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Go down to any real estate records office anywhere in Florida, and get ready for a history lesson.  Florida land ownership goes back to the days of Spanish land grants – and because land ownership has always been so important to people, there have always been careful records kept of who owns what tract of real estate.  Long ago, it was written by quill pens upon big thick sheets of paper bound together in cumbersome books.  Today it may be found on microfiche or computer drives, but it’s there.

Since land is bought in conjunction with borrowing money, there are also a lot of longstanding laws, that protect Florida land ownership, that is tied to mortgages and notes.   The basic law of notes and mortgages is not trendy, it’s not new, and most everyone involved in real estate (brokers, agents, bankers, inspectors, buyers, sellers, bankers, etc.) knows the basics of mortgages and how they work.

And it’s all very important.  Even if banks and mortgage servicers want us all to ignore that fact.

Banks and Mortgage Servicers Have Been Ignoring Real Estate Law and Land Records

For years now, in Florida and elsewhere in the country, banks and mortgage servicers seeking to foreclose on properties, or to sell foreclosed homes, have simply ignored the longstanding realities of Florida real estate law and land titles.   This means that these financial institutions are vulnerable to legal challenges that, among other things, question if:

  • they are the legal owner of the Note upon which they are seeking to foreclose upon in a foreclosure proceeding.
  • they are the legal holder of the Note upon which they are seeking to foreclose upon in a foreclosure proceeding.
  • they are the original holder and owner of the Note upon which they are seeking to foreclose upon in a foreclosure proceeding.

The Legal Weapons Against Bad Bank and Mortgage Servicers Trying to Foreclose Today

Whether they are acting in a panic or just thinking they can get away with ignoring Florida law, the truth is that those trying to foreclose upon real estate in Florida today face winning defenses – if the fight is brought before a judge.

1.  Standing

For instance, one argument is that the foreclosing party “lacks standing”  because they don’t have the promissory note (because it’s lost or destroyed.)  Standing is a big deal.  Without it,  they don’t have right to bring a legal claim.

“Standing has been equated with jurisdiction of the subject matter of litigation, and has been held subject to the same rules, one of which is that jurisdiction of the subject matter (thus standing to bring suit) cannot be conferred by consent.” Askew v. Hold the Bulkhead Save Our Bays, Inc., 269 So. 2d 696, 698 (Fla. 2d DCA 1972); see also Silver Star Citizen’s Committee v. City Council of Orlando, 194 So. 2d 681, 682 (Fla. 4th DCA 1967); Guernsey v. Haley, 107 So. 2d 184 (Fla. 2d DCA 1958).

No Proof of Being Holder or Owner of the Note is Key to Defeating Some Wrongful Foreclosures

Before they can rightfully file a foreclosure lawsuit in Florida, these banks and mortgage servicers must be the owner and holder, or have the rights of a holder, of the note.   There’s not an option here: you either are the owner and holder (or have the rights of a holder) or you’re not. Period.

Which doesn’t stop these institutions from filing these lawsuits and trying to obtain a foreclosure judgment if they can, even if they can’t prove that they are legally the owner and holder.  Shocking, right?

Under Florida law, not only do they have to claim to be the holder and owner in the paperwork they file, they have to be able to support that claim with real evidence.  This is a problem, time and again, especially where the note is lost or stolen (If you have been sued, read your lawsuit to see if they say the note has been lost or stolen.)  They’ll say they are the owner or holder with the right to enforce the obligation.  They may not have anything whatsoever to back that up.

When a bank sues without the original note in their possession, they are required to prove that they lawfully own or hold the note and they lost it or it was destroyed at some time while it was in their possession or while it was owned or held by a predecessor.  The bank now has a higher burden to enforce the note because now they have to show, prove, the chain of transfer of the note each time it changed hands prior to the time it was lost or stolen.  The reason is so to avoid situations where a different bank/lender shows up at a later date with the original note and asks to be paid.  This higher burden is a big problem because a large number of mortgage originators and others in the chain of ownership are no longer in business and the people who handled these transfers (if they actually happened?) are very difficult to locate.  The party filing the foreclosure has to spend a large amount of resources of tracking down someone who can testify that they transferred the note to bank “A” who then transferred the note to bank “B”, so on and so on.  As you can see, proving that chain of ownership can be difficult and expensive.

A plaintiff seeking to foreclose on a mortgage “must necessarily allege he is the owner and holder of the note and mortgage in question.” Your Construction Center, Inc. v. Gross, 316 So. 2d 596, 597 (Fla. 4th DCA 1975); See also 37 Fla. Jur. Mortgages and Deeds of Trust §240 (One who does not have the ownership, possession, or the right to possession of the mortgage and the obligation secured by it, (the note) may not foreclose the mortgage).

2.  Note vs. Mortgage

They need two documents to show the judge: the note and the mortgage.  Of the two, the note is the bigger deal since it is the document that provides all the details of the contract to loan the money (the promissory note).

“A mortgage is a mere incident of, and ancillary to, the note or other obligation secured thereby.” Sobel v. Mutual Dev. Inc., 313 So. 2d 77, 78 (Fla. 1st DCA 1975). The promissory note is evidence of the primary mortgage obligation. The mortgage is only a mere incident to the note. Carpenter v. Longan, 83 US 271, 274 (1872) Scott v. Taylor, 58 So. 30, 31 (Fla. 1912); Taylor v. American Nat’l Bank, 57 So. 678, 685 (Fla. 1912); Brown v. Snell, 6 Fla. 741 (1856); Thomas v. Hartman, 553 So. 2d 1256, 1257 (Fla. 5th DCA 1989); Restatement (Third) of Property (Mortgages) § 1.01 (1997).

The mortgage instrument is only the security for the indebtedness. Mellor v. Goldberg, 658 So. 2d 1162, 1163 (Fla. 2d DCA 1995); Grier v. M.H.C. Realty Co., 274 So. 2d 21, 22 (Fla. 4th DCA 1973).

If the bank or mortgage servicer cannot bring the note and mortgage to the courtroom and demonstrate that they are legally the holder and owner under Florida law, then they may have filed a lawsuit they cannot win.  They’ve come to court wearing a hat but owning no cattle.

3.  Homeowner Must Be Ready to Fight

However, to gain that victory, the homeowner must be willing and ready to fight that foreclosure proceeding. The judge cannot be expected to do the work of the defense team and double-check that each foreclosure lawsuit brought before him or her can be supported with the proper standing requirements (though the judge has the power to do so, if they have the time and the inclination).

That means the homeowner facing foreclosure being emotionally determined and physically strong and getting an experienced foreclosure defense attorney on board.   It’s your home – fight for it.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at, or (954) 458-8655.  If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments.  He’s happy to take your call.

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