Ruling Wrongful Foreclosure Dismissed in Appeals

Wondering if the homeowner ever wins? The short answer is YES. It may be in an appeals court, but if you know you are right, and that the foreclosure process was improperly handled, then it may be worth the court and attorney costs plus the time involved in resolving the case.

Recently, in Florida district court of appeals, the judge ruled in favor of Mara and Glenn Kenneth Powell over Wells Fargo Bank & MERS. The ruling stated: “Because the Bank failed to establish standing, we reverse the final judgment and remand for entry of an order of involuntary dismissal.” .

In 2005, the borrowers signed a note and mortgage to Bankers Mortgage Trust, Inc. (the original lender). In 2008, the Bank, as trustee, filed suit against the borrowers after they defaulted on the loan for mortgage foreclosure and for reestablishment of a lost note. Because the bank alleged it was the “legal and/or equitable owner and holder of the Note and Mortgage…” it was the responsibility of the bank to support that claim. In the exhibits submitted with the foreclosure filing, the bank included the copy of the note with an allonge (paper attached to a document such as a note for the purpose of receiving additional endorsements if the original note does not have room) with an endorsement to GreenPoint Mortgage Funding, Inc. .

Five years later, after the filing of the original foreclosure complaint, the Bank filed with the trial court the “True and correct” original note. On the back of the copy of the Allonge to the note, was an additional undated, special endorsement from GreenPoint Mortgage to the Bank. A second separate allonge bore an undated, blank endorsement from the bank. Because the second allonge was undated, the single witness for the bank was unable to testify when the allonge was attached. This meant proper standing could not be established by the bank and the appeals court ruled that the bank had not proven standing to foreclose on the homeowners. .

Per the court “A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose.” So, even after the courts were flooded with “show me the note” lawsuits, if the bank cannot prove they have the standing to foreclose, a homeowner with patience may still prevail.

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