Wednesday, November 23, 2011

Foreclosure Judgment Reversed Due Issues With Assignment Of Mortgage

In Venture Holdings & Acquisitions Group, LLC v. A.I.M. Funding Group, LLC (4D10-832), Real Investments, LLC v. A.I.M. Funding Group, LLC (4D10-1159), and Real Investments, LLC v. A.I.M. Funding Group, LLC (4D10-1848), the Fourth District released THIS consolidated opinion and held "that because A.I.M. did not file the original promissory note or account for its absence before the court entered summary judgment, we must reverse the summary judgment orders in each of the cases. We further find that A.I.M. lacked standing to foreclose at the time it filed its complaints, but that some parties waived the defense of lack of standing."
An assignment of a promissory note or mortgage, or the right to enforce such, must pre-date the filing of a foreclosure action. Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885, 886 (Fla. 4th DCA 1990). A party must have standing to file suit at its inception and may not remedy this defect by subsequently obtaining standing. Progressive Exp. Ins. Co. v. McGrath Cmty. Chiropractic, 913 So. 2d 1281 (Fla. 2d DCA 2005). “The assignee of a mortgage and note assigned as collateral security is the real party in interest, that he holds the legal title to the mortgage and note, and that he, not the assignor is the proper party to file a suit to foreclose the mortgage.” Laing v. Gainey Builders, Inc., 184 So. 2d 897 (Fla. 1st DCA 1966); see also A & B Discount Lumber & Supply, Inc. v. Mitchell, 799 So. 2d 301, 307-08 (Fla. 5th DCA 2001).
Here, before A.I.M. filed any of the foreclosure actions below, A.I.M. assigned the promissory note and mortgage to a third party as collateral for a loan. Thus, A.I.M. did not have standing to foreclose on any of the properties at the time it filed suit. However, “the entry of default precludes a party from contesting the existence of the plaintiff’s claim and liability thereon.” Fla. Bar v. Porter, 684 So. 2d 810, 813 n.4 (Fla. 1996) (citations omitted). Real, in Case No. 09-018086, was found to be in default. Venture in Case No. 09-19636, was found to be in default. Neither party may contest A.I.M.’s standing at the inception of the suit. See Glynn v. First Union Nat’l Bank, 912 So. 2d 357, 358 (Fla. 4th DCA 2005) (holding that a homeowner waived any claim that the bank lacked standing to foreclose where the homeowner never filed a motion or an answer in the trial court). But even a party in default does not admit that the plaintiff in a foreclosure action possesses the original promissory note....


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