In another installment of the never-ending saga of foreclosure troubles throughout the United States, residential lenders and mortgage-backed securities investors in Pennsylvania and New Jersey are facing increasing difficulties attempting to exercise their foreclosure remedies when borrowers default. These difficulties are due in part to the residential mortgage securitization process, particularly the manner in which promissory notes and mortgages are transferred from the initial lender to the ultimate investor. Several recent decisions in Pennsylvania and New Jersey illustrate these issues.
According to the opinion in Kemp v Countrywide Home Loans , a New Jersey bankruptcy court decision, plaintiff debtor, John T. Kemp, received an interest only adjustable rate note home mortgage loan from Countrywide Home Loans Inc. in 2006. No endorsement appeared on the note and accompanying the note was an unsigned “Allonge to Note,” which directed the borrower to “Pay to the Order of countrywide Home Loans, Inc., d/b/a America’s Wholesale Lender.”
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