BAC Home Loans Servicing, L.P. v. White
2011 OK CIV APP 35
| Okla. Civ. App. | 2011Background
- BAC sued Ronald and Teri White to foreclose a mortgage on their home, claiming it owned the note and mortgage through mesne assignments; the note and mortgage showed MERS as nominee for the lender and the mortgagee; a later assignment dated 2009 purportedly transferred the mortgage from MERS to Countrywide/BAC; the Whites denied default and challenged BAC’s ownership of note/mortgage; the trial court granted summary judgment to BAC, determining BAC owned the note and mortgage and the Whites were in default; on appeal the court reversed, holding there is a question of fact as to ownership of the note and remanded for trial; the opinion discusses MERS-related controversy and Oklahoma law treating ownership of the note as controlling for the mortgage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who owns the note and mortgage at the time of suit | BAC asserts it is the holder of the note and mortgage | Whites contend BAC has not proven ownership; note/mortgage not conclusively tied | Question of fact; summary judgment reversed |
| Whether the mortgage can be enforced if the note is not conclusively shown to be owned | Ownership of note equates to ownership of mortgage; BAC provided note and assignment | Ownership disputed; mortgage may be separated from note | Ownership dispute requires trial; cannot decide on summary judgment |
| Effect of MERS designation on enforceability under Oklahoma law | MERS as nominee can still transfer rights; indorsement shows chain | Oklahoma law ties mortgage rights to possession of the note; MERS exceptions insufficient | Oklahoma law requires ownership of the note to prove mortgage rights; need trial to resolve ownership |
Key Cases Cited
- Landmark Nat'l Bank v. Kesler, 216 P.3d 158 (Kan. 2009) (MERS lacks enforceable rights when it does not own the note)
- Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 159 P.2d 717 (Okla. 1945) (Ownership of the note carries with it the mortgage; bifurcation not allowed)
- Prudential Ins. Co. of America v. Ward, 274 P.2d 648 (Okla. 1929) (Mortgage securing a negotiable note is an incident to the note; indorsement/delivery transfers mortgage with note)