Consumer Finance Litigation

In Sas v. Federal National Mortgage Ass'n., No. 2D14-1003, 2015 WL 3609508 (Fla. 2d DCA June 10, 2015) the appellate court was faced with the issue of whether there was a requirement that the records custodian of the current loan servicer have personal knowledge of the manner in which the prior loan servicer maintained and created its business records in order for the records to be introduced into evidence under section 90.803(6), Fla. Stat. During the hearing on damages before the trial court, the current loan servicer, Seterus, had its records custodian testify that: he was familiar with Seterus's business practices in making and maintaining business records; the owner of the subject loan, Fannie Mae's record keeping requirements for mortgage loan servicers; and the mortgage loan servicing industry's general practices in making and maintaining records. Further, the records custodian testified that the prior servicer's payment history was audited by Seterus during the boarding process and that the payment history was updated by Seterus as payments were received. The borrower, Sas, objected to the records custodian's testimony and contended that there was a failure to lay the predicate for admission of Sas's payment history pursuant to section 90.803(6), Fla. Stat., because the custodian had no personal knowledge of the prior servicer's record keeping practices. The trial court agreed and entered a directed verdict in Sas's favor. Fannie Mae's motion for a new trial on damages was granted and asserted that it was error for the court to exclude the payment history pursuant to WAMCO XXVIII, Ltd., v. Integrated Electronic Environments, Inc., 903 So. 2d 230 (Fla. 2d DCA 2005), where the appellate court held that a prior note holder's business records could be admitted as business records because the current note holder relied on the prior note holder's documentation and checked the documentation for accuracy. On appeal, Sas contended that the trial court erred in applying WAMCO. This contention was rejected and the appellate court ruled that the trial court's application of WAMCO was proper. The appellate court held that the law is clear in that loan payment histories of a prior servicer are admissible under section 90.803(6), Fla. Stat., when they are relied on by a successor servicer who establishes that it independently verified the accuracy of the payment histories and its verification procedures demonstrate that the records are trustworthy. WAMCO, 903 So. 2d at 233; see also Bank of N.Y. v. Calloway, 157 So. 3d 1064 (Fla. 4th DCA 2015). There is no requirement that the records custodian have personal knowledge of the manner in which the prior servicer maintained and created its business records. See id. at 233 (noting that the records custodian lacked personal knowledge as to who at the successor servicer input the loan information, but that the business records were properly admitted into evidence); see also Calloway, 157 So. 3d at 1073; Glarum v. LaSalle Bank Nat'l Ass'n, 83 So. 3d 780, 782 n.2 (Fla. 4th DCA 2011).