A Charlotte law firm accused of botching a real estate closing in 1999 has successfully shooed away the loan servicing company that brought the ill-advised malpractice action.
Ocwen Loan Servicing filed a federal suit against Foodman Hunter & Karres alleging that the firm’s mistakes at the closing prevented Ocwen from foreclosing on a property in North Myrtle Beach.
What little paperwork that still existed in the case was a sloppy mess. For instance, the section of the mortgage assignment document that was supposed to include information on the recording of the underlying mortgage was blank.
The document also identified the wrong property.
But none of that was Foodman Hunter’s fault. The bank that transferred the original mortgage was to blame for the terrible recordkeeping, according to a Sept. 9 order from U.S. District Judge David Keesler of Charlotte.
But even if the firm had handled the closing, an allegation that Foodman Hunter disputed, Ocwen still would not have standing to sue because it never obtained the rights to service the loan at issue, Keesler found. He dismissed Ocwen’s suit.
“We argued that there was not an appropriate assignment and, ultimately, no filing of the mortgage and someone should have realized that long ago,” said an attorney for Foodman Hunter, Ryan Bolick of Cranfill Sumner & Hartzog in Charlotte.
Ocwen’s attorney declined to comment.
Meanwhile, Bolick said his clients were pushed into a difficult situation by being forced to defend themselves for something they allegedly did 16 years ago. Building the firm’s defense was complicated by the fact that it no longer had any files related to the closing. Lawyers are required to keep client files for six years before they’re sent to the shredder.
“They were understandably upset that something came back from so long ago,” Bolick added.
But now that Ocwen’s suit has been rejected Foodman Hunter can go ahead and party like it’s 1999.