U.S. BANK v COMBS | NYSC - "Not shown that MERS had any authority as nominee for the original lender to assign the note"


U.S. BANK v COMBS | NYSC – “Not shown that MERS had any authority as nominee for the original lender to assign the note”

U.S. BANK v COMBS | NYSC – “Not shown that MERS had any authority as nominee for the original lender to assign the note”



– against –

MARC D. COMBS, et al.,

On July 13, 2006, defendant executed a note, which was secured by a mortgage, in the
amount of $440,000.00 in favor of the lender, Mortgage Lenders Network USA, Inc
(Mortgage Lenders). The mortgage document stated, inter alia, that Mortgage Electronic
Registration Systems, Inc., or MERS, “is a separate corporation that is acting solely as a
nominee for Lender and Lender’s successors and assigns” and that MERS was the mortgagee
of record for purposes of recording. On June 16, 2007, MERS, as nominee, assigned the
mortgage, together with the bond or obligation described therein, to Wells Fargo Bank, NA
(Wells Fargo). On March 30, 2010, Wells Fargo then assigned the mortgage and note to

Plaintiff then commenced the within action by filing a copy of the summons and
complaint and lis pendens on April 6, 2010, after defendant was alleged to have defaulted
by failing to make payments due under the mortgage on September 1, 2009. Defendant was
served with process on April 21, 2010, pursuant to CPLR 308 (4). Defendant filed his
verified answer on August 2, 2010, asserting, inter alia, lack of standing to sue. On his
motion, defendant asserts that the purported assignment from Wells Fargo to plaintiff is a
nullity since MERS – who had no authority to assign the underlying note as a nominee –
executed the first assignment to Wells Fargo. Defendant also points out that “plaintiffs have
filed two foreclosure actions on the same property . . . based upon the same mortgages,
assignments etc.,” under Index No. 13129/2007; as such, defendant seeks dismissal of the
within action and related relief.

In opposition to the motion, counsel for plaintiff states, among other things, that: (1)
she has been advised by her client that plaintiff is in possession of the original note but
obtaining the document takes “considerable time” and, thus, the motion should be denied or
adjourned to allow plaintiff time to evidence its standing; (2) MERS has the authority to
assign the mortgage by virtue of the original lender’s membership in the MERS system; and
(3) defendant has no authority to challenge the assignment since, inter alia, the challenge is
not whether the debt exists but rather to whom it is owed.

In an action to foreclose a mortgage, plaintiff establishes standing by demonstrating
that it is both the holder or assignee of the subject mortgage as well as the holder or assignee
of the underlying note, by proving either physical delivery or execution of a written
assignment prior to commencement of the action (see Deutsche Bank Nat. Trust Co. v Rivas,
95 AD3d 1061 [2012]; HSBC Bank USA v Hernandez, 92 AD3d 843 [2012]; Citimortgage,
Inc. v Stosel, 89 AD3d 887 [2011]).

In the case at bar, plaintiff failed to demonstrate that it had standing to commence the
action. To the extent that counsel for plaintiff states that plaintiff is in possession of the
underlying note, same is insufficient to warrant denial of the motion. Preliminarily, it is
noted that an attorney affirmation is without evidentiary value (see e.g. Zuckerman v City of
New York, 49 NY2d 557 [1980]; Winter v Black, 95 AD3d 1208 [2012];Currie v Wilhouski,
93 AD3d 816 [2012]). It is further noted that plaintiff did not present any evidence (by way
of an affidavit from its representative) to demonstrate how or when it became the lawful
holder of the note (see Citimortgage, Inc., 89 AD3d at 888). Finally, upon commencement
of this action, plaintiff should have been prepared to demonstrate its standing to sue.

To the extent that plaintiff argues that it had the authority to assign the mortgage,
plaintiff has not shown that MERS had any authority as nominee for the original lender to
assign the note (see e.g. Bank of New York v Silverberg, 86 AD3d 274 [2011]); it is wellsettled
that a transfer of the mortgage without the underlying obligation is a nullity (see U.S.
Bank Nat. Assn. v Dellarmo, 94 AD3d 746 [2012]; Bank of New York, 86 AD3d at 280).

Finally, plaintiff’s contention that defendant does not have the authority to challenge
standing is simply without merit. While a debt may indeed be owed, plaintiff cannot
demonstrate that it is the party entitled to foreclose on same.

To the extent that defendant seeks other relief based upon the fact that there are two
actions pending to foreclose on the same mortgage, the related action was discontinued by
order dated February 1, 2012 and, as such, the motion is denied as moot.

Accordingly, defendant’s motion is granted to the extent that the complaint is hereby
dismissed without prejudice, and the notice of pendency heretofore filed in this action on or
about April 6, 2010 is hereby canceled. Upon service of a copy of this order with notice of
entry, the Clerk of Queens County is directed, upon the payment of proper fees, if any to
cancel and discharge said notice of pendency and to enter upon the margin of record of same
a Notice of Cancellation referring to this order.

Dated: October 10, 2012


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One Response to “U.S. BANK v COMBS | NYSC – “Not shown that MERS had any authority as nominee for the original lender to assign the note””

  1. Charles Reed says:

    Wells Fargo got the same problem with the 1.3 million Washington Mutual Bank government insured loans as they don’t have any proof they own the loan they foreclosed upon nor any of the loans they are still servicing for Ginnie Mae as Washington Mutual Bank is defunct.

    This is a snowball rolling down hill and not way to stop the information coming out on a daily basics. What you have in every single Washington Mutual FHA & VA loan (these loan were not sold to JPMorgan Chase) as they were in Ginnie Mae, and in some case the loan was sold to Washington Mutual and in other case they originated the loan but in all cases they relinquished the Note signed blank over to Ginnie Mae which is a fatal mistake because they separated the Notes, debt & security instrument .

    MERS claims that lender who have sold all the rights to these loan is the one giving them authorization to submit these fraudulent assignment should be the end of MERS as we know it.

    American taxpayers right now are owed $24 billion (plus damages) so far because of the fraud Ginnie Mae allowed these banks to put in their pockets in exchange for the properties proceeds from the illegal foreclosures. Can you say securities violation.


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