Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY


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.

Copyright 2009 Richard P. Zaretsky, Esq.


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 email:  - 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!   New Website

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Diane Bell, Hilton Head Real Estate, Bluffton 04/14/2009 10:09 AM
  2. Roland Woodworth 04/14/2009 04:08 PM
  3. Yvette Gardner 04/15/2009 12:33 AM
  4. Gabe Sanders 04/15/2009 11:59 PM
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Kay Van Kampen
RE/MAX Broker, RE/MAX Solutions - Springfield, MO
Realtor®, Springfield Mo Real Estate

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.

Apr 14, 2009 02:06 PM #39
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN

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!

Apr 14, 2009 02:49 PM #40
Kent Davis
Options Realty - Albuquerque, NM

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


Apr 14, 2009 03:05 PM #41
Roland Woodworth
Q Realty - Clarksville, TN
Q Realty - Power In Real Estate

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

Apr 14, 2009 04:09 PM #42
Andrew Martin
REMAX Accord - San Ramon, CA

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.



Apr 14, 2009 04:30 PM #43
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

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

Apr 14, 2009 04:31 PM #44
AMBER NOBLE GARLAND - Top Real Estate Expert, Property Tax Appeal Specialist & Author
Strategic Marketing Expert & Relocation Specialist Serving New Jersey and nationwide! - Marlboro, NJ
- The Agent You Can Trust To Deliver REAL Results!

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.

Apr 14, 2009 04:45 PM #45
Andrew Martin
REMAX Accord - San Ramon, CA

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 14, 2009 04:57 PM #46
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

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.

Apr 14, 2009 08:58 PM #47
Mark Watterson
Salt Lake City, UT
Utah Real Estate

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.

Apr 15, 2009 01:02 AM #48
Matthew Rosov
Amerisave Mortgage Corporation - Laurel, MD
Certified Mortgage Planning Specialist

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

Apr 15, 2009 02:12 AM #49
Pam Graham
All Real Estate Options - Jacksonville, FL
Jacksonville, Clay & St Johns Counties

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?

Apr 15, 2009 02:16 AM #50
Andrew Martin
REMAX Accord - San Ramon, CA

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.

Apr 15, 2009 03:02 AM #51
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

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 15, 2009 08:53 AM #52
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

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

Apr 15, 2009 11:59 PM #53
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY

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 16, 2009 02:11 PM #54

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 

Apr 19, 2009 10:58 AM #55
Josh Holt
RE/MAX Coast To Coast~ Dedicated to You! - Berwick, ME
Southern Maine and NH Real Estate - Your Source of Info on the Berwicks

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."

May 02, 2009 12:51 AM #56

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.

Jun 23, 2009 06:02 AM #57
Short Sale is a joke

My (now) husband applied for a short sale early March with Taylor Bean as he was laid of from construction in November and with no work in sight he was exhausting his savings and wanted to do the right thing with a short sale rather than just walk away (he's still unemployed).  Have had ONE person look at house (the past nine months) and luckily they contracted on it end of March for $110K, listed at $119K.  Owe(d) $146K on a $146K interest only loan taken out three years earlier (husbands fault, he should have talked to professionals).  Never heard a word from TB except to keep sending in repeat paperwork.  5 months later Taylor Bean is in trouble and the account is transferred to Ocwen.  He had to start the entire process over again and had to submit application twice as they lost it.  Buyers still hanging on and want the house.  Two EXACT homes and one larger on the SAME street and subdivision has sold in the past eight months for $90K, $110K and $95K respectively.  End of September Ocwen said their market analysis indicated $110K was too low (all 3 homes above were in the sales records at property appraiser and we never got a copy of their market analysis).  Buyers held at $110K.  Ocwen never answered and filed a lis pendens on 12/17 and we are waiting to be served (me as homestead spouse, not on loan).  Ocwen sent notice last week that the house insurance is due, it was escrowed the past three years, and when was he going to pay it??  Husband called and found out then that the short sale had been closed (they never mentioned that they filed for foreclosure on the phone) and he explained the three sales above and Ocwen offered to do another market analysis but as slow as they work they won't have it done by time our response to the complaint is due, which we have all the paperwork ready to submit showing that we have a sales contract on the house and his good faith to work with and settle yet Ocwen refuses to cooperate and is being unreasonable and only adding costs by not taking a very fair, reasonable and comparable offer for the house and filing for foreclosure.  This is sickening.  Husband used up all his savings while working with these (insert not so nice word) and they just don't care.  Where was the couple that the court ordered their home free and clear because the bank didn't move on their loan modification yet indicated they were and filed for foreclosure instead?  Not that he wants the house, he has moved out and into my house which I owned before we got married but it is now the principle that these mortgage holders do not cooperate with people.  Should we just let the house go through foreclosure or get an attorney and fight it?  I'm hoping the court would take into consideration the sales contract in which the buyers have held onto for nine months and see his cooperation and order Ocwen to work with him on the short sale.  Is that a possibility?  Also, I owned my home prior to us getting married.  It is still deeded in my name only as a single person (but as we are married now it is his too) and I was not a party of his home in foreclosure (except that we are now married).  Can this touch me or "my" home?

Dec 26, 2009 11:19 PM #58
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