A standing dispute dragged a $940K foreclosure through years of litigation. Here's how it ended
A Connecticut court just confirmed that swapping in the right plaintiff mid-case can save a foreclosure, even when the original lender arguably lacked standing.
The Connecticut Appellate Court handed down its decision on March 24, 2026, and it carries a practical reminder for anyone working in mortgage servicing or foreclosure operations. If the wrong entity files a foreclosure action, the case is not necessarily dead. But you need to fix it the right way.
Here is what happened. Back in July 2007, Graeme L. Street and Katherine L. Street took out a $940,000 loan from Bank of America to purchase a property at 23 River Road Drive in Essex, Connecticut. They mortgaged the property to secure the note. Everything was recorded in the local land records, and the deal moved forward as expected.
Then in July 2016, the Streets allegedly failed to make their monthly installment payment on the note. Bank of America exercised its option to declare the entire balance due, sent default notices on August 3, 2016, and the borrowers received and signed them on August 13, 2016. In November 2016, Bank of America forwarded a bailee letter agreement along with the note and mortgage to its agent, Hunt, Liebert & Jacobson, P.C. By April 2017, the bank filed the foreclosure action.
This is where it gets messy. The initial complaint did not state that Bank of America owned the note, and the note was not attached. A few months later, in July 2017, Bank of America assigned the mortgage and note to U.S. Bank National Association, Trustee for the RMAC Trust, Series 2016-CTT. In September 2017, Bank of America filed a motion to swap in the new entity as plaintiff, explaining that the mortgage had been assigned through error and inadvertence. The court approved it.
A revised complaint followed in September 2018, and the new plaintiff attached the note – endorsed in blank – along with the mortgage and the assignment. Later, through another series of assignments, U.S. Bank Trust National Association, Trustee for RCF 2 Acquisition Trust, came in as the second substitute plaintiff.
The Streets fought back. They raised a defense arguing that Bank of America never had standing to file the case in the first place. They also pushed for more discovery – the full mortgage file, trust agreements, servicing agreements, all of it – and asked the court to hold off on summary judgment until those documents came through.
The trial court was not persuaded. It granted summary judgment in April 2024, finding that the documentary evidence was enough to show Bank of America held the note when the action started. The court also pointed out that the Streets had received all the documents the plaintiff relied on and had even deposed the plaintiff's key witness. The Streets had not shown why more documents were needed.
After the court entered a judgment of strict foreclosure – with total debt around $1.4 million against a property valued at roughly $1.25 million – the Streets appealed.
The Appellate Court affirmed, but it took a slightly different path. Rather than deciding whether Bank of America actually held the note on the filing date, the court said it did not need to reach that question. Bank of America had filed a motion under Practice Book § 9-20 to substitute the real party in interest, and the trial court had granted it. Under Connecticut law, that kind of substitution relates back to the start of the case and fixes any standing problem retroactively. The legislature specifically designed it that way. So even assuming Bank of America got it wrong at the outset, the substitution cured the defect.
The Streets also argued that the trial court misapplied a 2023 Connecticut Supreme Court decision, JPMorgan Chase Bank, National Assn. v. Lakner, which dealt with discovery rights in contested foreclosures. In that case, the court granted a protective order that essentially denied the defendant all documentary discovery. The plaintiff then produced loan transaction documents at trial, and the defendant appeared to have a valid payment defense based on those records, but the trial court refused to consider it because the defense was not raised before trial. The Supreme Court found that the protective order substantially prevented the defendant from having the opportunity to pursue, develop, and support the defense he raised.
The Appellate Court said the two situations were not comparable. The Streets got discovery. They deposed the plaintiff's witness. They had every document the plaintiff submitted to the court. The court found no basis to delay or deny summary judgment on account of the defendants' outstanding requests.
The case was remanded for a recalculation of the debt and new law days, but the foreclosure stands.
For mortgage professionals, the takeaway is straightforward. If a foreclosure gets filed by the wrong entity – whether through a servicing transfer, an assignment delay, or just a clerical mix-up – Connecticut law provides a mechanism to fix it. But the fix has to happen through a formal substitution of the correct party. That substitution, once granted, reaches all the way back to the original filing date. It does not restart the clock.
It also helps to keep your documentation tight from the start. The cleaner the chain of assignments and the more complete the record, the less room there is for borrowers to challenge standing and drag out proceedings. This case took the better part of a decade from default to final judgment. Nobody wants that timeline on their books.
