The First District Court of Appeal has thrown out evidence presented in three foreclosure cases due to the lenders’ witnesses being unqualified to testify. In two of the cases, the court stated that the lawsuits should be dismissed in favor of the homeowners. The banks have 30 days to file a motion for rehearing or the decisions will become active throughout the state. It has been known for banks to bring one witness with inadequate knowledge of the origin or accuracy of mortgage records they provided. This is normally due to the number of servicing transfers from the time the loan is funded to the time of trial.
Florida courts had a tsunami of foreclosures filings after the housing market crashed in 2008. In the interim, defense attorneys argued that the plaintiffs were bypassing the evidentiary rules by providing counterfeit documents to prove their standing. This is led to the robo-signing scandal that was challenged in 2010 creating a mandate for servicers and lenders to suspend filing new foreclosure cases.
In 2013 the Fourth District Court ruled in the favor of Connie Yang, the owner, because her homeowner’s association failed to provide solid evidence in the accounting ledger they submitted. However, when defense attorneys tried to use this as an example against the banks, judges ruled that this case only applied to associations and not banks.
In Tallahassee, Judge Nikki Ann Clark of the First District ruled against Bank of New York Mellon because the evidence submitted to prove the amount owed by the defendants, Lloyd & Teresa Burdeshaw, was inadmissible hearsay. The bank’s witness was unsuccessful in authenticating the records provided by the bank and failed to qualify as a person with proficient intellect of the four aspects needed for business records exception. In addition to the case being dismissed for lack of foundation, it was later discovered that the case should have been dismissed years prior because of a motion to dismiss for inactivity that that was filed in 2010.
In another case, Kiefert v. NationStar Mortgage, the Court reversed the foreclosure judgment because the bank’s witness was only able to establish that its predecessor was in possession of the note when the complaint was filed, not that that the note had been endorsed at the time the complaint was filed.
Finally, in Lacombe v. Deutsche Bank, the Court ruled in favor of the defendant, citing that the witness that the bank brought was simply “incoherent”.
These cases were dismissed, refusing to remand any of them as the bank had plenty of time to present proper evidence. Many foreclosure defense attorneys feel that there is a double standard when it comes to foreclosure trials and the witnesses the bank provides. Many go as far as stating that the banks are feeding the witnesses with hearsay so that they may mimic this language in court, but that this would not be allowed to happen in, for example, a medical malpractice trial.
If these opinions stand, the banks will be forced to present evidence at trial just like in any other civil case. Hopefully, the threat of mass dismissals and the expense and loss associated with that prospect will incentivise bank to work with borrowers in modifying delinquent mortgage loans.
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