A state judge in Florida has ruled against U.S. Bank N.A. which filed a lawsuit against Ernest Harpster when the homeowner defaulted on a loan that he supposedly received in January 2007. The ruling is expected to affect how prosecutors look at cases related to bank foreclosure listings.
The bank presented an assignment of mortgage document to show that they received mortgage ownership on December 2007. However, the court judge has stated that the document presented by the bank was not prepared until 2008, which means that they have no proof of owning the mortgage when the lawsuit was filed.
The ruling is expected to contribute to increasing scrutiny from judges and prosecutors on how bank owned property listings are acquired. Prosecutors have stated that there is increasing concern on how banks try to seize homes they do not own.
In the Florida case, the judge declared that the document presented by the bank was not in existence when the lawsuit was filed and that it was created subsequently. This meant that the document was backdated and the judge stated that this showed an intention to mislead on the part of the bank.
Meanwhile, lawyers for the plaintiff bank have stated that U.S. courts are overwhelmed by the sheer number of cases related to bank foreclosure listings and repossessions and that most judges get buried in technicalities.
The bank’s lawyers further added that the document issue was a mistake and was not intentional. They argued that the document was signed and prepared in 2007 but they were unable to get it notarized until after several months have passed.
They added that they did discover problems of the same nature in other foreclosure auctions cases and have voluntarily withdrawn such lawsuits and filed them again after appropriate documents have been prepared.
Real estate market analysts have weighed in on the issue, stating that some of the confusions are due to the difficulties faced by banks in proving loan ownership because of the complicated makeup of the mortgage industry.
United States judges have stated that ever since the housing market crisis started, they have found some documents used to support ownership claims in lawsuits related to bank foreclosure listings to be invalid or erroneously filed and the Florida case is just one example.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.