In some foreclosure cases, the bank will try to use a big document called a pooling and servicing agreement (“PSA”) to prove standing to foreclose on the note and mortgage. These agreements are often hundreds of pages and can be difficult to understand.
If you are facing a foreclosure and the bank is trying to use a PSA to establish standing to foreclose, it is critical that you read the document very carefully because sometimes these PSAs are not all they are made up to be.
For example, some PSAs have a provision requiring the original note to be transferred to the document “custodian.” The PSA will specify which bank is appointed to be the “custodian.” If the bank does not tender evidence at trial that it has complied with the PSA then the PSA may not grant standing to the bank like the bank thinks.
Additionally, many PSAs do not mention the homeowner’s specific loan number. If the PSA does not mention the homeowner’s specific loan number, then the PSA would not grant standing to foreclose on that loan. Sometimes the bank will have a loan schedule attached to the PSA as an exhibit and if this is the case, you will want to make sure this loan schedule was actually filed with the Securities and Exchange Commission (“SEC”) as an exhibit contemporaneously with the PSA and you will want to make sure that the bank has a certified copy of the PSA. Otherwise, the document may be hearsay.
If you would like to read about a case where a PSA proved to be a problem for the bank, check out Friedle v. Bank of New York Mellon, 226 So. 3d 976 (Fla. 4th DCA 2016).
Don’t let the bank intimidate you by showing up at trial with this huge, complicated document. Request in writing that all trial exhibits be produced to you in advance of trial and take the time to review each exhibit carefully in advance of trial. If you do not understand it, retain a competent foreclosure defense lawyer to explain it or to defend your rights at trial.
Ryan C. Torrens, Esq.
Consumer litigation attorney