HELOC & REVERSES DISMISSAL KEY POINTS

Updated: Mar 21

Florida’s Fourth DCA issued an opinion reversing a Palm Beach circuit court which dismissed US Bank’s foreclosure complaint against Steven and Dorothy Grob (the Grobs) based on US Bank’s alleged lack of standing. US Bank National Assoc., etc. v. Grob, 4D21-1456 (Fla. 4th DCA March 30, 2022). US Bank filed a foreclosure complaint after the Grobs defaulted on their HELOC which was secured by a mortgage.
The Grobs moved to dismiss the complaint on the basis that the HELOC was “a non-negotiable instrument that could only be enforced by its owner.” The circuit court agreed and entered an order of dismissal finding US Bank lacked standing. US Bank appealed to the Fourth DCA which reversed the dismissal.
In reversing the dismissal, the Fourth DCA explained that although the HELOC was a non-negotiable instrument, an assignee of a non-negotiable instrument still obtained “all the rights of the assignor…” The Court concluded US Bank could initiate the foreclosure on behalf of MEB as MEB’s trustee and the fact US Bank’s servicer verified the complaint was a non-issue. The Court clarified: “The servicer’s involvement does not diminish the authority of the holder to foreclose. The Fourth DCA held the circuit court committed reversible error by dismissing the case since US Bank had standing to foreclose the HELOC and mortgage.