This case shows that hearsay evidence is admitted as long as it is a bank claiming an exemption. The witness, devoid of any actual knowledge, is allowed to testify about facts, events and circumstances about which he or she knows nothing. The Judge did enter judgment for the borrowers. But the 4th DCA reversed and ordered foreclosure. At some point the courts are going to roll back these pronouncements when and if the foreclosure crisis comes to an end. The precedent for other cases is against any written or unwritten prior doctrine. But in the meanwhile millions of people will still lose their homes to strangers without any financial interest in the loan.
This case might lead to the conclusion that borrowers should make payments through their own “servicers” who can then testify about the inconsistent, false assertions, and data maintenance standards of the other servicer.
The moral of this story is PREPARE and be RELENTLESS in what is always an uphill battle successfully defending foreclosure cases. And take it as far as you can to ward off an appellate decision that is based upon the “bank must win” doctrine.
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The hearsay rule is one of the basic points of American jurisprudence. Many societies have grappled with the issue. On its face, it is a simple proposition: what to do with a witness, who appears in court, and whose testimony is proffered relating to a statement by someone else out of court? The answer in most societies is that the statement is barred simply because the opposing party has no opportunity to test the veracity of the statements, or even to test whether the statement was actually made by the out of court party who the witness says made it.
Some places require more corroboration (more witnesses) while others, like American jurisprudence, bar such statements outright for reasons stated in the U.S. Constitution and most State constitutions — i.e., that the opposing party must have a right to cross examine the party making the statement in order for it to be admitted in evidence — except unfortunately in foreclosure cases.
Much of American jurisprudence has suffered an astounding number of retreats from the basic hearsay rule in this country. This has been coupled with appellate decisions expanding the hearsay “business records” exemption rule to the point where there is little scrutiny over whether the witness is competent and whether the statement is true. This is despite hundreds of case decisions that corroborate news stories in the public domain that reveal the absence of any real interest in the loans and the banks’ practice of fabricating, forging and robo-signing paper that were badly defined as “documents” merely because they had the title of a presumed valid document.
The seminal study performed by Katherine Ann Porter when she was at the University of Iowa and many other studies in various parts of the country corroborating the counterintuitive conclusion that many and probably most promissory notes were destroyed shortly after signature leading inevitably to the only possible conclusion that the “notes'” being used in foreclosures were neither real nor original; and despite the presence of a potentially valid cause of action to reinstate a “lost” promissory note, few, if any, foreclosing parties have actually proven or even alleged the “lost note” — because they cannot admit or even tell the story of what happened.
So here we have the usual pattern. A series of parties, none of whom actually have any records (or financial interest), but who have access to a third party central repository (like LPS/Black Knight) of images and data that is carefully mined and fabricated to support the declaration of default, the acceleration of the entire balance due and the fabricated “right” to foreclose based solely on unsupportable presumptions and not the rules of evidence.
The trial judge in this case “erroneously” applied normal rules of evidence and concluded that the witness was neither credible nor knowledgeable about the “records” that the bank claimed was thoroughly “audited” (not true in any instance that I have seen). The culprits in this case are some of the usual predators —- Chase, PennyMac and Washington Mutual. The appellate court tossed the trial court’s decision based upon the new doctrine of “the bank must win, even if everything they have done is wrong.”
The cumulative and specific effect of such rulings by trial courts or appellate courts is to undermine the possibility of settlement and workouts, which then overloads the judiciary in each state — hearing cases that would otherwise be settled were it not for the fact that the ONLY way for the servicer to make money is to pursue foreclosure at the expense of both investors and putative borrowers. Thus the servicers “offer” settlements in the form of modifications that are not intended to actually happen, much less benefit either the investor or the borrower. Settlement is sued as a ruse to lure borrowers into an insurmountable default that in many cases would never have any basis in fact but for the wrongful illusions created by the servicer for the interests of the servicer.
What to do?
Practitioners should drill down deeper making it more difficult for trial judges and appellate panels to use the presumption that the documents are real and that the witness knows anything about the “loan” about which the witness is testifying. This requires intensive preparation of strong objections and aggressive cross examination that reveals as much as possible that the witness knows nothing, the “boarded” “documents” were neither “audited” nor “boarded” all pointing to a complete lack of foundation to get the so-called “documents” into evidence. It is the way I have won cases, and the way most successful foreclosure defense lawyers have won their cases.
There is also the possibility of using the laxity of the rules of evidence against the bank by use of the recorded recollection rule, in which the use of a journal that fairly well tracks the business records exception may not be admissible, as such, but it CAN be read aloud verbatim:
(5) RECORDED RECOLLECTION.—A memorandum or record concerning a matter about which a witness once had knowledge, but now has insufficient recollection to enable the witness to testify fully and accurately, shown to have been made by the witness when the matter was fresh in the witness’s memory and to reflect that knowledge correctly. A party may read into evidence a memorandum or record when it is admitted, but no such memorandum or record is admissible as an exhibit unless offered by an adverse party.
F.S. 90.801 Hearsay; definitions; exceptions.—
(1) The following definitions apply under this chapter:
(a) A “statement” is:1. An oral or written assertion; or2. Nonverbal conduct of a person if it is intended by the person as an assertion.(b) A “declarant” is a person who makes a statement.(c) “Hearsay” is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.
(2) A statement is not hearsay if the declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement and the statement is:(a) Inconsistent with the declarant’s testimony and was given under oath subject to the penalty of perjury at a trial, hearing, or other proceeding or in a deposition;(b) Consistent with the declarant’s testimony and is offered to rebut an express or implied charge against the declarant of improper influence, motive, or recent fabrication; or(c) One of identification of a person made after perceiving the person.
History.—s. 1, ch. 76-237; s. 1, ch. 77-77; ss. 19, 22, ch. 78-361; ss. 1, 2, ch. 78-379; s. 2, ch. 81-93; s. 497, ch. 95-147.
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90.803 Hearsay exceptions; availability of declarant immaterial.—The provision of s. 90.802 to the contrary notwithstanding, the following are not inadmissible as evidence, even though the declarant is available as a witness:(1) SPONTANEOUS STATEMENT.—A spontaneous statement describing or explaining an event or condition made while the declarant was perceiving the event or condition, or immediately thereafter, except when such statement is made under circumstances that indicate its lack of trustworthiness.(2) EXCITED UTTERANCE.—A statement or excited utterance relating to a startling event or condition made while the declarant was under the stress of excitement caused by the event or condition.(5) RECORDED RECOLLECTION.—A memorandum or record concerning a matter about which a witness once had knowledge, but now has insufficient recollection to enable the witness to testify fully and accurately, shown to have been made by the witness when the matter was fresh in the witness’s memory and to reflect that knowledge correctly. A party may read into evidence a memorandum or record when it is admitted, but no such memorandum or record is admissible as an exhibit unless offered by an adverse party.
(6) RECORDS OF REGULARLY CONDUCTED BUSINESS ACTIVITY.—(a) A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or as shown by a certification or declaration that complies with paragraph (c) and s. 90.902(11), unless the sources of information or other circumstances show lack of trustworthiness. The term “business” as used in this paragraph includes a business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.(b) Evidence in the form of an opinion or diagnosis is inadmissible under paragraph (a) unless such opinion or diagnosis would be admissible under ss. 90.701–90.705 if the person whose opinion is recorded were to testify to the opinion directly.(c) A party intending to offer evidence under paragraph (a) by means of a certification or declaration shall serve reasonable written notice of that intention upon every other party and shall make the evidence available for inspection sufficiently in advance of its offer in evidence to provide to any other party a fair opportunity to challenge the admissibility of the evidence. If the evidence is maintained in a foreign country, the party intending to offer the evidence must provide written notice of that intention at the arraignment or as soon after the arraignment as is practicable or, in a civil case, 60 days before the trial. A motion opposing the admissibility of such evidence must be made by the opposing party and determined by the court before trial. A party’s failure to file such a motion before trial constitutes a waiver of objection to the evidence, but the court for good cause shown may grant relief from the waiver.(7) ABSENCE OF ENTRY IN RECORDS OF REGULARLY CONDUCTED ACTIVITY.—Evidence that a matter is not included in the memoranda, reports, records, or data compilations, in any form, of a regularly conducted activity to prove the nonoccurrence or nonexistence of the matter, if the matter was of a kind of which a memorandum, report, record, or data compilation was regularly made and preserved, unless the sources of information or other circumstances show lack of trustworthiness.(8) PUBLIC RECORDS AND REPORTS.—Records, reports, statements reduced to writing, or data compilations, in any form, of public offices or agencies, setting forth the activities of the office or agency, or matters observed pursuant to duty imposed by law as to matters which there was a duty to report, excluding in criminal cases matters observed by a police officer or other law enforcement personnel, unless the sources of information or other circumstances show their lack of trustworthiness. The criminal case exclusion shall not apply to an affidavit otherwise admissible under s. 316.1934 or s. 327.354.(9) RECORDS OF VITAL STATISTICS.—Records or data compilations, in any form, of births, fetal deaths, deaths, or marriages, if a report was made to a public office pursuant to requirements of law. However, nothing in this section shall be construed to make admissible any other marriage of any party to any cause of action except for the purpose of impeachment as set forth in s. 90.610.(10) ABSENCE OF PUBLIC RECORD OR ENTRY.—Evidence, in the form of a certification in accord with s. 90.902, or in the form of testimony, that diligent search failed to disclose a record, report, statement, or data compilation or entry, when offered to prove the absence of the record, report, statement, or data compilation or the nonoccurrence or nonexistence of a matter of which a record, report, statement, or data compilation would regularly have been made and preserved by a public office and agency.
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