By the LendingLies Staff
On February 13, 2018, the Florida Supreme Court accepted jurisdiction in an appeal emanating from a controversial issue in contested foreclosures – can a homeowner in foreclosure litigation secure attorney’s fees after successfully defending against foreclosure on the basis that the lender lacked standing to enforce the mortgage contract?
Florida law follows the American Rule on attorney’s fees, i.e. the loser does not pay the winner’s fees, unless there is a basis in contract or statute that provides for fee shifting.
When a homeowner successfully defends against foreclosure on the grounds that the lender lacks standing to enforce the mortgage, Florida’s District Courts of Appeal presently hold that the borrower cannot access the fee shifting clause. If the lender lacked standing to enforce the mortgage against the borrower, so too there must be insufficient standing (or privity) for the borrower to enforce the mortgage (specifically its fee shifting provisions) against the lender.
The homeowner contends that this result is unfair, because the lender takes the position in every foreclosure that it can enforce the mortgage. Lender’s counsel states that the party seeking fees has a burden of proof, and that if the borrower was successful on a standing argument, then the proof has not adequately established that the mortgage can be enforced by, or against the lender. This allows a lender with no standing to fabricate new evidence in the future so they will have opportunity after opportunity to perfect their standing and foreclosure action.
The bank also points to estoppel principals that bar the homeowner from taking a position contrary to his earlier position that the lender lacked the requisite standing for enforcement of the mortgage. The homeowner is placed between a rock and hard place having to defend against any party that shows up to foreclose even if they don’t have evidence of standing.
The case is Marie Ann Glass v. Nationstar Mortgage, LLC, et al., Case no, SC17-1387. The opinion in Glass was not the first of its kind, and it relied heavily on the Third DCA in Bank of New York Mellon Trust. Co. v. Fitzgerald, 215 So. 3d 116 (Fla. 3d DCA 2017), which in turn relied on HFC Collection Center, Inc. v. Alexander, 190 So. 3d 1114 (Fla. 5th DCA 2016) and others.
The Florida Supreme Court has accepted jurisdiction over Glass because of citizen’s outrage over a faux lender’s ability to keep coming back to the table, exhaust the homeowner’s resources and then when the homeowner prevails, not be required to reimburse the homeowner’s legal fees. There is an abundance of case law supporting the homeowner’s position and the remedy of sanctions motions under Fla. Stat. 57.105(1) but these remedies do not mitigate against the threat of frivolous foreclosures where the filing party lacks standing to proceed. The Florida Supreme Court has accepted jurisdiction should give lenders’ counsel concern.
This signals that perhaps the Florida Judiciary are tired of their dockets overflowing with pretend lender filings that waste valuable court time as they refile foreclosures again and again until the servicer can create a chain of title that is credible enough for them to foreclose- while exhausting the homeowner’s resources in the process. This is a common ploy used by loan servicers. The big banks have unlimited resources to litigate a foreclosure for decades. It isn’t unusual for a homeowner to spend a decade in litigation, accruing debt to continue to litigate and then in trial the bank admits, “um, well maybe we don’t own the debt- Fannie Mae does.” Not only should the attorneys involved be sanctioned by the court, but the homeowner should be reimbursed for every dime spent to save a home from a bank robber who is a stranger to the contract.