DISTRICT COURT OF APPEAL, OF FLORIDA, FIRST DISTRICT

First DCA Case No.: 1D11-4232 L.T. No.: 2006-CA-001265-XXXX-MA MARILYN G. HARLEY, et al. Appellant / Defendant, v. HSBC BANK, USA, NATIONAL ASSOCIATION, As Trustee For Home Equity Loan Trust Series AE 2005-HE5 Appellee / Plaintiff. _____________________________________/

APPEAL FROM THE FOURTH JUDICIAL CIRCUIT COURT IN AND FOR JACKSONVILLE-DUVAL COUNTY, FLORIDA

AMENDED INITIAL BRIEF OF APPELLANT MARILYN G. HARLEY

APRIL CARRIE CHARNEY, ESQ. JACKSONVILLE AREA LEGAL AID, INC. 126 WEST ADAMS STREET JACKSONVILLE, FLORIDA 32202

TABLE OF CONTENTS Page ii 1 5

TABLE OF CITATIONS STATEMENT OF THE CASE STATEMENT OF THE FACTS QUESTIONS PRESENTED

1. Whether the trial court misapplied the law and committed reversible legal error in granting judgment of foreclosure in favor of Appellee and on Appellant's counterclaim?

2. Whether the Appellee trust had any legal right to foreclose the mortgage at the commencement of this action?

3. Whether the federal Truth-in-Lending (TILA) disclosure statement that Appellee delivered to Appellant constitutes a material mis-disclosure under TILA that was unfair and deceptive and that violated the federal Truth-in-Lending Act by disclosing a "comfort" fixed-rate annual percentage rate in the TILA disclosure statement that overshadowed the adjustable interest rate information disclosed in the HUD-1 disclosure statement that Appellee gave to Appellant for the adjustable rate mortgage loan involved in this foreclosure?

4. Whether Appellee violated the applicable material disclosure obligations of the federal Truth-in-Lending Act by failing to give Appellant a "CHARMS" booklet at closing………………………………………………………………23

5. Whether the Appellee's December 19, 2005 notice of default and intent to accelerate sent to Appellant failed to conform to the requirements of the mortgage contract and Florida law?

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6. Whether the Appellee failed to comply with pre-foreclosure prevention notice requirements imposed by the National Housing Act, 12 USC 1701x(c)5?

SUMMARY OF ARGUMENT ARGUMENT STANDARD OF REVIEW CONCLUSION CERTIFICATE OF SERVICE SERVICE LIST

15 16 16 37 38 38

CERTIFICATE OF COMPLIANCE WITH FONT STANDARD…33

TABLE OF CITATIONS Cases 17 In re Cummings, 184 N.Y.S. 404 (N.Y. App. Div. 1920)

BAC Funding Consortium , Inc. v. Jean-Jacques 28 So. 3rd 936 (Fla. 2nd DCA 2010)

17

Bouskila v. M & I Bank Case No. 1D10-2127 (Fla. 1st DCA 2011)

17

17 In re Doble, No. 10-11296-MM13, 2011 WL 1465559 (Bankr. S.D. Cal. Apr. 14, 2011) Calderon v. J.B. Nurseries, Inc. 933 So. 2d 553 (Fla. 1st D.C.A. 2006)
ii

17

23,24 In re Celotex, 487 F.3d 1320 (11th Cir. 2007) Carapezza v. Pate 143 So.2d 346 (Fla. 3rd DCA 1962) 17

Crossland Sav. Bank FSB v. Constant 489 U.S. at 113, 109 S.Ct. 948 D’Angelo v. Fitzmaurice 863 So. 2d 311, 314 (Fla. 2003)

19

16

F.A. Chastain Constr. v. Pratt, 146 So.2d 910 (Fla. 3d DCA 1962)

Firestone Tire & Rubber Co. v. Bruch 489 U.S. 101, 112, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)

23

17 Gee v. U.S. Bank Nat‘l Ass‘n, No. 5D10-1687, 2011 WL 4645602 (Fla. 5th DCA Sept. 30, 2011) Gomez v. Am. Sav. & Loan Ass‘n, 515 So.2d 301 (Fla. 4th DCA 1987)

Goncharuk v. HSBC Mortgage Serv., Inc., 62 So. 3d 680 (Fla. 2nd DCA 2011)

17 In re Dana, 465 N.Y.S.2d 102 (N.Y. Sup. Ct. 1982)

Jones v. First National Bank in Fort Lauderdale 226 So.2d 834 (Fla. 4th DCA 1969)

17

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Sav..A. 3d 1191A (2006) 17 20 Rashid v. 2008) Verizzo v. Mass. 502 So.2d 596 (Fla.Konsulian v.401 (1997) 12 USC 1701x iv 20 20. 393 B. N. 411 (D.2d 1316 (Fla. Bank of New York 17 28 So. Inc. Stat. supra.2d 772 (1988) Rashid v... Inc. Gross. & Loan Ass‘n.2d 453 (Fla. 1997) Statutes Florida Statute 671.R. 4th DCA 1981) 17 In re Hayes. 2D10-2163 (Fla.22 . § 737.102(3) Fla. Newberry Fed. Lamy 12 Misc. 184 So. Newberry Federal Savings & Loan Ass’n. 3d 976 (Fla. Busey Bank. appeal after remand. Case No. 210 B.2d 897 (Fla. 259 (Bankr. 1st DCA 1966) LaSalle Nat’l Bank Ass’n v. 671. Hollywood Federal Savings & Loan Ass’n 397 So. 2nd DCA 2010) Your Constr.102 F. 316 So. 2nd DCA 2011) Laing v. 3d DCA 1987). 526 So.S. Ctr. Ann. Maniscalco v. 4th DCA 1975) In re Fidler.R. Gainey Builders. Mass. v.

C. § 226.1601 15 U. 52 Fed. 1987) Rules and Other Citations Restatement (Second) of Trusts § 37 Restatement (Second) of Trusts § 185 (1959) Restatement (Second) of Trusts § 186 (1959) Restatement (Second) of Trusts § 201 cmt.18(f).C. 1635 15 U.org/pdf/report/LEGALDOCS-1.S. 48665 (Dec. 1640(a) New York UCC § 3-202(2) 20 Regulations Reg.abcny. Z.C. November 27. 2006 http://www. 24.12 USC 1701x(c)(4) 12 USC 1701x(c)(5) National Housing Act. b (1959) When Do Allonges Meet The Requirements of the New York New York Law Journal. Reg.12 USC 1701x(c)5 15 U.S.S.pdf 23 19 15 v .

pdf 15 U. Part 226. b (1959NYA 1-102(3).R. now RA 1-302 http://www.org/pdf/report/LEGALDOCS-1.Trusts § 201 cmt. seq. note 48 of Section 226.. 12 C. et.S.F.23 of Regulation Z National Housing Act 12 USC 1701x(5) Trusts § 186 (1959) Trusts § 185 (1959) Trusts § 37 16 22 vi .C. 1601. Regulation Z.abcny.

vii .

HSBC Bank USA. Harley. (R. 1134-1155). 2011 "Final Judgment of Foreclosure" entered by the Fourth Judicial Circuit Court in and for Duval County. appeals a July 13. 7 Pg. 1 Pg. on July 13. Vol. As Trustee For Home Equity Loan Trust Series AE 2005-HE5. (R. the foreclosing Plaintiff in the Trial Court. Appellee filed an "Amended Complaint To Foreclose Mortgage And To Enforce Lost Loan Documents" (hereinafter "Amended Complaint") against Appellant on March 3. Appellant also appeals the July 25. 1 .STATEMENT OF THE CASE Appellant. 2006. Marilyn G. 2007 seeking to foreclose a recorded mortgage in favor of Trimerica Mortgage Corporation. 5 Pg. Vol. an original defendant in this residential foreclosure action. Vol." (R. Florida in favor of the Appellee. In its Amended Complaint. 2011. Attached to Appellee's amended complaint is an assignment of mortgage dated January 30. 43-69. Appellee claims that it "owns and holds the Note and Mortgage" but that Appellee "is not presently in possession of the original note and mortgage. Vol. National Association. 886-889). 5 Pg. 900). 2011 final order captioned "Amended Order on Plaintiff's Motion For Judgment As a Matter of Law On Defendant's Third Affirmative Defense and Counterclaim" entered by the Circuit Court granting the Appellee's motion for judgment on Appellant's counterclaim.

(R. Vol. Vol. (R. Vol. 7 Pg. 96-100) Appellant asserts affirmative defenses in her Amended Answer against the Appellee's foreclosure action claiming that Appellee failed to provide Appellant with a "Notice of Default and Intent to Accelerate" (R. Vol. 1 Pg. 96-100. denying that Appellee stated a cause of action for foreclosure on account of the Appellee not being the true owner of the claim and not being the real party in interest or shown to be authorized to bring the subject foreclosure action at the time this action was filed. (Id). Appellant denies that the subject promissory note is a negotiable instrument and points out that the Appellee failed to attach a copy of the underlying promissory note to its Amended Complaint. Affirmative Defenses And Counterclaim" (hereinafter "Amended Answer") denying that the recorded mortgage. 1224-1225) that conformed to the specific requirements of the mortgage and that such notice failure resulted in a failure of the Appellee to meet the pre-foreclosure obligations imposed by the mortgage contract and by Florida law as condition precedent to acceleration of the underlying debt and to foreclosure of the mortgage. a copy of which introduced into evidence. In her Amended Answer. Appellant further and additionally asserts affirmative defenses in her Amended Answer claiming that Appellee failed to comply with the federal statutory pre2 .Appellant timely filed her "First Amended Answer To Amended Complaint. 1 Pg. was assigned to Appellee. 11341155). 7 Pg.

3 . Appellant affirmatively defends against the foreclosure and asserts a counterclaim against Appellee seeking federal Truth-in-Lending rescission of the subject mortgage on the basis of the Appellee‘s conduct. T. (Id) Finally.foreclosure prevention notice requirement imposed on Appellee in equity and also imposed pursuant to a statutory scheme that embeds a federal statutory notice as a condition precedent to foreclosure of the subject residential mortgage. Vol. Appellant claims that Appellee‘s illegal conduct is evidenced by the fact that Appellee gave Appellant a "Federal Truth-In-Lending Disclosure Statement" (hereinafter "TILA Statement") (R. Appellant claims that Appellee did not comply with this condition precedent to acceleration and foreclosure by failing to send Appellant a notice that contained information about foreclosure avoidance counseling that Appellee offered to residential mortgage borrowers and that Appellee failed to send this notice within 45 days of Appellant's initial payment delinquency under the promissory note. 160:18 – 161:17) that disclosed a comforting fixed annual percentage rate to Appellant that overshadowed the HUD-1 disclosure form (Id) also given to Appellant at the closing for the adjustable rate mortgage that is the subject of this action. 209-212. which amounted to unfair and deceptive acts and materially violated the mandatory consumer disclosure obligations set out in the Federal Truth In Lending Act (hereinafter "TILA"). 2 Pg.

(R. 2011 which resulted in the entry of the July 13. it remains in effect and is adverse to Appellant. 2011 Final Judgment of Foreclosure. which was granted in part. by order of the circuit court canceling the sale.The Appellant also affirmatively defends this foreclosure and states a counterclaim seeking TILA rescission and other consumer remedies for her damages proximately caused by the fact that the Appellee also failed to comply with TILA by failing to give Appellant a CHARMS BOOKLET. The CHARMS BOOKLET is officially referred to as a "Consumer Handbook on Adjustable Rate Mortgages". Vol. but NOT resetting sale. 4 . 902-905. 5 Pg. as is the Amended Final Judgment on Counterclaim. Four years after this foreclosure action was commenced. A nonjury trial before the circuit court was held on January 24 and March 24. which is a material consumer disclosure and that Appellee failed to give this booklet to Appellant at the closing of the subject mortgage loan or at all. 2 Pg. The Final Judgment of Foreclosure is a final order. 923-924). Appellee filed a motion to cancel/reset the foreclosure sale. Appellee attached an original promissory note to a notice that Appellee filed in the circuit court. 350-380). Vol. (Id). (R.

925-1127). and in the servicing of the qualified mortgage loans transferred into the trust. powers. Appellant refinanced the debt on her home giving a promissory note to Trimerica Mortgage Corporation secured by a mortgage 5 . (R. derive all their respective trust related rights.STATEMENT OF FACTS The Appellee is a trust established pursuant to a trust agreement titled ―Pooling and Servicing Agreement Dated as of August 1. 6 Pg. (Id). as custodian and servicer. On April 5.09. 2005. Vol. in the conveyance and transfer of ―qualified mortgage loans‖ into the corpus of the Appellee trust. in Section 2. The PSA for the Appellee trust provides. Appellee‘s legal existence and capacity is controlled by the PSA pursuant to which HSBC Bank. as trustee. As a New York trust. obligations and duties in the forming the Appellee trust. 2005‖ (hereinafter ―PSA‖). and Wells Fargo. the custodian and the servicer with respect to the Appellee trust. that Appellee (represented in this action by HSBC as trustee) is an express trust governed by the laws of the state of New York. The PSA is the binding trust contract that controls all of the actions of the trustee.

as the Servicer. Wells Fargo. Vol. Vol. (R.recorded in the official records of the Duval Circuit Clerk on April 19. The referenced PSA (R. 1229-1237). 2005 between HSBC as the Trustee. ―Code‖ is the Internal Revenue Code of 1986. 1134-1135. ―Depositor‖ is ACE Securities Corp. 925-1127) and a related and incorporated Custodial Agreement (R. 7 Pg. (all definitions are PSA unless otherwise stated). ―Custodial Agreement‖ is the Custodial Agreement dated as of March 1. ―Custodial File‖ is defined in the Custodial Agreement as ―any mortgage loan documents which are delivered to the Custodian‖ relating to ―each Mortgage Loan‖. 6 Pg. 2005 at book 12421 and page 1878. as the Custodian and Wells Fargo. 7 Pg. 2005 with respect to each Mortgage Loan. 2005. 6 . ―Assignment‖ is an assignment of a mortgage in recordable form. ―Custodian‖ is Wells Fargo. 1156-1195) were introduced into evidence at trial by the Appellee and these agreements contain the following pertinent definitions: ―Agreement‖ is the Pooling and Servicing Agreement and all the exhibits and schedules. Vol. ―Closing Date‖ is August 26. ―Cut-off Date‖ is August 26.

as the Custodian under the Custodial Agreement on behalf of HSBC. 2005 and was introduced into evidence by Appellee. ―Mortgage Loan Schedule‖ is the initial list of mortgage loans included in REMIC I attached to the PSA as Schedule that ACE Securities (depositor) must deliver to Wells Fargo (as servicer and custodian) and to HSBC Bank (trustee) on August 26. The Mortgage Loan Schedule must list 37 specific items of information about each mortgage loan delivered by Wells Fargo (as custodian) to HSBC Bank. as the trustee. ―Mortgage File‖ is the mortgage loan documents that pertain to a mortgage loan. ―Mortgage Loan Purchase Agreement‖ (MLPA) is the mortgage loan purchase agreement between the ACE Securities DB Structured Products.―Mortgage‖ is the mortgage in a mortgaged property securing a mortgage note. 1156-1195). ―Mortgage Loan Documents‖ are the documents that evidence or relate to the delivery of the mortgage loan to Wells Fargo. The 37 data points that must be listed for each loan delivered by Wells Fargo include the mortgagor‘s first and last name and the street address of the mortgaged property. as trustee. the Seller that is dated August 26. 7 Pg. (R. 2005 (the closing date). Vol. 7 . pursuant to the Custodial Agreement.

―Mortgage Note‖ is the original executed note evidencing the debt under a mortgage loan. in its capacity as seller under the MLPA.gov/publications/p550/ch01. ―Startup Day‖ is August 26. ―Mortgagor‖ is the obligor on a mortgage note. http://www.irs. ―Trust Fund‖ includes all of the assets of REMIC I.. ―REMIC‖ or ―real estate mortgage investment conduit‖ is an entity formed for the purpose of holding a fixed pool of mortgages secured by interests in real property‖ within the meaning of Section 860 of the IRS Code. ―Servicer‖ is Wells Fargo appointed under the PSA ―in connection with the servicing and administration of the Mortgage Loans‖. ―Trust‖ is ―ACE Securities Corp. ―Seller‖ is DB Structured Products.. the trust created under the PSA. 8 . Serie 2005-HE5‖. 2005 with respect to each Trust REMIC. Home Equity Loan Trust. Inc. ―Mortgaged Property‖ is the underlying property securing the residential mortgage loan. ―Trust REMIC‖ is REMIC I..subject to‖ the PSA.html#en_US_2010_publink100010133 ―REMIC I‖ is the ―pool of assets…consisting of…such mortgage loans.

(Id). 6 Pg. title and interest‖ of ACE ―in and to the Mortgage Loans identified on the Mortgage Loan Schedule‖ concurrently with the execution and delivery of the PSA. 925-1127). the closing date of the Appellee trust. ―all right. (R. HSBC Bank. 2005. Under Section 2. as the Trustee of the Appellee trust. Section 2 of the Custodial Agreement specifies that ACE. under Section 2 of the Custodial Agreement in order for the subject mortgage loan to be included as part of the corpus of the subject trust were: 9 . subject to Section 2. agreed to transfer to HSBC Bank. (R.―Trustee‖ is HSBC Bank USA. 1156-1195). as the Depositor. ACE. 7 Pg.01 of the PSA. as the Depositor. The documents that ACE was required to deliver to Wells Fargo by August 26. HSBC Bank holds these mortgage loan documents in trust in its capacity as trustee of the Appellee trust. as the Trustee.01 of the PSA and Section 2 of the Custodial Agreement. National Association. Vol.02 of the PSA. acknowledges receipt of the Mortgage Loan Documents and all other assets included within the definition of the REMIC 1. Under Section 2. Vol. by August 26. on behalf of the Appellee Trust. a set of documents to Custodian Wells Fargo for each of the Mortgage Loans identified in the Mortgage Loan Schedule that was supposed to be attached to the PSA. This transfer from the depositor to the trust includes the mortgages securing the mortgage loans. had to deliver and release. 2005.

10 . as trustee. and. the originals of any intervening assignment of mortgage or certified the original Assignment of Mortgage ―executed in blank‖. b. (Id).02 of the PSA. endorsed in blank. 925-1127). Vol. the original Mortgage Note ―bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee. via original signature. copies with evidence of recording. (R. 1156-1195). Vol. c. Section 2 of the Custodial Agreement required Wells Fargo as Custodian to deliver to HSBC Bank the documents specifically identified above – the original Mortgage Note with all intervening endorsements. the original Assignment of Mortgage executed in blank and the original Mortgage or a certified copy with evidence of recording within the limited REMIC time authorized by the PSA. the original Mortgage or a certified copy with evidence of recording. Under Section 2. had authority to acknowledge receipt of the Mortgage Loan Documents and all the other assets of REMIC 1 that were delivered to it by ACE through the Custodian Wells Fargo by August 26. HSBC Bank. 2005 and to declare that it holds all the Mortgage Loan Documents in trust. and d. if previously endorsed. 6 Pg.a. (R. signed in the name of the last endorsee by a duly qualified officer of the last endorsee‖. 7 Pg.

2005.Section 3 of the Custodial Agreement. b. that is the subject of this action bearing all intervening endorsements necessary to show a complete chain of endorsements from Trimerica. that the original Harley Mortgage Note. was delivered by ACE to Wells Fargo by August 26. stated that all of the required Mortgage Loan Documents for the Mortgage Loan that is the subject of this foreclosure action was identified in the Mortgage Loan Schedule or (other than those Mortgage Loans identified on an exception 11 . 2005. d. (Id). delivered by Wells Fargo to HSBC. that an original Assignment of the Harley Mortgage ―executed in blank‖ was delivered by ACE to Wells Fargo by August 26. the original or recorded copies of any intervening assignments of the subject mortgage was delivered by ACE to Wells Fargo by August 26. there was no evidence presented by Appellee: a. that the Initial Trust Receipt and Certification. stating that each and every mortgage loan described and identified in the Mortgage Loan Schedule has a specific set of Mortgage Loan Documents delivered to HSBC Bank by the August 26. endorsed in blank. consistent with the PSA. also required Wells Fargo to deliver an Initial Trust Receipt and Certification to HSBC as trustee of the Appellee trust. or that c. 2005 cut-off date for the Appellee REMIC trust. via original signature. 2005. At trial.

However. Vol. 12 . (R. (R. 1156-1195). (R. meeting the definition of a "mortgage loan schedule" contained in the PSA. 2005. ACE agreed to purchase Mortgage Loans from Seller DB Structured Loan Products pursuant to the Mortgage Loan Purchase Agreement. There was supposed to be a list of loans attached to the PSA. This Mortgage Loan Schedule must contain the same 37 data points described in the PSA. 6 Pg. Additionally. but there is not. attached to the PSA or attached to any other document introduced into the evidence in this action. Mortgage Loan is defined in the Custodial Agreement consistent with the PSA as being ―[e]ach mortgage loan identified on the Mortgage Loan Schedule‖ that is supposed to be attached to the Custodial Agreement. Under the Custodial Agreement in the present case. Vol.report) were delivered to HSBC Bank by the cut-off date which was August 26. 925-1127). (Id). there was no evidence presented in this case that a Mortgage Loan Schedule was attached to the PSA. There was no mortgage loan schedule. the Mortgage Loan Schedule is defined in the Custodial Agreement the same as it is in the PSA as ―The schedule of Mortgage Loans to be delivered by the Depositor to the Custodian and the servicer (with a copy to the Trustee) two Business Days prior to the Closing Date and to be annexed‖ to the Custodial Agreement ―as Exhibit 8‖. (Id). 7 Pg. 1197-1200).

as to each of the mortgage loans listed on the Mortgage Loan Schedule. that each Mortgage Note was endorsed and that the Mortgage was assigned to the Appellee trust in conformity with Section 2 of the Custodial Agreement. Nor is there any evidence that Wells Fargo ever confirmed that all of the required documents relating to the Harley mortgage loan were reviewed by it. that the mortgage loan documents reviewed for each Mortgage Loan accurately reflected the information on the Mortgage Loan Schedule. 7 Pg. confirming that the Harley Mortgage Loan that is the subject of this foreclosure action was listed on any Mortgage Loan Schedule as defined in the PSA or by the Custodial Agreement. as defined and specified in the Custodial Agreement. nor could there be. There was no evidence presented in this case of the existence or delivery by Wells Fargo to HSBC of a Final Trust Receipt. In the present case. there was no evidence presented. that Wells Fargo reviewed any documents for the Harley mortgage loan for accuracy and no evidence showing that Well Fargo confirmed that the Harley Mortgage Note was endorsed or that the 13 . there was no qualifying Mortgage Loan Schedule. 1156-1195). 2005 and deliver to HSBC a Final Trust Receipt confirming that.Under Section 5 of the Custodial Agreement. Vol. Wells Fargo was supposed to review each Custodial File within 180 days after August 26. all of the above-described mortgage loan documents were reviewed. (R.

(R. Vol. as the trustee. At trial. but instead appears on a separate piece of paper. The federal Truth-in-Lending disclosure statement that Appellee delivered to Appellant constitutes a material misdisclosure under TILA that was unfair and deceptive and that violated the federal Truth-in-Lending Act by disclosing a 14 . 925-1127). after a Prepayment Addendum. (R. and prohibits the custodian from accepting any mortgage loans as contributions to the Appellee Trust REMIC after August 26. 1229-1237). (The Qualified Substitute Mortgage Loan transfer provisions in Section 2.02 of the PSA specifically limits HSBC. Appellee trust introduced into evidence a copy of the Harley note and an unauthenticated indorsement called "Allonge To Note" that was not physically attached to the Harley note. Section 11. SUMMARY OF ARGUMENT The trial court misapplied the law and committed reversible legal error in granting judgment of foreclosure in favor of Appellee because the Appellee trust did not have any legal right to foreclose the mortgage at the commencement of this action. Vol.Harley Mortgage was ever assigned in conformity with Section 2 of the Custodial Agreement. 7 Pg. 2005. 6 Pg.03 of the PSA do not apply to the Harley loan.

12 USC 1701x(c)5. 15 . Appellee violated the applicable material disclosure obligations of the federal Truth-in-Lending Act by failing to give Appellant a "CHARMS" booklet at closing. The Appellee failed to comply with preforeclosure prevention notice requirements imposed by the National Housing Act. The Appellee's December 19."comfort" fixed rate annual percentage rate that overshadowed the adjustable interest rate information contained in the HUD-1 disclosure for the adjustable rate mortgage loan involved in this foreclosure. The Appellee failed to accelerate the mortgage debt. 2005 notice of default and intent to accelerate failed to conform to the requirements of the mortgage contract or Florida law.

2006). 933 So. 2000)( Review of this pure question of law is de novo.2d 1186 (Fla. Dep't of Revenue.ARGUMENT THE TRIAL COURT MISAPPLIED THE LAW AND COMMITTED REVERSIBLE LEGAL ERROR IN GRANTING JUDGMENT OF FORECLOSURE IN FAVOR OF APPELLEE BECAUSE THE APPELLEE TRUST DID NOT HAVE ANY LEGAL RIGHT TO FORECLOSE THE MORTGAGE AT THE COMMENCEMENT OF THIS ACTION. 2000) Calderon v. are imposed on Appellee by the strict terms of Article XI of the PSA. Mgmt. 743 So. Armstrong v. Charles Perry Constr. 2d 311. Klonis v.B. 314 (Fla.C. moreover. 16 . 1st D.2d 627 (Fla. v.A.C.. Inc. a matter of law. 766 So. Jacobsen v. 1999) (The construction of a written contract is. 2004). Therefore. J. Appellee is subject to and must comply with the strict IRS regulations which. D’Angelo v.C. STANDARD OF REVIEW THE TRIAL COURT‘S DECISIONS CHALLENGED IN THIS APPEAL ARE CONTRARY TO LAW. Nurseries. 1st D. 1st D. Fitzmaurice. in turn. 773 So. 2003). Inc.A.2d 7 (Fla. 1st D. Ross Stores. Harris. THE STANDARD OF REVIEW ON ALL ISSUES RAISED IN THIS APPEAL IS DE NOVO.2d 431 (Fla. Inc. Computer Controls. 2d 553 (Fla.A. (R.) MISAPPLICATION OF LAW AND REVERSIBLE ERROR Appellee is a REMIC trust (Real Estate Mortgage Investment Conduit) and as such.A. our review standard over the lower tribunal's construction of the contract is de novo. 863 So..C. 882 So.

Mass. 2nd DCA 2010). And see: In re Doble. 2008).Y.S. Appellee had no right or claim to foreclose the Appellant's mortgage or prevail in this foreclosure action and Appellee failed to present any admissible evidence that Appellee held or owned the subject mortgage note at the commencement of this foreclosure action. 259 (Bankr.2d (N.S. Florida law requires that Appellee hold and own the subject note at the commencement of this action. 17 . Sup. 3rd DCA 1962).S. Ownership of the note and the mortgage are material facts at issue in this foreclosure that needed to be proved by Appellee. 465 N. Gainey Builders. LEXIS 1449 (April 14. It is basic trust law that.Y. 1920). a trust‘s founding document controls what rules and regulations must be adhered to by the trustee on behalf of the trust. First National Bank in Fort Lauderdale. 3rd 936 (Fla. As a REMIC Trust. Div. Carapezza v. N. Jones v. Appellee failed to establish standing or real party in interest status to prosecute this foreclosure action.Y. Jean-Jacques. and Your Construction Center. 28 So.. 226 So. as Trustee. 5D10-1687 (Fla.2d 834 (Fla.Y. BAC Funding Consortium. v.2d 596 (Fla. in addition to applicable laws. 2011 Bankr. 6 Pg. 143 So. 925-1127). Pate.R.2d 346 (Fla. Laing v. This is true in Florida and New York. Bank. See also. Gross. v. Absent such essential evidence of ownership and holder status.Vol.App. 4th DCA 1969). 316 So. 393 B.A. In re Dana. Inc. Gee v. 4th DCA 1975). 5th DCA 2011). Inc. 184 N. 1982) and In re Cummings. Ct. Case No. 404 (N. U. 2011) and In re Hayes.

HSBC Bank. Case No. 1229-1237) does not meet the technical requirements of the New York Uniform Commercial Code (which uses the 1951 version of the UCC) to make the transferee of a promissory note its ―holder. The PSA is the only mechanism by which the Appellee trust is competent to acquire.‖ 18 . but HSBC has no capacity or competency to acquire. Verizzo v. Bank of New York. In this case. Bouskila v. not only is HSBC bound by the strict terms and limitations of the PSA. 184 So. transfer. 7 Pg. dispose of or sell any mortgage loan or other asset. As trustee of the plaintiff trust. as trustee of the Appellee trust.Inc. 1st DCA 1966) (holder of note and mortgage is real party in interest in foreclosure action). Vol. M & I Bank. accord. Appellee completely failed to meet this evidentiary burden and the "Allonge To Note" that Appellee did introduce into evidence (R.2d 897 (Fla. 2nd DCA 2010) (requiring showing that foreclosing entity hold the note and mortgage and that it owned same before commencement of the foreclosure). 28 So. transfer. dispose of or sell any mortgage loan or other asset on the trust‘s behalf outside the terms of the PSA.. 1D10-2127 (Fla. 3d 976 (Fla. 1st DCA 2011) (―the party seeking to foreclose must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure‖). had the initial burden of presenting the Trial Court with evidence that the trust held the Appellant Harley's note at the commencement of this action.

is governed by New York law which clearly prohibits the use of any additional piece of paper for an indorsement. by its terms. This failure of a proper indorsesment and the fact that. are fatal to the Appellee's right to enforce the Appellant's promissory note as a negotiable instrument and deprive Appellee of any legal right to foreclose the Appellant's mortgage. The Appellee failed to establish it held the Harley note under the PSA on August 26. New York UCC § 3-202(2) states: ―An indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof. The Appellee trust. the promissory note at issue is not negotiable. 2005 (or ever).‖ The detached and separate "Allonge To Note" introduced by Appellee as evidence in this case is impaired and rendered ineffective under the New York UCC so that the allonge is not a valid indorsement of the Appellant's promissory note and does not satisfy the strict terms of the PSA. as long as enough space remains to write the indorsement somewhere on the negotiable instrument itself. the New York version of the UCC controls how and when the Appellee trust could gain the status and capacity of a holder of the Appellant's note. by the clear terms of the PSA.Because the PSA adopts for all purposes New York law. Even if this Court finds the Appellant's 19 .

decided that regardless of the fact that the assignor still owned the note. 3d 1191A (2006). Similarly. the Appellee trust is not and cannot be a holder of the promissory 20 . Constant. November 27. New York Law Journal. but did not attach it to the note. but instead to the back of another document in a group of documents that included the notes.. holding that this allonge was not an ―indorsement‖ under New York UCC § 3-202(2). 12 Misc.. the New York UCC literally requires an allonge to be ―firmly affixed‖ to the instrument. the assignee could not enforce the note or obtain a default judgment on the note. In Crossland Sav. in LaSalle Nat’l Bank Ass’n v. pursuant to its own PSA.promissory note negotiable. there is space on the note and the ―No-Space Test‖ does not allow the use of a separate allonge. the assignee took an assignment of the note without at the same time receiving an indorsement from the proper party. the indorsements were rejected because they were not stapled to the negotiable instruments themselves. by Lawrence Safran and Joshua Stein. Even if this Court were to accord to the Appellee trust in the present action the status of a transferee of an instrument by operation of law under the UCC." (3 sets of quotation marks here – are we missing one somewhere?) See: Getting Attached When do Allonges meet the requirements of the New York UCC?. Bank FSB v. The court. The assignee later did receive an allonge from the proper party. Lamy. 2006. Even when another law allows a separate indorsement.

the PSA .S. diligence. The UCC clearly respects the right of the Appellee in the present action to enter into a private agreement . As a result. F. All the provisions of Florida and New York‘s versions of the UCC are subject to be varied by private agreement (subject to limitations not applicable to the instant case).102 titled: ―Purposes. reasonableness and care‖. is a private agreement which changes the standards by which the Appellee trust can access holder status and gain UCC rights to enforcement.which self-limits the Appellee's capacity and ability to hold the Appellant's promissory note.102(3). The UCC bestowed the Appellee with the right to set up different standards to become a 21 . as authorized by the UCC. The PSA. rules of construction.note. variation by agreement‖ states that ―[t]he effect of provisions of this code may be varied by agreement‖. Florida Statute 671. This broad grant of power to private parties to contract away from the UCC by private agreement is only limited by prohibitions contained in other provisions of the UCC not applicable here and the parties are prohibited by the UCC from deviating or contracting away their respective UCC ―obligations of good faith. Appellee has no legal or contractual right to enforce the Appellant's promissory note under the UCC and Appellee has no legal ability or capacity to foreclose the Appellant's mortgage under Florida law. as it is not part of a "qualified mortgage loan" under the PSA. 671.

to claim ―transferee‖ or other ―non-holder‖ status on behalf of the Appellee in this case because the Appellant's promissory note and other requisite mortgage loan documentation was not transferred to the Appellee by August 26.102(3) is to grant the Appellee the right and power to execute the PSA and to expressly deny the power of HSBC.abcny.org/pdf/report/LEGALDOCS1.S. 671. as the trustee. now RA 1-302) see: the 2004 Report on Revised Article 1 of the Uniform Commercial Code prepared by the Committee on Uniform State Laws of The Association of the Bar of the City of New York at: http://www. 2005 as required by the strict terms of the PSA.102(3). Appellee was free to enter into the PSA and the other agreements and to change the legal consequences that would otherwise flow from the application of the UCC. 671.holder and these differing standards control as long as the deviations are not manifestly unreasonable. (formerly NYA 1-102(3). 22 . The effect of F. New York‘s version of the UCC has the identical provision to the ―variation by agreement‖ provision found in F.S.pdf The official comments to Article I of both the Florida and New York UCC inform that the UCC must be liberally construed and applied to permit the expansion of commercial practices through agreement of the parties.

then Appellee failed to establish holder status which is a statutory and common law precedent to the Appellee asserting a legal right to enforce the Appellant's promissory note under the UCC or to foreclose the Appellant's mortgage under Florida law. The Eleventh Circuit determined that in order to determine the power of the trustee.. 23 . In In re Celotex. citing: Firestone Tire & Rubber Co. Additionally pursuant to the PSA. the Eleventh Circuit was faced with the same fundamental issue of defining the relative powers of a New York express trust in the process of resolving whether or not the trustees possessed certain discretionary authority or whether the Trustees' actions were ultra vires under the Trust agreement. Appellee has no legal capacity to be a transferee or a non-holder in possession of the Appellant's promissory note. obligations and limitations that clearly vary the effect of the UCC with respect to how and when the Appellee trust can achieve holder status of a negotiable instrument.S. Assuming that the Appellant's promissory note is a negotiable instrument. 487 F. the court had to ―independently interpret the terms of the…Trust Agreement…‖ Id. Bruch. v. a New York common law trust.The PSA is now the primary source of rules. as the trustee of the Appellee. 489 U. It is also clear that under New York law. HSBC cannot act or ratify acts not authorized or in accordance with its own trust agreement (the PSA).3d 1320 (11th Cir 2007). 101. In re Celotex.

"). or (b) are necessary or appropriate to carry out the purposes of the trust and are not forbidden by the terms of the trust. the trustee derives the rule of his conduct. 4th Dist. "The extent of [a trustee's] duties and powers is determined by the trust instrument and the rules of law which are applicable.Ct.App." Restatement (Second) of Trusts § 201 cmt. b (1959)."). that ―[t]he extent and limit of the Administrator's powers are similarly determined by the terms of the Trust Agreement‖ referencing for authority The Restatement (Second) of Trusts § 37 ("[T]he settlor may grant powers to…the trustee. 835 (Fla." Restatement (Second) of Trusts § 186 (1959). § 164.1969) "[T]he trustee can properly exercise such powers and only such powers as (a) are conferred upon him in specific words by the terms of the trust. and not by his own interpretation of the instrument or his own belief as to the rules of law." Jones v. 226 So.112.Ed. the measure of his obligation. see also id. courts construe terms in trust agreements without deferring to either party's interpretation. 103 L. "From the trust. a beneficiary. First Nat'l Bank in Fort Lauderdale. the 24 . 948.2d 80 (1989) ("As they do with contractual provisions.2d 834. the Eleventh Circuit determined in the In re Celotex case. The Eleventh Circuit found that the general rule is: "If under the terms of the trust a person has power to control the action of the trustee in certain respects. 109 S. or a third person otherwise unconnected with the trust.Ct. Likewise. the extent and limit of his authority.

"If under the terms of the trust a person has power to control the action of the trustee in certain respects. the PSA and the Custodial Agreement bind the trustee of the Appellee trust to conform to the obligations under these controlling private agreements to administer the trust in accordance with the agreements. And. Id. In the present case. can take acts that are inconsistent with the express terms of the PSA or that exceed the power of control or authority granted therein. as trustee. at 113. 948. 109 S.S. Firestone. 25 . 489 U.trustee is under a duty to act in accordance with the exercise of such power. Id. citing." the In re Celotex court held that agents of trusts must ordinarily comply with the trustee‘s exercise of power as limited by the terms of the trust agreement. the Trustee and the trust in the instant case are duty bound to comply with and follow the procedural and substantive limitations on their authority under the PSA. the trustee is [ordinarily] under a duty to act in accordance…" Id." citing The Restatement (Second) of Trusts § 185 (1959) as "the black letter law of trusts". supra. Because the trustee is "a fiduciary to the extent he exercises any discretionary authority or control. Neither the Appellee nor HSBC.Ct. As in In Re Celotex. unless the attempted exercise of the power violates the terms of the trust or is a violation of a fiduciary duty to which such person is subject in the exercise of the power.

F. 12 C. seq. Part 226.573%. THE FEDERAL TRUTH-IN-LENDING DISCLOSURE STATEMENT THAT APPELLEE DELIVERED TO APPELLANT CONSTITUTES A MATERIAL MISDISCLOSURE UNDER TILA THAT WAS UNFAIR AND DECEPTIVE AND THAT VIOLATED THE FEDERAL TRUTH-INLENDING ACT BY DISCLOSING A "COMFORT" FIXED RATE ANNUAL PERCENTAGE RATE THAT OVERSHADOWED THE ADJUSTABLE RATE INFORMATION CONTAINED IN THE HUD-1 DISCLOSURE FOR THE ADJUSTABLE RATE MORTAGE LOAN INVOLVED IN THIS FORECLOSURE. Appellee is contractually prohibited and without legal power to exercise any rights with respect to the Appellant's note or mortgage. This form of overshadowing of a material financing term in a consumer contract constitutes an unfair and deceptive 26 .C. 15 U. Appellee engaged in unfair and deceptive acts in violation of TILA by giving Appellant a ―Federal Truth-In-Lending Disclosure Statement‖ (―TILA Statement‖) that disclosed a fixed APR of 9.. the Appellee put the Annual Percentage Rate disclosure in the HUD-1 in the shadows.R. Regulation Z. et. 1601.Because Appellee failed to acquire the transfer of Appellant's promissory note as required by the strict terms of the PSA. By disclosing a ―comforting‖ fixed APR in the TILA Statement that Appellee gave to Appellant.S.

the Appellee‘s predecessor in interest. the overshadowing disclosure of the APR beyond the allowable tolerance is a defective.125% tolerance allowed by TILA for the APR disclosure in this case for the Appellant's loan. 1601. the legal effect of which is to establish that the Appellee completely failed to give Appellant the required material TILA APR disclosure on the HUD-1. to give to Appellant at closing. For TILA purposes. The CHARMS booklet is a material disclosure which TILA required the lender in this case. et.C. The replacement APR of 9. The evidence and the record in the present case establish that the Appellee materially failed to comply with TILA by failing to give Appellant a ―Consumer Handbook on Adjustable Rate Mortgages‖ . 27 . inaccurate and erroneous disclosure of the APR.a CHARMS handbook .573 that is imputed to the HUD-1 as a result of the overshadowing exceeds the .S. APPELLEE VIOLATED THE APPLICABLE MATERIAL DISCLOSURE OBLIGATIONS OF THE FEDERAL TRUTH-IN-LENDING ACT BY FAILING TO GIVE APPELLANT A "CHARMS" BOOKLET AT CLOSING.at closing explaining the features of her adjustable rate mortgage (ARM) as required by 15 U.C. 15 U.S. seq.act under TILA because it effectively contradicted.1601. distracted attention from and drowned out the HUD-1 APR disclosure that was given to Appellant at closing.

28 . Because the interest rate for Appellant's mortgage note is adjustable and is secured by mortgage on her principal dwelling with a maturity longer than one year.23 of Regulation Z. The lender's failure to disclose the variable rate of this transaction as required by the TILA ARM disclosure rule is imputed to Appellee and entitles Appellant to recover from the Appellee her consumer statutory damages and also entitles Appellant to pursue her rescission right against the Appellee under TILA. Reg. § 226. 1987). In re Fidler.C.R. 1635 and Regulation Z. TILA gives Appellant a continuing right to rescind the subject mortgage which right the Appellant exercised by timely sending a rescission letter to the Appellee pursuant to the Federal Truth-in-Lending Act. Z. the Appellee is liable for the lender‘s failure to give Appellant the CHARMS booklet at closing and such failure triggered Appellant‘s right under TILA to rescind the loan. Section 226. Mass. 48665 (Dec. (R.18(f). 411 (D. As a result of the Appellee's unfair and deceptive acts in overshadowing the ARM disclosure in the HUD-1 and by failing to give Appellant a CHARMS booklet at closing. 36-38). 1 Pg. 15 U. See: note 48 of Section 226. the lender was required to give the CHARMS information to Appellant at closing. Vol.S. 1997) and see: Reg.Under TILA. 24. 210 B. 52 Fed.23.

Appellee had 20 days after receipt of Appellant's rescission notice to take all action necessary to terminate the mortgage on her property. Appellant timely notified the Appellee as required by and in accordance with TILA that Appellant was rescinding the mortgage because of the understating of the Annual Percentage Rate (APR) by more than the allowed . Appellee failed to introduce any evidence at trial that Appellee had terminated its security interest in Appellant's real property subject to the mortgage.125% and also because of the Appellee‘s failure to give her the CHARMS booklet explaining the features of adjustable rate mortgages (ARM) at closing as required by TILA.S. the Appellee violated TILA and is liable to Appellant for her statutory damages pursuant to 15 U. 29 .C. is that the Appellee came to trail with unclean hands and without any lawful right to pursue the equitable remedy of foreclosure. Another consequence of the Appellee's failure to terminate its security interest upon the lawful rescission of the mortgage by Appellant. Appellant has no other obligation to affect the legal rescission of her home loan pursuant to TILA. 1640(a) for the statutory violation. Under TILA.In her rescission letter. As a result of the Appellee's failure to introduce any evidence that Appellee canceled the Appellant's mortgage or terminated the security interest represented by the mortgage.

Newberry Federal Savings & Loan 30 . 146 So. Pratt. F. The December 19. the Appellee's December 19. 2005 NOTICE OF DEFAULT AND INTENT TO ACCELERATE FAILED TO CONFORM TO THE REQUIREMENTS OF THE MORTGAGE CONTRACT AND FLORIDA LAW. Instead. 2006 that was not yet due. & Loan Ass’n. 2005 notice of default failed to inform Appellant that she had to cure the payment default on her loan within 30 days of the date of the notice.A. 515 So. The $455. the Appellee‘s right to payment is contractually dependent upon compliance with the notice requirement for default and process by which the Appellee is contractually authorized to accelerate the mortgage debt is carefully set out in paragraph 22 of the Appellant's mortgage. acceleration of the debt has not occurred and foreclosure must be denied.58 was included by the Appellee to cover a mortgage payment for January. Until the condition of the notice required by paragraph 22 is met.58 to Appellee over and above the amount due as of the notice date to cure the payment default. Rashid v. Chastain Construction v.2d 301 (Fla 4th DCA 1987). THE APPELLEE FAILED TO ACCELERATE THE MORTGAGE DEBT. that Appellant pay an additional $455.2d 910 (Fla.THE APPELLEE'S DECEMBER 19. American Sav. See also Gomez v. 3d DCA 1962) aff‘d with directions. In this case. 157 So. 2005 notice demands that in order to avoid acceleration of the mortgage debt.2d 101 (1963).

2nd DCA 5/20/11). 3d DCA 1988) and Konsulian v. These decisions are consistent with the very recent ruling by the Florida Second District Court of Appeals in Goncharunk v. 4th DCA 1981) (Notice required upon subsequent default after prior default cured). Case No. 2005 notice of default also failed to substantially comply with the notice requirements of paragraph 22 of the mortgage because the notice fails to inform Appellant that she has the right to assert the non-existence of a default in a foreclosure proceeding. N. 2D10-2163 (Fla. Rashid v. 2nd DCA 2011). in which the court reversed a summary judgment involving a similar notice failure. is a contractual condition precedent to foreclosure.Association. Maniscalco v.A. Appellee's December 19. in turn. As a result. Busey Bank.2d 772 (Fla. 397 So. 2D10-2629 (Fla. 31 .. HSBC Mortgage Services. 526 So. Compliance with the contractual pre-foreclosure notice requirements is critical to the Appellee‘s entitlement to accelerate the subject debt which. supra. Hollywood Federal Savings & Loan Ass’n. Case No. the Appellant's mortgage debt was not legally accelerated and a clear condition precedent to foreclosure of the Appellant's mortgage was not met.2d 453 (Fla. Newberry Federal Savings & Loan Ass’n.

or provide the toll-free telephone number described in subparagraph (D)(i).… (B) Deadline for notification. 12 USC 1701x(c)(5) was enacted 21 years ago as part of the Housing and Community Development Act of 1987 and provides in pertinent part: 12 USC 1701x.THE APPELLEE FAILED TO COMPLY WITH PRE-FORECLOSURE PREVENTION NOTICE REQUIREMENTS IMPOSED BY THE NATIONAL HOUSING ACT. (A) Notification of availability of homeownership counseling. Assistance with respect to housing for low-and moderate income families (c)(5): Notification of availability of homeownership counseling. including the Appellee in the present case. 12 USC 1701x(c)(5) imposes a specific statutory obligation on all creditors in the United States. (non federally-insured home loans) to send a specific notice about access and availability of homeownership counseling to defaulting homeowners within 45 days of an initial home loan payment default. Except as provided in subparagraph C. The creditor is obliged to advise the homeowner of any homeownership counseling offered by the servicer of the loan and/or information about how to access HUD homeownership counseling. (i) Requirement. 12 USC 1701x(C)5. and (ii) before the expiration of the 45-day period beginning on the date on 32 . Notification under this subparagraph shall— (I) notify the homeowner…of the availability of any homeownership counseling offered by the creditor…. who service conventional loans.… (ii) Content. (III) notify the homeowner…of the availability of homeownership counseling provided by nonprofit organizations approved by the Secretary and experienced in the provision of homeownership counseling. The notification required in subparagraph (A) shall be made— (i) in a manner approved by the Secretary. the creditor of a loan…shall provide notice under clause (ii) to (I) any eligible homeowner who fails to pay any amount by the date the amount is due under a home loan.

an ―eligible homeowner‖ is one who is eligible for counseling as follows: 12 USC 1701x(c)(4) Eligibility for counseling. (B) the home is not assisted under title V of the Housing Act of 1949. or resume full home loan payments due to a reduction in the income of the homeowner because of— (i) an involuntary loss of. or is expected to be. in a question and answer supplement ―published in order to respond to creditor inquiries and to clarify creditor responsibilities‖ under the statute. (B) The term ―eligible homeowner‖ means a homeowner eligible for counseling under paragraph 4. For purposes of this subsection: (A) The term ―creditor‖ means a person or entity that is servicing a home loan on behalf of itself or another person or entity. and (C) the homeowner is. 55 FR 2416 (01/24/1990) states: ―We note that if a creditor‘s compliance…is challenged in court.Which the failure referred to in such subparagraph occurs. or income from the pursuit of the occupation of the homeowner. Under the terms of the statute. The Secretary shall issue any regulations that are necessary to carry out this subsection. the ultimate determination of the adequacy of 33 . unable to make payments. the self-employment of the homeowner. A homeowner shall be eligible for homeownership counseling under this subsection if— (A) the home is secured by property that is the principal residence…of the homeowner.… (7) Regulations. the employment of the homeowner. (D) The term ―homeowner‖ means a person who is obligated under a home loan. correct a home loan delinquency within a reasonable time. The secretary of HUD. or reduction in. or (ii) any similar loss or reduction experienced by any person who contributes to the income of the homeowner. (6) Definitions. (C) The term ―home loan‖ means a loan secured by a mortgage or lien on residential property. (E) The term ―residential property‖ means a 1-family residence.

it should be sent soon enough to enable the homeowner to benefit from the counseling. 4. delinquent again. both conventional mortgages and loans. The ―notification requirement applies to all home loans except those assisted by the Farmers Home Administration…Thus. rather than attempt to determine the cause of each delinquency.‖ 7. ―A notice must be sent to every homeowner every time the homeowner If the homeowner brings the loan current and becomes becomes delinquent. are subject to section 169. address and telephone number of the HUD-approved counseling agencies near the homeowner or a cost-free telephone number at the creditor‘s office where the homeowner can obtain this information…‖ 5.the creditor‘s notification and the legal consequences of any noncompliance will be made by the court. 6.‖ 3. ―The notice is not required (on) property sold under a land sales contract…until the contract is completed…‖ 8.‖ ―The notice must contain information on any counseling provided by the creditor and either the name.‖ 34 . ―[S]ince the purpose of the notice is to help the homeowner avert foreclosure. and those insured by HUD or guaranteed by the Department of Veterans Affairs. ―The statute does not require any creditor to provide counseling. HUD does not supply a form. ―Creditors may prefer to send the notice to all delinquent homeowners.‖ (Section 169 is a reference to the section of the Housing and Community Development Act that enacted 12 USC 1701x(c)(5)) 2. ―It is HUD‘s view that sufficient information has been provided on the section 169 notice requirement to enable creditors to prepare the notice.‖ (The question and answer supplement further advises creditors that: 1. another notice must be sent. HUD recommends that the notice be included in the creditor‘s first communication with the homeowner regarding the delinquency.

Appellant is a ―homeowner‖ within the definition contained in the statute as ―a person who is obligated under a home loan‖. 20964-65 (May 15. 1989). and c. The evidence presented in this case established that: a. If a creditor does provide homeownership counseling. 54 Fed. whenever a home loan is ‗delinquent‘. b. imposing and obligation upon any and all creditors to notify any eligible homeowner counseling. the notification requirement of 12 USC 1701x(c)(5) applies to the Appellant's loan because it is a home loan not assisted under title V of the Housing Act of 1949 that is secured by a mortgage. 35 . The statute required the Appellee to send Appellant a notice containing information about any foreclosure avoidance counseling that the Appellee offered to its residential home mortgage borrowers within 45 days of the delinquency in payment. The statute required the Appellee in this case to send a notice of preforeclosure counseling services to Appellant when she became delinquent in her mortgage payment. the creditor still has to ―notify the delinquent homeowner of the availability of homeownership counseling by HUD-approved counselors or by the Department of Veterans Affairs…‖ HUD published an advisory on the notice requirement of the statute which states: ―[T]he notice requirements …apply virtually to all mortgagees…‖ and that ―noncompliance with the law‘s requirements could be an actionable event that could affect a mortgagee‘s ability to carry out foreclosure in a timely manner…HUD regards the obligations imposed on creditors by the new law as self-executing: that is.9. the law speaks directly to creditors. Reg. the Appellee is a ―creditor‖ within the definition contained in the statute as the Appellee is ―a person or entity that is servicing a home loan on behalf of itself or another person or entity‖.

1701x(c)(5) before filing this foreclosure action.The evidence presented at trial in the present case establishes that the Appellee did not send a notice to Appellant that complied with the preforeclosure prevention notice requirement imposed on the Appellee by the National Housing Act.C.S. This failure is the result of the Appellee's actions in not sending Appellant a notice containing information on any foreclosure avoidance counseling that the Appellee offered to its residential home mortgage borrowers at all or within 45 days of the Appellant's delinquency in payment. 36 . The evidence presented in this case supports a finding that Appellee is not entitled to access the equitable remedy of foreclosure on account of the Appellee‘s failure to first comply with the federal statutory pre-foreclosure servicing notice obligation set out in 12 USC 1701x(c)(5) before instituting this foreclosure action. 12 U.

The payment obligations under the promissory note were never legally accelerated before the filing of this foreclosure action. The trial court misapplied the law and committed reversible error. 1701x(c)(5) by failing to send Appellant a notice containing information on foreclosure avoidance counseling within 45 days of the payment delinquency thereby denying Appellee access to the equitable remedy of foreclosure. 2005 notice of default sent by the Appellee failed to comply with the mortgage. Appellant timely rescinded the subject mortgage. 37 . The December 19. Appellee violated TILA by overshadowing the material APR disclosure and by failing to give Appellant a ―CHARMS‖ booklet at closing triggering Appellant's right to rescind the mortgage.S.C. Appellee‘s security interest in Appellant‘s real property should be terminated by this appellate court and the subject mortgage canceled. Appellee failed to comply with the preforeclosure notice requirement imposed by 12 U.CONCLUSION The Appellee did not hold Appellant's promissory note at the commencement of this action. Appellee's foreclosure complaint should be dismissed with prejudice and this matter should be remanded for consideration of appellant‘s claim for statutory damages and attorney‘s fees including attorney's fees for the prosecution of this appeal. Appellee had no legal right to foreclose the mortgage in this case.

Adams Street Jacksonville. Attorney for Appellee. 360 Boca Raton FL. 2011. LLP. 360.S. to with Times New Roman 14-point font. R. 32202 Attorney for Appellant JACKSONVILLE AREA LEGAL AID. Boca Raton FL.: 310425 126 W. Mail this 17th day of November. ESQ. INC. Federal Highway Ste. Harley. ______________________________ April Charney. Esq. ext. LLP 2424 N. Fishman & Cache. complies with the font requirements set forth in the Rule 9. Marilyn G.charney@jaxlegalaid. Shapiro. 2424 N.210(a)(2).org Attorney for Appellant CERTIFICATE OF COMPLIANCE THE UNDERSIGNED HEREBY CERTIFIES that the initial Brief of Appellant. 334317780 Attorney for Appellee April Charney.. 334317780. Florida 33202 Telephone: (904) 356-8371. 38 . 373 Facsimile: (904) 224-1587 april. _____________________________________ April Carrie Charney. Fishman & Cache.. 126 West Adams Street Jacksonville. App. Shapiro. Inc. by U.CERTIFICATE OF SERVICE I certify that a copy hereof has been furnished to Maris Ajmo. FL. Esquire Fla. Jacksonville Area Legal Aid.P. Esq. SERVICE LIST Marisa Ajmo. Bar. Federal Highway Ste. No. Fla.

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