January 21, 2014
On October 13, 2013, the Florida District Court of Appeals in American Home Mortgage Servicing, Inc. v. Bednarek held that a servicing agent of a larger bank had standing to file a foreclosure action against a homeowner because it properly acquired the mortgage and was therefore the note holder and owner for the purposes of foreclosure.
On May 31, 2005, Lucy Bednarek (“Defendant”) bought a home with a mortgage from American Brokers Conduit (“ABC”). On March 30, 2006, ABC sells the mortgage to Deutsche Bank’s servicing agent, AHMSI–Maryland (“AHMSI-M”). In September 2007, AHMSI-M brought a foreclosure action against Defendant and claimed that it was the owner and holder of the underlying promissory note. Separately, AHMSI-M was acquired by AHMSI (collectively “AHMSI”) in 2008 and the newly merged company continued the action by filing the original promissory note and mortgage in 2009. The trial court dismissed the case holding that AHMSI did not have standing to initiate the foreclosure action as it could not show that it was the owner and holder of the note and mortgage. However, the Florida Court of Appeals reversed the trial court’s ruling and held that AHMSI was the note owner and holder because ABC properly assigned the note to AHMSI prior to the start of the foreclosure action and therefore had standing to initiate the action.