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On April 20, 2020, the United States Court of Appeals for the Fourth Circuit in the Western District of Virginia, in Stepp v. U.S. Bank Trust National Association, Case No. 19-1067 held that “a bank office that conducts no mortgage related business does not qualify as a branch office of a mortgagee under the regulatory exception.
“According to Stepp, U.S. Bank improperly initiated foreclosure without first offering her a face to face meeting as required by 24 CFR 203.604(b). U.S. Bank argued that it was exempt from the face to face meeting requirement under 24 CFR 203.604(c)(2) which excuses the meeting when the mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either.” Because U.S. Bank’s Richmond office, the only one within 200 miles of Stepp’s home, conducted no mortgage related business and was not open to the public, U.S. Bank contended it did not qualify as a branch office of a mortgagee and so the exception applied.
The Fourth District Court of Appeal held that the text of 24 CFR 203.604(c)(2) cannot be read to encompass an office at which no mortgage related business is conducted. An office that does not mortgage related business at all, even if within 200 miles of a mortgagor’s home, will be poorly positioned to discuss the mortgage specific loss mitigation options. Note: this is a decision out of the Western District of Virginia and is not binding in all jurisdictions.
If Borrower sends a Cease and Desist Letter Argument Can be Made that No Face to Face Requirement is Needed.
On March 25, 2020, the Fourth District Court of Appeal in Bank of America v. Jones, Case No. 4D19-1164 (Fla. 4th DCA 2020) held that if a Borrower sends a cease and desist letter, it is a clear expression that the Borrowers would not cooperate and vitiated the requirement to conduct a face to face meeting. Accordingly, the Fourth District Court of Appeal reversed the involuntary dismissal, and remanded the proceedings. This case is not yet final, and subject to rehearing.
Defective notice did not prejudice the borrowers, as they did not attempt to cure the default.
On March 7, 2018, the Fourth District Court of Appeal in Citigroup Mortg. Loan Tr. Inc. v. Scialabba, No. 4D17-401, 2018 WL 1181020, (Fla. Dist. Ct. App. Mar. 7, 2018), held that “even if we concluded that the required notice was mailed to the incorrect address (address listed in loan modification agreement), the Bank correctly points out that the defective notice did not prejudice the Borrowers, as they did not attempt to cure the default.” The Court also held that from the record of appeal, the modification agreement was admitted into evidence, as it was attached to the complaint. The trial court never ruled that it did not consider the modification agreement to be in evidence or that it was inadmissible hearsay. The Fourth District Court of Appeal noted in a footnote, that the issue of whether a copy of the modification agreement attached to the certified copy of the complaint met the requirements of Section 90.953 was not addressed, as it was not adequately addressed in the briefs.
If Original Loan Modification cannot be introduced, there must be an explanation as to why. On February 14, 2018, the Second District Court of Appeal in McCampbell v. Fed. Nat'l Mortg. Ass'n, No. 2D16-177, 2018 WL 844361, (Fla. Dist. Ct. App. Feb. 14, 2018), held that the “trial court erred in admitting copies of the loan modification agreement where there was no explanation as to why the original loan modification was not introduced.” This decision is important as it cites to Rattigan v. Central Mortgage Co., 199 So. 3d 966, 967 (Fla. 4th DCA 2016), in which the Fourth District Court of Appeal held, “when the terms of an agreement are necessary for resolution of an issue brought before a court, the failure to introduce the agreement itself into evidence violates the best rule.”
Appellant, McCampbell appealed the final judgment of foreclosure in favor of the Bank, contending that the trial court erred in admitting copies of his loan modification agreement, and Federal National Mortgage Association (Fannie Mae) correctly concedes that the admission of the copies were improper.
At trial, Fannie Mae called one witness to testify and that witness did not produce the original loan modification agreement nor did the witness explain its absence. Rather, Fannie Mae sought the admission of a copy of the agreement, and over objection the trial court admitted the copy.
The Second District Court of Appeal reversed and remanded the lower court’s judgment for a new trial, citing to Heller v. Bank of Am., N.A., 209 so. 3d 641, 645 (Fla. 2d DCA 2017) (reversing and remanding final judgment of foreclosure for a new trial where trial court improperly allowed the bank’s witness to give hearsay testimony regarding content of business records which had not been admitted into evidence).
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Not entitled to prevailing attorney fees if not a party to the mortgage.On February 2, 2018, the Fifth District Court of Appeal released the opinion of PNC Bank, Nat'l Ass'n v. MDTR, LLC, No. 5D16-2887, 2018 WL 663792, (Fla. Dist. Ct. App. Feb. 2, 2018), in which the Court held that “a party that was not a party to the mortgage contract was not entitled to prevailing party’s attorney’s fees under provisions of mortgage upon voluntary dismissal of foreclosure complaint.”
Where a party prevails by arguing the Plaintiff failed to establish standing, the party cannot simultaneously seek to take advantage of a fee provision in the same contract. On February 7, 2018, the Fourth District Court of Appeal in Sabido v. Bank of New York Mellon, No. 4D16-2944, 2018 WL 735950, (Fla. Dist. Ct. App. Feb. 7, 2018), held that “where a party prevails by arguing the Plaintiff failed to establish standing, the party cannot simultaneously seek to take advantage of a fee provision in the same contract.” See also Nationstar v. Martins, Case No. 4D17-1140 (March 7, 2018); Lakmaitree v. 21st Mortgage Corporation, 4D17-1263 (March 7, 2018). *Important to note this case also discusses, Nationstar Mortgage LLC v. Glass, 219 So.3d 896 (Fla. 4th DCA 2017)(holding to be entitled to fees ... the movant must establish that the parties to the suit are also entitled to enforce the contract containing the fee provision). The Supreme Court recently has accepted jurisdiction over Glass.
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Not entitled to an award of damages for any defaults that occurred more than five years prior to the filing date of the current lawsuit.”On January 12, 2018, the Fifth District Court of Appeal, released Velden v. Natiostar Mortg., LLC ,No. 5D16-3628, 2018 WL 387243, (Fla. Dist. Ct. App. Jan. 12, 2018), in which the Court held, “that the bank was not entitled to an award of damages for any defaults that occurred more than five years prior to the filing date of the current lawsuit.” The background of this case is that Freedom Mortgage Corporation filed an action in July 2014, alleged that the borrower, Velden failed to make his February 1, 2009 mortgage payment as well as all subsequent payments. At trial the lower court entered a final judgment of foreclosure in favor of the bank, awarding the full amount of the unpaid note plus interest, dating back to January 2009. Appellant, Velden brought this appeal asserting that the trial court erred in denying the motion for involuntary dismissal because the bank’s complaint was filed more than five years after the date of the first missed payment. The Second District Court of Appeal disagreed, citing to U.S. Bank v. Diamond, 228 So. 3d 177, 178 (Fla. 5th DCA 2017). Appellant, also argued that the trial court erred in awarding the bank amounts which accrued beyond the five year limitations period, the Second District Court of Appeal agreed, citing to Bartram and Diamond. In regards, to Diamond, the Second District Court of Appeal reviewed the Fifth District Court of Appeals decision that remanded with instructions for the trial court to exclude any defaults that occurred more than five years prior to the filing date of the current suit.
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