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FLORIDA DCA FURTHER CLARIFIES BANK’S EVIDENTIARY | KEY POINTS

  1. On July 13, 2018, the Second DCA issued its second opinion in less than three months addressing the evidentiary requirements a bank must meet to prove compliance with the notice provisions of the mortgage, a condition precedent to foreclosing. Soule v. U.S. Bank National Association, as trustee for BNC Mortgage Loan Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1, Case No. 2D16-3231. Like its holding in Spencer v. DiTech Financial, LLC the Court reversed the Bank’s final judgment of foreclosure and remanded for an involuntary dismissal finding the Bank’s evidence that it satisfied conditions precedent to be insufficient.
  2. In Soule, the Bank’s only witness was employed by Ocwen; however, Chase, the Bank’s prior servicer, prepared and mailed the demand letter. The borrower argued that the Ocwen employee lacked personal knowledge regarding the act of mailing. The Bank’s only evidence of mailing was testimony from the Ocwen employee stating that since Ocwen boarded the loan, the letter was mailed. The witness explained if “there was any indication that a breach letter hadn’t been sent” it would have raised a “red flag” and Ocwen would not have boarded the loan. The Second DCA found this testimony insufficient to prove the demand letter was mailed pointing out that the witness failed to provide any testimony of “how anyone at Ocwen would know whether a default letter that was imaged into Chase’s system had or had not been mailed or what information might be in Chase’ s file to indicate that a default letter had not been mailed.” The Court also noted the witness admitted she never worked for Chase and she was never trained in any of Chase’s procedures, including Chase’s document imaging procedure.

When a borrower raises a defense based on failure to satisfy conditions precedent, the affiant (for summary judgment) or the witness (at trial) must be personally familiar with the mailing procedures of the entity which mailed out the demand letter. Supporting documentation or redundant evidence regarding these procedures and/or demonstrating the letter was mailed, e.g., a return receipt, a letter log or a supporting affidavit from the entity which mailed the demand letter is recommended since the bank will not be given a second chance to satisfy its burden of proof on this issue if the matter is tried.

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