In another development in Florida effecting potentially thousands of borrowers hoping to get rid of their mortgage because of a dismissed foreclosure case, an influential appellate court has put another nail in that coffin. Relying on a long line of recent cases, it reiterated that a mortgage that is accelerated after default but then that foreclosure is defeated, can be defaulted and accelerated again - and again.
I have written on the issue of Quiet Title and mortgage foreclosure several times, with the first articles speaking to successful cases and as time went on and the Florida courts developed concepts adverse to borrowers, of the slow death of the concept of quieting title to eliminate a mortgage. See these articles, with the most recent being listed first:
QUIET TITLE ACTIONS - STATUTE OF LIMITATIONS BECOMING IRRELEVANT
FREE AND CLEAR WITHOUT PAYING THE MORTGAGE - QUIET TITLE IS FOR REAL
QUIET TITLE SCHEME GONE WRONG MAKES ATTORNEY GO MISSING
QUIET TITLE MORTGAGE FORECLOSURE DEFENSE MERITLESS IN FLORIDA
This week the 4th District Court of Appeal SFR VENTURES vs. GARCIA has reinforced that when a foreclosure case is dismissed, that does not mean that it can not again be brought under the concept of "res judicata" (which is simplistically that it was decided and cannot be tried again).
In SFR, the court decision the foreclosure case was dismissed by the court for failure to prosecute. The reason it was dismissed is not important to the legal concept - it could also have been a trial and the borrower won the case. The point is that whether it is a trial or a dismissal, it is still considered as having been decided on the merits. When a case is decided on the merits it cannot be retried based upon the same facts relating to the same conduct. The legal rule is called "res judicata" and it prohibits retrial of the same case.
However, the Florida courts have been taking the position that a new default of a payment AFTER the original default can be declared and if that is the basis for the new foreclosure then a new suit can be brought and it is NOT bared by the res judicata rule.
Many readers may then say - Hey!, if the loan was accelerated then how can there be future defaults for monthly payments? That is a really good question and it is one of the issues now before the Florida Supreme Court. It is discussed in my article about the Statute of Limitations with the link above.
It is important to note that this case was actually brought by a homeowner association that foreclosed on its lien for unpaid assessments and got title to the property. But it can just as well apply to a third party bidder at a foreclosure sale based on a homeowner or condominium association lien. Many such buyers have sought to eliminate the first mortgage based on this type of scenario.
Stay tuned to this blog for developing information.
------------------------------------------------------------------------------------------------------------------------------------------
© 2014 Richard P Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES
Comments (18)Subscribe to CommentsComment