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Case Strengthens Need for Foreclosing Banks to Prove Notice Requirements


In the world of contract law, a pre-requisite or a condition precedent is a fancy legal term that means something has to be done before there is a right to enforce an agreement. So, for example, if I say that I must mail you a letter saying you’ve breached an agreement before I can sue you, even if you breach the agreement, if I don’t mail you that letter, I can’t sue you.

Mortgages have conditions precedent as well, most notably, the requirement that a bank or lender mails the borrower a notice before the bank is allowed to foreclose (this is often called a Paragraph 22 requirement). Most standard mortgages require that the notice give the borrower the opportunity to cure (correct) the default and that the bank demonstrate that they have in fact mailed the letter to the borrower.

Court Determines Whether Notice Letter Was Mailed

In a case recently decided by the Fourth District Court of Appeals, a bank was seeking to foreclose on a borrower. At trial, the bank had to show that it complied with the condition of mailing the Paragraph 22 letter.

Legally, just proving the letter exists or was drafted does not satisfy the requirement of showing that it was mailed. The letter itself was shown at trial—the question became whether it was mailed.

The bank, Deutsche Bank, sought to prove the letter’s mailing through its witness (actually, the witness was an employee of the bank’s servicer, Ocwen). When asked how the witness knew the letter had been mailed to the borrower, the witness said she didn’t understand “…what would be the point of the servicer taking the time, money, and energy to generate a letter and not mail[ing] it out.” This was hardly a definitive statement that the letter had been mailed.

Witnesses can also say that they have knowledge of a company’s business practices—that is, they can say that it was the regular practice of Bank A to mail letters, and show that they have knowledge of the bank’s practices.

The court found there was insufficient evidence to show the letter was mailed, and the case was sent back by the appellate court, which ordered the trial court to enter a dismissal of the foreclosure case.

Witnesses May Not Have Required Knowledge

The case doesn’t really break any new ground when it comes to foreclosure law, but it does highlight how often banks come to trial with witnesses that don’t know what they need to know in order for foreclosure to occur.

Often, bank witnesses have worked for multiple banks, or they work for the servicer and not the bank (or vice versa) or, in many cases, they never actually had anything to do with making loans or foreclosing, but rather are professional trial witnesses.

When these witnesses don’t have working knowledge of a bank’s practices in order to meet the evidentiary standards needed to get information or items into evidence, the borrower can end up victorious after a foreclosure trial (or after an appeal).

At Jacobs Legal in Miami, we try foreclosure cases and fight banks in court. Contact us to schedule your free initial consultation if you are involved in a foreclosure case.


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