Holder of Note and Mortgage Had Standing to Pursue Foreclosure Action

Florida District Appellate Court decision (May 8, 2015)

In this case, in 2006  homeowners executed a promissory note secured by a mortgage on their property in favor of Option One Mortgage.  The homeowners defaulted and, subsequent to the default, the original lender assigned the note to another party, Liquidation Properties, Inc. (LPI).  In 2008, LPI commenced a foreclosure proceeding against the homeowners’ property. In 2012, another company, AS Lily, LLC was granted permission to amend the complaint that had been filed by LPI , and thereafter filed a First Amended Complaint to continue with the foreclosure action. Attached as exhibits to the First Amended Complaint were the note, mortgage, and a blank endorsement.

The homeowners sought summary judgment contending that AS Lily LLC was not a proper party and therefore, lacked standing to pursue the foreclosure action against their property.   The lower court agreed and granted judgment in favor of the homeowners and AS Lily LLC appealed.

The appellate court found that, although AS Lily LLC was not the original lender, it was the  holder of the note and mortgage at the time that the First Amended Complaint was filed with the attached note, mortgage and blank endorsement.  As the holder of the note with a blank endorsement, when the operative complaint was filed in its name,  AS Lily LLC had standing to pursue the foreclosure proceeding. Accordingly, the appellate court reversed the lower court’s judgment in favor of the homeowners.

See case decision:  As Lily v._Morgan_(Fla._App.,_2015)