Justice Lizbeth Gonzalez
Citibank filed this foreclosure action on behalf of Bear Stearns Alt-A Trust. Homeowner McCray moved for dismissal arguing Citibank lacked standing. McCray previously filed an action against Colorado Federal Savings Bank (CFSB) and MERS as CFSB’s nominee, to discharge the first and second mortgages for the subject premises as null and void. Citibank maintained it had standing as it held the original note. Yet, the court noted the holder of the second and third notes was undisclosed. The court stated a plaintiff in a foreclosure action had standing where it was both the holder or assignee of the mortgage and underlying note at the time the action was commenced. Citibank’s counsel stated he held the initial note, but made no reference to the mortgages, and the court found the chain of custody was undisclosed. There was no proof Citibank held both the mortgages and notes when it commenced this action. The court granted McCray’s motion for good cause shown, finding CItibank failed to demonstrate its right to the debt in the absence of a chain of custody and proof the mortgages and notes were lawfully assigned to and held by it before commencing this action. Hence, Citibank lacked standing to foreclose, and the underlying action was dismissed.
