State Court Judge Rejects Ohio AG's "Real Party In Interest" Issue In Foreclosure; Allows Action To Continue

In Hamilton County, Ohio, The Enquirer reports:

• Ohio Attorney General Marc Dann suffered his first setback Monday in a novel effort to slow foreclosure filings in the state – and in doing so had his ethics questioned by a Hamilton County magistrate. Dann argues that lenders can’t foreclose unless they can prove they own the mortgage they say is in default. Paperwork proving ownership often lags behind as lenders buy and sell mortgages. The result is that foreclosing lenders don’t always have the paperwork to prove that they’re the mortgage owners. Traditionally, courts have allowed the foreclosures to proceed anyway. [...] Monday, however, Common Pleas Court Magistrate Michael Bachman rejected Dann’s argument.

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• Monday’s decision comes in case filed by Deutsche Bank National Trust Co. against Telisa Barnes. She bought a $128,000 home in Northside a year ago with the help of a mortgage from Equifirst Corp. Five months later, Deutsche Bank filed to foreclose, saying she owed $127,892 – plus interest. The state of Ohio had an interest in the property because Barnes put the house up as part of a $20,000 bond in an aggravated menacing case against another defendant. Dann argued that Deutsche Bank was not a “real party in interest” because it didn’t own the mortgage paper when it filed its foreclosure case. The magistrate ruled federal precedents don’t apply because federal courts have limited jurisdiction in foreclosure cases, while state courts are required to take them.

For more, see AG's foreclosure gambit shot down.

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