## Facts

- Terry Rector (and Patricia Rector) executed a mortgage loan in favor of Chemical Residential Mortgage (CRM).
- After the Rectors defaulted, CRM filed a mortgage foreclosure action.
- CRM’s complaint alleged that CRM was the owner and holder of the note and mortgage, entitled to enforce them, and that the Rectors had defaulted.
- The Rectors did not timely respond to the foreclosure complaint.
- The trial court entered a final judgment of foreclosure on April 7, 1995.
- The trial court entered an order amending the final judgment on August 5, 1996.
- On April 23, 1997, CRM moved to amend the final judgment again and reset the foreclosure sale date.
- On June 30, 1997, the trial court denied CRM’s motion and vacated both the 1995 final judgment and the 1996 amended judgment, concluding the foreclosure complaint was defective because CRM had not attached a written, recorded assignment of the mortgage (or otherwise attached the recorded mortgage documents) to the complaint.
- CRM appealed the June 30, 1997 order and related rulings.

## Issues

1. Whether a foreclosure complaint that alleges the plaintiff is the owner and holder of the note and mortgage and that the borrower is in default states a cause of action without attaching a written, recorded assignment of the mortgage.
2. Whether borrowers who fail to timely respond to a foreclosure complaint may later contest the plaintiff’s alleged owner/holder status and default to support vacating a final foreclosure judgment.
3. Whether the trial court erred as a matter of law by vacating the foreclosure judgments and denying the motion to amend/reset the sale date based on the absence of an attached recorded assignment.

## Decision

- The First District Court of Appeal reversed the trial court’s June 30, 1997 order.
- The court held the complaint properly stated a cause of action for foreclosure by the holder of the note and mortgage.
- The court held that, by failing to timely respond, the Rectors waived any denial of the complaint’s allegations that CRM was the owner and holder of the note and mortgage and that the Rectors had defaulted.
- The court held that, because the mortgage lien follows the debt, CRM was not required to attach a written, recorded assignment of the mortgage to maintain the foreclosure action.
- The case was remanded with directions for the trial court to reinstate the April 7, 1995 final judgment of foreclosure, vacate the June 30, 1997 order and all subsequent orders, reconsider CRM’s motion to amend the final judgment and set a new sale date, and determine a reasonable appellate attorney’s fee for CRM.
- The Rectors’ motion for appellate attorney’s fees was denied; CRM was awarded appellate attorney’s fees.

## Legal Principles

- A foreclosure complaint is legally sufficient when it alleges the plaintiff is the owner and holder of the note and mortgage and alleges the borrower’s default.
- A defendant’s failure to timely respond results in a default that admits the complaint’s well-pleaded allegations, including allegations of holder status and default.
- Under Florida law, the mortgage lien follows the debt; therefore, attachment of a written, recorded assignment of the mortgage is not required to maintain a foreclosure action where the plaintiff sues as holder of the note and mortgage.
- A trial court errs by vacating a final judgment of foreclosure on the ground that the complaint did not attach a recorded assignment when the plaintiff pleaded holder status and the defendants defaulted.

## Conclusion

The First District reversed the order vacating the foreclosure judgments, holding that CRM’s complaint stated a valid foreclosure claim and that the Rectors’ default admitted CRM’s alleged holder status and the Rectors’ default; because the lien follows the debt, CRM was not required to attach a written, recorded mortgage assignment, and the trial court was directed to reinstate the original foreclosure judgment, set aside later orders, address the sale date, and award CRM appellate fees.


Chemical Residential Mortgage v. Rector, 742 So. 2d 300 (1998)