Oregon Judge Rejects ‘Split the Note’ Theory

A three-judge panel of the Oregon Court of Appeals affirmed a lower court ruling rejecting a borrower's use of the ""split the note"" theory to argue against a non-judicial foreclosure, ""MERSCORP Holdings"":http://www.mersinc.org/ (MERS) announced.

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In the case _Hunt v. Aurora Loan Services_, the basis of the plaintiff's complaint is that the note had been securitized and separated from the deed of trust and that a foreclosing party must be the owner or holder of the note, according to court documents.

However, nowhere does the plaintiff argue he is not in default, and he admitted he does owe the ""proper owner"" of the note. Though, the plaintiff decided to stop making payments because he became ""aware that in many instances the purported lender was not the lender at all, but instead an imposter or interloper,"" according to court documents.

The plaintiff argued the defendants can't initiate a non-judicial foreclosure because they are not holders of the note and have not produced it for the plaintiff.

In the decision, Judge Stephen Tiktin determined the borrower was not able to prove the defendants violated Oregon law.

""Critically, plaintiff has not alleged that the circumstances required by ORS 86.735 to non-judicially foreclose a trust deed have not been met and plaintiff has not pointed to any provision of the non-judicial trust deed foreclosure statutes that requires the presentation of documents, including the note, to the debtor as a prerequisite of proceeding non-judicially,"" Tiktin wrote.

In addition, the plaintiff didn't point to any person or entity who claims to have the right to foreclose the trust deed.