The Three Professors Top Cases for 2009:

1. American First Federal, Inc. v. Battlefield Center, L.P., 282 S.W.3d 1 (Mo. Ct. App. 2009).

When a debt obligation is assigned to a third party, a general guaranty that guarantees such debt is automatically transferred by operation of law, even if such guaranty is not attached to or referenced in the assignment document transferring such debt obligation.

2. In re The Atrium View, LLC, No. 1:07-BK-02478MDF, 2008 WL 5378293 (Bankr. M.D. Pa. Dec. 24, 2008).  A prepayment premium of six months interest at the note rate is not a “reasonable . . . charge” for purposes of § 506(b) of the Bankruptcy Code, because it is unrelated to the market interest rate and may not reflect the remaining note term.

3. In re Cedar Funding, Inc., No. 08-52709-MM, 2009 WL 2038121 (Bankr. N.D. Cal. Apr. 10, 2009).  Victims of a Ponzi scheme involving deeds of trust unsuccessfully tried to avoid unsecured creditor status by arguing for an equitable lien or for a resulting trust.

4, CSFB 2001-CP-4 Princeton Park Corporate Center, LLC v. SB Rental I, LLC, A-6307-07T2, 2009 WL 2431530. (N.J. Super. App. Div. 2009); August 11, 2009. Once a Non-Recourse Carve-Out is triggered, it doesn't matter that is cured or that its occurrence in the first place had no effect on the lender; the borrower and each guarantor otherwise protected from liability for the borrowed amount become liable for the entire outstanding loan; and the amount thus collectable will not be characterized as liquidated damages.

5. First American Title Ins. Co. v. XWarehouse Lending Corp.  Cal.App. 1 Dist., 2009.
--- Cal.Rptr.3d ----, 2009 WL 2712308.  Title insuror not liable to purchaser of nonexistent loan from mortgage loan broker under policy issued to broker,  since lender was not an “insured” under the policy.

6. Jackson v. Mortgage Electronic Registration Systems, No. A08-397, 2009 WL 2461257 (Mn. Aug. 13, 2009).  A Minnesota statute provides that, before a nonjudicial foreclosure, the mortgage and all mortgage assignments must be recorded.  In this case of first impression, the Minnesota Supreme Court held that MERS still owns the legal title to a mortgage after the note it secures has been assigned.  Therefore, MERS can foreclose the mortgage without recording any mortgage assignments.  Cf. Mortgage Electronic Registration System, Inc. v. Southwest Homes of Arkansas, No. 08-1299, 2009 WL 723182 (Ark. Mar. 19, 2009), rehearing denied, Apr. 23, 2009 (Though named as the beneficiary of a deed of trust, MERS is not the beneficiary, has no interest in the secured land, and is not a necessary party to a foreclosure action.); Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619 (Mo. Ct. App. 2009) (Because MERS did not own a secured note and did not have the lender’s authority to transfer it, MERS could not transfer the deed of trust that secured it.); Landmark National Bank v. Kesler, 192 P.3d 177 (Kan. Ct. App. 2009) (MERS is not a necessary party to a foreclosure on a senior mortgage, because it has no property or ownership rights.).

7. In re Kreisler, 546 F3d 863, 7thCir, 10/20/08. Bankrtupcy and district court erred in equitably subordinating a secured claim to bottom position because mortgagor/debtor furtively acquired it at a deep discount, since that acquisition did not harm any other creditor.

8. Reliastar Life Insurance Company of New York v. Home Depot U.S.A., Inc., 570 F.3d 513 (2d Cir. 2009). Tenant may assert constructive eviction claim against landlord's mortgagee, rents assignee based upon defects caused by assignor landlord notwithstanding UCC 9-4039(c), tenant's  estoppel certificate or "hell or high water" clause in the recognition agreement.

9. In re Spillman Development Group, Ltd., 401 B.R. 240, Bkrtcy.W.D.Tex.,Jan 29, 2009. A full credit bid by the secured creditor at a Section 363 sale eliminates all claims it has against guarantors of the debt or against additional security it still holds

10. U.S. Bank v Tennessee Farmers Mutual Insurance, 277 SW3d 381,  Jan. 29, 2009.  Institution of foreclosure proceedings by the lender is not an increase of hazard that requires it to give notice to the fire insurer under the standard mortgage clause in the policy.

11. In re Villarreal, Bkrtcy.S.D.Tex.,2009., 2009 WL 2432338 (Bkrtcy.S.D.Tex.), Aug. 5, 2009. Foreclosure sale of property worth over $4 million (with over $3 million equity) to junior mortgage creditor for $100,000 credit bid may be voided in Chapter 13 proceeding as preference under §547, giving successful creditors more than they would have received under a Chapter 7 proceeding.

12. Yellowstone Mountain Club, LLC v. Credit Suisse, 2009 WL 1664449, Bankr. L. Rep. P 81,522, Bkrtcy.D.Mont., June 11, 2009 (NO. ADV.09-00014, 08-61570-11).  Secured first lien lender subordinated by court to unsecured lender claims as a consequence of secured lender's "predatory lending" conduct in accepting inflated appraisal of property to support huge commercial securitized loan.