Lack Of Standing, Questions Surrounding Validity Of Loan Mod Agreement Lead To Another Appeals Court "Boot Back" Of Lower Court Foreclosure Ruling

In another case where a lower court was apparently not up to the challenge in ruling correctly in a foreclosure case, the Maine Supreme Judicial Court recently vacated a summary judgment that would have allowed a foreclosure sale to proceed.

In this case, the foreclosing plaintiff , according to the the Maine high court, "had no interest in either the note or the mortgage" when the foreclosure action commenced. In addition, there was a question as to the validity of an earlier-entered into loan modification agreement between the foreclosing plaintiff and the homeowners, which led the court to conclude that summary judgment in favor of the foreclosing plaintiff was not appropriate.(1)

The court also pointed out that there was an improper substitution of plaintiffs that occurred in this case, which they nevertheless allowed, only because the homeowners did not challenge the substitution in the trial court, raising the challenge for the first time on appeal. For that reason, the issue was deemed unpreserved (and presumably deemed abandoned).(2)

For the ruling, see Kondaur Capital Corporation v. Hankins, 2011 ME 82 (Me. July 19, 2011).

(1) According to the court:

• [T]here are genuine issues of fact as to whether the Loan Modification Agreement is valid and, if not, how that invalidity affects the amounts due on the mortgage or, perhaps, whether that invalidity was cured by express or implied ratification of the parties, operation of estoppel, or some other legal theory. See Wilkins v. Waldo Lumber Co., 130 Me. 5, 11-13, 153 A. 191, 194 (1931).

(2) This should serve as a reminder, especially to self-represented (pro se) homeowners, that unless every possible issue in a case is raised in the pleadings (ie. complaint, answer, or counterclaim) or immediately objected to in court when an issue is raised by the adversary during the course of the proceedings, a judge can properly refuse to give the due consideration to the homeowner's unraised claims, defenses, and objections that they may deserve (without regard to how legitimate, meritorious, etc. they may otherwise be).