Certification of Original Promissory Note is Required to Bring a Mortgage Foreclosure Action
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In 2013, the Legislature enacted Section 702.015, Florida Statutes, which sets forth new pleading requirements for residential foreclosure actions. At that time, the Legislature requested the Florida Supreme Court to amend the Florida Rules of Civil Procedure to provide expedited foreclosure proceedings in conformity with Section 702.015. As such, the Florida Supreme Court enacted Rule 1.115. Both Section 702.015 and Rule 1.115 provide that the plaintiff must file a certification that they are in possession of the original promissory note with their foreclosure complaint. If the original note is lost, destroyed, or stolen, the plaintiff must instead file an affidavit. Failure to comply with this requirement may lead to sanctions by the court.
Are You in Possession of the Original Note?
When bringing a residential foreclosure action, the plaintiff must file a certification that they are in possession of the original promissory note. Section 702.015(4), and similarly in Rule 1.115(c), provides as follows:
If the plaintiff is in possession of the original promissory note, the plaintiff must file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified. Correct copies of the note and all allonges to the note must be attached to the certification. The original note and the allonges must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.
While Section 702.015(4) requires the plaintiff to file a certification that the plaintiff is in possession of the original promissory note, it does not preclude the plaintiff’s attorney from being the individual giving the certification. Bank of Am., N.A. v. Leonard, 212 So. 3d 417, 418 (Fla. 1st DCA 2016) (“Appellant’s attorney, as the agent of appellant, was entitled under the statute to certify that appellant was in possession of the original note based on counsel’s review of the collateral file, which contained the original note and was provided to counsel in connection with legal proceedings to enforce the note.”).
If the original promissory note does not name the plaintiff as the payee, the note must bear a special indorsement, or the plaintiff must submit evidence of an assignment of such note from the payee to the plaintiff. Ortiz v. PNC Bank, Nat. Ass’n, 188 So. 3d 923 (Fla. Dist. Ct. App. 2016) (holding the bank established standing to bring foreclosure action, where bank attached a copy of note, with a blank indorsement to complaint, and the original note matching the copy was later filed with the court).
Conveniently, Form 1.944(a) Mortgage Foreclosure provides a section for certification which includes the above mentioned requirements. The form includes the following declaration, “Under penalties of perjury, I declare that I have read the foregoing Certification of Possession of Original Note and that the facts stated in it all true.” Therefore, it is important that plaintiffs ensure they satisfy the requirements in the certification before filing their foreclosure complaint. A plaintiff who knowingly makes a false declaration may be guilty of the crime of perjury by false written declaration, a felony of the third degree. Fla. Stat. Ann. § 92.525(3).
What is the Original Note?
Section 702.015(3) defines “original note” or “original promissory note” as the signed or executed promissory note, rather than a copy thereof. Any renewal, replacement, consolidation, or amended and restated note or instrument given in renewal, replacement, or substitution for a previous promissory note is defined as the original promissory note. The term also includes a transferable record, as defined by the Uniform Electronic Transactions Act in section 668.50(16), Florida Statutes. A transferable record means an electronic record that:
- Would be a note under chapter 673, or a document under chapter 677, if the electronic record were in writing.
- The issuer of the electronic record expressly has agreed is a transferable record.
Therefore, a copy of an electronic promissory note is sufficient to prove the identity of the electronic note’s owner and to provide authorization to the loan servicer to pursue a foreclosure action. Rivera v. Wells Fargo Bank, N.A., 189 So. 3d 323 (Fla. 4th DCA 2016) (holding a paper copy of an electronic promissory note is enforceable in a mortgage foreclosure action).
Why Is Certification Now Required?
The purpose of Section 702.015 is to “expedite the foreclosure process by ensuring initial disclosure of a plaintiff’s status and the facts supporting that status, thereby ensuring the availability of documents necessary to the prosecution of the case.” Section 702.015(1). The certification requirement is not intended to be a prerequisite to suit, but failure to comply with the requirement may lead to sanctions by the court under Section 702.015(6). Campbell v. Wells Fargo Bank, N.A., 204 So. 3d 476, 480 (Fla. 4th DCA 2016) (“[S]ection 702.015(6) states that the court may sanction a plaintiff for failure to comply, which contradicts any argument that these are mandatory conditions precedent to suit or that the complaint must be dismissed for failure to comply, thus creating a mandatory, non-discretionary duty”). Therefore, failure to produce the original note to the court will unlikely lead to involuntary dismissal with prejudice. Possible sanctions may include an order dismissing the complaint with leave to amend, or perhaps monetary sanctions to reimburse a successful defendant for costs and/or attorney’s fees.
What Happens If The Note is Lost, Destroyed, or Stolen?
As stated in Section 702.014(5) and Rule 1.115(d), if the original note is lost, destroyed, or stolen, the plaintiff must file an affidavit under penalty of perjury with the complaint. The affidavit must:
(a) Detail a clear chain of all endorsements, transfers, or assignments of the promissory note that is the subject of the action.
(b) Set forth facts showing that the plaintiff is entitled to enforce a lost,
destroyed, or stolen instrument pursuant to s. 673.3091. Adequate protection as required under s. 673.3091(2) shall be provided before the entry of final judgment.
(c) Include as exhibits to the affidavit such copies of the note and the allonges
to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note as may be available to the plaintiff.
A plaintiff may also be guilty of the crime of perjury by false written declaration, a felony of the third degree, if they knowingly make a false declaration in their affidavit.
If a complaint does not comply with the above mentioned requirements, Section 702.015(6) provides that the court “may sanction the plaintiff for failure to comply.” Accordingly, banks or other residential mortgage lenders should be aware of the requirements under Section 702.015 to ensure they properly bring their mortgage foreclosure action and avoid any possible sanction the court may order for failure to comply.
- Austin B. Calhoun, Esquire
- Melissa Murrin, JD Candidate
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