Monday The Dead Rabbi Was Wrongfully Foreclosed Onin HPN Blog
Tuesday The Dead Rabbi’s HOA Settles With US Bank
The cool thing about owning MFI-Miami is that I get to work with some really smart litigators who not only bring me high profile cases but they usually think outside the box like I do. If you are a regular reader to this site you know I love attacking banks with unorthodox strategies especially when these strategies have the potential of setting legal precedent.
Two years ago, I was approached about working on a high profile case that had the potential of setting legal precedent for Property Owners Associations (POAs) across Florida. However, in this particular case I can’t take credit for the strategy nor do I deserve the credit for getting US Bank to capitulate at the eleventh hour. That credit goes to Michael Gable from Gable and Heidt in Hollywood, Florida. I can take the credit for the research but the rest goes to Michael Gable.
In April of 2010, Michael Gable had read about my clients, John and Diane Cirigliano in the Miami Daily Business Review and how their attorney used my research to argue that Wells Fargo lacked legal standing due to a myriad of problems with the loan including a break in the chain of the ownership of the mortgage. Michael wanted to know if these same arguments could work on behalf of homeowners associations. I told him I had never approached it from that angle but I didn’t see why not. What I didn’t know at the time was that Michael wanted to bring me in to help him execute a “Hail Mary” play he had in mind on behalf of one of his Property Owners Association client.
This story begins on June 4, 2007, nearly three years before I spoke to Michael, with the death of popular radio host and respected South Florida Cantor and Acting Rabbi, Danny Tadmore from Temple Beth El in North Miami Beach. After Danny Tadmore’s death, Adorno & Yoss, the foreclosure mill handling the foreclosure of Cantor Tadmore’s condo for BAC Home Loan Servicing took over eight months to file a Lis Pendens and begin foreclosure proceedings against the estate. After filing the Lis Pendens, they then let the foreclosure suit to languish in the bowels of the Miami-Dade Court House for nearly a year, until Tadmore’s POA, Williams Island Property Owners Association, who had been named as a co-defendant with Tadmore, decided to take a stand.
At the time, you didn’t have to be involved in South Florida real estate to understand their motivation. All you had to do is drive down Collins Avenue less than a mile from Tadmore’s home at night to see the devastation the foreclosure crisis had brought on POAs and HOAs across South Florida.
The Williams Island POA filed a motion to compel the bank to proceed with its foreclosure or start paying the assessments. The POA claimed that it was being unreasonably prejudiced by the bank’s “undue delay.” The trial court agreed and ordered the bank to “diligently proceed within thirty (30) days” or pay monthly maintenance fees. US Bank afraid of the deluge of lawsuits from POA s and HOAs from around Florida immediately appealed.
The Florida 3rd District Court of Appeals reversed the Circuit Court decision stating that there is no basis in the law for compelling the lender to proceed at a pace other than that which the lender has chosen to proceed. The opinion also indicated that the courts do not have the right or power to implement an order that it considered “social justice” at the particular moment without regard to established law.
Michael Gable went back to his desk and dusted off a copy of “The Art of War” by Sun Tzu and began devising another strategy to force US Bank to begin paying association fees and that is when he enlisted the assistance of MFI-Miami. However, we had to overcome a huge obstacle.
Florida Statute 720.3085 presented a huge obstacle for us because the statute makes it clear that a unit owner, regardless of how title has been acquired, is liable for all assessments which come due while he or she is the unit owner. The unit owner is jointly and severally liable with the previous owner for all assessments that came due up to time of title transfer. It also states that buyers at foreclosure sale are liable for assessments that came due prior to date the buyer acquires title.
The statute makes one exception to its blanket rule. Liability of a first mortgage holder who acquires title by foreclosure or by deed in lieu of foreclosure is only liable for assessments coming due prior to acquisition of title in the lesser amount of six months of assessments that came due immediately prior to acquisition of title or one percent of the original mortgage principal.
Florida Statute 720.3085 assumes the mortgage holder foreclosing on the condo owner has legal standing to foreclose but what if they don’t? Does this exception still apply? That was the million dollar question we needed answered.
Courts across Florida had already ruled that a proper chain of ownership of the mortgage must be in place before a entity can foreclose. In this particular case, Rabbi Tadmore’s mortgage was originated by Aegis Wholesale Corporation with MERS as its nominee. MFI-Miami discovered on February 5, 2008, a mortgage assignment had been recorded with the Miami-Dade Clerk of the Court assigning this loan from MERS to Harborview 2005-10 Trust Fund.
MFI-Miami found multiple issues with this assignment. The first being that the Trust name is wrong on the assignment and on all the court documents that follow it. Adorno & Yoss LLP who filed the assignment have Harborview 2005-10 Trust Fund when the proper name is HarborView Mortgage Loan Trust 2005-10. Harborview 2005-10 Trust Fund does not exist as a Trust. this alone would make the lis pendens void.
MERS also did not have proper authority to assign this mortgage as a nominee for Aegis Wholesale because Aegis Wholesale’s corporate parent, Aegis Mortgage Corporation filed for bankruptcy on August 13, 2007. This extinguishes any rights MERS had as a nominee. The assignment also violated the terms of the Pooling and Servicing Agreement for the Harborview Trust because it was not assigned into the Trust before the cutoff date specified in the Pooling and Servicing Agreement.
The other issue is Aegis Wholesale was not an approved originator for this Trust. The Trust specifically states it will only accept loans originated by Countrywide Home Loans.
After nearly two years, a hearing date was set for earlier this month and Michael and I would finally get an answer. However, at the eleventh hour before the hearing and after US Bank confirmed MFI-Miami’s findings, US Bank agreed to settle for approximately half of what Williams Island Property Owners’ Association asked for in assessments and maintenance fees on Danny Tadmore’s unit.
This case shows that the arguments that are used for foreclosure defense are strong enough to be used in order to help POAs and HOAs collect from the lenders who illegally foreclose.