We have written multiple blogs about standing to foreclose , but a new spate of recent cases out of Florida’s Fourth District Court of Appeals demonstrate that lenders still struggle with the issue of standing. On March 25, 2015, the Fourth DCA authored six opinions finding that lenders failed to establish standing to foreclose at the time the lawsuit was filed. These cases each involved a different lender, but they all dealt with essentially the same issue—whether the lender had properly established that it held the note and mortgage at the inception of the lawsuit. As we have previously cautioned , lenders must be sure that any and all endorsements to a promissory note are properly executed prior to the institution of a foreclosure action. The Fourth DCA’s recent cases establish that an undated endorsement in blank may not be sufficient evidence that the lender held the note at the inception of the case, and may actually create an issue of fact that prevents summary judgment and leads to further litigation. Transfers and assignments clarifying ownership which are executed after the action has begun may not be sufficient to establish standing to foreclose; the Fourth DCA has held that back-dated assignments suggest that, at the very least, disputed issues of fact exist as to standing.
While errors in transfers of loan documents may be correctable such that the lender could still ultimately obtain a foreclosure judgment, not having the proper endorsements at the outset of the litigation could lead to delay and unnecessary extra cost. Given the abundance of recent decisions reversing foreclosure judgments, particularly on summary judgment, due to lack of standing, lenders should take extra precaution to ensure that any endorsements are in order prior to initiating a foreclosure action.