February 23, 2015

(Mr. Barnes has been traveling and in numerous trials since the last post)

An Oregon Federal Judge has compelled the production of significant documents related to the defense of a foreclosure over the objection of counsel for Nationstar (the servicer seeking to foreclose). The documents compelled include the MERS Milestone Report; loan notes from all servicers; the “collateral” (origination) file from origination to present; any assignments of the Deed of Trust; and, most importantly, all documents as to the “who, when, and where the endorsements were placed on the Note.” The quoted language is from the Court Order itself.

As we all know, foreclosing parties routinely travel on the “we have the Note with an endorsement” mantra and argue that this is the be-all and end-all. Until now, there were only two states which specifically permitted challenges, by appellate decisions, to the authority and authenticity of alleged “endorsement stamps” on Notes: North Carolina (the Bass decision), and Florida (numerous decisions beginning with the McLean v. JPMorgan Chase Bank N.A. decision and others which have consistently followed it). The issues surrounding the timing and authority of the placement of the claimed “blank endorsements” on Notes relates directly to standing, including whether the foreclosing party had standing at the time that the foreclosure was filed and whether any interest in the Note was ever legally transferred.

Unfortunately, the Supreme Court of North Carolina reversed Bass, but fortunately the Florida appellate courts have consistently reaffirmed McLean and reversed final judgments in foreclosure cases where there were unresolved issues surrounding the claimed “endorsements.” The U.S. District Court for the District of Oregon has now followed suit, and rightfully so. We thank our local Oregon counsel for bringing this decision to us.

Today, a Clackmas county, Oregon Judge denied Nationstar’s Motion to Strike the homeowners’ defenses related to the authenticity and authority of the alleged endorsements on the Note made by the bankrupt Lehman Brothers in a US Bank securitization case. Counsel for Nationstar in this case was the same as in the Federal decision mentioned above. The ruling was consistent with the reasoning of the ruling in the Federal case which deemed the issues related to the authenticity of the Note including the authority to place the stamps on the Note to be relevant to the homeowner’s defense to the foreclosure. Jeff Barnes, Esq. represents the homeowner with local Oregon Counsel Elizabeth Lemoine, Esq.

These developments are of national importance, and show that at least two states are no longer going to blindly accept the “endorsement” theory without question and without issue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com