December 5, 2023

Leveraging Prior Declaratory Judgments for a Solid Standing in Foreclosure Cases

For mortgage lenders navigating complex foreclosure cases, the recent ruling in Warren v. HMC Assets, LLC serves as a crucial lesson in the strategic utilization of prior declaratory judgments to establish a firm standing in legal proceedings. This landmark decision underscores the significance of conducting comprehensive assessments of past litigation among creditors to confirm the legitimacy of note and mortgage assignments, supporting the standing of mortgage lenders in foreclosure actions. 

Insights from the Warren Case for Mortgage Lenders 

In the Warren case, the litigation revolved around a chain of assignments culminating in Sequoia Financial Solutions, Inc. (“Sequoia”) seeking foreclosure of a mortgage. To overcome a hurdle in proving standing due to a prior failure to establish one of the assignments in the chain, Sequoia pursued a declaratory judgment action against prior assignees, resulting in a Consent Declaratory Judgment affirming its ownership of the note and mortgage. 

Key Considerations for Mortgage Lenders: The Second District Court of Appeal’s Ruling 

Following the subsequent assignment of the note and mortgage to Kirkland Financial LLC and later, during the pendency of the case, to HMC Assets, LLC (“HMC”), a foreclosure action was initiated, supported by the previously obtained Declaratory Judgment as evidence of standing. The borrowers contested the validity of the Declaratory Judgment and associated business records, but the Second District Court of Appeal dismissed their claims, emphasizing the inapplicability of collateral estoppel due to their lack of involvement in the prior litigation between the creditors.  

Implications and Strategic Steps for Mortgage Lenders 

The Court’s decision highlights the critical role of the prior Declaratory Judgment in establishing Plaintiff’s standing to foreclose and validates the trial court’s reliance on the previous judgment. This ruling underscores the significance for mortgage lenders to meticulously evaluate previous litigation records and leverage prior judgments to establish a strong position in foreclosure actions. 

Strategic Guidance: Staying Informed and Staying Ahead 

Integrate the insights gleaned from the Warren case and similar precedent-setting rulings into your foreclosure strategies as mortgage lenders. By staying informed about the nuances of foreclosure litigation and, where applicable, effectively utilizing prior declaratory judgments, you can enhance your ability to achieve favorable outcomes in foreclosure actions. Stay proactive, stay informed, and continue strengthening your legal approach to navigate the intricacies of foreclosure cases successfully. 

How I Can Help You Navigate Foreclosure Cases 

As a seasoned legal professional with extensive knowledge and expertise in handling intricate foreclosure matters, I am dedicated to assisting mortgage lenders in successfully navigating complex legal landscapes. With a deep understanding of the implications of cases like Warren v. HMC Assets, LLC, I am well-equipped to provide comprehensive guidance and tailored strategies for bolstering your standing in foreclosure actions. Whether you require assistance in leveraging prior judgments or need strategic counsel for intricate legal proceedings, I am here to offer personalized support. Feel free to reach out to me today for a consultation. Together, we can fortify your position and achieve the best possible outcomes in your foreclosure cases. 

Irina Danilyan
Partner, Real Estate
Kelley Kronenberg-Fort Lauderdale, FL.
(954) 370-9970