The Busets get Abused by Florida's Third District Court

By J. Guggenheim

See: HSBC v Buset

On February 7, 2018, Florida’s Third District Court of Appeal rejected multiple arguments routinely advanced by borrowers’ counsel in defense and delay of foreclosure litigation, reversed the trial court’s order dismissing the case, and remanded with instructions to enter a judgment of foreclosure. HSBC Bank USA, N.A. v. Joseph T. Buset, et al. Case No. 3D16-1382. The opinion offers lenders and servicers who litigate foreclosures in Florida and fabricate documents to create the appearance of standing a strong an unconstitutional weapon to overcome legitimate defenses namely standing issues.

The court in Buset demolished plaintiff’s challenges to standing to maintain a foreclosure action or to even require that a bank has standing to proceed at all. The court stated that typically promissory notes are negotiable under the Florida analog of the Uniform Commercial Code, rejecting the argument that the note’s reference to the mortgage, and the note’s definition of “Note Holder” destroyed negotiability. Buset, slip op., pp. 7–9. The court also held that the plaintiff had standing to foreclose by virtue of holding a copy of a likely fabricated note endorsed in blank, most likely with a forged signature from a robosigner, and stated that the plaintiff need not show ownership of the loan through a chain of endorsements. Id., pp. 9–13.

The Borrower’s argued that HSBC lacked standing because of alleged violations of the Pooling and Servicing Agreement, affirming that Florida borrowers lack standing to assert such violations because they are not a party to the Pooling and Servicing agreeement Id., pp. 13–14.   The court rejected the attacks on the mortgage assignment that appeared to be created for the purposes of litigation, because the assignment was in a “proper form and because the formal mortgage assignment was superfluous; the mortgage followed the note and the note holder thus automatically had standing to enforce the mortgage. Id., pp. 14–15.”  Therefore, as long as you fabricate and robosign assignments you better make sure they have the appearance of legitimacy.  The court also made the erroneous presumption that through securitization that the mortgage still follows the note.  In that case, the mortgage followed the note right into a shredder.

The court also made two erroneous evidentiary rulings. First, Buset held the trial court erred by admitting the testimony of a so-called “expert” on loan securitization and negotiability, and ruled that such witnesses are precluded from testifying as to legal conclusions. The court is methodically eroding every resource and tool a homeowner has and interfering with due process.  In a murder trial would an expert on blood splatter patterns be barred?   Because of the complexity of securitization, only an expert can explain a process so convoluted and illogical by design that only someone who has studied the fact patterns for decades could even begin to explain the process and where the system went off the rails to cause the foreclosure crisis.

Buset is a Godsend to servicers because it eradicates every protection a homeowner has to ensure they aren’t preyed upon by a faux-creditor.   On the admissibility of prior servicing records that should be struck as hearsay, the court opinion states that “creating” a loan payment history at or near the time of payment is “industry practice” (Id., p. 16), therefore, servicers with no way to validate prior servicing records will be allowed to admit defective or fabricated records even when the new servicer does not have personal knowledge of the prior servicer’s record-entry and record-keeping practices. The court is encouraging servicers to fabricate loan histories out of thin air that may be grossly inaccurate but a homeowner will have no way to contest.

In the foreclosure “universe” the court encourages servicers to fabricate evidence, and hearsay is embraced as fact. Forgery, fabrication and what would be deemed Fraud on the Court in any other type of litigation- are utilized by the courts to foam the runway for a stranger to the transaction to steal a home.

Buset ruled that the new servicer’s loan-boarding process was sufficient to allow it to admit and rely on the prior servicer’s records even though that loan-boarding process did not include “an audit.” Id. This indicates that a new servicer need not bother with the burdensome duty to verify the accuracy of each transaction conducted by the prior servicer and they can rely on the old servicer’s records even if they are incomplete, inaccurate or don’t even exist.

Finally, Buset confirmed that a new servicer can incorporate a prior servicer’s records into its own so long as there is “a business relationship or contractual obligation between the parties that ensures a substantial incentive for accuracy.” Id., pp. 16–17. Thus, “contractual warranties” manufactured on site will be permitted to stand as prima facie evidence the servicer engaged in accurate record keeping should servicers admit prior defective servicing records into evidence.  In addition to fabricating notes and assignments, a new industry is born allowing servicing records to be manufactured on demand.  The court is basically telling loan servicers to perfect their crime before they file to foreclose and the court will facilitate their crime spree.

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