Standing To Foreclose In Maine: Bank of America, N.A. v. Greenleaf
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Standing To Foreclose In Maine:
Bank of America, N.A. v. Greenleaf 1
by John J. Aromando
“There are few titles in the law of higher importance
in the United States, than that of Mortgage.” 2
surmountable, obstacles for lenders and
servicers seeking to collect on non-per-
D uring the last several years, the
Law Court has issued a string of
decisions adverse to financial insti-
forming home loans.
Recently, however, the Law Court
issued a decision on an issue of funda-
mental importance to the residential
tutions in the area of residential mortgage judgments of foreclosure in the Superior
foreclosure litigation. Some of these deci- and District Courts, even though the lending community that took many in
sions have dealt with errors or even alleged borrower has admittedly defaulted on that community by surprise. In Bank
fraud in documentation supporting fore- the loan. Summary judgments are now of America, N.A. v. Greenleaf,5 the Law
closure actions.3 Others have taken lend- hard to come by. And trials have become Court ruled that a bank which held the
ers and servicers to task concerning the exercises in gamesmanship over whether original promissory note, and therefore
admissibility of evidence offered to prove the plaintiff can produce the right cus- the legal authority to collect the amount
foreclosure cases, in particular efforts todial witness to vouch for the reliability due under that note, could not foreclose
to admit business records under Rule of records reflecting the current status of on the mortgage that accompanied the
803(6) of the Maine Rules of Evidence.4 the loan, the substance of which often note, even though the mortgage exist-
These decisions have made it more dif- nobody seriously contests. All of this has ed for the sole purpose of securing the
ficult for lenders and servicers to obtain created significant, but hopefully not in- note. The Law Court held that, because
186 maine bar journal | FA L L 2 0 1 4
the foreclosing bank was not the origi- est has always been considered as a secu- protected by equity.”15
nal mortgagee (another lender made the rity interest only.”10 The Uniform Commercial Code
original loan and then sold it, a com- When the lender transfers the prom- (UCC) as adopted in Maine “codifies
mon practice within the industry), and issory note, the mortgage securing the the common-law rule that a transfer of
did not, in the Court’s view, hold a suffi- debt follows the note. The Law Court an obligation secured by a security in-
cient assignment of the mortgage, it did has described this as “the principle that terest or other lien on personal or real
not “own” the mortgage, and therefore determines the very essence of a mort- property also transfers the security in-
did not have standing to foreclose.6 In gage, namely, that the security follows terest or lien.”16 In other words, the
so ruling, the Court departed from es- the debt.”11 The Law Court has also held UCC “adopts the traditional view that
tablished Maine law confirming that the the mortgage follows the note; i.e., the
beneficial interest in a mortgage follows, transferee of the note acquires the mort-
and is not separated from, the note it se- The Saunders Court com- gage, as well.”17
cures when the note is transferred. The mented in a footnote that it was
Court imposed upon foreclosing lenders not addressing the situation The Maine Foreclosure Statute
a standing requirement—“ownership” where “the mortgage and the “In Maine, foreclosure is a creature
of the mortgage separate and distinct note are truly held by differ- of statute, see 14 M.R.S. §§ 6101-6325
from the note it secures—that appears ent parties,” but in that same (2013), and thus, standing to foreclose
nowhere in the Maine statute govern- footnote the Court cited its is informed by various statutory provi-
ing residential foreclosure actions or the own authority, going back over sions.”18 Maine is a judicial foreclosure
Court’s prior precedent. 100 years, confirming that the state, meaning that foreclosure must
As discussed further at the conclu- beneficial interest in a mortgage proceed by civil action.19 Section 6321
sion of this article, the adverse conse- defines who may bring a foreclosure
follows possession of the note it
quences of this decision to separate the action: “the mortgagee or any person
mortgage from the note for the purpose
secures, even without a separate claiming under the mortgagee may pro-
of analyzing standing to foreclose are assignment of the mortgage. ceed for the purpose of foreclosure by a
far-reaching and serious, and at this civil action.”20 The foreclosure statute it-
point probably require a legislative solu- that a separate assignment of the mort- self does not define “mortgagee” but the
tion. gage is not necessary to accomplish that common law definition established by
result.12 Although a bare legal interest in the Law Court is straightforward: “[A]
Maine Law on Mortgages the mortgaged premises may be held by mortgagee is a party that is entitled to
As described by a leading commen- another party, “he must hold the estate enforce the debt obligation that is se-
tator on Maine real estate law: in trust for the holder of the notes to cured by a mortgage.”21
secure which the mortgage was given,
The typical mortgage transaction whoever that holder may be,” 13 and may Law Court Precedent on Stand-
involves the execution of two doc- be compelled to convey that legal inter- ing to Foreclose before Greenleaf
uments: (1) a promissory note and As the Law Court itself observed in
(2) a mortgage deed. The promisso- Greenleaf, “we have not always clearly
ry note is the primary instrument; The sole purpose of the distinguished between issues of standing
it creates the legal obligation and mortgage–the “secondary and issues of proof.”22 Nevertheless, be-
makes the mortgagor personally instrument”–is to secure the tween 2010 and 2013, the Court issued
liable for payment of the debt. The “primary instrument,” the several decisions explicitly addressing
mortgage deed serves as collateral promissory note. It is therefore the plaintiff’s standing to bring a civil
security for the loan; it is the sec- action for foreclosure.23
ondary instrument and creates a
illogical to require “ownership” In those decisions, the Law Court
security interest in the land.7 of the mortgage, separate and articulated the general principles behind
distinct from the note, as a con- the standing requirement. “Because
Maine follows the title theory of dition of standing to foreclose. standing to sue in Maine is prudential,
mortgages, under which title to the Maine law has been clear on rather than of constitutional dimen-
mortgaged property passes from the this for many years: the mort- sion, we may ‘limit access to the courts
mortgagor (borrower) to the mortgagee gage follows the note. to those best suited to assert a particu-
(lender), subject to defeasance upon lar claim.’”24 “Verifying that a party has
satisfaction of the underlying debt, also standing ensures that there is ‘concrete
known as the equity of redemption.8 est to the legal holder of the promissory adverseness that facilitates diligent de-
Other states have adopted a lien theory note.14 As another leading commentator velopment of the legal issues present-
of mortgages.9 “However, as a practical on Maine real estate law has summarized ed.’”25 “At a minimum, ‘[s]tanding to
matter the distinction between lien- the rule: “If the note was assigned and sue means that the party, at the com-
theory states and title-theory states is the mortgage was not, the assignee has mencement of the litigation, has suffi-
largely academic; the mortgagee’s inter- an interest in the mortgage which will be cient personal stake in the controversy
F all 2 0 1 4 | maine bar journal 187to obtain judicial resolution of that con- longstanding Maine authority cited in to 11 M.R.S. § 3-1301.”37 The Clout-
troversy.’”26 Saunders establishing that the beneficial ier Court expressly held that the third
In Mortgage Electronic Registra- interest in the mortgage follows pos- paragraph of Section 6321 of the Maine
tion Systems, Inc. v. Saunders, the Law session of the note it secures, the Law foreclosure statute, requiring the mort-
Court confirmed that the only party Court commented that “JP Morgan gagee to “certify proof of ownership of
with standing to foreclose is the party would have been vulnerable to a motion the mortgage note and produce evi-
with the right to enforce the note.27 Be- by Harp challenging JP Morgan’s ability dence of the mortgage note, mortgage
cause a promissory note is a negotiable to foreclose at that time.”34 This com- and all assignments and endorsements
instrument, the Court specifically tied ment was superfluous to the holding in of the mortgage note and mortgage,”
that right to the person holding governed issues of proof only,
or possessing the original note and imposed no additional
under Section 3-1301 of the requirement for standing,
UCC.28 The Court in Saunders which was governed exclu-
expressly stated that the party sively by the first paragraph
entitled to foreclose—the “mort- of the statute.38 Regarding the
gagee” or a person claiming un- relevant language of the first
der it pursuant to Section 6321 paragraph of Section 6321,
of the Maine foreclosure statute stating that “the mortgagee
—“is a party that is entitled to or any person claiming under
enforce the debt obligation that the mortgagee may proceed
is secured by a mortgage.”29 The for the purpose of foreclosure
Saunders Court commented in by a civil action,” the Law
a footnote that it was not ad- Court had been equally clear:
dressing the situation where “the the case, because the Court concluded “In other words, a mortgag-
mortgage and the note are truly held by that the assignment of the mortgage to ee is a party that is entitled to enforce
different parties,” but in that same foot- JP Morgan before the borrower raised the debt obligation that is secured by a
note the Court cited its own authority, his objection to JP Morgan’s standing to mortgage.”39
going back over 100 years, confirming foreclose rendered the issue moot in any All of which makes perfect sense.
that the beneficial interest in a mortgage event.35 Going back to the general principles
follows possession of the note it secures, Then, in Bank of America, N.A. v. governing standing, the current holder
even without a separate assignment of Cloutier,36 the Law Court seemed to nail of a promissory note secured by a mort-
the mortgage.30 down once and for all the link between gage “has sufficient personal stake in the
The Law Court reaffirmed this link status as a holder of a promissory note controversy to obtain judicial resolution
between the holder of a promissory note under UCC Section 3-1301 and stand- of that controversy”40 in the event of a
under UCC Section 3-1301 and stand- default under the note. Even without
ing to foreclose in JP Morgan Chase v. a separate assignment of the mortgage,
Rather than relying on over a the current holder of the note also owns
Harp.31 Referring to the definition of century of Maine law confirm-
who can bring an action under Section the beneficial interest in that mortgage,
ing that the beneficial interest in protected by equity, which follows the
6321 of the Maine foreclosure statute—
“the mortgagee or any person claim-
a mortgage follows the owner- note under Maine law.41 That is the real
ing under the mortgagee”—the Court ship of the promissory note it party in interest under both the mort-
noted that “Maine has adopted the secures, the Court read into gage and the note,42 and the party “best
Uniform Commercial Code’s definition the Maine mortgage foreclo- suited to assert”43 the foreclosure claim.
of ‘person entitled to enforce’ an instru- sure law on standing a separa- Indeed, the Law Court has held that
ment,” quoting the language of UCC tion between ownership of the only the party with the right to enforce
Section 3-1301.32 mortgage and the legal right the note may foreclose on the mortgage
The Harp Court also noted that “[a]t the to enforce the note it secures, a securing that note.44
commencement of the litigation, JP A contrary view makes no sense. The
distinction not supported by the
Morgan owned the note, but not the sole purpose of the mortgage—the “sec-
plain language of the statute. ondary instrument”—is to secure the
mortgage,” because a written assign-
ment of the mortgage to JP Morgan “primary instrument,” the promissory
from the original holder of the note was ing to foreclose a mortgage securing that note.45 It is therefore illogical to require
not executed until several weeks after JP note. In language plain and simple, cit- “ownership” of the mortgage, separate
Morgan, as the new holder of the note, ing both Saunders and Harp, the Court and distinct from the note, as a condi-
had filed the foreclosure action.33 With- stated: “We have previously connected a tion of standing to foreclose. Maine law
out further discussion of the issue of party’s right to bring an action for fore- has been clear on this for many years:
who “owns” a mortgage, including the closure to its right to enforce pursuant the mortgage follows the note.46 Evi-
dence of conflicting claims to the mort-
188 maine bar journal | FA L L 2 0 1 4gage, when and if they actually arise, promissory note are bare legal title to the that case,55 can be read as endorsing the
can be dealt with as a matter of proof.47 property for the sole purpose of record- MERS system for assigning and releas-
As already noted, the Maine mortgage ing the mortgage and the corresponding ing mortgages.56
foreclosure statute requires the plain- right to record the mortgage with the That perspective, however, was
tiff, separate from the issue of standing, Registry of Deeds,” for the benefit of the placed in doubt by the Law Court’s de-
to “certify proof of ownership of the current owner of the promissory note.52 cision in Greenleaf. The Court adopted a
mortgage note and produce evidence The Saunders Court held that MERS narrow view of MERS’s legal authority
of the mortgage note, mortgage and all itself does not have standing to foreclose, to assign the mortgage in which it held
assignments and endorsements of the because it does not have “possession nominal title on behalf of the lender and
mortgage note and mortgage.”48 If that of or any interest in the note” secured its assigns.57 The Court held that such
proof leaves sufficient doubt concern- by the mortgage.53 The Court gave no assignments are legally insufficient to
ing that plaintiff’s legal right to enforce indication, however, that it saw any confer standing to sue for foreclosure on
the mortgage, the court can deny the the current holder of the note.58 Given
claim.49 That does not mean, however, the prevalence of mortgage assignments
that the plaintiff lacked standing to sue From there, the Court pro- and discharges executed by MERS un-
in the first instance. ceeded to analyze ownership of der this system, this ruling has thrown
That is where the law in Maine ap- the note and mortgage the mortgage and title industries in
peared to rest until the Greenleaf deci- Maine into potential chaos.
separately, contrary to over 100
sion. The Law Court overlooked or ig-
years of common law and nored prior precedent that could have
The Greenleaf Decision current UCC provisions em- avoided this result. Rather than relying
Discussion about Bank of America, phasizing the exact opposite. on over a century of Maine law confirm-
N.A. v. Greenleaf 50 has focused on Mort- ing that the beneficial interest in a mort-
gage Electronic Registration Systems, gage follows the ownership of the prom-
Inc. or MERS, and the continuing vi- problem with MERS’s performance of issory note it secures,59 the Court read
ability of MERS’s method of record- its essential functions as the Court itself into the Maine mortgage foreclosure
ing transfers (and also terminations) of described them: “to streamline the mort- law on standing a separation between
mortgage interests in Maine. An even gage process” by holding the nominal ownership of the mortgage and the le-
larger issue, foundational to Maine law interest in the mortgage through multi- gal right to enforce the note it secures,
on mortgages and foreclosures, is also in ple transfers of the note (“no matter how a distinction not supported by the plain
play, however. many times loan servicing, or the debt language of the statute.
The Law Court encountered MERS itself, may be transferred”), and execut- The Greenleaf Court began its analy-
previously in Saunders, where it de- sis of the standing issue with the premise
scribed the role of MERS in mortgage that, because foreclosure in Maine “is a
transactions as follows: Parties can no longer rely on creature of statute,” standing to foreclose
the MERS system for assigning is governed by the Maine foreclosure
MERS’s purpose is to streamline and releasing mortgage interests statute.60 The Court then acknowledged
the mortgage process by eliminat- in Maine. Even more significant- that the relevant statutory language, the
ing the need to prepare and record ly, the right “to enforce a debt first paragraph of 14 M.R.S. § 6321,
paper assignments of mortgage, permits “the mortgagee or any person
obligation that is secured by a
as had been done for hundreds claiming under the mortgagee” to “seek
of years. To accomplish this goal,
mortgage” no longer assures foreclosure of the mortgaged proper-
MERS acts as nominee and as standing to foreclose in Maine, ty.”61 Quoting its decision in Saunders,
mortgagee of record for its mem- even when the borrower admits the Court confirmed that “mortgagee”
bers nationwide and appoints it- the note is in default, and the means “a party that is entitled to enforce
self nominee, as mortgagee, for its lender’s beneficial interest in the the debt obligation that is secured by a
members’ successors and assigns, mortgaged property is uncon- mortgage.”62 Indisputably in the Green-
thereby remaining nominal mort- tested. leaf case, that was the plaintiff, Bank
gagee of record no matter how of America, N.A.,63 which should have
many times loan servicing, or the ended the standing inquiry in the plain-
debt itself, may be transferred.51 ing and recording at the registry of deeds tiff’s favor.
assignments or releases of the mortgage It was here that the Greenleaf Court
MERS itself does not hold or oth- when required on behalf of the benefi- departed from existing Maine law in
erwise own the promissory note or the cial owner.54 Indeed, the Saunders deci- a way that unexpectedly changed the
beneficial interest in the mortgage. As sion, which allowed substitution of the foreclosure landscape. The Court began
described by the Saunders Court, “the lender currently holding the promissory with the following comment: “Because
only rights conveyed to MERS in either note for MERS as the real party in in- foreclosure regards two documents—a
the . . . mortgage or the corresponding terest and proper foreclosure plaintiff in promissory note and a mortgage secur-
F all 2 0 1 4 | maine bar journal 189ing the note—standing to foreclose in- The Aftermath and Potential hardly seems like a good reason to over-
volves the plaintiff’s interest in both the Solutions ride established law governing beneficial
note and the mortgage.”64 From there, From a policy perspective, the sepa- ownership of security interests granted
the Court proceeded to analyze own- ration of the mortgage from the note by mortgages. And of course, this deci-
ership of the note and mortgage sepa- it secures announced in Greenleaf cre- sion is one more arrow in the quiver of
rately,65 contrary to over 100 years of ates obvious problems for lenders and borrowers’ counsel as they look for ways
common law and current UCC provi- a windfall for borrowers. It deprives to prevent foreclosures when there is no
sions emphasizing the exact opposite.66 lenders of bargained-for security that defense on the merits to the defaulted
The Court cited no language from the induced them to make the loan in the debt alleged.
Maine foreclosure statute support- first place, and allows borrowers to de- The resulting cost and chaos will be
ing this novel standing requirement of fault on their obligations without fac- significant. In addition to the financial
“ownership” of the mortgage separate ing consequences they agreed to accept. losses faced by lenders holding notes se-
and distinct from the note—because Debating the adequacy of the MERS cured by mortgages on which they no
none exists. The Court followed this paperwork assigning the mortgage in longer have standing to foreclose, there
new path based on the assertion that, this context is an academic exercise. In is also now significant turmoil in the
“[u]nlike a note, a mortgage is not a Greenleaf, nobody contended that the title industry as insurers struggle with
negotiable instrument,”67 and therefore, lender had misrepresented material facts how to address the title issues created by
“whereas a plaintiff who merely holds or that the borrower had been misled. this decision. MERS also executes and
or possesses — but does not necessarily records mortgage discharges, so the po-
own — the note satisfies the note por- tential title crisis is not limited to fore-
tion of the standing analysis, the mort- closures.72
The resulting cost and chaos Greenleaf creates a serious problem
gage portion of the standing analysis
requires the plaintiff to establish owner-
will be significant. In addition that needs to be fixed. It appears, how-
ship of the mortgage.”68 to the financial losses faced by ever, that any solution will need to come
Such concerns were merely hypo- lenders holding notes secured from the Legislature. The Law Court’s
thetical in Greenleaf, where the record by mortgages on which they no decision leaves little if any room for ju-
confirmed that Federal National Mort- longer have standing to fore- dicial correction and the dominoes are
gage Association (FNMA or Fannie close, there is also now signifi- already falling in foreclosure cases pend-
Mae), for whom the plaintiff Bank of cant turmoil in the title industry ing in the Superior and District Courts.
America serviced the loan, “is in fact as insurers struggle with how to Even final judgments in foreclosure ac-
the owner of the note,”69 and “that the address the title issues created by tions concluded before Greenleaf could
Bank has the priority interest in the this decision. be subject to challenge.73 Title insurers
property,” and “there are no other par- are scrambling to adjust, and litigation
ties that claim an interest in the prop- in that area may be around the corner.
erty.”70 There was no actual contest over Opportunities for self-help are limited.
“ownership” of the mortgage in Green- The intent of all parties involved could One option is to return to the original
leaf, and even if there was it should have not have been clearer, yet the result—the lender to obtain a substitute assign-
been resolved as a matter of proof, not borrower defaults, but does not forfeit ment of the mortgage, but if that origi-
standing. the security pledged for the defaulted nal lender is no longer in business—an
To have standing to foreclose, it had obligation to the current holder of the all-too-common occurrence since the
appeared to be enough before Greenleaf note—is the exact opposite. This exalts real estate bubble burst in 2008—the
that the plaintiff had the legal right to form over substance. current holder of the note may be out
enforce the note secured by the mort- Policy arguments in favor of such of luck. The Law Court did leave open
gage. The viability of the MERS re- an approach are difficult to divine. Cer- the possibility of proving “that MERS
cording system did not appear to be tainly, big banks are not very popular acquired [the requisite] authority [to as-
an obstacle to establishing standing to these days, and the hue and cry to fur- sign] the mortgage by . . . means other
foreclose in Maine. After the Greenleaf ther punish Wall Street can be difficult than that defined in the mortgage it-
decision, that is no longer true. Parties to resist. Given the prevalence of the self,”74 for example under the MERS
cannot necessarily rely on the MERS MERS system, however, smaller com- membership agreement and rules, docu-
system for assigning and releasing mort- munity banks are potentially caught in ments that were not part of the record
gage interests in Maine. More signifi- this trap as well. A string of recent law- in Greenleaf.
cantly, the right “to enforce a debt obli- suits illustrates one motivation for dis- It will be interesting to see in the
gation that is secured by a mortgage” no rupting the MERS recording system— coming months how the lending and
longer assures standing to foreclose in claims by county registries of deeds that title communities respond to these chal-
Maine, even when the borrower admits they are being deprived of fees because a lenges created by the Law Court’s deci-
the note is in default, and the lender’s new assignment of the mortgage is not sion in Greenleaf, and whether the Leg-
beneficial interest in the mortgaged recorded every time the loan is trans- islature is willing to step in to help solve
property is uncontested. ferred.71 Filling county coffers, however, these problems.
190 maine bar journal | FA L L 2 0 1 4not a sufficient interest on which to fore- 28. See id. at ¶ 12 (citing 11 M.R.S.
close under current law, see Mortg. Elec. § 3-1301 (2009)). The Court also noted
Registration Sys., Inc. v. Saunders, 2010 that, under Section 3-1301, a note may
ME 79, ¶ 15, 2 A.3d 289. be enforced by a party “purporting to
12. Jordan v. Cheney, 74 Me. 359, enforce a lost, destroyed, or stolen instru-
361 (1883) (“Nor is an assignment of the ment pursuant to 11 M.R.S. § 3-1309
mortgage necessary.”) (2009), or . . . purporting to enforce a
13. Id. at 361-62. dishonored instrument pursuant to 11
14. See Averill v. Cone, 128 Me. 546, M.R.S. § 3-1428(4) (2009).” Id.
149 A. 297 (1930). 29. Id. at ¶ 11 (emphasis in origi-
15. C. Cowan, Maine Real Estate nal).
John Aromando is a partner at Pierce Law and Practice, Section 13.2, at 519 (2d 30. Id. at ¶ 11 n. 3 (citing Averill
Atwood, LLP, where he represents lenders
in complex lawsuits including class actions ed. 2007) (citing Stone v. Locke, 46 Me. v. Cone, 129 Me. 9, 11-12, 149 A. 297
involving mortgage loans and mortgage fore- 445 (1859)). (1930); Wyman v. Porter, 108 Me. 110,
closures. He may be reached at jaromando@ 16. 11 M.R.S. § 9-1203(7) cmt. 9. 120, 79 A. 371 (1911); Jordan v. Cheney,
pierceatwood.com. 17. 11 M.R.S. § 9-1308 cmt. 6.; 74 Me. 359, 361-62 (1883)).
see also Report of the Permanent Edito- 31. 2011 ME 5, 10 A.3d 718.
rial Board for the Uniform Commercial 32. Id. at ¶ 9 n. 3.
Code 12 (Nov. 2011), available at http:// 33. Id. at ¶ 9.
1. 2014 ME 89, 96 A.3d 700. www.uniformlaws.org/Shared/Com- 34. Id.
2. F. Hilliard, The Law of Mortgages, mittees_Materials/PEBUCC/PEB_Re- 35. Id. at ¶ 14.
of Real and Personal Property, Preface to port_111411.pdf. 36. 2013 ME 17, 61 A.3d 1242.
First Edition (1852) (emphasis in origi- 18. Bank of America, N.A. v. Green- 37. Id. at ¶ 16.
nal). leaf, 2014 ME 89, ¶8, 96 A.3d 700. 38. Id. at ¶¶ 14-17.
3. See, e.g., Federal Nat’l Mortgage As- 19. See id. at ¶ 17, n. 11; 14 M.R.S. 39. Mortg. Elec. Registration Sys.,
soc. v. Bradbury, 2011 ME 120, 32 A.3d § 6321. Inc. v. Saunders, 2010 ME 79, ¶ 11, 2
1014; HSBC Mortgage Services, Inc. v. 20. 14 M.R.S. § 6321. A.3d 289; see also Bank of America, N.A.
Murphy, 2011 ME 59, 19 A.3d 815. 21. Bank of America, N.A. v. Green- v. Cloutier, 2013 ME 17, ¶ 17, 61 A.3d
4. See, e.g., Beneficial Maine Inc. v. leaf, 2014 ME 89, ¶ 9, 96 A.3d 700 1242 (“In contrast, paragraph one of sec-
Carter, 2011 ME 77, 25 A.3d 96; Bank of (quoting Mortg. Elec. Registration Sys., tion 6321 can be read consistently with
America, N.A. v. Greenleaf, 2014 ME 89, Inc. v. Saunders, 2010 ME 79, ¶ 11, 2 [UCC] Article 3-A to specifically define
¶¶ 25-27, 96 A.3d 700; but see The Bank A.3d 289 (emphasis omitted)). who may enforce a promissory note.”).
of Maine v. Hatch, 2012 ME 35, 38 A.3d 22. Bank of America, N.A. v. Green- 40. See supra at note 26.
1260; Bank of America, N.A. v. Barr, leaf, 2014 ME 89, ¶8, 96 A.3d 700. 41. See supra at notes 7-17.
2010 ME 124, 9 A.3d 816. 23. See, e.g., Mortg. Elec. Registra- 42. See Me. R. Civ. P. 17(a) (“Every
5. 2014 ME 89, 96 A.3d 700. tion Sys., Inc. v. Saunders, 2010 ME 79, action shall be prosecuted in the name of
6. Id. at ¶¶ 6-17. 2 A.3d 289; JP Morgan Chase Bank v. the real party in interest.”).
7. P. Creteau, Maine Real Estate Harp, 2011 ME 5, 10 A.3d 718; Bank of 43. See supra at note 24.
Law, Ch. 10, at 232 (1969) (emphasis in America, N.A. v. Cloutier, 2013 ME 17, 44. Mortg. Elec. Registration Sys., Inc.
original). 61 A.3d 1242. v. Saunders, 2010 ME 79, ¶¶ 12-15, 2
8. Johnson v. McNeil, 2002 ME 99, ¶ 24. Mortg. Elec. Registration Sys., Inc. A.3d 289.
10, 800 A.2d 702. v. Saunders, 2010 ME 79, ¶ 14, 2 A.3d 45. See supra at note 7.
9. P. Creteau, Maine Real Estate Law¸ 289 (quoting Lindemann v. Comm’n on 46. See supra at notes 7-17.
Ch. 10, at 234 n. 11 (1969). Govtl. Ethics & Election Practices, 2008 47. See, e.g., Deutsche Bank National
10. Id. (citing Pettengill v. Turo, 159 ME 187, ¶ 8, 961 A.2d 538, 541-42). Trust Company v. Wilk, 2013 ME 79, ¶¶
Me. 350, 13 A.2d 367 (1963)). 25. JP Morgan Chase Bank v. Harp, 11-22, 76 A.3d 363; Wells Fargo Bank,
11. Wyman v. Porter, 108 Me. 110, 2011 ME 5, ¶ 8, 10 A.3d 718 (quoting N.A. v. Burek, 2013 ME 87, ¶¶ 12-16,
120, 79 A. 371 (1911); see also Jordan Halfway House, Inc. v. City of Portland, 81 A.3d 330.
v. Cheney, 74 Me. 359, 361-63 (1883). 670 A.2d 1377, 1380 (Me. 1996) (quota- 48. 14 M.R.S. § 6321; see Bank of
Older decisions using contrary language, tion marks omitted)). America, N.A. v. Cloutier, 2013 ME 17,
see, e.g., Stanley v. Kempton, 59 Me. 26. Mortg. Elec. Registration Sys., Inc. ¶¶ 15-17, 61 A.3d 1242.
472 (1871); Dwinel v. Perley, 32 Me. v. Saunders, 2010 ME 79, ¶ 7, 2 A.3d 49. See, e.g., Deutsche Bank National
197 (1850); Smith v. Kelley, 27 Me. 472 289 (quoting Halfway House, Inc. v. City Trust Company v. Wilk, 2013 ME 79, ¶¶
(1847), to the extent still viable, refer of Portland, 670 A.2d 1377, 1379 (Me. 11-22, 76 A.3d 363.
only to the bare legal interest in the mort- 1996) (citing Sierra Club v. Morton, 405 50. 2014 ME 89, 96 A.3d 700.
gaged property, which in and of itself is U.S. 727, 731 (1972))). 51. Mortg. Elec. Registration Sys., Inc.
27. 2010 ME 79, ¶¶ 7-15, 2 A.3d v. Saunders, 2010 ME 79, ¶ 8, 2 A.3d
289. 289 (quoting MERSCORP, Inc. v. RoI,
F all 2 0 1 4 | maine bar journal 191861 N.E.2d 81, 86 (N.Y. 2006) (Kaye, therefore enjoys the right to enforce the Case No. 2:2014cv05500 (E.D. Pa., filed
C.J., dissenting)). debt.” (Emphasis added.)) Sept. 24, 2014).
52. Id. at ¶ 10. 64. Id. at ¶ 9. 72. See 33 M.R.S. § 551 (requiring
53. Id. at ¶ 15. 65. Id. at ¶ 12 (“The interest in the “a written instrument . . . signed and
54. Id. at ¶ 8. note is only part of the standing analysis, acknowledged by the mortgagee or by
55. Id. at ¶ 19. however; to be able to foreclose, a plain- the mortgagee’s duly authorized officer or
56. I, 2013 ME 17, ¶¶ 1, 4-5, tiff must also show the requisite interest agent, personal representative or assignee”
16-18, 61 A.3d 1242 (indicating, in in the mortgage.”) to discharge a mortgage, and imposing
response to a reported question, that the 66. See supra at notes 7-17. liability for the failure of the mortgagee
current holder of the promissory note, 67. Bank of America, N.A. v. Green- within 60 days after full performance
with an assignment of the mortgage by leaf, 2014 ME 89, ¶ 12, 96 A.3d 700 of the conditions of the mortgage to
MERS, had standing to foreclose). (citing 5 Emily S. Bernheim, Tiffany “record a valid and complete release of
57. Bank of America, N.A. v. Green- Real Property, § 1455 n. 14 (3d ed. Supp. the mortgage together with any instru-
leaf, 2014 ME 89, ¶¶ 13-16, 96 A.3d 2000)). ment of assignment necessary to establish
700. 68. Id. (emphasis in original). the mortgagee’s record ownership of the
58. Id. 69. Id. at ¶ 21. mortgage.”)
59. See supra at notes 7-17. 70. Id. at ¶ 28. 73. But see Bank of Am., N.A. v.
60. Bank of America, N.A. v. Green- 71. See, e.g., Union County, Ill. v. Kuchta, Slip Opinion No. 2014-Ohio-
leaf, 2014 ME 89, ¶ 8, 96 A.3d 700. MERSCORP, Inc., 920 F.Supp.2d 923 4275 (Oct. 8, 2014) (holding that a final
61. Id. at ¶ 9. (S.D. Ill. 2013); Montgomery County, judgment of foreclosure is not subject to
62. Id. Pa. v. MERSCORP, Inc., 904 F.Supp.2d collateral attack under Rule 60(b) or for
63. Id. at ¶ 11(“This is precisely 436 (E.D. Pa. 2012). More recently, lack of subject matter jurisdiction based
what the Bank established and the court one county has asserted a similar claim on the plaintiff’s alleged lack of standing
found in this matter; as the possessor of a against banks participating in the MERS to commence the foreclosure action).
note indorsed in blank, the Bank proved recording system. Montgomery County, 74. Bank of America, N.A. v. Green-
its status as the holder of the note and Pa. v. The Bank of New York Mellon et al., leaf, 2014 ME 89, ¶ 15, 96 A.3d 700.
nhdlaw.com • Portland (207) 774-7000 • Lewiston (207) 777-5200
192 maine bar journal | FA L L 2 0 1 4You can also read
