Seffar v. Residential Credit Solutions, Inc., ___ So. 3d ___, 40 Fla. L. Weekly D734 (Fla. 4th DCA March 25, 2015)

The appellate court reversed final judgment of foreclosure because of insufficient evidence of standing. RCS, a loan servicer, was the original plaintiff. Bayview, the subsequent loan servicer, was substituted as the plaintiff before trial. The original note was allegedly attached to the complaint, but the payee was ABN, and the note did not contain endorsements or allonges. Nine months later, RCS filed an original note with “an undated, blank allonge, payable to bearer, allegedly executed by a vice president of ABN,” but there was no indication that the allonge “was affixed to the note with which it was filed.” One of Bayview’s litigation managers testified at trial, but he was not the records custodian for either servicer, he was unfamiliar with their computer systems or how they gathered information or input it in their computer systems, and was unable to vouch for the accuracy of RCS’s records. Although he thought that Bayview purchased the note from RCS based on a screen shot on Bayview’s computer system, he had not seen the purchase agreement and did not produce a copy of it or the screen shot. He did not know when the allonge was executed, whether it was signed by hand or stamped, whether it was affixed to the note before it was filed, whether the signatory was employed by ABN when loan servicing was transferred from ABN to Franklin Bank, or who held the note when RCS sent notice of default to the borrower. This evidence failed to establish standing. “First, while the note and mortgage were originally held by ABN, the only assignment of mortgage attached to the complaint and introduced at trial was one from FDIC, as receiver for Franklin Bank to MERS as nominee for RCS. There [was] no proof of any transfer of the note or mortgage from ABN to Franklin Bank. Second, while Bayview contend[ed] that the undated allonge supplie[d] the connection, as it showe[ed] a transfer payable to bearer, there was no proof that the allonge was attached to the note, and Bayview presented no proof of when it was executed. Finally, there was no competent evidence of what rights Bayview acquired from RCS.” “Although, nine months after filing the complaint, RCS filed what purported to be the original note with an allonge payable to bearer, it was undated and there [was] no proof it was affixed to the promissory note. . . . The litigation manager did not know when the allonge was executed, or whether it was affixed to the note prior to filing.” “Bayview did not prove that either RCS or [Bayview] was a nonholder in possession. It never connected FDIC as receiver of Franklin Bank, from which RCS acquired an assignment of mortgage, to ABN, the original note holder.” The letters notifying the borrower that servicing of the loan had been transferred to RCS and then to Bayview failed to address the “right to enforce the note,” and the servicing agreements were not introduced in evidence. Although the litigation manager thought that Bayview purchased the note and mortgage from RCS, he never “[saw] a purchase agreement, and no document memorializing the purchase was entered into evidence. Therefore, because there [was] a gap in the transfer of the note and mortgage, Bayview did not prove that RCS, and subsequently Bayview, were nonholders in possession. . . . Simply stated, the evidence presented was woefully inadequate to prove standing to foreclose. It was quite apparent from the record that Bayview’s litigation manager did not have the requisite knowledge, nor did he produce documentary evidence, to support the claim.”

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