Scheider, Jr. v. Deutsche Bank National Trust Co.
- Citation:
- Case No. 13-1821 (4th Cir. May 21, 2014)
- Tag(s):
-
- Ruling:
- The Fourth Circuit Court of Appeals affirmed the decision of the United States District Court for the District of South Carolina at Beaufort granting summary judgment in favor of the defendants.
- Procedural context:
- Plaintiffs filed suit in South Carolina state court. Defendants removed to the district court based on federal question jurisdiction.The district court granted summary judgment in favor of the defendants. Plaintiffs appealed
- Facts:
- Plaintiffs stopped paying their $1.1 million mortgage and when the note holders acted to foreclose, filed suit asserting that the entities owning and servicing their mortgage could not enforce it. The note has been transferred a number of times, some of which occurred during the securitization of the loan. However, the mortgage had not been transferred to the note holder until five years after the note was assigned. Plaintiffs sought declaratory judgment, arguing primarily that because the transfer of the mortgage was untimely under the securitization agreements, the defendants did not properly own the mortgage and hence could not enforce it.
In affirming the district court's decision, the Fourth Circuit Court of Appeals found first that the note, endorsed to bearer, was properly payable to the defendants as they were in possession. The court then held that under South Carolina law, as elsewhere, the transfer of a note secured by a mortgage carries with it an assignment of the mortgage (although the converse is not always true) and that the securitization of the note did not alter that long standing rule.
- Judge(s):
- Before Motz, Diaz and Floyd, Circuit Judges
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