BAC Home Loans Servicing, L.P. v. McFerren
2013 Ohio 3228
Ohio Ct. App.2013Background
- In Feb 2008 McFerren executed a $211,500 promissory note (payable to Quicken Loans) and a mortgage naming MERS as mortgagee/nominee. Countrywide later endorsed the note in blank.
- Quicken/Note transfers: Quicken transferred the Note to Countrywide; Countrywide endorsed the Note in blank (bearer paper). MERS assigned the mortgage to BAC on March 16, 2011; assignment recorded April 19, 2011.
- BAC filed the foreclosure complaint June 30, 2011. BAC later merged into Bank of America; Bank of America substituted as plaintiff and moved for summary judgment.
- Bank of America produced (1) the mortgage and MERS-to-BAC assignment and (2) a copy of the Note showing endorsements; an officer’s affidavit stated Bank of America possessed the Note when moving for summary judgment but did not state BAC possessed the Note when it filed the complaint.
- The trial court granted summary judgment to Bank of America; McFerren appealed, arguing BAC lacked standing at the time it filed suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the plaintiff (BAC/Bank of America) had standing to commence foreclosure | BAC/Bank argued the recorded assignment of the mortgage to BAC conferred standing; later possession of the Note by Bank of America cured any deficiency | McFerren argued plaintiff lacked standing because BAC did not hold the Note (and thus had no real interest) when it filed the complaint | Court held plaintiff lacked proof BAC was holder of the Note when it filed; mortgage assignment alone insufficient—standing requires holder of both note and mortgage at filing |
| Whether standing is jurisdictional and may be raised at any time | Plaintiff argued timeliness bars new standing arguments on appeal | McFerren argued standing is jurisdictional and can be raised anytime | Court applied Ohio precedent that standing is jurisdictional and may be raised at any time |
| Whether an assignment of the mortgage alone is sufficient to establish standing | Plaintiff relied on authorities reading Schwartzwald to allow mortgage assignment alone in some contexts | McFerren argued mortgage-alone is insufficient because bare mortgage possession does not give enforceable right without the Note | Court rejected the mortgage-only theory, holding Schwartzwald did not eliminate the requirement that the foreclosing party hold the Note as well as the mortgage at filing |
| Remedy when plaintiff lacks standing at filing | Plaintiff sought remand and further proceedings | McFerren argued for dismissal | Court reversed the summary judgment and remanded for further proceedings (dissent would have dismissed) |
Key Cases Cited
- New Boston Coke Corp. v. Tyler, 32 Ohio St.3d 216 (Ohio 1987) (standing is jurisdictional and may be raised at any time)
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (Ohio 2012) (plaintiff in foreclosure must have standing at the time complaint is filed; lack of standing cannot be cured by later assignment)
- U.S. Bank, N.A. v. Richards, 189 Ohio App.3d 276 (Ohio Ct. App. 2010) (real party in interest in foreclosure is the current holder of the note and mortgage)