Lenders and Servicers Use of Record’s Custodian

By Joshua D. Miron, Attorney

A recent 4th District Court of Appeal of The State Of Florida (4th DCA) decision addresses a Servicer’s ability to testify to facts derived from a computer system where the individual has no personal knowledge of the information contained therein, and further a Servicer’s ability to testify to facts derived from a prior Servicer (attached).

In brief, the 4th DCA ruled in favor of a Wellington homeowner whose bank filed documents sworn to by employees with no personal knowledge of the case.  The ruling reversed in part a 2010 Palm Beach County Circuit Court summary judgment that said the homeowner owed the loan servicer an outstanding balance.  That amount was based on an affidavit of indebtedness signed by an employee of the loan servicer who pulled the information from a company computer, which the 4th DCA said amounts to hearsay outside of the business records exception (Fla. Stat. 90.803(6)(a). “[The employee] did not know who, how, or when the data entries were made into [the loan servicer’s] computer system,” the decision states. “[The employee] could state that the data was accurate only insofar as it replicated the numbers derived from the company’s computer system. He could not state if the records were made in the regular course of business. He relied on data supplied by [a third-party servicer], with whose procedures he was even less familiar. [He] could state that the data in the affidavit was accurate only insofar as it replicated the numbers derived from the company’s computer system. Despite [his] intimate knowledge of how his company’s computer system works, he had no knowledge of how that data was produced, and he was not competent to authenticate that data”.
 
Pursuant to section 90.803(6)(a), Florida Statutes, each Servicer and/or Lender should be prepared to testify through a record’s custodian: (1) the record (default, payment, non-payment etc.) was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record.
   
Although the basis for the Court’s decision is neither new nor novel, it does serve to inform otherwise uninformed defense counsel of an issue for attack. It also has the potential effect of requiring that Lenders and Servicers provide the Court with multiple affidavits or witness testimony from multiple sources to prove the indebtedness owed.  
 
If you have any questions on this matter, please contact Mr. Joshua D. Miron, Esq. Josh is an associate who practices in the Real Estate Default Group of Weltman, Weinberg & Reis Co., LPA. He can be reached at 954.740.5223 or jmiron@weltman.com.

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