In Re Smoak, 461 B.R. 510

Smoaks filed Chapter 13; plan initially paid the secured loan via balloon and refinance or modification; Ocwen served as servicer and filed a claim on behalf of Bank of New York Mellon as Trustee; plan was later modified to treat the secured claim as $76,000 with a 10-year amortization and refinance alternative; the Note showed a 2004-2009 transfer history with blank indorsement indicating Bank of NY Mellon as holder; dispute focused on PSA compliance and standing to enforce the Note; the court ultimately held Bank of NY Mellon is the holder and the real party in interest and the modified plan controls the allowed amount and treatment of the claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Holder/standing under UCC for note enforcement	Smoaks argue PSA noncompliance vitiates standing	Smoaks claim holder status not established; PSA controls transfers	Bank of NY Mellon is the holder and real party in interest
Effect of PSA on holder’s standing in bankruptcy	PSA compliance necessary to enforce Note	PSA does not alter Ohio UCC holder rules	PSA noncompliance does not defeat holder’s enforceability under Ohio UCC
Mortgage as incident of note and transfer validity	Transfers under PSA/mortgage assignments may be defective	Mortgage is an incident of the Note; transfer evidence suffices	Mortgage transfers do not defeat holder’s right to enforce the Note
Modification of plan and treatment of Bank NY Mellon claim	Modification attempts to reduce and alter claim	Modification unambiguous and binding; sets $76,000 with 10-year amortization	Modified plan binds Bank NY Mellon; claim fixed at $76,000 with amortization and refinance provision
Impact on claim allowance process and scheme of plan	Claims process should decide amount; plan controls	Plan modification appropriate due process and timing	Claim allowed/treated as per modified plan; Ocwen to be paid per plan terms

Veal v. Amer. Home Mortgage Servicing, Inc. (In re Veal), 450 B.R. 897 (9th Cir. BAP 2011) (real party in interest and enforceability under UCC discussed)
Hwang v. (In re Hwang), 438 B.R. 661 (C.D. Cal. 2010) (standing and enforcement under UCC analyzed in bankruptcy context)
Kemp v. Countrywide Home Loans, Inc., 440 B.R. 624 (Bankr. D. N.J. 2010) (holder status and enforceability where note is blank-indorsed)
In re Almeida, 417 B.R. 140 (Bankr. D. Mass. 2009) (standing and assignment issues in securitization context)
Correia v. Deutsche Bank Nat’l Trust Co. (In re Correia), 452 B.R. 319 (1st Cir. BAP 2011) (standing to raise PSA-related defenses rejected)