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What Does Standing to Sue Really Mean?


During the height of the foreclosure crisis–and even now, as homes continue to be foreclosed on–the word “standing” was heard routinely. It is often said that banks don’t have standing to bring their suits, or that a foreclosure case was won on the basis of standing. But what does that word even mean?

Having the Right to Sue

Simply put, standing means that the party that brings the action must have some stake in the outcome. The person suing must be the person actually injured by the wrongs alleged in the complaint, or must stand to gain or lose something on the outcome of the case.

In injury cases, this is an easy analysis–if you were not injured in an accident, you likely wouldn’t sue someone anyway (unless you’re suing on behalf of a minor child, which is a different situation). But if you were injured in any way, you have a stake in the outcome of the case and would have standing to sue.

The Extent of Injury or Damage Matters

However, not every injury is one that provides standing. Assume that a local factory is spewing chemicals in the air. You could not sue because the air you are breathing is becoming polluted, or because you don’t like pollution.

However, assuming you could prove you contracted a disease, and the disease was from pollution in the air, and from the exact kind of pollution the factory was spewing, you may come closer to having standing to sue.

Standing in Foreclosures

Standing gets a bit more difficult to analyze in other types of cases. In foreclosure cases, you may have heard people say that banks don’t own the loans or mortgages that they are suing to foreclose upon. If that is true (as it often is), then the bank would have no standing.

Thinking of it another way, imagine your neighbor’s roofer did not fix the roof even though your neighbor paid. You could not sue the roofer. Only your neighbor could. Similarly, in the foreclosure context, if Bank 1 does not own the loan or mortgage, it has no enforceable contract with the homeowner.

If that is the case, the bank can’t sue in court to enforce an agreement that it did not create, it did not purchase, or that wasn’t given to it by some former owner of the loan. It must show it actually has a right to enforce the loan and mortgage, otherwise it is not harmed by any breach, and thus has no stake in the outcome or injury from any alleged breach.

Buying and Selling Loans Creates the Problem

Standing is only an issue in foreclosure cases because loans were bought and sold and transferred, often multiple times, and often improperly. In a normal contract case, one of the parties that actually signed the contract would be suing. But because most banks filing foreclosures aren’t the same banks that loaned money, or put a mortgage on the property, standing became and remains today a very contested issue in foreclosure cases.

At Jacobs Legal in Miami, we help homeowners in foreclosure. Contact us to schedule your free initial consultation if you have a foreclosure case filed against you.


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