Phillips P. O'Shaughnessy Legal Malpractice Law Blog on Lawyers.com

Mortgage industry transactional lawyers at increasing risk of liability to the lenders they represented.

The Mortgage troubles that people are having all over the country are spawning some interesting developments, specifically attorneys who handled the mortgages are now at risk of receiving malpractice claims from the lenders for whom they worked. With millions of people in trouble, they are doing whatever they can do keep their home. Beginning with a Time magazine article last year, people are now using a unique strategy to stay in their house. When faced with foreclosure, they are saying four simple words:

“Show me the note.” 

Essentially, they are asking to see the original mortgage and note to demonstrate that the lender is in fact, the holder of their indebtedness. In Miami-Dade County, a judge recently dismissed a foreclosure case because the plaintiff could not produce the note. And it’s happening in other places too.

Why is this working? Imagine the flip side: you go to your bank with a photocopy of a check made out to cash and request payment in full. Many mortgages were transferred from the original lender, through Fannie Mae, into the banking system, securitized, and sold to pools of investors. This can be a complex process with many different steps and sometimes, paperwork can get mis-handled or mistakes can be made. If the attorneys handling the transaction for these various parties failed to obtain and properly record the originals of the notes and mortgages, they may face claims of legal malpractice if these originals cannot be produced when the lender seeks to foreclose the mortgage in court.

If your lender wants to foreclose on your property, it has to be able to show that they are the one to whom the money is owed. That right, the homeowners argue belongs only to the “Holder In Due Course” and who has legitimate possession of the original note, not a copy or an electronic entry. The homeowners rely on standard Uniform Commercial Code law, including Sections 3-301 (right to enforce belongs to the holder of the instrument) and 3-309 requires presentation of the original unless there is strict and exacting proof of how the original was lost or destroyed.

As homeowners vigorously defend their rights in foreclosure actions, the banks and lenders who cannot foreclose because they cannot “show me the note” may well look to their transactional lawyers to make them whole through a legal malpractice claim.

Mr. O’Shaughnessy, a legal malpractice attorney in Fort Lauderdale, has represented clients in cases involving:

- Legal Malpractice
- Professional Negligence
- Civil Litigation
- Business Torts
- Contract Disputes
- Personal Injury

Persons suspicious of the quality of their legal representation often need an experienced and aggressive lawyer like Phillips P. O’Shaughnessy to help determine whether there has been substandard performance that constitutes legal malpractice.  If you think you have been a victim of legal malpractice, contact Phillips P. O’Shaughnessy, P.A., for a consultation.

Our Legal Malpractice Attorney can assist you in the following areas:

- Broward County / Fort Lauderdale
- Miami-Dade County / Miami
- Palm Beach County / West Palm Beach

Phillips P. O’Shaughnessy
315 S.E. 12th Street
Ft. Lauderdale, Florida 33316
T: 954.712.0574
http://www.oshaughnessylawfirm.com