Florida Bankruptcy Attorney

In re Kemper, (Bankr.N.J. Nov. 16 2010

The court, basing its ruling on New Jersey state law and provisions of the UCC, held that the entity filing the proof of claim held an unenforceable
claim because 1) the owner of the note never had possession of the note, and 2) note was not properly endorsed to the new owner.

The ownership of the note had apparently been transferred to one or more entities, but never followed up with transfer of the original note.

" ... the note in question was never endorsed in blank or delivered to the Bank of New York, as required by the Pooling and Servicing Agreement."

" ... Countrywide, as the servicer, acts only as the agent of the owner of the instrument, and has no greater right to enforce the instrument than its
principal. [cites] Because the Bank of New York has no right to enforce the note, Countrywide as its agent and servicer cannot enforce the note."
Kemp, at 21.

"Because the claim filed by 'Countrywide Home Loans, Inc., servicer for Bank of New York' cannot be enforced under applicable state law, the
claim must be disallowed. 11 U.S.C. ? 502(b)(1)." Kemp, at 22

The ramifications of the ruling for the Chapter 13 plan are unclear.

In a contact with the law firm representing the debtor, it is acknowledged that notwithstanding the claim is disallowed, the ruling does not
automatically strip the lien.

So, you have a chapter 13 case in which the secured creditor's proof of claim is expunged, yet the mortgage is still secured on the property. How
is this handled in a Chapter 13 plan?

The case also demonstrates that securitization issues are often based largely on applicable state law, and so an adversary attack on the claim
must cite state statutes or cases, not merely the Bankruptcy Code.

Source: http://www.galewski.com/TampaBankruptcyLawyer.html

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