Happy New Year for Homeowners! No More Cutting Corners for Banks!

Banks will need to clean up their circus “act” in 2012 when it comes to Florida foreclosure cases thanks to a series of stinging decisions handed down by the 4th District Court of Appeals that could be the gift that keeps on giving for Florida homeowners.

The court finally realized the banks must have the proper authority before they proceed in the foreclosure process. For years I have been saying the banks have systematically been cutting corners in the foreclosure defense process by not having the requisite power to bring their cases.

In this most recent case, Robert McLean vs. JPMorgan Chase, Chase, which was seeking to foreclosure on McLean’s Broward County home, claimed the note from the borrower was “lost, stolen or destroyed.” I call shenanigans on that claim. The truth is banks were in such a rush to move forward that they just never bothered to check their own paperwork.

McLean sought to squash the foreclosure because he said that Chase ultimately could not prove they were the owner of the note. In fact the assignment of mortgage, which is a document which indicates that a mortgage has been transferred from the original lender, which Chase produced to the court was signed three days AFTER the first foreclosure complaint was filed by the bank.

The 4th DCA, in our eyes, had no choice but to reverse a lower court’s decision and side with the homeowner. As the saying goes, possession is nine tenths of the law, and in this case, Chase was left holding an empty bag. The court noted that if there was “substantial doubt about the note” that the bank should dismiss and refile the case, and it was clear from Chase’s lack of concrete proof that they had no legal standing in this case.

The 4th DCA’s ruling also guarantees homeowners have a right to an evidentiary hearing, rather than just a summary judgement.

The decision is a monumental leap forward in the way courts handle foreclosure cases and the role that the mortgage assignments play in the foreclosure process. What the courts have been doing was effectively denying the due process rights of those who were in foreclosure by not forcing the banks to prove ownership of these mortgages.

Gerald Richman, a lawyer for the foreclosure firm Shapiro and Fishman tried to downplay the importance of this ruling in the Palm Beach Post, saying it didn’t mean the foreclosure had no merit. Oh Gerry, you’re missing the point, by a mile. If you’re going to make people cross every “i” and dot every “t” before they get the keys to the kingdom, how can we not demand banks do the same before they take them back!!

The truth is the process the banks engaged in was unfair and unconstitutional, and the courts have now come to the conclusion that we did long ago.

Thank you, 4th District Court of Appeals, and may the New Year bring you many more moments of clarity like this one.