Florida Mortagage Promissory Note & Contract Endorsement Law

Mortgage lenders have the right to assign mortgages to deeds of trust when they establish them. However, many lenders in Florida do not assign the mortgage at the time it is established; instead, they make the assignment when they need to foreclose on a mortgage. At the time of publication, this practice is illegal and puts the lender in jeopardy of losing its right to foreclose.


Deeds of Trust
Florida mortgage lenders often put the deeds to homes in the name of a trustee -- usually the Mortgage Establishment Registration System, or MERS. However, mortgage lenders must put the deeds in the MERS' name when they establish a mortgage; if they do not do so until after a homeowner defaults on his agreement to pay the mortgage, the mortgage lender may not have the authority to foreclose on the home.

Robo-Signers
Some Florida mortgage companies use "robo-signers" -- people who sign thousands of mortgages over to MERS or other trustees when there is a problem with a mortgage. As of July 2011, however, using robo-signers is illegal. Florida courts consider documents signed in this manner to be fraudulent and may dismiss a foreclosure lawsuit if the lender appears to have used a robo-signer.

New York Law
Although Florida has its own laws regarding mortgages, most courts in the United States follow New York law regarding the validity of mortgages -- 80 percent of mortgages must follow these laws, according to the "South Florida Sun-Sentinel." New York law says that any mortgage assignment made later than specified by the original mortgage agreement is invalid. Thus, most Florida courts require mortgage lenders to make assignments of trust when the mortgage is established.

Considerations
At the time of publication, foreclosure remains a large-scale problem in Florida as well as in the rest of the United States because of widespread economic problems, such as job loss and inability to make mortgage payments. Attorneys for mortgage lenders may, therefore, view the mortgage-assignment issue as a technicality and argue that delinquent homeowners should lose their homes. However, since at the time of publication, most Florida courts enforce mortgage-assignment requirements, mortgage lenders should assign interest when the mortgage is established or risk losing their right to foreclose.