IN THE SUPREME COURT OF OHIO
SRMOF 2009-1
TRUST
Appellee
vs
SHARI LEWIS, et aL *
Appellant.
“Pay no attention to the man behind the curtain.”
– L. Frank Baum, The Wonderful Wizard of Oz
REPLY ARGUMENT
SRMOF offers the Court three different propositions of law which it believes will validate the Court of Appeals’s decision and lead to a conclusion that it had standing to sue because of its acquisition of an interest in the mortgage. Some of the arguments are premised on the “complexity” of modern mortgage financing. Others are based on a limited reading of the Mortgage itself. Still others find life in circumstances not before the Court. What it does not do, however, is examine the actual verbiage of the mortgage. Neither does it explore the underpinnings of the general rules on which its arguments are based. Once that is done, once the curtain is pulled back, the issues before the Court become much simpler to resolve.
FACTS REDUX:
Much of SRMOF’s argument relates to the rights it claims it acquired under the Assignment of Mortgage from Selene Finance, LP in August 2011. Because so much of SRMOF’s argument revolves around the contractual language of the Mortgage and the path of the Note, Lewis asks the Court to carefully review the record. Doing so will outline why the rights that were transferred by and to the various parties involved in Lewis’s loan did not confer standing on SRMOF until long after suit was filed.
Where’s The Note?
The complete path of the Note is not shown by the record. ‘The record reveals that at only two points of time was the location of the note positively known. Lewis issued the Note to First Union Mortgage Corporation on November 21, 2001.
Appellee Supp. S-4.
First Union apparently endorsed the Note in blank, making it bearer paper (the date of the endorsement is unknown). “There is nothing in the record to indicate where the Note went after the endorsement. SRMOF came into possession of the original Note sometime between August 14, 2012 and August 24, 2012. Notice To Withdrawal of Amended Motion for Summary Judgment Appellee Supp. S-66.
The lack of a Note did not, however, slow the wheels of the secondary mortgage market. On December 10, 2010, Wells Fargo Bank, N.A. executed a Lost Note Affidavit And Indemnification Agreement “in favor of Selene Finance.” Appellee Supp. S-50.
Contrary to SRMOF’s contention, the Lost Note Affidavit And Indemnification Agreement did not provide any information about the location of the Note since Lewis issued it. Neither was the document sufficient to grant to any person the right to enforce the Note.
The Mortgage Moves – A Lot.
Lewis executed the Mortgage on November 21, 2001. Appellee Supp. S- 7.
The Mortgage was granted to Mortgage Electronic Registration Systems, Inc., (MERS) “solely as nominee for Lender and Lender’s successors and assigns.” Id. “Lender” is defined as First Union Mortgage Corporation. Appellee Supp. S-8.’
The Mortgage was then assigned thrice.
A. Assignmerit No. 1- from MERS, “acting solely as nominee for First Union Mortgage Corporation” to “Wells Fargo.” (June 9, 2011). Appellee Supp. S-23.
This assignment was executed more than six months after Wells Fargo Bank, N.A. executed the Lost Note Affidavit And Indemnification Agreement.
B. Assignment No. 2 – from Wells Fargo Bank, N.A. to Selene Finance, LP (August 8, 2011) Appellee Supp. S-26
C. Assignment No. 3 – Selene Finance, LP to SRMOF 2009-1 ‘Trust (August 24, 2011). Appellee Supp. S-29.
1. AN INTEREST IN THE MORTGAGE IS NOT ENOUGH TO CONFER STANDING.
Lewis does not contest the general proposition that a mortgagee to whom specific rights are granted can sue for breach of the mortgage’s terms. This general principal, however, presumes two important facts. First, the mortgage must indeed grant rights to the mortgagee. In other words, the mortgagor’s duties must flow to the mortgagee, not to a third party for whom the mortgagee is acting. Second, the mortgagee whose rights have been violated must actually sue for a breach of its rights. Neither of those facts is present in this case.
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