The New Mexico Supreme Court handed Bank of New York Mellon (and the district court’s analysis) its ass in a handbasket. This whole opinion is great. Some of the key findings or analyses:
- Possession of a note specially indorsed to another does not by itself demonstrate that the possessor is entitled to enforce the instrument. Demonstration of the “transfer” is required.
- Bank servicer’s testimony from servicer records when the records are not even attached and the records were regarding a time frame when the servicer was not servicing do not meet evidentiary muster because hearsay, no business record exception for the testimony instead of the records themselves, and no demonstration of personal knowledge by the testifying party.
- MERS can only transfer what it has. What MERS had was a nominal agency to the original Lender in the Deed of Trust. MERS had no interest in the Note.
- The deed follows the note. The converse is not true. The note does not follow the deed.
- The “no one else claimed it so it must be ours” argument (so logically unsound, it kills me, but I hear it all of the time) is annihilated.
Check it out here.
Also, the Court reaches out to hold that the consumer law of New Mexico is not preempted by federal law governing nationally chartered banks.