Mortgage foreclosure cases continue to clog Florida’s courts, and residential mortgage foreclosure programs continue to offer homeowners perhaps their best option for home retention.  For those of us mediating mortgage foreclosure cases, as well as for those who litigate them, a case came out of the Fourth District Court of Appeal about two weeks ago that warrants attention.  The case has nothing to do with foreclosure mediation per se.  It does, however, illustrate yet another way in which foreclosures can bog down the litigation process even more.  If there’s a silver lining in all this, however, it is that it may make foreclosing lenders a little more willing to come to the table.

In Glarum v. LaSalle Bank Nat’l Assn., 36 FLW D1967 (Fla. 4th DCA Sept. 7, 2011), the mortgagors appealed a summary judgment of foreclosure entered in favor of the bank.  The appellants admitted they were in default, but contested the amount by which they were in default.  The bank’s affidavit of indebtedness was executed by an individual employed as a “specialist” for the loan servicer, Home Loan Services, Inc.  In deposition, this specialist testified that he could not verify the accuracy of the data at the time it was entered into the servicer’s computers.  He did not know who had entered the data or when it was entered.  He also admitted that some of the information in the computer, and upon which he relied, came from the bank’s prior servicer.  The Glarum court concluded that the foregoing rendered the “specialist’s” affidavit hearsay falling outside the business records exception.  It reversed the summary judgment and remanded for further proceedings.

This particular case, currently the subject of a motion for rehearing, has gotten a lot of attention very quickly.  It seems unlikely that the deficiencies in the Glarum servicer’s knowledge and affidavit are unique to that case.  This will potentially give borrowers the ability to slow the foreclosure process with nothing more than a simple deposition of the person who signs the affidavit of indebtedness.  There is little doubt that eventually (and probably sooner rather than later), lenders will revise their affidavits so as to capture the data required by Glarum.  In the meantime, though, the potential for additional litigation delay may put an arrow in the borrower’s quiver, one of few the borrower may have when his or her home is in foreclosure.

Michael S. Orfinger
Upchurch Watson White & Max Mediation Group

Bookmark & Share