Florida Attorney General Investigating Allegedly Fraudulent Mortgage Assignments
The Florida attorney general's office has launched a civil investigation against Fidelity National Financial Inc. and Lender Processing Services Inc. to review allegations that the companies used fabricated assignments in foreclosure cases. According to the AG's summary of the case, the office is reviewing whether "bogus assignments" of mortgages were created in order that foreclosures may go through more quickly and efficiently.
Over the last several years, borrowers in default have alleged that a lender or assignee may not foreclose without producing the original note. Courts have generally rejected the "show me the note" defense by applying basic legal principles applicable to negotiable instruments. See, e.g., Diessner v. Mortgage Electric Registration Services, 618 F.Sup.2d 1184, 1187 (D.Ariz. 2009)("...district courts have routinely held that Plaintiff's 'show me the note' argument lacks merit.") The Florida AG's investigation, regardless of the outcome, may spawn yet another basis for defaulting borrowers to delay or defeat loss mitigation efforts of lenders and servicers.
