Real Property – Mortgage Foreclosure – Commercial – Evidence – In Camera Review – Noteholder

In re Cullifer (Lawyers Weekly No. 012-082-16, 25 pp.) (Wanda Bryant, J.) Appealed from Onslow County Superior Court (Jack Jenkins, J.) N.C. App. Unpub.

Holding: The petitioner-bank’s Exhibits N and O contained private financial and account information; therefore, an in camera review was more beneficial than the harm that would have been caused by publicizing private financial information.

We affirm the trial court’s judgment that the bank was the holder of a valid debt and instrument granting a right to foreclose.

Respondents’ counsel was present at the in camera review and never asked to review Exhibits N and O. Under the doctrines of fairness, estoppel, and/or acquiescence, respondents cannot now complain that they were prejudiced by the fact that they did not get to inspect the documents.

Respondents argue that competent evidence showed that the petitioner-bank was not the holder of a note drawn, issued, or indorsed to it as required by G.S. § 25-3-204.

It is true that respondents’ note was transferred among several institutions. However, when given the chance to dispute that the petitioner-bank had possession of the originals at the hearing or that the copies were not correct, respondents declined to do so.

In addition, with regard to respondents’ argument that there was no evidence that the note was indorsed to the petitioner-bank, federal law provides that the FDIC may transfer a promissory note without indorsement or assignment. 12 U.S.C. § 1821(d)(2)(G)(i)(II).

Finally, respondents ratified the transfer of the note from their original lender to First Federal Savings and Loan Association of Charleston – the petitioner-bank’s predecessor – via the FDIC when they executed a note amendment with FFS & LAC.

Accordingly, the evidence showed that the petitioner-bank was the holder of a valid debt and an instrument granting a right to foreclose.

Affirmed.