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Murray vs HSBC

  

January 27, 2015

In this foreclosure puzzle, one of the pieces is missing. The borrowers appeal a final judgment of foreclosure following a non-jury trial. They argue the bank failed to prove standing. We agree and reverse.

The borrowers and Option One Mortgage Corporation, a California corporation (“Option One California”), executed a mortgage and note. When the borrowers missed their monthly payment, HSBC filed a two-count complaint seeking to foreclose the mortgage and reestablish the lost note. The original complaint, filed February 13, 2009, alleged that HSBC “owns and holds said note and mortgage.” The borrowers then filed their answer and affirmative defenses.

On April 3, 2009, Sand Canyon Corporation f/k/a Option One Mortgage Corporation (“Sand Canyon”) executed an assignment of the mortgage to HSBC. The assignment included an effective date of January 24, 2009. On April 6, 2010, HSBC voluntarily dismissed the lost note count and filed the original note and mortgage. The note was made payable to Option One California, but did not have an indorsement or allonge.

On October 5, 2010, Sand Canyon executed another assignment in favor of HSBC, with a stated effective date of April 23, 2007. On February 6, 2013, HSBC filed a second amended complaint alleging that HSBC was “a nonholder in possession with the rights of a holder and is entitled to enforce the terms of the Note and Mortgage, pursuant to Florida Statute 673.3011.” The case proceeded to a non-jury trial.

At trial, HSBC offered the testimony of a loan analyst with Ocwen Loan Servicing (“Ocwen”). HSBC also offered the pooling and servicing agreement (“PSA”), note, mortgage, demand letter, and payment history. HSBC did not admit the assignments into evidence.

The main issue at trial concerned HSBC’s allegation that it was a nonholder in possession with the rights of a holder.1 The PSA and attached mortgage loan schedule both referenced the borrowers’ loan. The PSA had ACE Securities Corp. (“ACE”) as the Depositor, Option One Mortgage Corporation as the Servicer, Wells Fargo Bank, N.A. (“Wells Fargo”) as the Master Servicer and Securities Administrator, and HSBC as the Trustee. The effective date of the PSA was May 1, 2006; it does not reference Option One California.

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Back to January 2015 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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