DISTRICT COURT OF APPEAL OF FLORIDA

SECOND DISTRICT

JAMES DANIEL WALLACE and 

ALICE SEDENA ALLEN,

Appellants,

v.

NATIONSTAR MORTGAGE LLC d/b/a 

MR. COOPER, SUCCESSOR BY 

MERGER TO PACIFIC UNION 

FINANCIAL, LLC,

Appellee.

No. 2D23-926

January 17, 2024

Appeal from the Circuit Court for Pinellas County; Thomas M. 

Ramsberger, Judge.

Malcolm E. Harrison and Michelle Moore of Law Office of Malcolm E. 

Harrison, P.A., Wellington, for Appellants.

Amber Kourofsky of Troutman Pepper Hamilton Sanders LLP, Atlanta, 

Georgia; and Alec Hayes of Troutman Pepper Hamilton Sanders LLP, 

Atlanta, Georgia (substituted as counsel of record) for Appellee.

MORRIS, Judge.

James Wallace and Alice Allen (the borrowers) appeal a final 

judgment of foreclosure entered against them and in favor of Nationstar 
2

Mortgage LLC after a bench trial. We reverse the final judgment because 

the trial court erred in admitting an inadmissible business record that 

constituted the only evidence that Nationstar had complied with a 

condition precedent to filing suit.

The borrowers executed a note and mortgage in August 2017. The 

holder of the note, Pacific Union Financial, LLC, filed a foreclosure 

complaint against the borrowers in August 2018, alleging that the 

borrowers had defaulted on their loan in March 2018. Pacific Union later 

merged with Nationstar. After a bench trial in November 2022, the trial 

court entered a judgment of foreclosure in favor of Nationstar in April 

2023. 

On appeal, the borrowers raise several issues. We find merit only 

in their argument that the trial court erred in admitting a record that 

was inadmissible under the business records hearsay exception to show 

that Nationstar fulfilled a condition precedent to foreclosure.

In their answer to the complaint, the borrowers asserted that 

Nationstar failed to comply with 24 CFR § 203.604 (2018), a condition 

precedent to foreclosure of their FHA loan. That regulation provides in 

relevant part:

(b) The mortgagee must have a face-to-face interview 

with the mortgagor, or make a reasonable effort to arrange 

such a meeting, before three full monthly installments due on 

the mortgage are unpaid. If default occurs in a repayment 

plan arranged other than during a personal interview, the 

mortgagee must have a face-to-face meeting with the 

mortgagor, or make a reasonable attempt to arrange such a 

meeting within 30 days after such default and at least 30 

days before foreclosure is commenced . . . .

(c) A face-to-face meeting is not required if:

. . . .

(5) A reasonable effort to arrange a meeting is 

unsuccessful.
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(d) A reasonable effort to arrange a face-to-face meeting 

with the mortgagor shall consist at a minimum of one letter 

sent to the mortgagor certified by the Postal Service as having 

been dispatched. Such a reasonable effort to arrange a faceto-face meeting shall also include at least one trip to see the 

mortgagor at the mortgaged property, unless the mortgaged 

property is more than 200 miles from the mortgagee, its 

servicer, or a branch office of either, or it is known that the 

mortgagor is not residing in the mortgaged property.

24 CFR § 203.604.1 "[A] mortgagee's ability to foreclose upon an FHAbacked loan is cabined by these federal regulations." Kuhnsman v. Wells 

Fargo Bank, N.A., 311 So. 3d 980, 981-82 (Fla. 2d DCA 2020). "[T]he 

face-to-face interview [is] a condition precedent to foreclosure." Id. at 

984 (relying on Derouin v. Universal Am. Mortg. Co., 254 So. 3d 595 (Fla. 

2d DCA 2018)). However, "a lender complies with the regulation 

[requiring a face-to-face interview], despite not conducting the interview, 

so long as it demonstrates its 'reasonable efforts' to do so." Id. at 985. 

As laid out in § 203.604(d), a "reasonable effort" consists of one letter 

sent to the mortgagor and at least one trip to see the mortgagor at the 

property. See Kuhnsman, 311 So. 3d at 982 (quoting § 203.604(d)).

The dispute in this case centers on whether a trip was made to see 

the borrowers at their home. At trial, Nationstar introduced a record to 

1 Here, the borrowers raised noncompliance with § 203.604(b) as 

both a specific denial and an affirmative defense. See Derouin v. 

Universal Am. Mortg. Co., 254 So. 3d 595, 600 (Fla. 2d DCA 2018) 

(deciding to not weigh in on the conflict of "whether noncompliance with 

the regulations must be raised as an affirmative defense or as a specific 

denial in an answer" because the borrowers raised noncompliance as 

both an affirmative defense and a specific denial); see also Kuhnsman v. 

Wells Fargo Bank, N.A., 311 So. 3d 980, 984 (Fla. 2d DCA 2020) 

("Indisputably, the [borrowers] challenged Wells Fargo's compliance with 

the face-to-face interview requirement. Consequently, regardless of 

whether the requirement was raised as an affirmative defense or as a 

specific denial, the parties teed up the issue.").
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show that a field agent conducted a trip to the borrowers' home. The 

record is a document titled "Pacific Union F2F Results." The document 

notes that contact was attempted but was not made with the borrowers 

at their home on April 25, 2018, at 7:22 p.m. The borrowers' counsel 

objected to this document on the basis of hearsay, lack of foundation, 

and lack of personal knowledge. He argued that the witness, an 

employee for Nationstar, was unable to explain how the field agent notes 

were verified and that the record was therefore not trustworthy. The trial 

court ruled that the record was admissible based on the "onboarding 

process as testified by the witness."

"The standard of review for the admissibility of evidence is abuse of 

discretion." Deutsche Bank Nat'l Tr. Co. v. Sheward, 245 So. 3d 890, 892 

(Fla. 2d DCA 2018) (first citing Channell v. Deutsche Bank Nat'l Tr. Co., 

173 So. 3d 1017, 1018 (Fla. 2d DCA 2015); and then citing Bayview 

Loan Servicing, LLC v. Kay, 227 So. 3d 779, 781 (Fla. 1st DCA 2017)). 

But "the question of whether evidence meets the statutory definition of 

hearsay is a matter of law and thus subject to de novo review." Id. (citing 

Burkey v. State, 922 So. 2d 1033, 1035 (Fla. 4th DCA 2006)).

To be admissible [as business records under section 

90.803(6)(a), Florida Statutes], the movant is required to 

establish the following: 

(1) the record was made at or near the time of the 

event; (2) was made by or from information 

transmitted by a person with knowledge; (3) was 

kept in the ordinary course of a regularly 

conducted business activity; and (4) that it was a 

regular practice of that business to make such a 

record.

Yisreal v. State, 993 So. 2d 952, 956 (Fla. 2008) (citing 

Jackson v. State, 738 So. 2d 382, 386 (Fla. 4th DCA 1999)).

Additionally, in those instances where a business takes 

custody of another business's records and integrates them 

within its own records, "the acquired records are treated as 
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having been 'made' by the successor business, such that both 

records constitute the successor business's singular 'business 

record.' " Bank of N.Y. v. Calloway, 157 So. 3d 1064, 1071 

(Fla. 4th DCA 2015) (quoting United States v. Adefehinti, 510 

F.3d 319, 326 (D.C. Cir. 2007)). "[A] witness can lay the 

foundation for business records of another company," 

Bayview Loan Servicing, 227 So. 3d at 781, and "[t]here is no 

requirement that the records custodian have personal 

knowledge of the manner in which the prior servicer 

maintained and created its business records." Sas v. Fed. 

Nat'l Mortg. Ass'n, 165 So. 3d 849, 851 (Fla. 2d DCA 2015) 

(citing WAMCO XXVIII, Ltd. v. Integrated Elec. Env'ts, Inc., 903 

So. 2d 230, 233 (Fla. 2d DCA 2005)). What is required, 

however, is independent verification of the loan payment 

history. WAMCO XXVIII, 903 So. 2d at 233; Holt v. Calchas, 

LLC, 155 So. 3d 499, 504 (Fla. 4th DCA 2015). A successor 

business may establish the trustworthiness of records "by 

independently confirming the accuracy of the third-party's 

business records upon receipt." Bank of N.Y., 157 So. 3d at 

1072.

Id. at 893 (second and third alterations in original) (holding that 

witness's "testimony set forth the procedures utilized by [servicer] to 

independently verify the accuracy of the payment history records from 

the prior loan servicer" and that trial court therefore erred in excluding 

payment history). 

A record does not constitute an admissible business record if "the 

sources of information or other circumstances show lack of 

trustworthiness." § 90.803(6)(a), Fla. Stat. (2022). 

Given this trustworthiness threshold, mere 

" 'reliance by the [incorporating business] on records created 

by others, although an important part of establishing 

trustworthiness, without more is' " insufficient. State v. 

Fitzwater, 122 Hawai'i 354, 227 P.3d 520, 532 (2010) 

(quoting 2 Kenneth S. Broun et al., McCormick on Evidence § 

292, at 318 (6th ed. 2006)). In most instances, a proponent 

will clear this hurdle by providing evidence of a business 

relationship or contractual obligation between the parties that 

ensures a substantial incentive for accuracy. See, e.g., Matter 
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of Ollag Constr. Equip. Corp., 665 F.2d 43, 46 (2d Cir. 1981) 

("[B]usiness records are admissible if witnesses testify that 

the records are integrated into a company's records and relied 

upon in its day-to-day operations." (citations omitted)); White 

Indus., Inc. v. Cessna Aircraft Co., 611 F. Supp. 1049, 1061 

(W.D. Mo. 1985) (finding the "indicia of trustworthiness" 

apparent "where the reporting duty arises by way of a 

continuing business relationship between two independent 

business entities"). In the alternative—as tacitly applied in 

WAMCO—the successor business itself may establish 

trustworthiness by independently confirming the accuracy of 

the third-party's business records upon receipt. See, e.g., 

Simien v. Unifund CCR Partners, 321 S.W.3d 235, 243 (Tex. 

App.-Houston [1 Dist.] 2010) ("[A] document created by one 

business may become the records of a second business if the 

second business 'determines the accuracy of the information 

generated by the first business.' " (quoting Martinez v. 

Midland Credit Mgmt., Inc., 250 S.W.3d 481, 485 (Tex.App.-El 

Paso 2008, no pet.))). 

Calloway, 157 So. 3d at 1071-72 (alterations in original).

Courts have held that records from a prior servicer or bank are 

admissible as business records when the witness for the current servicer 

or bank specifically testifies regarding the current servicer's or bank's 

process of verifying the information from the prior servicer or bank. See, 

e.g., WAMCO XXVIII, 903 So. 2d at 233 (holding that the loan payment 

histories of a prior servicer are admissible under section 90.803(6) 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); 

Azran Miami 2 LLC v. Deutsche Bank Nat'l Tr. Co., 282 So. 3d 924, 927 

(Fla. 3d DCA 2019) ("The Bank's witness, the records custodian from 

Select Portfolio Servicing, testified that as his company was the 

subsequent servicer of the mortgage, that he was familiar with the 

Bank's boarding process, and that the records were verified and boarded 
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accordingly. . . . The circumstances of the loan transfer itself would have 

been sufficient to establish trustworthiness given the business 

relationships and common practices inherent among lending institutions 

acquiring and selling loans." (citing Calloway, 157 So. 3d at 1073)); Le v. 

U.S. Bank, 165 So. 3d 776, 778 (Fla. 5th DCA 2015) ("Although there was 

no testimony that [the witness] worked for the prior servicer, she testified 

that she was familiar with industry standards in recording and 

maintaining the records and that the records received from the prior 

servicer were tested for accuracy and compliance with industry 

standards via a boarding process before the information was input into 

SLS's system. She was able to testify regarding the specifics of SLS's 

verification process. This was sufficient evidence of the records' 

trustworthiness."). 

Here, the witness testified that he was familiar with the system 

used by Nationstar to service its loans, including the instant loan. He 

also testified regarding the onboarding process used when Nationstar 

acquires a loan from another servicer. Those records are relied upon by 

Nationstar, and those records are checked for accuracy and to confirm 

that they conform to industry standards. As for the instant loan, 

Nationstar "went through the onboarding process and . . . did not see 

any issues, and so there was no remedial process engaged in because no 

issues were found." 

However, the witness admitted that the field call notes were not 

created by Nationstar or its predecessor, Pacific Union. Rather, the field 

call notes came from one of Pacific Union's vendors, JM Adjustment 

Services (JMA). The witness had never worked for JMA, had never been 

trained by JMA, and was not familiar with the recordkeeping or policies 

and procedures of JMA. The witness agreed that when Nationstar 
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onboards loan histories from prior servicers, it verifies the accuracy of 

the loan histories, normally checking the figures mathematically. He 

agreed that the field call notes could not be verified mathematically: 

"[T]he information that we receive from prior servicers is not always 

mathematical information. We do review their business practices about 

record creation and maintenance and relationships with vendors and 

servicing of the loans that they have, in addition to reviewing the 

information that we received from them." The witness could not point to 

any records demonstrating that Nationstar independently verified the 

information in the field call notes. He went on:

I do know that our boarding process requires communication 

with prior servicers and we search our due diligence about 

their business practices, which would have included this type 

of information. But as far as whether someone picked up the 

phone or sent an email to JMA, I could not attest to that. 

This case is distinguishable from those cases that generally allow 

the admission of records of a prior servicer based on witness testimony 

from the successor servicer regarding the onboarding process of the loan 

records. Here, Nationstar relied on business records of Pacific Union, a 

third party, which include a record of a fourth party. And this record 

was not being relied upon to show a figure verifiable through the prior 

servicer's records, such as amount due on the loan or payment history. 

Rather, this record purportedly documented an event that was offered to 

prove compliance with a condition precedent. The witness was unable to 

testify regarding Pacific Union's relationship with the vendor, JMA, that 

would ensure the accuracy of the record, and the witness did not 

establish that Nationstar verified the accuracy of this document when it 

obtained the loan records from Pacific Union. Further, the witness's 

testimony regarding the general onboarding process of Pacific Union's 

records was not sufficient to prove that the record created by JMA was 
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admissible under the business records exception. Accordingly, the trial 

court erred in finding that the "onboarding process as testified by the 

witness" was sufficient to satisfy the business records exception to 

hearsay.

Without the record introduced by Nationstar, Nationstar was 

unable to show compliance with § 203.604, a condition precedent to 

foreclosure. Accordingly, we reverse the final judgment entered in 

Nationstar's favor and remand for the trial court to enter judgment in 

favor of the borrowers. See Mace v. M&T Bank, 292 So. 3d 1215, 1224 

n.3 (Fla. 2d DCA 2020) ("In nonjury cases where a party has not moved 

for involuntary dismissal but nonetheless shows on appeal that the 

evidence is insufficient to support the judgment, see Fla. R. Civ. P. 

1.530(e), the correct instruction would be to enter a judgment in favor of 

the appellant, see Winchel v. PennyMac Corp., 222 So. 3d 639, 646 n.5 

(Fla. 2d DCA 2017)."). 2

Reversed and remanded. 

NORTHCUTT and SMITH, JJ., Concur.

Opinion subject to revision prior to official publication.

2 The borrowers argue on appeal that a final judgment should be 

entered in their favor. At the bench trial, they argued that Nationstar 

was not entitled to a foreclosure judgment; they did not move for an 

involuntary dismissal.