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Banks Challenge Florida Appeals Court Ruling Against Robo-Signing in Foreclosures - Glarum v. LaSalle Bank

October 21, 2011

Our Redlands foreclosure defense attorneys were interested to see a recent article about a court ruling that's bringing new life to the year-old issue of robo-signing. As the Palm Beach Post reported Oct. 17, mortgage lender LaSalle Bank is asking a Florida appeals court to clarify and reconsider a September ruling that forbade it from relying on affidavits signed by people with no actual knowledge of the truth of their content. This is precisely the issue behind last year's robo-signing scandal, in which it was revealed that the practice of signing affidavits without verifying them was widespread, and frequently led to forging of signatures. The lender is not seeking to overturn the Fourth District Court of Appeals ruling in Glarum v. LaSalle Bank et al., but it wants to court to rule that the person signing the affidavit may rely on computer records without having personally entered them or being their direct custodian.

Gary and Anita Glarum admitted in their foreclosure case that they had missed payments, but disputed the exact amount they missed. Their loan servicer, Home Loan Services, filed an affidavit from employee Ralph Orsini claiming the Glarums owned more than $340,000 on their loan. Orsini testified that he relied on computer records for the number, but did not enter the numbers himself and relied at least partially on a past servicer, Litton Loan Servicing. Notwithstanding the Glarums' challenge, the trial court granted summary judgment to LaSalle on the foreclosure. It also sanctioned the Glarums' attorney for filing what it said were frivolous pleadings. However, the Fourth District Court of Appeal reversed both rulings. It found that Orsini's affidavit was inadmissible hearsay. Under Florida law, evidence is admissible only if the custodian of the records can demonstrate that they were made at or near the event; made from information obtained by a person of knowledge; were kept in the ordinary course of business; and it was a regular practice of the business to keep such a record.

Because Orsini did not know who, how or when the records were made, the appeals court found that the amount of the Glarums' default was still at issue. Thus, summary judgment was inappropriate, it said. It then went on to strike down the sanctions against the Glarums' attorney, which stemmed from the attorney's filing of an affidavit the court called a "form affidavit." The document gives an expert opinion on laypeople's ability to distinguish between original promissory notes and copies, and the lawyer apparently filed it in nearly every mortgage case. Because there was no testimony specific to the case, the trial court sanctioned the lawyer and ordered him to pay attorney fees for LaSalle. Nonetheless, the appeals court found, the trial court never made an express finding of bad faith, as required for sanctions. Thus, it reversed the finding of sanctions in favor of LaSalle.

In its motion for rehearing and clarification, the bank said the ruling was causing "calamitous confusion"; a large law firm said the deision could affect thousands of foreclosure cases in Florida. The Glarums' attorney told the Palm Beach Post he thought the bank was attempting to preserve a strategy of taking shortcuts in foreclosure cases, which it was not legally entitled to because a personal knowledge requirement is well established. As Newport Beach foreclosure defense lawyers, we agree. The ruling does nothing more than require banks to follow the same rules other litigants in Florida are required to follow. This may disrupt existing foreclosure practices in Florida, but we believe that just reflects poorly on the legality of the mortgage industry's practices. As San Diego foreclosure defense attorneys, we hope courts in other judicial foreclosure states take notice and scrutinize their own cases.

Howard Law, P.C., represents Californians of all backgrounds who are struggling o fight off a foreclosure they believe they can avoid, but are getting no help from their lenders. If you'd like to talk to us about your case and your options, you can call toll-free at 1-800-872-5925 or send us an email.

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