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Wells Fargo Bank, N.A. v McNee | NYSC “Court is not persuaded by Wells Fargo’s laborious interpretation of the myriad of transfer documents”

Wells Fargo Bank, N.A. v McNee | NYSC “Court is not persuaded by Wells Fargo’s laborious interpretation of the myriad of transfer documents”


SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF RICHMOND

WELLS FARGO BANK, N.A.
3476 Stateview Boulevard
Ft. Mill, SC 29715

Plaintiff,

-against-

TINA McNEE, NEW YORK CITY ENVIRONMENTAL
CONTROL BOARD, NEW YORK CITY TRANSIT
ADJUDICATION BUREAU, PEOPLE OF THE
STATE OF NEW YORK, WELLS FARGO BANK,
N.A., CHRISTINE EAGLES and JAMES EAGLES,
Defendants.

EXCERPT:

Plaintiff’s arguments notwithstanding, this Court is not persuaded by Wells Fargo’s laborious
interpretation of the myriad of transfer documents or the breadth of the language employed therein
to confer standing upon it. “[L]anguage cannot overcome the requirement that the foreclosing party
be both the holder or assignee of the subject mortgage, and the holder or assignee of the underlying
note at the time a foreclosure action is commenced” (Bank of NY v. Silverberg, 86 AD3d 274, 283).
In this case, Wells Fargo has adduced no proof in opposition to McNee’s cross motion(s) sufficient
to demonstrate that it was either. Plaintiff at bar clearly divested itself of the note and mortgage
as early as March of 2007, when it sold both to Barclays Bank. It is alleged that Barclays thereafter
divested itself of the note and mortgage on or about May 31, 2007, but it does not appear whether
or when either came back into the possession of Wells Fargo prior to the commencement of this
action on February 8, 2008. Hence, plaintiff has failed to demonstrate, prima facie or otherwise that
it was, in fact, the holder of the McNee note and mortgage at the time the action was commenced.
Neither has plaintiff demonstrated “by a preponderance of the evidence” (id. at 281-282, quoting
Bank of N.Y. v. Alderazi, 28 Misc3d 376, 379-380 [Sup Ct, Kings Co 2010]), that it was acting in
the capacity of, e.g., an agent of Deutsche Bank5.

It is well settled that “[s]tanding requires an inquiry into whether a litigant has an interest…in
the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the
litigant’s request” (Carprer v. Nussbaum, 36 AD3d 176 [internal quotation marks omitted]; Wells
Fargo Bank Minn., N.A. v. Mastropaolo, 42 AD3d 239). Where the issue of standing is raised by
a defendant, a plaintiff must prove its standing in order to be entitled to relief (see US Bank N.A. v.
Collymore, 68 AD3d 752, 753; Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 AD3d at 242).
In an action, as here, to foreclose a mortgage, a plaintiff’s standing is normally dependant on
its status as both the holder or assignee of the subject mortgage and the holder or assignee of the
underlying note at the time the action is commenced (see US Bank, N.A. v. Collymore, 68 AD3d at
753; cf. Bank of NY v. Silverberg, 86 AD3d at 283). As a general rule, once the promissory note
is tendered to and accepted by an assignee, the mortgage passes as an incident to the note (see
Mortgage Elec. Registration Sys., Inc. v. Coakley, 41 AD3d 674); However, the opposite is not true.
“[A] transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The
security cannot be separated from the debt and exist independently of it” (Merritt v. Bartholick, 36
NY 44, 45). Accordingly, a mortgage cannot be foreclosed by someone who has failed to
demonstrate a right of recovery on the debt (see FGB Realty Advisors v. Parisi, 265 AD2d 297, 298;
Bergman on New York Mortgage Foreclosures §12.05[1][a][1991]). As the First Department held
in Katz v. East-Ville Realty Co., (249 AD2d 243, 243), a “[p]laintiff’s attempt to foreclose upon a
mortgage in which he had no legal or equitable interest [is] without foundation in law or fact” (see
Kluge v. Fugazy, 145 AD2d 537). Hence, Wells Fargo’s attempt to foreclose upon the subject
mortgage must be denied, the complaint dismissed, and McNee’s cross-motion(s) to dismiss for lack
of standing pursuant to CPLR 3211(a)(3) granted.

In view of this finding, the remaining grounds for relief in plaintiff’s motion have been
rendered academic.

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