Bank can foreclose despite lost mortgage note, judge rules

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Superior Court Judge Mary F. Thurber

THUMBS DOWN

JUDGE THURBER HAS NOT CAUGHT UP WITH THE LAW.

When Judges do this, they are letting their emotions and personal ideology get in the way of the rule of law. She had no evidence in front of her — at least none that was competent. She would have no way of knowing if anyone was getting a windfall without hearing evidence. Instead she focused on the paperwork. — AND AS LONG AS YOUR OPPOSITION GETS THE JUDGE TO GO HEAD DOWN ON THE PAPERWORK WITHOUT LOOKING UP AT YOU TELLING HIM OR HER THAT THE FACTS ARE AT VARIANCE WITH THE PAPERWORK, YOU ARE GOING TO HAVE TROUBLE.

But let’s face it. With some people you can be clear as glass and smooth as silk and totally right on the facts and the law and lose anyway. Perhaps some good will come out of this case on appeal.

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A Bergen County judge has ruled that a lender can foreclose on a mortgage even if the lender doesn’t have the mortgage note because a previous lender lost it.

Bogota homeowner Janett Alvarado challenged Bank of America’s right to foreclose on her home, arguing that it did not possess the note for the $292,000 mortgage.

Bank of America acknowledged that the note was lost by the original lender, now-defunct Washington Mutual. Washington Mutual transferred the loan obligation to LaSalle Bank, which was later merged with Bank of America.

“The pivotal issue is … whether any person other than the person who lost the note can enforce a lost note,” wrote Superior Court Judge Mary F. Thurber in her recent ruling. “This court is persuaded that Bank of America, as successor to LaSalle National Bank … has the right to enforce the obligation represented by the lost note.”

To decide otherwise, Thurber wrote, would result in a “windfall” to the homeowner. “That result would not be equitable,” she wrote, pointing out that Alvarado admitted she had not paid her mortgage since 2008. Thurber also noted that Washington Mutual had signed an affidavit of lost note in July 2006.

In a statement, Bank of America said it “is pleased with the court’s ruling to permit this matter to move toward resolution.”

Alvarado’s lawyer, Joshua Denbeaux of Westwood, said he plans to appeal the ruling.

“If they don’t possess the note, the bank doesn’t have standing to foreclose,” he said. “New Jersey law says the only person who can enforce it is the person who lost it.” That would be Washington Mutual, which no longer exists.

Foreclosures hit a record 65,000 in New Jersey last year, triple the number of 2006. As the tide of foreclosures has risen nationwide, lawyers defending distressed homeowners have fought back by challenging the legal paperwork. Several big lenders, including Bank of America, suspended their foreclosure activity last fall, acknowledging irregularities including “robo-signing” — when employees signed affidavits without verifying their accuracy.

Responding to the reports of robo-signing, New Jersey Chief Justice Stuart Rabner recently ordered lenders to show that their foreclosure procedures were in order, or face a state-imposed freeze of foreclosure activity. The lenders are due in court in Trenton on March 1 in that case.

Tags: Superior Court Judge Mary F. Thurber
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