MORTGAGE RIGHTS
The New Foreclosure Defenses Standing at the Time the Foreclosure Is Filed There are a string of interesting Florida cases in which a homeowner had a foreclosure dismissed because there is no proof that the servicer had standing at the time it filed the foreclosure. This string of cases comes into play when a servicer (1) fails to allege in the complaint how it obtained the right to enforce the note; and (2) attached to the complaint a note that has not been endorsed or has an undated blank endorsement. Florida courts are strictly enforcing the rule that a plaintiff has to have standing at the time the complaint is filed. When the servicer attaches a copy of the note to the complaint that is not endorsed, the servicer has to prove that it had the right to enforce the note (collect the amout due) as of the time it filed the foreclosure complaint. Take a look at these cases: Pennington v. Ocwen Loan Servicing, LLC, 151 So. 3d 52, 53 (Fla. 1st DCA 2014); Kelly v. Bank of N.Y. Mellon, 170 So. 3d 145, 146 (Fla. 1st DCA 2015); Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903, 906 (Fla. 1st DCA 2013; Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 353 (Fla. 1st DCA 2014); Tilus v. AS Michai LLC, 161 So. 3d 1284, 1286 (Fla. 4th DCA 2015); Lamb v. Nationstar Mortg., LLC, 174 So. 3d 1039, 1041 (Fla. 4th DCA 2015); and Bristol v. Wells Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130, 1132-33 (Fla. 4th DCA 2014). Servicers often try to enter the original note in the record either as evidence supporting a motion for summary judgment or at trial. Florida courts have adopted the rule that an undated, blank endorsement does not, by itself, prove that the servicer had the right to enforce the note at the time the complaint was filed. In other words, if the court cannot tell when the blank endorsement was put on the note (i.e., the endorsement is undated), then the court cannot tell if the note was endorsed at the time the complaint was filed. The Florida courts do not accept proof of possession of the note as satisfactory evidence that the servicer had standing at the time the foreclosure was filed if the servicer was not the party to which the note was made payable. I consider this line of cases a foreclosure defense created by securitization. Remember that during securitization, notes are made payable to the bank making the mortgage loan. (explained in The Guide at How Securitization Was Supposed To Work.) The path that the note takes from the bank to the securitization trust can be extremely complicated, but we know one fact to be true: the trust is not the bank to which the note is made payable. When a securitized loan is foreclosed, the original party to which the note was made payable is never the plaintiff. Because someone other than the original payee seeks to enforce the note (collect the amount due), all securitization foreclosure cases are governed by 3.201(2) of the Negotiable Instruments section of the Uniform Commercial Code. This is what the rule says: if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder When a note has been made payable to the bank that made the mortgage loan, for example, the note is "an instrument ... payable to an identified person." (The UCC calls businesses "persons."). If a note does not have an endorsement, but was given to another party, the note has not been "negotiated." In Florida, it looks like the servicer must have proof that the note was negotiated to it before it filed the foreclosure case to prove that it had standing at the time the case was filed. The servicer must prove that at the time it filed the foreclosure (1) it had possession of the note; (2) the party who was the original payee (the bank that made the mortgage loan in our example) endorsed the note; and (3) the endorsement was dated at a time before the suit was filed. If the endorsement was "in blank," the servicer has met its burden of proof. An endorsement in blank looks like this: Pay to the order of _________________. Sometimes, the original payee will endorse the note to another party. This is called a "special" endorsement. When there is a special endorsement, in Florida the servicer has to prove that the note was "negotiated" to it when it changed hands. Remember, Florida courts will not accept possession alone as sufficient proof of standing at the time the foreclosure was filed. Let's look at the negotiable instrument law about the "transfer" of notes to see why this is so. Rule 3.203(1) defines transfer: An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. Before we examine the rule like a lawyer, I should explain that you are the "issuer" of the note you made payable to the company that gave you the mortgage loan. So, the rule applies to what happens after you give the note to that company. We know that in securitization, the note may be delivered to a number of parties before it is deposited in the securitization trust. When lawyers read a rule such as this one, they break it down into parts like this: An instrument is transferred when (1) it is delivered by a person other than its issuer (2) for the purpose of giving to the person receiving delivery the right to enforce the instrument. Breaking the rule into parts shows us why proof of possession alone is not enough to show standing at the time the foreclosure complaint is filed. Possession may prove element number 1(delivery by a person other than the party who issued the note) but it says nothing about whether the note was delivered "for the purpose of giving the to the person receiving delivery the right to enforce the instrument." Said another way, there is no proof that element number 2 has been satisfied. What particularly delights me about the Florida cases is that they shoot a hole in the banks' favorite argument about "even a thief can enforce a note" If a party has a stolen note, it cannot satisfy the requirement that the note was delivered to it with the purpose of giving it the right to enforce the note. By the way, servicers have tried introducing assignments of mortgages as proof that the note was negotiated to it before it filed the foreclosure. The Florida courts reject this argument because assignments of mortgages only apply to mortgages. Notes are never mentioned in the assignment documents. To sum up, find cases in your jurisdiction saying that a plaintiff must have standing at the time they file a complaint. If you find such a case, take a look at the note that is attached to the complaint. If the note has either not been endorsed or has an undated endorsement in blank, you may have an argument that the servicer did not demonstrate standing at the time it filed the complaint. The other place you need to check is the complaint itself. Make certain that the complaint does not explain how the servicer obtained the right to enforce the note before It filed the complaint. If the complaint does not show standing on its face (in the language and/or from reviewing the attached note), you can think about filing a motion to dismiss. Whether you file a motion or wait until a later time such as summary judgment, the servicer will have the burden of proving standing at the time it filed the complaint.
NEXT: Fraud on the Court
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
The New Foreclosure Defenses Standing at the Time the Foreclosure Is Filed There are a string of interesting Florida cases in which a homeowner had a foreclosure dismissed because there is no proof that the servicer had standing at the time it filed the foreclosure. This string of cases comes into play when a servicer (1) fails to allege in the complaint how it obtained the right to enforce the note; and (2) attached to the complaint a note that has not been endorsed or has an undated blank endorsement. Florida courts are strictly enforcing the rule that a plaintiff has to have standing at the time the complaint is filed. When the servicer attaches a copy of the note to the complaint that is not endorsed, the servicer has to prove that it had the right to enforce the note (collect the amout due) as of the time it filed the foreclosure complaint. Take a look at these cases: Pennington v. Ocwen Loan Servicing, LLC, 151 So. 3d 52, 53 (Fla. 1st DCA 2014); Kelly v. Bank of N.Y. Mellon, 170 So. 3d 145, 146 (Fla. 1st DCA 2015); Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903, 906 (Fla. 1st DCA 2013; Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 353 (Fla. 1st DCA 2014); Tilus v. AS Michai LLC, 161 So. 3d 1284, 1286 (Fla. 4th DCA 2015); Lamb v. Nationstar Mortg., LLC, 174 So. 3d 1039, 1041 (Fla. 4th DCA 2015); and Bristol v. Wells Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130, 1132-33 (Fla. 4th DCA 2014). Servicers often try to enter the original note in the record either as evidence supporting a motion for summary judgment or at trial. Florida courts have adopted the rule that an undated, blank endorsement does not, by itself, prove that the servicer had the right to enforce the note at the time the complaint was filed. In other words, if the court cannot tell when the blank endorsement was put on the note (i.e., the endorsement is undated), then the court cannot tell if the note was endorsed at the time the complaint was filed. The Florida courts do not accept proof of possession of the note as satisfactory evidence that the servicer had standing at the time the foreclosure was filed if the servicer was not the party to which the note was made payable. I consider this line of cases a foreclosure defense created by securitization. Remember that during securitization, notes are made payable to the bank making the mortgage loan. (explained in The Guide at How Securitization Was Supposed To Work.) The path that the note takes from the bank to the securitization trust can be extremely complicated, but we know one fact to be true: the trust is not the bank to which the note is made payable. When a securitized loan is foreclosed, the original party to which the note was made payable is never the plaintiff. Because someone other than the original payee seeks to enforce the note (collect the amount due), all securitization foreclosure cases are governed by 3.201(2) of the Negotiable Instruments section of the Uniform Commercial Code. This is what the rule says: if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder When a note has been made payable to the bank that made the mortgage loan, for example, the note is "an instrument ... payable to an identified person." (The UCC calls businesses "persons."). If a note does not have an endorsement, but was given to another party, the note has not been "negotiated." In Florida, it looks like the servicer must have proof that the note was negotiated to it before it filed the foreclosure case to prove that it had standing at the time the case was filed. The servicer must prove that at the time it filed the foreclosure (1) it had possession of the note; (2) the party who was the original payee (the bank that made the mortgage loan in our example) endorsed the note; and (3) the endorsement was dated at a time before the suit was filed. If the endorsement was "in blank," the servicer has met its burden of proof. An endorsement in blank looks like this: Pay to the order of _________________. Sometimes, the original payee will endorse the note to another party. This is called a "special" endorsement. When there is a special endorsement, in Florida the servicer has to prove that the note was "negotiated" to it when it changed hands. Remember, Florida courts will not accept possession alone as sufficient proof of standing at the time the foreclosure was filed. Let's look at the negotiable instrument law about the "transfer" of notes to see why this is so. Rule 3.203(1) defines transfer: An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. Before we examine the rule like a lawyer, I should explain that you are the "issuer" of the note you made payable to the company that gave you the mortgage loan. So, the rule applies to what happens after you give the note to that company. We know that in securitization, the note may be delivered to a number of parties before it is deposited in the securitization trust. When lawyers read a rule such as this one, they break it down into parts like this: An instrument is transferred when (1) it is delivered by a person other than its issuer (2) for the purpose of giving to the person receiving delivery the right to enforce the instrument. Breaking the rule into parts shows us why proof of possession alone is not enough to show standing at the time the foreclosure complaint is filed. Possession may prove element number 1(delivery by a person other than the party who issued the note) but it says nothing about whether the note was delivered "for the purpose of giving the to the person receiving delivery the right to enforce the instrument." Said another way, there is no proof that element number 2 has been satisfied. What particularly delights me about the Florida cases is that they shoot a hole in the banks' favorite argument about "even a thief can enforce a note" If a party has a stolen note, it cannot satisfy the requirement that the note was delivered to it with the purpose of giving it the right to enforce the note. By the way, servicers have tried introducing assignments of mortgages as proof that the note was negotiated to it before it filed the foreclosure. The Florida courts reject this argument because assignments of mortgages only apply to mortgages. Notes are never mentioned in the assignment documents. To sum up, find cases in your jurisdiction saying that a plaintiff must have standing at the time they file a complaint. If you find such a case, take a look at the note that is attached to the complaint. If the note has either not been endorsed or has an undated endorsement in blank, you may have an argument that the servicer did not demonstrate standing at the time it filed the complaint. The other place you need to check is the complaint itself. Make certain that the complaint does not explain how the servicer obtained the right to enforce the note before It filed the complaint. If the complaint does not show standing on its face (in the language and/or from reviewing the attached note), you can think about filing a motion to dismiss. Whether you file a motion or wait until a later time such as summary judgment, the servicer will have the burden of proving standing at the time it filed the complaint.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
The New Foreclosure Defenses Standing at the Time the Foreclosure Is Filed There are a string of interesting Florida cases in which a homeowner had a foreclosure dismissed because there is no proof that the servicer had standing at the time it filed the foreclosure. This string of cases comes into play when a servicer (1) fails to allege in the complaint how it obtained the right to enforce the note; and (2) attached to the complaint a note that has not been endorsed or has an undated blank endorsement. Florida courts are strictly enforcing the rule that a plaintiff has to have standing at the time the complaint is filed. When the servicer attaches a copy of the note to the complaint that is not endorsed, the servicer has to prove that it had the right to enforce the note (collect the amout due) as of the time it filed the foreclosure complaint. Take a look at these cases: Pennington v. Ocwen Loan Servicing, LLC, 151 So. 3d 52, 53 (Fla. 1st DCA 2014); Kelly v. Bank of N.Y. Mellon, 170 So. 3d 145, 146 (Fla. 1st DCA 2015); Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903, 906 (Fla. 1st DCA 2013; Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 353 (Fla. 1st DCA 2014); Tilus v. AS Michai LLC, 161 So. 3d 1284, 1286 (Fla. 4th DCA 2015); Lamb v. Nationstar Mortg., LLC, 174 So. 3d 1039, 1041 (Fla. 4th DCA 2015); and Bristol v. Wells Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130, 1132-33 (Fla. 4th DCA 2014). Servicers often try to enter the original note in the record either as evidence supporting a motion for summary judgment or at trial. Florida courts have adopted the rule that an undated, blank endorsement does not, by itself, prove that the servicer had the right to enforce the note at the time the complaint was filed. In other words, if the court cannot tell when the blank endorsement was put on the note (i.e., the endorsement is undated), then the court cannot tell if the note was endorsed at the time the complaint was filed. The Florida courts do not accept proof of possession of the note as satisfactory evidence that the servicer had standing at the time the foreclosure was filed if the servicer was not the party to which the note was made payable. I consider this line of cases a foreclosure defense created by securitization. Remember that during securitization, notes are made payable to the bank making the mortgage loan. (explained in The Guide at How Securitization Was Supposed To Work.) The path that the note takes from the bank to the securitization trust can be extremely complicated, but we know one fact to be true: the trust is not the bank to which the note is made payable. When a securitized loan is foreclosed, the original party to which the note was made payable is never the plaintiff. Because someone other than the original payee seeks to enforce the note (collect the amount due), all securitization foreclosure cases are governed by 3.201(2) of the Negotiable Instruments section of the Uniform Commercial Code. This is what the rule says: if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder When a note has been made payable to the bank that made the mortgage loan, for example, the note is "an instrument ... payable to an identified person." (The UCC calls businesses "persons."). If a note does not have an endorsement, but was given to another party, the note has not been "negotiated." In Florida, it looks like the servicer must have proof that the note was negotiated to it before it filed the foreclosure case to prove that it had standing at the time the case was filed. The servicer must prove that at the time it filed the foreclosure (1) it had possession of the note; (2) the party who was the original payee (the bank that made the mortgage loan in our example) endorsed the note; and (3) the endorsement was dated at a time before the suit was filed. If the endorsement was "in blank," the servicer has met its burden of proof. An endorsement in blank looks like this: Pay to the order of _________________. Sometimes, the original payee will endorse the note to another party. This is called a "special" endorsement. When there is a special endorsement, in Florida the servicer has to prove that the note was "negotiated" to it when it changed hands. Remember, Florida courts will not accept possession alone as sufficient proof of standing at the time the foreclosure was filed. Let's look at the negotiable instrument law about the "transfer" of notes to see why this is so. Rule 3.203(1) defines transfer: An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. Before we examine the rule like a lawyer, I should explain that you are the "issuer" of the note you made payable to the company that gave you the mortgage loan. So, the rule applies to what happens after you give the note to that company. We know that in securitization, the note may be delivered to a number of parties before it is deposited in the securitization trust. When lawyers read a rule such as this one, they break it down into parts like this: An instrument is transferred when (1) it is delivered by a person other than its issuer (2) for the purpose of giving to the person receiving delivery the right to enforce the instrument. Breaking the rule into parts shows us why proof of possession alone is not enough to show standing at the time the foreclosure complaint is filed. Possession may prove element number 1(delivery by a person other than the party who issued the note) but it says nothing about whether the note was delivered "for the purpose of giving the to the person receiving delivery the right to enforce the instrument." Said another way, there is no proof that element number 2 has been satisfied. What particularly delights me about the Florida cases is that they shoot a hole in the banks' favorite argument about "even a thief can enforce a note" If a party has a stolen note, it cannot satisfy the requirement that the note was delivered to it with the purpose of giving it the right to enforce the note. By the way, servicers have tried introducing assignments of mortgages as proof that the note was negotiated to it before it filed the foreclosure. The Florida courts reject this argument because assignments of mortgages only apply to mortgages. Notes are never mentioned in the assignment documents. To sum up, find cases in your jurisdiction saying that a plaintiff must have standing at the time they file a complaint. If you find such a case, take a look at the note that is attached to the complaint. If the note has either not been endorsed or has an undated endorsement in blank, you may have an argument that the servicer did not demonstrate standing at the time it filed the complaint. The other place you need to check is the complaint itself. Make certain that the complaint does not explain how the servicer obtained the right to enforce the note before It filed the complaint. If the complaint does not show standing on its face (in the language and/or from reviewing the attached note), you can think about filing a motion to dismiss. Whether you file a motion or wait until a later time such as summary judgment, the servicer will have the burden of proving standing at the time it filed the complaint.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
The New Foreclosure Defenses Standing at the Time the Foreclosure Is Filed There are a string of interesting Florida cases in which a homeowner had a foreclosure dismissed because there is no proof that the servicer had standing at the time it filed the foreclosure. This string of cases comes into play when a servicer (1) fails to allege in the complaint how it obtained the right to enforce the note; and (2) attached to the complaint a note that has not been endorsed or has an undated blank endorsement. Florida courts are strictly enforcing the rule that a plaintiff has to have standing at the time the complaint is filed. When the servicer attaches a copy of the note to the complaint that is not endorsed, the servicer has to prove that it had the right to enforce the note (collect the amout due) as of the time it filed the foreclosure complaint. Take a look at these cases: Pennington v. Ocwen Loan Servicing, LLC, 151 So. 3d 52, 53 (Fla. 1st DCA 2014); Kelly v. Bank of N.Y. Mellon, 170 So. 3d 145, 146 (Fla. 1st DCA 2015); Lindsey v. Wells Fargo Bank, N.A., 139 So. 3d 903, 906 (Fla. 1st DCA 2013; Kiefert v. Nationstar Mortg., LLC, 153 So. 3d 351, 353 (Fla. 1st DCA 2014); Tilus v. AS Michai LLC, 161 So. 3d 1284, 1286 (Fla. 4th DCA 2015); Lamb v. Nationstar Mortg., LLC, 174 So. 3d 1039, 1041 (Fla. 4th DCA 2015); and Bristol v. Wells Fargo Bank, Nat'l Ass'n, 137 So. 3d 1130, 1132-33 (Fla. 4th DCA 2014). Servicers often try to enter the original note in the record either as evidence supporting a motion for summary judgment or at trial. Florida courts have adopted the rule that an undated, blank endorsement does not, by itself, prove that the servicer had the right to enforce the note at the time the complaint was filed. In other words, if the court cannot tell when the blank endorsement was put on the note (i.e., the endorsement is undated), then the court cannot tell if the note was endorsed at the time the complaint was filed. The Florida courts do not accept proof of possession of the note as satisfactory evidence that the servicer had standing at the time the foreclosure was filed if the servicer was not the party to which the note was made payable. I consider this line of cases a foreclosure defense created by securitization. Remember that during securitization, notes are made payable to the bank making the mortgage loan. (explained in The Guide at How Securitization Was Supposed To Work.) The path that the note takes from the bank to the securitization trust can be extremely complicated, but we know one fact to be true: the trust is not the bank to which the note is made payable. When a securitized loan is foreclosed, the original party to which the note was made payable is never the plaintiff. Because someone other than the original payee seeks to enforce the note (collect the amount due), all securitization foreclosure cases are governed by 3.201(2) of the Negotiable Instruments section of the Uniform Commercial Code. This is what the rule says: if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder When a note has been made payable to the bank that made the mortgage loan, for example, the note is "an instrument ... payable to an identified person." (The UCC calls businesses "persons."). If a note does not have an endorsement, but was given to another party, the note has not been "negotiated." In Florida, it looks like the servicer must have proof that the note was negotiated to it before it filed the foreclosure case to prove that it had standing at the time the case was filed. The servicer must prove that at the time it filed the foreclosure (1) it had possession of the note; (2) the party who was the original payee (the bank that made the mortgage loan in our example) endorsed the note; and (3) the endorsement was dated at a time before the suit was filed. If the endorsement was "in blank," the servicer has met its burden of proof. An endorsement in blank looks like this: Pay to the order of _________________. Sometimes, the original payee will endorse the note to another party. This is called a "special" endorsement. When there is a special endorsement, in Florida the servicer has to prove that the note was "negotiated" to it when it changed hands. Remember, Florida courts will not accept possession alone as sufficient proof of standing at the time the foreclosure was filed. Let's look at the negotiable instrument law about the "transfer" of notes to see why this is so. Rule 3.203(1) defines transfer: An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. Before we examine the rule like a lawyer, I should explain that you are the "issuer" of the note you made payable to the company that gave you the mortgage loan. So, the rule applies to what happens after you give the note to that company. We know that in securitization, the note may be delivered to a number of parties before it is deposited in the securitization trust. When lawyers read a rule such as this one, they break it down into parts like this: An instrument is transferred when (1) it is delivered by a person other than its issuer (2) for the purpose of giving to the person receiving delivery the right to enforce the instrument. Breaking the rule into parts shows us why proof of possession alone is not enough to show standing at the time the foreclosure complaint is filed. Possession may prove element number 1(delivery by a person other than the party who issued the note) but it says nothing about whether the note was delivered "for the purpose of giving the to the person receiving delivery the right to enforce the instrument." Said another way, there is no proof that element number 2 has been satisfied. What particularly delights me about the Florida cases is that they shoot a hole in the banks' favorite argument about "even a thief can enforce a note" If a party has a stolen note, it cannot satisfy the requirement that the note was delivered to it with the purpose of giving it the right to enforce the note. By the way, servicers have tried introducing assignments of mortgages as proof that the note was negotiated to it before it filed the foreclosure. The Florida courts reject this argument because assignments of mortgages only apply to mortgages. Notes are never mentioned in the assignment documents. To sum up, find cases in your jurisdiction saying that a plaintiff must have standing at the time they file a complaint. If you find such a case, take a look at the note that is attached to the complaint. If the note has either not been endorsed or has an undated endorsement in blank, you may have an argument that the servicer did not demonstrate standing at the time it filed the complaint. The other place you need to check is the complaint itself. Make certain that the complaint does not explain how the servicer obtained the right to enforce the note before It filed the complaint. If the complaint does not show standing on its face (in the language and/or from reviewing the attached note), you can think about filing a motion to dismiss. Whether you file a motion or wait until a later time such as summary judgment, the servicer will have the burden of proving standing at the time it filed the complaint.
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.  MORTGAGE RIGHTS