In Re Mims
438 B.R. 52
| Bankr. S.D.N.Y. | 2010Background
- Debtor Tandala Mims filed a voluntary Chapter 7 petition on July 27, 2010.
- Wells Fargo seeks relief from the automatic stay to foreclose on 1167 Grenada Place, Bronx, NY.
- Wells Fargo asserts a secured claim under a First Mortgage (May 10, 2004) and an Assignment dated September 13, 2010.
- Note originally payable to Lend America; later endorsement indicates transfer to Washington Mutual Bank, but no demonstrated assignment to Wells Fargo.
- Property value is claimed at $430,000 with Debtor asserting exempt equity and intent to retain; Debtor’s last payment was June 4, 2010 and several post-petition defaults occurred.
- Court notes Wells Fargo obtained its interest shortly before the lift-stay motion and presents a worksheet with pre-petition defaults; Debtor and trustee did not respond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to lift stay | Wells Fargo is a secured creditor with an Assignment. | Debtor or estate cannot be bound by Wells Fargo without proper ownership of Note. | Wells Fargo lacks standing to request relief from the automatic stay. |
| Right to foreclose as holder of a note | Wells Fargo holds the Mortgage and Note through assignment, enabling foreclosure. | Wells Fargo failed to prove possession or valid assignment of the Note. | Wells Fargo failed to prove it owns the Note; cannot pursue state-law foreclosure. |
| Effect of defective Note assignment on foreclosure | Assignment of Mortgage may transfer rights to foreclose. | Assignment did not expressly assign the Note; delivery/transfer lacking. | Assignment insufficient to show Wells Fargo owns the Note; standing lacking. |
| Validity of the Mortgage Assignment particulars | Assignment executed to enable lift-stay relief is credible. | Assignment raises questions (notarization, address, derivation of rights) not resolved. | Reservation of questions; denial of lift-stay without prejudice. |
Key Cases Cited
- Kokoszka v. Belford, 417 U.S. 642 (1974) (undefined 'party in interest' scope guided by purposes of the Bankruptcy Act)
- In re Comcoach, 698 F.2d 571 (2d Cir. 1983) (creditors may obtain relief from stay; focus on who may invoke relief)
- Johnson v. Home State Bank, 501 U.S. 78 (1991) (foreclosure as right to payment; ownership of note essential)
- Kluge v. Fugazy, 145 A.D.2d 537 (2d Dept. 1988) (assignment of mortgage requires transfer of debt; mortgage without debt is null)
- HSBC Bank USA, Nat. Ass'n v. Miller, 26 Misc. 3d 407 (N.Y. Sup. Ct., 2009) (assignment mechanics and enforceability under New York law)