Hearsay, Foreclosures, and the “Bank Must Win” Doctrine

In American courts, the hearsay rule is supposed to be one of the cornerstones of evidence law. A witness may not testify about an out-of-court statement to prove the truth of that statement, because the opposing party has no chance to cross-examine the original speaker. The U.S. Constitution and nearly every state constitution protect this principle.

Except, it seems, in foreclosure cases.

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How Hearsay Slips In Through the “Business Records” Exception

Over the past decade, courts have steadily broadened the “business records” exception, especially in foreclosure litigation. Here’s what that looks like in practice:

• A witness with no personal knowledge testifies about a borrower’s alleged default, relying only on computer-generated “records.”

• Those records are usually sourced from central repositories like Black Knight/LPS, not from the plaintiff’s own files.

• Judges allow them in, treating them as if they’re trustworthy—even though they are routinely fabricated, robo-signed, or incomplete.

This effectively guts the hearsay rule and gives banks a free pass.

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A Case Example: When the Trial Judge Got It Right

In one recent case, the trial judge applied the rules of evidence correctly. He found the bank’s witness was not credible and had no actual knowledge of the loan records. Judgment was entered for the homeowners.

But on appeal, the 4th DCA reversed—and ordered foreclosure. The appellate panel embraced what can only be called the new doctrine of “the bank must win, even if everything they have done is wrong.”

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The Fallout: Why Settlement Rarely Happens

These rulings have ripple effects:

• Servicers profit primarily through foreclosure, not through workouts.

• They dangle “modifications” as bait, but the goal is to engineer a default that cements their case.

• Borrowers and investors both lose, while courts become clogged with cases that could have settled.

The result: millions of homes lost to entities with no actual financial interest in the loan.

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What Defense Lawyers (and Homeowners) Can Do

Defeating this machine isn’t easy—but it’s possible. The key is preparation and persistence.

1. Attack the Presumptions

• Don’t let courts assume documents are real or that witnesses are competent.

• Demand foundation for every record. Who created it? When? Under what authority?

2. Be Aggressive With Objections

• Object to lack of personal knowledge.

• Object to hearsay and lack of foundation.

• If an objection is sustained, move to strike the testimony and exhibits immediately.

3. Cross-Examine Hard

Expose that:

• “Boarded” documents were never actually audited.

• Servicer witnesses often have no knowledge of loan boarding, payment histories, or data integrity.

• The so-called “original note” may never have existed or was destroyed long ago.

4. Consider Using Their Rules Against Them

Florida’s evidence code allows a “recorded recollection” to be read into evidence. While the bank leans on business records exceptions, borrowers may be able to use recorded recollections to their own advantage.

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The Moral of the Story

Foreclosure defense is always an uphill battle. The system is tilted. But with strong objections, relentless discovery, and aggressive cross-examination, you can push back against the “bank must win” doctrine.

Prepare. Be relentless. And take it as far as you can—because appellate rulings won’t change unless trial courts are forced to build a proper record.

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Disclaimer: This article is for educational purposes only. It is not legal advice. Always hire a licensed attorney in your jurisdiction.

Posted in Corruption, foreclosure defenses, Uncategorized |