Can a mortgagee claim possession of the assigned rents?

On appeal, the district court applied state law, as required by Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979), and held that perfection of an interest in assigned rents under Virginia law is accomplished by recording the agreement that contained the assignment of rents provision. Vienna, 136 B.R. at 1992 WL 51 (citations omitted). Therefore, the district court reversed the bankruptcy court's holding that the mortgagee had not perfected its interest in the rents. The district court concluded that under Virginia law possession of the property was not a necessary affirmative step required to be taken by the mortgagee before it could enforce its right to collect the assigned rent. The district court reasoned that because the automatic stay precluded the mortgagee from taking possession of the property, the mortgagee's motion for sequestration of the rents was the equivalent to seeking relief from the stay and was a sufficient affirmative step to trigger the mortgagee's right to enforce its interest in the cash collateral, or in other words, its right to collect the rents.