COURT CLARIFIES REQUIREMENTS | Key Points
The Second DCA recently confirmed that a note containing a negative amortization provision is still a negotiable instrument as defined by § 673.104(1), Fla. Stat. Stacknik v. U.S. Bank Nat’l Ass’n as Tr., MASTR Adjustable Rate Mortgages Tr. 2007-3 Mortgage Pass-Through Certificates, Series 2007-3, 44 Fla. L. Weekly D2773 (Fla. 2d DCA Nov. 15, 2019). The Court reasoned that the borrower still made “an unconditional promise…to pay a fixed amount of money…” even though the principal amount could increase based on “other charges” identified in the note. The Court concluded since the note was negotiable the bank was a holder with standing to foreclose.
The Court also explained even if the note was determined to be non-negotiable, the borrower would still be obligated under the note because “contractual obligations to pay money are enforceable independent of whether they are negotiable instruments.”
Lastly, the Court clarified that any one of the following were sufficient to prove satisfaction of conditions precedent: Proof of regular business practices (through witness testimony), an affidavit swearing that the letter was mailed, a return receipt, or a mailing log.