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Q
& A
Question:
What happens after an association forecloses on a home with a very large mortgage lien (larger than current appraisal by more than $100,000) and the bank is not able to find the paperwork?
B.G.,
Boynton Beach
,
FL
Answer: The
association steps into the shoes of the homeowner and takes
title subject to the mortgages. If the association
doesn’t pay the mortgage, the bank forecloses on the
association. If the bank cannot find the paperwork, the bank
cannot foreclose. As of February 2010, the Florida
Supreme Court ruled banks must file a verified foreclosure
complaint, which means that the bank must properly plead in
the complaint and verify that the bank is a party in
interest, with capacity and standing to sue. Most
mortgages are held in a securitized trust, pursuant to the
guidelines of the Pooling and Servicing Agreement (“PSA”)
approved by the Securities and Exchange Commission. The SEC
requires the trust to comply with all state laws in which
the mortgages will be offered. This means that the
trust must register with the State of Florida Division of
Corporations, much like a foreign corporation would be
required to register. The trusts do not have standing
to sue if they are not registered. More importantly, the
bank foreclosing may not be a party in interest. The
PSA is very detailed and outlines which banks (usually at
least five) hold the note and mortgage, for how long, what
they are required to do with it, and when they must pass it
to the next bank. The PSA also has a cut-off date and
no mortgages can be assigned to the pool after the cut-off
date. Most foreclosure mills assign the mortgage to
the pool right before filing the foreclosure action, which
is invalid. This is important because this is a step
that has not been properly followed and cannot be
corrected after the cut-off date.
Barbara Billiot Stage, Esq.
Question:
May associations "withhold" documents through a process of "hide and seek"? Our HOA is interpreting FS 720.303 (5) INSPECTION AND COPYING OF RECORDS to mean that the only obligation the HOA has to comply with a request for a specific document would be “to allow access to the official records." Our HOA does not feel any obligation to tell you where to look, to tell you if the document is even in the files, or to answer any questions you might ask regarding your request. In essence, the HOA is refusing any assistance; therefore, you are looking for the proverbial "needle in the haystack"! Is there any document that one can present to support the assertion that when one asks for a "specific" document, then the HOA must comply by providing it?
G.P.,
Titusville
,
FL
Answer:
A law can
be violated if one does not act within the spirit of the
law. The spirit of the law, which requires a board to
provide access to records, is in my opinion violated, if the
board does not provide meaningful access by telling a
homeowner if the board has a document which has
been requested by a homeowner, and if so, where the document
can be found. If the board does not know, this is
different. But
if it is something that the board is aware of, or could
easily find out, then it seems to me that the board should
be obligated to help the homeowner to find the document.
Barry Silver, Esq.
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