posting for

Wednesday, June 25, 2003

 

by:  Bert Rush

brush@firstam.com

 

ASSIGNMENT OF MORTGAGES/PROMISSORY NOTES/FORECLOSURE

 

A Connecticut Court of Appeals has held that a mortgage holder may not foreclose absent evidence of ownership of the underlying note.

 

The case is Fleet National Bank v. Vijay J. Nazareth, 818 A.2d 69 (2003).  Here, as best we can tell, is what happened.

 

In October 1994 Vijay and Charmaine Nazareth executed a promissory note and mortgage, securing repayment of $184,000, in favor of Shawmut Mortgage Company. 

 

Later, Shawmut Mortgage merged with, and became known as, Fleet Mortgage Corporation.  Fleet Mortgage assigned its interest in the mortgage, but not the note, to Fleet National Bank (which appears to have been a sister corporation to Fleet Mortgage).  Fleet National Bank then assigned the mortgage to R.I. Waterman Properties, Inc. (which was a subsidiary of Fleet National Bank, responsible for handling the Bank's foreclosures). 

 

In any case, the Nazareth loan became delinquent and Fleet National Bank filed an action for judicial foreclosure.  In due course, Waterman Properties was substituted as plaintiff in the judicial foreclosure action. 

 

At trial, defendants Nazareth claimed that Waterman Properties lacked standing to bring the action because it was not a holder of the underlying note.  It was undisputed that Fleet Mortgage was still the holder (i.e., owner) of the note, while Waterman Properties was holder (i.e., owner by assignment) of the mortgage.  It appears Waterman Properties argued that failure to assign the note with the mortgage was clearly an oversight.  The trial court ruled in favor of Waterman Properties, and defendants appealed.

 

The Court of Appeals reversed, holding there is no legal authority for the assignee of a mortgage to foreclose absent proof of assignment of the underlying note.  In so holding, the Court distinguished prior Connecticut cases upholding enforcement of a mortgage where the holder was shown to have an interest in the underlying note but, as in one case, the note was lost.

 

Likewise, the Court said the Connecticut statute permitting a note holder to foreclose a related mortgage, even though the mortgage has not been assigned, did not help Waterman Properties in this 'opposite' situation.  Said the Court, "(w)e conclude, therefore, that the legislature did not intend to permit the holder of the mortgage, without having been assigned the note, the ability to foreclose on the property."  (See Connecticut General Statutes section 49-17.)

 

With that, the Court ordered that the case be remanded with instructions that it be dismissed.

 

Comment:   There's a familiar rule that "the security follows the debt," or the mortgage interest goes with the note, but, as illustrated in this case, the converse may not always be true.

 

I'll confess this result doesn't make perfect sense to me.  Wouldn't it seem that assignment of the mortgage evidences an intention to assign at least some part of the underlying debt?  If not, why was the mortgage assigned?  Rhetorical question--or at least one, in Connecticut anyway, to be put to the legislature rather than a court.

 

A tough result for mortgage assignees, and their lawyers, who may seek to enforce mortgages that have been passed through now defunct corporations, with neither records nor witnesses to explain what was intended.

 

Questions, comment, argument?  Just press the "reply" button....

 

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(This message is being re-sent, to see if we can correct some formatting glitches in the prior transmission.  This is part of a continuing battle with our Microsoft Outlook e-mail software.)

 

Following Wednesday's posting, a Savant who must remain nameless writes:

 

Actually, at least to me, the case makes perfect sense. A mortgage, as I understand it, is security for an obligation owed to the mortgagee (as opposed to a Trust Deed where the security is held for the benefit of the owner [whoever it may be] of the obligation). Since the owner of the Note has a right to enforce payment in accordance with the terms of the instrument, any other construction would result in the possible obligation to make duplicate payments . . . or did I miss something?

 

Joseph Reineberg (Baltimore, MD) writes:

 

I like the strict construction Connecticut Court of Appeals. After all the mortgage follows the debt and the dog wags the tail.

 

Gil Lebovitz (Hartford, CT) writes:

 

The sky has not yet quite fallen in.  The Connecticut Appellate is an intermediate court, and I have to believe that Fleet Bank will appeal this decision to the Connecticut Supreme Court, which frequently reverses the Appellate Court (but which also has made some off the wall decisions).

 

It is black letter law in Connecticut that "the mortgage follows the debt," so this decision makes sense on its face.  I don't know what form of assignment was used in the Nazareth case, but if they used the statutory form provided in Connecticut General Statutes section 49-10, the decision makes no sense at all, because, while the language in the statutory form talks about an assignment of the "mortgage," the statute says that an assignment substantially in this form is sufficient for an assignment of the debt (as I read the statute).

 

I am trying to get more background information on this decision, and will advise you further when I have something.

 

Dave Bell (Agents Support and Management Services, Wyomissing, PA) writes: 

 

Seems like a lot of money spent on both sides (which begs another question - how do you pay to litigate [and re-litigate!] this stuff when you're in foreclosure?) assuming Fleet can merely assign the note to Waterman and then foreclose anyway.

 

Jim Dondero (Grand Rapids, MI) writes:

 

These days, I'm sure that there are PLENTY of parallels to this factual situation! Michigan law is that only the holder of a mortgage by recorded chain of assignments may exercise the "power of sale" therein, allowing it to be foreclosed non-judicially. Also, the last recorded assignment into the foreclosing lender must be recited in the Notice of Foreclosure. Sales in violation of these principles have long been held VOID by the Michigan Supreme Court in a progeny of cases dating back to 1891. Needless to say, this has been a recurring problem of late for mortgage lenders and their attorneys where there is a broken chain of assignments at the time foreclosure proceedings are commenced. And with this Connecticut decision, I wonder if we should begin requiring proof that the lender is the "holder in due course" of the underlying Note, before we would insure title derived through a sheriff's sale???

 

Ric Klarin (Talon Group, Glendale/L.A., CA) writes:

 

The need to verify that the promissory note secured by a deed of trust or mortgage has been assigned is sometimes overlooked. This practice has cost title insurers who insured a Trust Deed or Mortgage Assignee but did not verify possession of the properly endorsed secured note. The California Forms and Practices Manual contains the following on this subject.

 

"Although the ownership of a promissory note cannot be ascertained from examination of the records of county recorders, the right of a transferee of a note to enforce the mortgage or deed of trust securing that note it is usually evidenced by an assignment of the mortgagee's or beneficiary's interest.  Such assignment is often recorded in the county where the real property is located.  But, to assume that the record assignee of the security, is also owner of the promissory note it secures is to make the unwarranted assumption that:

 

a.  The note was properly endorsed and

 

b.  The note was delivered to and is in possession of the assignee of record."

 

By Bert Rush:  Our posting Wednesday was repeated, verbatim, on Prof. Pat Randolph's DIRT listserv, eliciting these comments from the "editor" (Prof. Randolph) and further replies to DIRT:

 

Editor's Comment 1: The critical fact to the editor here is the statement in the opinion that it was "undisputed" that the party bringing the foreclosure action was not the owner of the obligation.

 

Editor's Comment 2: The prevailing rule is to assume that the parties intended to assign the debt along with the mortgage, even if there is no evidence of anything by the mortgage assignment. Nelson and Whitman discuss this concept and cite cases in their treatise: Real Estate Finance Law pp 373-374 (4th Ed. West 2001). They also recommend this approach in the Restatement of Mortgages, Sec. 5.4b. This presumption solves most problems.   But it does not solve the problem where the holder of the debt does not agree that it is no longer the owner of the debt and insists that it assigned the mortgage separately.  In that case, then at best the owner of the debt ought to be an additional party plaintiff in the mortgage foreclosure action.  At worst, the transfer is a nullity and only the debt holder can foreclose. For this more conservative position that the transfer is a nullity, the minority rule, Nelson and Whitman cite case law in Florida, Arizona, New York, California, Indiana, and South Dakota.  Even though a minority rule, when you've got New York and California following it, you've got a rule with some "legs."

 

Editor's Comment 3: The lender brought this on itself by establishing a foreclosure method that seemed quite likely to fail, especially in a title theory state like Connecticut.  The editor wonders why the lender would take this case up on appeal rather than clean up the ownership problem - either transferring the note to the foreclosing party or transferring the mortgage to the note holder and then reforeclosing.  Maybe there were statute of limitations issues or bankruptcy issues, but that does seem to have been a smoother path.

 

DIRTer Mike Baucum (Baucum@baucumsteedlaw.com) writes:

 

Pat, Texas has a very recent case with similar result and other cases with similar finding.  Texas is a non-judicial foreclosure state so a true holder of the note can foreclose pretty easily by a trustee foreclosure.  But if they "own" the obligation but don't physically hold they have to do a judicial foreclosure with a judgment and sale held by the Sheriff, all of which adds a lot of cost to the process.  No one in the Texas case disputed that the foreclosing party was the owner of the obligation; they just were not the holder.

 

In the recent case there was a "catch-all" assignment of deed of trust lien and the note, but case did not mention the note being endorsed or account for the note itself.  This leads me to believe that the note had gone missing.

 

So the caption for Texas is:  Assignment of Mortgage without note WILL block foreclosure rights.

 

DIRTer Max Lieberman (liebermn@popmail.voicenet.com) writes:

 

At 12:55 PM 6/25/2003 -0500, you wrote:

 

MORTGAGES; ASSIGNMENT; Connecticut court concludes assignee of mortgage that lacks possession or formal assignment of note may not foreclose.

 

The RTC used to do this all the time.  Some bonehead thought that they could sell the Note to party A and the Mortgage to party B.  Never made sense to me.

 

More on point, most Assignments of Mortgage forms I have seen reference the note or underlying debt, so there should not be a problem, even if the note was never formally endorsed over.

 

DIRTer (and Savant) Jack Murray (Chicago, IL) and our own Dena Cruz (UCC Division, San Francisco, CA) write:

 

The following analysis may shed some light on the "mortgage following the note" side of the equation:

 

Effective July 1, 2001, the rules regarding interests in promissory notes dramatically changed. This was done in an attempt to accommodate asset securitization; the asset-based commercial-paper market currently holds $708 billion in assets (up from $517 billion in 1999), and is by far the most rapidly growing segment of the U.S. credit markets. Former Article 9 of the Uniform Commercial Code classified a promissory note as an instrument, and the sale of an instrument was outside the scope of Article 9.

 

Revised Article 9 expressly includes the sale of promissory notes within its scope. See UCC sec. 9-109(a)(3). However, there are some limitations:

 

1. Sales of promissory notes as part of the business from which they arose

2. Assignments of promissory notes for collection, only

3. Assignments of promissory notes to an assignee in satisfaction of indebtedness

 

These exclusions typically do not effect securitization transactions.

 

Sec. 109(b) of Revised Article 9 provides (as did Former Article 9) that "[t]he application of this article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this article does not apply." However, cmt. 7 to this section makes clear the views of the drafters that a recorded assignment of a mortgage has no bearing on whether a security interest in the mortgage is created or perfected and that any cases to the contrary are overruled. According to cmt. 7, "an attempt to obtain or perfect a security interest in a secured obligation by complying with non-Article 9 law, as by an assignment of record of a real-property mortgage, would be ineffective... [O]ne cannot obtain a security interest in a lien, such as a mortgage on real property, that is not also coupled with an equally effective security interest in the secured obligation."

 

A buyer of an interest in a promissory note should enjoy automatic perfection under Revised Article 9 of the UCC, but should also file a UCC-1 Financing Statement just in case the seller/originator's bankruptcy trustee subsequently alleges that the transaction was really a loan and not a sale. Methods of perfection can create problems for the escrow holder and the borrower/debtor. The method of perfection of a security interest in a promissory note depends on whether the transaction involves a "sale" of that type of property or a "loan" secured by that type of property. To perfect an interest in the note, the buyer/lender should, if the interest is a:

 

a. "Loan secured by interest in promissory note": Perfect by possession or filing. UCC secs. 9-312(a) and 9-313(a). Since possession of the note is not always practical, in many instances filing of a UCC-1 may be only way to perfect. A BFP in possession will prime perfection by filing!

 

b. "True Sale" of an interest in a promissory note: be aware that neither filing, nor possession is necessary or effective to perfect the security interest. Perfection is AUTOMATIC upon attachment if the "security interest" results from the sale of the promissory note. UCC sec. 9-309(4). Once perfected, the security interest takes priority over the interest of a subsequent lien creditor and the originator/debtor's bankruptcy trustee. See UCC sec. 9-317(a)(2); 11 USC 544(a)(1).

 

In addition, to accommodate the practice of warehouse lending, Revised Article 9 provides that a secured party does not relinquish possession of the mortgage if a mortgage warehouse lender delivers the original note to prospective purchasers. It need only instruct the third party that it is to hold for the benefit of the secured party, and to re-deliver the collateral to the secured party. UCC sec. 9-313(h), cmt. 9.

 

Because perfection can be done without filing, and possession of the instrument is not determinative of ownership, and because UCC sec. 9-203(g) holds that the mortgage follows the note, the original maker of the note and an escrow holder can not rely on the public records to determine who owns the note and who can sign a reconveyance or release of the mortgage. Revised Article 9 does not protect the original maker, nor provide advice on how to determine whom to pay. Revised Article 9 simply states that the "issues are determined by real-property law".  The Comments to UCC Sec. 9-109 also state that any attempt to obtain or perfect a security interest in a mortgage by complying with non-Article 9 law (such as recording a collateral assignment of the beneficial interest) would not be effective. Purchasers of interests in promissory notes and the underlying debtors must rely on representations and the financial stability of originators/sellers to determine who really owns the interest. UCC sec. 9-308, cmt. 6.

 

Some commentators, viewing this phenomenon from the maker/account debtor's perspective, refer to this set of facts as an "invisible lender scenario" because the debtor under the mortgage-secured note will not be able to ascertain what has occurred through examination of the public records (including who has the right to execute a reconveyance or release of the mortgage).

 

If the maker of the note can not determine whom to pay, and recording of a collateral assignment of the beneficial interest is ineffective and not indicative of ownership, failure to rely on the public records by the escrow holder should not be the basis of a breach of fiduciary duty cause of action. Reliance on the public records would be foolhardy and may even be actionable negligence.

 

As noted above, an absolute assignment of a promissory note carries with it the securing mortgage without the requirement of physical delivery of either the note or mortgage, and attachment of a security interest in a promissory note (which automatically includes the attachment of a security interest in the securing mortgage) requires either a security agreement authenticated by the debtor or possession of the collateral by the secured party pursuant to an agreement. See UCC Secs. 9-309(4) and 9-203. Under the "principal/incident" view of the note/mortgage relationship, UCC secs. 9-203(g) and 9-308(e) provide that attachment of a security interest in a promissory note is also attachment of a security interest in a securing mortgage, and the perfection of a security interest in a promissory note is also perfection of a security interest in a securing mortgage.

 

It should be noted that Revised Article 9 ostensibly makes it easier for a secured party with a security interest in a promissory note to foreclose a mortgage securing the note. After the debtor/mortgagee's default, the secured party may exercise the debtor/mortgagee's rights with respect to any property that secures the debtor/mortgagee's obligations. (U.C.C. sec. 9-607[a][3]).

 

The secured party does not have to foreclose on the promissory note in order to foreclose on the mortgage. Of course, the secured party cannot foreclose or exercise the debtor/mortgagee's foreclosure or other remedies unless the debtor/mortgagee is entitled to do so under the mortgage. This raises the possibility that the debtor/mortgagee may not be in default under its obligation to the secured party, but the obligor/mortgagor is in default under its note to the debtor/mortgagee. If the debtor/mortgagee is not in default, the secured party cannot foreclose on the mortgage. (The agreement between the debtor/mortgagee and the secured party should address this situation).

 

Title insurers may have some concerns with respect to these particular revisions to Article 9. For the secured party to have insurable title following a foreclosure, the secured party will need to have a good chain of title to the mortgage. (In some states, a secured party cannot foreclose unless it has a recorded chain of title.) This is why the secured party will usually require that an assignment of the mortgage from the debtor/mortgagee to the secured party be properly recorded in the applicable land records at the time of the grant of the security interest in the note to the secured party. If this has not occurred, the debtor/mortgagee may subsequently be unwilling to cooperate in the secured party's request for an assignment to assist the secured party (especially if the debtor/mortgagee is in default under the security agreement or other loan documents).

 

Sec. 9-607(b) of revised Article 9 provides a way for the secured party to document its interest in the mortgage in the land records without the debtor/mortgagee's involvement. Under this section, the secured party is authorized to file in the land records a copy of the security agreement and a sworn affidavit, which states that a default has occurred and that the secured party is entitled to foreclose nonjudicially. However, some problems exist with respect to this procedure: 1. a conflict may arise with state laws that require an acknowledgment or other conditions to recording a document in the land records (which provisions are usually not found in a security agreement); 2. Neither revised Article 9 nor the Official Comments provide that a memorandum of the security agreement (as opposed to the entire agreement) is sufficient for recording, and there is uncertainty as to whether other loan documents referenced in the security agreement must also be recorded (most debtor/mortgagees would not want the entire document[s] recorded); 3. a filed security agreement will only (as noted above) establish a chain of title if the debtor named in the security agreement is in fact the mortgagee in the mortgage and the secured party named in the security agreement is the secured party that proposes to foreclose. If there have been further assignments of the note, these further assignments also would have to be documented. See UCC Sec. 9-619 (explaining the transfer statement). As one commentator recently stated, "Title insurance companies presumably will develop underwriting guidelines for determining when a foreclosure by a secured party that has established its chain of title by filing its security agreement is enforceable"; 4. this procedure does not appear to be available in those states that do not permit nonjudicial foreclosure proceedings. See W. Rodney Clement and Baxter Dunaway, "Revised Article 9 and Real Property," 36 Real Prop. Prob. & Tr. J. 511 (Fall 2001).

 

Sec. 9-109(d)(11) of Revised Article 9 continues to exclude from its coverage "the creation or transfer of an interest in or lien on real property," with certain limited exceptions. This language, but for the exceptions (which don't affect this analysis), is identical to Former Article 9. However, this language is not entirely accurate because, as noted above, Revised Article 9 DOES provide for transfers of mortgages (which clearly are "liens on real property").

 

In a follow-up to the above, Jack Murray (Chicago, IL) writes:

 

The courts, at least in Connecticut, appear much more willing to uphold the rights of a foreclosing lender when it is the note holder (with or without the supporting mortgage) than in the situation where the lender is the mortgage holder but not the note holder.

 

Interestingly, the Superior Court of Connecticut (Judicial District of Fairfield, at Bridgeport), in Manufacturers and Traders v. Felix Figueroa, 2003 Conn. Super. LEXIS 1138 (April 22, 2003), an unreported decision issued three weeks after the Connecticut Appellate Court's decision in Fleet Nat'l Bank v. Nazareth, held that the plaintiff, as holder of the mortgage note and an unrecorded assignment of the mortgage, had standing to prosecute a state foreclosure action. The plaintiff/assignee filed an action to foreclose a mortgage executed by defendant mortgagors. Default for failure to appear was entered against the mortgagors and the assignee filed a motion for strict foreclosure. The court, sua sponte, raised the issue of whether the assignee had standing to invoke the court's jurisdiction to render a judgment of foreclosure.

 

The court noted that the assignee was assigned a note and mortgage, but the assignment of the mortgage was not recorded on the land records. The issue before the court was whether the (off record) assignee of the mortgage had standing to bring the foreclosure action. The superior court held that the assignee, as holder of the mortgage (by virtue of the off record assignment), had standing to foreclose the mortgage since the assignee had a valid assignment of the promissory note in compliance with Conn. Gen. Stat. § 49-10. Despite the fact that Conn. Gen. Stat. § 47-10 required that a conveyance be recorded to be effective, the court found that the assignment in the instant action was valid under Conn. Gen. Stat. § 49-10, which addressed the issue more specifically. The court noted that there was no question that the assignee was the owner of the note and mortgage. The assignee established ownership by complying with Conn. Gen. Stat. § 49-10, thereby giving it standing to foreclose the mortgage.

 

Interestingly, Conn. Gen. Stat. sec. 49-10 provides that an assignment of the mortgage debt  (i.e., "a debt or other obligation secured by a mortgage, assignment of rent or assignment of interest in a lease") executed in accordance with the provisions of the statute "vests" title in the assignee, and further provides that the recording of the assignment alone is insufficient to constitute notice to the mortgagor. The court also refers to Conn. Gen. Stat. sec. 49-17, which "provides that a mortgage may be foreclosed by the holder of an assignment of the mortgage note even though the assignee may not have received an assignment of the mortgage deed." The court then states the familiar maxim that "the security follows the debt."

 

The court acknowledges that a few other Connecticut cases have held that a plaintiff is required, pursuant to another Connecticut statute, Conn. Gen. Stat. sec. 47-10, to record the mortgage assignment in order to have standing to maintain a foreclosure action. Sec. 47-10 provides that "no conveyance shall be effectual to hold any land against any other person but the grantor and his heirs, unless recorded on the records of the town in which the land lies." The court rejects the holdings of these other cases, finding that "while sec. 47-10 concerns conveyances generally, sec. 49-10 more specifically addresses the assignment and enforceability of the mortgage debt." The court also states that the class of people protected under this statute is limited to "those who rely on the land records and are prejudiced by another's failure to record a conveyance." The court notes that in this case "there is no question that the plaintiff is the owner of the note and mortgage," and "the parties are not disputing who has priority over the property." According to the court, "this estoppel protection accorded by sec. 47-10 is further circumscribed because it is unavailable to those who have actual knowledge of the status of the title or who lack such knowledge because of their own negligence."

 

Interestingly, the court acknowledges "the potential title problems that may arise if a plaintiff in a foreclosure action fails to record its assignment of mortgage even after final judgment of the foreclosure enters (citation omitted). Consequently, although a plaintiff with an unrecorded mortgage assignment may have legal standing to foreclose, there are practical and policy considerations that militate against a delay in filing of the assignment."  However, the court gives not guidance on how to deal with these "practical and policy considerations."

 

The court also cites a "leading commentator" on Connecticut foreclosure law, Denis Caron, as stating, in Connecticut Foreclosures (3d Ed. 1997),  that "[i]t should be clear that the assignee of a mortgage deed  cannot foreclose without prior compliance with sec. 49-10 and perhaps even sec. 47-10, but such is not the situation with the assignee of a mortgage note." (Emphasis in text.) (The court cites the Fleet Nat'l Bank v. Nazareth case in support of this statement.)

 

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Following last Wednesday's posting, and replies, Dena Cruz (UCC Division/San Francisco, CA) writes:

 

Last thoughts from the UCC side of our corporation:

 

The problem with the Fleet case is that it really does not tell us what the intent of the secured party/lender was.  I am not sure if this is bad lawyering or just the way the decision was drafted.

 

Clearly, Article 9 and Article 3 (Negotiable Instruments) allow enforcement when the note has been lost before or after transfer to an assignee or is simply unavailable.  "Protection" must be provided to prevent the debtor/borrower from paying the same debt twice.  So, if there was intent to transfer the Fleet Note when the assignment of mortgage was executed, the plaintiff/ lender should have prevailed.

 

If there was no intent to transfer, and the assignee of the mortgage was simply a "servicer"/ agent for the holder of the note, why not argue simple agency law???  This situation is quite common in the lending industry.  Maybe it was simply the way the action was plead (bad lawyering).

 

The long and short of this is:  Possession is not an indication of ownership of the note.  Recording of Collateral Assignments is not required under the code adopted by all 50 states and DC.  Enforcement of the debt without the note is allowable under Article 3.  Equitable arguments are available to prevent a borrower from benefiting from the industry's inability to keep track of its documents. 

 

The title industry will have to get a handle around the increased risk that resulted from all 50 states enacting the Revisions to Article 9.

 

By Bert Rush:  In addition to LandSakes, Wednesday's posting also appeared on Prof. Pat Randolph's DIRT listserv.  Here are further replies to the posting on DIRT.

 

DIRTer John Steele (JSteele3@aol.com ) writes:

 

If this case had arisen in Maryland, the opposite result undoubtedly would have been reached. By statute in Maryland (Ann. Code of Md., RPA 7-103) the owner of record of a mortgage is conclusively presumed to be the owner of the note it secures. It is, therefore, unnecessary to assign the note if the mortgage is assigned. However, Maryland treats deeds of trust differently. With them ownership of the indebtedness carries with it the benefits of the security instrument. (See Le Brun v. Prosise, 79 A.2d 543 and Billingsley v. Mitchell, 262 A.2d 746). Both mortgages and deeds of trust are used in Maryland, although deeds of trust have been more widely used in recent times due to ease of off-record transfer and some other relative conveniences (foreclosure and security for future advances), but anyone not familiar with the distinction can easily make a mistake. I wonder if something similar happened in Connecticut.

 

DIRTer Howard Lax ( hlax@earthlink.net ) writes:

 

See also In re Atlantic Mortgage Corporation, 69 B.R. 321, 1987 Bankr. Lexis 44 (U.S. Bankr. Ct., E.D. Mich. 1987), in which the same mortgages were assigned several times.  The court held that that the bankruptcy trustee had a better claim to ownership of  the loans than the assignees of the mortgages if the assignees of the mortgages did not also have the endorsed notes.