Rogan v. Vanderbilt Mortgage and Finance, Inc. (In re Dorsey)

Summarized by Thomas DeCarlo , John Steinberger & Associates, PC
11 years 12 months ago

Citation:

Case No. 13-8036 (6th Cir BAP 2013)

Tag(s):

Ruling:

Alleged creditor who could not prove entitlement to enforce note could not enforce security agreement given to secure obligation under note.

Procedural context:

Trustee filed adversary proceeding to determine creditor's right to enforce note and security agreement where note was payable to third party and not endorsed either to creditor or in blank, although a separate assignment did transfer the mortgage to creditor. Bankruptcy Court entered summary judgment that creditor did not have interest in note and could not enforce note or mortgage. The Bankruptcy Appellate Panel affirmed the Bankruptcy Court's ruling.

Facts:

Debtor borrowed money from Popular Financial and signed a note and gave a mortgage to secure the note. Popular assigned the note and mortgage to MERS. MERS later assigned the mortgage, but not the note, to Vanderbilt Mortgage. The Chapter 7 Trustee sought declaration that Vanderbilt was not the holder of the note and could not enforce either the note or the mortgage. The Bankruptcy Court entered Final Judgment awarding the Trustee title to the property free and clear of any claim of Vanderbilt. The BAP affirmend, holding that under Kentucky law, only the holder of the note can enforce either the note or the mortgage. Although Vanderbilt has physical possession of the note, that was not sufficient where note was not endorsed either to Vanderbilt or in blank.

Judge(s):

Emmerson, Lloyd & Opperman

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