Standing To Foreclose Requires That The Plaintiff Own Or Hold The Note-Not Both

In Wells Fargo Bank v. Morcom (5D11-4089), the Fifth District reversed a trial court's judgment in favor of the borrower. In the case:

Appellant filed a complaint on August 6, 2010, seeking to foreclose a mortgage issued by Appellees. Appellant alleged, inter alia, that “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” Appellant attached to the complaint copies of the mortgage and the promissory note.1 The note is endorsed “pay to the order of ________ without recourse,” with the blank space populated with a stamp of Wells Fargo Bank, N.A.

The trial court held that the borrowers were entitled to judgment in their favor because the bank did not prove that it owned and held the note. The Fifth District, however, concluded that you do not need to prove both ownership and that you hold the note. The court stated:

The Florida UCC and recent cases from this court stand for the proposition that a plaintiff has standing to bring a foreclosure action if the plaintiff is the holder of a promissory note, endorsed in blank, secured by a mortgage….We have previously held that “[t]he party that holds the note and mortgage in question has standing to bring and maintain a foreclosure action.” Deutsche Bank Nat’l. Trust Co. v. Lippi, 78 So. 3d 81, 84 (Fla. 5th DCA 2012) ….“[T]he person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder.”….In Lippi, Deutsche Bank’s second amended complaint contained the language that it “is now the holder of the Mortgage Note and Mortgage and/or is entitled to enforce the Mortgage Note and Mortgage.” Lippi, 78 So. 3d at 84. The facts in Lippi are almost identical to Appellant’s complaint in the present case, which provides that the “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” The Lippi court held, where the note was endorsed in blank, meaning it was “payable to the bearer and could be transferred simply by possession,” Deutsche Bank’s standing was established because it was the note holder, regardless of any recorded assignments.

In the present case, the original note Appellant attached was endorsed in blank with Appellant’s name stamped in the blank endorsement field, which, paired with section 673.3011(1), established that Appellant was the holder entitled to enforce the instrument….

Applying portions of the Florida UCC, other district courts of appeal have determined that a party that holds a note endorsed in blank has standing to foreclose a mortgage.

Based upon the fact that the bank was holding the note, which was endorsed in blank, the bank had standing to foreclosure and was entitled to judgment in its favor.