Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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The burden of reestablishing lost instruments

The lost note” argument remains pretty popular in foreclosure cases. I wrote in a recent blog how foreclosure mills sometimes show such loyalty to their clients that in an apparent cover-up they take the blame for lost instruments upon themselves.

But recently one of such cases reached the court of appeal. And the 3rd DCA determined in a recent opinion – Guerrero v. Chase Home Finance, Fla. 3rd DCA 2012, that the burden of reestablishing the lost documents was not met.,10&case=17866949597116564286&scilh=0

The action at hand was commenced by Chase Home Finance as the “present designated holder of note and mortgage. Attached to the complaint was a copy of the promissory note payable to Freedom Mortgage Corporation. At trial Chase’s counsel informed the court that the original note could not be located but that his law firm’s custodian of records was present with an affidavit regarding these lost documents. The Guerreros objected arguing that no lost note claim has been alleged.

Chase’s counsel asked the court to permit it to amend the pleading to conform to the evidence it was going to present, and the court responded by saying it would be done at the conclusion of the case, not as a preemptive motion. The witness was permitted to testify despite the Guerreros’s objection that he was not listed on the witness list.

In conjunction with his testimony, the witness proffered an affidavit representing that Chase holds the obligors of the note harmless and agrees to indemnify them from any loss they may incur by reason of a claim by any other person to enforce the lost note. However, on cross-examination the witness admitted that he neither knew what this representation meant, nor knew if Chase (much less IBM/Fannie Mae) agreed to it. The affidavit was stricken.

At the close of the testimony the Guerreros requested entry of judgment in their favor because Chase could not surrender the original note and, pursuant to Section 673.3091(2), Florida Statutes, could not reestablish the note without having asserted a lost note claim and without having introduced sufficient evidence to satisfy requirements of such claim. A final judgment of foreclosure was nonetheless entered.

The court of appeal held that the burden of reestablishing lost documents was not met. The affidavit was stricken, and there was no other evidence required by Section 673.3091(2), Florida Statutes. The judgment of the lower court was reversed.


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