Bank Liability for Inaccurate or Forged Documents in a Foreclosure Case
Recently, a seemingly typical foreclosure case in Florida was cherry-picked by the appeals circuit to be heard by the state supreme court. The case is Pino v. Bank of New York Mellon, and could become a precedent-setting case that could seriously affect future foreclosure cases all across Florida.
Many are comparing this to the case of U.S. Bank National Association v. Ibanez, a foreclosure case recently heard by the Massachusetts Supreme Court. The court voided the foreclosure judgment in that case because the suing banks were not the holders of the mortgage. The judgment sent shockwaves throughout the foreclosure servicing world, as it is well established that ownership of thousands, if not millions, of mortgages nationwide can no longer easily be proven. While the U.S. Bank case has not prevented lenders from trying to foreclose without proof of ownership, it has changed the game so that many judges are starting to seriously reconsider this necessary court procedure.
Proving note ownership in order to foreclose is already law in Florida, of course, although it is not well followed and it is often used as a defense to a foreclosure. However, the Pino case will set a different but equally important precedent, answering the question of whether banks that have tried to foreclose using inaccurate (and most likely forged) documents can simply withdraw from the case and walk away. Countless lawyers, including the attorney for defendant Roman Pino, have tried to seek sanctions against lenders who have tried to wrongfully foreclose, and typically the lenders' attorneys respond by voluntarily withdrawing their lawsuits. The question is, when foreclosure firms file improper cases by the thousands and withdraw only when they risk getting caught, should they be held accountable? Another question the Florida supreme court will consider is whether the lender can then refile with new paperwork or whether the defense attorney can continue to seek discovery and ask the court to sanction the bank by cancelling the mortgage.
The supreme court heard the case on May 10, 2012, and a decision may take up to eight months for the court to render. Amerihope Alliance Legal Services is eagerly anticipating what could be a groundbreaking victory for the rights of Floridian homeowners.