Foreclosure defense: Court rules bank must prove ownership


Following foreclosure moratoriums by PNC Bank, Bank of America, J.P. Morgan Chase, and Ally Financial, the settlement of deceptive marketing charges by Wells Fargo Bank, and the Attorney General’s investigation into faulty foreclosure practices at the Florida Default Law Group, the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, LLP., a Florida court ruled that banks must provide evidence of ownership when attempting to foreclose on a property.

On Wednesday, a three-judge panel of the 4th District Court of Appeal in West Palm Beach overturned an earlier summary judgment by Palm Beach Circuit Court Judge Thomas Barkdull, allowing repossession of a Boca Raton couple’s home by US Bank National Association. The foreclosure went through even though the lender did not provide an original note or other acceptable proof of ownership.

In the case of Guiseppe Servedio, the court ruled that banks must provide evidence they actually own and hold the mortgage when seeking to foreclose on a property. “Some judges have been lax about the rules of evidence,” stated Peter Snyder, his attorney. “I think that what this case says is you better have the original note.”

The decision comes following an earlier ruling against Deutsche Bank where the court stated that “[a] summary judgment should not be granted where there are issues of fact raised by [the] affirmative defense[s] which have not been effectively factually challenged and refuted.” In this matter, a homeowner asserted several defenses that were ignored by Deutsche Bank and the lower court.

The recent decisions come amid critical reports of judicial foreclosures receiving “rocket docket” processing despite missing and/or poorly prepared documents. Last week, Wells Fargo admitted making mistakes in 55,000 foreclosure cases but promised to expeditiously address them.

The San Francisco-based bank said it plans to resubmit documents in Florida and 22 other states by mid-November. This move comes two weeks after Wells Fargo officials issued a statement saying its affidavit procedures and daily auditing “demonstrate our foreclosure affidavits are accurate.”

Officials at Wells Fargo claim the mistakes were technical and that it had no plans to halt the foreclosure process as PNC Bank, Bank of America, J.P. Morgan Chase, and Ally Financial did. “We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” says Teri Schrettenbrunner, a bank spokeswoman.

Through the Mortgage Foreclosure Multi State Group, attorneys general in all 50 states are investigating whether legal procedures and documents were handled properly in judicial foreclosures. As the probe widens, a number of attorneys general have opened separate investigations on “robo-signers” as well as law firms and banks.

Shapiro & Fishman, LLP, one of the four Florida foreclosure firms being investigated by the Florida attorney general for allegedly providing inaccurate or false documents, represented US Bank against the Servedio’s. Lawyers at the firm could not be reached for comment, but in the past have denied any wrongdoing.

In the appellate opinion, the judges said that even though US Bank later provided the court with a copy of the original note, it was insufficient because it was submitted after Barkdull finalized the foreclosure. “Without evidence demonstrating [the bank’s] status as holder and owner of the note, genuine issues of material fact remain,” the judges wrote.

“Unfortunately, for the sake of expediency and reduction of overloaded dockets, judges are granting summary judgments without full consideration of a homeowners affirmative defenses and the evidence presented,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale. “In some cases, the appellate courts have now found that banks did not provide a note or prove ownership of the property being foreclosed upon.”

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune (Media General Group) – http://www2.highlandstoday.com/content/2010/oct/31/foreclosure-defense-court-rules-bank-must-prove-ow/news-newbusiness/ To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

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