All items from Florida Banking Law Blog

Authored by Douglas L. Waldorf, Jr. of Rogers TowersThere have been several articles posted on this blog on the subject of standing – the legal right to enforce a promissory note and/or mortgage.  This continues to be a popular issue for defense counsel to raise and, as a result, relevant and current caselaw is abundant.
I have a couple of observations in this regard.  First, the majority of reported decisions involve appeals of entry of summary final judgment.  Florida attorneys understand that the standard for entry of summary judgment involves a finding that there are no disputed issues of material fact.  In many of the cases on standing, the plaintiff lender failed to establish this at the summary judgment hearing.  That does not mean that in all of these cases standing cannot be established.  It may ultimately be if the summary judgment preparation and hearing is done correctly with adequate evidence of standing presented.

Posted 3 days 16 hours ago

Authored by Janet C. Owensand Scott J. Kennelly of Rogers TowersAn important issue that arises for lenders when pursuing foreclosure actions is determining when the statute of limitations begins to run.  Florida Statutes provide that a party has five years to foreclose a mortgage, but determining when the five years begins to run has proven to be a topic of legal debate.  Lenders who find themselves potentially beyond the statute of limitations after an unsuccessful first attempt to foreclose may find hope in the recent decision by the Florida Fifth District Court of Appeals in U.S. Bank National Association v. Bartram.

Posted 5 days 16 hours ago

Authored by Heather S. Nason of Rogers TowersThe hotel industry appears to be on an uptick, which is good news for lenders.  Hotel construction in May 2014 is up over 13% from the same time period in 2013.  Moreover, record high occupancy rates and low supply could continue to drive an influx of new rooms into 2015 and beyond.  As more lenders are called upon to secure these projects, lenders should consider that hotel projects require a particular diligence not always found in other types of commercial projects.  Below are a few of the more commonly overlooked issues.
The Elevated Role of UCC Financing.  A significant percentage of the value of a hotel property is in furnishings, artwork, televisions, dining equipment, and other personal property.  As such, lenders should obtain a separate security agreement that specifically identifies the personal property and prevents the borrower from disposing of the property except in the ordinary course of business.  The lender should consider obtaining UCC insurance as well.

Posted 1 week 4 days ago

Authored by Scott St. Amandand Gabriel Crafton of Rogers TowersAs we discussed in our previous post regarding the Christou case, social media is discoverable – and consequently subject to a litigation hold.  From an evidentiary standpoint, social media is not without its shortcomings, and it is important to understand that social media is vulnerable to irretrievable loss, through the acts of the account holder to delete the account, through malware and hacking, through the website administrator’s inadvertent error, or dozens of other possibilities.  A recent case out of New Jersey, Gatto v. United Air Lines, highlights this vulnerability and the sanctions which arise from such irretrievable losses of potential evidence.
The plaintiff in Gatto was a baggage handler at JFK airport who suffered serious injuries that left him paralyzed.  As part of their discovery, the defendants requested to look at the plaintiff’s social media accounts to evaluate the impact that his injury had on his lifestyle.  The plaintiff authorized the defendants to access his social media accounts, except Facebook, which access was later granted in a pre-trial settlement conference.

Posted 2 weeks 3 days ago

Authored by J. Ellsworth Summers, Jr.and Scott St. Amand of Rogers TowersEarlier this month the Sixth Circuit Court of Appeals ruled that the appeal of Syncora Guarantee Inc. must be heard by the lower federal district court before the bankruptcy court may conduct its trial on the city’s proposed Chapter 9 restructuring plan, which is scheduled to begin on August 14th.  Syncora, a municipal bond insurer and one of Detroit’s many creditors, petitioned the Sixth Circuit to order the federal district court to reconsider its appeal to stop Detroit from using tax revenue from casinos rather than preserving the revenue so as not to deplete the bankruptcy estate.  Bankruptcy Judge Steven Rhodes ruled in August that casino revenue is city property and therefore subject to the automatic stay.
At $15 million a month, casino taxes are the city’s single best stream of revenue.

Posted 2 weeks 5 days ago

Authored by Samantha Alves Orender of Rogers TowersThe Equal Credit Opportunity Act (“ECOA”) was signed into law by Congress in 1974.  This law makes it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of, inter alia, the applicant’s marital status, religion, sex, race, or age.  Pub. L. No. 93-495, 15 U.S.C.A. §§1691-1691f.  In order to enforce and administer the ECOA, Congress authorized the Federal Reserve Board to promulgate regulations. These regulations shed light on what could be perceived as discrimination in a credit transaction, so it is important for lenders to know and understand these regulations.

Posted 3 weeks 3 days ago

Authored by Armando Nozzolilloand Michael S. Waskiewicz of Rogers TowersA recent case out of the Eleventh Circuit Court of Appeals (the “Court”) concluded that proceeds stemming from a post-confirmation settlement agreement between a chapter 13 debtor and its mortgagor related to a violation of the automatic stay become property of the bankruptcy estate.  In Crouser v. BAC Home Loans Servicing, LP (In re Crouser), Case No. 13-14304 (11th Cir. June 2, 2014) (“Crouser”), a chapter 13 debtor received proceeds from the settlement of certain claims against his mortgagor for violation of the automatic stay after confirmation of debtor’s chapter 13 plan.  The chapter 13 trustee argued that the settlement proceeds should be classified as property of the estate.

Posted 3 weeks 5 days ago

Authored by J. Ellsworth Summers, Jr.and Scott St. Amand of Rogers TowersWhen the Fourth Circuit handed down its opinion in the case of In re Davis,[1] which permitted lien stripping in “Chapter 20” proceedings, the stage was set for the Eleventh Circuit to expand debtor’s ability to escape from underwater junior mortgages.  Before the June 18th opinion in In re Scantling,[2] bankruptcy courts within the Eleventh Circuit were decisively split regarding a debtor’s ability to strip a wholly unsecured lien when the debtor was ineligible to receive a Chapter 13 discharge based upon the proximity of a previous Chapter 7 discharge.  In a brief opinion, however, the Eleventh Circuit authorized lien stripping in “Chapter 20” proceedings, even without the prospect of the debtor’s discharge in the Chapter 13 proceeding.

Posted 4 weeks 2 days ago

Authored by Douglas L. Waldorf, Jr. of Rogers TowersBanks are, once again, making real estate secured loans in Florida.  Those in the industry will undoubtedly be aware of the fact that most lenders require a mortgagee title insurance policy to insure their mortgage lien on the collateral real property.  As a result of the real estate collapse of the past several years, lenders have brought a significant number of claims under title policies and, in the process, they have learned some important facts about title insurance coverage.  Here are a few things to keep in mind in that regard.
A title insurance policy does not necessarily insure that a title problem will be rectified. In fact, there are occasions where the title issue itself cannot be cleared.  In those cases, the policy will generally provide payment for actual damages incurred (usually related to the diminution of the value of the insured interest) up to the amount of the policy.
Title policies provide that timely notice be given if a claim is being made.  The policy terms will also provide the address to which notice must be sent.  Any insured contemplating a claim should carefully review the policy terms to determine what is required in the way of notice.

Posted 4 weeks 3 days ago

Authored by Heather S. Nason of Rogers TowersThe Florida Second District Court of Appeals recently ruled on yet another challenge to a note holder’s standing to foreclose based on lack of ownership of the mortgage.  In OneWest Bank, F.S.B. v. Bauer (May 30, 2014), the Florida Second District Court of Appeals held that the holder of a note had standing to foreclose, even without proof of ownership of the loan documents.  In the trial court, OneWest Bank clearly established that it held the note but there was conflicting testimony as to whether OneWest Bank owned the loan or merely serviced it, as successor to IndyMac Bank, F.S.B.  The trial court held that OneWest Bank lacked standing to foreclose because the evidence presented before the court conflicted with the allegations in OneWest Bank’s complaint, that it was the owner and holder of the note and mortgage.

Posted 5 weeks 4 days ago