Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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William A. Roper, Jr.
The standing defense is frequently a subject of posts to the Forum.  Perhaps we have failed to call sufficient attention to the almost universal rule that standing is determined by the state of facts at inception or commencement of the suit.

Within this thread, I propose the collection of cases in support of this basic holding.  To this end, I begin with several U.S. Supreme Court cases, as well as the holding of the 6th Circuit Court of Appeals in non-mortgage cases:
“Subject-matter jurisdiction ‘depends on the state of things at the time of the action brought’ [quoting Chief Justice John Marshall]… Mollan v. Torrance, 9 Wheat. 537, 539 (1824); see, e.g., Smith v. Sperling, 354 U.S. 91, 93, n. 1 (1957); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289-290 (1938).”
From Justice Scalia’s concurring opinion in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49; 108 S. Ct. 376; 98 L. Ed. 2d 306; 1987 U.S. LEXIS 5030 (U.S. 1987).
http://scholar.google.com/scholar_case?case=4589718656053559795

"It is quite clear, that the jurisdiction of the Court depends upon the state of things at the time of the action brought, and that after vesting, it cannot be ousted by subsequent events."
Mollan v. Torrance, 22 U.S. 537, 539; 6 L. Ed. 154; 1824 U.S. LEXIS 390; 9 Wheat. 537 (U.S. 1824).
http://scholar.google.com/scholar_case?case=6746763598429179806

But jurisdiction, once attached, is not impaired by a party's later change of domicile.  Mollan v. Torrance, 9 Wheat. 537.  As Chief Justice Marshall said in that case: "It is quite clear, that the jurisdiction of the Court depends upon the state of things at the time of the action brought, and that after vesting, it cannot be ousted by subsequent events."  Id., p. 539.  The rationale, that jurisdiction is tested by the facts as they existed when the action is brought, is applied to a situation where a party dies and a non-diverse representative is substituted.  Dunn v. Clarke, 8 Pet. 1 (1834).
Smith v. Sperling, No. 316, 354 U.S. 91; 77 S. Ct. 1112; 1 L. Ed. 2d 1205; 1957 U.S. LEXIS 730; 68 A.L.R.2d 805 (U.S. 1957)
http://scholar.google.com/scholar_case?case=16791991754028554976

The Supreme Court has consistently held that "jurisdiction is tested by the facts as they existed when the action [was] brought" and "`that after vesting, it cannot be ousted by subsequent events.'" "Smith v. Sperling, 354 U.S. 91, 93 n. 1, 77 S.Ct. 1112, 1 L.Ed.2d 1205 (1957) (quoting Mollan v. Torrance, 22 U.S. (9 Wheat.) 537, 539, 6 L.Ed. 154 (1824)); see also Freeport-McMoRan Inc. v. K N Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991).  In Friends of the Earth, the Supreme Court applied its "longstanding rule that jurisdiction is to be assessed under the facts existing when the complaint is filed," Lujan, 504 U.S. at 570 n. 4, 112 S.Ct. 2130, when it concluded that the plaintiffs had standing to seek both injunctive relief and civil penalties.
Cleveland Branch, NAACP v. City of Parma, No. 99-3546, 263 F.3d 513; 2001 U.S. App. LEXIS 19193 (6th Cir. 2001)
http://scholar.google.com/scholar_case?case=11734532265363189189
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William A. Roper, Jr.
Here are a few more foundational U.S. cases:
Since the act of 1875, if it appears from the pleadings and proofs taken together that the defendants are citizens of the United States and reside, in the sense of having their permanent domicil, in the State of which the complainants are citizens, (or that each of the indispensable adverse parties is not competent to sue or liable to be sued, therein,) the Circuit Court cannot maintain cognizance of the suit.  And the inquiry is determined by the condition of the parties at the commencement of the suit.  Mullen v. Torrance, 9 Wheat. 537; Conolly v. Taylor, 2 Pet. 556; Crehore v. Ohio & Mississippi Railway, 131 U.S. 240; Jackson v. Allen, 132 U.S. 27.
Anderson v. Watt, No. 138, 138 U.S. 694, 702-3; 11 S. Ct. 449; 34 L. Ed. 1078; 1891 U.S. LEXIS 2357 (U.S. 1891).
http://scholar.google.com/scholar_case?case=9397452236618991264

Jurisdiction refers to the court's competency to consider a case.  In essence, it is authority "to decide a given type of case one way or the other."  Hagans v. Lavine, 1974, ___ U.S. ___, 94 S.Ct. 1372, 39 L.Ed.2d 577, 42 L.W. 4381.  This is determined at the outset of the suit for reasons that are at least partially practical: the parties, the witnesses, and the public should not be put to the inconvenience and expense of a trial only to be told, after the trial is over, that they were in the wrong courthouse and must go to another for a new trial.  Hence the determination whether a suit arises under the Constitution or laws of the United States rests upon "the plaintiff's statement of his own cause of action."  Louisville & Nashville R. R. Co. v. Mottley, 1908, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126.  See also Bell v. Hood, 1946, 327 U.S. 678, 66 S.Ct. 773, 90 L. Ed. 939; Skelly Oil Co. v. Phillips Petro. Co., 1950, 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194; Chandler v. O'Bryan, 10 Cir. 1971, 445 F.2d 1045; 1 Barron & Holtzoff, Federal Practice & Procedure § 25 (Wright ed. 1960).
Mobil Oil Corporation v. Kelley, No. 73-1793, 493 F.2d 784 (5th Cir. 1974), cert. denied, 419 U.S. 1022, 95 S.Ct. 498, 42 L.Ed.2d 296 (1974).
http://scholar.google.com/scholar_case?case=2007824178863743399

Consistent with general principles for determining federal jurisdiction, diversity of citizenship must exist at the time the action is commenced.  Newman-Green, Inc.  v. Alfonzo-Larrain, 490 U.S. 826, 830, 109 S.Ct. 2218, 2221, 104 L.Ed.2d 893 (1989). In cases removed from state court, diversity of citizenship must exist both at the time of filing in state court and at the time of removal to federal court.  See, e.g., Kanzelberger v. Kanzelberger, 782 F.2d 774, 776 (7th Cir. 1986).  If diversity is established at the commencement and removal of the suit, it will not be destroyed by subsequent changes in the citizenship of the extant parties.  Smith v. Sperling, 354 U.S. 91, 93 n. 1, 77 S.Ct. 1112, 1114 n. 1, 1 L.Ed.2d 1205 (1957); Mollan v. Torrance, 22 U.S. (9 Wheat.) 537, 539, 6 L.Ed. 154 (1824); 1 J. Moore, Moore's Federal Practice, § 0.74[1] (1996).
Coury v. Prot, Nos. 94-20084, 94-20694, 85 F.3d 244, 248-9 (5th Cir. 1996)
http://scholar.google.com/scholar_case?case=5823254376657387933

"Federal jurisdiction is determined by the facts as they exist when the case is filed, and not by what happens later, see Mollan v. Torrance, 22 U.S. (9 Wheat.) 537, 549, 6 L.Ed. 154 (1824); Smith v. Sperling, 354 U.S. 91, 93 n. 1, 77 S.Ct. 1112, 1113 n. 1, 1 L.Ed.2d 1205 (1957), as otherwise a defendant could defeat a diversity suit simply by moving to the plaintiff's state after suit was filed."
American Nat. Bank & Tr. Co. of Chicago v. Bailey, No. 83-1972, 750 F.2d 577 (7th Cir. 1984)
http://scholar.google.com/scholar_case?case=12615094634842051452

In determining federal court jurisdiction, we look to the original, rather than to the amended, complaint.  Subject matter jurisdiction must exist as of the time the action is commenced.  See Mollan v. Torrance, 22 U.S. (9 Wheat.) 536, 538, 6 L.Ed. 154 (1824) (jurisdiction "depends upon the state of things at the time of the action brought"); Nuclear Eng'g Co. v. Scott, 660 F.2d 241, 248 (7th Cir.1981) ("Jurisdictional questions are answered by reference to the time of the filing of an action...."), cert. denied, 455 U.S. 993, 102 S.Ct. 1622, 71 L.Ed.2d 855 (1982); Mobil Oil Corp. v. Kelley, 493 F.2d 784, 786 (5th Cir.) (jurisdiction "is determined at the outset of the suit"), cert. denied, 419 U.S. 1022, 95 S.Ct. 498, 42 L.Ed.2d 296 (1974).[2]  If jurisdiction is lacking at the outset, the district court has "no power to do anything with the case except dismiss." 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3844, at 332 (1986) (footnote omitted); accord United States v. Boe, 543 F.2d 151, 159 (C.C.P.A.1976) (when subject matter jurisdiction is lacking, the district court "ha[s] no power to do anything, other than to dismiss the action," and any order other than to dismiss is a nullity).
Morongo Band of Indians v. Cal. St. Bd. of Equal, Nos. 87-2320, 87-2371 and 87-2393, 858 F.2d 1376 (9th Cir. 1988).
http://scholar.google.com/scholar_case?case=5274103220799023358
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William A. Roper, Jr.
To the case citation for Cleveland Branch, NAACP v. City of Parma, No. 99-3546, 263 F.3d 513; 2001 U.S. App. LEXIS 19193 (6th Cir. 2001), we should add the subsequent appellate history:
Cleveland Branch, NAACP v. City of Parma, No. 99-3546, 263 F.3d 513; 2001 U.S. App. LEXIS 19193 (6th Cir. 2001), cert. denied 535 U.S. 971, 122 S.Ct. 1438, 152 L.Ed.2d 382 (2002).
[The U.S. Supreme Court declined to review the  case.]
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William A. Roper, Jr.
Here are some Ohio cases both Federal District Court and state appellate court showing that a plaintiff must demonstrate that it is the holder of the note and mortgage at commencement:
"To show standing, then, in a foreclosure action, the plaintiff must show that it is the holder of the note and the mortgage at the time the complaint was filed.  The foreclosure plaintiff must also show, at the time the foreclosure action is filed, that the holder of the note and mortgage is harmed, usually by not having received payments on the note."
In re Foreclosure Cases, 521 F.Supp.2d 650 (U.S. Dist. S.D. Ohio 2007) (Rose, J.)
http://scholar.google.com/scholar_case?case=938737983544632292

"To have standing, a plaintiff in a foreclosure action must be the mortgagee [or assignee of the mortgagee] when it files suit.  See generally In re Foreclosure Cases, 2007 WL 3232430 (N.D. Ohio) (Boyko, J.).  Accord, e.g., In re Foreclosure Cases, 521 F. Supp. 2d 650 (S.D. Ohio 2007) (Rose, J.)."
Novastar Mortgage, Inc. v Snyder, No. 3:07CV480 (U.S. Dist. N.D. Ohio 2008) (Carr, J.)
http://scholar.google.com/scholar_case?case=9216928087837987187

A party lacks standing to invoke the jurisdiction of a court unless he has, in an individual or a representative capacity, some real interest in the subject matter of the action.[1]  The Eleventh Appellate District has held that "Civ.R. 17 is not applicable when the plaintiff is not the proper party to bring the case and, thus, does not have standing to do so.  A person lacking any right or interest to protect may not invoke the jurisdiction of a court."[2]  The court also noted that "Civ.R. 17(A) was not applicable unless the plaintiff had standing to invoke the jurisdiction of the court in the first place, either in an individual or representative capacity, with some real interest in the subject matter. Civ.R. 17 only applies if the action is commenced by one who is sui juris or the proper party to bring the action."[3]

The Twelfth Appellate District agrees.  In 2007, the court held that "[t]he `real party in interest is generally considered to be the person who can discharge the claim on which the suit is brought * * * [or] is the party who, by substantive law, possesses the right to be enforced.'"[4]  Unless a party has some real interest in the subject matter of the action, that party will lack standing to invoke the jurisdiction of the court.  The court concluded that, "[i]n a breach of contract claim, only a party to the contract or an intended third-party beneficiary of the contract may bring an action on a contract in Ohio."
Wells Fargo Bank v. Byrd, Nos. C-070889 and C-070890, 2008 Ohio 4603 (Oh. App. 1st 2008)
http://scholar.google.com/scholar_case?case=5139784127070096552

"A party lacks standing to invoke the jurisdiction of a court unless he has, in an individual or a representative capacity, some real interest in the subject matter of the action.  State ex rel. Dallman v. Court of Common Pleas (1973), 35 Ohio St.2d 176, 298 N.E.2d 515, syllabus.  The Eleventh Appellate District has held that `Civ.R. 17 is not applicable when the plaintiff is not the proper party to bring the case and, thus, does not have standing to do so.  A person lacking any right or interest to protect may not invoke the jurisdiction of a court.' Northland Ins. Co. v. Illuminating Co., 11th Dist. Nos. 2002-A-0058 and 2002-A-0066, 2004-Ohio-1529, at ¶17 (internal quotations and citations omitted).  The court also noted that `Civ.R. 17(A) was not applicable unless the plaintiff had standing to invoke the jurisdiction of the court in the first place, either in an individual or representative capacity, with some real interest in the subject matter.  Civ.R. 17 only applies if the action is commenced by one who is sui juris or the proper party to bring the action.'  Travelers Indemn. Co. v. R. L. Smith Co. (Apr. 13, 2001), 11th Dist. No. 2000-L-014." Wells Fargo Bank, N.A. v. Byrd, 178 Ohio App.3d 285, 2008-Ohio-4603, 897 N.E.2d 722.
Wells Fargo Bank, NA v. Jordan, No. 91675, 2009 Ohio 1092 (Oh. App. 8th 2009)
http://scholar.google.com/scholar_case?case=1340268357153930112

See also:

U.S. Bank, N.A. v. Perry, No. 94757, 2010 Ohio 6171 (Oh. App. 8th 2010)
http://scholar.google.com/scholar_case?case=5082448843791277686 
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William A. Roper, Jr.
Some New York Cases Showing Standing Is Determined at Commencement

Here are some New York State cases showing that standing is determined at the commencement of the suit:

Appellate Cases
Where the plaintiff is the assignee of the mortgage and the underlying note at the time the foreclosure action was commenced, the plaintiff has standing to maintain the action (see First Trust Natl. Assn. v Meisels, 234 AD2d 414 [1996]; Slutsky v Blooming Grove Inn, 147 AD2d 208 [1989]).
Federal National Mortgage Association v. Youkelsone, 303 A.D.2d 546, 546-7, 755 N.Y.S.2d 730 (NY App. 2nd Dept. 2003)
http://scholar.google.com/scholar_case?case=9686572543337644117

In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced (see Mortgage Elec. Registration Sys., Inc. v Coakley, 41 AD3d 674 [2007]; Federal Natl. Mtge. Assn. v Youkelsone, 303 AD2d 546, 546-547 [2003]; First Trust Natl. Assn. v Meisels, 234 AD2d 414 [1996]).
U.S. Bank, NA v Collymore, 68 A.D.3d 752, 753-4, 2009 NY Slip Op 9019, 890 N.Y.S.2d 578 (NY App. 2nd Dept. 2010)
http://scholar.google.com/scholar_case?case=12986848906558373013

"In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced" (U.S. Bank, N.A. v Collymore, 68 AD3d at 753).
U.S. Bank, N.A. v. Madero, No. 2010-02046, 80 A.D.3d 751, 752, 2011 NY Slip Op 00505, 915 N.Y.S.2d 612 (NY App. 2nd Dept. 2011)
http://scholar.google.com/scholar_case?case=11299985545886232717

"A plaintiff has standing where it is both (1) the holder or assignee of the subject mortgage and (2) the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action with the filing of the complaint (see Wells Fargo Bank, N.A. v Marchione, 69 AD3d at 207-209; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754)."
Aurora Loan Services, LLC v. Weisblum, Nos. 2010-03065, 2010-05864, 2011 NY Slip Op 04184 (NY App. 2nd Dept. 2011)
http://scholar.google.com/scholar_case?case=7634440800047097953
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Angelo
Just to add to the NY cases that cite standing must be comenced before the summons and complaint is filed.  Additionally, this case also states that the issue of standing doesn't always need to to be raised in the answer or pre-answer motion to dismiss.
http://scholar.google.com/scholar_case?case=1142744624508210989&q=marchione&hl=en&as_sdt=4,33

The defendants first addressed the issue of the assignment in a February 3, 2008, reply affirmation of counsel which pointed out that Wells Fargo lacked standing to bring the action. Wells Fargo argues that the Supreme Court erred in relying on this argument, as it was first raised in the defendants' reply papers. "The function of reply papers is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of, or new grounds for the motion" (Matter of Harleysville Ins. Co. v Rosario, 17 AD3d 677, 677-678 [2005]; see also Matter of TIG Ins. Co. v Pellegrini, 258 AD2d 658 [1999]; Dannasch v Bifulco, 184 AD2d 415, 417 [1992]). Here, however, 207*207 the Supreme Court correctly recognized that the defendants' raising of the issue of standing in their reply was proper. The defendants' argument that the plaintiff lacked standing was in response to the plaintiff's submission of the assignment, presented for the first time in the papers the plaintiff submitted in opposition to the motion. Accordingly, the Supreme Court, in the exercise of its discretion, properly considered the response to the new evidence offered for the first time in the reply (see Matter of Kennelly v Mobius Realty Holdings LLC, 33 AD3d 380, 382 [2006]).

In sum, inasmuch as the assignment was not made until after the summons was filed, Wells Fargo had no standing to bring this action. Therefore, the order is affirmed.

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William A. Roper, Jr.
Angelo:

Thanks for that!  I would underscore that the New York case authority is generally so monolithically supportive of the proposition that standing should be raised in the first responsive pleading that for anyone first answering, it seems to be a good idea to raise the standing defense right away.

But IF the defendant has ALREADY ANSWERED and omitted the defense, where, as in Marchione, the plaintiff has presented evidence which for the first time implicates and impreaches its own standing, it would seem both necessary and appropriate to then immediately raise standing in the reply (citing Marchione et al). 

In failing to raise the issue, the issue is rather clearly waived.  Whether one can sneak the issue in via reply seems to be an emerging area, but certainly one that ought to be argued.

*

As an aside, I want to note that you have been recently been singular amongst New York Forum participants in both your participation at the Forum and your growing body of knowledge.  New York is probably hands down the most defendant friendly foreclosure venue in the country.

When I beat you up about being seduced by wingnut theories, it is in large part due to my conviction and confidence that you can do well there ably using mainstream arguments.

The treachery of New York's Rule that standing needs to be asserted within the first responsive answer is one reason WHY NY defendants' interests are usually best served obtaining the services of a capable and experienced attorney specializing in foreclosure.
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Kohler
Is this true in Florida?
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JJ
Yes Kohler.
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mar7

FEDERAL HOME LOAN MORTGAGE CORPORATION, Appellee,
v.
SCHWARTZWALD ET AL., Appellants.

Nos. 2011-1201 and 2011-1362.

Supreme Court of Ohio.

Submitted April 4, 2012.Decided October 31, 2012.

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mar7
Note: in ohio you can go to the respective court web site e.g. Ohio Supreme Court and all of the filed briefs are there for download!  at no cost.
**
note: generally, depending on the County of Clerk of the Court, one can also download the filed briefs without cost.
***
fyi: Summit County Ohio allows the download of all of the lower court filings i.e. complaint; answer; etc AT NO COST!
**
good luck
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mar7
sorry the second 'note' is referring the appellate briefs.
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mar7
79 So.3d 170 (2012)

Robert McLEAN, Appellant,
v.
JP MORGAN CHASE BANK NATIONAL ASSOCIATION, not individually but solely as Trustee for the holders of Structured Asset Mortgage Investments II, Inc., Mortgage Pass-Through Certificates, Series 2006-ARS, Appellee.

No. 4D10-3429.

District Court of Appeal of Florida, Fourth District.

February 8, 2012.
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Crickett
On what grounds can a fraudulent foreclosure be filed in federal court?
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