promissory note that is endorsed in blank has standing to mortgage
foreclosure proceedings under Connecticut law.
A copy of the opinion is available at:
When the defendant-borrower defaulted on her mortgage payments, plaintiff
RMS Residential Properties, LLC ("RMS") instituted foreclosure
proceedings. The borrower filed an answer, special defenses and a
counterclaim, contending among other things that RMS lacked standing to
institute a foreclosure action, because it was purportedly not the
rightful owner of the note at the time of the foreclosure action.
RMS filed an affidavit with the court, wherein its attorney-in-fact stated
that RMS, through its attorney, was the holder of the promissory note.
Both parties moved for summary judgment, and the lower court granted RMS'
motion. The borrower appealed.
On appeal, the borrower argued that RMS lacked standing to foreclose, and
contended that RMS' affidavit constituted an admission that it was not the
rightful owner of the debt. RMS responded that the holder of a note is
presumed to be the owner of the debt and may foreclose absent the
defendant rebutting that presumption.
The Court began its analysis by examining the relevant statutory law. It
noted that in Connecticut, a "person entitled to receive the money
secured" by a mortgage may foreclose on that mortgage, even absent
assignment of that mortgage. Conn. General Statutes Sec. 49-17. Further,
as the promissory note in question was endorsed in blank, the Court
observed that such an instrument "becomes payable to bearer and may be
negotiated by transfer of possession alone..." Id. at Sec.
The Court also examined the relevant case law in Connecticut, which
provides that the holder of a note endorsed in blank is entitled to a
presumption of ownership of the same.
With that framework in place, the Court found that as the holder of the
promissory note, RMS was entitled to a presumption that it was the owner
of the debt. Because the borrower did not rebut this presumption, the
Court held that "RMS was authorized by statute to commence this
foreclosure action." Therefore, it affirmed the lower court's judgment.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
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