REAL ESTATE: MORTGAGE FORECLOSURE: STANDING: SPECIAL ENDORSEMENT FROM THE PLAINTIFF TO A THIRD PARTY

Dixon v. Express Equity Lending Group, LLLP, ___ So. 3d ___, 38 Fla. L. Weekly D1220 (Fla. 4th DCA June 5, 2013)

The appellate court reversed final judgment of foreclosure for the lender, Express Equity Lending Group, LLLP, because “the lender did not have standing to foreclose.  Although the lender’s president testified that the lender was the owner and holder of the note, the special endorsement appearing on the back of the original note suggest[ed] otherwise.  Under section 673.2501(1) [Florida Statutes] and Rigby [v. Wells Fargo Bank, N.A., 84 So. 3d 1195, 1196 (Fla. 4th DCA 2012)], the special endorsement stating ‘pay to the order of U.S. Century Bank’ established that only U.S. Century Bank had standing to bring the foreclosure action.”  The language of the special endorsement trumped the testimony of the lender’s president that the lender entered into a separate mortgage warehouse lending agreement in which it pledged a security interest, rather than ownership, in the note.  According to the president, if the lender defaulted under the warehouse lending agreement, the warehouse lender would have had recourse to the pledged note to satisfy the indebtedness, but the appellate court gave controlling effect to the language of the special endorsement.