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The game has been obvious to everyone. Until recently, it seemed that the courts considered it irrelevant. But decisions over the last couple of years have shown that the courts are increasingly disturbed by the”musical chairs” game being played by the banks. Why are they doing this? Why do we have changing trustees, changing plaintiffs, changing servicers? IN private many judges and even Chief Judges have said to me that this is the most disturbing part of the whole foreclosure mess. They understand that this is probably an attempt to avoid detection. They want to know what the banks are hiding.
The second DCA in Florida recently ruled on the issue reversing the trial court who chose to ignore the basic principle underlying lawsuits, assignments and any other kind of legal action — you can’t assert rights that the original party did not have. If the Assignor had nothing, then you have nothing. No more and no less. If the Trustee is a the Trustee of an empty trust, then the trustee has nothing. If the servicer claims to have powers derived from the empty trust then it has nothing. And now if the original Plaintiff in an action had nothing, then the new Plaintiff also has nothing. Nothing plus nothing equals nothing.
Another interesting aspect to the opinion is that the burden shifts to the foreclosing party if the homeowner asserts a lack of standing as a defense. It isn’t up to the homeowner to prove that — it is up to the foreclosing party to prove its right to be in court or to otherwise initiate foreclosure.
Where, as here, the defendant asserts a lack of standing as a defense to foreclosure, it is incumbent upon the plaintiff to prove its standing at trial. Gonzalez v. Deutsche Bank Nat’l Trust Co., 95 So. 3d 251, 253-54 (Fla. 2d DCA 2012). This requires the plaintiff to show that it is the “holder” of the note or a person acting on behalf of the holder. Mortg. Elec. Regis. Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007). If the plaintiff is not the original lender, it may establish its standing as a holder “by submitting a note with a blank or special endorsement, an assignment of the note, or [with a sworn statement] otherwise proving the plaintiff’s status as the holder of the note.” Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013) (citing McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012)). A plaintiff that is not a holder, such as a mortgage servicer, can establish standing through proof that it is authorized to enforce the note on behalf of the holder. Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639, 642-43 (Fla. 2d DCA 2015).
It does appear that the courts are getting less concerned with a “free house” (a myth) and more concerned with the truth.
Filed under: foreclosure