Monday, October 24, 2011

NC High Court To Decide Litigation Where Bankster Allegedly Failed To Prove It Had Right To Foreclose On Homeowner

In Raleigh, North Carolina, an excerpt from an editorial in the Charlotte News & Observer:

  • Today, the state Supreme Court is scheduled to hear the case of Linda Dobson, an impoverished widow represented by Legal Aid of N.C.,(1) who is appealing a ruling that would result in the loss of her home through foreclosure to a large mortgage servicer - before the party seeking to enforce a loan document has presented evidence of a right to do so.

  • The essence of the case is this: According to state law, a party pursuing a right arising from a promissory note must comply with enforcement provisions of the Uniform Commercial Code, meaning the party must establish that it is in possession of the underlying loan documents.

  • The bank - without showing that it holds the original note, and without showing Dobson was delinquent - simply asserted that she was delinquent and the bank had the right to foreclose. It could not even produce a proper payment history showing what amount, if any, Dobson owes.

  • What's at stake for Dobson is her home. For the rest of us, if the court eventually rules for the bank, we will lose longstanding principles and tradition protecting private property rights embedded in American legal history.


  • No doubt our Founders would be repulsed to learn of a powerful corporate litigant boldly stating a claim to a right in a lawsuit, and then fully expecting to acquire and enforce this right in the court based upon a mere statement. To enforce the note as the holder, the bank was obligated - but failed - to present evidence of possession of the properly endorsed Dobson note.

  • Let's hope, not only for Dodson's sake, that our highest court is still in the business of rendering just, even-handed and fair decisions, even for parties whose net worth amounts only to the value of their homes.

For more, see No shortcuts to foreclosure.

(1) Legal Aid of North Carolina (LANC) is a statewide, nonprofit 501(c)3 law firm that provides free legal services in civil matters to low-income people in order to ensure equal access to justice and to remove legal barriers to economic opportunity. LANC operates in all 100 counties in North Carolina through 24 geographically based offices.

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