Bank of New York v. RomeroAnnotate this Case
In 2006, Joseph and Mary Romero signed a mortgage contract with the Mortgage Electronic Registration Systems (MERS) as nominee for Equity One, Inc. They pledged their home as collateral for the loan. The Romeros alleged that Equity One urged them to refinance their home for access to the home's equity. The terms of the new loan were not an improvement over their then-current loan: the interest rate was higher and the loan amount due was higher. Despite that, the Romeros would receive a net cash payout they planned to use to pay other debts. The Romeros later became delinquent on their increased loan payments. A third party, Bank of New York (BONY), identified itself as a trustee for Popular Financial Services Mortgage, filed suit to foreclose on the Romeros' home. BONY claimed to hold the Romeros' note and mortgage with the right of enforcement. The Romeros defended by arguing that BONY lacked standing to foreclose because nothing in the complaint established how BONY held their note and mortgage, and that the contracts they signed were with Equity One. The district court found that BONY had established itself as holder of the Romeros' mortgage, and that the bank had standing to foreclose. That decision was appealed. Upon review, the Supreme Court concluded the district court erred in finding BONY's evidence demonstrated that it had standing to foreclose. Accordingly, the Court reversed the district court and remanded the case for further proceedings.