Nationstar Mtge., L.L.C. v. Grund
2014 Ohio 5612
Ohio Ct. App.2014Background
- Appellant Grund obtained a 2006 mortgage from Lehman Brothers Bank secured by real property in Ashtabula County.
- On the same date, Grund signed a promissory note for $78,000, later endorsed in blank to Lehman Brothers Holdings and then transferred.
- A mortgage, executed the same day, was given to MERS as nominee for the lender to secure the note.
- Ground defaulted on and after October 1, 2011; the outstanding balance was accelerated, then assigned to Aurora Bank in February 2012.
- Aurora Bank sued in April 2012; in June 2012Aurora assigned the mortgage to Nationstar and sought substitution as plaintiff.
- Nationstar moved for summary judgment; Grund argued lack of standing; the trial court granted summary judgment and foreclosure in Nationstar's favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing and real party in interest | Aurora Bank had standing; note transferred to Aurora via MERS; Nationstar became real party when assigned. | Ownership of the note or lack thereof defeats enforcement; servicer status does not confer enforceability. | Aurora had standing; Nationstar was real party in interest; summary judgment affirmed. |
| Transfer of note and mortgage | Mortgage assignment to Aurora transferred the note; the note followed the mortgage as intended by the parties. | The assignments may be defective; the note must be owned to enforce. | Assignment of mortgage (to Aurora) transferred the note; the note and mortgage remained enforceable in Aurora and later Nationstar. |
| Authority of servicing agent to enforce | Nationstar, as servicing agent, can enforce the note even if not owner; assignment to Nationstar later granted rights. | Servicing agent lacks enforceable rights if not owner. | Servicing agent may enforce the note; Nationstar was entitled to enforce and became real party in interest. |
Key Cases Cited
- Bank of Am., N.A. v. Kuchta, 2014-Ohio-4275 (Ohio) (standing is a jurisdictional requirement)
- Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012-Ohio-5017) (standing to sue requires interest in note or mortgage)
- Dobbs v. Bank of Am., N.A., 5th Dist. No. 2009-CA-000002, 2009-Ohio-4742 (5th Dist. 2009) (assignment transfers mortgage and note together when intended)
- Fed. Home Loan Mortg. Corp. v. Rufo, 11th Dist. Ashtabula No. 2012-A-0011, 2012-Ohio-5930 (2012-Ohio-5930) (assignment of mortgage can transfer note; common law application)
- LaSalle Bank Natl. Assn. v. Brown, 2014-Ohio-3261 (2d Dist. Montgomery) (non-holder in possession may enforce under UCC; transfer vests enforcement rights)
- Waterfall Victoria Master Fund v. Yeager, 2013-Ohio-3206 (11th Dist. Lake) (mortgage assignment challenges by mortgagor lacking standing)
- Merlo, Bank of Am., N.A. v., 2013-Ohio-5266 (11th Dist. Trumbull) (holder not required to plead ownership to enforce note)