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All the Time in the World. Creditors Gain Advantage in Filing Foreclosure Suits.


We recently blogged about a case, see http://www.gillattorneys.com/single-post/2016/06/27/Florida-Appellate-Court-Gives-Financial-Institutions-an-Almost-Unlimited-Statute-of-Limitations-to-File-Foreclosure-Complaints, Deutsche Bank Trust Co. Ams. v. Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016), that I felt could have far ranging implications in Florida.

The whole premise of Beauvais is that a mortgage is an installment loan with monthly payments due each month. If a debtor fails to make a monthly payment, a mortgage company can accelerate the loan based on the failure to make a certain payment even if the last payment was made more than five (5) years (Florida has a 5 year statute of limitations on written contracts) from the date of the acceleration.

When the housing market crashed in 2008, mortgage companies were not prepared for the onslaught of Florida consumers who either walked away from their homes or stopped paying their mortgages. It was not uncommon for mortgage companies to take up to three (3) years to transfer a delinquent account to a foreclosure law firm.

When foreclosure lawsuits were filed, debtors hired consumer attorneys whose sole purpose was to stall and see if the mortgage companies had the required documents and testimony required under a strict interpretation of Florida law. In many instances the mortgage companies dismissed their foreclosure lawsuits. Recent case law has made it much easier for mortgage companies to prevail in Florida courts.

In Bartram v. U.S. Bank, N.A., 2016 Fla. LEXIS 2424 (Fla. Nov. 3, 2016), the Florida Supreme Court addressed the same issue that was raised in Deutsche Bank Trust Co. Ams. v. Beauvais. In Bartram, the debtor stopped making payments on her $650,000.00 mortgage, a foreclosure lawsuit was filed and dismissed, and then a subsequent foreclosure action was filed more than five (5) years after the debtor’s original default.

On appeal, the Florida Supreme Court concluded that, “[a]bsent a contrary provision in the residential note and mortgage, dismissal of the original foreclosure action against the mortgagor has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage.”

The Court further added that “with each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right, but not the obligation, to accelerate all sums due under the note and mortgage.

Under Bartram, mortgage companies have the option of proceeding with foreclosure lawsuits on cases that may have been previously dismissed and/or not prosecuted. In fact, even if a mortgage company lost a case at trial, Bartram allows mortgage companies to file a subsequent lawsuit.

Many Florida debtors who were under the belief that they could live in their homes indefinitely, without paying the mortgage, may be in for a surprise. Many will now be faced with new foreclosure lawsuits and may be ultimately be forced out of their homes.

This case is a huge win for mortgage creditors.

To find out how the attorneys and staff at Gill Law Firm may assist you, please contact us at awgill@gillattorneys.com or by phone at (561) 454-0301.

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