Florida Supreme Court Rules in Favor of Mortgage Lenders in Foreclosure Decision

by San Antonio Attorney

The Florida Supreme Court on Nov. 3 decided in favor of mortgage lenders in a ruling that advocates of homeowners say will cause renewed confusion for several borrowers on whether they will be able to remain in their homes.

It is possible that mortgage lenders are going to file another round of foreclosure lawsuits against borrowers who prevailed in the foreclosure cases about five years ago in the event the borrowers fail to keep up with the payments again in the course of five years of the dismissal of the first case, the court order says.  Borrowers have stressed out that the statute of limitations is five years.  The attorney of one borrower said closure has been removed for many borrowers because the statute of limitations was not applied in the case.

But the attorney representing the mortgage lenders said if the court decided in favor of the borrowers, it would be devastating to the mortgage industry.  He projected that lenders in Florida would have lost $300 million to $400 million security in real property.

The Bartram ruling covers mortgage agreements that have an acceleration clause, which means that in case a homeowner does not pay, the lender can demand the full unpaid amount of the loan be paid right away.

The justices discovered that when foreclosure lawsuits are dismissed, borrowers and lenders go back to their status before the foreclosure complaint.  The homeowners are able to continue their installment payments, instead of paying them all at once.

It also restores the right of mortgage lenders to require acceleration and foreclose on a property based on the subsequent non-payment of the borrowers, as stated in the court ruling of Justice Barbara Pariente.  For that reason, the statute of limitations is not applicable on the amount owed under the mortgage loan.

 

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