Keeping Banks Honest in Foreclosure

by Matthew C. Bothwell on July 27, 2011

A recent ruling from the Massachusetts Supreme Court has shed even more light on the unorganized and often secretive world of mortgage foreclosures.  US Bankcorp and Wells Fargo appealed a ruling by the lower court holding that under Massachusetts law, foreclosure sales are invalid unless the banks can prove that the mortgage was officially recorded and owned by the banks.  Although this ruling does not have any controlling authority in Florida, it represents a national trend of the court’s keeping the mortgage companies honest and making sure that they have legal standing to bring a claim.

Legal standing is the right of a person or corporation to bring suit.  It is how the courts ensure that you are being sued by the right person and helps protect you against fraudulent claims.  As such, it makes sense that a bank should be required to prove that it has a legal right to take your home before you are displaced.  Florida law requires that all persons or companies, including banks, have legal standing to bring suit.  As such, if properly raised, courts will require banks to submit admissible evidence to prove that it has a legal right to bring the foreclosure action and take your home. 

Evidence sufficient to prove a bank has proper standing may include a properly recorded note and mortgage issued in the name of the prosecuting bank but be careful, banks will often times attempt to substitute an affidavit of a representative as evidence of proper standing.  Often times an affidavit of a bank “representative” is inadmissible hearsay and if a proper objection is made it will not be admissible as proper evidence.  This is especially important when a bank has filed a Motion for Summary Judgment seeking a quick end to the foreclosure process.  Also, in Florida, a valid note and mortgage must be recorded in the county in which the property is located to foreclose on property. 

After you sign a mortgage it is very likely that your note and mortgage are sold or transferred from your original bank or lender to other entities.  These secondary, third, fourth or even fifth note holders may attempt to foreclose on your property with full knowledge that they do not have proper standing to sue but hope that you do not understand your rights and that they can force the foreclosure through.  Keeping the banks honest and not allowing them to force a foreclosure on you may afford you time to renegotiate with the bank, sell the property or allow you to make other living arrangements.

If you have questions concerning property foreclosure, short sale or any other matter involving creditor collections, please contact Matthew C. Bothwell, P.A. at (904) 351-6640.

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