The Third District Court of Appeal also ruled Miami-Dade Circuit Senior Judge Judith Kreeger was wrong to find the bank's witness testimony was hearsay.

“The trial court was not authorized to deny foreclosure merely because it believed the borrower signed a 'bad bargain,' ” wrote Third DCA Judge Richard Suarez, with Chief Judge Leslie Rothenberg and Judge Vance Salter concurring. “ We thus reverse the entry of involuntary dismissal and remand for entry of final judgment of foreclosure.”

Homeowner Alfredo Brito was making his monthly mortgage payments as usual when in June 2008 his payment was rejected by his loan servicer, according to the appellate court. From then on, no other payments were made.

Two years later, the loan servicer advised Brito he was in default and demanded $60,000 as a remedy. Lender Deutsche Bank National Trust Co. then brought a foreclosure proceeding. In Brito's answer, his counsel did not allege the default came from any failure on the bank's part to notify him of a change in his payment amount or interest rate.

Brito's original loan servicer was absorbed by West Palm Beach-based Ocwen Loan Servicing in 2012, and an Ocwen representative testified at a two-day bench trial about the loan payment history and default letter.

Kreeger then entered a judgment in Brito's favor “concluding — in total contradiction to its admission of Ocwen's witness's testimony and documents into evidence at trial — that the testimony was hearsay, and that the bank had thus failed to prove [Brito] received a notice of payment or interest change that could trigger a default (while noting that such was not required),” the Third DCA found.

Kreeger excluded the demand letter and the payoff printout when she should have admitted them, the appellate court ruled. The Third DCA found the Ocwen witness met the “business records” exception to the hearsay rule, which requires only that he is qualified to authenticate the records, not that he personally prepared them.

Any lack of notice in a change to Brito's payment amount or interest rate was also irrelevant, the court ruled, as the homeowner's counsel never raised it.

Anthony Yanez and Nicole Topper of Blank Rome in Fort Lauderdale represented the bank. Yanez declined to comment.

Bruce Jacobs of Jacobs Keeley in Miami, who represents the homeowner, plans to seek rehearing and rehearing en banc. He argues the verification process for the loan servicer's records is questionable, as Ocwen is facing a Consumer Financial Protection Bureau complaint for shoddy recordkeeping. Among other things, Jacobs also claims the Ocwen witness lacked personal knowledge about whether a third-party vendor mailed the default letter.

“The trial court understood the Britos were elderly, suffered from dementia, paid religiously, and were forced into foreclosure because of the predatory financial product,” Jacobs said in an email. “Under the circumstances, it's appropriate to require Ocwen to comply with the rules of evidence and Florida Supreme Court precedent. No court is authorized to grant the equitable relief of foreclosure if there is unclean hands or insufficient evidence of standing to foreclose merely because the borrower defaulted on their mortgage.”

Albert Diaz

The Third District Court of Appeal also ruled Miami-Dade Circuit Senior Judge Judith Kreeger was wrong to find the bank's witness testimony was hearsay.

“The trial court was not authorized to deny foreclosure merely because it believed the borrower signed a 'bad bargain,' ” wrote Third DCA Judge Richard Suarez, with Chief Judge Leslie Rothenberg and Judge Vance Salter concurring. “ We thus reverse the entry of involuntary dismissal and remand for entry of final judgment of foreclosure.”

Homeowner Alfredo Brito was making his monthly mortgage payments as usual when in June 2008 his payment was rejected by his loan servicer, according to the appellate court. From then on, no other payments were made.

Two years later, the loan servicer advised Brito he was in default and demanded $60,000 as a remedy. Lender Deutsche Bank National Trust Co. then brought a foreclosure proceeding. In Brito's answer, his counsel did not allege the default came from any failure on the bank's part to notify him of a change in his payment amount or interest rate.

Brito's original loan servicer was absorbed by West Palm Beach-based Ocwen Loan Servicing in 2012, and an Ocwen representative testified at a two-day bench trial about the loan payment history and default letter.

Kreeger then entered a judgment in Brito's favor “concluding — in total contradiction to its admission of Ocwen's witness's testimony and documents into evidence at trial — that the testimony was hearsay, and that the bank had thus failed to prove [Brito] received a notice of payment or interest change that could trigger a default (while noting that such was not required),” the Third DCA found.

Kreeger excluded the demand letter and the payoff printout when she should have admitted them, the appellate court ruled. The Third DCA found the Ocwen witness met the “business records” exception to the hearsay rule, which requires only that he is qualified to authenticate the records, not that he personally prepared them.

Any lack of notice in a change to Brito's payment amount or interest rate was also irrelevant, the court ruled, as the homeowner's counsel never raised it.

Anthony Yanez and Nicole Topper of Blank Rome in Fort Lauderdale represented the bank. Yanez declined to comment.

Bruce Jacobs of Jacobs Keeley in Miami, who represents the homeowner, plans to seek rehearing and rehearing en banc. He argues the verification process for the loan servicer's records is questionable, as Ocwen is facing a Consumer Financial Protection Bureau complaint for shoddy recordkeeping. Among other things, Jacobs also claims the Ocwen witness lacked personal knowledge about whether a third-party vendor mailed the default letter.

“The trial court understood the Britos were elderly, suffered from dementia, paid religiously, and were forced into foreclosure because of the predatory financial product,” Jacobs said in an email. “Under the circumstances, it's appropriate to require Ocwen to comply with the rules of evidence and Florida Supreme Court precedent. No court is authorized to grant the equitable relief of foreclosure if there is unclean hands or insufficient evidence of standing to foreclose merely because the borrower defaulted on their mortgage.”