Standing – whether or not a lender has the right to foreclose – is still showing up as an issue for banks in Sunshine State foreclosure litigation. And one national lender was slapped by both the trial and appellate courts for having “unclean hands” after it foreclosed on a Florida homeowner.

On Jan. 7, a state appellate court ruled for a Florida homeowner in a foreclosure case involving the question of standing. In Joseph v. BAC Home Loans Servicing, Rosanne Joseph appealed the foreclosure of her house, arguing that the note and mortgage holder failed to prove its standing to foreclose at the time of the filing of the complaint.

The court sided with the borrower, explaining that Taylor, Bean and Whitaker Mortgage Corp. had produced no evidence to show that it owned the note or mortgage on the date of the filing of the complaint. Taylor Bean transferred the note and mortgage to BAC Home Loans Servicing LP, and BAC was substituted as the plaintiff into the foreclosure suit.

In Bymel v. Bank of America, a state appellate court ruled for a man who had purchased a Florida home in a short sale. Bank of America approved the sale but informed the short seller after settlement that final approval had not been given, according to the court’s March 11 opinion. William J. Bymel sued and then appealed after the trial court ruled against him.

BofA ran afoul of the Sunshine State’s “unclean hands” rule in Bank of America v. Pate. Using the unclean hands defense, the defendant argues that the plaintiff is not entitled to relief because the plaintiff engaged in some sort of wrongdoing.

The Charlotte, N.C.-based bank assured Phillip and Barbara Pate, based on the appraisal showing the home’s value far exceeded the $50,000 mortgage loan, that it would issue a home-equity loan in addition to the mortgage loan, according to the March 16 opinion. This was a precondition to the Pates’ agreement to purchase the home, which was in very poor condition but had historical appeal for the Pates, the court explained.

The Pates needed the HEL to restore the house. BofA informed the Pates that it would close on the HEL after the mortgage loan was issued. However, the bank later refused to issue the HEL, in part on the ground that the appraisal issued by Homefocus was flawed, the court said. Both the trial court and the appellate court ruled against BofA.

The appellate court upheld the trial court’s ruling that BofA had “unclean hands” in the foreclosure of the Pate’s home. The appeals court also upheld the trial court’s award on the couple’s counterclaims for breach of contract and fraud and the award of $250,000 in punitive damages and $60,443.29 in compensatory damages, against the lender and its affiliate, Homefocus Services LLC, which provided an allegedly flawed appraisal. In addition, the appellate court upheld the lower court’s ruling ordering the bank to correct the Pates’ credit histories.

An appellate court ruled in Colon v. JP Morgan Chase Bank for a homeowner on Feb. 6, reversing a lower court decision in favored of Chase. Cristobal Colon appealed, arguing that the trial court erred in entering summary final judgment because competent evidence was not presented to refute his defense that the bank failed to satisfy the notice requirement of the mortgage.

The appellate court agreed and reversed as there was some dispute in the record whether the acceleration letter had been provided to Colon either during discovery or at the summary judgment hearing.

In Cobbum v. CitiMortgage, the state appellate court ruled for a Florida couple on Feb. 27, declaring that the trial court should not have denied their motion to amend their answer, as there was no evidence that the amendment would prejudice CitiMortgage Inc.

On Jan. 7, a state appellate court ruled in favor of a Florida homeowner in Fischer v. U.S. Bank National Association – another case dealing with the issue of standing. At the 2013 trial involving Gregory Fischer, U.S. Bank’s witness could not say what entity owned or held the note and mortgage at the time of the foreclosure. Although the bank proved that it acquired the note at some time, it did not prove at trial that it had standing at the time the complaint was filed.

A Florida state appellate court in Wachovia Mortgage v. Montes on Jan. 28 ruled in favor of a lender whose foreclosure was involuntarily dismissed at trial. Wachovia Mortgage FSB argued that the trial court had made a mistake in dismissing the case before Wachovia finished presenting its evidence.

The appellate agreed and sent the case back to the trial court for a new trial. Wachovia filed the original promissory note with the court before the trial. At trial, however, the parties discovered that the original note was missing from the court file. Wachovia sought to introduce a copy, but the defendants lodged a best evidence objection, disputed the authenticity of the original and moved to involuntarily dismiss the case. Without permitting further presentation of evidence, the court granted the motion.

About one week later, the clerk found the original note and returned it via mail to Wachovia. Wachovia promptly moved for rehearing or a new trial, arguing the dismissal was premature and explaining that trial could now proceed with the original note. The trial court denied the motion and entered final judgment for the homeowners.

In Laws v. Wells Fargo, the state appellate court on Feb. 27 ordered a case to trial after the lower court granted summary judgment for Wells Fargo over the homeowner’s objection that the lender failed to give the required notice of intent to accelerate required by HUD regulations. Wells Fargo has not denied that it failed to send Laws a written notice of default and intent to accelerate. Nor was any such notice entered into evidence below.

An order dismissing a foreclosure was reversed on Dec. 31 by the appellate court in Wells Fargo Bank v. Geisel because dismissal was not requested by the bank or required under the circumstances. The appellate court noted that the case took an unusual turn when the lender, having purchased the property at judicial sale, filed a motion to vacate the final judgment, the judicial sale, and the certificates of sale and title because the mortgage contained an erroneous legal description that was carried into the final judgment, the notice of sale, and the certificates of sale and title.

Vacating the final judgment and the subsequent actions “is necessary to allow the [bank] to reform the Mortgage . . . and to foreclosure [sic] the Property with the correct legal description,” the lender said in court documents.

Source: Mortgage Daily, Distributed by Tribune Content Agency, LLC.