Sometimes when you win, you also lose. That’s the reality that may face some foreclosure defendants in the aftermath of a new ruling by a Florida state appellate court, which throws a wrench into a common foreclosure defense strategy.
As reported by Law.com, borrowers Frederick and Jonelle Sabido had argued that Bank of New York Mellon did not have legal standing to foreclose on their property because the bank was not originally a signatory on their promissory note and mortgage. They had originated their mortgage with JPMorgan Chase Bank N.A., but it later passed to Bank of New York Mellon.
The Sabidos successfully argued that the bank had “failed to show how the note and mortgage came into its possession.” However, that strategy came back to bite them when it was time to try and recoup their legal fees.
As Law.com explains, Florida Statute Section 57.105(7) has typically allowed winners in foreclosure cases such as this one to then force the losing party to pay their legal fees. There’s just one problem: the Sabido’s whole argument hinged upon proving that Bank of New York Mellon didn’t have legal standing in the first place.
As Fourth District Court of Appeal Judge Robert M. Gross wrote in his decision: “The borrowers’ motion for fees is denied because the Bank of New York Mellon was not a party to the note and mortgage, and because the borrowers successfully argued that the Bank of New York Mellon was not entitled to enforce the instrument containing the attorney fee provision.”
“No one ever likes to see someone do good work and not get paid,” said Roy D. Oppenheim, the attorney representing the Sabidos. “It basically means that any bank can bring a foreclosure, whether they have standing or not, and not worry about there being consequences for such egregious conduct.”