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MOTION FOR SUMMARY JUDGMENT OF FORECLOSURE - DEFEATED! AND HOW I DID IT

Today I used a new technical defense to successfully defeat a motion for summary judgment for foreclosure and I wanted to pass it on to other attorneys (or those who know attorneys) helping homeowners in foreclosure.

This happened in Florida, but other states' rules could provide the same type of relief.

The bank filed its foreclosure some months ago and the homeowner tried to represent himself and did a poor job of it because there were several deficiencies in the pleadings filed by the bank. Then I came into the picture just 8 days before a scheduled court hearing to grant the bank's Motion for Summary Judgment of Foreclosure, at which time the public sale date for the house would have been set.

As with most foreclosure suits the promissory note could not be produced so the bank was going to produce at the hearing an Affidavit of Lost Promissory Note. This is permitted under a special state statute that creates a mechanism to prove up a financial instrument that was lost by the holder.

However, the Rules of Summary Judgment say that any pleading to be used by the moving party (here, the bank) must be filed with the court and provided to the other parties at least 20 days prior to the hearing.

The bank complied with the lost note statute (they had the lost note affidavit to give to the judge), but not the court rule about the 20 days, I argued -- and the judge agreed and denied their Motion for Summary Judgment.

This whole exercise was not to create a delay so the client can live in the house for free -- it was obtained so the client can complete a short sale (he still needs a buyer) and avoid a foreclosure deficiency judgment that will haunt him for the next 20 years.

I pass this on in the hope that this customary practice by the lenders will be recognized by attorneys and used to help out those needing more time to find a better solution than foreclosure.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at Need Short Sale Information? - These Articles Probably Answer Your Question

Posted by Richard Zaretsky, Florida Real Estate Attorney on 04/14/2009 08:11 AM

Comments (57)

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57 Comments on MOTION FOR SUMMARY JUDGMENT OF FORECLOSURE - DEFEATED! AND HOW I DID IT

APR

Richard...

This is a seriously 'need to know' thing for anyone in this business. Thanks for sharing with us. We all truly appreciate it :)

TLW...ROAR!

Law is there to protect both sides of the problem. Good for you for taking it on.

Richard - Interesting information for all of us. Thanks so much for letting us know!

Mary

Richard,

Thank you for letting us know of this issue/option when assisting clients in foreclosure.

Hi Richard,

Thanks for the info, it's amazing to me how many cases I see where filing dates are not met. As Realtors we meet those dates all the time, I would expect attorneys to be held to the same standard.

Stuart

I also know of someone who got caught with papers not properly filed, but they failed to contact an attorney because they didn't have the money and the bank foreclosed. The banks are very sloppy in the paperwork to say the least.

Thats good info. Glad you take time to post this on Active Rain.

I live in another state and we actually have no mortgages and promissory notes, we have security deeds here in Georgia with no judicial foreclosure. That leads me to not knowing anything about the way this occurs in Florida, but knowing if the bank "lost" a security deed they could get a certified copy from the recorded one at the court house to ask... wasn't the promissory note recorded? Couldn't they have obtained a certified copy? Just curious.

Morning Richard, Thanks for the insight into this dark corner of the foreclosure process. I hope all turns out for the best.

My question is how many attorneys are good enough and care enough to do the good job you did for your clients? Thanks for the post.

Counselor -

Appreciate the sharing, Richard!

Indeed, you have to use every available tool these days to help your distressed clients - especially when consumation of the short sale is likely imminent.

Why don't banks understand this without the need for such technicalities and clever legal thinking?

Fewer homes would revert to them, they will save millions, and the toll on troubled homeowners would not be so stark?

Thanks for helping the little guy! Great David and Goliath story - but one that shouldn't have to be told!

DEAN & DEAN'S TEAM CHICAGO

In Oklahoma our team has been able to get homes pulled from the docket. We typically have someone ready to buy the short sale, so 9 times out of 10 we submit the contract to the lender up front, and it is the lender that pulls it. It is also important to catch these early to avoid what you had to do. FYI, if I lived in Florida, West Pam Beach is where I would go.

Richard: nice to see you bought this client more time but if the note holder ismoving for summary judgment of foreclosure how successful will getting a short sale approval actually be? You may have won a battle but the war is hardly over.

Best of luck!

John

Excellent post. I will make sure to send this article on to my cousin who is a lawyer.

Kind Regards,

Manolis

Thanks for sharing this information. I will make sure to pass it on to the many professionals I deal with in this industry!!

Happy Tuesday!!

Lori

Richard - I would love to see more Real Estate Attorneys here on Active Rain. Good information. Knowledge is indeed, power. You provided your clients with just that. Hope things work out for them.

Thank you, Richard. Any knowledge of a technical move that can help clients these days is much needed. Thanks for sharing.

Richard, the first question that came to my mind is do you think the bank is going to be willing to negotiate a short sale with your client now that they have been outfoxed by you?

I'm not trying to be a wise guy, simply wondering if the bank will hold a grudge of sorts.

As I make my living by selling REO properties at auction, I have seen both sides (debtor and bank).

Thanks for your post and being active in the real estate profession.

Personally, I hate when attorneys get people off on "technicalities". Your client knew his time of living for free was ending, and the bank was finally going to take action. Why didn't your client work on the short sale earlier, when they first went into default? If there were no offers, lower the price and you'll get one and then you can submit it to the bank and start working on the short sale.

All you did was to help screw the bank even further, and put the burdon on the rest of the people that are paying their mortgages and watching their investments in the financial industries go down even further. Seriously, was it the banks fault that your client stopped paying their bills?

A technicality? Really.... I sure wish I could live for free and snub my nose at the rest of the good people of the country that are struggling to make their mortgage payments on time while your client just gained another few months of free living. Must make you feel proud.

Thank you for sharing the legal side of this issue. Good for us Realtors to know we can count on you when there are issues betond our expertise.

Richard, you are at the top of your game! I am shocked that the judge allows them to "make up" a lost Note. I've heard that most of those were sold to overseas investors, THAT is why they are not available. The Notes are not lost. They will resurface when the Chinese investors come over to claim their rightful property! Scary, eh!!!

Join & post to my group at http://activerain.com/groups/virtualoffice

Thanks for sharing, any info to help distressed homeowners is great

Richard - This is interesting information indeed. Thanks so much for sharing it. I am going to pass it along to our resident short sale specialist.

Great information, thanks for passing it along.

Richard, Good job!!! Contrary to Andrew's comment, the banks also need to go by the law. Whether or not the sellers are working the system is not the issue. The issue is that if the law is on the books it needs to be followed.

Richard,

Just curious. In your opinion, will this tick the bank off and cause them to give the seller a hard time about approving a short sale. It's hard enough getting them approved as it is. There is an agent in my office who has a full price cash offer on a short sale she has been trying to get closed since DECEMBER. And she has sent the paperwork in 4 times!

Ann Cordes, Keller Williams Realty, Waco Texas

www.WacoShacks.com

You wrote that there were deficiencies in the pleadings . . . and this was the reason you prevailed. Because you were able to ascertain this, and bring it up before the court. The plaintiff would not have known about these things, and would not have been able to argue on the point -- since they didn't know what the point was (what was "at issue").

A good catch on your part. But, what if the deficiency wasn't there? They would have been SOL, even with legal counsel.

On the plus side, I'm willing to bet, the banks have entire transaction files FULL of deficiencies, but the layperson wouldn't know. On that note, people should consult competent legal counsel. As they should consult and retain competent real estate professionals!

Good job, great information and I hope the poor seller can get the short sale completed. I'll look forward to more of your informative posts.

Great information, and as I've always said, anytime you can get advice from a lawyer for FREE, make sure you're listening and taking advantage of that! We need more lawyers here on Active rain! Consider yourself bookmarked!

Aloha Richard,

Thank you for this informative post. I know it will come in handy and is valuable information to pass on to clients and friends who are facing similar difficulties, Kudos for sharing!

Peace,

Very interesting--I've heard of some loopholes although i wouldn't call this a loophole. I appreciate you sharing this.

Thank you Richard.

Wow! The beginnings of a true success story. Let's hope you find that buyer soon.

Nice job, Richard. I have to completely disagree with Andrew's comment. Regardless of any other circumstances, the rule of law must be followed... and in this case the bank failed. One would hope the client would use that time wisely, but that's another horse altogether.

Richard - "However, the Rules of Summary Judgment say that any pleading to be used by the moving party (here, the bank) must be filed with the court and provided to the other parties at least 20 days prior to the hearing."

Did that basically delay another 20 days?

Thanks for sharing this with us all -- appreciate it. All the best.

I hoep your client finds a buyer and completes a short sale so that a foreclosure does not haunt him all of his life. Andrew, take a look at the CDPE course. It might help you understand that people in distress make poor decisions. We shouldn't judge them - we should help them.

A good attorney is worth every penny!

I presented an offer today on a short sale and hopefully stopped the foreclosure. I'll find out tomorrow. Unfortunately the bank promised to call back today and didn't.

Genius Richard - we've had to have clients go to court with their attorney's and our full price short sale contracts on the home and ask the judge to deny foreclosure because the lenders are ignoring or unwilling to settle yet clog up the justice system (tax payers money) to proceed to foreclose.

This technicality will be passed on to our sphere of influence, not to mention the half dozen attorneys in our own family LOL.

p.s. small world....Jeff's Grandma lives in PBG - I'm sure we've driven by your office several times in past visits to West palm!

Richard you know the law and the judge agreed. I have heard requesting the lender to produce the Note can provide some valuable time; thanks for the additional information on this topic.

Kent Davis

Richard. Great information.. Glad to hear your were able to help these home owners.

Seriously folks, I don't get it. Some of you are acting like the bank is the bad guy????? I know some of you are just blogging for points so that doesn't really count, but for the rest of you let me figure this out. The bank loans money to someone so they can buy a house. The borrower then stops making the payments back to the bank, and continues to live in an asset that they don't own. They get a notice of foreclosure and continue to live for free (while the rest of us on A.R. and about 90% of those living in the US) continue to pay our mortgages or rent to the person that owns the asset. And just because the bank didn't give them a piece of paper 20 day prior to court, this person gets to further milk the system and live for free. And the bank is the bad guy. What kind of messed up deal is that to the bank and the rest of us? Why didn't the homeowner have a copy of the promissory note? Didn't they sign it at closing. I don't care if the bank has 1 day or 20 days to produce the note, it's a technicality their skating on, and going back to my original note Personally, I hate when attorneys get people off on "technicalities. I don't personally care for people that are enablers of bad behavior. And living in a home for free is in my opinion bad behavior.

Thanks for providing this. California is mostly a non-judicial foreclosure state, but I imagine it may come up.

Business is business and not personal, so if you were able to help your client based on a technical loophole then so be it. Well done Richard.

Amber, I hope you lend money to someone one day, or own a rental home, or have something stolen from you (living in a home for free is "stealing" from the bank, and the taxpayers and stockholders) and then we'll see if you have such a cavalier attitude about it. If I steal something from a store is it their fault because they made it so tempting? I guess the end always justifies the means and we'll see what you say when a tenant stops paying you because of a "loophole".

And yes you can say that I'm angryor passionate about this subject. It's the victim mentality and the dumbing down of America that has my blood boiling lately. Oh the poor victims. They borrowed money from a bank, and the bank is the bad guy. And then there's the lawyers that come along and say, hey, maybe there's a slight technicalily that has nothing to do with paying a mortgage or not, but maybe we can use it to screw the bank even more. Besides, how dare they ask to be either paid back on the loan, or have their asset returned. How dare they.

Do you think we'll ever see a day in this country again when people are responsible for their actions and it's not always someone elses fault? I don't think so, it's too late.

APR

To those of you that think this is "milking" the system or similar abuse of the lender's good intentions on lending money and then getting screwed by us lawyers:

My response is that you have not seen the other side of the table. Specifically for this example of what was accomplished (it was a win of a battle - not the war) -

Have you ever experienced the situation where some stranger to whom you have been making payments on a loan that they did not make to you (ie: the loan servicer or loan owner was changed) ends up being a phony? Have you ever had a situation where the seller of a house is not the real owner but a forged owner? [see - TRUE STORY - Renter forges deed, then conspires to sell house and pocket mortgage proceeds]

Most states have laws that try to stop this type of occurence. Just like it happens to a house title, it also happens to a mortgage deed or promissory note title. Being certain that the party suing is entitled to sue is simply the obligation of the lender to prove that they made the loan or alternatively are entitled to be THE ONE paid on the loan. THIS DEFENSE DOES NOT MEAN THE LOAN IS NOT TO BE REPAID - IT ONLY ASKS "WILL THE REAL LENDER PLEASE STAND UP"!

Most seasoned real estate attorneys can tell you about a situation where a loan is repaid in full and then no satisfaction of loan is forthcoming - only to find out the loan payment was made to the wrong party and the real party still wants its money!!!!!

Sometimes technicalities to some are real life stories to others.

I think it great that someone is sticking up for the little guy. They are normally the ones that get the smelly end of the stick.

Thank-you for passing this on. Good to see all Lawyers aren't as bad as previously thought! ;-)

Andrew we can feel your passion loud and clear. Let's do a what if scenario, because I don't know the seller's side of the story. What if the seller has been doing everything they can to get the short sale done? What if the seller experienced a major negative in life that caused them to not be able to afford their payments? What if the seller isn't trying to live for free but really has a legit reason for not making his/her payments? Now what if the seller is trying to live for free? Then they will be foreclosed on if they don't pay that's the rule. There's also rules that the bank has to follow in order to foreclose on the homeowner and whether it's a small detail not followed, followed it must! So if this gives the seller time to get the short sale done then why not?

This will be my last post on this subject since we're beating a dead horse on this. Although I guess I'm getting more points which seems to be the goal of most people who make comments on A.R. I will admit, it's easier to just agree with the poster and slap them on the back and say how awesome they are, then to actually have a point to make. I guess A.R. points are points either way.

Richard, to your point, "Have you ever experienced the situation where some stranger to whom you have been making payments on a loan" I guess it's just me, but I wouldn't be making payments to a stranger. (unless I guess it's a hard money loan from a shark).

Anyway, enoughs, enough. Good luck to you and happy milking!!!!!!

end of subject for me.

Congratulations on being someone's white knight. Not being a lwayer, but is that similar to asking the loan comoany to produce the original mortgage, which had been bundled by the original bank and sold off who knows where?

APR

Thanks Richard, great post. I'm going to attempt to send some folks your way for help.

You did a good thing (I can't believe I am praising a lawyer), and I appreciate that you shared it with us. I do quite a few short sales and your client is lucky to have your advocacy.

APR

That is all well and good but the bank will still come after them for any deficiency that stems from the short sale. Unless it was a purchase money loan the bank reserves the right to a deficiency judgment. They are selling the HELOC's to attorneys who are suing the clients for the difference. You are not out of the woods yet. The best avenue is bankruptcy. They they cannot collect

MAY

Great job. You just helped save this guys life. Irene, depending on how the short sale is completed, most often, the bank accepts the amount as "settled for less than owed, no further amount due."

JUN

I landed on this blog seeking info on forclosure defense. I will post this as someone from the other side of the coin. Here's the story: Husband disabled 18 mos ago. Hearing coming up Aug 08. Informed lender HOUSEHOLD FINANCE of the situation from day one. We caught up the arrearage from last year, fell behind again after an auto accident at the end of last year for me. Kept lender in loop whole time. Called HOPE NOW got credit counseling but no help there. Put in ACORN housing's plan in April, still keeping lender in loop. Lender tells us for 6 mos we are in hardship dept. then files forclosure on us. I have found a job (a miracle in Florida's economy) after 14 months of looking. HFC will not accept any short sales. They will not do any mortgage modifications. PERIOD.

I PROMISE you we never intended to "live rent free" in our home of 12 years. It is not a flip, it is not a house grab, we did not refinance and pull money out of our home. WE ARE NOT BAD PEOPLE. There are some bad people out there but we are not. Frankly I hope Andrew had enough savings to get him through a tanked economy like ours, because his turn is coming. Anyway the point of this post is that if you have a deal with HFC, forget it. We will use every available means to force them to work with us, and if the continue to choose not to, we will lose our home. It is an american tragedy and it happens every day.

So Andrew, keep your holier than thou thoughts to yourself until you have walked a mile in these shoes. And the rest of you please keep helping your clients.

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