Elsner v. Albrecht

The present case involves two parties who were victimized by the Diamond-Obie mortgage scheme. Diamond Mortgage, ostensibly as a loan broker, arranged for a mortgage on plaintiffs’ property, which was in turn funded by defendants as investors. Although Diamond Mortgage failed to disburse the funds to plaintiffs, Diamond assigned the mortgage and note to defendants for the sum of $26,500. Since plaintiffs never received any money, plaintiffs sued to quiet title and remove the mortgage. Defendants claim status as holders in due course, and claim they are entitled to payment on the mortgage and…