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OneWest Bank, FSB v. Palmero

Florida Court of Appeals, Third District

April 18, 2018

OneWest Bank, FSB, Appellant,
v.
Luisa Palmero, et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 10-3055 Abby Cynamon, Judge.

          Burr & Forman LLP and Joshua H. Threadcraft (Birmingham, AL), for appellant.

          Carrera & Amador, P.A. and Juan M. Carrera, for appellees.

          Before EMAS, LOGUE and LUCK, JJ.

          LUCK, J.

         The bank appeals the trial court's judgment for a surviving spouse in this reverse mortgage foreclosure case. After the borrower-husband passed away, and the bank sought to foreclose for non-payment, the trial court concluded that the surviving spouse was not a borrower under the loan but the bank still could not foreclose because the federal reverse mortgage statute prohibited foreclosure against a surviving spouse living in the mortgaged residence. We agree the surviving spouse was not a borrower but vacate the judgment and reverse because the trial court improperly relied on the statute that no one raised as a defense to the foreclosure action.

         Factual Background and Procedural History

         In September 2006, Roberto and Luisa Palmero spoke to a reverse mortgage counselor for an hour and received "information about the implications of and alternatives to a reverse mortgage." In a session tailored to their unique financial circumstances, the counselor spoke to the Palmeros about the impact of the reverse mortgage on their estate and heirs. After the counseling session, the Palmeros certified that they had discussed the financial implications of, and alternatives to, the reverse mortgage, and they understood its advantages and disadvantages, the payment plan, and its costs.

         In December 2006, the Palmeros mortgaged their home to Value Financial Mortgage Services, Inc. (The reverse mortgage was later assigned to OneWest Bank.) As part of the reverse mortgage, the Palmeros executed these five documents (among some others):

          1. The mortgage.

         In the mortgage, the borrower was defined as "Roberto Palmero, a married man reserving a life estate unto himself with the ramainderman [sic] to Luisa Palmero, his wife, Idania Palmero, a single woman and Rene Palmero, a single man." In the signature block, it said, "BY SIGNING BELOW, Borrower accepts and agrees to the terms contained in this Security Instrument and in any rider(s) executed by Borrower and recorded with it." Mr. and Mrs. Palmero signed as the borrower under this sentence.[1]

         2. The note.

         The note defined borrower to mean "each person signing at the end of this Note." Mr. Palmero was the only person who signed at the end of the note as the borrower.

         3. The loan application.

         In the loan application, the property was said to be in Mr. Palmero's name. Mr. Palmero was named as the borrower, and he signed as the borrower. Even though there was a space for a co-borrower, Mrs. Palmero was not listed as the co-borrower and she did not sign the loan application.

         4. The ...


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