Established Ownership of Mortgage?

J.P. Morgan Chase Bank, N.A. v. Murray, 2013 PA Super 55, 2013 Pa. Super. LEXIS 142 (2013)

Frank Kosir, Jr., Esquire
fk@muslaw.com

This matter addressed the issue of whether an alleged mortgage holder had established ownership of the mortgage and note in question so as to justify a grant of summary judgment in a mortgage foreclosure proceeding.  On May 6, 2010 Deutsche Bank National Trust Co. as Trustee for Washington Mutual Mortgage Securities Corp. 2000-1 (“Deutsche Bank”) commenced a foreclosure action against Francis X. Murray (“Murray”) pursuant to a residential mortgage.  In its Complaint, Deutsche Bank identified Great Western Bank d/b/a Sierra Western Mortgage Company as the mortgagee, and alleged that, through a series of transfers and mergers, it held title to the mortgage and note.  Following the filing of the Complaint, JP Morgan Chase Bank, N.A. (“Plaintiff”) was substituted as plaintiff in the proceeding by leave of court based upon an allegation that it was the successor in interest to Deutsche Bank.

In response to the Complaint, Murray filed an Answer and New Matter asserting inter alia that, as more than seven (7) years had passed from the execution of the alleged assignment and its recording, the assignment was defective and the foreclosure complaint had to be dismissed.  Murray further asserted that certain assignments in the chain of title were defective, and that the name of the original mortgagee on the mortgage differed from that set forth in the Complaint.  The trial court entered summary judgment for the Plaintiff, concluding that there was no question of material fact as to the Plaintiff’s rights in the Mortgage or Note, or in its right to foreclose.

On appeal, our Superior Court reversed.  In issuing its ruling, the court concluded that a review of the record established several defects in the Plaintiff’s case that warranted the reversal of the trial court’s grant of summary judgment.  First, the Plaintiff had failed to establish that it was in possession of the original note indorsed in blank and, as such, was unable to establish that it had a right to foreclose against Murray.  Although the Plaintiff had produced a note, the parties were unable to agree as to whether the note produced was in fact an original indorsed in blank, thereby creating an issue of material fact prohibiting the entry of summary judgment.  For these reasons, the matter had to be remanded to the trial court for further proceedings to determine, inter alia, whether the note in the Plaintiff’s possession was in fact the original note indorsed in blank, thereby vesting in the Plaintiff the right to foreclose against Francis.  However, the court further concluded that, as the Plaintiff had failed to provide any evidence that it was a rightful successor to the original lender, the trial court had erred in granting the Plaintiff leave to substitute itself as a party in the matter and that, prior to a hearing on remand, the Plaintiff had to establish that it was in fact a successor in interest to the original lender.