In Wells Fargo Bank, N.A. v. Horn, the Ohio Supreme Court held “that the plaintiff in a foreclosure action must have standing at the time it files its complaint. But…the plaintiff [is not required to] submit proof of standing at that time.” By issuing this opinion, the Horn court overturned an appellate court ruling that required foreclosing entities “to attach to the complaint all of the evidence upon which it will rely to prove standing.”

On April 19, 2010, Plaintiff Wells Fargo Bank, N.A. (Wells Fargo) filed a foreclosure action against Defendant borrowers. When Wells Fargo filed its complaint, it attached (1) a copy of the promissory note, endorsed in blank, that listed Norwest Mortgage as the lender and (2) a copy of the mortgage that listed Norwest Mortgage as the lender. Wells Fargo ultimately filed a motion for summary judgment. In order to prove standing, Wells Fargo supplemented the note and mortgage with an affidavit averring that Norwest Mortgage Inc. changed its name to Wells Fargo Home Mortgage, Inc., which later merged with Wells Fargo. Wells Fargo also provided appropriate certificates supporting the name change and merger. The trial court, based on this evidence, ruled in favor of Wells Fargo.

The borrowers appealed the trial court’s ruling. The borrowers did not raise the standing issue in their appeal. However, Ohio’s Ninth District Court of Appeals addressed the standing issue sua sponte, and reversed the trial court’s decision, ruling that a foreclosing entity “must attach to its complaint documents that prove that it has standing at the time the complaint is filed.”

The Horn court, in overturning this ruling, noted that the appellate court had misinterpreted the Supreme Court’s prior decision in Schwartzwald. The Schwartzwald court ruled that a foreclosing entity “must have standing at the time that it files the complaint.” The Horn court clarified that a foreclosing entity must have standing at the time it files the complaint but that it does not have to prove standing at the time it files the complaint. The Supreme Court went on to state that requiring the foreclosing entity to prove standing at the time it files the complaint contradicts Ohio’s notice pleading standard.

As courts continue to address standing in the context of foreclosures, mortgage servicers and other foreclosing entities should rely on common sense opinions like Horn that uphold established legal precedent.