A few months ago, attorney Neil Garfield wrote a glowing endorsement of the Florida 11th Circuit trial opinion in HSBC v Buset sending forth HSBC without day for a variety of reasons, none of them sensible. The Stop-Foreclosure blog echoed Garfield’s sentiment. In due course the Florida 3rd District Court of Appeals overturned all of the holdings of the Buset opinion, and remanded the case back to trial court for a final judgment of foreclosure, holding the following:
- The trial court erred in accepting expert testimony on legal issues;
- The note is not merely a secured interest under UCC Article 9, but rather a negotiable instrument under UCC Article 3 and Florida law, in spite of its reference to the mortgage without incorporating it, and the definition of Note Holder does not destroy negotiability of the note;
- HSBC, as note holder and “PETE” (Person Entitled To Enforce the note under the UCC) or agent of the PETE, had standing to foreclose, irrespective of the incomplete or broken chain of ownership of the note during its securitization, and does not need to prove ownership or an unbroken chain of ownership of the note, AND the trial court erred by focusing on the irrelevant chain of ownership of the note instead of the relevant PETE;
- Purported violations of the Pooling and Servicing Agreement (PSA) are irrelevant to the PETE status of the note holder and did not destroy HSBC’s standing to sue for foreclosure because borrowers are not parties to or beneficiaries of the PSA, and therefore borrowers may not raise PSA violations as defenses to foreclosure
- Assignment of the mortgage did not destroy HSBC’s standing to foreclose because the mortgage always follows the note and the PETE always has authority over the mortgage.
- The servicer’s business records were admissible, and the trial court erred by blocking admission of borrower payment history, default letters, and payoff printout.
- HSBC did not have unclean hands justifying dismissal
What does this prove?
Well, to begin with, borrowers facing foreclosure cannot trust attorneys like Bruce Jacobs and Neil Garfield to save them from foreclosure. They will just make failing arguments, and waste a lot of money while leading their victim into the hungry jaws of foreclosure.
Second, it suggests that borrowers must find out how the creditor, servicer, lender, mortgage broker, loan officer, title company, or appraiser injured them in the loan transaction, and then GO ON THE ATTACK.
Where do we find such a strategy in action?
In foreclosure activities across the land every business day. The borrower injures the creditor by breaching the loan agreement, so the creditor files a foreclosure lawsuit or takes the case to the trustee, and a foreclosure and sale of the property follow in due course.
Of course, creditors and their allies in the loan transaction make a host of errors in most loans, and if the borrower hires a competent examination firm like Mortgage Fraud Examiners to look for tortious conduct, legal errors, contract breaches, or violations of law, the examination will turn up injuries (typical of 95% of the loans in the past 15 years). Some of the injuries might justify huge compensatory and punitive damages.
Don’t expect a foreclosure pretense defense attorney to look for causes of action in a loan transaction. Such attorneys usually bilk their clients and withdraw from the case just in time for foreclosure.
Maven at MortgageAttack