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“The borrower owes money not to the world at large,” the Court noted, “but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.” In other words, proving you own the debt is just as important as proving you haven’t been paid.Which brings us to the second group that ought to be concerned about the decision: Those successor lenders and loan servicers that, while paying lip service to proper loan documentation, are too lazy, cheap or sloppy to do the job right.The Court decided the case by affirmatively answering a very specific legal question: whether Yvanova could challenge the legality of the 2011 assignment even though she was not a party to it?As a general proposition, a person lacks standing to challenge either the terms or enforcement of an agreement to which he or she is not a party.Since only the actual owner of a secured debt can foreclose on the security, however, the Court permitted Yvanova to challenge the validity of the assignment of the secured debt – e.g., whether the assignee actually received assignment of the debt.Otherwise, the Court reasoned, a borrower, like Yvanova, would be unable to protect her home from an unlawful foreclosure by a party lacking ownership of the underlying debt.Notwithstanding that earlier dissolution and transfer, “New Century” executed a purported assignment of Yvanova’s deed of trust on December 19, 2011 to Deutsche Bank National Trust, as trustee for a Morgan Stanley investment trust. The assignment indicates that it was prepared by Ocwen Loan Servicing, LLC, identified as New Century’s attorney in fact, as well as the contact for both the assignor and assignee.According to Yvanova’s complaint, the Morgan Stanley investment trust had a “closing” date (“the date by which all loans and mortgages or trust deeds” must be transferred to the trust) of January 27, 2007.

As a result, you should use good judgment and not send confidential or other sensitive information and/or documents to anyone at Geraci until you are notified that a formal attorney-client relationship has been established.The Court specifically stated it was expressing “no opinion as to whether . If anyone ought to harbor concerns about the Court’s decision, it’s those lenders too hidebound in their thinking to appreciate the simple fact that the identity of the actual holder of the debt matters at the time of foreclosure.The arguments of the named defendants in the case clearly reflected the sentiments of traditional lenders – asserting that, as Yvanova owed the money, she was not prejudiced by the “void” assignment. New Century Mortgage Corporation and Why It’s Nice to Actually Own the Debt Before You Foreclose In a February decision, absurdly hailed as “groundbreaking,” the California Supreme Court sought to clean up one aspect of the litigation morass created in the wake of the mortgage-backed securities crisis.Based upon the self-evident principal that only the actual holder of a debt can foreclose on the collateral securing it, the Court, in its decision in employed simple logic in a very limited opinion that affords homeowners marginal relief from only the sloppiest of lenders.

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