Establishing the authority to foreclose a note and mortgage is simple when the note and mortgage are held by the original lender. In today’s world, banking institutions often seek to enforce notes and mortgages which have been endorsed in their favor from the original lender, either directly or through any number of intermediaries.

Bennett v. Deutsche Bank Nat’l Trust Co., a recent decision out of Florida’s Fourth DCA clarified the 2010 holding in Riggs v. Aurora Loan Services, LLC, in which the same court held that an endorsement on a note was self-authenticating pursuant to Florida Statute § 90.902(8). In Bennett the lender sought a summary final judgment of foreclosure, alleging that it possessed the authority to enforce the note and mortgage based upon two allonges that it filed with the foreclosure complaint. The first allonge contained an endorsement from the original lender to an intermediate holder of the note, and the second allonge contained an endorsement from the intermediate holder to the foreclosing lender. Importantly, both allonges were signed by the same individual.

In response to the bank’s foreclosure complaint, the defendants argued in their affirmative defenses that the endorser of both allonges lacked the authority to sign on behalf of the endorsing entities. The lender moved for summary judgment, relying on Riggs to argue that the signatures on the allonges were self-authenticating. However, the Court found that the issue of authentication or authority to endorse had not been raised in Riggs thus making that decision distinguishable.

Because the defendants in the Bennett case placed the validity of the endorsement signatures directly at issue in their answer, the burden shifted to the lender to prove that the endorser possessed the requisite authority to execute both (or either) of the allonges. The Bennett court found that a genuine issue of material fact existed as to the authority of the endorser, and, therefore, summary judgment was improper.

Although Bennett should not come as a surprise to lenders, it should serve as a reminder to verify the authority of all endorsements and signatures on pertinent documents before filing the foreclosure complaint. Failure to do so may be costly.