New Case Makes Foreclosing Easier for Banks
Although the foreclosure crisis seems to be behind us, and although the number of foreclosures filed is lower than it was at the height of the crisis, there are still plenty of cases working their way through our court system. Some are newer cases, and some are older ones, with banks oftentimes refiling cases that were dropped, forgotten, or which the banks lost the first time around.
Unfortunately, some of our appellate courts are taking the opportunity to continue to make law that is not favorable for consumers. A recently released case makes it easier for banks to win foreclosures at trial where there are multiple servicers or multiple owners of a loan.
Transfers of Loans and Documents
As a general rule, when a loan is transferred (either because the loan is bought and sold, or because the company servicing the loan has changed), there must be some evidence that the new owner/servicer has verified the accuracy of the records that it received from the old, previous owner/servicer. Whoever it is that is testifying in court for the new owner/servicer, must be able to verify that the records it seeks to admit in court are accurate, and are records that were kept in the normal course and scope of the prior owner/servicer’s business.
That’s difficult for banks to do. Many of the people testifying for banks in court have no knowledge of their own company’s policies and procedures, much less that of any prior servicer or owner. Many prior owners or servicers of loans are long out of business, making it impossible for many witnesses to have any personal knowledge of the policies and procedures of that company.
Recent Case Makes Banks’ Burden Easier
A recent appellate court opinion seems to have made it a bit easier for banks and lenders to meet their burden. The appellate court, in an effort to seemingly make it easier for subsequent owners/servicers to admit records into evidence, noted the “business practices inherent among lending institutions” when buying and selling loans to each other. Because of those relationships, the Court held that simply showing “the circumstances of the loan transfer itself” would have been sufficient for the bank to meet its evidentiary burden.
This language opens the door for a lender simply to show that a loan was bought and sold, alleviating them of the need to make any other showing to get records admitted. This statement by the Court is not written in Florida’s evidence code—the code makes no note of the relationship between any company.
Of course, many bank witnesses may not even know the circumstances that surround any particular purchase or transfer of loan information, and thus still may not be able to get the documents that they need to foreclose into evidence.
However, the case is a reminder that courts are continuing to make it difficult for consumers, and that it takes a qualified foreclosure defense attorney to understand how to fight against these kinds of court rulings.
Do you have questions about foreclosure? Contact Jacobs Legal to speak with one of our Miami consumer rights attorneys today.