Tuesday, September 13, 2011

'Stunning' Decision On 'Unremarkable' Issue Of Law In Recent Florida Foreclosure Case

From a recent post in Reality Check:

  • [T]he District Court of Appeal for the 4th District in Florida issued a wholly unremarkable ruling in Glarum v. LaSalle that nonetheless could massively complicate banks’ efforts to foreclose in Florida.(1) When foreclosing, the court said, a bank has to use evidence, not hearsay. In this case, the hearsay was LaSalle’s claim about how much the homeowner owed it–the bank’s “affidavit of indebtedness.”

  • What is hearsay? Split the word in two and it’s obvious: the witness hears something, and then says it to the court. Hearsay’s prohibited for a basic reason: you can’t trust it to be true, as anyone who has played “telephone” knows. The hearsay rule has a 500+ year pedigree, so it’s not possible that any lawyer or judge in Florida thought it was okay to use hearsay to win a case.


  • Ruling that LaSalle’s affidavit of indebtedness was inadmissible hearsay was unremarkable as a matter of law. But in a state where some judges have displayed pro-bank bias so powerful they don’t require the banks to follow the rules, the decision is stunning. In fact, banks are likely to be far more than stunned by it; they may be stopped in their tracks for a long time.

  • That’s because the affidavit represented normal business practice: have an employee look at a piece of paper, look at a computer screen, and sign. By rejecting Orsini’s affidavit, the court is forcing the banks to overhaul their basic foreclosure processes. Don’t be too sympathetic to those poor banks, however. The hearsay nature of these affidavits is obvious, and the only way banks could think it would be alright to use them would be to think they are above the law.

  • That is, a business with a healthy respect for the rule of law would have said to itself at the very beginning: ‘hmm, we need to submit evidence, not hearsay, so let’s set up our business to allow us to do that. Let’s verify the data we get from previous servicers; let’s have quality control procedures that insure the data we enter is accurate and not altered later; let’s make sure that we have employees who really understand how we do all this make the affidavits we give courts. Instead, the banks said, ‘here’s how we do business. Courts better accept it.”

For more, see Florida Appeals Court Rules Banks Must Follow.

(1) See also, Florida Trial Judge Fumbles Another F'closure Ruling; Sworn Affidavit By One Without Personal Knowledge Of Facts = Inadmissible Heresay: Appeals Court on the latest misadventure in a foreclosure ruling for the Palm Beach County trial judge whose ruling in Glarum v. LaSalle was overturned on appeal, Judge Meenu Sasser.

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