I have not posted for some time. It has not been for lack of interesting stuff happening in the industry. It is because that stuff has been so widely reported in the mainstream media. I have had little to add that would be of interest or which would make the widely distributed news more useful.
But the Maryland Court of Appeals has reported Anderson v Burson ( http://mdcourts.gov/opinions/cosa/2010/434s09.pdf ) on December 22, 2010. This is an opinion worth reading if you are involved in title insurance, foreclosure or bankruptcy work. It clarifies how a lender or servicer may demonstrate its standing to sue for lien priority where the chain of endorsements and assignments is unclear or incomplete.
The case presents a very common fact pattern: The "XYZ Trust" alleges standing to appoint a substitute trustee for purposes of foreclosing a deed of trust naming a prior lender and trustee. The title chain is missing a clear endorsement of the note over to the "XYZ Trust." The borrowers thus moved to enjoin the foreclosure.
The core of this opinion is the Specials' review of the commercial law defining "holders," and the transfer of instruments. In sum, where "XYZ Trust" is not linked into the chain of title by an express endorsement or allonge, it will have standing to sue or appoint substitute trustees if it meets the definition of "a non-holder in possession" as the term presents in the Commercial Code.
For outside counsel, this means some adjustment to our pleading of the issue. It also lessens our burden of proof, since absence of that exact endoresment is no longer fatal to the standing issue. Now, please excuse me as I must amend a few complaints!
