Eighth Circuit Finds No Merit in Borrowers' "Show-Me-The-Note" Case

Foreclosure Mortgage Servicing

On August 27, the U.S. Court of Appeals for the Eight Circuit upheld a district court’s dismissal of a suit by borrowers challenging the validity of a foreclosure completed by their mortgage servicer. Butler v. Bank of Am., N.A., No 11-2653, 2012 WL 3641469 (8th Cir. Aug. 27, 2012). On appeal, the borrowers argued that their putative class action suit should be reinstated because the district court mistakenly characterized their claims as a single “show-me-the-note” claim, rather than as a quiet title action. After a close review of the allegations and causes of action, the court found no merit in this “borderline frivolous lawsuit” and upheld the dismissal. The court characterized the borrowers’ claims that the foreclosure was invalid because the servicer held the mortgage but not the note as a “flawed theory” unsupported by Minnesota law. Under Minnesota law and previous application of that law by the Eighth Circuit and Minnesota Supreme Court, the court held that the servicer has an undeniable right to initiate foreclosure as the legal holder of title.