Vincent Howard and our Moreno Valley foreclosure defense attorneys were interested to see a case that put a twist on demands to "show me the note" as a way to stop foreclosure. This took place in Maine, the state where robo-signing first became a major issue, and where the courts have therefore been hesitant to simply rubber-stamp foreclosures. In Bank of America v. Cloutier, Bank of America was the servicer for James Cloutier, who does not dispute that he was in default on his mortgage when the bank began a foreclosure. Freddie Mac actually owned the note, but the note, endorsed in blank, was in the possession of Bank of America. The trial court in the foreclosure case asked the Maine Supreme Court to rule on what proof of ownership is required under Maine law for foreclosure purposes.
Cloutier and the bank jointly stipulated all of the facts. Cloutier took out his home loan in 2006 and missed his first payment in January of 2010. The original lender endorsed the note to Countrywide, which endorsed it to another arm of Countrywide, which endorsed it in blank. Freddie Mac bought the note in 2006 and remains the owner, but Bank of America, the servicer for the loan, has physical possession. It pursued the foreclosure in its capacity as servicer by filing a foreclosure complaint in 2010. After mediation, the bank moved for summary judgment. Before it ruled, however, the trial court asked the Maine high court for a ruling, citing contradictory rulings in the lower courts about whether the bank may pursue a foreclosure as a "mortgagee or any person claiming under the mortgage."
The Maine judicial foreclosure statute, as amended in 2009, requires the mortgagee to certify proof of ownership of the note and produce evidence of the note, mortgage and all assignments and endorsements. Cases arising since the amendments have been silent about the first requirement, at issue here, the Maine high court said. Cloutier argues that the law means only the owner of the note may foreclose, not a holder of the note or another entity entitled to enforce it--but the high court disagreed. It read the requirement to "certify proof of ownership" as a requirement to provide the evidence described by the rest of the sentence: the documents, endorsements and assignments, not as a limitation on standing. Thus, because Bank of America unambiguously has the right (via contract and ownership) to enforce the note, the court said, it may foreclose as long as it can show those documents.
Vincent Howard and our Tustin foreclosure defense lawyers appreciate that the high court reminded foreclosing entities to have their paperwork in order. The fact that Maine's foreclosure statute was amended in 2009 suggests that the state has learned lessons from the housing downturn. Many lenders all over the country started foreclosures in 2008 and 2009 without adequate proof of ownership, and the Maine statute, reiterated by this decision, clearly requires it. The homeowner in this case was not concerned so much with the chain of ownership as with whether the law permits anyone other than the owner to foreclose. At Howard Law, P.C., our Yucaipa foreclosure defense attorneys vigorously defend foreclosures that don't appear to be in proper order, because we don't believe it's too much to ask for proof before banks are permitted to take people's property away.
If you're fighting a foreclosure that you believe is wrongful or could have been avoided, Vincent Howard and the experienced attorneys at Howard Law can help. Tell us your story or learn more about your rights by sending us a message online or calling toll-free at 1-800-872-5925.