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Judge (J): We’re here on a motion by BailMeOutBanc for summary judgment in its foreclosure action against Lender Liability Equities LLC. It’s hard to imagine a more straightforward motion. Counsel: what’s the defense?
Borrower’s Counsel (BC): Your Honor, there is a fatal defect in the loan documents which precludes the relief sought.
J: I’m intrigued, counsel...
Lender’s Counsel (LC): As am I. [smugly]
BC: The borrower’s interest in the property was not fully mortgaged to the bank. Therefore, foreclosure is not an available remedy.
LC: The granting clause is 9 pages long.
BC: While borrower granted, conveyed, bargained, sold, set aside, released, confirmed, hypothecated, pledged, and even aliened the property to the bank, it did not enfeoff the property.
J: Well, that’s strange. Are you saying that the granting clause did not include the standard and customary enfeoffment language?
BC: That’s right, Your Honor. The borrower did not enfeoff the property. No enfeoffment.
J: Why would a lender not require enfeoffment? It makes no sense.
BC: Your Honor. We’ve word searched every mortgage ever recorded in New York and every other state in the country, except Louisiana of course. Feoffamentum was never recognized under the Napoleonic Code. Why I don’t know.
J: Yes, I recall something about that in law school.
BC: Right. We’ve examined literally millions of mortgages from commercial banks, savings and loans, insurance companies, equity funds, Fanny and Freddie and CMBS lenders. There is not one mortgage, not one, that has omitted the critical enfeoffment provision. Until now.
LC: I’ve seen some crazy excuses from deadbeat borrowers but this is insane! [LC turns to his bright, young and somewhat ashen-faced associate clutching his laptop: “Find me an enfeoff-less mortgage, NOW!”]
BC: According to Black’s Law Dictionary, a feoffment is, and I quote: “The gift of any corporeal hereditament to another…operating by transmutation of possession, and requiring as essential to its completion, that the seisin be passed…which might be accomplished either by investitute or by livery of seisin.”
LC: What is a law dictionary and who the hell is Black?
J: Before your time counselor, apparently. Big green book; got one in my credenza. I like that “livery of seisin” line. Very mellifluous. I may use that in my next decision; maybe this one.
BC: Your Honor. A mortgage without enfoeffment is like “res loquitur” without the “ipsa”. Enfeoffment has been the rule of law since the time of Blackacre.
LC: What? I do a ton of work for BlackRock. Never lost a foreclosure action [Ghostlike associate whispers to LC: “He’s right; every mortgage in every database includes enfeoffment.]
J: Anything else before I decide the motion?
LC: Your Honor! I acknowledge that the mortgage should have included the “enfeoffment” language, but that was a simple mistake of omission. Its not as if the borrower negotiated the clause out. The bank was never asked to waive enfeoffing. The issue just never came up.
BC: Don’t even see enfeoffment in the commitment letter.
LC: When would foeffment ever be included to in a commitment?
J: It will now I guess.
LC: Your Honor, I assure you that in the future all the mortgages my firm produces will be entitled “Mortgage, Security Agreement, Assignment of Leases and Rents, Fixture Filing and Instrument of Complete Enfoeffment Ab Initio” And not in that order.
J: I’ll be sure to look for that, counselor, next time.
LC: Judge, please! [Prostrate associate to LC: “Look at this.” LC: “What?! Oh, that’s right!] Your Honor. Borrower’s counsel issued an opinion letter confirming the enforceability of the mortgage. The argument against foreclosure cannot prevail.
BC: Counselor. The opinion clearly states that the mortgage is enforceable in accordance with its terms. You see a term spelled “enfeoffment” in that mortgage?
LC: Judge, the bank has a fundamental right to foreclose on its collateral. Denying that right is tantamount to the forfeiture of the bank’s interest in real property. There is no principle of law more established than “the law abhors a forfeiture.”
J: Actually, I’ve always been kind of indifferent, but I keep that to myself.
LC: Your Honor. The only request I can make at this point is that you exercise your right of equitable discretion to recognize the parties’ true intentions and to grant the relief to which the bank is entitled. It would be the height of inequity for borrower to evade responsibility to repay the loan, simply due to a scrivener’s error. An unintentional human mistake that the Court should rectify, in the interests of justice. Simple equity, Your Honor, is all we are requesting.
J: You make a compelling argument counselor. However, you know that I’m bound by the US Supreme Court’s decision. Something like: “I can’t define equity, but I know it when I see it.” Well, I don’t see it here. And last I heard equity is in the eye of the beholder, not the note holder. [J, gesturing to court officer: “Scrape those nice young attorneys off the floor and call the next case.”]
By: Eric Rubenstein, Esq Ruskin Moscou Faltischek P.C. firstname.lastname@example.org 516-663-6513
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