Another blow to banks was dealt recently by the Florida Fourth District Court of Appeal when it ruled in favor of a pro se appellant, Linda Zimmerman, who sought to have her bank foreclosure reversed. For those of you not well versed in legal jargon, "pro se" means Ms. Zimmerman was not represented by an attorney when she achieved this legal victory.
The 4th DCA agreed with this homeowner that JPMorgan Chase Bank had failed to establish that it had possession of the promissory note before filing its foreclosure complaint in 2009 against the Lake Worth home.
The case is not over yet as it was remanded to the lower court which now means that Chase must prove it was the holder of the promissory note on the date it filed its foreclosure complaint. If Chase fails to prove possession on the date it filed, it will not have standing to pursue its foreclosure against Ms. Zimmerman and the case will be dismissed. If Chase's original action is dismissed, it may then have a statute of limitations problem when it comes to refiling.
So what does all this mean for community associations? Unlike bank foreclosures, associations are not saddled with the same burdens as lenders. Naturally, an association must prove that the amounts being demanded are actually owed and that all statuorily-required protocol was followed. However, association members do not have the various holes to poke that they do when it comes to fighting a bank foreclosure. Remember that big stack of papers you signed when you obtained a mortgage? Well, if there were problems with the Truth in Lending Statement or the RESPA Disclosure, those can become defenses to your bank foreclosure as well as the bank's failure to have possession of your promissory note.
For association members who may be struggling financially, the message is clear. Pay your association whether or not you plan to fight your bank foreclosure. Association assessments are typically a lot smaller than your mortgage payment and the association can proceed to foreclose a lot quicker and with fewer hurdles. Paying your association assessments allows you to stay in your property at a price that is normally less than what it would cost you to rent elsewhere. For association directors, the message is also clear. If you are still waiting around for banks to foreclose on the delinquent properties in your community there are no guarantees that is going to happen any time soon or any time at all!