2014 NMCA 090
N.M. Ct. App.2014Background
- Homeowner refinanced in 2006 with New Century; note payable to New Century secured by mortgage on home.
- 2008 default; 2009 Bank filed complaint for foreclosure attaching an unindorsed note payable to New Century.
- Homeowner moved to dismiss (Aug 2010) arguing Bank failed to show ownership of the note; Bank produced an assignment dated 2006 but recorded in 2009.
- Trial began Sept 16, 2010; Bank introduced original note indorsed in blank but did not show when indorsement occurred; expert testimony on assignment was denied as untimely.
- District court found Bank validly assigned the mortgage and entitled to foreclose; Homeowner appealed challenging standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Bank standing to foreclose at filing | Homeowner claims Bank did not establish ownership of note and mortgage at filing. | Bank asserts it held the note and mortgage via assignment and possession at filing. | Bank lacked standing at filing; reversed. |
| Right to enforce the note based on attached documents | Bank's unindorsed note attached to complaint establishes enforcement right. | Romero requires indorsed note; unindorsed note cannot establish standing. | Unindorsed note insufficient to establish standing at filing; not proven. |
| Effect of mortgage assignment on note ownership | Assignment of mortgage to Bank shows Bank owns the lien and note. | Assignment transfers mortgage only; does not transfer the note. | Assignment does not transfer the note; does not cure lack of standing. |
| Mootness of HLPA and fraud arguments | HLPA violation and fraud on the court should be addressed. | Standards for standing control; these issues are ancillary. | Moot due to lack of standing; not addressed. |
Key Cases Cited
- Romero v. Bank, 320 P.3d 1 (2014-NMSC-007) (standing required at filing; must show timely ownership of note and mortgage)
- Bank of N.Y. v. Romero, 320 P.3d 1 (2014-NMSC-007) (standing is jurisdictional; unindorsed note to third party insufficient)
- Kabba v. Bank, 276 P.3d 1006 (Okla. 2012) (foreclosing party must possess properly indorsed and dated documentation at filing)