 537 (2nd Dept. 1988) (absent assignment or delivery of the note, the assignment of the mortgage is a nullity)]. There being no evidence that the endorsements were made prior to the commencement of the action, Plaintiff failed to establish that it was in possession of the Note at the time it commenced this action.
A plaintiff seeking judicial redress must have standing before this court. “If standing is denied, the pathway to the courthouse is blocked” (Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 812 , cert denied 540 U.S. 1017 ). “Standing … requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request” (Caprer v. Nussbaum, 36 AD3d 176 [2nd Dept. 2006]).
Today, with multiple and (and often unrecorded) assignments of mortgage obligations and multiple securitizations often related to the same debt, the courts should carefully scrutinize the status of parties who claim the right to enforce these mortgage obligations. For the unrepresented homeowner, the issues of standing and real party in interest status of the foreclosing party are never considered. Without such scrutiny, there is a risk that the courts will give the judicial “seal of approval” to foreclosures against unrepresented homeowners who have little, if any, understanding of these issues, much less the legal significance thereof. To quote my colleague in Kings County, “[a]llowing this case to proceed on behalf of a plaintiff without standing at the commencement of the action would [also] open the door to potential fraud and place in jeopardy the integrity of title to the property to be foreclosed.” [Bowling, supra at p. 4].
It is against this backdrop that the court, on reargument, affirms its prior order with dismissal without prejudice. [*5]