If you’ve ever wondered what “foreclosure fraud” is all about or how a homeowner could possibly have legitimate defenses to a foreclosure lawsuit, take a close look at the Order of Dismissal from Judge Rondolino.
The Plaintiff in this case is Deutsche Bank National Trust Company, as Trustee Under the Pooling and Servicing Agreement Dated as of May 1, 2001. However, the Note and Mortgage attached to the Complaint are in the name of Maxwell Mortgage, Inc. The Note contains no indorsement, and there is no allonge, no assignment of mortgage, and no other documentary evidence reflecting a transfer of the Note/Mortgage from Maxwell to Deutsche. Hence, on the face of the Complaint, Deutsche has no basis to obtain a foreclosure.
After Judge Rondolino dismissed the case the first time, Deutsche filed an assignment of mortgage. However, the assignment was not created until after the lawsuit was filed, and Florida law does not enable a plaintiff to acquire standing after filing suit. See Progress Exp. Ins. v. McGrath Community Chiro., 913 So. 2d 1281 (Fla. 2d DCA 2005). To circumvent this deficiency, Deutsche contends the Note was transferred to it before the suit was filed (even though the written assignment was done after) by some sort of “equitable assignment.” However, as Florida law requires the pleading of facts, alleging an “equitable assignment” is insufficient without specifying the time, place, and manner of transfer. In other words, where the written assignment post-dates the filing of the lawsuit, how could the “equitable transfer” have taken place beforehand?
If this sounds like a lot of legal jargon, it is. So here’s what’s really going on, both in this case and many others.
Banks don’t have their paperwork in order. Banks, in this case Deutsche, file foreclosure lawsuits on a regular basis without the requisite paperwork. When foreclosure cases go unchallenged, these deficiencies go unchallenged, so the banks generally get away with the deficient paperwork. When foreclosure lawsuits are contested, by attorneys such as myself, banks and their lawyers often try to fix the problem after the fact. That’s why I routinely see allegations like those in this case alleging an “equitable transfer,” without any factual basis, before the suit was filed even though the written assignment is dated after suit was filed. Again, how could an “equitable transfer” have taken place before the suit was filed when the written assignment is dated months after?
Whether these types of allegations are permitted is the issue in thousands of Motions to Dismiss (and, ultimately, motions for summary judgment) in foreclosure cases throughout Florida. Many judges, particularly senior judges, in their ongoing attempt to “push through” foreclosure cases, have denied Motions to Dismiss by homeowners, enabling Plaintiffs such as Deutsche to get away with conclusory allegations of “equitable transfer” without any factual basis.
As you can see, Judge Rondolino is not one of these judges. He believes Plaintiffs, even in foreclosure cases, should have to plead some facts in support of an alleged “equitable transfer” of the Note/Mortgage, particularly when the filing of suit precedes the date of the written assignment. Obviously, I agree … but there’s more to it than that.
The issue isn’t just whether Plaintiffs such as Deutsche should have to plead facts in support of the alleged equitable transfer … the issue is whether such facts exist. Again, how could an “equitable transfer” have taken place before the suit was filed when the written assignment is dated months after?
Given his reference to “incacerative sanctions” (if Deutsche’s allegations are proven untrue), it seems Judge Rondolino shares the same belief that I do – in many of these cases, the requisite facts don’t exist. In other words, it seems there was no “equitable transfer” before the suit was filed, yet Deutsche alleges otherwise to try to “push through” the foreclosure.
This sounds complicated, but this is the issue in foreclosure cases throughout Florida. Is the Plaintiff entitled to foreclose? Can it establish standing as of the date it filed suit? Is the bank’s paperwork in order? Many times, the answer is “no,” and it’s good to see a judge call out the banks on these deficient filings.