by Carol Lawson Esq | Jul 2, 2015 | Florida Foreclosures, Foreclosure
Le v. U.S. Bank, 5D14-578 (May 22, 2015) (Fla 5th DCA 2015)
US Bank’s Loan Payment History was used to establish the homeowner’s default and the amount of the alleged debt as is the case in all foreclosures. Often the histories contain information transmitted by one or more prior loan servicers, with only the current servicer present at trial. The question, in this case, was are these prior histories inadmissible hearsay within hearsay.
For a current servicer to establish the business records exception for information transmitted by a prior servicer under FL § 90.803(6), the testifying witness must not only testify that the current servicer verified the information it received, but must also have knowledge of the prior servicers’ record keeping procedures. See Kimberly Le v. U.S. Bank, 5D14-578 (May 22, 2015) (Fla 5th DCA 2015).
In Kimberly Le, this Court held that a payment history was admissible where the bank’s witness testified that her company’s loan boarding process (i) verifies the accuracy of the information it received from the prior servicer and (ii) confirms that the prior servicer’s entries conformed to industry standards. Id. at p.3. Unless the witness can testify to both elements, the information transmitted by the prior servicer does not satisfy the business records exception to hearsay.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: calh@gate.net
by Carol Lawson Esq | May 3, 2015 | Consumer Credit, Florida Foreclosures, Foreclosure, Loan Modification
Morejon v. F&M Real Estate, Inc., et. al., 40 Fla. L. Weekly D823a (Fla. 2n DCA April 8, 2015). Unless a borrower voluntarily agrees to produce financial documents in advance of a mediation to allow a lender to evaluate possible mortgage options or options to foreclosure, court-ordered foreclosure mediations may become futile. The 13th Judicial Circuit’s interlocutory order requiring borrowers to produce private financial records for court-ordered mediation, based upon their Uniform Order of Referral to Foreclosure Mediation which requires that the borrower provide a completed financial disclosure form and any additional documentation requested by the plaintiff at least 30 days prior to the scheduled mediation was quashed by the 2nd DCA.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: calh@gate.net
by Carol Lawson Esq | Apr 12, 2015 | Consumer Credit, Florida Foreclosures, Foreclosure
The District Court of Appeal of Florida, Fourth District, reversed a mortgage foreclosure judgment, because the prior foreclosure action had been dismissed with prejudice by operation of law- an adjudication on the merits, barring the second foreclosure action based on the same default under the doctrine of res judicata.
The Court held that the mortgagee was required to provide a new notice of breach of the mortgage agreement to support its foreclosure complaint in the second action, which the mortgagee did not do.
A new default would not have barred the 2nd foreclosure action
http://www.4dca.org/opinions/April%202015/04-08-15/4D13-4825.op.pdf
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: calh@gate.net
by Carol Lawson Esq | Apr 6, 2015 | Consumer Credit, Florida Foreclosures, Foreclosure
Clark v Statebridge (Fla. 6th Jud. Dist.) A trial court in the Sixth Judicial Circuit in and for Pasco County, Florida recently denied a mortgagee’s motion to dismiss a borrower’s complaint that alleged a violation of the Florida Consumer Collection Practices Act (“FCCPA”) for sending monthly mortgage statements directly to the borrower while the borrower was represented by counsel.
The trial court determined that the borrower had stated a cause of action for a violation of the FCCPA, as the TILA servicing rule requiring periodic statements (12 CFR 1026.41) does not preempt the FCCPA’s bar on directly communicating with borrowers in connection with the collection of a debt while they are represented by counsel.
The court held that the FCCPA was not preempted by the federal requirement to send a monthly mortgage statement to the borrower.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: calh@gate.net
by Carol Lawson Esq | Apr 1, 2015 | Florida Foreclosures, Foreclosure
The 4th DCA issued four opinions on the same day addressing the issue of standing to sue in mortgage foreclosure actions. In every case, the Court held that the plaintiff mortgagee failed to present sufficient evidence of standing.
In the first case, the assignment of mortgage was executed after the foreclosure was filed, and the plaintiff mortgagee did not present evidence that it became the holder of the note prior to the filing of the complaint. Court reversed the judgment of foreclosure entered in favor of the plaintiff mortgagee, holding that the plaintiff mortgagee did not provide it had standing when the complaint was filed.
4D13-4645.op
Standing to foreclose may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint. The assignment or equitable transfer must pre-date the filing of the foreclosure action, and a party that does not have standing when the complaint is filed cannot retroactively remedy this defect.
Even though the note introduced at trial showed the plaintiff had standing at that point in time because plaintiff was the bearer under a “blank endorsement” under section 673.2051 of Florida’s version of the Uniform Commercial Code, because the blank endorsement was undated, the Appellate Court held that the plaintiff mortgagee did not prove it was the holder when the complaint was filed.
In the second case, the Court rejected another attempt to remedy retroactively a standing problem caused by a blank and undated indorsement on the promissory note.
4D13-3799.op
The plaintiff mortgagee attached copies of the mortgage and promissory note bearing an undated, blank endorsement from the original lender.
Prior to trial, the plaintiff filed the original note with the court, but the note differed from the copy attached to the complaint in that it showed another undated endorsement — from the original lender to another bank, not the plaintiff. The plaintiff also filed an assignment of mortgage from the original lender, dated one month after the lawsuit was filed.
Standing must exist at the time the foreclosure suit is filed. This burden, the Court held, may be satisfied by submitting “the note bearing a special indorsement in favor of the plaintiff, an assignment from payee to the plaintiff or an affidavit of ownership proving its status as holder of the note.”
The Court further held that, when standing is based on an undated indorsement on the note, the plaintiff mortgagee must show that the indorsement occurred before the complaint was filed through record evidence such as testimony of a person with knowledge, proving that it had the right to enforce the note on the date the complaint was filed.
The plaintiff’s trial witness was unable to say with certainty whether the copy of the note attached to the complaint was the most recent version, nor could he definitely show that the plaintiff had possession of the note prior to the filing of the complaint. For these reasons, the Appellate Court held that the plaintiff could not prove that it had standing to foreclose the mortgage “by establishing an assignment or equitable transfer of the note and mortgage prior to instituting the complaint.”
The Court also held that the plaintiff mortgagee failed to present evidence proving that it actually had equitable title to the note and mortgage before the complaint was filed.
The third case resulted in another victory for borrowers due to the plaintiff mortgagee’s failure to prove standing when the complaint was filed, with the Court reversing the final judgment of foreclosure and remanding for entry an order involuntarily dismissing the case.
4D13-4040.op
The plaintiff mortgagee sued to foreclose attaching a copy of the mortgage to the complaint. Shortly thereafter, it filed a copy of the note, which was devoid of either blank or special endorsements.
At trial, the plaintiff mortgagee introduced into evidence the original note, two assignments, and part of a pooling and servicing agreement (“PSA”). However, the second assignment, to the plaintiff mortgagee, was signed more than six months after the foreclosure was filed. The plaintiff mortgagee’s witness also testified that, based on a “cut-off date” for the trust of April 1, 2006 reflected in the excerpt from the pooling and servicing agreement, the borrower’s loan was transferred
The Court first held that the plaintiff mortgagee did not prove standing through the second assignment because it was executed after the foreclosure complaint was filed.
In addition, the Court held that the original note introduced at trial did not prove that the plaintiff mortgagee had standing to foreclose because the special indorsements on the note were undated and there was no testimony that these indorsements were made part of the note before the foreclosure action was filed.
Even more problematic was the fact that the special indorsement was in favor of a non-party bank, not the plaintiff mortgagee, because under section 673.2051(1) of Florida’s version of the Uniform Commercial Code, when a note contains a special indorsement, “the instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person.”
In the fourth case, the Fourth District once again held that the evidence presented was insufficient to prove the plaintiff mortgagee had standing for foreclose, again reversing the foreclosure judgment and directing the trial court to enter judgment in the borrower’s favor.
http://www.4dca.org/opinions/March%202015/03-25-15/4D13-3514.op.pdf
The borrower signed a note and mortgage in 2006. The servicing rights to the loan were transferred in 2009 to the plaintiff servicer, which filed suit after the borrower defaulted, alleging that it had the right to enforce the note and mortgage.
The note attached to the complaint was stamped “original” and did not contain any endorsements or allonges. Also attached was an assignment of mortgage from the Federal Deposit Insurance Corporation (“FDIC”) as receiver for a defunct bank, to MERS, as nominee for the plaintiff servicer.
Months after the complaint was filed, the servicer filed what it claims was the “original” note, along with an undated, blank allonge payable to the bearer. There was no indication however that the allonge had been affixed to the note.
Shortly before trial, the plaintiff servicer moved to substitute a new servicer as the plaintiff, which the trial court granted.
At trial, a litigation manager for the new servicer testified, but he was not familiar with the computer systems that the prior servicers used for the loan, how information was input into those systems or whether it was done correctly, or whether the prior servicers’ records were accurate, only that they were provided to the current servicer.
The Court also rejected the plaintiff servicer’s argument that its predecessor was a “nonholder in possession” because that party, as opposed to a holder in due course, cannot rely on possession alone, but “must account for possession of the unendorsed instrument by proving the transaction though which the transferee acquired it. If there are multiple transfers, the transferee must prove each prior transfer. Once the transferee establishes a successful transfer from a holder, he or she acquires the enforcement rights of that holder.”
Because the plaintiff did not offer any evidence of the prior transfers of the note, the Court held this gap made it impossible to prove that the plaintiff servicer was a nonholder in the possession and the evidence presented according to the Court was “woefully inadequate to prove standing to foreclose.”
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: calh@gate.net
