US court exposes the Achilles Heel of securitisation
“In order to have standing to foreclose a mortgage, a party ‘must own or control the underlying debt.'”
New Jersey litigants need look no further. In fact, in every other state of the U.S. you will find the same decisions each quoting from several other to the same effect. Courts across the country have usually confused the issue and accepted the allegation of ownership as proof of ownership. This court answers that as well:
To establish such ownership or control, Plaintiff must present properly authenticated evidence that it is the holder of the note or a non-holder in possession with rights of the holder.”
So what is a holder, such that the party has established “ownership or control of the underlying debt.” That is the issue that has been blurred by the banks.
The banks focus on the state statutes (UCC) enabling a holder to enforce without ever establishing that the party owns or controls the underlying debt. If you think about it that is nonsense. But that one thing, more than anything else, is responsible for millions of wrongful foreclosures.
Here are some basic black letter rules, quoted in the NJ case, that have been followed for centuries:
- A holder must possess the original note.
- Transfer of possession must be “authenticated by an affidavit or certification based upon personal knowledge.”
- A party relying upon power of attorney or other document must produce the authenticated original of that document.
- Using the words “as attorney in fact” means nothing unless the party is able to produce a witness who, in their own personal knowledge, knows and states that the POA is in writing and has not been revoked.
- That witness must be able to lay the factual foundation and authentication for introduction of the Power of Attorney or any other such document.
- Without such foundation and authentication, any testimony or documents proffered by virtue of the POA cannot be admitted into evidence and for purposes of the case then, such statements or documents do not exist.
- A party who claims a legal relationship with another party and who relies upon it for proffering evidence must provide evidence of the legal relationship.
- A Power of Attorney must be in writing, duly signed and acknowledged as set forth in state statutes. Oral Powers of Attorney cannot be used to circumvent the requirement that interests in real property (including mortgages) must be in writing.
- A party seeking to enforce a note must be able to establish, though competent evidence, the location and the previous locations of the note in order to establish possession and the right to enforce, respectively.
- Certifications must be based upon personal knowledge and not general familiarity.
- If testimony is offered based upon a “review” of records, the records must be present or the witness must identify those records and how the witness acquired personal knowledge of their content.
- Assignments of mortgage must be authenticated by a person who has personal knowledge of the assignment (and the circumstances in which the assignment occurred). Otherwise the assignment is hearsay and must be excluded from evidence unless otherwise admitted for different reasons. Hearsay statements in assignments cannot be admitted into evidence and for purposes of the case then, such statements do not exist.
- The fact that an assignment or other document exists as an original or a copy does not mean that what is written on it can be admitted into evidence. But without a proper objection, the document can be admitted into evidence as proof of the matters asserted therein.
- A document signed by an agent or “nominee” like MERS after the demise of the principal is void because the power of attorney expires upon expiration of the principal. If the originator no longer exists, MERS is not authorized to act on behalf of the original.
NJ court decision