by the FDIC prior to extinguishing any interest in the property, the deed from Nassau County to Medcor transferring title in the premises is invalid. The tax lien, owned by Medcor, remains unaffected and is a valid encumbrance on the property.
C. Rights of Beal Bank as Assignee
The issue remains whether Beal Bank, as assignee, may assert the same rights and privileges accorded to the FDIC. For the reasons that follow we conclude that an assignee may assert the same legal rights which the FDIC could have asserted had the FDIC not made the assignment.
It is axiomatic that an assignee takes all of the rights of the assignor, no greater and no less. An assignee becomes "subject to all equities and burdens to property assigned because he receives no more and can do no more than his assignor." State Bank of India v. Walter E. Heller & Co., 655 F. Supp. 326 (S.D.N.Y. 1987). Moreover, when rights are transferred to an assignee, he receives the same legal rights as the assignor, no more and no less. See Kolbeck v. LIT America, Inc., 923 F. Supp. 557 (S.D.N.Y. 1996). In addition, courts have held that federal banking regulations can be applied for the benefit of an assignee, purchaser or successor in interest of the FDIC. Federal Savings & Loan Insurance Corp. v. Griffin, 935 F.2d 691, 698 (5th Cir. 1991); In Re: Woodstone Limited Partnership, 149 B.R. 294, 297 (E.D.N.Y. 1993).
Beal Bank became a successor in interest after purchasing the mortgage from the FDIC. Accordingly, Beal Bank is entitled to assert all rights and privileges that the FDIC would have been permitted to rely upon. As a result of having concluded that the FDIC was entitled to rely upon § 1825 (b)(2) to prevent foreclosure of the property, it is the opinion of this Court that Beal Bank may rely on this provision to have the tax deed declared void. Moreover, to find otherwise would undermine the entire purpose of § 1825 (b)(2) because providing the FDIC's successors in interest with less rights than the FDIC would effectively deprive the FDIC of the ability to market the loans it takes over in order to recoup whatever funds it can. Congress' purpose in creating the Financial Institutions Reform, Recovery and Enforcement Act would be frustrated if the FDIC's lien protections disappeared as soon as the FDIC attempted to sell its property interests. Although the Medcor deed is void pursuant to the Financial Institutions Reform, Recovery and Enforcement Act, the obligation to satisfy the tax lien remains pursuant to § 1825(b)(1). This pre-receivership lien attached to and remained with the property upon its sale to Beal Bank. Thus, Beal Bank is liable for the amount of the tax lien.
For the foregoing reasons, the motion for summary judgment is granted. The deed of conveyance to Medcor is void pursuant to 12 U.S.C. § 1825 (b)(2), which forbids the "levy, attachment, foreclosure, or sale without the consent of the [FDIC]." 12 U.S.C. § 1825 (b)(2). Absent consent, foreclosure of the FDIC property is not an available means of recovering the relevant property taxes. Furthermore, a literal reading of the statute evidences that the statute was intended to reach pre-existing liens as well. Additionally, plaintiff as the assignee to the FDIC, is entitled to assert all rights and privileges available to the FDIC. Finally, as the assignee to the FDIC, Beal Bank remains obligated to pay the tax lien held by Medcor pursuant to 12 U.S.C. § 1825 (b)(1).
LEONARD D. WEXLER
UNITED STATES DISTRICT COURT
Dated: Hauppauge, New York
August 5, 1997
© 1992-2004 VersusLaw Inc.