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Vidal v. Liquidation Properties, Inc.

By Kerry McInerney • Wednesday, December 5, 2012

Liquidation Properties filed a foreclosure complaint on February 5, 2009, in Broward County.   To demonstrate standing to foreclose, Liquidation produced the original note and mortgage, an undated allonge endorsed in blank, and a mortgage assignment executed on February 6, 2009, with an effective date of January 15, 2009.   The trial court held there was no material issue of fact as to Liquidation's standing to foreclose. The borrowers appealed.

The Fourth DCA, in citing a 2012 Fourth DCA case, found that a lender must prove that it had standing to foreclose as of the date the complaint was filed.  If an assignment of mortgage does not occur until after the complaint is filed, a lender can still establish standing to foreclose if the note endorsement occurred prior to the filing of the foreclosure lawsuit.  In this case, the allonge was not dated and Liquidation did not file an affidavit demonstrating that the note was transferred prior to the filing of the complaint.

With respect to the mortgage assignment, it was dated and sworn to on February 6, 2009, but the language on the assignment stated that it was effective as of January 15, 2009.  The court concluded that two inferences could be drawn from the effective date language.  One inference is that the ownership of the note and mortgage were equitably transferred to Liquidation on January 15, 2009, but on the other hand, one could also infer that the parties to the transfer were attempting to backdate the assignment to their benefit.   The court ruled that because the mortgage assignment language yielded two possible inferences, a dispute of fact existed, and the entry of summary judgment by the trial court was due to be reversed.


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