District Court of Appeal of Florida, Fifth District.
Opinion filed February 17, 2012.
Marc D. Beaumont, Port Orange, pro se.
Todd A. Armbruster of Moskowitz, Mandell, Salim & Simowitz, P.A., Fort Lauderdale, for Appellee.
PER CURIAM.
Marc D. Beaumont appeals a final summary judgment entered by the trial court on a claim to foreclose a residential mortgage and recover on a promissory note executed in connection with the mortgage. We reverse.
The final summary judgment in this case was entered in favor of Novastar Home Mortgage, Inc. (“Novastar”), a nonparty to the suit because of its prior withdrawal from the case. It is fundamental error to enter judgment in favor of a nonparty. Beseau v. Bhalani, 904 So. 2d 641 (Fla. 5th DCA 2005); Rustom v. Sparling, 685 So. 2d 90 (Fla. 4th DCA 1997). The defect, which is jurisdictional, can be raised by this Court sua sponte. Dep’t of Envtl. Prot. v. Garcia, 36 Fla. L. Weekly D1664b (Fla. 3d DCA Aug. 3, 2011).
The judgment would also have to be reversed even if entered in favor of appellee, The Bank of New York Mellon, as Successor Trustee Under Novastar Mortgage Funding Trust 2005-3 (“Mellon”). Mellon sought in the complaint to reestablish the note and recover on it. See § 673.3091, Fla. Stat. (2010). This required Mellon to show it was entitled to enforce the note when it lost the instrument, or that it directly or indirectly acquired ownership from a person who was entitled to enforce the instrument when loss of possession occurred. § 673.3091(1), Fla. Stat.[1] Mellon failed to prove who lost the note and when it was lost, offered no proof of anyone’s right to enforce the note when it was lost, and produced no evidence of ownership, due to the transfer from Novastar to Mellon.[2] See Duke v. HSBC Mortg. Servs., LLC, 36 Fla. L. Weekly D2569a (Fla. 4th DCA Nov. 23, 2011). The trial court was also required to address the issue of providing adequate protection to Beaumont against loss that might occur by reason of a claim by another person to enforce the instrument. § 673.3091(2), Fla. Stat. If Mellon has, in fact, found the note, it must produce it prior to judgment. Gee v. U.S. Bank Nat’l Ass’n, 72 So. 3d 211, 212 (Fla. 5th DCA 2011); Perry v. Fairbanks Capital Corp., 888 So. 2d 725, 726 (Fla. 5th DCA 2004); see also Feltus v. U.S. Bank Nat’l Ass’n, 37 Fla. L. Weekly D253a (Fla. 2d DCA Jan. 27, 2012).
Mellon also argues that Beaumont has waived the lack of “standing” to enforce the note because of the failure to assert this as an affirmative defense. Generally, the failure to raise standing as an affirmative defense operates as a waiver. Kissman v. Panizzi, 891 So. 2d 1147, 1150 (Fla. 4th DCA 2005) (holding lack of standing is an affirmative defense that must be raised by defendant and failure to raise it generally results in waiver). Standing involves the right to enforce the note and must exist when suit is filed. See, e.g., McLean v. JP Morgan Chase Bank Nat’l Ass’n, 36 Fla. L. Weekly D2728a (Fla. 4th DCA Dec. 14, 2011); Taylor v. Deutsche Bank Nat’l Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010). There is no evidence showing that Beaumont was on notice prior to the time his answer was filed that ownership of the note had been transferred from Novastar to Mellon. In fact, the claimed transfer, alleged to have occurred on the day suit was filed, was either concealed by Novastar for more than three years while it continued to pursue the action, or Novastar backdated the assignment it finally produced on July 23, 2010, as justification for substituting Mellon as plaintiff. Under these circumstances, Beaumont may raise lack of standing when suit was filed as a defense. See Boston Hides & Furs, Ltd. v. Sumitomo Bank, Ltd., 870 F. Supp. 1153, 1161 n.6 (D. Mass. 1994) (holding banks were not precluded from raising affirmative defense of fraud for first time on summary judgment in action alleging wrongful dishonor of letter of credit, where banks did not discover information suggesting fraud until almost one year of discovery). Furthermore, Mellon must prove its right to enforce the note as of the time the summary judgment is entered, even if Beaumont had waived the right to challenge the bank’s standing as of the date suit was filed. Venture Holdings & Acquis. Group, LLC v. A.I.M. Funding Group, LLC, 75 So. 3d 773 (Fla. 4th DCA 2011). Its failure to do so would require this Court to reverse the summary judgment entered on the note and mortgage, even if judgment had been entered in favor of Mellon.
REVERSED.
TORPY, PALMER and COHEN, JJ., concur.
[1] A negotiable instrument is enforceable by: (1) the holder of the instrument, (2) a nonholder in possession who has the rights of a holder, or (3) a person not in possession of the instrument who is entitled to reestablish a lost, destroyed or stolen instrument pursuant to section 673.3091, or who has paid or accepted a draft by mistake as described in section 673.4181. § 673.3011, Fla. Stat.
[2] The record contains a copy of an assignment of the note from Novastar to Mellon, but the document was never offered into “evidence,” by being attached to an affidavit for purposes of authentification. As such, it is not competent evidence of the assignment and cannot be considered in ruling on Mellon’s motion. See, e.g., Morrison v. U.S. Bank, N.A., 66 So. 3d 387, 387 (Fla. 5th DCA 2011) (reversing summary judgment of foreclosure where defendant asserted she had not received a notice of default as required by mortgage, and bank had simply filed an unauthenticated notice letter).
UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION
In re MARIA RENEE BALDERRAMA Debtor.
CARLA P. MUSSELMAN, TRUSTEE Plaintiff,
vs.
DEUTSCHE BANK TRSUTE COMPANY AMERICAS, in trust for Residential Accredit Loans, Inc. Mortgage Asset- Backed Pass-Through Certificates, Series 2007-QH5, Defendant.
MEMORANDUM OPINION PARTIALLY GRANTING AND PARTIALLY DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS MOTION FOR SUMMARY JUDGMENT
EXCERPT:
In response, the trustee filed her own cross motion for summary judgment arguing the various documents Deutsche has provided to support its position, including three different versions of the note and two versions of the allonge, were ineffective to transfer any interest to Deutsche and evidence Deutsche‘s bad faith in purporting to own the note.17 The trustee‘s argument primarily is based on the second allonge provided by Deutsche upon the Court‘s order compelling discovery. The second allonge includes an endorsement from RFC to Deutsche that did not exist in the first allonge, and, according to the trustee, Deutsche caused this endorsement to be made fraudulently to meet the needs of litigation.18 The trustee urges the Court to find Deutsche has not adequately explained the discrepancies between the two allonges, has not met its burden to prove it is the legitimate owner of the note, and title to the Property should vest in the trustee.
[…]
Neither version of the allonge, however, includes dates of the alleged transfers as stated by Ms. Faber. Even assuming she had the authority to endorse the note to Deutsche, Ms. Faber does not explain why RFC initially failed to produce the second allonge with the RFC endorsement in its motion to lift stay, even though it allegedly existed at that time. These ?holes? present substantial questions of fact as to Deutsche‘s good faith and the second allonge‘s authenticity. The Court cannot avoid suspecting that the second allonge indeed was created solely to rebut the trustee‘s assertions in this litigation and did not previously exist. If so, the Court suggests Deutsche and Ms. Faber individually consider the possible consequences of propounding potentially false evidence and perjured testimony to the Court.
A valentine from Chief United States Bankruptcy Judge Karen S. Jennemann on Feburary 14, 2012:
The Court cannot avoid suspecting that the second allonge indeed was created solely to rebut the trustee‘s assertions in this litigation and did not previously exist. If so, the Court suggests Deutsche and Ms. Faber individually consider the possible consequences of propounding potentially false evidence and perjured testimony to the Court. Muselman v. Deutsche Bank, U.S. Bankruptcy Court, Middle District of Florida, Orlando Division, Case No. 6:10-bk-07828-KSJ. Document 67, page 8.
As gratifying as this recognition of fraudulent documents may be, it does raise the question: just what are the consequences of propounding false evidence and perjured testimony to the Court. With the exception of a few judges and a few decisions, there have been no consequences whatsoever.
In re Maria Renee BALDERRAMA, Debtor. Carla P. Musselman, as Chapter 7 Trustee, Plaintiff,
v.
Deutsche Bank Trust Company Americas, in trust for Residential Accredit Loans, Inc. Mortgage Asset-Backed Pass-Through Certificates, Series 2007-QH5, Defendant.
United States Bankruptcy Court, M.D. Florida, Orlando Division.
May 4, 2011.
186*186 Seldon J. Childers, Childers Law LLC, Gainesville, FL, for Plaintiff.
Daniel A. Miller, Broad and Cassel, West Palm Beach, FL, for Defendant.
MEMORANDUM OPINION PARTIALLY GRANTING AND PARTIALLY DENYING TRUSTEE’S AMENDED AND RENEWED MOTION TO COMPEL PRODUCTION OF DEUTSCHE BANK
KAREN S. JENNEMANN, Bankruptcy Judge.
In this adversary proceeding the Chapter 7 trustee, Carla Musselman, seeks to quiet title and to value at zero dollars defendant Deutsche Bank’s alleged secured interest in debtor Maria Balderrama’s non-homestead real property. As part of discovery, the trustee served interrogatories and document production requests seeking information about the bank’s purchase of the promissory note and mortgage on the disputed property.[1] Deutsche Bank resists producing any discovery related to the purchase history of the note and the chain of title of the mortgage arguing that, under Florida law, it has established its secured interest in the property merely by alleging it holds the original promissory note endorsed specially in its favor.[2] The trustee disputes Deutsche Bank’s characterization of Florida law and notes that neither the Court nor the trustee has seen the original endorsed note. She now requests the Court 187*187 compel the bank to produce the requested information.[3]
Although Deutsche Bank is correct that under Florida law if it holds a validly endorsed original note it may be deemed equitably also to own the mortgage, the bank first must establish its actual possession of the original note. As such, the trustee’s discovery requests pertaining to Deutsche Bank’s status as holder of the note, including the authenticity and authority of the signatures endorsing the note, are relevant. All other requests, including any requests for information regarding the prior ownership history of the note or the mortgage, are irrelevant and overbroad under Florida law. Accordingly, the Court will grant in part and deny in part the trustee’s motion and direct Deutsche Bank to respond to interrogatory number 5 and document request numbers 7 and 30 on or before June 3, 2011. The trustee’s motion to compel otherwise is denied, and the objections raised by the bank are sustained as to all other interrogatories and production requests.
On September 28, 2010, the trustee initiated this adversary proceeding to value Aurora Loan Services’ secured claim at $0.00 pursuant to § 506(a) of the Bankruptcy Code[4] and to quiet title in property owned by the debtor located in Rockledge, Florida. Aurora is the servicing agent on the mortgage, and it previously has moved for relief from stay to foreclose on the mortgage,[5] which this Court denied without prejudice for lack of evidentiary support.[6] On October 18, 2010, the trustee served her first set of interrogatories and first requests for production of documents on Aurora. On November 17, 2010, Aurora filed its objections to the trustee’s discovery requests,[7] objecting to certain requests seeking information about the history of the ownership of the subject note and mortgage. Aurora’s objections are based on its position that under Florida law the holder of a promissory note may equitably own and enforce a mortgage, even without a written assignment of the mortgage, and, accordingly, that the trustee’s requests seeking information regarding chain of ownership are irrelevant and overbroad.
On December 16, 2010, at a pretrial conference before this Court, the parties discussed Aurora’s objections to the trustee’s discovery, and the trustee made an ore tenus motion to amend the complaint to name Deutsche Bank as the real defendant in interest as the alleged holder of the original promissory note, which the Court granted.[8] At the hearing, the trustee also agreed to file an amended motion to compel Deutsche Bank to respond to the discovery requests served on Aurora, and Deutsche Bank has agreed for purposes of resolving the amended motion to compel and its/Aurora’s objections to the trustee’s discovery that it will step into Aurora’s position and stipulate for convenience that the discovery served on Aurora properly was served on it.[9]
188*188 Accordingly, on January 4, 2011, the trustee amended her complaint to change the name of the defendant from Aurora to Deutsche Bank Trust Company Americas, in trust for Residential Accredit Loans, Inc. Mortgage Asset-Backed Pass-Through Certificates, Series 2007-QH5.[10] On January 18, 2011, Deutsche Bank filed its answer to the amended complaint.[11] On January 28, 2011, the trustee filed her amended motion to compel defendant’s response to trustee’s first interrogatories and request for production of documents and an associated memorandum of law.[12] On February 25, 2011, Deutsche Bank filed its memorandum in response to the trustee’s motion to compel.[13]
The trustee’s amended complaint argues Deutsche Bank cannot provide sufficient evidence of its purchase of either the note or the mortgage to assert a secured claim to the disputed property. The trustee now seeks to compel production of information from Deutsche Bank regarding its purchase of the underlying debt and mortgage, and especially whether the note and mortgage were properly assigned.
In response to the motion to compel, Deutsche Bank reiterates Aurora’s previous position, arguing certain interrogatories and production requests regarding chain of title are irrelevant and overbroad because, under Florida law, it need only show it holds the original note evidencing its purchase of the debt underlying the mortgage for it to equitably own the mortgage, too.[14] Essentially, the bank argues that, in Florida, a mortgage travels equitably with the underlying debt in the absence of a formal written assignment of the mortgage. Because the bank allegedly holds the note specially endorsed in its favor, Deutsche Bank maintains it already has established its security interest in the property.
The Court largely agrees with Deutsche Bank’s legal argument. Under applicable Florida law,[15] a mortgage, even without a written assignment, may travel equitably to the holder of the underlying debt, i.e., to the entity holding the original, properly executed and endorsed promissory note. Thus, if Deutsche Bank establishes it is the holder of a validly endorsed note, it, in turn, will establish its equitable ownership of the mortgage securing the note. This general rule of Florida law (the “General Rule”) was stated best in 1938 by the Florida Supreme Court in the seminal case Johns v. Gillian, as follows:
… a mortgage is but an incident to the debt, the payment of which it secures, and its ownership follows the assignment of the debt. If the note or other debt secured by a mortgage be transferred without any formal assignment of the mortgage, or even a delivery of it, the mortgage in equity passes as an incident to the debt, unless there be some plain and clear agreement to the contrary, if that be the intention of the parties.[16]189*189Johns goes on to say that “[t]he transfer of the note or obligation evidencing the debt… operates as an assignment of the mortgage securing the debt, and it is not necessary that the mortgage papers be transferred, nor, in order that the beneficial interest shall pass, that a written assignment be made.”[17]Johns concluded that “if there had been no written assignment, Gillian would be entitled to foreclose in equity upon proof of his purchase of the debt.”[18] Finding that Gillian had sufficiently proven his purchase of the debt through his in-court testimony, the court held that Gillian was the “equitable owner of the mortgage” entitled to foreclose, even though no formal assignment of the mortgage was executed.
The General Rule is alive and well in Florida.[19] In Riggs v. Aurora Loan Services, LLC,[20] Florida’s Fourth District Court of Appeals held Aurora was entitled to summary judgment in a foreclosure action when it produced the original mortgage, a promissory note endorsed in blank, and affidavits that stated Aurora was the proper holder of the note and mortgage. Aurora did not submit a written assignment of the mortgage, and Aurora was not the original mortgagee. Nonetheless, the court found Aurora was the holder of the note entitled to enforce its terms under Fla. Stat. § 673.3011, and thus could foreclose on the mortgage, because it provided sufficient evidence of its purchase of the debt underlying the mortgage: possession of the original note endorsed in blank.[21]
Likewise, in another decision, the Fourth District Court of Appeals reversed and remanded a dismissal of a foreclosure action because the lower court failed to consider application of the General Rule.[22] In that case, WM Specialty filed a foreclosure complaint on December 3, 2002, and later, in response to a motion to dismiss, filed an assignment of mortgage dated January 3, 2003. The assignment, however, reflected that the mortgage was transferred to WM Specialty prior to the complaint date on November 25, 2002. The lower court found the complaint was void ab initio because WM Specialty did not hold the note and mortgage as of the date of filing the complaint. In reversing the lower court, the appellate court instructed the lower court to consider on remand whether WM Specialty acquired an equitable interest in the mortgage before execution of the written assignment by virtue of the prior transfer of the note and mortgage to WM Specialty. The court quoted Johns favorably at length for the proposition that “the mortgage in equity passes as an incident to the debt,” and indicated the lower court had failed to consider this General Rule.
In reaching its conclusion, WM Specialty Mortgage distinguished the facts before it from Jeff-Ray Corp. v. Jacobson,[23] another Fourth District Court of Appeals case the Chapter 7 trustee relies on in attempting to establish an exception to the General Rule. Jeff-Ray held that a trial court erred in not dismissing a foreclosure complaint for failure to state a cause of 190*190 action because it relied upon an assignment that was not in existence when the complaint was filed. There, the complaint was filed on January 4, 1988, supported by an alleged assignment of mortgage dated in 1986, which was not attached to the complaint. When the plaintiff later produced the assignment, it was dated April 18, 1988, four months after the complaint was filed. The plaintiff’s actions therefore led the appellate court to conclude that plaintiff had lied to the court by stating it held an assignment of mortgage from 1986 when in fact it held no assignment at all. Moreover, the court in Jeff-Ray did not discuss the General Rule or consider whether equitable transfer of the mortgage occurred prior to filing the foreclosure complaint because the plaintiff had not alleged any facts that might have indicated such transfer occurred (e.g. purchase of the underlying debt or any indication the plaintiff held possession of the mortgage in 1986).
These recent Florida appellate court cases all support Deutsche Bank’s position that proof of ownership of the debt underlying a mortgage is sufficient under Florida law to equitably convey the mortgage to the debt holder. Moreover, these cases suggest a note specifically endorsed to a foreclosure plaintiff is sufficient proof of purchase of the debt underlying a mortgage to equitably convey such mortgage. Indeed, Riggs indicates the holder of a note endorsed in blank may hold an equitable interest in the mortgage securing the note.[24]
The trustee disputes this legal analysis and, in response, argues that an exception to the General Rule applies.[25] She interprets Johns[26] to create an exception to the General Rule that if a foreclosure plaintiff lacks a written assignment of the mortgage he must prove his purchase of the debt beyond merely establishing he is the holder of the note underlying the mortgage. The trustee relies on this sentence: “Or if there had been no written assignment, Gillian would be entitled to foreclose in equity upon proof of his purchase of the debt.” Noticeably absent from this sentence and the Johns decision, however, is any statement that a creditor’s proof of its status as holder of a promissory note is not proof of purchase of the debt. The trial court in Johns required testimony of Gillian to establish he purchased the mortgage debt because there were factual issues raised concerning the timing of the purchase of the note.[27] But nothing in Johns or the more recent Florida appellate court cases can credibly be construed as establishing an exception to the General Rule that would require a note holder to prove its purchase of the debt beyond simply establishing that it is indeed the note holder. Proof of a creditor’s status as holder of a note underlying a 191*191 mortgage is proof of purchase of the debt, and the previous ownership history of the note and mortgage is irrelevant.
The trustee’s argument also relies on a decision from the Massachusetts Supreme Court, applying Massachusetts law, to argue that Florida state courts require more than the original note to convey equitable title to a mortgage.[28] Because Massachusetts law treats the equitable assignment of mortgages very differently than Florida law, a Massachusetts court’s interpretation of the law of their state is irrelevant to this proceeding. Ibanez sums up well how Massachusetts law deals with equitable transfer of mortgages as follows:
In Massachusetts, where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage. [] Rather the holder of the mortgage holds the mortgage in trust for the purchaser of the note, who has an equitable right to obtain an assignment of the mortgage, which may be accomplished by filing an action in court and obtaining an equitable order of assignment.[29]
These procedures are quite different than Florida’s procedures and its General Rule. Unlike Massachusetts, Florida law does allow the assignment of a note to carry with it the implicit assignment of the mortgage. Indeed, Ibanez distinguishes Massachusetts law from such other states’ laws that provide for equitable assignment of a mortgage.[30] Massachusetts law simply differs from Florida law and, as such, cannot create any type of exception to the still valid Florida General Rule. A creditor who holds a validly endorsed promissory note is deemed to hold an equitable lien arising from the related mortgage, without any requirement to have a separate valid assignment of the mortgage.[31]
Deutsche Bank, however, still has not proven to either the trustee or the Court that it holds a validly endorsed promissory note evidencing its purchase of the debt on the disputed property. Therefore, Deutsche Bank cannot rely on the General Rule to avoid responding to the trustee’s discovery requests pertaining to the authenticity of the note. The trustee has raised in her complaint doubts concerning the authenticity and effectiveness of the endorsements on the allonge to the note. The copies of the note and mortgage attached as an exhibit to its response therefore are insufficient to establish Deutsche Bank’s status as holder of the note.
Because the trustee has raised issues concerning the authenticity of and authority to endorse the note and allonge, the Court will overrule Deutsche Bank’s objection and compel its response to interrogatory number 5, seeking the names and addresses of “each person whose signature appears on any endorsements on the Note or any allonge.” The Court similarly will overrule Deutsche Bank’s objections and 192*192 compel its response to requests for production numbers 7 and 30. These requests seek documents and information related to Deutsche Bank’s purchase of the note and the authority of the individual who signed the endorsement. The inquiries are relevant to whether Deutsche Bank is the holder of a properly endorsed note.
The Court will sustain Deutsche Bank’s objections to every other interrogatory[32] and document production request,[33] finding such requests are irrelevant and overbroad in light of the General Rule. In particular, information on the chain of title of the mortgage, which parties have ever held an interest in the note or mortgage, and the electronic records related to this mortgage is irrelevant to the question of whether Deutsche Bank now holds the original validly endorsed note.
Accordingly, the Court will partially grant and partially deny the trustee’s motion to compel and direct defendant Deutsche Bank to respond to certain of the trustee’s first set of interrogatories and document production requests on or before June 3, 2011, as specified above. A further pretrial conference is set in this adversary proceeding for 2:00 p.m. on June 22, 2011.
A separate order consistent with this memorandum opinion will be entered simultaneously.
DONE AND ORDERED.
[1] As discussed below, the trustee’s discovery requests actually were served on Deutsche Bank’s predecessor to this adversary proceeding, Aurora Loan Services. Deutsche Bank has stipulated for purposes of this motion to compel that such requests were served on it, too. The Court similarly assumes that Deutsche Bank is authorized to prosecute the objections to the trustee’s discovery requests previously articulated by Aurora Loan Services and, for purposes of this motion, the interest of Deutsche Bank and Aurora Loan Services are identical.
[2] Defendant’s Response to Trustee’s Amended and Renewed Motion to Compel Defendant’s Response to Trustee’s First Interrogatories and Trustee’s First Request for Production of Documents and Incorporated Memorandum of Law (Doc. No. 25). A list of defendant’s specific objections to particular interrogatories and production requests is attached to its Response as Exhibit B.
[3] Trustee’s Amended and Renewed Motion to Compel Defendant’s Response to Trustee’s First Interrogatories and Trustee’s First Request for Production of Documents (Doc. No. 23).
[4] All references to the Bankruptcy Code are to Title 11 of the United States Code.
[5] Doc. No. 22 in the Main Case.
[6] Doc. No. 36 in the Main Case.
[7] Doc. Nos. 7, 8.
[8] Doc. No. 15.
[9] Fn. 4 of Defendant’s Response (Doc. No. 25). Deutsche Bank has adopted Aurora’s objections by incorporating them as Exhibit B to its Response.
[10] Doc. No. 17.
[11] Doc. No. 19.
[12] Doc. Nos. 23, 24.
[13] Doc. No. 25.
[14] Doc. No. 25 and Ex. B thereto set forth the bank’s specific objections.
[15] Paragraph 16 of the copy of the mortgage attached as Exhibit A to Defendant’s Response (Doc. No. 25) states the applicable law is the “law in which the property is located.” The property is located in Rockledge, Florida, and neither party disputes that Florida law applies.
[27] Specifically, one of the main issues in Johns was whether a possibly dissolved corporation properly transferred its ownership of a mortgage. Because factual issues arose as to the timing of the corporation’s assignment of the mortgage, the purported purchaser of the note and mortgage testified in court as to his purchase of the debt. Johns makes no mention of the lack of a written assignment of the mortgage as the reason for the purported note holder’s testimony. The trustee’s interpretation of Johns as establishing a requirement under Florida law that without a written assignment of mortgage a purported note holder must go beyond proof of its status as note holder to establish the purchase of the debt, including chain of title and the entire ownership history of the note, therefore is strained and unsupported by the facts of the case.
[30] Id. (citing Barnes v. Boardman, 149 Mass. 106, 114, 21 N.E. 308 (1889) and quoting within the citation “In some jurisdictions it is held that the mere transfer of the debt, without any assignment or even mention of the mortgage, carries the mortgage with it, so as to enable the assignee to assert his title in an action at law … This doctrine has not prevailed in Massachusetts….”).
[31] The trustee also argues the Florida U.C.C. has abolished the General Rule. This proposition has no support in either the Florida U.C.C. or, as demonstrated by the recent Fourth D.C.A. decisions discussed above, in Florida case law.
[32] In particular, the objections are sustained as to interrogatory numbers: 1, 2, 3, 8, 9, 10, 13, 16, 17.
[33] In particular, the objections are sustained as to requests for production numbers: 8, 9, 10, 11, 17, 18, 19, 20, 22, 23.
The predecessor to this section dates back to 1993 and, in short, it effectively provided that a show cause hearing could be had for the benefit of the creditor for the purpose of determining whether the debtor could be forced to pay rent as a condition to maintaining its defense in a foreclosure suit. A couple of bright attorneys challenged the statute as being unconstitutional on the grounds that it was a denial of procedural due process and that it unconstitutionally allowed the legislature to prescribe procedure which is an area reserved by the Constitution to the courts, thereby violating the separation of powers provision. (The version of the statute they attacked is attached above.) The third DCA bought into the argument, but the Supreme Court reversed while having no problem in concluding that since the procedural aspects of the statute were directly intertwined to its remedial purpose, there was no separation of powers violation. (See Caple v. Tuttle). Based upon the strong negative case law concerning this issue, there is almost no chance of the defense bar likely winning a separation of powers argument. The supreme court also dismissed the procedural due process arguments for reasons which are not that germane to the pending legislation.
Nevertheless, while we thought it might be worth speaking to the bright lawyers who initially prevailed in the 3rd DCA; one attorney is now a sitting judge on the 3rd DCA and out of bounds for purposes of discussion, the other, currently employed by Grey-Robinson.
Which still leaves us with the question does the procedure provided by the pending legislation render it unconstitutional as a violation of procedural due process. For those not familiar with the body of procedural due process law, the devil is always in the details. First of all well over 99% of the law in this area involves state action where the government; be it Federal, State or local is one of the litigants. The courts allow much wider latitude to the conduct of private parties so we start with a very uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process when it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence.
However, we do think the facts of the foreclosure crisis coupled with some of the language available concerning procedural due process keeps us in the ballgame.
Subject:Draft to Start Public Awareness – Position Statement Bullet Points and Stats
There are at least 5 legislators with a solid background in real estate transactional work. Most Legislators and the Public think: 1) they have time to wait for a more consumer friendly bill before they have to take action and 2) they think that if these houses get back on the market then the market will turn around. They are wrong.
During the course of the session, those legislators with a real estate background should be extremely amenable to persuasive arguments on title integrity being totally undermined by a judicial process which has minimal concern for ferreting out the truth. They need to share their heightened awareness with their colleagues.
The Bill is past the point of making it more consumer friendly. In light of the evidence that has surfaced regarding foreclosure abuses by banks, robo-signing, securitization, fraud (in the inducement too) our legislature should not even consider such a bill. While the public in general feels that there are a lot of people milking the system and living two years or more for free, it is not because of the consumer, but the bank’s conduct.
The proposed legislation is bad for the common good.
As we see it:
· If the Banks and HOAs get everything they wanted from the Legislature this spring there would be economic chaos, because the real estate markets would be flooded with more properties, driving prices down another 25% or more, thereby driving tax rolls way down and bankrupting local governments;
· FACT: 95% of the foreclosure cases are not contested;
· FACT: Yet, it still takes over 600 days for the average foreclosure case to wind its way through the court system;
· The reality demonstrates that banks are the ones who numerically and statistically are the ones most responsible for the slowness in which foreclosure cases move through the system, and the legislation is completely unnecessary;
· The process is already in place, if they followed it, they could have a foreclosure done in 75 -90 days;
· Wholesaling our constitutional rights is not the answer; this creates a summary proceeding, it’s totally unnecessary if the procedures already in place were used properly;
· The procedure provided by the pending legislation makes it unconstitutional as a violation of procedural due process;
· Unfortunately, well over 99% of the law in the area of procedural due process involves state action where the government; be it Federal, State or local is one of the litigants. The courts allow much wider latitude to the conduct of private parties so homeowners start off with an uphill battle. Very rarely have the courts concluded that private actors have not been provided with procedural due process as long as it has been demonstrated that the allegedly aggrieved party was given notice of the hearing and the opportunity to present evidence;
· The facts of the foreclosure crisis, robo-signing, securitization, servicing problems, and fraud, coupled with some of the language available concerning procedural due process keep consumers in the ballgame;
· Every case currently being litigated is under assault with this legislation;
TWO KEY FACTORS IN THE PENDING LEGISLATION THAT CONSUMERS SHOULD BE OUTRAGED AT:
· Section 7 of the legislation provides:
Section 7. The amendments to ss. 702.10, Florida Statutes, and the creation of s. 702.13, Florida Statutes, are remedial in nature and shall apply to causes of action pending on the effective date of this act. Sections 702.11 and 702.12, Florida Statutes, created by this act, apply to cases filed on or after July 1, 2012.
· Make no mistake about it paragraph (1)(a)5 is the dagger. It provides:
State that, if any defendant files defenses by a motion, a verified or sworn answer, affidavits, or other papers or appears personally or by way of an attorney at the time of the hearing, the hearing time shall be used to hear and consider the defendant’s motion, answer, affidavits, other papers, and other evidence and argument as may be presented by any defendant or any defendant’s counsel, and the court shall then make a determination as to whether a preponderance of the evidence and the arguments presented support entry of a final judgment of foreclosure, and if so, the court shall enter a final judgment of foreclosure ordering the clerk of the court to conduct a foreclosure sale.
STATISTICS OF BANK OWNED HOMES – as of January 28, 2012 by Lynn Szymoniak, Esq. on Fraud Digest – Evidence the banks owning more properties is not changing anything
· Home ownership in Florida’s 33 counties with population of 100,000 or greater as of January 24, 2012 is partially set forth here. The 34 counties with populations under 100,000 have a combined population of 1,278,080, approximately the population of Hillsborough County. The home ownership of Hillsborough has been used to approximate the ownership in the 34 counties, you can find the stat on each county at www.frauddigest.com
· FLORIDA HOMES OWNED BY 8 LARGEST BANKS: 22,112
· FLORIDA HOMES OWNED BY FANNIE & FREDDIE: 7,170
· FL HOMES OWNED BY BANK OF AMERICA: 5,143
· FL HOMES OWNED BY WELLS FARGO: 4,727
· FL HOMES OWNED BY DEUTSCHE BANK: 3,114
· FL HOMES OWNED BY BANK OF NEW YORK: 2,855
· In January, 2012, in Palm Beach County, Florida, for example, 11 banks, FANNIE and FREDDIE and one mortgage servicer were the biggest homeowners, with 2,907 homes owned in total. Palm Beach County is the third largest county, by population, in Florida.
· The banks and servicer owned 2,284 homes; FANNIE & FREDDIE owned 623 homes.
· Three of the banks, Bank of America, Wells Fargo and Deutsche Bank, owned more homes than FANNIE.
· Wells Fargo (including Wachovia) was the largest homeowner, owning 551 homes.
· Bank of America and Deutsche Bank were close second and third largest, owning 496 homes and 454 homes, respectively. (The Bank of America total represents homes owned by Bank of America, BAC Home Loans Servicing and Countrywide.)
· FANNIE owned 441 homes; FREDDIE owned 182 homes.
· 1 – MIAMI-DADE COUNTY (pop. 2,496,435) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 650 BANK OF NEW YORK: 367 CHASE: 254 CITIBANK: 222 DEUTSCHE BANK: 676 FANNIE: 515 FREDDIE: 213 HSBC: 324 U.S. BANK: 121 WELLS FARGO: 579 BANKS: 3,193/F & F: 728
· 2 – BROWARD COUNTY (pop. 1,748,066) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 624 BANK OF NEW YORK: 479 CHASE: 157 CITIBANK: 99 DEUTSCHE BANK: 445 FANNIE: 712 FREDDIE: 188 HSBC: 205 U.S. BANK: 489 WELLS FARGO: 493 BANKS: 2,991/F & F: 900
· 3 – PALM BEACH COUNTY (pop. 1,320,134) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 497 BANK OF NEW YORK: 338 CHASE: 180 CITIBANK: 111 DEUTSCHE BANK: 454 FANNIE: 441 FREDDIE: 182 HSBC: 175 U.S. BANK: 196 WELLS FARGO: 551 BANKS: 2,502/F & F: 623
· 4 – HILLSBOROUGH COUNTY (pop: 1,229,226) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 220 BANK OF NEW YORK: 116 CHASE: 40 CITIBANK: 30 DEUTSCHE BANK: 152 FANNIE: 265 FREDDIE: 83 HSBC: 84 U.S. BANK: 138 WELLS FARGO: 197 BANKS: 977/F & F: 348
· 5 – ORANGE COUNTY (pop. 1,145,956) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 278 BANK OF NEW YORK: 31 CHASE: 102 CITIBANK: 49 DEUTSCHE BANK: 130 FANNIE: 500 FREDDIE: 126 HSBC: 83 U.S. BANK: 120 WELLS FARGO: 216 BANKS: 1,009/F & F: 626
· 6 – PINELLAS COUNTY (pop. 916,542) HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE
o BANK OF AMERICA: 166 BANK OF NEW YORK: 99 CHASE: 16 CITIBANK: 28 DEUTSCHE BANK: 113 FANNIE: 47 FREDDIE: 0 HSBC: 40 U.S. BANK: 143 WELLS FARGO: 181 BANKS: 786/F & F: 47
· Bank of New York, the trustee for hundreds of Countrywide trusts, owned 338 homes.
· U.S. Bank, the trustee for many Bear Stearns trusts, owned 196 homes
· HSBC bank, the trustee for almost all of the Deutsche Bank Securities trusts, owned 175 homes.
· JP Morgan Chase, including the homes owned by Chase Mortgage, and the Chase subsidiaries, Homesales, Inc. and Homesales of Delaware, Inc., owned a relatively low 174 homes.
· Aurora Loan Services, keeper of most of the Lehman Brothers loans, was in 10th place among the large homeowners, with 149 homes.
· Citibank, including Citimortgage, was the only other bank owning over 100 homes, with 111 homes.
· Suntrust owned 82 homes; IndyMac/OneWest owned 54 homes; and GMAC owned 31 homes.
An appeals court has denied Attorney General Pam Bondi‘s request to allow the state Supreme Court to review a ruling she says limits her ability to fight foreclosure fraud. Because of this decision, seven pending cases are now threatened, Bondi said Thursday.
In December, the state’s 4th District Court of Appeals ruled that Bondi does not have the authority to investigate a law firm for alleged fraud under the Florida Deceptive and Unfair Trade Practices Act because attorneys’ work on behalf of lenders did not constitute trade or commerce. She asked the court to certify that its decision in the Law Offices of David Stern, P.A. v. State of Florida case passes upon a question of great public importance so that she could appeal to the Supreme Court.
MADIGAN FILES SUIT OVER FAULTY MORTGAGE ASSIGNMENTS FILED WITH COUNTY RECORDERS
Attorney General Alleges Faulty Practices in Foreclosing on
Homeowners in Crisis
Chicago — Attorney General Lisa Madigan today filed a lawsuit against Nationwide Title Clearing for filing faulty documents with Illinois county recorders. Nationwide Title Cleaning Inc. (NTC) is a Florida-based company that prepares documents for mortgage servicers to use against borrowers who are in default, foreclosure or bankruptcy.
“The practices that NTC used were a key contributor to the mortgage crisis by undermining the integrity and accuracy of the mortgage servicing and foreclosure process,” Attorney General Madigan said.
NTC provides a range of mortgage loan services to eight of the top 10 lenders and mortgage servicers in the country. NTC specializes in creating, processing and recording mortgage assignments, which are often used for a lender to foreclose on a borrower.
The lawsuit, filed in Cook County Circuit Court, alleges numerous violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act. Madigan is asking the court to require NTC to review and correct all documents it unlawfully created and recorded in Illinois, and pay back all revenues, profits and gains achieved in whole or in part due to unlawful practices. The suit also asks the court to impose civil penalties against the company.
The Honorable Bill Schuette Attorney General of Michigan
Mr. Schuette –
I have the utmost respect for you and your office, and I wish to commend your hard work on the recent mortgage robo-signing crisis. The challenges we have faced in Michigan concerning property fraud have been unlike anything we have ever seen before, and you have been actively engaged in this fight with myself and the other Michigan Registers of Deeds.
As you know, the deadline for Michigan to sign on to the 50-state mortgage fraud settlement is February 3rd. I recognize that this is a difficult decision, and that there are many factors to consider.
I am writing to ask that you stand firm, and refuse to add Michigan to any settlement that would give criminal immunity to the defendants. Our ongoing investigations have demonstrated that the major banks in this settlement, and their hired document mills, were engaged in the practice of robo-signing. Hundreds of residents here in Ingham County, and thousands of residents across the state, were illegally foreclosed upon because of this practice.
These illegalities have stolen due process from our own citizens, and robbed them of precious time that could have been used to recover and resume their mortgages, or obtain a modification. A family who is facing a foreclosure is already vulnerable; this practice insured that they could not possibly reclaim their home.
We have even received information in recent days that shows LPS, a document mill included in the proposed settlement, specifically requested to have this criminal investigation converted to a civil lawsuit. It seems clear that they are aware of their vulnerability to these charges, and are attempting to save their company’s stock price by avoiding responsibility.
All I am asking is that we treat the banks in the same way we would treat our own citizens. If a person in Michigan were to commit fraud and forgery, and use these practices to take someone’s property, that person would go to jail. I respectfully request that we leave that same possibility open for the banks and corporations that have committed those same crimes here in our state.
Sincerely, Curtis Hertel Ingham County Register of Deeds
If this isn’t proof something isn’t smelling right at the Florida’s AG’s office, I don’t know what this is?
When you read David Dayens article, keep in mind where the assignments came from… LPS/DOCx!
FDL-
We’re at T-minus four days for sign-ons to the foreclosure fraud settlement, and we know that Florida’s Pam Bondi is on board, despite pushback from advocates in her state, ground zero for the foreclosure crisis. There’s an interesting nugget buried in this article, though.
Bondi spokeswoman Jennifer Meale said in an email that their concerns are “misguided” because the settlement would provide a historic level of monetary relief and will overhaul the mortgage industry.
“Rather than engaging in political grandstanding, Attorney General Bondi is working hard to reach an agreement that gets Floridians substantial relief now and holds banks accountable for their misconduct,” Meale wrote.
The settlement is expected to provide $1,800 each for about 750,000 families across the country. It is a response to such practices as “robo-signing” by bank employees who often knew little or nothing about the mortgage documents they were hired to sign.
Nevada, New York, Delaware, New Hampshire and Massachusetts contend the deal isn’t strong enough because it would protect banks from future civil liability.
It will not, though, fully release them from future state criminal lawsuits.
Religious and community groups urged Attorney General Pam Bondi on Monday to take a tougher stance on a proposed settlement with the nation’s five largest mortgage lenders over deceptive foreclosure practices.
A pair of ministers and an evicted former homeowner delivered a letter after holding a news conference outside Bondi’s office at the Capitol.
They contend the proposed $25 billion national deal that Bondi supports doesn’t go far enough. They say that’s because the negative equity on homes in Florida alone is about $120 billion.
They’re all connected to Wall Street and against us.
Go ahead and vote for this winner who was cashing in on you getting booted out your home!
ThinkProgress-
A ThinkProgress examination of Mitt Romney’s presidential personal financial disclosuresfrom May 2011 reveal that the former Massachusetts governor and his wife own or owned millions of dollars worth of a Goldman Sachs investment fund invested heavily in mortgage-backed obligations. And the current owners of those mortgage debts began foreclosure proceedings against thousands of Floridians.
Along with his investments in Bain Capital funds linked to offshore tax havens, the Romneys have large investments in the Goldman Sachs Strategic Income Fund (institutional class). The firm’s March 2011 annual report for the fund notes that about 8 percent of the fund is invested in banks and 24.5 percent is invested in mortgage-backed obligations. Romney’s form says he has invested between $1,000,001 and $5,000,000 in the fund and his wife Ann has invested an additional $1 million-plus. Since the 2008 economic meltdown and the enactment of the Troubled Asset Relief Fund, this fund has done quite well, growing 7.88 percent between April 2010 and March 2011.
BARBARA KIMMICK a/k/a BARBARA WALDON KIMMICK, Appellant,
v.
U.S. BANK NATIONAL ASSOCIATION, as Trustee for the GSAA Home Equity Trust 2007-7 Asset Backed Certificates, Series 2007-7; UNKNOWN TENANT NO. 1; UNKNOWN TENANT NO. 2; and ALL UNKNOWN PARTIES CLAIMING INTERESTS BY, THROUGH, UNDER OR AGAINST A NAMED DEFENDANT TO THIS ACTION, OR HAVING OR CLAIMING TO HAVE ANY RIGHT, TITLE OR INTEREST IN THE PROPERTY HEREIN DESCRIBED, Appellees.
No. 4D10-4158.
District Court of Appeal of Florida, Fourth District.
January 18, 2012.
Robert P. Bissonnette of Robert P. Bissonette, P.A., Fort Lauderdale, for appellant.Roy A. Diaz and Diana B. Matson of Smith, Hiatt & Diaz, P.A., Fort Lauderdale, for appellee U.S. Bank National Association.HAZOURI, J.
Barbara Kimmick appeals from the granting of U.S. Bank’s amended motion for summary final judgment of foreclosure and attorneys’ fees, which was based upon the affidavit of indebtedness, the mortgage, and the promissory note. Kimmick asserts there were genuine issues of material fact precluding the granting of the summary judgment. We agree and reverse.
Kimmick filed an affidavit in opposition to the motion for summary judgment. She stated that she has resided at the subject property for twenty years and in February of 2009, she lost her job. She continued paying her mortgage from her savings through July of 2009. She then stated:
4. On or about August 6, 2009, I contacted my lender, Bank of America, and explained that I was experiencing financial hardship due to the loss of my job and that I had exhausted my personal savings thereafter in paying the subject note and mortgage from February 2009 to July 2009.
5. I requested assistance from Bank of America in paying my mortgage and, over the phone, Bank of America, by and through its representative, Bethany, calculated a new and reduced mortgage payment in the amount of $506.85 and that I was to start paying the new amount immediately.
6. Bank of America, by and through Bethany, further stated to me that after three (3) month’s payment of the $506.85, they would review my payment history and, if I had consistently met my payment obligations, that they would grant me a permanent mortgage modification at that amount.
7. In reliance on Bank of America’s representations above, I faithfully paid Bank of America the monthly sum of $506.85 for six (6) months from August 2009 through January 2010. A true copy of my Bank of American Payment Overview reflecting and evidencing the foregoing is attached hereto as Exhibit “A”.
8. Importantly, the Bank of America Payment Overview, on its face, clearly states that my six (6) months of reduced mortgage payments was for “mortgage remodification” [emphasis supplied].
9. Thereafter, on January 11, 2010, this foreclosure action was filed against me claiming that I defaulted in the subject mortgage of this action an failing to pay my mortgage payments due commencing September 1, 2009.
10. However, I could not possibly have been in default of the subject mortgage because, as evidenced an Exhibit “A” attached, Bank of America agreed to accept and was accepting monthly mortgage payments from me from August 2009 until January 2010 — when this foreclosure action was unilaterally filed. I have also paid for insurance and real estate taxes on the subject property.
11. Accordingly, Plaintiff is equitably stopped from maintaining this action not only an accepting monthly mortgage payments from me but also by bootstrapping and manufacturing the alleged basis for my mortgage default herein. Thus, Plaintiff has filed the instant action in bad faith without any investigation prior thereto.
Exhibit A is a printout from Kimmick’s online bank account showing the six payments to Bank of America Home Loans from her account.
U.S. Bank filed an affidavit of the assistant secretary of BAC Home Loans Servicing in which he states that the records show that the September 1, 2009, payment was not made. It further states:
7. There has been no payment after the date of October 16, 2009. The borrower has not qualified for a loan modification under the HAMP guidelines and the borrower is not paying on a loan modification currently.
At the summary judgment hearing, Kimmick’s counsel presented the facts from her affidavit to the court. He asserted equitable estoppel. He also argued that where an affirmative defense is pleaded, and the plaintiff does not negate it, the plaintiff is not entitled to summary judgment.
In response to Kimmick’s affidavit U.S. Bank referred the court to the pre-acceleration letter sent to the borrower in September and October which counsel stated they said: “The default will not be considered cured unless BAC Home Loan Servicing, LP receives good funds in the amount of $3,153.77 on or before November 18, 2009. BAC Home Loan Servicing, LP reserves the right to accept or reject a partial payment of the total amount due without waiving any of its rights herein or otherwise. For example, if less than the full amount that is due is sent to us, we can keep the payment and apply it to the debt but still proceed to the foreclosure since the default would not have been cured.” Kimmick’s counsel did not deny that Kimmick received the letter but that they had told her to pay a reduced amount and which the bank accepted. U.S. Bank acknowledged that it received five of six of Kimmick’s payments.
The trial court entered its Summary Final Judgment of Foreclosure which did not address any of Kimmick’s affirmative defenses.
Kimmick argues that U.S. Bank waived its right to foreclose based upon the representations made to her by the agent she spoke to at Bank of America. The affirmative defense was stated as follows:
24. For her Twelfth Affirmative Defense, KIMMICK states that Plaintiff has waived its rights to foreclosure by the actions of Plaintiff’s agent and loan servicer for the subject mortgage, to-wit: Bank of America, agreeing to and actually accepting reduced mortgage payments from KIMMICK for at least six consecutive months.
Waiver is defined as an intentional relinquishment or abandonment of a known right or privilege, or conduct that warrants an inference of the intentional relinquishment of a known right. In order to establish a valid waiver, the following elements must be satisfied: (1) the existence at the time of the waiver of a right, privilege, advantage, or benefit that may be waived; (2) the actual or constructive knowledge thereof; and (3) an intention to relinquish that right, privilege, advantage or benefit.
An acceleration clause in a mortgage confers upon the mortgagee a contract right of constitutional dimensions. Courts are obligated to protect the validity of such contracts and may impair the mortgagee’s right to foreclose only in limited situations. Specifically, courts will bar acceleration and foreclosure as follows:
Foreclosure on an accelerated basis may be denied when the right to accelerate has been waived or the mortgagee estopped to assert it, because of conduct of the mortgagee from which the mortgagor (or owner holding subject to a mortgage) reasonably could assume that the mortgagee, for or upon a certain default, would not elect to declare the full mortgage indebtedness to be due and payable or foreclose therefore; or where the mortgagee failed to perform some duty upon which the exercise of his right to accelerate was conditioned; or where the mortgagor tenders payment of defaulted items, after the default but before notice of the mortgagee’s election to accelerate has been given (by actual notice or by filing suit to foreclose for the full amount of the mortgage indebtedness) or where there was intent to make timely payment, and it was attempted, or steps taken to accomplish it, but nevertheless the payment was not made due to a misunderstanding or excusable neglect, coupled with some conduct of the mortgagee which in a measure contributed to the failure to pay when due or within the grace period.
Id. at 1172-73 (citations omitted) (emphasis supplied).
Kimmick also asserts that U.S. Bank waived acceleration when its agent told Kimmick that she could make the lower payments for several months, possibly get a modification, and then U.S. Bank would not proceed with an acceleration.
U.S. Bank asserts that this court can affirm the judgment with respect to the affirmative defense of waiver for a different reason. In both the note and the mortgage, there is the same provision which states:
Borrower not released; Forbearance an Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured an this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured an this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender’s acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.
U.S. Bank argues that this “No Waiver” provision allows it to accept prior late or reduced payments without losing its right to enforce its rights and remedies. Kimmick, however, is asserting that U.S. Bank waived this provision by representing to her that she could make reduced payments, which were timely, and meet the requirements for a permanent mortgage modification.
Therefore, there remain genuine issues of material fact as to the issues raised by the affirmative defense of the loan modification. We reverse and remand for further proceedings consistent with this opinion.
Reversed and remanded.
MAY, C.J., and DAMOORGIAN, J., concur.
Not final until disposition of timely filed motion for rehearing.
It’s always about the money and these things must change.
Orlando Sentinel-
A measly $338.91.
That’s how much Sherman McCray owed his homeowner association when the board of directors foreclosed on his Clermont house.
Of course, the debt wasn’t just $338.91 by the time a Lake County judge on Jan. 3 ordered the 81-year-old Korean War veteran’s home sold.
Oh, no. Between 2010 when McCray failed to pay a homeowners assessment and that final hearing, the all-powerful homeowner association in the Vistas subdivision had levied late fees, costs and interest, and it had busied itself running up absurd lawyer bills by sending threatening letters at every turn.
BY LYNN E. SZYMONIAK, ESQ., ED., FRAUD DIGEST JANUARY 15, 2012
How many days does it take to foreclose in Florida? The averagenumber of days for a foreclosure action to be completed is often reported, and usually accompanied by a criticism that the process is too unwieldy. The long foreclosure process has often been blamed for the nation’s slow economic recovery. The discussion often movesquickly from “How long does it take?” to “How long should it take?”
While bank lawyers often argue that the foreclosure system should be changed so that foreclosures can move quickly through the courts, foreclosure defense advocates often point to due process horror storieslike the recent story of Chief Circuit Judge Alan Dickey in Seminole County, Florida, who scheduled 300 foreclosure cases for three days,saying, “If everybody shows up, I’ll have about 30 seconds a case.”
Realty Trac provides the statistics in most stories. Realty Tracreported in January, 2012, that in Florida it took an average of 806days to complete a foreclosure, the third longest time in the nation.
New York reportedly took the longest to foreclose – 1,019 days andNew Jersey was second at 964 days.
An examination of actual foreclosure cases in Palm Beach County does not support the Realty Trac findings. In this study, all of the cases filed by a major forecloser, Deutsche Bank National TrustCompany (“DBNTC”), in December, 2009, were examined. DBNTC filed 170 new cases in December 2009.
Of the 170 cases, 76 cases (43.5%) remained open as of January15, 2012.
54 of the cases were closed with entry of a final judgment of foreclosure.
40 of the cases were voluntarily dismissed by DBNTC. In manycases, a voluntary dismissal indicates the parties have reached a settlement. In foreclosures, it is also common for a bank to dismisswhen the file is being transferred to another firm, a very common occurrence.
Of the cases with voluntary dismissals, the average time from filingto dismissal was 342 days.
Of the cases closed with a final judgment of foreclosure, the average number of days from the initial filing to the closing of the case was 345 days. A few cases continue long after the entry of a finaljudgment of foreclosure, because of post-judgment motions to re-open or set aside the final judgment. In such cases, the actual sales datewas used as the end date.
Of the 94 resolved cases, 58 (62%) were resolved in less than one year.
In many of the open cases, there had been very little effort by thebanks to move the case to a final resolution. It was not unusual to find open cases where there had been no docketed activity for over sixmonths, and there were numerous cases where there had been no docketed activity for over one year.
When a foreclosure is completed, and the home sold, it is oftensold for less than half of the amount of the original loan.
The median sales price for existing homes in Palm Beach County fell from$406,800 in June, 2005 to $183,700 in November, 2011. A trustee may actually benefit, in the short term, from prolonging theforeclosure process because the final realized loss does not have to be reported to investors until the sale, thus allowing the trustee to delaythe inevitable bad news to the investors. The servicer certainly benefits as the average servicer fees for servicing a loan in foreclosure are often three to five times the fees for servicing a performing loan.
There were a few hard-fought cases, with discovery disputesappearing regularly on the docket. In such cases, these disputes often involved delays by the banks in responding to discovery requests bythe homeowner/defendants, particularly where the banks were asked to produce trust-related documents such as the Pooling and Servicing
Agreement from the trust or original loan documents. Many of thecases involved Affidavits of Lost Notes and Lost Mortgages. The delays were caused by the plaintiff/bank.
This study will be expanded to include an entire calendar quarterand the other major foreclosers, Bank of America and Chase. It will include data from Hillsborough and St. Johns counties.
Here are the details of the action on the 170 DBNTC foreclosurecases filed in Palm Beach County in December, 2009:
1. Arundel, Jeanette Filing Date: 12-1-2009 Bank’s Motion for Summary Judgment: 2-3-2010 Final Judgment of Foreclosure: 6-23-2010 204 DAYS
2. Booth, Jay C., Jr. Filing Date: 12-1-2009 PENDING Bank’s Motion to Dismiss on 1-5-2012
3. Dickens, Matthew W. Filing Date: 12-1-2009 Bank’s Notice of Voluntary Dismissal: 5-11-2010 161 DAYS
4. Garza, Abel Filing Date: 12-1-2009 Bank’s Motion for Summary Judgment: 1-28-2010 PENDING Last Activity: 4-12-2011
5. Girtman, Esperanza Filing Date: 12-1-2009 Bank’s Motion for Summary Judgment: 1-26-2010 Final Judgment of Foreclosure: 5-12-2010 162 DAYS
6. Hendricks, Leon Filing Date: 12-1-2009 Bank’s Motion for Summary Judgment: 7-15-2010 PENDING Last Activity: 12-8-2011
7. Jecrois, Jean Michelet Filing Date: 12-1-2009 PENDING Last Activity: 3-21-2010
8. Louidort, Elza Filing Date: 12-1-2009 Bank’s Motion for Summary Judgment: 1-25-2010 Bank’s Notice of Voluntary Dismissal: 5-11-2010 161 DAYS
9. Powell, Clifford Filing Date: 12-1-2009 PENDING Last Activity: 12-15-2009
10. Prince, Eddie Filing Date: 12-1-2009 Final Judgment of Foreclosure: 8-3-2010 245 DAYS
11. Sanchez, Ivan Filing Date: 12-1-2009 Bank’s Motion to Dismiss: 6-21-2010 PENDING Last Activity: 6-21-2010
12. Snow, Frederic Gary Filing Date: 12-1-2009 PENDING Last Activity: 1-11-2012
13. Torres, Sarah Filing Date: 12-1-2009 PENDING Last Activity: 1-25-11
14. Filing Date: 12-1-2009 PENDING Last Activity: 12-28-2009
15. Harrison, Letitia Monique Filing Date: 12-2-2009 Bank’s Motion for Summary Judgment: 3-22-2010 Final Judgment of Foreclosure: 6-14-2010 194 DAYS
16. Hernandez, Angel Filing Date: 12-2-2009 Bank’s Notice of Voluntary Dismissal: 9-30-2010 302 DAYS
17. Joseph, Ana Filing Date: 12-2-2009 Bank’s Motion for Summary Judgment: 3-16-2010 Final Judgment of Foreclosure: 10-18-2010 Post-judgment pleadings; sold 5-4-2011 518 DAYS
19. Sandoval, Carlos Filing Date: 12-2-2009 PENDING Last Activity: 3-31-2010
20. Wong, Suok Ing Filing Date: 12-2-2009 Bank’s Motion for Summary Judgment: 9-17-2010 PENDING Last Activity: 1-4-2012
21. Badgley, Kenny Filing Date: 12-3-3009 Final Judgment of Foreclosure: 6-14-2010 Post-judgment pleadings; sold 3-4-2011 457 DAYS
22. Coicou, Joseph Filing Date: 12-3-2009 Bank’s Motion for Summary Judgment: 2-12-2010 PENDING Last Activity: 10-14-2011
23. Dieter, Eric A. Filing Date: 12-3-2009 Bank’s Motion for Summary Judgment: 11-5-2010 Dismissed: 12-15-2010 377 DAYS
24. Figueroa, Dora D. Filing Date: 12-3-2009 PENDING Last Activity: 10-24-2011
25. Flores, Jaime Filing Date: 12-3-3009 Final Judgment: 7-20-2010 Post judgment Pleadings, Sold: 3-11-2011 463 DAYS
26. Pelaez, Aldo Filing Date: 12-3-2009 Bank’s Motion for Summary Judgment: 1-19-2010 PENDING Last Activity: 10-31-2011
27. Pompey, Sharon Filing Date: 12-3-3009 Final Judgment of Foreclosure: 5-10-2010 Post-judgment pleadings; sold on 10-21-2010 322 DAYS
28. Bedasee, Lenford Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 5-20-2010 Final Judgment of Foreclosure: 7-1-2010 Post-judgment Motions; Sold to Bank on 4-15-2011 497 DAYS
29. Blake, Everal D. Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 3-22-2010 PENDING Last Bank Activity: 2-4-2011
30. Brown, Paul Hugh Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 3-22-2010 Final Judgment of Foreclosure: 9-28-2010 298 DAYS
31. Narcisse, Anel Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 2-23-2010 Final Judgment of Foreclosure: 7-8-2010 218 DAYS
32. Wachocki, Phillip Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 6-21-2010 PENDING Last Activity: 11-14-2011
33. Weiss, Stephen Filing Date: 12-4-2009 Bank’s Motion for Summary Judgment: 2-16-2010 Final Judgment of Foreclosure: 9-14-2010 Bankruptcy and Post-Judgment Motions Sold to Bank/Plaintiff: 9-9-2011 644 DAYS
34. Astorga, Silvia Filing Date: 12-7-2009 Bank’s Notice of Voluntary Dismissal: 3-4-2010 87 DAYS
35. Santiago, Lily Filing Date: 12-7-2009 PENDING Last Activity: 8-8-2011 Referral to Mediation
36. Herisse, Innocent Filing Date: 12-7-2009 Bank’s Motion for Summary Judgment: 6-2-2010 Final Judgment of Foreclosure: 7-16-2010 Post-judgment motions; sold to bank/plaintiff on 6-30-2011 570 DAYS
37. Johnson, Johnny Filing Date: 12-7-2009 Bank’s Voluntary Dismissal: 11-16-2011 709 DAYS
38. Jules, Wasler Filing Date: 12-7-2009 Bank’s Motion for Summary Judgment: 2-18-2010 Bank’s Voluntary Dismissal: 10-1-2010 298 DAYS
39. Martin, Rigoberto Filing Date: 12-7-2009 Bank’s Motion for Summary Judgment: 7-29-2010 PENDING Last Activity: 6-13-2011 (Bank’s Motion to Substitute Counsel)
40. Auguste, Enique Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 2-25-2010 Voluntary Dismissal: 11-8-2011 700 DAYS
41. Cook, William Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 3-12-2010 Final judgment of foreclosure: 6-18-2010 Bankruptcy and post-judgment motions PENDING Last Activity: 12-27-2011
42. Delva, Wislande Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 2-9-2010 Final judgment of foreclosure: 6-17-2010 191 DAYS
43. George, Beryl Filing Date: 12-8-2009 PENDING Last Activity: 8-11-2010
44. Gonzalez, Juan Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 8-12-2010 PENDING Last Activity: 7-7-11
45. Levinger, Jane Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 1-7-2010 PENDING Last Activity: 1-6-2012
46. McCarty, Shirlon Dioni Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 4-20-2010 PENDING Last Activity: 8-22-2011 (substitution of counsel for bank)
47. Petrone, Anthony Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 7-26-2010 Final Judgment of Foreclosure: 9-27-2011 301 DAYS
48. Saqib, Sobia M. Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 2-4-2010 PENDING Last Activity: 1-5-2012
49. Spee, Eric Filing Date: 12-8-2009 Bank’s Motion for Summary Judgment: 12-31-2009 Voluntary Dismissal: 11-19-2010 346 DAYS
50. Dennis, Marilyn Filing Date: 12-9-2009 Bank’s Motion for Summary Judgment: 6-3-2011 PENDING Last Activity: 10-19-2011
51. Jules, Gina Filing Date: 12-9-2009 Bank’s Motion for Final Judgment: 1-28-2010 Final Judgment of Foreclosure: 9-14-2010 Bank’s Motion to Vacate Final Judg. and Vol. Dismissal: 3-7-2011 453 DAYS
52. Lay, Lonnie Filing Date: 12-9-2009 Voluntary dismissal by bank: 12-7-2010 363 DAYS
54. Yepes, Cesar Filing Date: 12-9-2009 Bank’s Motion for Summary Judgment: 2-5-2010 Final Judgment of Foreclosure: 8-9-2010 Post-judgment Motions Final Judgment of Foreclosure (#2): 3-31-2011 477 DAYS
55. Basant, Garfield Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 6-11-2010 Final Judgment of Foreclosure: 11-8-2010 Bankruptcy and Post-Judgment Motions; Sold to Bank on 4-15-2011 491 DAYS
56. Brewster, Eileen Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 2-4-2010 Final Judgment of Foreclosure: 7-16-2010 218 DAYS
57. Derilus, Jean Filing Date: 12-10-2009 PENDING Last Activity: 4-25-2011
58. Dik, Carolyn Adams Filing Date: 12-10-2009 Final Judgment of Foreclosure: 8-23-2010 Bank’s Motion to Vacate Judgment and Dismiss: 10-24-2011 683 DAYS
59. Drake, Darla Filing Date: 12-10-2009 Bank’s Motion for Summary Final Judgment: 7-22-2010 Final Judgment of Foreclosure: 8-24-2010 257 DAYS
60. Faustin, Max Filing Date: 12-10-2009 Bank’s Motion for Summery Judgment: 10-4-2010 PENDING Last Activity: 8-3-11 Bank’s Motion to File an Amended Complaint
61. Goffe, Christina Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 4-20-2010 Final Judgment of Foreclosure: 5-27-10 168 DAYS
62. Hartl, William Filing Date: 12-10-2009 Bank’s Notice of Voluntary Dismissal: 5-18-2011 524 DAYS
63. Kaplan, Jill Filing Date: 12-10-2009 Bank’s Notice of Voluntary Dismissal: 3-5-2010 85 DAYS
64. Rorabaugh, Patricia Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 4-14-2010 Final Judgment of Foreclosure: 7-16-2010 PENDING Last Activity: 1-4-2012 (Granting Bank’s Motion to Sub. Counsel for Stern)
65. Rose, Warren Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 3-10-2010 Final Judgment of Foreclosure: 5-12-2010 153 DAYS
66. Tartarkin, Barry Filing Date: 12-10-2009 PENDING Last Activity: 2-9-2010
67. Vasquez, Sergio Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 8-31-2011 PENDING Last Activity: 8-31-2011
68. Williams, Roney Filing Date: 12-10-2009 Bank’s Motion for Summary Judgment: 2-10-2010 Final Judgment of Foreclosure: 6-21-2010 193 DAYS
69. Angel, Alejandro Filing Date: 12-11-2009 PENDING Last Activity: 1-10-2012
70. Baptiste, Kenol Jean Filing Date: 12-11-2009 Bank’s Motion for Summary Judgment: 3-22-2010 Final Judgment of Foreclosure: 6-14-2010 185 DAYS
71. Duff, Jack Filing Date: 12-11-2009 Bank’s Motion for Summary Judgment: 2-9-2010 Bank’s Motion for Voluntary dismissal: 4-1-2011 477 DAYS
72. Isaac, Emmanuel R. Filing Date: 12-11-2009 PENDING Last Activity: 8-26-2010
73. Manjaro, Errol* Filing Date: 12-11-2009 PENDING Last Activity: 11-21-2011 74. New Century Mortgage Filing Date: 12-11-2009 Final Order of Foreclosure: 4-21-2010 131 DAYS
75. Schapiro, Sarita Filing Date: 12-11-2009 Bank’s Motion for Summary Judgment: 4-14-2011 PENDING Last Activity: 7-19-2011 76. Thelemaque, Onondieu Filing Date: 12-11-2009 Bank’s Motion for Final Judgment: 1-28-2010 Renewed: 12-5-2011 PENDING Last Activity: 12-9-2011
77. Vogal, Lee Scott Filing Date: 12-11-2009 Bank’s Motion for Summary Judgment: 6-3-2010 Final Judgment of Foreclosure: 7-19-2010 220 DAYS
78. Walden, Tangela Filing Date: 12-11-2009 Bank’s Motion for Summary Judgment: 2-16-2010 Bank’s Voluntary Dismissal: 4-1-2011 477 DAYS
79. Wilson, Charles J. Filing Date: 12-11-2009 Final Judgment of Foreclosure: 5-9-2011 514 DAYS 14
80. Zeien, Jason Filing Date: 12-11-2009 Bank’s Voluntary Dismissal: 12-27-2011 746 DAYS
81. Caballero, Hilda Filing Date: 12-14-2009 Bank’s Motion for Summary Judgment: 3-1-2010 Final Judgment of Foreclosure: 6-18-2010 Post-judgment Motions; sold to plaintiff 9-7-2011 514 DAYS
82. Deponte, Eugenia C. Filing Date: 12-14-2009 Bank’s Motion for Summary Judgment: 2-3-2010 Final Judgment of Foreclosure: 7-6-2010 182 DAYS
83. Francois, Raphael Filing Date: 12-14-2009 PENDING Last Activity: 6-10-2011 (bank’s motion to sub. counsel)
84. Gernstadt, Hal Filing Date: 12-14-2009 Bank’s Notice of Voluntary Dismissal: 6-9-2010 177 DAYS
85. Kese, Claudette Witter Filing Date: 12-14-2009 Bank’s Notice of Voluntary Dismissal: 7-30-2010 228 DAYS
86. Licata, Angelo Filing Date: 12-14-2009 Final Judgment of Foreclosure: 8-2-2010 231 DAYS
87. Moody, Gary Filing Date: 12-14-2009 Final judgment of foreclosure: 9-28-2010 298 DAYS
109. Lehman, Elizabeth Filing Date: 12-16-2009 PENDING Last Activity: 1-3-2012
110. Maxwell, Bertha P. Filing Date: 12-16-2009 PENDING Last Activity: 7-22-2010
111. Muras, Wayne Filing Date: 12-16-2009 Final Judgment of Foreclosure: 6-14-2010 180 DAYS
112. Shapiro, Andrea Filing Date: 12-16-2009 Bank’s Motion for Default Filed: 5-24-2010 PENDING Last Activity: 5-24-2010
113. Shook, Kraig Filing Date: 12-16-2009 PENDING Last Activity: 8-4-2011
114. Troncone, Monique Filing Date: 12-16-2009 Bank’s Motion for Summary Judgment Filed: 3-2-2010 Final Judgment of Foreclosure Entered: 5-12-2010 147 DAYS
115. Lormejuste, Clare Rose Filing Date: 12-17-2009 Vol. Dismissal by Bank: 6-28-2010 193 DAYS
116. Meant, Jean Baptiste Filing Date: 12-17-2009 Bank’s Motion for Summary Judgment Filed: 5-6-2010 Final Judgment of Foreclosure Entered: 6-21-2010 185 DAYS
117. Rubner, Vaclave Filing Date: 12-17-2009 Bank’s Motion for Summary Judgment Filed: 3-22-2010 Final Judgment of Foreclosure Entered: 6-14-2010 179 DAYS
118. Travis, Farah Filing Date: 12-17-2009 Bank’s Motion for Summary Judgment Filed: 1-4-2010 Voluntary Dismissal By Bank: 11-19-2010 337 DAYS
119. Zaremba, Jameelia Filing Date: 12-17-2009 Bank’s Motion for Summary Judgment Filed: 3-26-2010 Final Judgment of Foreclosure Entered: 7-8-2010 Numerous Post Judgment matters; Sold to Bank: 12-30-2011 ($31,100) 743 DAYS
120. Boden, Pio Izabel Filing Date: 12-18-2009 Voluntary Dismissal By Bank: 4-15-2010 118 DAYS
121. Cullen, Lyn Filing Date: 12-18-2009 Bank’s Motion for Summary Judgment Filed: 3-16-2010 PENDING Last Activity: 3-16-2010
122. Guerrier, Jean Filing Date: 12-18-2009 Bank’s Motion for Summary Judgment Filed: 2-22-2010 Voluntary dismissal by Bank: 2-19-2011 428 DAYS
123. Jestine, Saint Jamais Filing Date: 12-18-2009 Vol. Dismissal by Bank: 2-16-2010 60 DAYS
124. Kearney, Virginia Filing Date: 12-18-2009 Bank’s Motion for Summary Judgment Filed: 9-29-2010 PENDING Last Activity: 9-29-2010
125. Pierre, Carmel Filing Date: 12-18-2009 PENDING Last Activity: 5-25-1
127. Santiago, Ana E. Filing Date: 12-18-2009 Bank’s Motion for Summary Judgment Filed: 1-4-11 Bank’s Notice of Voluntary Dismissal Filed: 4-13-2011 480 DAYS
128. Wilson, David Filing Date: 12-18-2009 PENDING Last Activity: 12-22-2011
129. Cash, Cleona Filing Date: 12-21-2009 Bank’s Motion for Summary Judgment Filed: 10-26-2010 PENDING Last activity: 10-8-2010
130. Duran, Juan Filing Date: 12-21-2009 Bank’s Motion for Summary Judgment Filed: 2-5-10 PENDING Last activity: 12-29-2010
131. Esposito, Sally Filing Date: 12-21-2009 PENDING Last activity: 11-1-2010
132. Garcia, Jorge Filing Date: 12-21-2009 Bank’s Motion for Summary Judgment Filed: 7-16-2010 Final Judgment of Foreclosure Entered: 8-10-2010 232 DAYS
133. Jean-Pierre, Elvince Filing Date: 12-21-2009 Bank’s Motion for Summary Judgment Filed: 4-13-2010 PENDING Last Activity: 4-27-2011
134. Stenback, Gordon Filing Date: 12-21-2009 Bank’s Motion for Summary Judgment Filed: 7-2-2010 Numerous post-judgment pleadings Sold to bank for $16,600 on 3-14-2011 448 DAYS
135. Paloni, Chrissa Filing Date: 12-22-2009 PENDING Last Activity: 7-14-2011
136. Serrano, Joseph Filing Date: 12-22-2009 Final Judgment of Foreclosure Entered: 6-16-2011 Numerous post-judgment pleadings Sold to plaintiff for $190,200 on 8-1-2011 587 DAYS
137. Spence, Ida Filing Date: 12-22-2009 Bank’s Motion for Summary Judgment Filed: 7-13-2010 PENDING Last Activity: 11-22-2010
138. Arvisais, Arlettie Filing Date: 12-23-2009 Bank’s Motion for Summary Judgment Filed: 9-10-2010 Final Judgment of Foreclosure Entered: 12-20-2011 ($149,435) Sale date 2/13 (5200 Edgecliff Avenue) 362 DAYS
139. Cisterna, Paul Filing Date: 12-23-2009 Bank’s Notice of Voluntary Dismissal: 2-19-2010 58 DAYS
140. Elliott, Paul Filing Date: 12-23-2009 Bank’s Motion for Summary Judgment Filed: 3-16-2011 PENDING Last Activity: 5-31-2011
141. Jackson, Rickey Filing Date: 12-23-2009 Final Judgment of Foreclosure: 9-8-2010 259 DAYS
142. Lloyd, Stephen Filing Date: 12-23-2009 Bank’s Motion for Summary Judgment Filed: 2-23-2010 Final Judgment of Foreclosure Entered: 7-15-2010 ($829,749.31) 204 DAYS
143. Williams, Kenneth Filing Date: 12-23-2009 PENDING Last Activity: 12-22-2011
144. Barrett, James Filing Date: 12-28-2009 Final Judgment of Foreclosure: 8-23-2011 238 DAYS
From Andrew Bennett Spark, Assistant Attorney General, Tampa Economic Crimes
August 8, 2011
Cell: 941.321.5927
I. Introduction
By way of introduction, I have served as an Assistant Attorney General in the Economic Crimes Division of the Florida Attorney General’s Office since March of 2004, first in Orlando, and the last 6 ½ years in Tampa. I have been reading articles concerning the controversies swirling around the Attorney General’s Office with respect to the forcedresignations of June Clarkson and Theresa Edwards (from whom I took over day-to-day handling of the ProVest investigation), and the employment of Joe Jacquot with Lender Processing Services, one of the companies at the heart of the foreclosure robo-signing issues. While I have a significantly different philosophy concerning these cases than Clarkson, Edwards, and most other homeowner advocates, the people of the State of Florida are entitled to fair and honest government, independent of personal connections and powerful interests, and I have decided to speak out.
As an important caveat, please note that the below contains various factual statements, and asks questions. If I ask a question, it is because I truly do not know the answer, not because I am implying any particular answer to the question.
II. Former Director of Economic Crimes Mary Leontakianakos now works for foreclosure law firm Marshall Watson
Joe Jacquot is not the only high-ranking recent member of the Attorney General’s Office to now be working with a company which has been the subject of one of our foreclosure investigations. Mary Leontakianakos, who was Director of Economic Crimes until approximately January 3 of this year has, according to The Florida Bar, taken a job at foreclosure firm Marshall Watson. http://www.floridabar.org/names.nsf/0/C1D818F4CF8FA1EE85256A8400081E2D?Open
Document Leontakianakos was centrally involved in the foreclosure investigations while leading our Division, including the investigation of Marshall Watson: http://www.abc-7.com/Global/story.asp?S=12968488
It appears that Watson and/or Leontakianakos have been secreting her employment from the public. By using a personal email address as her contact email address rather than the Marshall Watson email address suffix MarshallWatson.com, Leontakianakos has been able to avoid search functions which would reveal her affiliation. It is through the use of email suffixes that one may search the Florida Bar’s database for former employees of the foreclosure firms under investigation. In addition, Watson has taken down the portion of his website showing the attorneys in the firm; it appears to be the only portion of his website that is inaccessible from elsewhere on the firm’s website (interestingly enough, Watson’s own attorney profile on that portion of the website is easily found directly from a Google search, and so does Caryn Graham’s, but there’s none for Leontakianakos)..
As has been widely reported, the Attorney General’s Office entered into a settlement with Marshall Watson in March of this year. A copy of the settlement agreement with Marshall Watson is found here:
Note that Paragraph 4.1 of the agreement requires Marshall Watson to name a liaison to the Attorney General’s Office. Is Mary Leontakianakos that liaison? I do not know. However, Leontakianakos’ address on The Florida Bar website is listed as Fort Lauderdale, and yet a search of the website of the Broward County Clerk of Court reveals that she has not appeared as an attorney in a lawsuit in Broward County – ever.
If Leontakianakos is that liaison, would she have been switching sides during the course of a controversy, Rule 4-1.9 of The Florida Bar states, “[a] lawyer who has formerly represented a client in a matter shall not thereafter:
(a) represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent;”
Of course, the Economic Crimes Division acts in a parens patriae role as a representative of the people of the State of Florida. Consent of the people of the state cannot meaningfully be given in such a situation – and judging by the reaction of so many of people in the state the past few weeks since the Clarkson/Edwards/Jacquot story broke, it is safe to say such consent by the people would not be given even if it meaningfully could be given.
The Case Report for the investigation indicates that attorney Caryn Graham is the “point person” to contact at Watson for concerns about the AVC. According to The Florida Bar website, Graham is still with the Watson firm. Watson recently hired former Broward Chief Judge Tobin in a supervisory capacity. Indeed, the Miami Herald reported that Tobin said he would not spend much time in the courtroom. http://www.miamiherald.com/2011/05/18/2222892/browards-chief-judge-resigns.html
If Leontakianakos is not actually the liaison, despite the entry about Graham in the Case Report, this begs a few questions, one of which is what, if anything, Leontakianakos is doing there?
The other question that arises is whether Leontakianakos’ hiring by Watson is connected to the settlement. The settlement agreement does not specify as such; however, I have been told by someone in my office that in another case some years back, another highranking individual with Economic Crimes received a job with a subsequent employer out of settlement proceeds from a case – and the connection between the settlement and the job was not disclosed.
During her tenure as Director of Economic Crimes, Leontakianakos encouraged side agreements that werecontemporaneous with but not memorialized in the formal settlement documents (“AVC”s). Perhaps as some sort of Freudian-like slip reflective of what may be in effect a golden parachute, on the Bar website Leontakianakos still describes her practice in the “Occupation” field as “Government attorney.” The Marshall Watson settlement contains an unusual provision, paragraph 6.1, requiring the Attorney General to close the investigation upon the execution by all parties. It is typical for our office to close investigations following execution, and parties do typically want the public to know that the investigation is closed; what it is unusual, however, at least in my experience, is for the settlement agreement to explicitly state as such memorializing the closing as a priority. Why the extra concern? (Interestingly enough, despite that provision, I should note that the investigation is now open – I don’t know whether it remained opened or was reopened).
You have absolutely no idea how many times this happens…This makes #??? for Bank of America foreclosing “error”?
TBO-
PLANT CITY —
Barbara and Rick Borchers sold their house and paid their mortgage in full eight years ago.
But now, all these years later, another lender, Bank of America, is suing them for foreclosure on the same house. When the process server knocked on their door, lawsuit in hand, the Borchers thought it must be a mistake.
“Everyone I tell says, ‘That’s impossible, it’s a scam, somebody is pulling your leg,'” Barbara Borchers said.
The lawsuit is no mistake. But it starts with one – made by the title company the Borchers hired to handle their sale in 2003.
Foreclosure statistics, like all numbers, fail to convey the human misery involved. If “irresponsible borrowers” caused Florida’s crisis, well, no one would look to the Attorney General for action. What does law enforcement have to do with irresponsible borrowers? But that’s not what happened–banker fraud and gambling wrecked the housing market. And now the banks are resorting to document fraud to process the millions of foreclosures their earlier bad acts set in motion.
“I will only have the very best, most skilled people on the job; those who embody the highest standards of ethics, responsibility, professionalism, and performance,” Bondi wrote. “These two staff attorneys clearly and repeatedly failed to measure up to these standards.”
With all the evidence, where is Florida’s lawsuit against LPS? Nevada had to take the bull by the horns since you couldn’t. Speaking of “ethics, responsibility, professionalism, and performance” … NEXT!
Sun Sentinel-
An independent report released Friday cleared Attorney General Pam Bondi‘s office of any wrongdoing in the May firings of two lawyers in her South Florida office who were nationally recognized for exposing foreclosure fraud and unsavory mortgage lending practices.
The long-awaited report from Chief Financial Officer Jeff Atwater‘s office said no laws or policies were violated in the dismissal of Theresa Edwards and June Clarkson, who had argued that their firings came down to politics, not performance.
“A review of the circumstances surrounding the termination of Edwards and Clarkson, along with the information gathered during this inquiry, did not warrant initiating a formal investigation into a potential violation of law, rule or policy,” the report says. “During the course of the inquiry there was no specific allegation of wrongdoing made by any person, and no discovery of evidence of wrongdoing on the part of anyone involved in the matter.”
Foreclosure Debt Relief: Creates “Foreclosure Debt Claims Act”; authorizes creation & administration of deficiency judgment reimbursement program by Florida Housing Finance Corporation contingent upon occurrence of certain conditions precedent; provides for future termination of program; authorizes continuation of program after depletion of funds; provides procedures & eligibility requirements for homeowners & financial institutions to file specified monetary claims.
NOTE: Below in her request appears a reference to a link @ #4 Nevada v. LPS, but where is her lawsuit against LPS??
Attorney General Pam Bondi today filed a motion asking the Fourth District Court of Appeal to certify that its recent decision in Law Offices of David Stern, P.A. v. State of Florida passes upon a question of great public importance. In Stern, the Fourth DCA held that the Attorney General’s Office lacked authority under the Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”) to subpoena records of the Stern firm as part of an investigation into possible misconduct in the firm’s handling of foreclosure cases.
Applicable court rules require certification from the Fourth DCA before this office may appeal the Stern decision to the Florida Supreme Court. The Attorney General’s motion asks the Fourth DCA to certify that its decision in Stern passes upon the following question of great public importance: whether the creation of invalid assignments of mortgages by a law firm and subsequent use of such documents by the firm in foreclosure litigation on behalf of the purported assignee is an unfair and deceptive trade practice which may be the subject of an investigation by the Office of the Attorney General.
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT
July Term 2011
ROBERT McLEAN, Appellant,
v.
JP MORGAN CHASE BANK NATIONAL ASSOCIATION, not individually but solely as Trustee for the holders of STRUCTURED ASSET MORTGAGE INVESTMENTS II, INC., MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-ARS, Appellee.
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