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Presumption of Standing

We’ve talked about this before – the banks must prove that they are the proper party to be suing a borrower in a foreclosure action. Generally speaking, this is called “standing”. It used to be that the bank must show how they acquired a borrower’s loan, typically through possession of the note and mortgage. A good defense attorney could hold them to task and make them prove every step of the way. And oftentimes, a lack of proper evidence to prove how a borrower’s loan went from company A to company B resulted in the foreclosure case being dismissed. However, recent case law has changed the landscape to the borrower’s detriment.

A recent case out of the 4th District Court of Appeals titled Ortiz v. PNC National Bank Association, loosened the requirements for a bank to prove standing. In a general sense, no longer does a bank need to prove how they acquired the loan – they simply need to have a copy of the note and mortgage attached to their foreclosure complaint. So long as the copy of the note and mortgage attached to the complaint matches the actual original note and mortgage at the time of the parties go to trial, the courts have held that is sufficient evidence to prove standing. It creates a rebuttable presumption that the bank that is foreclosing against you is the proper party in the first place. In a sense, this swaps the responsibilities of the bank and the borrower.

In most lawsuits, the person suing has the burden to prove their case. In a foreclosure action, the bank must prove there is a contract (the note and mortgage), that the bank is the proper party to be suing on that contract (standing), that there was a breach of the terms of the contract (a default), and that the bank is entitled to a recovery (damages). The recent Ortiz case has shifted the burden to proving standing from the bank to the borrower. If a borrower wants to argue that the bank is not the proper entity suing them, it’s the borrower’s burden to prove that it’s the wrong bank, as oppose to the bank’s burden to prove that they are the right party. This shift requires a new approach to dealing with the banks and disproving their foreclosure case. The typical arguments you often hear regarding MERS, who owns the Note, and proving standing aren’t as strong as they used to be.

But that’s not to say that all hope is lost. When the courts make it easier for the banks, it just means that a skilled defense attorney will find other ways to break apart the bank’s case. When you’re facing a foreclosure action, the help of seasoned attorneys who know the law and know how to use the law to your advantage is paramount. If you’re dealing with a foreclosure, you don’t have to go through it alone. Just because it’s easy for the banks doesn’t mean it has to be hard for you. Loan Lawyers is a group of dedicated attorneys who use their collective knowledge to help keep you in your home. Reach out to us today to set up an appointment and let us fight for you