Aurora Loan Services LLC couldn’t stick to its story and, in the end, its multiple revisions ended up costing its successor a foreclosure appeal on a Royal Palm Beach home.
The Littleton, Colorado-based lender appeared to have been caught in the fast-paced world of mortgage transfers that left it uncertain of its ownership of the note on the four-bedroom, 2,800-square-foot house.
Aurora sued in August 2008 after homeowner Sarit Assil defaulted on a mortgage. In the original version of the complaint, Aurora identified itself as the owner of the lost note. But it revised the complaint twice, sometimes identifying itself as owner, other times as servicer of the loan.
The first amended complaint dropped the lost note claim and attached a copy of a document with a special endorsement to Deutsche Bank. Then it backpedaled on its stance as owner, altering the lawsuit yet again to say it was servicing the loan for Deutsche Bank and authorized to foreclose on the lender’s behalf.
That inconsistency proved to be the undoing of Nationstar Mortgage LLC, a Coppell, Texas-based firm that acquired the Assil debt.
“Because Aurora was not shown to be the holder of the note, it essentially proceeded under the theory that it was a nonholder in possession of the note with the rights of a holder,” Fourth District Court of Appeal Judges Carole Taylor, Melanie May and Mark Klingensmith wrote in the unsigned opinion. “However, Aurora failed to provide sufficient proof that it was authorized at any time to prosecute the foreclosure action on behalf of Deutsche Bank. In short, there was insufficient proof that Aurora was the holder of the note or was otherwise a person entitled to enforce the note at the time it filed the action.”
At trial, Nationstar tried to show that Deutsche Bank owned the note when Aurora filed the complaint. It called one witness to bolster its argument and introduced into evidence a screen shot, taken from Aurora’s system three days before the servicer filed suit, showing a scanned copy of the note with a special endorsement to Deutsche Bank.
Its efforts convinced Palm Beach Circuit Senior Judge Howard Harrison, who granted Nationstar a final judgment as successor to Aurora in the foreclosure case. But they fell short on appeal.
The Fourth DCA found the lenders failed to show Aurora had standing to sue on the date of the filing where it had no mortgage or note assignment, no blank or special endorsement on the promissory note and “no competent evidence” it held the note when it brought suit.
The panel reversed the judgment based on Aurora’s lack of standing and remanded for entry of an involuntary dismissal.
Major lenders suspended foreclosure actions in 2010 amid the robo-signing scandal, which relied on false and forged documents to fill gaps in mortgage records. Aurora Bank agreed in 2013 to pay $93 million into a special fund and $149 million in other assistance as part of a $9.3 billion settlement with 13 banks over foreclosure abuses.
Craig Boudreau of the Law Office of Craig A. Boudreau in Wellington represented the homeowner on appeal.
Nancy Wallace, William Heller and Celia Falzone of Akerman’s Tallahassee, Fort Lauderdale and Jacksonville offices represented Aurora.
Neither side had comment by deadline.