There are a number of great defenses to foreclosures in Florida.
It is best to have an foreclosure attorney who knows what the heck they are doing to properly present these foreclosure defenses. I will go through a few of the common ones and give my 2 cents on each. Many defenses are waived if not presented timely and properly. This is why it is so important to hire a competent foreclosure lawyer in Florida.
1. Defective or Lack of Notice of Acceleration - Paragraph 22 of most standard mortgages have a notice of acceleration clause. This clause requires the bank to provide the borrower with notice of intent to accelerate. There are about 7 items that must be listed in that letter. This is a powerful foreclosure defense in Florida right now. Foreclosure after foreclosure has been reversed by the appellate courts for the bank’s failure to prove this condition precedent (see example). Banks are allowed to generally plead that all conditions precedent to the filing of the foreclosure have been met. Its is then up to the homeowner to raise the lack of the notice pursuant to paragraph 22 of the mortgage as an affirmative defense. Failure to do so will waive this defense, so it is important to get this right. Another great reason to hire a foreclosure attorney who knows what they are doing. The bank must then prove at trial or summary judgment that a notice that meets the requirements of paragraph 22 was sent. If they can’t prove it, then the homeowner wins.
2. Lack of Standing – This is a common, but often misunderstood, defense to foreclosure cases. Standing is the legally ability for a party to bring a claim in court. In a foreclosure case, the bank must prove that they are the owner or holder of the note in order to foreclose. Florida law has not been too kind to homeowners in this area. The law as it stands now is that if the bank has the original note and it is either (a) payable to them, (b) indorsed to them, or (3) it has a blank indorsement, then that is all the bank needs to prove standing. There is a lot of bad information out there on the internet, mostly put out there bu non-lawyers who don’t have a clue what they are talking about. Here are some common misconceptions.
The bank needs an assignment of mortgage in order to foreclose – Not true, the law in Florida is that the mortgage follows the note.
The bank must prove that they paid for the loan – Not true, as long as they have a blank indorsement or a specific indorsement to them, the banks will be able to prove standing.
The bank must prove all signatures on the note are valid – Not true, it is presumed that they are valid. The homeowner must raise this as an affirmative defense and raise the issue of authenticity of the signatures as a negative averment.
This defense is best left to the professionals. The foreclosure attorneys at Loan Lawyers know these issues cold and are available for free consultations in Broward, Miami-Dade, and Palm Beach if you are ready to really fight your foreclosure.
3. The Bank Did Not Comply With the Pooling and Servicing Agreement – Much has been made of this defense over the last few years. I previously wrote an article on this issue. While I think that the arguments are sound, they simply have not been gaining traction. The Third District Court of appeals in Castillo v. Deutsche Bank Nat. Trust Co. said “Because the [homeowner] is neither a party to nor a third-party beneficiary of the trust, we find the [homeowner] lacks standing to raise this issue and affirm the final judgment of foreclosure in favor of the [bank], as the holder of the original note and mortgage.” While I believe that this is an issue to raise, I would not want to put all of my eggs in this basket. Most cases around the country are against the homeowner on this issue.
4. The Blank Indorsement Post-Dated The Filing of the Complaint – This is an interesting defense that not too many lawyers have zeroed in on yet. Three cases from the Second District Court of Appeals have held this year that when the bank is trying to prove standing by introducing a note with a blank indorsement, they must prove that they obtained possession of the indorsement prior to the filing of the complaint. I just argued this issue in my trial last week against Wells Fargo. We will see what the judge does with this. This is really a standing argument but I believe that it deserves special treatment as its own defense in this article. The idea behind this defense is that the Florida UCC states that anyone in physical possession of a note with a blank indorsement can foreclose. The law also states that a party must have standing before filing the lawsuit. So, if the bank did not have physical possession of the note with a blank indorsement when they filed the lawsuit, then they did not have standing at the time the lawsuit was filed, and the homeowner wins.
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