Daily Development for Tuesday, November 9, 1999

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

Thanks to John Blyth of the New York Bar for providing this report.

MORTGAGES; FORECLOSURE; JURISDICTION; FEDERAL COURTS: Jurisdiction for foreclosure of a mortgage held by the FDIC lies in federal court even after the mortgage has been transferred to nongovernmental parties.

Federal Deposit Insurance Corporation v. Four Star Holding Co., 178 F.3d 97 (2d Cir. 1999)

The FDIC brought a mortgage foreclosure action pursuant to the New York Real Property Actions and Proceedings Law and asserted jurisdiction pursuant to 12 U.S.C. § 1819(b)(2)(A). The District Court may retain jurisdiction after the FDIC transferred its interest in the subject property to a third party. A transferee from FSLIC or FDIC, as successor of their interests, is still entitled to the protection of federal courts. This case presented the first opportunity to the Second Circuit to review this jurisdictional question.

Comment: The holding is consistent with the position of the Fifth Circuit in Federal Sav. & Loan Ins. Corp. v. Griffin, 935 F.2d 691 (5th Cir. 1991).

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