A financial service company’s decision to retain Goldberg Segalla partner Scott B. Mueller, hoping his experience would be the difference in a complex Florida foreclosure matter, resulted in a favorable summary-judgment ruling.

The case stems from a refinanced mortgage loan closed internally by our client at one of its branches.

The borrowers retained a “foreclosure rescue” attorney with a reputation of being a thorn in the side of lenders across the Sunshine State. In essence, these attorneys look for technical defects or violations in the mortgage documentation to exploit or leverage mistakes against lenders’ collateral — i.e. homes — regardless of the merit of the actual loan default.

Given the long history of this particular “rescue” attorney in enforcing Florida’s strict rules regarding the validity of mortgage recitals, our client retained Scott, a partner in our firm’s Real Estate Litigation and Title Disputes practice group, to salvage the effectiveness of the mortgage.

Scott tapped his vast experience with equity — using comparable harm/fault and windfall arguments — to ask the court to adjust the mortgage and reform it to resuscitate its validity.

The borrowers had a lengthy history of trying to avoid the foreclosure and, for years, would request modifications, file bankruptcy, and use any other tactics to stave off foreclosure.

This proved key to Scott’s defense.

During the borrowers’ efforts to avoid the mortgage lien, they signed numerous documents that ratified and clarified the position that they intended the refinance mortgage to operate as a lien upon the property, and that the non-borrowing spouse benefited from the proceeds based on our client’s refinance funds satisfying prior mortgages. There were also multiple other examples of the borrowers taking inconsistent actions when faced with the convenient and meritless position that due to a typographical error, the borrower should somehow retain all the benefits of the loan without responsibility.

After some focused discovery and research, Scott moved for summary judgment based on the equitable remedies of reformation and equitable lien to put the parties back in the position they originally intended.

The court agreed and granted summary judgment to our client, thus enabling them to proceed with enforcing its mortgage. Thus, thanks to Scott’s skill and experience, our client was able to salvage what would have been a total loss.