Tue Jan 25, 2011 7:58pm EST
* Lender need not show physical possession of note
* Homeowner challenge Bank of America’s foreclosure right
By Grant McCool
NEW YORK, Jan 25 (Reuters) – A lender need not show physical possession of a note on underlying debt in order to seek foreclosure of a mortgage that has been securitized, a New Jersey court ordered, departing from previous court rulings in the United States.
In the case decided on Jan. 7, Bank of America Corp (BAC.N) sought to foreclose on the home of Janett Alvarado of Bogota, New Jersey, but the note and mortgage for $292,000 had been lost by Washington Mutual Bank [WMPDC.UL] before the loan obligation was transferred to Bank of America.
Courts in the United States have been unwilling to allow banks to enforce their interests without showing that they possessed the physical note.
A Superior Court judge in New Jersey, Mary Thurber, ruled that Bank of America was entitled to enforce Alvarado’s note obligation and was entitled to summary judgment.