Thomas v. Federal National Mortgage Association (In re Thomas)
- Summarized by Andrew Johnson , Onsager | Fletcher | Johnson | Palmer LLC
- 12 years 8 months ago
- Citation:
- Case No. 11-037, Bankruptcy Appellate Panel of the Tenth Circuit (the “BAP”)
- Tag(s):
-
- Ruling:
- Federal National Mortgage Association (“FNMA”) lacked standing to seek a “comfort order” that the automatic stay had been terminated pursuant to 11 U.S.C. 362(c)(3)(A). Citing In re Miller, 666 F.3d 1255 (10th Cir. 2012), the BAP ruled that FNMA did not demonstrate it had standing because there was no evidence in the record that FNMA had possession of the promissory note at issue, which was endorsed in blank. The BAP also ruled that a "comfort order" pursuant to 11 U.S.C. 362(j) confirming the termination of the automatic stay was equivalent to an order terminating the automatic stay and therefore a final appealable order.
- Procedural context:
- Debtor appealed a bankruptcy court order granting a “comfort order” pursuant to 11 U.S.C. 362(j) that the automatic stay was terminated pursuant to 11 U.S.C. 362(c)(3)(A) by debtor’s bankruptcy case filed less than one year following the dismissal of a prior bankruptcy case. The BAP reversed and remanded the case.
- Facts:
- In 2007 debtor executed a promissory note and deed of trust to Freedom Mortgage Corporation (“Freedom”). The deed of trust, however, named Mortgage Electronic Registration Systems (“MERS”) as the beneficiary. In 2008, debtor stopped paying Freedom. In 2009 Freedom endorsed the note in blank and transferred possession of the note to Chase Home Finance LLC (“Chase”). In 2009 Chase commenced a foreclosure. Shortly before the foreclosure sale date debtor commenced a chapter 13 bankruptcy, which was dismissed in 2010.
In 2010 an assignment of the note and deed of trust to FNMA was recorded; however, the assignment was executed by MERS, not Chase. Debtor filed another chapter 13 bankruptcy later in 2010. FNMA then filed a proof of claim and a motion seeking confirmation that the automatic stay had terminated thirty days after the petition date pursuant to 11 U.S.C. 362(c)(3)(A). Debtor objected to the motion on the basis that FNMA lacked standing.
The bankruptcy court held a hearing at which FNMA offered to introduce the original promissory note endorsed in blank. The BAP opinion reflects that the bankruptcy court believed that no evidence was necessary and, therefore, did not permit FNMA to introduce the original promissory note.
- Judge(s):
- Thurman, Nugent and Romero
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