Mortgage Investors Suit Claiming Citi Doomed Foreclosure Attempt By Failing To Deliver Note To Go To Trial

Reuters reports:

• CitiFinancial Mortgage must defend a lawsuit over problems with loan documents, a federal appeals court ruled, in a widening controversy over the quality of legal filings in U.S. foreclosure proceedings.

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• In the case decided by the 7th Circuit U.S. Court of Appeals this week, two investors purchased an Illinois mortgage from CitiFinancial for $140,000 in 2001. But the company never delivered a copy of the underlying note, which doomed the investors' attempt to foreclose on the property, according to the decision. The investors, Patrick Cogswell and Patrick O'Flaherty, then sued CitiFinancial.

• The 7th Circuit reversed a lower court ruling and said the case could be decided at trial.

For the story, see Citi unit must defend foreclosure suit (Case involves allegations of missing documents).

For the ruling, see Cogswell v. CitiFinancial Mortgage Company, Inc., No. 08-2153 (7th Cir. October 5, 2010).