STUDENT LOAN LAWSUITS lawsuits have found NCT susceptible to one defense in particular- that of standing. NCT never has a contractual relationship with a borrower, only acquiring a loan along with thousands of others after multiple assignments. The amount of SEC documentation necessary to assign securitized student loans multiple times is staggering, so it’ s not surprising this“ shell game” can create issues regarding who owns any particular loan. One recent New Hampshire case illustrating the problem is that of NCSLT 2006-1, 2007-4 v. Glynn, 219-2015-CV-00209( NH Sup. Ct. 2015) where Judge Houran dismissed two lawsuits filed by NCT. NCLST sued Glynn who filed a motion to dismiss, alleging the court did not have subject matter jurisdiction to hear the dispute because plaintiff did not own the debt, and, therefore, had no standing. The complaint attached a copy of the note indicating the lender was Bank of America, but no evidence of assignment. The court scheduled an evidentiary hearing requiring plaintiff to produce proof it owned the debt. After considering a number of documents submitted by NCT, Judge Houran at page 3 of that opinion held:
The court determines that the evidence presented is insufficient to demonstrate that the plaintiff owns the debt. As noted above, the 2007 pool supplement assigned certain loans to NCF [ i. e. National Collegiate Funding, LLC ]- namely the loans listed on Schedule I. However, NCSLT has failed to provide the court with a copy of Schedule I. Without Schedule 1, the court cannot determine which loans Bank of America assigned to NCF. Thus, the court determines that NCSLT has failed to establish it owns Glynn’ s debt.
Judge Houran’ s decision is far from unique as a growing number of courts in other jurisdictions have arrived at similar conclusions albeit flying under the radar as unreported cases.
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National Association of Consumer Bankruptcy Attorneys Summer 2016 CONSUMER BANKRUPTCY JOURNAL 39