Ohio Appeals Court: Homeowners Can Challenge Transfers of Loans and Loan Documents

Dec 9, 2015

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This article presents persuasive but not binding decisions reported in the State of Ohio. Seek legal counsel before making any decisions or taking any actions.

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U.S. BANK v GEORGE | OH Appeals Ct – to disregard the contradicting copies of the note without proper authentication of current documentation and explanation of the discrepancies, “would be unjust…

In an appellate decision echoing Judge Boyco’s decisions from many years ago, the appellate court in Ohio has expressed outright what we have have been advancing on these pages since 2007. The paperwork is not presumptively valid and by now the banks have essentially proven, as in this case, that they cannot be trusted to present anything other than fabricated instruments.

The presumptions relied upon by the banks is that even if the documents were altered or forged, the borrower had no right to challenge the procedure, the actors or the documents. This decision explicitly states that such an approach is inherently defective and even reversed its own prior decisions.

Here are some quotes from the decision:

Appellants argue that different copies of the note—the first attached to the complaint and amended complaint, and the second attached to the motion for summary judgment—present genuine issues of material fact to preclude summary judgment. We find this point to be well-taken, and we depart from the conclusion of the trial court.

We thus extend our holding in Pasqualone to clarify that standing broadly exists for persons to challenge the validity of the transfer of a note or assignment of the mortgage, whether or not in privity with the person entitled to enforce the note or mortgage, regardless of whether or not the note has been negotiated and transferred under R.C. Chapter 13, Ohio’s codification of the Uniform Commercial Code.

{¶ 26} ” ‘ “Where the party does not rely on any specific statute authorizing invocation of the judicial process, the question of standing depends on whether the party has alleged * * * a ‘personal stake in the outcome of the controversy.’ ” ‘ ” Schwartzwald at ¶ 21, quoting Cleveland v. Shaker Hts., 30 Ohio St.3d 49, 51 (1987), quoting Middletown v. Ferguson, 25 Ohio St.3d 71, 75 (1986), quoting Sierra Club v. Morton, 405 U.S. 727, 731-32 (1972), quoting Baker v. Carr, 369 U.S. 186, 204 (1962). The maker of a note or mortgagor who is facing enforcement at law on the note or enforcement in equity on the mortgage has a personal stake in challenging whether a person claiming to be entitled to enforce such a note or a mortgage has been duly transferred or assigned rights under either or both instruments, regardless of whether or not the challenger is in privity with the person claiming the right to enforce.

we clarify governing case law and overrule our previous holding in Locke, fully restoring the burden placed on the person asserting entitlement to enforce the note or mortgage. Accordingly, the maker of the note or mortgage has standing to challenge their enforcement against the maker, even if not a party in privity to the particular transfer or assignment challenged.