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Happy Thanksgiving from Florida’s Fourth District

Posted on November 23, 2011 by Mark Stopa

Florida’s Fourth District Court of Appeal issued two wonderful opinions today, just in time for Thanksgiving.

In Duke v. HSBC Mortgage Services, LLC, the court reversed an order granting a bank’s motion for summary judgment.
http://www.4dca.org/opinions/Nov%202011/11-23-11/4D09-5183.op.pdf
The facts in that case were like those I see in many foreclosure cases: the note did not have an indorsement, and was apparently lost, so HSBC relied on an Assignment of Mortgage for the requisite standing. But the assignment post-dated the filing of the complaint. In reversing the summary judgment, the Fourth District explained:

genuine issues of material fact remain in dispute regarding the owner and holder of the note and mortgage at the time the complaint was filed.

This is yet another illustration of how foreclosure defense attorneys can appropriately defend foreclosure cases. The issue in this case wasn’t whether the homeowner was behind on mortgage payments. The issue was HSBC’s ability to prove its entitlement to foreclosure. This is not an anomaly, folks – fact-patterns like this exist in countless foreclosure cases throughout Florida.

A second case from the Fourth District is perhaps even more powerful. In Venture Holdings & Acquisitions Group, LLC v. A.I.M. Funding Group, LLC, the Fourth District not only reversed a summary judgment of foreclosure, it directed the lower court to dismiss the case outright! As the court explained:
http://www.4dca.org/opinions/Nov%202011/11-23-11/4D10-832,10-1159,10-1848.op.pdf

An assignment of a promissory note or mortgage, or the right to enforce such, must pre-date the filing of a foreclosure action. Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885, 856 (Fla. 4th DCA 1990). A party must have standing to file suit at its inception and may not remedy this defect by subsequently obtaining standing. … Here, before A.I.M. filed any of the foreclosure actions below, A.I.M. assigned the promissory note and mortgage to a third party as collateral for a loan. Thus, A.I.M. did not have standing to foreclose on any of the properties at the time it filed suit.

In so ruling, the Fourth District distinguished those defendants who had properly defended the case (and were entitled to be dismissed as defendants) from those who did not properly defend, (were defaulted, and were not entitled to be dismissed). This ruling, of course, again illustrates the importance of defending a foreclosure suit from its inception.

The moral of these two decisions? The bank’s obligation to prove its standing to foreclose is well-established in Florida law. And even if the bank appears to be the “right” bank to sue, that’s not the end of the inquiry – the bank had to be the “right” bank to sue as of the date the foreclosure lawsuit was filed.
Mark Stopa

http://www.stayinmyhome.com

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23 Responses

  1. Marco Cruz,

    Also love your summary.

  2. nice summary

  3. Enraged Homeowner – I am your new servicer – You are to pay me – You are to start now – Make payable to WTF Bank of Cyber Space –

    Do not ask questions and do not be late – I will trash you and throw your family into the streets –

    I will use your payments as proof of being the rightous creditor and sell the note to some other fool –

    Some day you will be approached by a real creditor, but by then WTF Bank will be long gone and you will be on your own – HaHaHa

    ( I get your point Enraged – Per the UCC you reduce debt $1.00 for every $1.00 paid, but only if payment is made to the correct creditor – Money given to anyone else is just that – Given – )

    ( If you purchased a used car from a buy here pay here lot – would you continue to pay if you knew that the lot owner could not give you a clear title after the last payment is made ? – )

  4. Shuster & Saben wins another foreclosure case against Bank of America

    Shuster & Saben won another foreclosure case against Bank of America subsidiary BAC Home Loans. This victory in Brevard County, follows a trial victory for the firm, in another case against Bank of America pending in Miami-Dade. The firm’s victorious foreclosure client was a family living in Palm Bay. At the onset of the case, the firm diligently assisted the client in submitting a complete loan modification request under HAMP. When the firm’s efforts to reach a reasonable settlement were not countered with a single loan modification offer, firm lawyer Richard Shuster knew it was time to go on the attack. The firm served requests for admission on Bank of America that asked the bank to admit that the bank did not own the note and mortgage on our clients home and did not hold the note.

    When Bank of America failed to reply to the requests for admission within thirty days the requests were deemed admitted by operation of law. The firm then filed a motion for summary judgment on behalf of the homeowners. The firm expected that the bank’s lawyers would files responses to the requests for admission prior to the summary judgment hearing but the bank’s lawyers never filed responses to the requests for admission. At the hearing on the Defendant / Homeowner’s motion for summary judgment, the bank, for the first time made an oral motion for relief from admissions. The motion was untimely and was denied by the Court. The Court then granted Defendants’ Motion for Summary Judgment and adjudicated that Bank of America did not own or hold the loan. Since this was an adjudication on the merits Bank of America will NOT be able to re-file the case. The firm will now seek prevailing party attorney’s fees on behalf of its client to be paid by Bank of America and will commence an action to quiet title to the client’s property.

    Lawyers and scheduling staff at Shuster & Saben are often told by judges and Court scheduling assistants that very few foreclosure defense lawyers go on the attack and file offensive motions for summary judgment. Often foreclosure defense lawyers are content to simply file a motion to dismiss. Unfortunately, when a motion to dismiss is granted, it is usually either with leave to amend or with leave to re-file a new lawsuit. When a homeowner wins a motion for summary judgment on a pertinent issue, the losing bank will not be able to prosecute a new lawsuit under the principals of res judicata. http://en.wikipedia.org/wiki/Res_judicata
    Shuster & Saben has won other cases with this aggressive strategy and encourages other foreclosure defense lawyers to give this technique a try.
    http://floridaforeclosuredefense.blogspot.com/2011/05/shuster-saben-wins-foreclosure-case.html

    To view a redacted copy of the entire order please click the link below:
    REDACTED ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
    http://thetruthaboutloanmodification.files.wordpress.com/2011/11/redacted-order-granting-def-msj.pdf

    About Shuster & Saben: Shuster & Saben, LLC is firm of eight civil litigators, practicing foreclosure defense, insurance litigation, and consumer protection law, from four Florida offices in Miami, Doral, Fort Lauderdale, and Melbourne. The firm passionately defends foreclosure cases pending in counties within two hours drive of the firm’s 4 offices. The firm can be reached by E-mail at foreclosuredefenselaw@gmail.com
    Posted by Richard Shuster at 9:00 AM
    Labels: Bank of America foreclosure, best foreclosure lawyers in Florida, foreclosure defense, foreclosure summary judgment, Palm Bay, winning foreclosure trials

  5. Enraged

    You are right as to counts in court and that SOL plays a very important role. If you read many cases out there, these cases are largely dismissed on technicalities. And, TILA is even more complicated as rescission is considered a Statute of Repose.

    But, the TILA Amendment is new (May 2009) and it’s Congressional purpose was for the creditor to identify itself when “loan” is assigned or sold. In foreclosures, we are seeing fabricated assignments to establish standing in foreclosure, which we know is false. Thus, creditor is in violation of the TILA Amendment. And, if creditor does not identify itself to you – with contact information – we can request it at any time. Once we establish the party claiming to be creditor is false, numerous other opportunities open up for fraud and other consumer law violations that should be subject to the discovery rule.

    Court want specifics as to the law.

    As to AGs and DOJ, you are also right on this. This is the reaction most people get. My problem is that any AG settlement is going to be without full investigation and this settlement will directly or indirectly affect our rights in courts.

  6. Lying-when theysay——theyve-stopped-robosiging.html–

    http://www.nakedcapitalism.com/2011/11/banks-lying-when-they-say-theyve-stopped-robosiging.html

    Friday, November 4, 2011
    Bank CEOs Lying When They Say They’ve Stopped Robosiging

    Page 2: Good Articles
    theforeclosurefraud.com/Page_2__Good_Articles.htmlClick here for Mike Konczal, “Foreclosure Fraud for Dummies, 2: What is a Note, and ….. Get Away with Pledging Mortgages to Multiple Buyers?” Naked Capitalism. …. Massachusetts that target Bank of America Corp., Wells Fargo & Co., HSBC …

    HSBC FORECLOSURES AND THE NEWTRAK SYSTEM OF…
    stopforeclosurefraud.com/…/hsbc-foreclosures-and-the-newtrak-system…Aug 26, 2011 – and perpetrated fraud on the court); In re Thorne, 2011 WL 2470114…. Services Naked Capitalism- Yves Smith The very fact that this item. …

    Desert Underwater Part 3: Robo-Signing … – Foreclosure Fraud
    4closurefraud.org/…/desert-underwater-part-3-robo-signing-problem…
    23 hours ago – Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge … What Do HSBC’s Foreclosure Moratorium and Robo-Signing Claims Really … New link: Naked Capitalism http://t.co/EIQ4xPqW 20 hours ago; New …

    Main Street | Aloha Politics
    http://www.alohapolitics.com/?tag=main-street
    HSBC and JP Morgan accused of manipulating silver market,” Garry White and … “Foreclosure Fraud: We Need to Fix the Banks Again,” Yves Smith, Naked … “ No Criminal Charges Against AIG Execs,” Yves Smith, Naked Capitalism, 5/21/10 …

    The Mortgage Lender Implode-O-Meter – tracking the housing…
    ml-implode.com/
    Solstice Capital Group – HSBC … HSBC Mortgage Corp…. A three act play about affidavit fraud in AG Masto’s Nevada • Some Real Estate Loans That Lost All…

    U S Department of Justice: Latest News, Videos, Photos | Times of…
    The Revenue Department looks controlled by land fraud mafia like k.s.shankar reddy of … Bill Black: The High Price of Ignorance Naked Capitalism … U.S. authorities charged an Indian-American client of HSBC Holdings on Wednesday with …

    Just a fee headline sites.

  7. @E.Toile

    That one is for you!!!!!!!!!!!!!!

    http://www.nakedcapitalism.com/2011/11/black-friday-antidote-george-carlin-on-advertising-and-consumerism.html

    I laughed so hard, I nearly fell off my chair!

  8. Yves Smith on “Why no banker has gone to jail yet”.

    http://www.nakedcapitalism.com/2011/11/we-speak-on-pbs-newshour-about-why-no-bank-executives-have-gone-to-jail.html

    Even if it’s just on PBS, at least we’re starting to hear “jail” and “bankers” in the same sentence in the media…

  9. Anonymous,

    If I recall, until fairly recently, courts insisted on specific violations (Tila, respa, etc.). Didn’t we see recently in Alabama or somewhere a case in which a claim of negligence was accepted by the jude (he dismissed other ones but he commented rather extensively on the negligence aspect). I need to review that case but if I read correctly, it means that the door is open for more counts in one action. Tila has a very short S.O.L. but breach of contract and negligence vary from state to state. In some states, it can even be 6, 8 or 10 years. So, even if we blow the SOL on Tila, there is more we can do.

    We need to dig into that. Especially on the negligence. Negligent supervision, negligent training, negligent whatever.

  10. Anonymous,

    I truly believe that we have the tools in the court system to inflict damages and legally stop paying. The key is to get injunctions as soon as we are informed of a transfer/assignment of collection rights.

    We wouldn’t take it from a jdb. We can sue JDBs for violation of FDCPA and harrassment. Why not treat servicers the same way? They contact us, we give them 30 to “validate” the alleged debt. They don’t. We sue. And we could do that as a preemptive strike.

    I’d like to hear from someone who’s tried it. What’s to lose? Ultimately, everyone may end up losing the house anyway. Might as well go on the attack before we’ve invested too much into the mortgage payments. Then, if it backfires (and I don’t see why it should. It’s all a question of how we present our complaint), we don’t lose it all.

  11. E. Toile,

    I did contact my AG a while back. He responded with a lame three-liner. I insisted and since then, nothing. Not a peep. Same for my governor. Too busy going after unions right, education, police, firefighters, etc… We’re waiting to see if Walker is recalled in WI to do something similar here. My state is way too rich and conservative, though. Old money.

  12. Meant — “does NOT include part-time….”

    Hate missing those “nots.”

  13. E. Tolle,

    Agree – need to be at AGs.

    Very frightening Fed Res (on Wednesday) proposes new stress to banks to commence in early 2012.

    Must meet stress test for 13% unemployment (note unemployment rate does include part-time workers who desire full time work, and does not include those unemployed who have given up looking for work). Also, stress test will require bank capital to support an 8% decline in GDP.

    What does this tell you???

    Not good.

  14. Enraged

    Never had the opportunity to obtain court protection before the default because homeowners were unaware of preceding fraud. This is despite fact that fraud began PRIOR to fraudulent refinance with all undisclosed to borrowers at time of fraudulent “refinance.” (I put in quotes because not a real mortgage “refinance”).

    And, now when the default on the fraudulent refinance must be defended, courts are not allowing borrowers to go back to origination – to go back to where the fraud actually started. Why?? foreclosure challenges do not allow borrowers to challenge the origination unless under strict TILA violation within applicable Statute of Limitations.

    This is ongoing debt collection fraud in courts. That is, foreclosure attorneys have one agenda and that is to inform the court of the current default. All court hears is “you owe the money.” This has been going on for over a very long time.

    And, why has this fraud in courts been going on?? Because of deregulation. Deregulation has allowed concealment of the identity of the current creditor to fraudulent collection rights. If any borrower gets close to questioning the concealed current creditor, documents are fabricated in court to further prevent actual disclosure.

    End result — discovery is blocked or concealed by fabricated documents. False origination, the crux of “mortgage” foreclosure fraud, is prevented from being adjudicated in courts because foreclosure attorneys focus courts attention on fabricated documents to a default and because origination is not allowed as a challenge unless TILA is properly plead within SOL. .

    We have an avenue to challenge foreclosures to incorporate the defense to foreclosure by fraud in the origination via the amendment to the TILA — which likely can meet the SOL. To date, not utilized in courts to the fullest extent (in conjunction with Federal Reserve Opinion — now Rule to the law).

    Know that this is a broken record by me. And, know that some are having success in some courts. I am not an attorney, but for those still having difficulty, new action under TILA Amendment may be appropriate. Further, good BK attorneys know that the current creditor MUST be identified.
    In 100 out of 100 foreclosure cases, the current creditor is not being identified. And, how the “refinance” came to be a (false) “mortgage” is not given the opportunity to be exposed.

    Must use what we have to allow that exposure – within the law. .

    And, there is more. Much more. No prior “loan” paid off by a “refinance.”

    Thanksgiving for each other – whether or not we agree. Here for each other.

  15. Enraged,

    I have the same questions. Refinanced with Taylor Bean & Whitaker who were shut down by the Feds for fraud in 2009. Cenlar sends me a letter saying they have been “assigned” my mortgage for servicing.
    MERS is on the mortgage as mortgagee with TB&W as lender. Note show TB&W only as lender. The county records show no assignment of this mortgage to anyone and MERS will tell you they don’t have to record “assignments” of “their” mortgages. I’m not in a foreclosure situation but the chain of title is obviously very unclear. Could I refinance or sell and be sued later by the “unknown” noteholder?

  16. Of course you’re right Enraged. No doubt about it. Payer and Payee are not to be confused with what those guys behind the curtain demand that we believe, just because they say so, and if we don’t, they’ll blow up the world. Screw them all. I’m a firm believer in euthanasia for Wall Streeters. A small neutron bomb set around that brass bull would do the trick.

    A couple of things….I really wish all you folks would contact your AGs and let them know in civil but realistic terms, that the jig is up and the world is totally hip to the crimes that Wall Street committed, is committing, on a daily basis. The cat is out of the bag. Quit playing games here with our lives. It’s way passed time to stop acting like nothing’s going on while Rome, or in this case America continues to turn to cinders. We won’t be able to clean up the mess these idiots have made until we all act like adults for a change and determine what steps are necessary to move forward as a society, one who’s been terrifically damaged due to the banksters operating a circus without nets. Enough of us have been used as cannon fodder. Cut it out. NOW. It won’t be pretty if they don’t. They can take that straight to the bank.

    Second, here’s the transcript of Harry Shearer’s radio show from last month when he interviewed the best deal that Wall Street ever produced, Yves Smith. It’s a good read. Enjoy.

    http://www.harryshearer.com/article/?auid=VsXWE45984Sok7y

  17. @Anonymous,

    My point exactly! Although I am not speaking about refinance but about transfers and assignments but even in case of refinance, if i refinance with Paul and Peter comes to me 2 years down the road alleging that I owe him and not to Paul anymore, it seems that obtening the court protection until Peter until he proves I should pay him anything (rather than simply not pay) might help a lot.

    We seem to insist on court protection after the fact. Why not obtain it before we default? And while judges look into it, we get a reprieve.

  18. Enraged,

    The point you are missing is that, as to subprime refinances, they were not mortgages to begin with. So all the chatter as to assignments is irrelevant as they are invalid to start with including starting before the so-called refinance.

  19. Yeah. Finally, things are exposing to show up against the insidious hsbc—The_Hongkong_and_Shanghai_Banking_Corpo, they presume that they are God, not bigger than God, God themselves, Wrong…they are not the first however, any thing or anyone who Exalts themselves to the highest degree, and thinks they are untouchable, finds out that the gravity of Truth, levels all. The God has the final word.

  20. The reason I am asking this question is that if anyone had questioned the “transfer” in court and obtained an injunction right off the bat, we might have avoided thousand and thousands of foreclosures. The “where is the note” and the QWRs after the fact were all reactive.

    Now would be the time to teach people to be pro-active and approach the court BEFORE foreclosure, so as to turn a non-judicial matter into a judicial one in anticipation. That, in my views, might go a long way toward slowing down the pace of foreclosures.

    What say you?

  21. @Nancy Drewe,

    Thank you for your answer but… it doesn’t make sense to me. So, let me rephrase my question and please see if you can answer in a way that I don’t get. (I’m not excessively sophistiscated and a lot of the jargon flies way over my head).

    In order for any servicer to collect from the homeowner, shouldn’t said servicer already hold some legal document allowing it to do so? Suppose I buy a house. The lender is a MERS affiliate. MERS is named as the beneficiary/nominee/agent and everything it can think of claiming to be. Shortly after the refinance, I receive the copy of my docs… showing that I owe the money to Wells. Let’s assume that the subordination agreement has been recorded and I start paying Wells.

    2 years down the road, Wells sends me a letter stating that BofA is now my servicer. BofA sends me the same thing and starts sending me monthly statements. No recording exists of any assignment, transfer or any such thing. Shouldn’t BofA (technically and… legally) own some piece of paper to confirm what is alleged? If I pay BogA, am I being… gullible or plain stupid? Better yet, can I go back to BogA after 3 months and say “Prove it or refund my money and forget about getting one more penny”?

    I haven’t seen specific case law in which the homeowner simply decides to approach the court to have his payments stopped on the grounds that the servicers is not entitled to anything… and I’m very curious to see if it has been tried.

  22. ‘SERVICERS’ COLLECT LOAN PAYMENTS.

    THE ASSIGNMENT ‘MERS’ IS A LIS PENDENS NOTICE OF LAWSUIT IS ALL.

    ITS PART OF THE PRE-FORECLOSURE PROCESS IN WHICH THE DOCUMENT PROVIDERS WILL GENERATE AN ASSIGNMENT IN THE FORM NEEDED FOR THE STATE THE PROPERTY LOCATED

    THE ASSIGNMENT IS HEY WE ARE SUING FOR CURRENT DEBT OWED.

    SERVICER DOES NOT HAVE ASSET.

    ASSIGNMENT DOES NOT VEST ASSET.

    .

  23. There is one question I haven’t seen addressed, with respect to the timeliness of the assignment of mortgage. From what I keep reading, servicers must have an assignment that predates their foreclosure filing. Fair enough. It speaks to standing.

    Shouldn’t the servicer likewise hold the assignment in due form PRIOR to sending monthly mortgage statements? In other words, have we been paying servicers on the basis of a letter we received from the new servicers even though they had no right to our money?

    It may have been addressed in the past. If it’s the case, sorry about that. Answers welcome.

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