Murphy's Law: Paperwork Errors Dog Lenders in Foreclosure Cases

Samantha Joseph, Daily Business Review
January 28, 2015

It should have been a straightforward case, but a clerical error put Bank of America on the losing end of a four-year foreclosure case Wednesday.

The bank won a final judgment against homeowner Heather Epstein in 2009. By the following year, she had vacated her Tamarac condo, and Bank of America gained control of the property with a new certificate of title.

The problem was the mortgage and all subsequent documents included an incorrect legal description of the condo.

"It's about mistake upon mistake upon mistake," said Epstein's attorney Roy Oppenheim, who teamed with Donna Greenspan Solomon of Solomon Appeals Mediation & Arbitration and Jacquelyn Trask and Geoffrey Sherman of Oppenheim & Pilelsky. "And the mistakes continue to compound."

Court documents suggest the bank discovered the error in 2010 after the Broward County property appraiser's office rejected the certificate of title and refused to transfer title because the legal description didn't match the official record.

But attorneys say it took the bank two years to move to fix the problem, leaving Epstein as the documented owner facing homeowner association bills.

"She was on the hook with the HOA because the bank left her hanging," Trask said. "They did nothing with the property and made it worse. They did not maintain it or cover the utilities, and she didn't even know she still owned the property."

In 2012, Bank of America filed a motion to wipe out the foreclosure judgment and certificate of title to allow it to correct the mortgage documents.

But a trial court denied that motion without prejudice because Florida's rules of civil procedures allow only a one-year period to vacate judgments due to errors.

Bank of America made a second attempt in 2013, this time arguing the incorrect legal description on its documentation could affect the rights of a neighboring property owner. The trial court sided with the bank, prompting Epstein to appeal.

Fourth DCA Judge Burton Conner said a court could have corrected the legal description before the foreclosure judgment but not after, so Bank of America would need to start the foreclosure action from the beginning. Judges Cory Ciklin and Alan Forst concurred.

For Epstein, that's both good news and bad. She regained control of the property but will likely have to battle it out in court to determine who's liable for maintenance and upkeep after she left the home.

"That's going to be the bigger question," Oppenheim said.

Bank of America attorney Manuel Hiraldo of Blank Rome in Fort Lauderdale declined comment.

Another case of clerical slipups cost Wachovia Mortgage FSB its foreclosure case against a group of homeowners at Courtyard Homes at the Grove in Weston.

But this time it was a court error—and not the bank's—that led Broward Circuit Judge Michael Gates to toss the case.

Wachovia, now part of Wells Fargo Bank NA, filed the original promissory note before trial against homeowners Jose Montes and Catalina Solano. But when the note disappeared from the court file, the defendants successfully challenged the bank's evidence and won an involuntary dismissal.

But about a week later, a court clerk found the note and mailed it to the bank.

"Wachovia was denied the opportunity to present any evidence in support of its claim, let alone finish its case in chief," Fourth DCA Judge Cory Ciklin wrote Wednesday, reversing the lower court's ruling and remanding the case.

Judges Jonathan Gerber and Spencer Levine concurred.

"It was a clear-cut case. The opinion says it all. It was procedurally improper, but it is what it is," said Wachovia attorney Francisco Armada, who teamed with Beverly Pohl of Broad and Cassel. "Now we have to go back to trial and retry the whole case.

It took more than a year to resolve the appeal.

"It was a case that should never have happened," Pohl said.

Miami Lakes attorney Robert Flavell represented Montes and Solano. He did not respond to a request for comment by deadline.