By Amanda Lundergan
In the not-too-distant past, shopkeepers kept their records by hand, scrawling notes on slips of paper or triplicate forms that were squirreled away in office file cabinets until they were needed. If they were needed in court to resolve a dispute with the client, they enjoyed a special exception to an otherwise applicable evidentiary objection – hearsay.
The recent Fifth District Court of Appeal decision in U.S. Bank National Association vs. Patrician J. Bartram, et al was incorrect, and should the Florida Supreme Court take up the case, it should rectify a decision that will only cause decades of litigation in an already overburdened court system.
The greatest threat to due process in foreclosure litigation since the days of robo-signing is at full tilt in courtrooms across the state. While the nation was appalled at the discovery that financial institutions were regularly foreclosing on homes with summary judgment affidavits that were not based on personal knowledge, it has taken little notice of the fact that this same flippant disregard of the Rules of Evidence has simply moved into the courtroom.
Contemporary negotiable instruments law developed hundreds of years ago, before every important institution of the modern financial world: incorporated banks, business corporations, developed capital markets, global monetary systems, electronic transfers, and even paper currency. It is counterintuitive that this ancient law of negotiable instruments would have any relevance to one of the world’s most sophisticated, cutting-edge tools of high finance — the pooling and securitization of mortgage loans. Yet, the courts routinely look to such law to resolve a foreclosure crisis spawned by the collapse of mortgage-backed securitization, a process which is as strained as trying to decide First Amendment issues using cases pre-dating the Constitution. It is all the more extraordinary that, just as the nation begins to awaken to “robo-signing” and other such pervasive and methodical abuses of the court systems, judges should find themselves slavishly compelled to apply a body of law shaped (and then abandoned) by the very authors of such scandals: the financial institutions.
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