That only four documents are needed to foreclose on a uniform mortgage (note, mortgage, payment history, and a paragraph 22 letter). That a trial can be done in five minutes. Finally, that a bank is presupposed a victory.
This idea; that foreclosure trials are easy, is flawed. In this post, I want to address the notion that only four documents are needed to foreclose.
There are already cases that dispel the four document myth. In the context of standing, we not only need the holder of the note, but the owner if the bank is proceeding under an agency theory. If the Plaintiff contends that there is a paragraph 22 letter, it also needs to prove that the letter was actually sent (and in compliance with the mortgage itself). Recently, a new case came out of Florida’s Fourth District Court of Appeal that requires additional documents to prove up damages in a foreclosure on a variable rate note and accompanying mortgage.
Specifically, on November 12, 2014, the Court in Salauddin v. Bank of America, No. 4D13-2747, held that a bank must prove “whether there were any changes in the interest rate based on the adjustable rate clause in the note, and what those changes were.” This case is clear in that failure to prove interest rate changes won’t prevent a foreclosure, but it will result in a reduction of damages based on the amount of interest charged and proven.
In my view, the actual holding of this case provides less value than the underlying analysis. Instead of just allowing a foreclosure because the bank has four magical documents, we must actually look at those documents and the bank must prove compliance with each and every element of those documents and the rules of procedure. We cannot just allow the bank’s to foreclose because they happen to present a note at trial. There are additional requirements that are too often overlooked by some in the judiciary.