Court of Appeal reversed a foreclosure judgment in favor of the lender to favor homeowner instead

Maria Supria v. Goshen Mortgage, LLC, 2017 WL 6029671, (Fla. 4th DCA Dec. 6, 2017)

As a consequence of transferring mortgages in the secondary market, a lender’s ability to establish its proper chain of transfers at the time a foreclosure action commences often proves problematic. Recently, the Fourth District Court of Appeal reversed a foreclosure judgment in favor of the lender, Goshen Mortgage, LLC, based upon standing and directed that judgment be entered in favor of the homeowner.

Centerpointe Financial. Inc. made the loan to the homeowner. Centerpointe eventually sold the mortgage and transferred the note through an allonge. An allonge is a document attached to a note that provides additional space for endorsements. Unfortunately, the allonge was detached from the note and misplaced. Ultimately, the loan was purchased by Goshen. When the homeowners defaulted on the loan, Goshen filed an action for foreclosure. At trial, Goshen asserted that it was not a holder of the note but contended it was a nonholder in possession. The Fourth District opinioned that to prove ownership rights as a nonholder, the lender must show; there was an effective transfer, proof of purchase of the debt, or a valid assignment. Goshen did not meet its burden of proof.

Accordingly, when Goshen acquired the loan, it received no enforceable rights. Goshen demonstrates the proper need for a review of all documents at the time a transfer of a loan occurs to avoid the pitfalls encountered by Goshen in the process. We at Kahn and Resnik, PL have the experience to assist all parties in memorializing their rights, and, if necessary to enforce them.