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Bank Fails to Show Standing to Maintain Foreclosure Lawsuit

Bank Fails To Show Standing To Maintain Foreclosure LawsuitIn a case before Justice Robert Muller sitting in Clinton County, Beneficial Finance Service provided a mortgage loan to Carpenter. Carpenter defaulted in making payments to Beneficial Finance Service. Caliber Home Loans, acting under a Power of Attorney for Beneficial Finance Service, started a foreclosure lawsuit against Carpenter. Carpenter claimed defenses to the lawsuit including a lack of standing by Caliber Home Loans.

Summary Judgment Application

The Calibers brought a motion for summary judgment against Carpenter. They sought to have his answer dismissed. Justice Robert Muller noted plaintiff’s papers did not contain a power of attorney. They also did not contain a servicing agreement authorizing Caliber Home Loans to act as attorney in fact and servicer.

The Judge’s Decision

Justice Muller found it was unclear whether the affidavit by Neilson indicating he was familiar with Caliber Home Loans business records also claiming that Caliber was the custodian receiving physical possession of the note and mortgage from Beneficial Finance Service was valid. Justice Muller found it was also unclear whether the plaintiff actually had physical possession of the note. The assignment of the mortgage did not discuss who had possession of the note. It only discussed the transfer of the mortgage.

Justice Muller rendered the decision stating Beneficial Home Servicer and Caliber Home Loans failed to establish standing to bring the foreclosure lawsuit and the summary judgment motion was denied.

Conclusion

Financial institutions must prove they are the appropriate party to bring a foreclosure lawsuit. The defense to the foreclosure lawsuit being brought by an institution that does not have the proper authority is called “lack of standing.”

schlissel-headshotElliot S. Schlissel is a foreclosure attorney who has been fighting foreclosure lawsuits for more than three decades. He can be reached at 800-344-6431 or e-mailed at Elliot@sdnylaw.com.

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

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