JPMorgan Chase Bank, N.A. v. Erlandson

821 N.W.2d 600 (Minn. Ct. App. 2012)

 

RULE:

At a foreclosure sale, in order to make a credit bid in the amount of the debt due on the mortgage being foreclosed, the mortgagee need not show that it also holds the note associated with the mortgage being foreclosed.

FACTS:

Appellants executed a promissory note in favor of the lender. The note was secured with a mortgage. The lender assigned the legal title to the mortgage in favor of the bank. Appellants defaulted, thus the bank sued to foreclose the mortgage. The district court awarded in favor of the bank a decree of foreclosure as well as a money judgment on the amount due on the note. Appellants moved the district court to vacate the summary judgment, insisting that since the bank failed to show that it had been assigned the promissory note then it cannot foreclose the mortgage.

ISSUE:

Can an assignee of a mortgage foreclose the property even if it failed to show that it was also assigned the rights under the promissory note?

ANSWER:

Yes.

CONCLUSION:

In a mortgage foreclosure action, the district court correctly ruled that the bank could foreclose its mortgage because the bank held legal title to the mortgage and appellants had defaulted on their mortgage obligations. The bank was not required to hold the note associated with the mortgage. The district court did not err in confirming the bank's purchase of appellants' property at the sheriff's sale because a mortgagee was permitted to make a credit bid under Minn. Stat. § 581.05 (2010) in the amount of the debt due on the mortgage without showing that it held the note associated with the mortgage.

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