ProSe wins Against BOA!!!

http://www.stayinmyhome.com/blog/wp-content/uploads/2013/05/Order-for-Pro-Se-Homeowner.pdf

In Hillsborough County Case No. 10-CA-20354, Bank of America declared a homeowner in default, then sued for foreclosure.  The homeowner represented himself in court, arguing, essentially, that he was not in default and that BOA had applied payments to his account improperly.

Shapiro, Fishman & Gache, L.L.P was BOA attorney

Verification of Complaint

Florida’s Fifth District Court of Appeal just issued an opinion in U.S. Bank, N.A. v. Wanio-Moore which seems to indicate that anyone can verify a foreclosure complaint consistent with the requirements of Fla.R.Civ.P. 1.110(b).  In fact, that person need not specify his/her position or title with that verification, as a mere signature is sufficient.  In the words of the Fifth District, “the trial court erred in concluding that a foreclosure verification must state must state the signer’s position” and “the rule does not require any information about the signer’s positional authority.” http://www.5dca.org/Opinions/Opin2013/040113/5D12-1746.op.pdf

Florida’s Second District Court of Appeal in Deutsche Bank Nat’l Trust Co. v. Prevratil, where the Second District ruled that Deutsche Bank could satisfy its obligation to verify the foreclosure complaint under Fla.R.Civ.P. 1.110(b) by having its servicer and attorney-in-fact, Select Portfolio Services, sign the verification. http://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2013/March/March%2008,%202013/2D12-2030.pdf

Florida courts have long required some type of evidence – certainly something more than the filing of a complaint – to support a conclusion that one is “likely” to prevail.  See City of Jacksonville v. Naegele Outdoor Advertising Co., 634 So. 2d 750 (Fla. 1st DCA 1994).

What about when the Bank wrongly forecloses?

So you got a Summary Judgment in favor of the Homeowner that the Bank should not have foreclosed- now what?

In the bank’s view, the homeowner can’t resume making normal, monthly mortgage payments – not without paying all of the late charges, attorneys’ fees, and default interest since the alleged default, not to mention the monthly payments that accrued since the last payment was made.

The homeowner’s view, doing that would be ridiculous.  Why should a homeowner who was wrongly declared in default have to pay default interest, late charges, and attorneys’ fees where those charges would have been unnecessary if the bank hadn’t wrongly declared the default

Judge William Levens of Hillsborough County 's  Final Judgment not only denied a foreclosure, but it required the bank to reinstate the mortgage as of the date that payments stopped being accepted.  All default interest, late charges, attorneys’ fees – POOF, GONE.  The homeowner could resume making monthly, mortgage payments today as if the mortgage were never in default. http://pubrec3.hillsclerk.com/oncore/showdetails.aspx?id=16972127&rn=1&pi=0&ref=search

Bank appealed to 2^nd DCA http://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2013/April/April%2017,%202013/2D12-3051.pdf

The Second District makes this ruling, it is binding law for every circuit judge in Florida and affirmed Judge Levens position of putting the parties back in the financial positions they would have been in had the foreclosure not occurred. The appellate court affirmed the judge’s ruling that the mortgage should be reinstated retroactive to the date that the bank wrongly stopped accepting monthly mortgage payments.

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Motion to Dismiss

As long as a motion to dismiss is pending, the homeowner need not file an Answer, and without an Answer in place, the case isn’t “at issue” under Fla.R.Civ.P. 1.440 and can’t be set for trial.  Hence, a motion to dismiss prevents a trial from being set.

On April 22, 2013, Florida’s First District Court of Appeal issued a written opinion in Wells Fargo Bank, N.A. v. Bokatka, Case No. 1D11-3356 (Fla. 1st DCA 2013).  The lower court dismissed the foreclosure suit with prejudice and the First District reversed that ruling.  

The Court stated: In this case, we do not fault the trial judge for dismissing the bank’s initial complaint, which facially created a contradiction between who the bank alleged was the owner of the note (the bank) and whom the attached note and mortgage identified as the owner (Option One). The parties’ attempts to interject or examine materials outside the pleadings, dismissal without prejudice was appropriate simply to allow the bank an opportunity to amend its initial complaint to address this discrepancy and to fortify its allegations and attachments.

Even given this I do not favor Motion to Dismiss unless the plaintiff's error is egregious as they tend to angery the Court.

Motion to Dismiss

As long as the motion to dismiss is pending, the homeowner need not file an Answer, and without an Answer in place, the case isn’t “at issue” under Fla.R.Civ.P. 1.440 and can’t be set for trial.  Hence, a motion to dismiss prevents a trial from being set.

On April 22, 2013, Florida’s First District Court of Appeal issued a written opinion in Wells Fargo Bank, N.A. v. Bokatka, Case No. 1D11-3356 (Fla. 1st DCA 2013).  The lower court dismissed the foreclosure suit with prejudice and the First District reversed that ruling.  

The Court stated: In this case, we do not fault the trial judge for dismissing the bank’s initial complaint, which facially created a contradiction between who the bank alleged was the owner of the note (the bank) and whom the attached note and mortgage identified as the owner (Option One). The parties’ attempts to interject or examine materials outside the pleadings, dismissal without prejudice was appropriate simply to allow the bank an opportunity to amend its initial complaint to address this discrepancy and to fortify its allegations and attachments.

Bank Induced Default-Defense

Any homeowner who was duped to stop making payments under the auspices of a loan modification (only to ultimately realize the modification never came). See La Boutique of Beauty Academy, Inc. v. Meloy, 436 So. 2d 396 (Fla. 2d DCA 1983) (“because the mortgagee, by its own conduct, led appellees to believe acceleration would not occur following a late payment … we affirm the order granting summary judgment for the mortgagors”); Dale v. Jennings, 107 So. 175 (Fla. 1926); Kerber v. Chadan, Inc., 364 So. 2d 1264 (Fla. 4th DCA 1978). When a bank leads a homeowner to believe acceleration/foreclosure won’t occur after a default in payments – as it does when it tells a homeowner to default in order to get a loan modification – then it should not be able to foreclose.  In Meloy, the Fourth District affirmed a summary judgment for the homeowners where the bank led the homeowners to believe a foreclosure would not occur after the default. 

Stone V BankUnited

2013 Fla. App. Lexis 7207
May 3, 2013
2nd DCA
Case 2D12-980

Standing

1. Date of allonge
2. evidence of transfer of equitable interest
3. assignment from payee
4 receivership agreement

Case Law Update

Drummond v. Welsh (In re Welsh), Means test allows debtor to deduct from current monthly income payments on secured debts; debtor need not take into account Social Security income to satisfy § 1325.

Deutsche Bank National Trust Company v. Clarke

January 2012

The trial court entered a directed verdict in favor of the defendant, finding that the Plaintiff's failure to enter the original note and mortgage at trial was fatally defective to its case. During the course of the trial, the court inquired as to the location of the originals. "The original note had been filed with the clerk of the court and was in the court file in preparation for an earlier scheduled summary judgment hearing." The trial court stated it would accept the use of copies after being advised of the originals whereabouts. There was no objection to the use of the copies pursuant to the best evidence rule. Fla. Stat. § 90.953 (2010). The court reserved ruling and did not enter its order until the trial was concluded.

In overturning the trial court's order, the Fourth DCA not only made an evidentiary ruling, it also harmonized a series of cases addressing the need to tender the original documents to the trial court in foreclosure proceedings. Through its opinion, the Fourth DCA has held the tender of the documents to the court at any time during the foreclosure action should be sufficient.

McNeal v. GMAC Mortgage, LLC, Homecomings Financial, LLC

March 11,2012

The holding in McNeal v. GMAC Mortg., LLC (In re McNeal), 2012 U.S. App. LEXIS 9589 (11th Cir May 11, 2012) is based on the concept that Dewsnup - which involved an attempt to cramdown a partially secured mortgage - did not overrule, explicitly, the Folendore decision. Accordingly, it remains good law, and a three judge panel cannot overrule an earlier three judge panel. The undercutting of the Folendore reasoning by the Supreme Court was not sufficient to allow lower courts to disregard binding precedent of the earlier 11th Circuit decision.

At present, stripping mortgages in Chapter 7 is permitted in the 11th Circuit.

Castillo v Deutsche, June 6, 2012

The Florida Third District Court of Appeals ruled on an issue that relates to borrower claims that an investor must establish compliance with its obligations under a Securitized Trust Agreement as a condition of enforcing a note and mortgage held by the trust. The Court ruled that the borrower does not have standing. This ruling is subject to a motion for rehearing and is not final but confident it will stand. 

NOVASTAR V. BUCKNOR

NOVASTAR V. BUCKNOR click  for case.

Bouskia

The party seeking foreclosure must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure action. Servedio v. U.S. Bank Nat. Ass’n, 46 So. 3d 1105 (Fla. 4th DCA 2010). Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder. See § 673.3011, Fla. Stat. (2009); Taylor v. Deutsche Bank Nat. Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010). An allegation of default in a complaint must be proven by competent evidence. See Terra Firma Holdings v. Fairwinds Credit Union, 15 So. 3d 885 (Fla. 2d DCA 2009).


(“In circumstances such as these where the moving party’s allegations raise a colorable entitlement to rule 1.540(b)(3) relief, a formal evidentiary hearing on the motion, as well as permissible discovery prior to the hearing, is required.”).

Ind Sup Ct Holds Failure to Name Second-Lienholder in Foreclosure May Result in Buyer Taking Subject To

The Indiana Supreme Court recently held that a mortgage lender who failed to make a junior lienholder a party to a foreclosure action could not institute a new and subsequent foreclosure action against the junior lienholder, because the first mortgage lender's lien was extinguished by the doctrine of merger.


A copy of the opinion is available at:

http://www.in.gov/judiciary/opinions/pdf/06291102rdr.pdf
Countrywide Home Loans, Inc. ("Countrywide") foreclosed on a property, bid its judgment and took title to the property by way of a sheriff's deed.

In error, Countrywide did not make Citizens State Bank of New Castle ("Citizens") a party to the foreclosure action, although Citizens held a judgment lien on the property. Countrywide then conveyed title to the
property to Federal National Mortgage Association ("FNMA").

When Countrywide discovered Citizens' judgment lien, Countrywide filed an action titled "Complaint for Strict Foreclosure," seeking to foreclose Citizens' interest in the subject property. Citizens filed a separate action against FNMA attempting to foreclose on its judgment lien. The two actions were consolidated, each side moved for summary judgment, and the trial court granted the motion brought by Countrywide and FNMA.

Citizens appealed and the appellate court reversed, on the grounds that through the doctrine of merger, Countrywide's lien was extinguished. The Indiana Supreme Court granted transfer, vacating the opinion of the appellate court.

As you may recall, the doctrine of merger provides that when one party acquires both a lien on and legal title to a property, the two interests merge, and the lien is extinguished. However, merger may produce an arguably unfair result where it operates to give a junior lienholder priority over a senior lienholder. Therefore, an exception to the doctrine of merger provides that merger will not take place if it is against the best interests of the party in whom the interests merge.

The Court began its analysis by nothing that, under Indiana law, a junior lienholder not made a party to a foreclosure action is not bound by the foreclosure. In such circumstances, a purchaser at a foreclosure sale takes the property subject to the junior lienholder's interest.

Next, the Court scrutinized the merger and anti-merger doctrines. It concluded that although courts must presume that the mortgagee intended the result that it was in its best interest, that presumption can be rebutted by evidence finding that a merger had been expressly agreed to.

The Court found such evidence here. When Countrywide conveyed its interest in the property to FNMA, it used language which indicated that the title conveyed was free from all encumbrances. The Court reasoned that Countrywide could only make such a conveyance if Countrywide's lien had been extinguished through merger.

Because "Countrywide demonstrated that it intended a merger of its interests," the Court held that Countrywide was not entitled to the remedy of strict foreclosure. Thus, the decision of the trial court was reversed.

Foreclosure case goes to Supreme Court of Florida

http://pdfserver.amlaw.com/dbr/Nieves-appeal.pdf

In Nieves' case, the 4th District Court of Appeal ruled Feb. 3 that BNY Mellon legally avoided a claim that it committed a fraud on the court by voluntarily dismissing a foreclosure action against Pino, a Lake Worth, Fla., resident. The claim was dismissed after Pino's counsel scheduled depositions and asked for an evidentiary hearing to determine whether BNY Mellon used a fraudulent mortgage assignment.


On appeal is an 8-1 en banc decision saying courts have no authority to rescind voluntary dismissals and that no harm was done. Judge Mark Polen disagreed, saying the allegation of a systemic fraud was the very thing the Supreme Court addressed in its 2010 rule change giving courts greater latitude in sanctioning plaintiffs who make false allegations.

http://www.law.com/jsp/law/sfb/article.jsp?id=1202501156555&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110715&kw=Newcomer%20to%20Argue%20High-Stakes%20Foreclosure%20Case%20Before%20Fla.%20Supreme%20Court

Bank of NY v Silverberg -NY APP Ct

An intermediate appellate court of the State of New York recently held that Mortgage Electronic Registration Systems, Inc. ("MERS") cannot assign the right to foreclose to a plaintiff in a foreclosure action, absent MERS's right to enforce, or possession of, the related promissory note.


The foreclosure defendant borrowers ("borrowers") received two loans from Countrywide Home Loans ("Countrywide"), each secured by separate mortgages. Both mortgages identified MERS as the mortgagee of record, as nominee of Countrywide.

The borrowers then executed a consolidation agreement with Countrywide (the "consolidation agreement"). The terms of the consolidation agreement again named MERS as mortgagee as nominee of Countrywide, and named Countrywide as the lender and note holder. In addition, the terms of the agreement gave MERS the right to assign the underlying mortgages, but did not specifically give MERS the right to assign the underlying notes.

The borrowers defaulted. After the default, MERS assigned the consolidation agreement to Bank of New York, as Trustee ("Trustee").

Trustee initiated foreclosure proceedings in its name. The borrowers moved to dismiss the foreclosure action for lack of standing. The lower court denied borrowers' motion, and borrowers appealed.

The appellate court noted that, under New York law, "[i]n a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced;" and that "a transfer of the mortgage without the debt is a nullity." Based on that precedent, the Court concluded that "a foreclosure of a mortgage cannot be pursued by one who has demonstrated no right to the debt."

With this in mind, the Court scrutinized the consolidation agreement. It found that although the agreement gave MERS the right to assign the mortgages, it did not specifically give MERS the right to assign the underlying notes. Further, the record did not indicate that the notes were ever physically delivered to MERS. Therefore, MERS did not have the authority to assign the notes. According to the Court, because Countrywide "merely stepped into the shoes of MERS" as the assignee of the mortgages, the Court held that Countrywide and its successors and assigns did not have standing to foreclose.

The Court did not explain how the plaintiff Trustee was somehow not both the holder or assignee of the subject mortgage, and the holder or assignee of the underlying notes, at the time the foreclosure action was commenced.

The foreclosure plaintiff Trustee relied a recent New York appellate court opinion which held that MERS did have the authority to foreclose where MERS is identified in the mortgage as the mortgagee and nominee of record (as was the case in the consolidation agreement). However, the appellate court here noted that the other case involved a lender who transferred the promissory note to MERS prior to the commencement of the foreclosure action. Here, in contrast, there was no such transfer. Thus, the Court found it distinguishable from the matter at hand.

The Court concluded by noting that it was "mindful" of the impact its decision might have on the mortgage industry. However, the Court stated that "the law must not yield to expediency and the convenience of lending institutions."

Merriganv. Bank of New York Mellon, et al, No. 2D11-178, June 24, 2011, Second District Court of Appeal

April, 2011-ACLU filed petition in appellate court alleging Lee County rocket docket (12-2008), processing foreclosure cases differently than other civil cases, violates due process

Merriganin foreclosure after leaving job to care for husband injured in car accident

Merriganintended to vigorously defend case and sought re-assignment to general civil docket

ACLU: deck stacked against homeowners, Florida Supreme Court said clearing cases must comport with fairly adjudicating cases on merits

Florida legislature funded senior judges for backlog, funding ends June 30th, 2011

Lee chief Circuit Judge responded that rocket docket allows parties to opt out and have norehearings

Appellate Court ruled that case management system does not summarily impact due process, courts can manage caseload

Korte v. US Bank National Association

et al, No. 4D09-4285, June 8, 2011, Fourth District Court of Appeal, Palm Beach County


Brian Korte, Esquire appealed trial court’s award of sanctions under §57.105 against him and his firm for filing unsupported affirmative defenses

Appellate court found statute applicable in mortgage foreclosure cases to sanction defendants/or their counsel for asserting defenses know or should know not supported but assert for primary purpose of delay

Foreclosure case filed March, 2008

Korte filed answer, affirmative defenses alleging that lender failed to provide borrowers with TILA disclosures

Lender served Korte with unfiled motion for sanctions, advising would file in 21 days if not withdrawn

Motion for sanctions filed in court file December, 2008, Korte withdrew as attorney in February, 2009

Lender deposed Korte and borrower: Korte did not investigate defenses

Borrower stated never received copy of defenses or of motion for sanctions, never discussed with Korte

Borrower testified received TILA disclosures

Korte did not appear at hearing on motion for sanctions

Trial court found defenses frivolous, primarily for delay, not acting in good faith

Court awarded fees, accrued interest for delay

Court sanctions $20,563.59 ($18,682.99 accrued interest) against Korte only instead of splitting with client

Korte appealed finding of bad faith, but appellate court noted trial court’s specific findings

Korte appealed award of accrued interest as unsupported by evidence

Appellate court noted lender representative submitted original note showing interest rate into court, representative testified about calculation

Example of appellate courts correcting the excesses of defense bar, trial court judges

Lender/servicer counsel will be more pro-active in addressing similar cases

Cases on Verfied Complaints

AURORA LOAN SERVICES, Plaintiff, v. TODD A. FLEETWOOD AND KRISTI FLEETWOOD, Defendant. Circuit Court, 19th Judicial Circuit in and for Indian River County. Case No. 31-2010-CA-073506. January 26, 2011. Cynthia L. Cox, Judge.


FINAL ORDER OF DISMISSAL



The verification must be included in the complaint itself for the Court to be certain that the affiant has read the actual allegations and to make it clear what is being verified. The purpose of the verification is to create accuracy and accountability. There is no provision in the rule for the filing of a separate verification in a separate document. Common sense dictates that without verification in the complaint itself, it would never be clear what the affiant reviewed and what allegations they verified. The rule does not permit qualifying or limiting language. The complaint needs to be verified by an employee or officer of the plaintiff, by an employee or officer of its loan servicer, or by the attorney who files the case. Designations such as”authorized agent”, “authorized signatory”, “authorized officer”, “representative of the plaintiff’s servicer”, “representative of the plaintiff” and the like are meaningless, insufficient and tell the reader nothing. The rule requires a clean, plain statement of accuracy by a person who actually verifies the truth of the claims made, and who is identified as being in a position to actually do so. This case seeks to foreclose a residential mortgage and was filed after the effective date of the rule amendment.



IT IS THEREFORE ORDERED AND ADJUDGED as follows:



1. This case is DISMISSED without prejudice. No other pleadings by the plaintiff will be permitted in this case, other than a request for rehearing if appropriate. If the plaintiff elects to file a new action to foreclose on the same property, it must be filed under a new case number and a new filing fee will be required.



2. The plaintiff may move for reconsideration within ten days, on the sole ground that the subject property is not residential property. A copy of the motion and any supporting memorandum must be provided to the undersigned. The Court may rule on the motion without a hearing. No hearing will be set unless determined by the Court to be necessary.



3. It is confiscatory of the Court’s time to have to address this matter. Repeat violations by the same firm, or by the same attorney, may result in imposition of personal sanctions, and issuance of an order directed to the attorney or firm to show cause why that attorney or firm should not be prohibited from filing further foreclosure cases in this Court.

Online Reference: FLWSUPP 1804NATI

Mortgages — Foreclosure — Complaint — Verification — Unverified foreclosure complaint filed after February 11, 2010, effective date of rule 1.110(b) is dismissed with leave to amend



NATIONSTAR MORTGAGE LLC, PLAINTIFF, v. CRAIG K. LUNT AND DOROTHEA C. LUNT, Defendant. Circuit Court, 6th Judicial Circuit in and for Pinellas County, Civil Division. Case No. 10-6330-CI-20. February 7, 2011. Honorable George Jirotka, Judge. Counsel: Karen Thompson, for Plaintiff. Matthew D. Weidner, for Defendant.



ORDER



THIS CAUSE came to be considered upon the Defendant’s Motion to Dismiss, this court having reviewed the Defendant’s motion and accepted the argument of counsel for Defendant who appeared in person and counsel for Plaintiff who appeared via telephone, it is hereby:



ORDERED AND ADJUDGED as follows:



1. The Defendant’s Motion To Dismiss/Motion For More Definite Statement asserted that the Florida Supreme Court, pursuant to Rule 1.110(b), mandated that residential foreclosure complaints shall be verified and that the effective date of the requirement was February 11, 2010.



2. Plaintiff argued that the change to Florida Rule of Civil Procedure was not effective until June 2, 2010 and that because the instant complaint was filed prior to June 2, 2010, the instant complaint was not required to be verified.



3. This court finds that the effective date of Florida Rule of Civil Procedure Rule 1.110(b) is February 11, 2010 and that all residential complaints defined by the Rule must be verified beginning February 11, 2010.



4. Because the instant complaint is not verified in any manner, by any party, the Defendant’s Motion to Dismiss/Motion For More Definite Statement is GRANTED and the case is dismissed except that the Plaintiff shall have thirty (30) days to amend their complaint.

Foreclosure Cases

Augenstein v Deutsche Bank




http://mattweidnerlaw.com/blog/wp-content/uploads/2011/02/11-01-17-Final-Order-Opinion-1.pdf




2nd DCA SMACKDOWN- Attorney’s Fees Due in Foreclosure Cases!

http://mattweidnerlaw.com/blog/wp-content/uploads/2011/02/South-Bay-Lakes-Homeowners-Association.pdf