Florida is Hotbed of Foreclosure Litigation

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MORTGAGE EXPERT
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A number of delinquent borrowers have had success using litigation to stop foreclosures. In addition, lenders are up against errors that they might or might not be able to overcome in court. Several of the latest foreclosure cases were in Florida. A mistake by one servicer landed it in hot water with the court.

Fannie Mae said last month in Announcement SVC-2010-13 that servicers are now required to assign delinquent mortgages secured by Florida properties to an attorney in the secondary lender’s retained attorney network for mediation before initiating foreclosure proceedings. The change was prompted by the passage of a Florida Supreme Court administrative order from December 2009.

Fannie’s new policy must be implemented by the end of this year.

A bad fax copy caused the Pottawattamie County, Iowa, sheriff’s office to misread a bid by CitiMortgage Inc. as $15,807 instead of $45,808 as was intended, a copy of the decision indicated. Unaware that the property sold for less than its intended bid, Citi issued a lien release and judgment satisfaction.

Citi eventually discovered the error and unsuccessfully sought to have the sheriff’s sale set aside. An appeal to the Court of Appeals of Iowa was also not successful.

When Litton Loan Servicing sent a letter to delinquent borrower Camille Gburek about discussing alternatives to losing her home, she filed a lawsuit alleging violation of the Fair Debt Collection Practices Act. The district court granted a dismissal request from Litton, but the U.S. Court of Appeals, Seventh Circuit, reversed the dismissal.

U.S. Bank failed to send a representative to the public sale of Florida property that it had obtained a final judgment of foreclosure on, and the home was sold to Hill & Beckman Inc. and Tamed Corp. So the next day, U.S. Bank filed an objection and a motion to return third-party funds, vacate the certificate of sale and set aside the sale.

The trial court denied the motion without a hearing. Then U.S. Bank filed a motion for rehearing and supplemental objections to the sale. The bank argued that the sale should be set aside because of the inadequate bid price that resulted from its mistake.

But the motion was denied by the trial judge, again, without a hearing.

The case landed at the District Court of Appeal of Florida, Fifth District, which reversed the order denying U.S. Bank’s motion to set aside the foreclosure sale and return funds to the third-party purchasers. The fifth district also remanded the case for further proceedings.

In Ohio, U.S. Bank failed to submit a copy of the note claiming its unavailability with its complaint filed against John W. Richards and Patricia Richards, so the trial court denied its request for a summary judgment, a copy of the decision posted by Leagle.com said. A subsequent judge took over, however, and granted the motion after a note copy as well as a chain of assignments were produced.

But the Court of Appeals of Ohio, Ninth District, Summit County reversed the judgment, noting that the trial court never ruled on Patricia Richards’ motion for a more definite statement.

The District Court of Appeal of Florida, Third District, reversed a final summary judgment in favor of HSBC Bank USA against Glazy Ruscalleda and Jose Ruscalleda, the decision published by Leagle indicated. HSBC and American Home Mortgage Servicing Inc. simultaneously attempted to foreclose on the same mortgage.

“The complaint filed by HSBC falsely alleged that it was the current owner and holder of the mortgage and note, when, in reality, American Home Mortgage was still the holder,” the third district said.

A denial of Carole H. Verneret’s motion for satisfaction of judgment was reversed by the District Court of Appeal of Florida, Third District, according to a copy of the decision published by Leagle. The court noted that there was a proper exercise of the right of redemption.

But the Florida court affirmed the trial court’s decision to enter final judgment against Verneret and affirmed the order denying Verneret’s motion to dismiss.

A final summary judgment in favor of American Home Mortgage Servicing Inc. was vacated by the District Court of Appeal of Florida, First District. The borrower in the case is Evie Kontos.

“As all parties acknowledge, however, the uncontested facts of record do not establish that appellee is presently entitled to foreclose because the record contains no evidence of any assignment or comparable transaction,” the court wrote. “Accordingly, we vacate the final summary judgment and remand this case for further proceedings”

The Bank of New York, as trustee, failed to file a brief in response to a merit brief in an appeal of a foreclosure by Jeanetta Brunson before the Court of Appeals of Ohio, Ninth District, Summit County. So the court reversed the judgment and remanded the matter to the trial court.

A summary judgment in favor of Deutsche Bank National Trust Co. was vacated by the Supreme Court of Maine, a copy of the decision from Leagle said. The borrowers, Jon E. Saunders and Belinda L. Saunders, originally closed the loan in June 2006 with Accredited Home Lenders Inc. The court wrote that Mortgage Electronic Registration Systems Inc. filed the lawsuit, but the trial court substituted Deutsche — which was OK. However, substituting Deutsche meant that the bank was not entitled to summary judgment.

Tarry Gullett was successfully able to appeal a summary judgment in favor of National City Bank even though he wasn’t on title because of a clause in the deed giving him first right of refusal.

After stating Monday that “all new residential foreclosures are continuing in the ordinary course of business with no interruption in our usual practice,” Ally Financial Inc. acknowledged in a Bloomberg news report a defect in affidavits used to support evictions. Employees reportedly submitted affidavits, sometimes without having a notary present, containing information they didn’t personally know was true, and most cases are expected to be resolved in the next few weeks — though some might require court intervention.

Jillian Winterberg claims that the locks were changed on the doors of her Vero Beach, Fla., home a month before a foreclosure was even filed, the Palm Beach Post reported. After an attorney helped her gain possession, she was locked out again — motivating her to file a lawsuit in Indian River County against Wells Fargo and First American Real Estate Information Services Inc.

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