Stein v. Chase Home Finance, LLC
2011 U.S. App. LEXIS 23824
| 8th Cir. | 2011Background
- Stein refinanced in Oct 2006 with Chase Bank USA, N.A. for $484,000, signing a promissory note and a mortgage, recorded Nov 15, 2006; the mortgage secures the note and is transferable.
- In Jan 2007 Stein obtained a $100,000 loan from National, securing it with a second mortgage recorded Feb 15, 2007; both mortgages are on Stein's home.
- Stein defaulted on Chase's mortgage by March 2008; by Aug 2008 he owed roughly $30,000; Chase notified him of foreclosure proceedings on Sept 17, 2008.
- Chase executes an Assignment of Mortgage to Chase Home Finance on Sept 28, 2008, recording it Oct 3, 2008, conveying the mortgage and the note’s rights to Chase.
- Foreclosure by advertisement proceeds; sheriff's sale Jan 21, 2009, with Chase as the highest bidder for $524,558.22; sheriff's certificate of sale issued as prima facie evidence of validity.
- Stein does not redeem within six months; National, as junior lienholder, redeems on July 22, 2009 for the amount Chase paid plus fees and interest.
- Stein later files a state-court complaint challenging the foreclosure; Chase and National remove to federal court, where summary judgments are granted for both defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a mortgage holder must possess the note to foreclose by advertisement | Stein argues Minnesota law requires possession of the note. | Chase contends transfer of note is not required; statute allows foreclosure by the holder of the mortgage. | No requirement to hold the note; if required, undisputed facts show possession. |
| Whether Chase possessed the promissory note at foreclosure time | Stein contends Chase did not hold the note when foreclosure commenced. | Chase had both mortgage and note via September 2008 assignment and produced the note. | Undisputed facts show Chase possessed the note; no genuine issue material. |
| Validity of National's redemption as junior lienholder | Stein argues redemption was invalid if foreclosure was invalid. | Redemption is permissible post-foreclosure and after Stein failed to redeem. | Redemption vindicated because foreclosure deemed valid. |
| Whether National's merger with PNC affected redemption timing | Stein asserts pre-redemption transfer to PNC invalidates National's redemption. | National merging with PNC was not challenged in district court; record lacking findings. | Argument not briefed or developed below; court declines to address. |
Key Cases Cited
- Jackson v. Mortgage Electronic Registration Systems, Inc., 770 N.W.2d 487 (Minn. 2009) (held that an assignment of the note need not be recorded to foreclose; legal title holder may foreclose regardless of note ownership)
- Campbell v. Davol, Inc., 620 F.3d 887 (8th Cir. 2010) (precludes consideration of arguments not developed below; standard for evaluating record on appeal)