August 21, 2015
This time of year is generally slow in foreclosure litigation as many of the Judges and attorneys are on vacation. However, the Florida appellate courts have been issuing opinions reversing foreclosure judgments on almost a weekly basis.
For years, mere possession of an alleged note with a “blank endorsement” (which we call a “stamp”) was enough to carry the day to prove standing without any evidence of authority or authentication of the stamp and despite homeowner defenses challenging the alleged “endorsement”. In many jurisdictions, it still is.
However, the Florida appellate courts have taken the lead in delving into the real issues surrounding the alleged “endorsements”, none of which are ever dated. In the recent opinion of Kelly v. Bank of New York as Trustee for CWALT, Inc. ALT 2007-25, Florida 1st District Court of Appeal Case No. 1D13-2778 (opinion issued July 14, 2015), the Court reversed the final judgment of foreclosure finding that BNY had failed to prove standing on multiple grounds, and despite testimony from the representative of a prior servicer that the “collateral file” was sent to foreclosure counsel prior to the filing of the Complaint.
The Court held that where the plaintiff files the original note after filing suit, an undated blank endorsement on the note is insufficient to prove standing at the time the initial complaint was filed, citing to Tilus v. AS Michai LLC, 161 So.3d 1284 at 1286 (Fla. 4th DCA 2015). The Court further held that when a plaintiff asserts standing based on an undated endorsement, it must show that the endorsement occurred before the filing of the complaint through additional evidence, citing to Lloyd v. Bank of NY Mellon, 160 So.3d 513 at 515 (Fla. 4th DCA 2015).
The Court found that the only “additional evidence” was the testimony from a mortgage resolution associate for a prior servicer who did not testify as to when the endorsement occurred. The fact that the testimony established only that the original plaintiff was in possession of the note at the time the complaint was filed was not enough to establish standing in the absence of evidence as to when the endorsement occurred.
We have found that in addition to these stamps not being dated, there are often situations where (a) the stamp is not even on the signature page of the note but was placed on the back of one of the pages; (b) the alleged signor of the stamp was not an employee of the entity whose name appears with the stamp; (c) that the signature on the stamp is one of many variations of the signature of the signer; and (d) that there are multiple versions of the note, both with and without stamps and filed at different stages of the litigation.
Just two days ago, the Florida 4th District Court of Appeal issued its opinion in Perez v. Deutsche Bank National Trust Company, etc., Case No. 4D13-4812, which reversed another final judgment of foreclosure involving Ocwen where the representative testified that the note was provided to Deutsche Bank at the time that the securitization trust was created in connection with the PSA. However, the representative did not know when Ocwen requested the note.
The Court held that Deutsche Bank failed to establish standing because no evidence was introduced showing that the note was transferred to Deutsche Bank prior to the inception of the lawsuit. Like prior cases, the “endorsement” was undated. The representative was unable to testify when the note was endorsed, and the PSA was not introduced into evidence. The Court also held that even if the PSA had been introduced into evidence, this would be insufficient to establish standing as there was no evidence that the indorsee had the intent to transfer any interest to the trustee, citing to Balch v. LaSalle Bank, N.A., 2015 WL 641534 (Fla. 4th DCA, Aug. 5, 2015).
The Perez Court also cited to Jarvis v. Deutsche Bank, 40 Fla. L. Weekly D1416 (Fla. 4th DCA, June 17, 2015) which held that evidence that the note was physically transferred into a trust prior to Deutsche Bank filing its complaint does not, by itself, establish standing.
These decisions finally deal with the real issues as to what proof of standing is all about, and dispel the myth that mere possession of a note with a blank and undated stamp is enough to take away someone’s home. Bravo and kudos to the Florida appellate courts. The rest of the courts in this country should take notice and hold foreclosing parties to their evidentiary burdens.
We thank several of our dedicated followers for bringing these important appellate decisions to our attention.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com