Alert February 19, 2013

Maine Supreme Court Rejects Show-Me-the-Note, but Requires Identification of Noteowner

Addressing the question of what proof a party must present "to prove ‘ownership’ of the mortgage note and mortgage for purposes of foreclosure," the Maine Supreme Court held that a foreclosure plaintiff must identify the "owner or economic beneficiary of the note," in addition to meeting other statutory requirements. In the underlying case, the loan servicer filed a foreclosure action on behalf of the note owner. The borrower contested the foreclosure, contending that only the economic beneficiary of the note could sue for foreclosure, and that the servicer was not the ultimate beneficiary (and thus not the proper party to sue).

The Maine Supreme Court noted that trial courts in Maine had come to different conclusions on what a plaintiff must do to "certify proof of ownership of the mortgage note," as required by Maine’s foreclosure statute. The Court ruled that this language did not require a foreclosure plaintiff to be the owner of the note, only to "indicate the basis for the plaintiff’s authority to enforce the note pursuant to Article 3-A of the UCC." Thus, the loan servicer had standing to bring a foreclosure action because it was uncontested that the servicer was the holder of the note and had authority to enforce the note on behalf of the loan’s beneficial owner.