Recently, a New Jersey court ordered that a lender does not need to show physical possession of a note on underlying debt in order to foreclose on a mortgage that has been securitized, reports Reuters. This ruling departs from previous U.S. court rulings.
The ruling stems from a case that was decided on January 7, involving Bank of America Corp. and a New Jersey resident. The bank sought to foreclose on a home in Bogota, NJ., in connection with a Bank of America $292,000 note and mortgage, that was misplaced prior to the assignment to the bank. The New Jersey Superior Court Judge ruled that the bank was permitted to enforce the home owner’s note obligation and was entitled to summary judgment. Previously, the U.S. courts would not as easily permit banks to enforce their interests without showing they possessed the physical note.
The ruling stated that the conclusion was reached because of the combination of several factors, including the fact that over four years had passed since the note was lost and that it was lost immediately after execution in 2006. However, the ruling stated that the bank would be required to intervene and be held liable from any future law suit from a separate mortgage company against the homeowners regarding the loan. In this case, the New Jersey home owner did not argue that they executed a note and mortgage to Washington Mutual Bank, the assignor, and then defaulted on the loan in 2008. Instead, the owner challenged the claim of Bank of America that it had the right to foreclose.
If you are a New Jersey resident and have questions about mortgage foreclosure, contact Robert Manchel, who is a highly experienced and skilled New Jersey mortgage foreclosure attorney. He has advised many home owners facing foreclosure and is well-versed in New Jersey laws regarding foreclosure. He has also helped those struggling with bankruptcy in New Jersey. Call Mr. Manchel at 866-503-5655 today to learn how he can help.