Past Rulings by New York Judge Schack Reached Ibanez-Like Conclusions

Via Naked Capitalism’s Yves Smith.

In another blow to securitization industry efforts to minimize the recent Massachusetts Supreme Judicial Court decision in Ibanez (or perversely, spin it as a victory), some of Judge Schack’s earlier decisions come to conclusions similar to those of Ibanez. This confirms the view of Georgetown law professor Adam Levitin, who has argued that Ibanez has the potential to influence the decisions of courts in other title theory states (very rough definition: in a title theory state, the lender holds a deed of trust, which means he owns the property until the borrower pays off the mortgage in full. By contrast, in a lien theory state, the borrower owns the property, but gives the lender a lien against the property which he can exercise to foreclose on the real estate if the borrowers defaults. Title theory states are generally also non-judicial foreclosure states). …