The Neil Garfield Show LIVE at 6pm Eastern: Lender’s Evidence In Foreclosure Lawsuits: Striking Hearsay

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We’ve all watched courtroom dramas on television where the defense attorney leaps to his feet and calls out “Objection! Hearsay.”

The judge proceeds to bang his gavel and says “sustained,” or “overruled,” and the trial continues.  “Hearsay” refers to repeating something that someone else said.  A homeowner in litigation must learn to object to hearsay evidence.

In Kelsey v. Suntrust Mortgage, Inc., the lender obtained a default judgment of foreclosure.  Default judgments are common when the borrower does not answer the foreclosure lawsuit. There is no trial, but the lender must still introduce certain evidence into the court record including the note and mortgage, the acceleration letter or Notice of Default sent to the borrower, and evidence of the amount owed on the note.

And that’s where hearsay comes in. In a court proceeding, any statement that was made outside the courtroom is considered hearsay if it’s offered as proof of the statement’s truth. For example, if your friend told you that Joe stole $100, hearsay rules would prevent you from using your friend’s statement as a basis for testifying in court that Joe is a thief.

Hearsay rules don’t just apply to oral statements. They also apply to documents if a party is using a document to prove that the information in the document is true. That means that most documents are considered hearsay unless they are “authenticated” by a witness.  Sometimes, the witness will testify that he or she prepared or signed the document when they didn’t.

In foreclosure cases, most documents are authenticated and admitted into evidence under the business records exception to the hearsay rule. A custodian of records testifies that he or she is familiar with the way records are prepared and kept by the lender, and that this document was prepared according to that ordinary business practice.

How does this help a borrower? Since mortgages are often assigned from one lender to another, lenders may have a difficult time producing a witness who has sufficient knowledge to authenticate the loan documents and payment history.

That’s what happened in the Kelsey case. The only witness was a mediation litigation specialist who said that she knew nothing about this loan, had seen the note for the first time on the day of the trial, and had only reviewed the mortgage file when she found out the case was being tried. She relied on a proposed order prepared by someone else to testify about the amount owed. This information would be struck as hearsay.

The homeowners objected to the litigation specialist’s testimony. They said she should not have been allowed to testify because she not show that she was a custodian of records or that she had personal knowledge of the documents. The trial court overruled their objection, admitted the documents into evidence, and entered a foreclosure judgment against the homeowners.

On appeal, the Florida Court of Appeal agreed with the homeowners. It ruled that the documents were hearsay, did not have the proper authentication, and should never have been allowed as evidence.

You must object to almost all documents as hearsay, otherwise, the court will accept them as valid.

The Banks have Blue-Chip Lawyers. You should have an experienced Lawyer on your side.

3 Responses

  1. Lenora – Contact Anthony Andersen:

  2. You made this closing statement on the above article>>>>The Banks have Blue-Chip Lawyers. You should have an experienced Lawyer on your side. I have been boycotted in my State, NC, from legal representation because the 3 Law Firms entangled in my illegal foreclosure, RICO Conspiracy, Fraud Upon the Court Case that involves a fraudulent foreclosure, forced illegally 7 years after proper rescission… with proper rescission, registered with book and page # filed on the Deed of My property… completed in Statute. The Supreme Court Ruled January 13th, 2015 Rescission is valid when put in the mail. I need a lawyer to represent me to file a summary judgement. Can you help me find a lawyer. My understanding of Statute involving jurisdiction and venue is that it can even be filed in Florida which is where I would prefer it to be filed. Please get back in touch with me. I NEED A LAWYER. CASE READY TO BE FILED AS A SUMMARY JUDGEMENT.

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