In an era in which loans are transferred from servicer to servicer, the issue of whether or not the bank’s business records are accurate has become a very hotly contested issue in most foreclosure trials.
The rules of evidence are clear: Documents should not be admitted unless the person who is trying to set the foundation for them has personal knowledge of those documents. But how can a person from Bank B swear to the accuracy of documents created by Bank A?
The First District Court of Appeals addressed this issue in the case of Hunter v. Aurora in March 2014. The Court concluded that a witness who was neither a current nor former employee of the initial lender and otherwise lacked particular knowledge of the previous lender’s record-keeping procedures was unable to substantiate when the records were made, whether the information they contain derived from a person with knowledge, whether the initial lender regularly made such records or whether the records even belonged to the initial lender.
In other words, the records were inadmissible and the bank could not prevail at the foreclosure trial.
This case can have huge implications in foreclosure trials in which a subsequent servicer or bank tries to put into the record the business records of a previous bank.
This case has massive implications for anyone who has a loan that has been transferred one or more times. The burden on the bank to admit its business records – an absolute requirement of a mortgage foreclosure – just increased significantly.