No Chance to Stop Foreclosure

After defaulting on his home equity loan, the borrower filed suit to stop the servicer from foreclosing on his home. The borrower argued that (1) the note had been cancelled through the addition of a “VOID” on the last page, (2) that the photocopy of the note produced by the servicer was not authentic, and (3) that the servicer had not shown how it acquired the note, and therefore had not proven it was authorized to enforce it. The court of appeals affirmed summary judgment in favor of the servicer, rejecting all three of the homeowner’s claims. The “VOID” stamp did not show any intent to cancel the note, the court held, because it only appeared over an unused endorsement line on the last page, and there was no other indication of cancellation. The servicer also did not need to produce the original of the promissory note because it was seeking a judicial foreclosure, not making demand for payment of the note, and the borrower had admitted he had defaulted under the note. Finally, the servicer was not required to establish a complete record of the transactions by which it had acquired the note, as its ownership was validly established by the allonge that transferred the note from the original lender to the servicer.

Chance v. CitiMortgage, Inc., No. 05-12-00306-CV