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CIT Completes Acquisition of OneWest Bank

CIT Completes Acquisition of OneWest Bank

  • CIT’s Total Assets Increase to More Than $65 Billion; Total Deposits Increase to More Than $30 Billion1
  • Combines CIT’s National Lending Platform with OneWest’s Regional Branch Banking Network

NEW YORK & PASADENA, Calif.–(BUSINESS WIRE)–CIT Group Inc. (NYSE: CIT), a leading provider of commercial lending and leasing services, today announced that it has completed its previously announced acquisition of IMB Holdco LLC, the parent company of OneWest Bank N.A. (OneWest Bank) for approximately $3.4 billion in cash and stock. The transaction, first announced on July 22, 2014, has received all required regulatory approvals.

“The completion of this transaction advances our strategic efforts to build a leading commercial banking franchise”

“The completion of this transaction advances our strategic efforts to build a leading commercial banking franchise,” said John A. Thain, Chairman and Chief Executive Officer of CIT. “Through the combination of our national lending and leasing platform with OneWest’s wholesale lending and branch banking franchise, we’ve created a differentiated provider of banking services for small and middle market businesses. I look forward to working with our newest colleagues as we integrate our two organizations, serve the needs of our customers and communities and realize the benefits of this transaction for our shareholders.”

The combined company, CIT Group Inc., has more than $65 billion in assets and more than $30 billion of deposits.1 As part of the transaction, CIT Bank merged with and into OneWest Bank, which was renamed CIT Bank, N.A. CIT Bank, N.A. operates an Internet banking franchise, as well as a network of 70 retail branches throughout Southern California as OneWest Bank, a division of CIT Bank, N.A.

CIT Group Inc. will continue to be led by John A. Thain, Chairman and Chief Executive Officer. Steven T. Mnuchin, former Chairman of IMB Holdco LLC, joined CIT Group Inc. as Vice Chairman and a member of its Board of Directors. In addition, Al Frank, a former independent director of OneWest Bank, joined the CIT Board, which increased its size from 13 to 15 members.

Under the terms of the transaction, IMB Holdco LLC shareholders received approximately $1.867 billion in cash and approximately 30.9 million shares of CIT, as well as approximately 168,000 restricted stock units of CIT.

J.P. Morgan Securities LLC served as financial advisor to CIT, and Wachtell, Lipton, Rosen & Katz served as CIT’s legal counsel. Goldman, Sachs & Co., Bank of America Merrill Lynch and Cleary, Gottlieb, Steen & Hamilton LLP represented IMB Holdco LLC. Sullivan & Cromwell served as joint regulatory counsel for CIT and IMB Holdco LLC.

(1) Pro forma financial data based on unaudited CIT and OneWest data as of March 31, 2015.

About CIT

Founded in 1908, CIT (NYSE: CIT) is a financial holding company with more than $65 billion in assets. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing and advisory services principally to middle market companies across more than 30 industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. cit.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable federal securities laws that are based upon our current expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. The words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements contained in this press release, other than statements of historical fact, including without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and our actual results may differ materially. Important factors that could cause our actual results to be materially different from our expectations include, among others, the risk that (i) there are difficulties and delays in integrating OneWest with CIT or fully realizing projected cost savings and other projected benefits of the transaction, (ii) business disruption during the pendency of or following the transaction, including diversion of management time, reputation risk, and the reaction of customers and counterparties to the transaction, (iii) changes in asset quality and risk as a result of the transaction, (iv) CIT is unsuccessful in implementing its strategy and business plan, (v) CIT is unable to react to and address key business and regulatory issues, and (vi) changes in general economic conditions, including changes in interest rates and capital markets. CIT describes these and other risks that could affect its results in Item 1A, “Risk Factors,” of CIT’s latest Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission. Accordingly, investors should not place undue reliance on the forward-looking statements contained in this press release. These forward-looking statements speak only as of the date on which the statements were made. CIT undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except where expressly required by law.

Contacts

CIT MEDIA RELATIONS:
C. Curtis Ritter
Senior Vice President of Corporate Communications
(973) 740-5390
[email protected]
or
Matt Klein
Vice President, Media Relations
(973) 597-2020
[email protected]
or
CIT INVESTOR RELATIONS:
Barbara Callahan
Senior Vice President
(973) 740 -5058
[email protected]

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Onewest Bank, FSB v Colace | NY App. Div. 2nd Dept. – plaintiff may have violated HAMP regulations and guidelines, which would constitute a failure to negotiate in good faith as required by CPLR 3408(f)

Onewest Bank, FSB v Colace | NY App. Div. 2nd Dept. – plaintiff may have violated HAMP regulations and guidelines, which would constitute a failure to negotiate in good faith as required by CPLR 3408(f)

Decided on July 29, 2015 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
PETER B. SKELOS, J.P.
L. PRISCILLA HALL
SANDRA L. SGROI
BETSY BARROS, JJ.

2013-03487
(Index No. 22836/10)

[*1]Onewest Bank, FSB, respondent,

v

Esther Colace, appellant, et al, defendants.

 

Nassau/Suffolk Law Services Committee, Inc., Hempstead, N.Y. (Rosina Caputo of

counsel), for appellant.

 

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Esther Colace appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), entered January 18, 2013, as granted those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike her answer, and denied her cross motion for leave to amend her answer.

ORDERED that the order is modified, on the law, (1) by deleting the provisions thereof granting those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike the answer of the defendant Esther Colace, and substituting therefor provisions denying those branches of the plaintiff’s motion without prejudice to renewal, and (2) by deleting the provision thereof denying the cross motion of the defendant Esther Colace for leave to amend her answer, and substituting therefor a provision denying that cross motion without prejudice to renewal; as so modified, the order is affirmed insofar as appealed from, with costs to the defendant Esther Colace, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith.

The plaintiff commenced this action against the defendant Esther Colace (hereinafter the defendant) seeking to foreclose the mortgage on the defendant’s home in Levittown. As mandated by CPLR 3408(a), the plaintiff and the defendant subsequently participated in settlement conferences for the statutorily intended purpose of determining whether they could reach “a mutually agreeable resolution to help the defendant avoid losing . . . her home.” At the second settlement conference, the defendant’s attorney raised the issue of whether the plaintiff was negotiating in good faith as required by CPLR 3408(f). However, the action was transferred out of the foreclosure settlement conference part without any resolution of that issue. The defendant’s attorney claims that she consented to transferring the action out of the foreclosure settlement conference part because she mistakenly believed that the purpose of the transfer was to conduct a hearing to determine whether the plaintiff had negotiated in good faith. It is undisputed that when the defendant’s attorney asked the plaintiff’s attorney to consent to return the action to the foreclosure settlement conference part one day after the transfer, the plaintiff’s attorney refused to so consent. Following the transfer, the plaintiff moved, inter alia, for summary judgment on the complaint and to strike the defendant’s answer, and the defendant cross-moved for leave to amend her answer. The Supreme Court granted [*2]those branches of the plaintiff’s motion, and denied the cross motion.

Under the circumstances of this case, it was premature for the Supreme Court to entertain the plaintiff’s motion and the defendant’s cross motion. CPLR 3408 requires the parties to a residential foreclosure action to attend settlement conferences at an early stage of the litigation, at which they must “negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible” (CPLR 3408[f]). During settlement conferences, “[m]otions shall be held in abeyance” (22 NYCRR 202.12-a[c][7]). Here, the defendant submitted evidence that the plaintiff may have failed to exercise good faith during the settlement conference phase of this action with respect to her applications seeking a loan modification pursuant to the federal Home Affordable Modification Program (hereinafter HAMP). Specifically, she presented evidence that the plaintiff may have violated HAMP regulations and guidelines, which would constitute a failure to negotiate in good faith as required by CPLR 3408(f) (see U.S. Bank N.A. v Smith, 123 AD3d 914, 917). She also presented evidence that the plaintiff engaged in dilatory conduct, such as making piecemeal document requests, providing contradictory information, and repeatedly requesting documents which had already been provided (see One W. Bank, FSB v Greenhut, 36 Misc 3d 1205[A], 2012 NY Slip Op 51197[U] [Sup Ct, Westchester County]; US Bank N.A. v Alejandra Padilla, 31 Misc 3d 1208[A], 2011 NY Slip Op 50535[U] [Sup Ct, Dutchess County]). Since the defendant’s submissions raise a factual issue as to whether the plaintiff failed to negotiate in good faith, thus depriving her of a meaningful opportunity to resolve this action through loan modification or other potential workout options (see CPLR 3408[a]), the Supreme Court should have held a hearing to determine this issue prior to consideration of the plaintiff’s motion and the defendant’s cross motion.

Accordingly, we remit the matter to the Supreme Court, Nassau County, for a hearing to determine whether the plaintiff met its obligation to negotiate in good faith pursuant to CPLR 3408(f). In the event that the Supreme Court finds that the plaintiff did not meet its obligation to negotiate in good faith, it shall direct the parties to participate in further settlement conferences for the purposes of “determining whether the parties can reach a mutually agreeable resolution” of this action (CPLR 3804[a]) prior to considering and thereafter making a new determination, should the parties seek renewal, of those branches of the plaintiff’s motion which were for summary judgment on the complaint and to strike the defendant’s answer, and the defendant’s cross motion for leave to amend her answer. In the event that the Supreme Court finds that the plaintiff did meet its obligation to negotiate in good faith, it shall thereafter make a new determination, should the parties seek renewal, of the subject branches of the plaintiff’s motion and the defendant’s cross motion.

SKELOS, J.P., HALL, SGROI and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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Whoa: NY Regulator moves to suspend Promontory Financial Group, the ultimate who’s who of ex-govt officials

Whoa: NY Regulator moves to suspend Promontory Financial Group, the ultimate who’s who of ex-govt officials

NYT-

The Promontory Financial Group occupies a position of trust in the global financial system, acting as a consultant to big banks, foreign nations and the Vatican. Its influence has soared over the years, positioning it as a sort of shadow regulator that provides government authorities with a window into bank misconduct. And the firm’s political ties run deep, thanks to its founder and chief executive, Eugene A. Ludwig, a former top banking regulator and a law school friend of Bill Clinton.

But an important driver of Promontory’s success — guiding New York State banks through regulatory problems — is now in jeopardy, and so is the firm’s reputation for independence.
Continue reading the main story

On Monday, New York State’s financial regulator effectively suspended Promontory from conducting most assignments for banks that are licensed in New York State and suspected of wrongdoing. The decision to suspend the firm indefinitely, an unusually aggressive move even for the Department of Financial Services, a New York agency known to scuffle with Wall Street, was detailed in a report that accused Promontory of helping to obscure some of the same bank misconduct it was supposed to unearth.

[NEW YORK TIMES]

 

New York State
Department of Financial Services
 
Report on Investigation
of
Promontory Financial Group, LLC

I. Summary
The New York State Department of Financial Services (the “Department”) was created in 2011 to help ensure the safety and soundness of New York’s banking, insurance and financial services industries, to help ensure prudent conduct by providers of financial products and services, and to promote the reduction and elimination of unethical conduct by and with respect to banking, insurance and other financial services institutions. Pursuant to this mandate, on September 4, 2013, the Department undertook an investigation into Promontory Financial Group, LLC (“Promontory”). The conduct in question relates to reports that Promontory prepared and submitted to the Department in 2010-2011 detailing the findings of its review of certain transactions by Standard Chartered Bank (“Standard Chartered” or the “Bank”), an institution regulated by the Department.

The Department’s extensive, two-year investigation included the collection and review of thousands of documents, the taking of sworn testimony of five current and two former employees of Promontory, including two managing directors and the Chief Operating Officer, and the review of four written submissions made by Promontory’s counsel over the course of the investigation (including reports by four purported experts hired by Promontory). After careful consideration of the documents, testimony and submissions:

The investigation shows that Promontory exhibited a lack of independent judgment in the preparation and submission of certain reports to the Department in 2010-2011; and

Certain testimony regarding key issues provided by the Promontory witnesses during the course of the Department’s investigation lacked credibility.

Accordingly, the Superintendent has determined that the ends of justice and the public advantage would not be served by providing Promontory with access to confidential supervisory information pursuant to New York State Banking Law § 36(10). Therefore, the Department will review all pending and future requests to provide Promontory with confidential supervisory information under Section 36(10) and, barring any change in circumstances, the Department intends to deny all such requests until further notice.

[…]

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image: American Banker

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HSBC Bank USA v San-Miguel | NYSC – a second allonge is inexplicably submitted, same being apparently attached to the defective written MERS assignment and not to the note, as the terms of the allonge – and established case and statutory

HSBC Bank USA v San-Miguel | NYSC – a second allonge is inexplicably submitted, same being apparently attached to the defective written MERS assignment and not to the note, as the terms of the allonge – and established case and statutory

NEW YORK SUPREME COURT – QUEENS COUNTY

HSBC BANK USA, etc.,
Plaintiff(s),

- against –

ROBERT SAN-MIGUEL, et al.,

Excerpt:
Plaintiff has failed to meet its burden in order to properly confer its standing. Initially,
plaintiff’s reliance upon the written assignment is insufficient since plaintiff failed to
demonstrate that MERS was either the holder or assignee of the note when the instrument
was purportedly assigned by the instrument dated September 18, 2009, or that it had the
authority to execute assignments on behalf of the originator of the loan (see Homecomings
Financial, LLC v Guldi, 108 AD3d 506 [2013]; Deutsche Bank Natl. Trust Co. v Spanos, 102
AD3d 909 [2013]; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680 [2012]; Bank of
New York v Silverberg, 86 AD3d 274 [2011]).

Furthermore, Ms. Vera’s affidavit, other than her mere declaration that she knows
plaintiff has been assigned the note – without any detail as to, inter alia, the date of the
assignment – it would appear that her knowledge stems, at least in part, from the written
assignment, said assignment being defective for the reasons noted, supra. To the extent she
relies on the affirmation of plaintiff’s counsel, plaintiff’s counsel has not demonstrated
personal knowledge of when plaintiff came into possession or ownership of the loan
documents.

Moreover, while it is noted that plaintiff may rely on physical delivery of the note
alone, the fact that: (1) the allonge following the note is undated; (2) Ms. Vera is silent on
the circumstances surrounding delivery of the note (see U.S. Bank Nat. Assn. v Faruque, 120
AD3d 575 [2014]; Homecomings Financial, LLC v Guldi, 108 AD3d at 509; HSBC Bank
USA v Hernandez, 92 AD3d 843 [2012]); and (3) a second allonge is inexplicably submitted,
same being apparently attached to the defective written assignment and not to the note, as the
terms of the allonge – and established case and statutory law (see e.g. UCC § 3-202 [2]) –
require, warrant denial of the motion for summary judgment. Even assuming the second
allonge were sufficient, plaintiff presents no proof that Ocwen had the authority to execute
same on Delta’s behalf. Indeed, the only power of attorney provided was the one as it relates
to plaintiff.

Notwithstanding issues of standing, plaintiff has not established that it complied with
certain conditions precedent to suit. Namely, defendants, in their answer, denied paragraph
ninth of the complaint which alleges that no payment was made, despite demand. The
mortgage requires the lender, prior to declaring the entire balance due and commencing
foreclosure, send a notice of default which, inter alia, provides for an option to cure the
default. Plaintiff has not submitted proof that such a notice was sent. Ms. Vera’s contention
that “[i]ndeed, an acceleration letter was sent” is insufficient to prove same. Her contention
that follows, that “the declaration to accelerate contained in this very paragraph of the
complaint serves, as a matter of law . . . as that very election to accelerate,” is without
foundation.

Finally, it is noted that, in opposition to the motion, defendants point out that plaintiff,
a trust, may not have complied with, inter alia, its Mortgage Loan Sale and Contribution
Agreement regarding transfer of ownership of the subject loan documents.

 

[…]

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HSBC Bank USA, N.A. v Roumiantseva | NY App. Div. 2nd Dept. – MERS was never the holder of the note and, therefore, was without authority to assign the note…As a result, the defendants demonstrated, prima facie, that the plaintiff’s purported basis for standing was not valid

HSBC Bank USA, N.A. v Roumiantseva | NY App. Div. 2nd Dept. – MERS was never the holder of the note and, therefore, was without authority to assign the note…As a result, the defendants demonstrated, prima facie, that the plaintiff’s purported basis for standing was not valid

Decided on July 29, 2015

SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Second Judicial Department

PETER B. SKELOS, J.P.
L. PRISCILLA HALL
SANDRA L. SGROI
BETSY BARROS, JJ.

 

2013-09197
(Index No. 22274/09)

[*1]HSBC Bank USA, National Association, etc., appellant,

v

Svetlana Roumiantseva, et al., respondents, et al., defendants.

 

Hogan Lovells US, LLP, New York, N.Y. (David Dunn, Chava Brandriss, and Heather R. Gushue of counsel), for appellant.

Law Office of Alan J. Sasson, P.C., Brooklyn, N.Y. (Yitzchak Zelman of counsel), for respondents.

 

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Saitta, J.), dated June 11, 2013, which granted the motion of the defendants Svetlana Roumiantseva and Iouri Roumiantsev to dismiss the complaint for lack of standing.

ORDERED that the order is affirmed, with costs.

Where the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief (see HSBC Bank USA, N.A. v Calderon, 115 AD3d 708, 709; Bank of N.Y. v Silverberg, 86 AD3d 274, 279; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753). A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is either the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872, * 3-4 [2015]; see Kondaur Capital Corp. v McCary, 115 AD3d 649, 650; Bank of N.Y. v Silverberg, 86 AD3d at 279). “The plaintiff may demonstrate that it is the holder or assignee of the underlying note by showing either a written assignment of the underlying note or the physical delivery of the note” (U.S. Bank Na. v Guy, 125 AD3d 845, 846-847; Kondaur Capital Corp. v McCary, 115 AD3d at 650). “As a general matter, once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note. However, the transfer of the mortgage without the debt is a nullity, and no interest is acquired by it because a mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation” (Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 911; see Citibank, N.A. v Herman, 125 AD3d 587, 588; see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872 at * 4; Bank of N.Y. v Silverberg, 86 AD3d at 280).

On a defendant’s motion to dismiss the complaint based upon a plaintiff’s alleged lack of standing, the burden is on the defendant to establish, prima facie, the plaintiff’s lack of standing as a matter of law (see U.S. Bank N.A. v Guy, 125 AD3d at 847; HSBC Mtge. Corp. [USA] v MacPherson, 89 AD3d 1061, 1062). “To defeat the motion, a plaintiff must submit evidence which raises a question of fact as to its standing” (U.S. Bank N.A. v Guy, 125 AD3d at 847; US Bank N.A. v Faruque, 120 AD3d 575, 578; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 683).

Here, in support of their motion to dismiss the complaint, the defendants Svetlana Roumiantseva and Iouri Roumiantsev (hereinafter together the defendants) submitted the plaintiff’s response to their demand for documents supporting the plaintiff’s purported basis for standing set forth in the complaint. The plaintiff allegedly obtained its right to foreclose by way of an assignment of the mortgage and note from Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting as nominee for the original lender. However, the documents showed that MERS was never the holder of the note and, therefore, was without authority to assign the note (see Citibank, N.A. v Herman, 125 AD3d 587, 589). As a result, the defendants demonstrated, prima facie, that the plaintiff’s purported basis for standing was not valid.

In opposition, the plaintiff submitted, among other things, a copy of an endorsement in blank dated December 7, 2006. Thereafter, the Supreme Court directed the plaintiff to produce the original note and the endorsement (see CPLR 3212[c]). The endorsement was attached to the original note by only a paperclip. UCC 3-202 provides that “an indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof.” Here, the purported endorsement, attached by a paperclip, was not so firmly affixed to the note as to become a part thereof (see UCC 3-202[2], Comment 3; Slutsky v Blooming Grove Inn, 147 AD2d 208, 212; cf. U.S. Bank N.A. v Guy, 125 AD3d at 847; Deutsche Bank Trust Co. Ams. v Codio, 94 AD3d 1040, 1041). As such, the purported endorsement did not constitute a valid transfer of the underlying note to the plaintiff.

The affidavit of the plaintiff’s servicing agent, which was improperly submitted for the first time in sur-reply, should not have been considered by the Supreme Court (see CPLR 2214; McMullin v Walker, 68 AD3d 943, 944; Flores v Stankiewicz, 35 AD3d 804).

Accordingly, the Supreme Court properly granted the defendants’ motion to dismiss the complaint for lack of standing.

SKELOS, J.P., HALL, SGROI and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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Gretchen Morgenson: A Slack Lifeline for Drowning Homeowners

Gretchen Morgenson: A Slack Lifeline for Drowning Homeowners

New York Times-

After Lucy Circe became disabled and could no longer work, she applied to Bank of America for a mortgage loan modification on her Vermont home. Over more than two years, starting in 2012, the bank repeatedly requested copies of documents that had already been provided, asked for proof that she was no longer married to a man she did not even know, and made other errors, like asking why Ms. Circe had indicated that she didn’t want to keep her property when she had actually told the bank she did.

None of it made sense. But a disturbing report on the federal government’s Home Affordable Modification Program issued on Wednesday suggests that Ms. Circe’s experience was anything but unique.
Continue reading the main story

Advertised in 2009 as a lifeline for as many as four million troubled borrowers, the program was one of the Obama administration’s signature efforts to help homeowners. But the report, by Christy L. Romero, the government official with authority to monitor the program, shows that six years later, just 887,001 borrowers are participating in loan modifications — deals that reduce the costs of mortgages.

It appears that the program has allowed big banks to run roughshod over borrowers again and again.

[NEW YORK TIMES]

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In Re Community Bank of Northern Virginia (PNC Bank) | 3rd Cir. COA – Class Action – decision addresses the issues of commonality, TILA/HOEPA, RESPA, standing, active misleading/fraudulent concealment, and equitable tolling

In Re Community Bank of Northern Virginia (PNC Bank) | 3rd Cir. COA – Class Action – decision addresses the issues of commonality, TILA/HOEPA, RESPA, standing, active misleading/fraudulent concealment, and equitable tolling

H/T Alina

Some snippets:

We agree with that conclusion. Due diligence does not mean that borrowers must presume their bank is lying or dissembling and therefore that further investigation is needed. Reading the blizzard of paper that sweeps before them is ample diligence in itself. In short, a borrower ought to be able to rely on the documents provided by a financial institution. Indeed, RESPA and TILA/HOEPA were passed, in large part, because Congress recognized that the average borrower is incapable of detecting many unfair lending practices, including fraud. “[W]hile the law of fraud does not endorse a ‘hear no evil, see no evil approach,’ neither does it require that an aggrieved party have proceeded from the outset as though he were dealing with thieves.” Jones v. Childers, 18 F.3d 899, 907 (11th Cir.1994) (additional quotation marks omitted). “A plaintiff ? cannot be expected to exercise diligence unless there is some reason to awaken inquiry and direct diligence in the channel in which it would be successful. This is what is meant by reasonable diligence.” Sheet Metal Workers, Local 19 v. 2300 Grp., Inc., 949 F.2d 1274, 1282 (3d Cir.1991) (internal quotation marks omitted). The Complaint here does not allege any facts disclosed on the face of the HUD–1s or that were otherwise provided to the Plaintiffs that should have awakened inquiry and demanded some further diligence. We conclude, therefore, that the Plaintiffs’ allegation that the class fully participated in all aspects of the mortgage loan transactions by “reviewing their loan documentation” is sufficient to satisfy the reasonable diligence requirement for equitable tolling in this case. (App. at 307, ¶ 409.) Cf. White, 2014 WL 4063344, at *5–6. In addition, proving that class members did, in fact, fully participate in the loan process in that fashion does not cause the issue of equitable tolling to predominate over issues common to the whole class.

____________

First, it asserts that, to litigate the RESPA claims, the putative class will be required to demonstrate on a loan-by-loan basis that no services were provided in exchange for the alleged kickbacks. But the Complaint alleges that Equity Plus performed absolutely no services to earn the transferred (i.e., kicked-back) portion of the fees, which is at least plausible in light of the contractual arrangement between Equity Plus and CBNV.23 While that allegation places a potentially onerous evidentiary burden on the Plaintiffs, it also leads us to conclude that, on the present record and at this stage of the case, PNC’s arguments fail to show that the District Court abused its discretion.

Second, PNC asserts that “there are several different types of [fees] that Plaintiffs are complaining about, and not all putative class members paid every such fee.” (Opening Br. at 48.) PNC contends that, as a result, the fact-finder will be required to determine what fees were assessed to each individual class member and whether Equity Plus performed services in exchange for each fee, and that such individual determinations would predominate in the litigation. That argument is also unpersuasive because, again, Equity Plus—the recipient of the settlement fees at issue in this case—allegedly performed no mortgage broker services in exchange for the fees and was contractually precluded from providing any services.

PNC’s third and fourth arguments can be addressed simultaneously. The third argument is that any claims premised on alleged violations of the affiliated business arrangement (“ABA”) disclosure requirements of RESPA would require loan-by-loan analysis of the ABA disclosures.24 The fourth argument is that any claims premised on CBNV’s alleged practice of charging “discount fees” without providing a discount interest rate in exchange would require an examination of each individual loan to see whether the borrower was charged a discount fee, and if so, whether the borrower obtained a discount or some other benefit as consideration for the fee. We need not address the merits of either of those arguments, however, because the alleged violations of the ABA disclosure requirements and the alleged discount fee practice are not essential to the Plaintiffs’ RESPA claims. The elements of the Plaintiffs’ RESPA claims that are “essential”—namely violations of the anti-kickback and unearned fee provisions of RESPA—can potentially be proven with common evidence. Hayes, 725 F.3d at 359 (“[T]he predominance requirement focuses on whether essential elements of the class’s claims can be proven at trial with common, as opposed to individualized, evidence.”).

_______________________

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CFPB Takes Action Against Mortgage Company for Blocking Consumers’ Attempts to Save Their Homes

CFPB Takes Action Against Mortgage Company for Blocking Consumers’ Attempts to Save Their Homes

Residential Credit Solutions to Pay $1.5 Million for Servicing Wrongs

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against Residential Credit Solutions, Inc. for blocking consumers’ attempts to save their homes from foreclosure. The mortgage servicer failed to honor modifications for loans transferred from other servicers, treated consumers as if they were in default when they weren’t, sent consumers escrow statements falsely claiming they were due a refund, and forced consumers to waive their rights in order to get a repayment plan. Residential Credit Solutions has agreed to pay $1.5 million in restitution to victims and a $100,000 civil money penalty for its illegal actions.

“By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” said CFPB Director Richard Cordray. “Residential Credit Solutions must now compensate its victims $1.5 million as a result of our action.”

Residential Credit Solutions, headquartered in Fort Worth, Texas, is a national mortgage servicing company with about $95 million in total assets. Since 2009, approximately 75,000 borrowers have had their loans transferred to Residential Credit Solutions. The company specializes in servicing delinquent loans and “credit-sensitive” residential mortgage loans, where the borrower is at high risk for default. As a servicer, it is responsible for, among other things, creating and sending monthly statements to borrowers, and collecting and processing payments. For troubled borrowers, it administers short sale and foreclosure relief programs provided by the owner of the loan. These “loss mitigation” programs provide alternatives to foreclosure.

According to today’s order, Residential Credit Solutions engaged in illegal practices when servicing loans that it acquired from other servicers. On a number of occasions, the company failed to honor trial loan modifications that consumers had entered into with their prior servicers. Instead, it insisted that the consumer re-prove that they qualified. This effectively set consumers back as though they had not received a trial modification. It also prolonged many people’s loss mitigation plans. The company put consumers in loan modification trial period purgatory and confused consumers about the status of their modifications, making it difficult for them to take appropriate action. In many cases, the company delayed or deprived borrowers of the opportunity to save or sell their homes.

Residential Credit Solutions’ failures as a mortgage servicer hurt homeowners. In many cases, the company deprived borrowers of the ability to make an informed choice about how to save or sell their home, caused borrowers to drop out from the loss mitigation process entirely, and drove borrowers into foreclosure. The company violated the Consumer Financial Protection Act. Specifically, since January 2009, the company has:

  • Failed to honor in-process modifications: Some of the borrowers who had their mortgage loans transferred to Residential Credit Solutions were already in trial modifications where they were making reduced payments. Residential Credit Solutions’ practice from at least 2009 to 2013 was to not honor those agreements. Instead, the company insisted that consumers re-qualify for the modifications. The company treated these consumers as if they were still in default, subjecting them to collection calls, late fees, and default and delinquency notices. Many consumers had their loans referred to foreclosure, and some eventually lost their homes.
  • Provided incorrect information: For the in-process modifications that Residential Credit Solutions failed to recognize, the company gave incorrect information to certain consumers about their unpaid balances, payment due dates, interest rates, monthly payment amounts, and delinquency statuses.
  • Misrepresented to consumers that they had extra money in escrow and were due a refund: Servicers are required, with certain exceptions, to provide annual escrow account statements to consumers. These statements include the amount of any surplus funds, which must be refunded to a consumer whose loan payments are current. Many of the escrow statements that Residential Credit Solutions sent to delinquent consumers incorrectly stated that they had an escrow surplus of between $80 and $10,000.
  • Forced consumers to waive certain rights to get a payment plan: Sometimes, the company offered a payment plan to consumers who fell behind in their payments. It allowed the consumer to make additional payments over a defined period of time; these were often a consumer’s last opportunity to avoid default or foreclosure. But the company illegally required consumers to surrender certain legal rights in future foreclosures and bankruptcy protections as a condition of receiving the payment plan.

This enforcement action covers Residential Credit Solutions’ illegal practices prior to the January 2014 effective date of the CFPB’s new mortgage servicing rules.

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. Today’s order requires Residential Credit Solutions to, among other things:

  • Pay $1.5 million in redress to victims: The company must pay $1.5 million to the hundreds of consumers whose in-process loan modifications were not honored. Borrowers who receive payments will not be prevented from taking individual action on their claims as a result of this settlement.
  • Engage in efforts to help affected borrowers preserve their home: For certain borrowers affected by its unlawful practices who were not foreclosed on, Residential Credit Solutions must convert in-process loan modifications into permanent modifications. And it must engage in outreach, including telephone and mail campaigns and translation services to contact borrowers and offer them loss mitigation options. It must stop foreclosure processes for certain borrowers, if those are happening.
  • Honor prior loss mitigation agreements: Residential Credit Solutions must honor loss mitigation agreements entered by prior servicers, including in-process modifications, continue processing pending loss mitigation requests received in transfers, and review and evaluate pending loss mitigation applications.
  • End all mortgage servicing violations: In addition to being subject to the loss mitigation provisions of the CFPB’s new mortgage servicing rules, Residential Credit Solutions is prohibited from making misrepresentations to consumers regarding loss mitigation, such as false statements about how much is owed.
  • Adhere to rigorous servicing transfer requirements: The company must create a detailed data integrity program that tests, identifies, and corrects errors in loans transferred to it to ensure that it has accurate information about consumers’ loans. Residential Credit Solutions may not transfer loans in loss mitigation, in or out, unless all account-level documents and data relating to loss mitigation are provided to the new servicer by the date of transfer.
  • Make loss mitigation applications readily available: Residential Credit Solutions must make its loss mitigation application available to consumers at no cost by making it readily accessible on its website and providing it upon request to consumers. The application must identify all required documentation and information necessary to complete a loss mitigation application. It must also adequately train its personnel in loss mitigation procedures.
  • Pay $100,000 civil penalty: The company will make a $100,000 penalty payment to the CFPB’s Civil Penalty Fund.

A copy of the consent order is available at:
http://files.consumerfinance.gov/f/201507_cfpb_consent-order_residential-credit-solutions.pdf

###
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

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Posted in STOP FORECLOSURE FRAUD4 Comments

HSBC Bank USA, N.A. v Roumiantseva | NY App. Div. 2nd Dept. – MERS was never the holder of the note and, therefore, was without authority to assign the note…purported endorsement, attached by a paperclip, was not so firmly affixed to the note did not constitute a valid transfer of the underlying note

HSBC Bank USA, N.A. v Roumiantseva | NY App. Div. 2nd Dept. – MERS was never the holder of the note and, therefore, was without authority to assign the note…purported endorsement, attached by a paperclip, was not so firmly affixed to the note did not constitute a valid transfer of the underlying note

Decided on July 29, 2015 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
PETER B. SKELOS, J.P.
L. PRISCILLA HALL
SANDRA L. SGROI
BETSY BARROS, JJ.

 

2013-09197
(Index No. 22274/09)

[*1]HSBC Bank USA, National Association, etc., appellant,

v

Svetlana Roumiantseva, et al., respondents, et al., defendants.

 

Hogan Lovells US, LLP, New York, N.Y. (David Dunn, Chava Brandriss, and Heather R. Gushue of counsel), for appellant.

Law Office of Alan J. Sasson, P.C., Brooklyn, N.Y. (Yitzchak Zelman of counsel), for respondents.

 

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Saitta, J.), dated June 11, 2013, which granted the motion of the defendants Svetlana Roumiantseva and Iouri Roumiantsev to dismiss the complaint for lack of standing.

ORDERED that the order is affirmed, with costs.

Where the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief (see HSBC Bank USA, N.A. v Calderon, 115 AD3d 708, 709; Bank of N.Y. v Silverberg, 86 AD3d 274, 279; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753). A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is either the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872, * 3-4 [2015]; see Kondaur Capital Corp. v McCary, 115 AD3d 649, 650; Bank of N.Y. v Silverberg, 86 AD3d at 279). “The plaintiff may demonstrate that it is the holder or assignee of the underlying note by showing either a written assignment of the underlying note or the physical delivery of the note” (U.S. Bank Na. v Guy, 125 AD3d 845, 846-847; Kondaur Capital Corp. v McCary, 115 AD3d at 650). “As a general matter, once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note. However, the transfer of the mortgage without the debt is a nullity, and no interest is acquired by it because a mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation” (Deutsche Bank Natl. Trust Co. v Spanos, 102 AD3d 909, 911; see Citibank, N.A. v Herman, 125 AD3d 587, 588; see Aurora Loan Servs., LLC v Taylor, ____ NY3d ____, ____, 2015 NY Slip Op 04872 at * 4; Bank of N.Y. v Silverberg, 86 AD3d at 280).

On a defendant’s motion to dismiss the complaint based upon a plaintiff’s alleged lack of standing, the burden is on the defendant to establish, prima facie, the plaintiff’s lack of standing as a matter of law (see U.S. Bank N.A. v Guy, 125 AD3d at 847; HSBC Mtge. Corp. [USA] v MacPherson, 89 AD3d 1061, 1062). “To defeat the motion, a plaintiff must submit evidence which raises a question of fact as to its standing” (U.S. Bank N.A. v Guy, 125 AD3d at 847; US Bank N.A. v Faruque, 120 AD3d 575, 578; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 683).

Here, in support of their motion to dismiss the complaint, the defendants Svetlana Roumiantseva and Iouri Roumiantsev (hereinafter together the defendants) submitted the plaintiff’s response to their demand for documents supporting the plaintiff’s purported basis for standing set forth in the complaint. The plaintiff allegedly obtained its right to foreclose by way of an assignment of the mortgage and note from Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting as nominee for the original lender. However, the documents showed that MERS was never the holder of the note and, therefore, was without authority to assign the note (see Citibank, N.A. v Herman, 125 AD3d 587, 589). As a result, the defendants demonstrated, prima facie, that the plaintiff’s purported basis for standing was not valid.

 

In opposition, the plaintiff submitted, among other things, a copy of an endorsement in blank dated December 7, 2006. Thereafter, the Supreme Court directed the plaintiff to produce the original note and the endorsement (see CPLR 3212[c]). The endorsement was attached to the original note by only a paperclip. UCC 3-202 provides that “an indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof.” Here, the purported endorsement, attached by a paperclip, was not so firmly affixed to the note as to become a part thereof (see UCC 3-202[2], Comment 3; Slutsky v Blooming Grove Inn, 147 AD2d 208, 212; cf. U.S. Bank N.A. v Guy, 125 AD3d at 847; Deutsche Bank Trust Co. Ams. v Codio, 94 AD3d 1040, 1041). As such, the purported endorsement did not constitute a valid transfer of the underlying note to the plaintiff.

The affidavit of the plaintiff’s servicing agent, which was improperly submitted for the first time in sur-reply, should not have been considered by the Supreme Court (see CPLR 2214; McMullin v Walker, 68 AD3d 943, 944; Flores v Stankiewicz, 35 AD3d 804).

Accordingly, the Supreme Court properly granted the defendants’ motion to dismiss the complaint for lack of standing.

SKELOS, J.P., HALL, SGROI and BARROS, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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Posted in assignment of mortgage, foreclosure fraud, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., STOP FORECLOSURE FRAUD0 Comments

David Stern v. Bank of Am. Corp. | Third Federal Judge in a Row Declines to Follow Florida Appellate Opinion on Statute of Limitations for Mortgage Foreclosure

David Stern v. Bank of Am. Corp. | Third Federal Judge in a Row Declines to Follow Florida Appellate Opinion on Statute of Limitations for Mortgage Foreclosure

Via JDSUPRA

In Stern v. Bank of Am. Corp., No. 2:15-CV-153-FTM-29CM, 2015 WL 3991058 (M.D. Fla. June 30, 2015) United States District Court Judge John Steele became the third consecutive United States District Court Judge in Florida to reject the Third DCA’s ruling in Beauvais, describing Beavais as “contrary to the overwhelming weight of authority  which holds that even where a mortgagee initiates a foreclosure action and invokes its right of acceleration, if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file later foreclosure actions . . . so long as they are based on separate defaults.” (internal quotation marks omitted).

Via CaseText-

  • UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION
  • ·
  • Case No: 2:15-cv-153-FtM-29CM (M.D. Fla. Jun 30, 2015)

STERN V. BANK OF AM. CORP.

M.D. Fla.

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION

Case No: 2:15-cv-153-FtM-29CM

06-30-2015

DAVID STERN, Personal Representative of the Khaki Realty Trust, Plaintiff, v. BANK OF AMERICA CORPORATION, Defendant.


OPINION AND ORDER

This matter comes before the Court on review of Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint (Doc. #11) filed on March 30, 2015. Plaintiff filed a Response (Doc. #17) on April 8, 2015. For the reasons set forth below, the motion is granted.

I.

Plaintiff David Stern (Stern), acting as personal representative of the Khaki Realty Trust (the Trust) has filed an Amended Complaint (Doc. #9) against Defendant Bank of America Corporation (BOA) seeking a declaratory judgment concerning a parcel of real property owned by the Trust. The underlying facts, as set forth in the Amended Complaint, are as follows:

Stern, via the Trust, owns a parcel of real property (the Property) located in Cape Coral, Florida. (Id. at ¶ 3.) The Property was originally purchased by Ana and Marvin Fuller (the Fullers) in 2005 and the Fullers executed a mortgage (the Mortgage)*22are the time of purchase. (Id. at ¶¶ 8-9.) Sometime thereafter, the Mortgage was assigned to Countrywide Home Loans, Inc. (Countrywide). (Id. at ¶¶ 10.) As a result of the Fullers’ failure to make required mortgage payments, Countrywide accelerated the mortgage and filed a mortgage foreclosure action. (Id. at ¶¶ 10, 25.) In April 2008, the Fullers filed for bankruptcy and, ultimately, received a discharge of their debts including their mortgage obligation. (Id. at ¶¶ 11-12.) In 2011, the mortgage foreclosure action against the Fullers was dismissed without prejudice. (Id. at ¶ 13.) The Mortgage was assigned to BOA in 2014. (Id. at ¶ 14.) In April 2014, Marvin Fuller died. Subsequently, Ana Fuller executed a quitclaim deed transferring to Stern her right, title, and interest in the Property. (Id. at ¶¶ 16-17.) BOA is currently in possession of the Property and has taken actions to prevent Stern from accessing and occupying it. (Id. at ¶ 15.)

Based on these allegations, Stern seeks a declaratory judgment (1) that the statute of limitations bars BOA from foreclosing upon the Property; (2) that BOA is not entitled to possession of the property; and (3) that BOA must yield possession of the property to the Trust. BOA now moves to dismiss, arguing that the Amended Complaint fails to state a claim upon which relief can be granted.

*33

II.

Under Federal Rule of Civil Procedure 8(a)(2), a Complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. at 555. See also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). This requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff, Erickson v. Pardus, 551 U.S. 89 (2007), but “[l]egal conclusions without adequate factual support are entitled to no assumption of truth,” Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are merely consistent with a defendant’s liability fall short of being facially*44plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (internal quotation marks and citations omitted). Thus, the Court engages in a two-step approach: “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

III.

As set forth in the Amended Complaint, the Fullers’ lender accelerated the Mortgage based upon the Fullers’ failure to make a required mortgage payment and, after the Fullers failed to pay the accelerated mortgage debt, the lender commenced a foreclosure action. (Id. at ¶¶ 10-15, 25.) The foreclosure action against the Fullers was subsequently dismissed without prejudice. (Id.) According to Stern, the dismissal without prejudice did not unwind the acceleration. Actions to foreclose a mortgage are subject to a five-year statute of limitations. Fla. Stat. § 95.11(2)(c). Stern argues that the limitations period here began to run as to the full amount owed on the Mortgage on the date of acceleration. Because the limitations period has since expired, Stern contends that BOA (who now owns the Mortgage) is barred from foreclosing upon the Property in the future, and he seeks a declaratory judgment to that effect. BOA argues that Stern is not entitled to such a declaration because BOA continues to possess rights under the Mortgage, including the right to foreclose upon the Property*55on the basis of future non-payment defaults. Therefore, BOA contends that the Amended Complaint must be dismissed.

In response to BOA’s motion, Stern relies on the Florida Third District Court of Appeal’s recent decision in Deutsche Bank Trust Co., Americas v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. 3d DCA, Dec. 17, 2014). In Beauvais, following the borrower’s default on a mortgage, the mortgagee accelerated the debt and commenced foreclosure. (Id. at *1.) Subsequently, the foreclosure action was dismissed without prejudice. (Id.) Nearly six years later, the mortgagee brought a new foreclosure action, which the borrower argued was barred by the statute of limitations. (Id. at *2.) The court agreed, holding that the statute of limitations ran from the date of acceleration and did not restart when the initial foreclosure action was dismissed without prejudice. (Id. at *10.)

However, Beauvais is contrary to the overwhelming weight of authority, which holds that “even where a mortgagee initiates a foreclosure action and invokes its right of acceleration, if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file later foreclosure actions . . . so long as they are based on separate defaults.” Dorta v. Wilmington Trust National Association, No. 13-CV-185, 2014 WL 1152917, at *1 (M.D. Fla. Mar. 24, 2014); see also, e.g., Lacroix v. Deutsche Bank Nat. Trust Co., No. 14-CV-431, 2014 WL 7005029, at *2 (M.D. Fla. Dec. 10, 2014) (“Regardless of whether*66the statute of limitations bars individual defaulted payments that are more than five years old, the mortgage and note remain valid and enforceable.”); Torres v. Countrywide Home Loans, Inc., No. 14-CV-20759, 2014 WL 3742141, at *4 (S.D. Fla. July 29, 2014) (“While any claims relating to individual payment defaults that are more than five years old may be subject to the statute of limitations, each payment default that is less than five years old creates a basis for a subsequent foreclosure or acceleration action.”); Singleton v. Greymar Associates, 882 So. 2d 1004, 1008 (Fla. 2004) (“In this case the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.”); Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954, 956 (Fla. 4th DCA 2014) (where a prior foreclosure action was dismissed without prejudice, “any acts of default still within the statute of limitations may be raised in a subsequent suit”).

Accordingly, the Court declines to follow Beauvais and instead concludes that the statute of limitations does not bar BOA from foreclosing upon the Property on the basis of future non-payment defaults or non-payment defaults which have occurred within the past five years. As a result, Stern cannot obtain declaratory relief he seeks and the Amended Complaint must be dismissed.

*77

Furthermore, the outcome would not change even if the Court were to follow Beauvais. At most, Beauvais prevents BOA from foreclosing upon the property as a result of non-payment defaults only. Id. at *11. However, Stern does not simply seek a declaratory judgment that BOA cannot foreclose upon the Property as a result of non-payment defaults. Instead, he seeks a declaratory judgment that BOA may not foreclose upon the Property for any reason, as well as a declaratory judgment that BOA may not prevent Stern from possessing, occupying, and using the Property. Thus, Stern is seeking to extinguish any rights BOA has pursuant to the Mortgage and, effectively, quite title to the Property in favor of himself. Even under Beauvais, such relief is unavailable.

As explained in Beauvais, the duration of a mortgage lien is governed by Fla. Stat. § 95.281(1)(a), which provides that a mortgage lien with a readily ascertainable maturity date terminates five years after maturity. The Beauvais court further explained that a lender’s acceleration of the mortgage does not accelerate the mortgage’s maturity date. 2014 WL 7156961, at *11. Thus, because the mortgage in question had not yet reached maturity, the Beauvais court refused to extinguish the mortgage or quiet title, even though the court had already held that the foreclosure action was time-barred. Id. The same is true here,*88as the Fuller’s Mortgage1 contains a readily ascertainable maturity date of November 1, 2035. (Doc. #1-5, p. 3.) Therefore, the Court cannot extinguish the Mortgage or quiet title to the Property in favor of Stern, even if the Court were to follow Beauvais. Because Stern’s requested relief is precluded as a matter of law, the Court concludes that any further amendment to the Amended Complaint would be futile. Therefore, the Amended Complaint will be dismissed with prejudice.

1.

The Mortgage was provided by BOA as an exhibit to its Notice of Removal. (Doc. #1.) When analyzing a motion to dismiss for failure to state a claim, the court typically considers only the complaint and the exhibits attached thereto. Nevertheless, the Court may consider the Mortgage because it is central to Stern’s claim and its authenticity has not been challenged. Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005).——–

Accordingly, it is now

ORDERED:

Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint (Doc. #11) is GRANTED and the Amended Complaint is dismissed with prejudice. The Clerk shall enter judgment accordingly, terminate all pending motions and deadlines as moot, and close the file.

DONE AND ORDERED at Fort Myers, Florida, this 30th day of June, 2015.

/s/_________

JOHN E. STEELE

SENIOR UNITED STATES DISTRICT JUDGE Copies: Counsel of record

.

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Posted in STOP FORECLOSURE FRAUD0 Comments

The Foreclosure Hour: What Every Homeowner Needs To Know About Loan Modifications

The Foreclosure Hour: What Every Homeowner Needs To Know About Loan Modifications

Facing Foreclosure?

If so, you can’t afford to miss a single show!
Our upcoming guests will help you save your home.

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

 

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Host: Gary Dubin -

Co-Host:  John Waihee -

Guest:  Virginia Parsons -

What Every Homeowner Needs To Know About Loan Modifications

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 Submit questions to [email protected]

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

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Posted in STOP FORECLOSURE FRAUD0 Comments

SIGTARP REPORT | More Than 7 Out of 10 (70%) Homeowners Were Turned Down From Their Servicer for HAMP

SIGTARP REPORT | More Than 7 Out of 10 (70%) Homeowners Were Turned Down From Their Servicer for HAMP

“We also report that 70% of homeowners who applied for HAMP got turned down, with JP Morgan Chase, Bank of America, and Citi, each turning down 80% or more and Ocwen denying more than 70% of the homeowners.”

 

SIGTARP for the Troubled Asset Relief Program Advancing Economic Stability Through Transparency, Coordinated Oversight, and Robust Enforcement
Quarterly Report to Congress
July 29, 2015

ONLY 30% OF HOMEOWNERS WHO APPLIED FOR
HAMP GOT IN, 70% WERE TURNED DOWN BY
THEIR SERVICER

At the start of TARP, our nation was in a foreclosure crisis. More than two million
homeowners had foreclosures commenced against them in 2008.1 TARP is not
supposed to be just a bailout of the largest financial firms, but was always supposed
to include a bailout of homeowners at risk of foreclosure. Congress rejected
Treasury’s initial proposal that TARP just be a bailout of some of the largest
financial firms. Instead, in recognition of the foreclosure crisis, Congress made
foreclosure mitigation an express part of the law authorizing TARP. Among other
things, preserving homeownership is an explicit purpose of that law, and “the need
to help families keep their homes” is one of the considerations that the Secretary of
Treasury is required by law to consider in exercising his authorities under TARP.2
As SIGTARP reported in its March 25, 2010, audit report,i a working group of
officials from Treasury, the Department of Housing and Urban Development, and
the White House developed the outlines of a mortgage modification program that
was intended to “have a scale that can have a real impact on turning the housing
problems around in this country.”

In February 2009, the Administration announced its signature TARP housing
program known as the Home Affordable Modification Program (“HAMP”) to
“enable as many as 3 to 4 million at-risk homeowners to modify the terms of their
mortgage to avoid foreclosure.”3

Treasury designed HAMP to encourage mortgage servicers, on a voluntary
basis, to modify eligible mortgages so that the monthly payments of homeowners
who are in default or at imminent risk of default will be reduced to affordable,
sustainable levels. To encourage participation, Treasury pays incentives using
TARP funds. HAMP was initially a $75 billion program: $50 billion to be funded
by TARP funds for Treasury’s part of HAMP (to modify mortgages not owned by
the Government–sponsored enterprises Fannie Mae and Freddie Mac), plus $25
billion for GSE-owned mortgages.4 Although this allocation was reduced to $29.8,
approximately $18.5 billion in TARP funds remains unspent and available for
HAMP as of June 30, 2015.5

Although participation in HAMP is voluntary, servicers who agree to participate
are required to offer HAMP modifications to all eligible homeowners. The actual
execution of HAMP lies in large part with participating mortgage servicers, whose
employees are responsible for reviewing homeowner HAMP applications and
deciding whether a homeowner gets into HAMP or not. A servicer must follow the
HAMP rules in making its decision, and Treasury has an oversight responsibility to
ensure that servicers follow Treasury’s HAMP rules.ii

[…]

Down Load PDF of This Case

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Posted in STOP FORECLOSURE FRAUD2 Comments

KENNEY v. HSBC BANK USA NA | FL 4DCA – no evidence indicating when the blank endorsement was placed onto the note…the assignment was insufficient to establish HSBC’s standing

KENNEY v. HSBC BANK USA NA | FL 4DCA – no evidence indicating when the blank endorsement was placed onto the note…the assignment was insufficient to establish HSBC’s standing

 

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

GEORGE L. KENNEY a/k/a GEORGE KENNEY,
Appellant,
v.
HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE FOR DEUTSCHE ALT-A SECURITIES, INC., MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-6, SUSIE N. KENNEY a/k/a SUSIE KENNEY, SEA OAKS PROPERTY OWNERS ASSOCIATION, INC., SEA OATS OF JUNO BEACH CONDOMINIUM TWO ASSOCIATION, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
Appellees.
No. 4D13-4165
[ July 22, 2015 ]
Jeffrey Harrington, Millie Orrico and Adriana C. Clamens of Harrington Law Associates, PLLC, West Palm Beach, for appellant. Michael K. Winston, Dean A. Morande and Donna L. Eng of Carlton Fields Jorden Burt, P.A., West Palm Beach, for Appellee–HSBC Bank USA, National Bank.

The borrower, George Kenney, appeals a final judgment of foreclosure entered after a non-jury trial. We find merit in his argument that HSBC Bank USA, National Association, as Trustee for the Holders of Deutsche Alt–A Securities, Inc., Mortgage Loan Trust, Series 2005–6 (“HSBC”) failed to prove it had standing at the time it filed the foreclosure action. We therefore reverse.

In 2005, the borrower and his wife executed a promissory note in favor of American Brokers Conduit. The borrower also executed a mortgage securing payment of the note.

On December 29, 2009, HSBC filed a foreclosure complaint against the borrower and his wife. The complaint alleged that HSBC “as servicer for the owner and acting on behalf of the owner with authority to do so, is the present designated holder of the note and mortgage with authority to pursue the present action.” The copy of the note attached to the complaint did not contain any endorsements.

On January 4, 2010, a vice president of American Brokers Conduit executed an Assignment of Mortgage in favor of HSBC. The assignment reflected that it was assigning the mortgage together with the note. The assignment stated that it was effective “as of the 1st day of December, 2009?”

In the borrower’s answer, he asserted as an affirmative defense that HSBC was not in possession of the original promissory note and did not have standing to foreclose.

At trial, HSBC attempted to prove its standing by introducing the original note, as well as the testimony of a loan verification analyst employed by Wells Fargo. The original note bears a blank endorsement from the original lender, American Brokers Conduit. But there was no testimony indicating when the blank endorsement was placed onto the note.

The analyst testified that Wells Fargo acquired the loan and began servicing it on August 1, 2006. He testified that when Wells Fargo boarded the note on August 1, 2006, there were procedures in place to ensure that the original note had the proper endorsement. He also explained that there has not been any transfer of ownership of the note since Wells Fargo became the servicer on August 1, 2006.

The analyst testified that on August 1, 2006, HSBC—as trustee for an entity of Deutsche Bank—was the owner of the note. At another point, however, he testified that HSBC was not the owner of the loan and was merely the trustee for the Deutsche Bank entity, explaining: “[T]he investor—the owner of the note is Deutsche Bank. The plaintiff is HSBC. They’re the trustee for them on this case.” He did not know the date when HSBC purchased the note.

The borrower introduced the Assignment of Mortgage into evidence and questioned the analyst about its contents. The analyst had no explanation for why the assignment was signed after the case was filed. He first saw the assignment about ten days before trial. He pointed out that the assignment indicated that it was effective on a date “prior to the case being filed.” However, the analyst’s testimony was based solely on the plain language of the assignment document, and was not based on personal knowledge of an assignment that occurred before the filing of the complaint.

Following the conclusion of trial, the lower court entered a final judgment in favor of HSBC. This appeal ensued.

An appellate court applies a de novo standard of review to the ultimate question of whether a plaintiff proved its standing to bring the foreclosure action. Dixon v. Express Equity Lending Grp ., 125 So.3d 965, 967 (Fla. 4th DCA 2013).

“A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose.” McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170, 173 (Fla. 4th DCA 2012). The plaintiff must prove that it had standing to foreclose when the original complaint was filed. Id.

The UCC provides that a “person entitled to enforce” a negotiable instrument means the holder of the instrument, a non-holder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce. § 673.3011(1)-(3), Fla. Stat. (2013).

“A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo Bank, N.A., 124 So.3d 308, 310 (Fla. 2d DCA 2013). “When a plaintiff asserts standing based on an undated endorsement of the note, it must show that the endorsement occurred before the filing of the complaint through additional evidence, such as the testimony of a litigation analyst.” Lloyd v. Bank of New York Mellon, 160 So.3d 513, 515 (Fla. 4th DCA 2015).

Here, HSBC did not prove that it was a person entitled to enforce the note at the time it filed the foreclosure complaint.

First, the original note was insufficient to prove HSBC’s standing at the inception of the case because there was no evidence indicating when the blank endorsement was placed onto the note. See Tremblay v. U.S. Bank, N.A., 40 Fla. L. Weekly D1064, 2015 WL 2089069 (Fla. 4th DCA May 6, 2015). In Tremblay, we explained:

Bank’s attachment of a copy of the note with a blank indorsement was insufficient to establish standing because Bank’s only witness testified that his employer—the servicer—had been the holder of the note since August of 2005. Based on this testimony, the servicer was the proper party to initiate the action, not Bank.

Id. at *1.

Likewise, in this case, the Wells Fargo analyst’s testimony suggested that Wells Fargo—the servicer—was the entity in possession of the note since 2006, which would mean that Wells Fargo was likely the holder of the note when the complaint was filed and would have been the proper party to initiate the action. The analyst’s testimony failed to establish that, at the time of the original complaint, HSBC was the holder of the note or was otherwise a person entitled to enforce the note.

Second, the assignment was insufficient to establish HSBC’s standing. Although the assignment contained a purported effective date before the complaint was filed, it was executed after the complaint was filed and the witness “did not have any information, other than the document itself, to verify when the assignment took place.” See Lloyd, 160 So.3d at 515; see also Matthews v. Fed. Nat’l Mortg. Ass’n, 160 So.3d 131, 133 (Fla. 4th DCA 2015) (“Nor does the backdated assignment, standing alone, establish standing.”); Vidal v. Liquidation Props., Inc., 104 So.3d 1274, 1277 n. 1 (Fla. 4th DCA 2013) (“Allowing assignments to be retroactively effective would be inimical to the requirements of pre-suit ownership for standing in foreclosure cases.”).

Finally, the analyst’s vague testimony that either HSBC or a Deutsche Bank entity owned the note was insufficient to prove HSBC’s standing. HSBC did not introduce a pooling and servicing agreement (“PSA”), nor did HSBC introduce any competent evidence that the depositor under the PSA had the intent to transfer any interest to HSBC as the trustee. See Jelic v. LaSalle Bank, Nat’l Ass’n, 160 So.3d 127, 130 (Fla. 4th DCA 2015) (reversing a final judgment of foreclosure where there was no evidence that the party transferring the note into a PSA had any intent to transfer an interest to the trustee); Deutsche Bank Nat’l Trust Co. v. Boglioli, 154 So.3d 494, 495 (Fla. 4th DCA 2015) (evidence at trial failed to demonstrate the plaintiff’s standing to foreclose where the sole testifying witness was unable to testify as to when the note was endorsed, and the plaintiff failed to introduce a pooling and servicing agreement that was the alleged method through which the plaintiff acquired the assignment of the note).

Because HSBC did not prove that it had standing when it filed the original complaint, we reverse and remand for entry of an order of involuntary dismissal of the action.

Reversed.

PER CURIAM.

TAYLOR, MAY and KLINGENSMITH, JJ.

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Reverse-mortgage nightmare can start after borrower dies

Reverse-mortgage nightmare can start after borrower dies

Philly-

Financial decisions can have consequences that outlive the people who make them.

In the case of three women, two in South Philadelphia and one in Delaware County, the decision to take out a reverse mortgage – a special kind of loan that allows borrowers 62 and older to convert a portion of their home’s equity into cash – has made their lives a nightmare.

All three were younger than their spouses and not yet 62, which meant they did not qualify for these mortgages and could not be co-borrowers. Their names were removed from the deeds so their husbands could qualify.

Read more at http://www.philly.com/philly/business/real_estate/20150728_Reverse-mortgage_nightmare_can_start_after_borrower_dies.html#H7fubeYSvvqgkz0C.99

 image: CNN Money

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JCHS Harvard U: The State of the Nation’s Housing 2015

JCHS Harvard U: The State of the Nation’s Housing 2015

The State of the Nation’s Housing

Source: http://www.jchs.harvard.edu/research/state_nations_housing

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Peuguero v. Bank of America | FL 4DCA – the Bank failed to provide sufficient evidence to support the judgment amount

Peuguero v. Bank of America | FL 4DCA – the Bank failed to provide sufficient evidence to support the judgment amount

 

NATACHA PEUGUERO and ANGELO PEUGUERO, Appellants,
v.
BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP, FKA COUNTRYWIDE HOME LOANS SERVICING, LP, Appellee.

No. 4D13-3210.
District Court of Appeal of Florida, Fourth District.
July 15, 2015.
Thomas Erskine Ice and Amanda L. Lundergan of Ice Appellate, Royal Palm Beach, and Thomas D. Hall of The Mills Firm, P.A., Tallahassee, for appellants.

J. Randolph Liebler, Tricia J. Duthiers, Adam M. Topel, and Kristen Tajak of Liebler Gonzalez & Portuondo, Miami, and Lisa J. Geiger and Matt Mitchell of Burr & Forman, LLP, Orlando, for appellee.

FORST, J.

Appellants Natacha and Angelo Peuguero appeal the entry of a final judgment of foreclosure in favor of Appellee Bank of America (“the Bank”). While we disagree with Appellants’ argument that the foreclosing bank failed to prove standing, we agree that the Bank failed to provide sufficient evidence to support the judgment amount. Therefore, we affirm the trial court’s entry of judgment, but we reverse and remand for a determination of the correct amounts owed.

Background

Appellants executed a note and mortgage in favor of Diversified Mortgage in August 2007. By 2009, Appellants were no longer able to make payments on the loan. Countrywide Bank filed a complaint to foreclose on the loan in August 2009, alleging that it was the owner and holder of the note. The complaint included a count to reestablish a lost note. Attached to the complaint was an unendorsed copy of the note.

In April 2011, Countrywide moved to amend the name of the plaintiff in the action to the Bank, as Countrywide and the Bank had merged. An amended complaint was filed by the Bank in December 2011. A copy of the note, now including an allonge, was attached to the Amended Complaint. The allonge contained endorsements from Diversified Mortgage (the original lender) to Countrywide FSB, from Countrywide FSB to Countrywide Home Loans, then back to Countrywide FSB, and finally a blank endorsement. None of the endorsements were dated.

At trial, the Bank called one of its employees to testify. This witness testified that she was familiar with the record-keeping practices of both the Bank and Countrywide and that the payment history for this loan was kept in the ordinary course of business. On the strength of this testimony, the trial court admitted the payment history into evidence.

The witness was also asked to confirm the amount owed by Appellants to the Bank. Relying on a proposed judgment drafted by the Bank, but not entered into evidence, the witness testified to both the principal and interest owed on the loan.

The trial court entered a final judgment of foreclosure in favor of the Bank in the amount of $697,807.36. Appellants now appeal the judgment against them, arguing the Bank’s witness was not qualified to testify, that the original plaintiff in this action, Countrywide, did not have standing when it filed the complaint, and that the trial court erred by allowing the witness to testify from the proposed judgment. While we hold that the Bank adequately proved Countrywide had standing to file the initial complaint, we agree with Appellants’ challenge to the calculation of the interest due as part of the judgment award.

Admissibility of Payment History

Appellants initially argue that testimony by the Bank’s witness concerning Appellants’ loan payment history should have been deemed inadmissible hearsay and not as an exception to the hearsay rule. The business records exception, found in section 90.803(6), Florida Statutes (2013), allows a party to introduce evidence that would normally be inadmissible hearsay if:

(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.

Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008). Here, the witness provided enough testimony to meet these requirements.

We have previously addressed a similar situation in Cayea v. CitiMortgage, Inc., 138 So. 3d 1214 (Fla. 4th DCA 2014). There, a foreclosing bank introduced a printout of a loan payment history as a business record. Id. at 1217. The bank called a witness, who testified that other bank employees routinely input payments into the bank’s computer system and that the record presented at trial was simply a printout of the bank’s records that was printed specifically for trial. Id. at 1216. We affirmed the trial court’s admission of this document, holding that the records were admissible, even if the printouts were not kept in the ordinary course of business, “so long as a qualified witness testifies as to the manner of preparation, reliability, and trustworthiness.” Id. at 1217. Relying on Weisenberg v. Deutsche Bank National Trust Co., 89 So. 3d 1111, 1113 (Fla. 4th DCA 2012), we held that the witness had sufficient knowledge where he “demonstrated his familiarity with [the bank]’s record-keeping system and the process for uploading payment information.” Cayea, 38 So. 3d at 1218.

Likewise, the witness in this case testified that even though she was not responsible for maintaining or updating the records, she was familiar with the Bank’s procedures for inputting payment information into the proper computer systems. Although she was unable to give the precise name for each group in the Bank’s structural hierarchy that was responsible for entering various events into the computerized records, she knew that events/transactions were processed at the time of their occurrence and placed into the Bank’s systems, as per the standard business practice of the Bank. Furthermore, the trial court did not find any indication that the witness’s testimony was unreliable. Therefore, based on our precedent in Cayea, we find that the witness was qualified to lay the foundation for the admission of the business records.

“The law is . . . clear there is no per se rule precluding the admission of computerized business records acquired from a prior loan servicer.” Glarum v. LaSalle Bank Nat’l Ass’n, 83 So. 3d 780, 782 n.2 (Fla. 4th DCA 2011). The records from a prior servicer must, of course, have some indicia of accuracy, either through personal knowledge of a witness, as discussed in Holt v. Calchas, LLC, 155 So. 3d 499, 504 (Fla. 4th DCA 2015), or a showing of some contractual relationship between the current and prior servicers. Bank of N.Y. v. Calloway, 157 So. 3d 1064, 1072 (Fla. 4th DCA 2015). For example, in WAMCO XXVIII, Ltd. v. Integrated Electronic Environments, Inc., 903 So. 2d 230, 232-33 (Fla. 2d DCA 2005), the court held that a document detailing amounts owed was admissible as a business record even where the witness’s testimony was based on information from a previous holder of the note. The witness testified that he knew how the prior holder’s accounting systems worked and that “the procedures were `bank-acceptable accounting systems.'” Id. at 233. Further, the witness testified that the current holder verified the records for accuracy when it obtained them. Id. In the instant case, the witness testified that she was familiar with the record-keeping practices of the prior holder of the note, Countrywide. She testified that, based on her training, Countrywide and the Bank had identical procedures and record-keeping systems in place.

A trial court’s ruling on the admissibility of evidence under the business records hearsay exception is reviewed for an abuse of discretion. See Cayea, 138 So. 3d at 1216; LEA Indus., Inc. v. Raelyn Int’l Inc., 363 So. 2d 49, 52 (Fla. 3d DCA 1978) (“[I]t lies within the trial court’s discretion to determine whether admission of . . . business records is justified.”). In the instant case, based on the weight afforded by the trial court to the testimony of the Bank’s witness, the admission of the business records of the prior note holder to establish the loan payment history was not an abuse of discretion.

Standing

“A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose. Standing may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint.” McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012) (internal citations omitted). “[A] party’s standing is determined at the time the lawsuit was filed.” Id.

In this case, the original plaintiff, Countrywide, had standing at the time it filed suit. At trial, the Bank offered the note, mortgage, allonge, and notice-of-default letter into evidence. Although the witness was unable to specify exactly when Countrywide first held the note, the loan payment history reveals that Countrywide began receiving payments from Appellants shortly after the closing date for the loan. Additionally, the loan payment history indicates that Countrywide paid taxes and other fees associated with the mortgaged property in the time prior to the filing of the original complaint. This is a noteworthy factor in determining standing, as financial institutions are not known to incur expenses on behalf of properties for which they do not hold an interest.

The undated allonge, in combination with the testimony of the Bank’s witness, indicates that Countrywide, in various corporate forms, was a holder of the note prior to the endorsement in blank. Where holder status is based on an endorsement in blank, the plaintiff must prove that the endorsement was effectuated before the lawsuit was filed. Feltus v. U.S. Bank Nat’l Ass’n, 80 So. 3d 375, 377 n.2 (Fla. 2d DCA 2012). A plaintiff need not prove the exact date of a necessary endorsement to show standing at the inception of the foreclosure action—testimony that the endorsement was effectuated before the filing of the complaint will suffice. See McLean, 79 So. 3d at 173 (concluding an affidavit of ownership is sufficient to prove standing).

Here, the witness responded in the affirmative to a cross-examination inquiry as to whether the endorsements on the allonge were “definitely put on before the filing of the complaint.” She testified that Countrywide owned and held the note when the complaint was filed and that its policy and procedure is to have notes endorsed before foreclosure complaints are filed. “Evidence of the routine practice of an organization, whether corroborated or not and regardless of the presence of eyewitnesses, is admissible to prove that the conduct of the organization on a particular occasion was in conformity with the routine practice.” § 90.406, Fla. Stat. (2013); People’s Trust Ins. Co. v. Roddy, 134 So. 3d 1071, 1073 (Fla. 4th DCA 2013); Shands Teaching Hosp. & Clinics, Inc. v. Dunn, 977 So. 2d 594, 599 (Fla. 1st DCA 2007) (“The existence of a routine practice creates an inference that an agent or employee of the organization acted according to the practice. In the absence of contrary evidence, jurors may properly assume that an employee has adhered to established procedures.” (citation omitted)).

The Bank, successor in interest to Countrywide, furnished sufficient admissible testimony and evidence from which the trier of fact could conclude that all endorsements on the allonge were made before the filing of the complaint and that Countrywide was a holder with standing to foreclose at the time of filing the original complaint.

Calculation of Interest Owed

Despite our agreement with the trial court that the Bank adequately proved standing, we are compelled to partially reverse the trial court’s ruling on the issue of damages. At trial, the only evidence of the amount of interest owed by Appellants came from the witness, who merely testified that the amount written on a proposed final judgment was correct. However, this proposed judgment was never admitted into evidence. While the loan payment history, which was submitted into evidence, reflects the amount of principal owed on the loan, there are no entries that indicate the accrual of the almost $200,000 in interest the trial court granted to the Bank.

“A document that was identified but never admitted into evidence as an exhibit is not competent evidence to support a judgment.” Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So. 3d 280, 281-82 (Fla. 2d DCA 2014). In Wolkoff, the Second District reversed a judgment of foreclosure where the plaintiff’s witness “merely confirmed that the totals given to him on a proposed final judgment `seemed accurate'” and never actually stated the total amount owed. Id. at 281. Similarly, in Sas v. Federal National Mortgage Ass’n, 112 So. 3d 778, 779 (Fla. 2d DCA 2013), the plaintiff presented witness testimony of the specific amount owed, but failed to produce the business records upon which the witness relied.

While the court in Wolkoff remanded that case to the trial court with instructions to enter an involuntary dismissal, 153 So. 3d at 283, the Sas court remanded the case for further proceedings to establish the amounts owed. 112 So. 3d at 780. We addressed the Wolkoff/Sas dichotomy in Beauchamp v. Bank of New York, 150 So. 3d 827 (Fla. 4th DCA 2014). In choosing remand rather than reversal, we noted

[t]he facts of the instant case are more similar to Sas than Wolkoff because here, like the plaintiff in Sas, the Bank established the amount of indebtedness through witness testimony, even though that testimony concededly was inadmissible hearsay. This is unlike Wolkoff, where the plaintiff failed to produce any evidence, admissible or not, supporting the amount of indebtedness.

Id. at 829 n.2.

The instant case, like Beauchamp and Sas, featured a witness who testified to an exact amount of damages, but relied on evidence not in the record. Furthermore, unlike Wolkoff, the loan payment history here was submitted into evidence. Therefore, the proper remedy in this case is to remand for further proceedings to properly establish the damages owed. See also Mazine v. M & I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011) (remanding for new damages determination where documentary evidence necessary to establish damage amount was erroneously admitted without foundation).

Conclusion

The trial court properly admitted the loan payment history under the business records exception. Likewise, the Bank was able to show the original plaintiff had standing at the time it filed suit. However, the trial court erred by basing the amount of the final judgment on a document not in evidence. Therefore, we reverse and remand for determination of the amounts owed.

Affirmed in part, reversed in part.

WARNER and GROSS, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

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Utah Revives BofA Foreclosure Fight Tied to Corruption Case

Utah Revives BofA Foreclosure Fight Tied to Corruption Case

Bloomberg-

Utah’s attorney general revived a potential billion-dollar battle with Bank of America Corp. over foreclosure practices after two of his predecessors were charged with corruption for abandoning the fight.

The lawsuit is deja vu for U.S. District Judge Bruce Jenkins, who last week allowed Utah Attorney General Sean Reyes to join a homeowner’s case accusing Bank of America unit ReconTrust Co. of illegally foreclosing on Utahans’ homes.

Jenkins expressed puzzlement when outgoing Attorney General Mark Shurtleff bowed out of a similar case two years ago — just months after the judge ruled the suit could head to trial.

[BLOOMBERG]

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Farkas v. U.S. Bank | FL 4DCA – not the owner or holder of the note when the suit was filed because the assignment was dated a day after the foreclosure lawsuit was filed

Farkas v. U.S. Bank | FL 4DCA – not the owner or holder of the note when the suit was filed because the assignment was dated a day after the foreclosure lawsuit was filed

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

JANOS FARKAS,
Appellant,

v.

U.S. BANK, NATIONAL ASSOCIATION, as Trustee for WAMU Mortgage Pass Through Certificate for WMALT Series 2007-OA4,
Appellee.

No. 4D13-3006
[May 27, 2015]

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Diana Lewis, Judge; L.T. Case No. 2009CA035912(AW).

Janos Farkas, Austin, pro se.
Joseph D. Wargo and Susan Capote of Wargo & French, LLP, Miami, for appellee.

MAY, J.

A borrower appeals a final judgment of foreclosure, raising four issues. We find merit in the standing argument and reverse.

The borrower executed a promissory note and mortgage in favor of ComUnity Lending, Incorporated, a California Corporation. The note attached to the complaint did not contain a blank endorsement, but the note introduced at trial did.

The loan was securitized pursuant to a pooling and servicing agreement and assigned to the loan trust Washington Mutual Mortgage Pass-Through Certificates for WMALT Series 2007-OA4 (“Trust”). Washington Mutual Bank (“WaMu”) then became the servicer of the loan. The Federal Deposit Insurance Corporation acquired some of WaMu’s assets and liabilities and sold them to JPMorgan Chase Bank, N.A. (“Chase”). Chase then became the servicer.
The borrower defaulted. WaMu sent the borrower a “Notice of Collection Activity” letter (“acceleration letter”), advising of thirty days to cure the default or the loan would be accelerated. The borrower failed to cure the default.

On October 19, 2009, U.S. Bank (“bank”) filed a foreclosure action and attached the mortgage, note, and a lis pendens. At the non-jury trial, the borrower and bank stipulated to the note and mortgage attached to the complaint and the borrower’s receipt of the acceleration letter.

The bank called a research officer from Chase, who testified over the borrower’s objection,1 that the Trust obtained the loan on May 1, 2007. WaMu serviced the loan on behalf of the Trust until Chase acquired servicing rights in September 2008. The bank also presented a document custodian, who testified that the bank’s law firm received the original note, but lost it. A copy of the note was introduced as a true and correct copy of the original. On cross-examination, the borrower introduced an assignment of mortgage, dated October 20, 2009, the day after the bank filed its complaint.

The borrower argues the bank lacks standing because it was not the owner or holder of the note when the suit was filed. The bank responds that the testimony sufficiently established standing. We agree with the borrower and reverse.

“‘Whether a party is the proper party with standing to bring an action is a question of law to be reviewed de novo.’” LaFrance v. U.S. Bank Nat’l Ass’n, 141 So. 3d 754, 755 (Fla. 4th DCA 2014) (quoting Elston/Leetsdale, LLC v. CWCapital Asset Mgmt. LLC, 87 So. 3d 14, 16 (Fla. 4th DCA 2012)).
“[T]he party seeking foreclosure must demonstrate that it has standing to foreclose.” McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). “‘A party must have standing to file suit at its inception and may not remedy this defect by subsequently obtaining standing.’” Matthews v. Fed. Nat’l Mortg. Ass’n, 160 So. 3d 131, 133 (Fla. 4th DCA 2015) (quoting Venture Holdings & Acquisitions Grp., LLC v. A.I.M. Funding Grp., LLC, 75 So. 3d 773, 776 (Fla. 4th DCA 2011)).

In a similar case, the Second District reversed a summary judgment of foreclosure because the bank did not have standing. Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 309 (Fla. 2d DCA 2013). There, the loan was transferred from the original lender, BNC Mortgage, Inc., into a trust with
1The borrower objected to the witness because she was not identified by name on the witness list, although the witness list included a bank representative to testify concerning business records.

Wells Fargo as trustee. Id. Wells Fargo filed a foreclosure complaint. Id.
The original note had a blank endorsement on the back of the note, but was not in the record, so it was unknown whether the endorsement was dated. Id. at 311. The trial court entered summary judgment for the bank, and the borrower appealed. Id.

The Second District reversed. Id. at 309. Nothing in the record established that Wells Fargo had possession of the note. Id. at 311. And, the bank could not prove standing at the time it filed the complaint. Id.

Here, the note filed with the complaint did not contain a blank endorsement. The blank endorsement on the copy filed at trial was undated, and no one was able to testify to when the endorsement occurred. The bank’s witnesses established only that the bank had standing at the time of trial, but not at the time it filed its complaint. In addition, the borrower introduced the assignment of mortgage, dated the day after the complaint was filed. Like Focht, the bank failed to prove standing.

For this reason, we reverse.
Reversed.

CIKLIN and LEVINE, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing

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Hillary Clinton will not propose reinstating a bank break-up law known as the Glass-Steagall Act

Hillary Clinton will not propose reinstating a bank break-up law known as the Glass-Steagall Act

Robert Reich-

Hillary Clinton won’t propose reinstating a bank break-up law known as the Glass-Steagall Act – at least according to Alan Blinder, an economist who has been advising Clinton’s campaign. “You’re not going to see Glass-Steagall,” Blinder said after her economic speech Monday in which she failed to mention it. Blinder said he had spoken to Clinton directly about Glass-Steagall.

This is a big mistake.

It’s a mistake politically because people who believe Hillary Clinton is still too close to Wall Street will not be reassured by her position on Glass-Steagall. Many will recall that her husband led the way to repealing Glass Steagall in 1999 at the request of the big Wall Street banks.

[ROBERT REICH]

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DK CONSULTANTS LLC RELEASES THE OSCEOLA COUNTY, FLORIDA FORENSIC EXAMINATION

DK CONSULTANTS LLC RELEASES THE OSCEOLA COUNTY, FLORIDA FORENSIC EXAMINATION

Special Thanks to Heroes Dave Krieger & DK CONSULTANTS LLC for this report!

Clouded Titles-

SAN ANTONIO, TEXAS — As of this date and time, approval has been given by the attorneys representing the Osceola County, Florida Clerk of the Circuit Court, Hon. Armando Ramirez, to release the Forensic Examination conducted of his real property and court records in Kissimmee, Florida (this is a 8.3MB pdf file, make sure your hard drive will allow you to download it). For a further explanation of the information contained in the report, click on the link below:

OSCEOLA COUNTY REAL PROPERTY RECORDS FORENSIC EXAMINATION

The local Orlando and Osceola County media appear to be divided as to exactly where their support lies for the information contained in the Osceola County, Florida Forensic Examination of the official property records and related court records involving numerous foreclosure actions.

As many of you know, I have been assisting (as a paralegal and consultant) distressed property owners’ attorneys in foreclosure defense issues through the contribution of chain of title assessments. Anyone who has read Clouded Titles knows what my position is in all of this foreclosure mess. I also teach chain of title assessment and quiet title workshops around the country to homeowners and their attorneys who wish to acquire and evaluate my research for their own purposes. I have been doing this since I launched the first version of my book in December of 2010. This report, should you dare to explore it, will certainly enlighten you and you will walk away with many questions. Your questions will probably be extremely valid, more valid than the questions that were posited to me by Sheriff’s Economic Crimes Unit’s detectives in Osceola County when I met with them, along with two of the examination team examiners.

 [CLOUDED TITLES]

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Balch v. LASALLE BANK NA | FL 4DCA- plaintiff must show that the endorsement occurred prior to the inception of the lawsuit… Secondly, the assignment is insufficient to establish standing, as the assignment was executed after the complaint was filed

Balch v. LASALLE BANK NA | FL 4DCA- plaintiff must show that the endorsement occurred prior to the inception of the lawsuit… Secondly, the assignment is insufficient to establish standing, as the assignment was executed after the complaint was filed

 

SHERMAN BALCH and ANNMARIE BALCH, Appellants,

v.

LASALLE BANK N.A., as Trustee for Washington Mutual Mortgage Pass-through Certificates WMART Series 2006-5 Trust, Appellee.

No. 4D14-2057.
District Court of Appeal of Florida, Fourth District.
June 17, 2015.
Sherman Balch and AnnMarie Balch, Palm City, pro se.

Jeffrey T. Kuntz and Thomas H. Loffredo of Gray Robinson, P.A., Fort Lauderdale, and Maureen A. Vitucci and John M. Brennan, Jr., of GrayRobinson, P.A., Tallahassee, for appellee.

STEVENSON, J.

Sherman and AnnMarie Balch (collectively, “Homeowners”) appeal a final judgment of foreclosure entered in favor of LaSalle Bank N.A. (“LaSalle Bank”). We find the trial court erred in finding LaSalle Bank had standing at the time it initiated the foreclosure complaint, and accordingly reverse and remand for further proceedings.

Facts

LaSalle Bank filed its complaint in March of 2008. It sought to foreclose on the mortgage and to re-establish a lost note. LaSalle Bank attached to this complaint a copy of the mortgage and a copy of the note. The note listed American Home Mortgage as the lender and contained no indorsements. Close to three months later, LaSalle Bank filed the original note. The original note contained an undated special indorsement from American Home Mortgage to Washington Mutual Bank.

LaSalle Bank called one witness at trial. The witness worked for JP Morgan Chase Bank, the servicer for Homeowners’ loan. He explained that Homeowners’ loan was part of a pooling and servicing agreement (“PSA”) that came into existence in June of 2006. The PSA listed WaMu Acceptance Corporation as the depositor, Washington Mutual Bank as the servicer, and LaSalle Bank National Association as the trustee for the trust. Relying on the cut-off date for the trust, the witness testified that Homeowners’ loan was transferred into the trust on or around June 29, 2006.

As it pertains to the note, the witness never specified when the special indorsement was placed onto the original note. LaSalle Bank also introduced into evidence a copy of an assignment, dated April 3, 2008, which assigned MERS’ interest in the mortgage and note to LaSalle Bank. MERS was not a party to the PSA.

Homeowners moved for an involuntary dismissal, arguing LaSalle failed to prove standing. The trial court denied the motion and entered final judgment of foreclosure in favor of LaSalle Bank.

Analysis

“We review the sufficiency of the evidence to prove standing to bring a foreclosure action de novo.Lloyd v. Bank of New York Mellon, 160 So. 3d 513, 514 (Fla. 4th DCA 2015). Here, LaSalle Bank did not provide sufficient evidence that it had standing at the time it filed the foreclosure complaint.

First, there was no evidence indicating when the special indorsement in favor of Washington Mutual Bank was placed onto the note. See McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 174 (Fla. 4th DCA 2012) (“Where the plaintiff contends that its standing to foreclose derives from an endorsement of the note, the plaintiff must show that the endorsement occurred prior to the inception of the lawsuit.”). Secondly, the assignment is insufficient to establish standing, as the assignment was executed after the complaint was filed. See Rigby v. Wells Fargo Bank, N.A., 84 So. 3d 1195, 1195-96 (Fla. 4th DCA 2012) (reversing entry of final summary judgment because the bank failed to establish it had standing to foreclose when the evidence showed the assignment was dated one day after the complaint was filed). Finally, evidence that the note was transferred into the PSA prior to the foreclosure action is insufficient by itself to confer standing because there was no evidence that the depositor under the PSA had the intent to transfer any interest to the trustee. See Jelic v. LaSalle Bank, Nat’l Ass’n, 160 So. 3d 127, 130 (Fla. 4th DCA 2015) (reversing a final judgment of foreclosure, in part because there was no evidence that the party transferring the note into a PSA had any intent to transfer an interest to the trustee).

Based on the foregoing, we reverse and remand for entry of an order of involuntary dismissal of the action. See Sosa v. U.S. Bank Nat’l Ass’n, 153 So. 3d 950, 952 (Fla. 4th DCA 2014) (reversing and remanding for entry of an order of involuntary dismissal when the bank failed to provide sufficient evidence of its standing).

Reversed and remanded.

GERBER and LEVINE, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

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BANK OF AMERICA v. DELGADO | FL 3rd DCA – the Bank failed to prove the amount due on the note

BANK OF AMERICA v. DELGADO | FL 3rd DCA – the Bank failed to prove the amount due on the note

District Court of Appeal of Florida,Third District.

BANK OF AMERICA, N.A., etc., Appellant,

v.

Brian D. DELGADO, et al., Appellee.

No. 3D13–910.

Decided: May 6, 2015

Before SHEPHERD, C.J., and EMAS and SCALES, JJ. Liebler, Gonzalez & Portuondo, and Alan Pierce, J. Randolph Liebler, Tricia J. Duthiers, Jeremy Roth and Mary J. Walter, for appellant. Graham Legal, P.A., and H. Dillon Graham, III, for appellee.

In this foreclosure action, Bank of America (“the Bank”) appeals a final judgment entered in favor of the Appellees, Mr. and Mrs. Delgado (“the Borrowers”), on the basis that the Bank failed to prove the amount due on the note.1 The Bank argues that it was thwarted from proving the amount of indebtedness because the trial court improperly excluded the loan payment history from evidence. For the reasons stated below, we agree with the Bank, reverse the final judgment, and remand for a new trial.

I. Factual Background

On July 25, 2005, the Borrowers executed a mortgage and promissory note in the amount of $247,000. On January 13, 2010, the Bank filed a complaint to foreclose on the mortgage. The complaint alleged that the Borrowers defaulted on June 1, 2009, and made no subsequent loan payments.

The matter proceeded to a nonjury trial on March 7, 2013. The trial court received the original note and mortgage into evidence, without objection. The Borrowers objected, however, when the Bank sought to lay a foundation for admission of the loan payment history as a business record.

The Bank called Mary Davis as a witness; Davis is a mortgage resolution associate with the Bank who began working for the Bank in 2012. Prior to trial, Davis reviewed the mortgage, the note, the loan payment history, and the breach letter the Bank sent to the Borrowers in July 2009.

Davis testified that the Bank began servicing the loan in August 2005, when it received the collateral file. According to Davis, pursuant to the Bank’s policies and procedures, the person with the most knowledge of the subject loan payments recorded the loan payment entries in the system at or near the time the payments occurred. Davis explained that this type of loan payment information is kept and maintained in the Bank’s ordinary course of business. Further, Davis testified that she reviewed the loan payment history for the Borrowers’ loan and was able to confirm the accuracy of the payment entries appearing on the proffered loan payment history.

After laying this foundation, the Bank attempted to introduce the loan payment history into evidence. The Borrowers objected on the basis that Davis was not qualified to testify as to the policies and procedures of the Bank dating back to 2005, because Davis did not begin working for the Bank until 2012. The trial court sustained the Borrowers’ objection, and did not allow the payment history into evidence.

The Bank then called Mr. Delgado to the stand. Mr. Delgado admitted that he last made a mortgage payment to the Bank in June of 2009. When asked whether he owed $228,004.26 on the loan, Mr. Delgado answered, “I’m sure it is in that vicinity, I just don’t know exactly.”

At the close of the Bank’s case, the trial court entered final judgment for the Borrowers. The Bank filed the instant appeal.

II. Analysis

A. Elements of the Bank’s Case

Foreclosure plaintiffs must show: (1) an agreement; (2) a default; (3) an acceleration of debt to maturity; and (4) the amount due. Kelsey v. SunTrust Mortg., Inc., 131 So.3d 825, 826 (Fla. 3d DCA 2014) (citing Ernest v. Carter, 368 So.2d 428, 429 (Fla. 2d DCA 1979)). The trial court determined that the Bank had not established the fourth element required to make its prime facie foreclosure case.2

“It is axiomatic that the party seeking foreclosure must present sufficient evidence to prove the amount owed on the note.” Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So.3d 280, 281 (Fla. 2d DCA 2014). Generally, “a foreclosure plaintiff proves the amount of indebtedness through the testimony of a competent witness who can authenticate the mortgagee’s business records and confirm that they accurately reflect the amount owed on the mortgage.” Id .

B. Loan Payment History as a Business Record

Under section 90.803(6), Florida Statutes, business records may be admitted if the proponent of the evidence demonstrates the following through a records custodian or other qualified person:

(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.

Weisenberg v. Deutsche Bank Nat’l Trust Co., 89 So.3d 1111, 1112 (Fla. 4th DCA 2012) (quoting Yisrael v. State, 993 So.2d 952, 956 (Fla.2008)). “While it is not necessary to call the individual who prepared the document, the witness through whom a document is being offered must be able to show each of the requirements for establishing a proper foundation.” Mazine v. M & I Bank, 67 So.3d 1129, 1132 (Fla. 1st DCA 2011).

With regard to the requirements for admitting the loan payment history into evidence, Davis testified:

[O]ur policies and procedures are the person with the most knowledge creates these [loan payment] entries at or near the time that the events [of payment or nonpayment] occur. If someone makes a payment the person with the most knowledge puts the information into our system and that person is supervised and trained. Our policies and procedures require that person to put the information in at or near the time the events occur.

Davis testified that this information is kept and maintained in the ordinary course of business. Additionally, Davis explained, “the Department who handles the payment process inputs the payments that are received and updates the system with those entries.”

Davis reviewed the history of the loan prior to testifying in court. By reviewing the system and database, Davis was able to see all the correspondence regarding the loan. Davis was able to confirm that the entries were made at the time the events occurred because they corresponded with the date stamps of the entries. Davis could not identify any reason to believe the entries in the payment history were inaccurate.

C. Trial Court’s Ruling

When asked whether Davis knew if the Bank’s policies and procedures have changed since 2005, Davis answered, “I do not know.” Since Davis did not begin working for the Bank until 2012, the trial court effectively disqualified Davis as a foundational witness, and determined that the Bank had not met the requirements for admission into evidence of the loan payment history as a business record.3

D. Standard of Review

Generally, appellate courts review a trial court’s ruling on the admissibility of evidence under an abuse of discretion standard. See, e.g., Sas v. Fed. Nat’l Mortg. Ass’n, 112 So.3d 778, 779 (Fla. 2d DCA 2013). However, a “[trial] court’s discretion is limited by the evidence code and applicable case law. A [trial] court’s erroneous interpretation of these authorities is subject to de novo review.” Olesky ex rel. Estate of Olesky v. Stapleton, 123 So.3d 592, 594 (Fla. 2d DCA 2013) (quoting Sottilaro v. Figueroa, 86 So.3d 505, 507 (Fla. 2d DCA 2012), review denied, 103 So.3d 139 (Fla.2012)).

Here, we are called upon to review the trial court’s application of the hearsay rule’s business records exception, i.e., the trial court’s interpretation of the law. Hence, we review the trial court’s interpretation of the law de novo.

E. Our Holding

Contrary to the trial court’s interpretation of the business records exception, the exception does not contain a requirement that the foundational witness be “in the employ of the business to which it relates at the time of its making, so long as he understands the system.” 34 Am.Jur. Proof of Facts 2d 509 (1983) (citing 4 Weinstein’s Evidence ¶ 803(6)[02] )). Although Davis was not “in the employ” of the Bank “at the time” all of the entries were made on the loan payment history, Davis’s testimony showed that she had personal knowledge of, and understood, the Bank’s record-keeping system.

Davis was able to establish: (1) when the records were made; (2) that the information contained in the records was derived from a person with knowledge of such information; (3) that such records were kept in the Bank’s ordinary course of business; and (4) that it was the regular practice of the Bank to make such records. See, e.g., Weisenberg, 89 So.3d at 1112 (finding business records exception satisfied where bank’s witness was a supervisor at bank’s servicing agent with personal knowledge of bank’s internal process for applying loan payments and calculating balances, and who was familiar with bank’s record-keeping system, and knew how payment data was uploaded from bank’s computer system to servicing agent’s system).

III. Conclusion

We thus conclude that Davis’s testimony established the necessary foundation for admitting the loan payment history into evidence as the Bank’s business record. As such, the trial court reversibly erred when it excluded the loan payment history.

Reversed and remanded for a new trial consistent with this opinion.

FOOTNOTES

1. At the conclusion of the Bank’s case, the trial court entered a final judgment for the Borrowers, stating, “[i]f the evidence before the court is not sufficient to sustain the plaintiff’s case, then I have no alternative but to do something different.” Borrowers’ counsel responded, “[i]f the plaintiff rests we ask the court to enter a judgment for the defendant.” The trial court replied, “I’ll do it.”Hence, the trial court’s final judgment was entered consistent with, and pursuant to, Florida Rule of Civil Procedure 1.420(b), and constitutes an involuntary dismissal with prejudice of the Bank’s case.

2. The Bank introduced the original note and mortgage into evidence without objection (element 1). Mr. Delgado admitted on the stand that at some point he stopped making payments (element 2). The Bank accelerated repayment of the loan by filing the complaint (element 3).

3. Borrowers’ counsel: “We object? She’s [Davis] testified that she doesn’t know what the policy was before 2012.” The trial court: “Exactly. Exactly. That’s your problem. That’s your problem right there.”

SCALES, J.

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