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Who has the right to foreclose on a home is not always clear

Nobody, not even the banks, are supposed to be above the law in Florida. A foreclosure is a court action, and as with any court action there is a procedure that must be followed. This is to ensure that the rights of all parties involved are respected.

One of the basic rules of civil procedure is that a party initiating a lawsuit actually be the allegedly injured party. This is known as “standing” to sue. In foreclosure cases, the party with standing to sue must hold the promissory note and mortgage on the property in question, or be an authorized representative of the party that does.

Before about 10 years ago, determining standing to file for foreclosure it was a relatively simple matter. Then, as the Florida Bar Journal explains, around 2005 securitization struck. Lenders originated residential and commercial mortgages, then assigned them to trusts, where the mortgages were pooled together by the thousands. Several different parties arose with rights and duties in regards to the loans in the trust, such as trustees, master servicers, special servicers and certificate holders.

Thus, proving standing has become quite complex, especially for mortgages originated between 2005 and 2008. For homeowners, this could mean the difference between getting the action dismissed, and losing their home through foreclosure or forced sale.

Determining whether a foreclosing party can be highly technical, and the matter is often confusing to the layperson. However, an attorney knowledgeable in foreclosure law knows how to determine what entity has the right to foreclose on his or her client -- and who does not have that right.

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