Our Firm Gets Big Win for Homeowner in Foreclosure Defense Case
It’s no secret that the big banks perpetrated some of the biggest acts of fraud on the American people and our economy during the late 2000s, leading to the economic and foreclosure crisis. Although foreclosures are down and the economy has recovered somewhat, many foreclosure cases still linger in the courts, as banks still try to refile cases that they weren’t able to foreclose on.
We Try to Allege Bank Fraud in Foreclosure Defense Case
Despite how well known this fraud was (some would say it is now even part of our culture, with many movies and TV shows having been created demonstrating the illegal activity), courts are often hesitant to even allow homeowners to allege fraudulent activity by a bank as a defense to a foreclosure.
Recently, our firm scored a huge victory in the appeals court in a foreclosure case dating all the way back to 2009 (Sorenson v. Bank of New York Mellon, Case No: 2D16-273). In 2009, the bank filed a foreclosure case against a homeowner, but the loan paperwork did not have the proper stamps (endorsements), showing the legal transfer from the originating bank to the bank (actually, the trust) trying to foreclose.
Not surprisingly, in the middle of the case, the bank showed up with a copy of the loan documents, which now suddenly had the proper stamps on them.
In May 2015, we moved to change the homeowner’s answer to allow the homeowner to argue that the bank had added those stamps fraudulently and had falsely and fraudulently backdated documents to make it look like the bank had the legal right to foreclose when in fact they did not.
Our request was denied—that is, the court didn’t even think we had the right to make the argument that the documents were fraudulent. In August 2015 and January 2016, we asked again to be allowed to argue fraud, and the court said no. The court said the case was too old to allow the homeowner to add defenses to the case.
We Take the Denial to the Appeals Court
After a judgment of foreclosure was entered in 2016, we appealed the case to the appellate court, arguing that the homeowner should have been given the right to argue fraud at trial.
The appellate court noted that we had been asking to amend the homeowner’s answer to add fraud since May 2015, and thus, this was not a last minute tactic just to stall the case. Florida has a history of allowing parties to amend their defenses (and claims), and there needs to be a very good reason for a court to deny such a request by a party.
The appellate court acknowledged that the case was old, but found that was largely due to the bank’s own errors during the case. Additionally, because arguing fraud was closely related to the issues in the case anyway, the bank could not claim it was surprised or prejudiced by the amendment.
The judgment was overturned, and our client was finally given permission to proceed and make the fraud arguments in court. The case goes to show how important it is for foreclosure defense attorneys to act diligently and pursue a homeowner’s defenses as actively as possible and as early as possible.
At Jacobs Legal in Miami, we fight foreclosures all the way to trial and any appeals. Contact us to schedule your free initial consultation if you are involved in a foreclosure case.