November 5, 2012

In a 3-page written opinion, a Colorado District Court Judge has denied the application of JPMorgan Chase for an order authorizing the nonjudicial sale of a homeowner’s primary residence. The ruling comes after a full evidentiary hearing requested for and argued by Jeff Barnes, Esq., who represents the homeowner.

JPM alleged that it had succeeded to the rights of the Note and Deed of Trust through two “Allonges”, neither of which was physically attached to the Note. The Allonge which was allegedly signed by the original lender did not contain any language as to “affixation” to the Note, and no evidence was presented as to the authenticity or authority of the signatures on this Allonge. The Court’s opinion cited the case law which Mr. Barnes presented to the Court at the hearing, which set forth the standard for “affixation” of an allonge to a Note.

The Court found that JPM did not meet the standard, and also found that there was no competent evidence as to authenticity or authority of the signatures on the Allonges, noting significantly that “the statutory presumption about the authenticity for signatures does not apply”. JPM’s counsel had argued at the hearing that the Allonges were “self-authenticating” under Colorado law; Mr. Barnes argued that the statutory presumption did not apply to the Allonges, which themselves are not negotiable instruments or self-authenticating documents.

The ruling is significant as it sets forth the requirement that there be competent evidence as to the authenticity and authority of the signatures on an allonge (which JPM’s counsel alternatively referred to in the hearing as an “endorsement”). This ruling is in line with recent case law from Florida and North Carolina which require evidence of authority and authenticity on claimed endorsements, rejecting the notion that an undated and unauthenticated “blank endorsement” suffices for admissibility purposes and purposes of showing that a foreclosing party has standing.

The ruling is also significant as it held that when a homeowner challenges the authority of a party to foreclose in a Rule 120 proceeding that the court must consider that defense in the Rule 120 hearing, citing the Goodwin decision from the Supreme Court of Colorado which Mr. Barnes cited in his formal opposition to JPM’s Rule 120 Motion. JPM’s counsel argued that the only issues in a Rule 120 are military status and probability of default, and that the homeowner lacked standing to raise other issues. The Court, citing Goodwin, held otherwise.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com