Finder’s Keepers? Possession of Mortgage Note Generally, But Not Always, Needed For Foreclosure

by:    Michael L. Rich

Mortgage holders seeking to foreclose on delinquent mortgagors need to be aware of a recent precedential ruling that imposed a strict requirement concerning proof of standing.  The N.J. Appellate Division, in Wells Fargo Bank, N.A. v. Ford, A-3627-06, held on January 28, 2011 that a bank could not proceed with foreclosure on a residential home unless it proved it acquired ownership or control of the mortgage note from the original lender.                

Wells Fargo asserted that it acquired the mortgage and underlying $403,750 promissory note by assignment from the original lender, Argent Mortgage Co.   The assignment had not been recorded.  Wells Fargo nonetheless won summary judgment below based on a certification from someone who claimed knowledge of the amounts owed for principal, interest and other charges, but who did not indicate the source of that knowledge.

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