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US Bank v. Decision One: Proving Assignment Of A Mortgage Just Got Harder

A recent Maine Superior Court decision in US Bank v. Decision One Mortgage highlights the challenge of a foreclosing party to prove that it owned -- or had sufficient rights in -- both the note and the mortgage. The importance of establishing ownership in order to foreclose on a mortgage was established by Bank of America, N.A. v. Greenleaf, 2014 ME 89, a seminal decision of Maine’s highest court in 2014.

In U.S. Bank, N.A., as Trustee for LSF8 Master Participation Trust v. Decision One Mortgage Company, LLC, (Superior Court, CV-15-65)(July 26, 2016), Judge Clifford refused an effort by a mortgage holder to establish ownership of the mortgage through a quiet title action, a declaratory default judgment, and a judgment on the pleadings. The plaintiff was denied on all three counts.

The plaintiff in this case was the holder of a mortgage note that was originally issued to Decision One. The plaintiff claimed that Decision One was no longer a functioning entity and, as a result, plaintiff was not able to get a written confirmation of assignment of the related mortgage, or other documentation from Decision One, that would satisfy the Greenleaf requirement. As a result, the plaintiff sought a court order, in the form of a quiet title action, to establish that it did own the mortgage and so could foreclose. The plaintiff also asked for a declaratory default judgment and a judgment on the pleadings.

The Court held that a quiet title action was not available to determine the ownership of a mortgage and denied the plaintiff’s request. The Court also denied the other two motions after finding: (1) the plaintiff had not submitted the required affidavit for a default judgment, and (2) judgment on the pleadings was available only if an answer had been filed by the other party, which had not happened.

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