TheMReport

52 | TH E M REP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T SERVICING DEPARTMENT LOCAL EDITION SERVICING NORTH CAROLINA // Ongoing settlement negotiations between Bank of America and the Justice Department to resolve an investigation into the bank's role in the mortgage crisis reached a stalemate in June, as the government reportedly rejected the bank's earlier $12 billion offer. Citing "people briefed on the matter," the New York Times reported that the offer fell far short of the record $17 billion that prosecutors are seeking to resolve the state and federal investigations. BofA is seeking to continue negotiations while the government finishes readying its petition to file in federal court. The record settlement sought could signal a more aggres- sive stance from the Justice Department in resolving inves- tigations into the events leading up to the mortgage crisis. The current record holder, JPMorgan Chase, reached a deal with prosecutors in 2013 for $13 billion, though the bank reportedly is- sued fewer securities in the run- up to the crash than BofA. According to the report, the deadlock seems to be centered upon two crucial issues: the amount of the settlement and the method of payment. BofA would like to minimize the cash penalty that is paid out and instead put the money towards consumer relief. While consumer relief will be a part of the settlement, the government is pushing for a larger cash payment that will be a meaningful deterrent rather than just the cost of doing business. For its part, BofA is torn between the competing interests in putting the mortgage crisis behind it and resisting penalties that it feels are overly punitive. The bank is resisting partly because of the pressure it says it felt from the Federal Reserve to go through with the purchase of Merrill Lynch in late 2008. Still, prosecutors contend that it is unclear if the bank would have been able to legally back out of the acquisition. Representatives for both the Justice Department and BofA did not immediately return requests for comment. Standing, Declaratory Relief and Lost Assignments— Overcoming Procedural Hurdles SHIFT IN FORECLOSURE LAW CREATES NEW STANDARDS IN OHIO. By Charles Gasior OHIO // Ohio foreclosure law un- derwent a shift in the initial evi- dentiary requirements throughout the previous decade, starting with the landmark federal court deci- sion in Deutsche Bank Nat'l Trust Co. v. Steele1, to the current Ohio Supreme Court's Fed. Home Loan Mtge. Corp. v. Schwartzwald decision2 and its recent appellate court interpretations. The first said, in short, that the Plaintiff must demonstrate it is the real party in inter- est at the time of the filing of its complaint. The result was the instantaneous dismissal of hundreds of cases (and the quiet death of filing in federal court). This decision carved—but more like poured—its way into the Ohio State Courts, with the Ohio Supreme Court finally put- ting its stamp on the proposition that standing is jurisdictional in Schwartzwald. The evolution of these cases and those in between has caused foreclosure counsel to become exceedingly diligent in establishing standing prior to the filing of any action. Plaintiff's counsel now ensures it has (1) a recorded copy of an assignment of the mortgage to the named plaintiff and (2) either a blank or specifically endorsed note before filing its case. While some courts may require more, most will adhere to the standards of ORC 1303.31 in regard to the note. However, there are times when executing and/or acquiring the assignment of mortgage is not possible due to it being lost, destroyed, and/or the assignee of record being non-existent. The Ohio Revised Code provides a special remedy for pleading when the relief sought is outside the parameters of a normal pleading, specifically at Chapter 27213, Declaratory Judgments. A plaintiff can re- quest that the Court declare it to be the property party in interest while naming and estopping the previous parties in interest. Again, this is particularly convenient when the assignment is unobtainable and one has exhausted their options. To bol- ster one's standing claim, ensure possession of the original note to assert the plaintiff's status at the time of filing. Finally, in an effort to provide clarity to the chain of title, and to put future parties on notice of the plaintiff's interest, an affida- vit relating to title4 setting forth said interest can be recorded at the appropriate county recorder's office. The affidavit should set forth the applicable facts concerning the chain of title, the originating mortgage record- ing information, and adequately describe the subject property. Districts are quick to dismiss matters without proper docu- mentation. The ability to at least get a hearing on the matter, and ultimately provide a marketable title, is paramount. 1 In re foreclosure Cases 2007 WL 3232430 (N.D. Ohio, Oct 31, 2007), 2 Fed. Home Loan Mtge. Corp v. Schwartzwald, 134 Ohio St.3d 13, 2012. 3 See ORC 2721.02 and ORC 2721.12.4 Ohio Revised Code 5301.252 Charles V. Gasior is a supervising attorney from the Law Offices of John D. Clunk Co., LPA, a mem- ber of the JDC Family of Companies, which provides legal services to clients in Ohio & Kentucky. Mr. Gasior is licensed to practice law in the State of Ohio and the Northern Federal District Court in Ohio. Continued from 50

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