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WHAT DOES STANDING MEAN IN A MORTGAGE FORECLOSURE?

For centuries, the law has been clear that the person filing a lawsuit must have the right to bring that action when it is filed.  It is not sufficient to acquire the right to file the suit at a later date.  To have the right to foreclose a mortgage in Florida, a person or entity must prove two things:

1.    That the person or entity that filed suit has the right to enforce the promissory note which is secured by the mortgage.  This right is determined by Florida's version of the Uniform Commercial Code.  Usually, this right is satisfied by being a "holder" of the promissory note.  Being a "holder" means that the promissory note is either payable to the plaintiff, or is endorsed to the plaintiff by one endorsement or a series of endorsements, or the note is endorsed in "blank" by one endorsement or a series of endorsements.

2.  That the person or entity that filed suit has possession of the original note when the lawsuit is filed.  Possession can be proven by physical possession, e.g. evidence that the note was is the plaintiff's vault on the date the lawsuit is filed, or by constructive possession.  An example of constructive possession is where the plaintiff has an agreement with another party (such as the servicer) to hold possession of the note for the benefit of the plaintiff. 

When served with a foreclosure lawsuit, it is virtually impossible to determine if the plaintiff will be able to prove standing if the case goes to trial.  That is why it is critical to hire an attorney as soon as you are served with foreclosure who will file an answer and any relevant affirmative defenses.  Failure to file an answer denying certain allegations of the foreclosure complaint will act as admissions of those allegations. That could mean little or no evidence of standing will be required by the plaintiff and most likely the home will be able to be foreclosed without a trial.  Although there are many reasons to search for competent foreclosure defense counsel when served with a foreclosure complaint, a lawyer's assistance with arguments concerning whether a plaintiff has standing certainly are at the top of the list.

James E. Toale is a Board Certified Real Estate Lawyer, who served as the Sarasota Foreclosure General Magistrate for the 12th Judicial Circuit during 2013 and 2014.  He heads the Real Estate department at Tannenbaum Law Group.

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Tannenbaum Scro, P.L.
1990 Main Street Suite 725
Sarasota, FL 34236

Toll Free: 866-615-4543
Phone: 941-444-9092
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214 S. Lucerne Circle
Orlando, FL 32801

Phone: 407-738-4379
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