This one’s for you, Tony – and for everyone else trying to find ways to beat those evil banksters.
Homeowners can win a foreclosure trial in a variety of ways. One of my favorites is when the bank is unable to prove its case because it is unable to get information from the prior servicer into evidence. Let me explain.
By the time a foreclosure case gets to trial, it’s rare that the plaintiff prosecuting the case was the same bank that loaned the money. Typically, these loans have changed hands many times by the time trial rolls around. Often, the servicer of the loans change even from the time the foreclosure lawsuit was first filed. Even if you have no legal training, it’s not hard to imagine the evidentiary problems this poses for plaintiffs at a foreclosure trial.
For example, suppose Bank of America was the servicer at the time the paragraph 22 letter was sent, but Nationstar is the servicer at the time of trial. In a normal lawsuit, when the plaintiff goes to trial, it would subpoena any third-party witnesses to trial (e.g. a records custodian or employee of Bank of America) to ensure they can testify. In foreclosure-world, though, that virtually never happens. If Nationstar is the Plaintiff/servicer, you can almost rest assured that one witness will come to trial – an employee of Nationstar (and by “employee,” I mean someone whose sole job entails robo-perjuring, I mean testifying, at foreclosure trials). Well, just think about it. If the only witness at trial is from Nationstar, but Bank of America is the company that allegedly sent the paragraph 22 letter, then how can the employee of Nationstar testify that the paragraph 22 letter was sent? “I work for Nationstar, and I’ve never worked for Bank of America, but I’m here today under oath to say that Bank of America sent this letter.” Huh?
Likewise, if the payment history was a Bank of America payment history up until the time the loan was service transferred to Nationstar, then how can the Nationstar witness testify about the payment history for a company that he/she never worked for?
There is no easy answer to these questions. This is, frankly, one of the most hotly-contested legal issues in foreclosure-world nowadays. To illustrate, take a look at Hunter v. Aurora Loan Svcs., LLC, 137 So. 3d 570 (Fla. 1st DCA 2014). In that case, Florida’s First District Court of Appeal reversed a final judgment of foreclosure, finding the bank was unable to properly admit into evidence business records from the prior servicer. Here’s the portion of that decision I highlight for judges when I take this case to trial:
Here, Mr. Martin’s testimony failed to establish the necessary foundation for admitting the Account Balance Report and the consolidated notes log into evidence under the business records exception. Mr. Martin was neither a current nor former employee of MortgageIT, and otherwise lacked particular knowledge of MortgageIT’s record-keeping procedures. Absent such personal knowledge, he was unable to substantiate when the records were made, whether the information they contain derived from a person with knowledge, whether MortgageIT regularly made such records, or, indeed, whether the records belonged to MortgageIT in the first place. His testimony about standard mortgage industry practice only arguably established that such records are generated and kept in the ordinary course of mortgage loan servicing. … The Account Balance Report and consolidated notes log Aurora relied on were incorrectly admitted into evidence as business records, and therefore, could not serve to establish Aurora’s standing to sue Mr. Hunter in foreclosure
I recently prevailed at a foreclosure trial with precisely this argument. The witness was a records custodian for Cenlar, the plaintiff, and never worked for the prior servicer. When Cenlar tried to introduce the loan history of that prior servicer into evidence, the judge did not allow it. As a result, Cenlar was unable to prove the amount due – an essential requirement for banks in foreclosure cases in Florida – and ultimately entered judgment for my client. If that sounds odd, just think about it. Without the prior servicer’s loan history in evidence, how could Cenlar prove the principal balance owed on the Note? It couldn’t. Sure, Cenlar’s payment history had a principal balance listed on it. But that principal balance was taken from the prior servicer’s records, which were excluded from evidence. Unable to prove the amount due, Cenlar lost that trial.
Cenlar tried to argue otherwise in this Motion for Rehearing, but my response to that motion prompted the Court to enter this Order Denying Rehearing.
This sounds foolproof, right? If the plaintiff/servicer changes in most foreclosure cases, and the banks only bring one witness to trial, i.e. a corporate representative for the current plaintiff/servicer, then banks are systematically unable to prove their cases … so homeowners should win all the time, right? Just think about it. If the Paragraph 22 letter is on Bank of America letterhead and the witness is from Nationstar – ha! Nationstar can’t prove the letter was sent; homeowner wins. The first half of the payment history was maintained by Bank of America, but the witness at trial is from Nationstar – ha! Nationstar can’t prove the amount due. This sounds great, but, unfortunately, it’s not that simple.
In Wamco XXVIII, Ltd. v. Integrated Electronic Environments, Inc., Florida’s Second District Court of Appeal allowed a current servicer to testify about the prior servicer’s business records. 903 So. 2d 230 (Fla. 2d DCA 2014). In my everyday foreclosure practice, banks regularly cite this case in conjunction with testimony about the “boarding process.” According to these robo-perjurers (I’m sorry, I mean persons whose sole job it is to testify at foreclosure trials), the current bank/servicer has a process where they “verify” the accuracy of the information from the prior servicer’s records. And since that information has been “verified,” the current servicer can incorporate that information into its records, adopting it as its own, and use that information to testify at trial. Hence, the information might be generated by a different company, but the current plaintiff can testify about it. Nationstar has an employee at trial with a Bank of America payment history in hand? That’s just fine – Nationstar incorporated that payment history into its records via a “boarding process,” ensuring the accuracy of that information before doing so. Never mind, of course, that it is necessarily impossible for Nationstar to actually verify any of that information without actually talking to Bank of America and/or obtaining the underlying information … but I digress. That’s the bag of rocks the banks are regularly selling our courts … and as we saw in Wamco, it sometimes works.
So how do I handle this situation? Which case is right, Hunter or Wamco? Are those decisions in conflict? Personally, I show judges Hunter, and I distinguish Wamco because the witness in that case personally “overs[aw] collections” of loans and was “personally involved” in the servicing of the loans. In my trials, the witnesses almost never fit the criteria in Wamco, so Hunter is more analogous, I argue.
Some judges don’t like this argument. They don’t want homeowners who haven’t paid their mortgage to win on “technicalities” like this. My response? The evidence code is not a technicality, and the rules aren’t different for foreclosure cases. In fact, I rarely give an opening statement in foreclosure trials, but when I do, it’s usually that. “Judge, I simply remind the court that the rules of evidence are not different just because this is a foreclosure case.” Plus, I find little reason to cater to banks on evidentiary issues when they could issue subpoenas to these third-party witnesses; they just systematically refuse to do so. Why? In my view, it’s because they know the court system is, more often than not, going to bail them out, allowing them to get away with bending the rules to facilitate their foreclosures. Rules be damned – we’ve got foreclosures to process!
Like most things in foreclosure-world, my evidentiary objections on issues like this sometimes work and sometimes don’t. But hey, we’re talking about homeowners in foreclosure. Anything that works even some of the time is another tool for the toolbox. And if your judge doesn’t like it, make sure you remind the Court. ”The rules of evidence aren’t different just because this is a foreclosure case.”
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Today’s inspiration just met me in my office.
He’s a Florida homeowner who used to be wealthy but lost it all in the Great Recession. Over the past few years, he’s read my blog, used it to defeat five foreclosure cases (pro se, but with the help of a non-foreclosure lawyer). At the same time, he’s started rebuilding his financial affairs and realized he wished he had given away more money when he had it. Inspired by my cash giveaways to the homeless, he wanted to contribute to my give-aways. Yes, he’s an anonymous donor.
Instead of cash handouts to the homeless, though, he wants to pay me to take a few foreclosure cases for homeowners who otherwise wouldn’t be able to pay. He thinks that better targets those in need.
As a result, in the next few months, I’ll be looking for such homeowners as they come in the door. Don’t ask – you’ll be turned down (and that’s not how this works). Instead, just know that I’ll be looking for such homeowners, with the help of this anonymous donor who wants to contribute to the cause.
Pay it forward, folks. Together, we’ll change the world.
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Original Story: WTSP
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I recently had a trial which, in my view, exposed everything that is wrong with foreclosure-world. But first, a little background …
In most civil lawsuits, it’s up to the parties to set a trial date. Courts don’t set trials on their own; the parties do. In foreclosure-world, though, little is normal. For many months now in Courts throughout Florida, it’s the Courts that take it upon themselves to set cases for trial. Candidly, this dynamic has always driven me crazy. From a defense perspective, when Courts take it upon themselves to set trial, it feels like the Courts are helping the banks prosecute their cases – helping them foreclose on homeowners faster. Some might disagree, arguing either side could win at trial and the Courts are just managing their dockets. But think about it. In 99.99% of foreclosure cases, the banks are the only party seeking relief. Hence, in my view, when a Court takes it upon itself to set a trial, it’s like the Court is saying “you’ve sued for foreclosure, bank? You want relief from the Court? Here, come to this trial date so you can foreclose on this house sooner.” Maybe that’s not what is intended, but as a defense lawyer, that’s how it feels. (If you disagree, then you tell me – how does a quicker trial date help a homeowner?)
It doesn’t always feel that way, of course. Sometimes, the good judges in Florida will dismiss cases at trial when the law and facts require it. So am I saying the system is only fair when cases are dismissed? Of course not. For me, the fairness of the system is often seen not in the result at trial, but whether the Court insists on going forward with the trials that it scheduled.
Consider a recent trial I had in Brevard County. It was a six year old foreclosure case, filed in 2008. Trial had been set twice by the Court and continued once at the Plaintiff’s request. Here we were, at trial the second time, and Plaintiff was verbally requesting another continuance. Plaintiff had no written motion, see Fla.R.Civ.P. 1.460, and, frankly, had no good reason whatsoever for a continuance.
What should a Court do in this situation? It’s a six-year-old foreclosure case. The Court set trial on its own initiative, on the basis that it had to advance the case to resolution to manage its docket. I’m there, per the Court’s Order, ready for trial. Should the Court grant another continuance? To get another continuance, the Plaintiff should need to have a really darn good reason, right? Homeowners certainly wouldn’t get a continuance at trial in a six-year-old foreclosure case without a darn good reason, would they? So why should a bank?
You read the transcript of the Transcript of the hearing and you tell me. Did the Plaintiff have a good reason for a continuance? I sure didn’t think so, and, if I’m being honest, I felt like I thoroughly destroyed the bank’s argument for a continuance. At trial, the bank argued that a Pooling and Servicing Agreement was off by one number, and that was the reason they needed a continuance. I was shocked, as the PSA had not been produced in discovery, identified as an exhibit, or in any way mentioned as part of Plaintiff’s case. For me, this was a totally irrelevant document, yet Plaintiff was using an irrelevant error as a pretense for a continuance to which it was not entitled. That document was not even relevant, and Plaintiff (as the party seeking the continuance) was not even explaining how it was relevant!
As I argued to the judge, I thought the integrity of the judicial system required that continuance be denied. Otherwise, as I explained, Courts come across as little more than debt collectors for the banks. “Here, come to trial and get a judgment. Oh, you’re not ready for your judgment today? Come back in a couple of months and get a judgment then. Oh, you’re still not ready? Come back in a couple more months and you can foreclose then.”
At some point, particularly when Courts set the trial dates, the integrity of the system requires that these continuances be denied. If the bank has a really good reason for a continuance – something that, as the judge said in the final paragraph of the transcript, would truly deprive the bank of its day in court (e.g. the witness’ car broke down coming to trial, death in the family, unexpected emergency), then fine – I get that. But where the bank argues for a continuance based on a document that was not even relevant in the case, six years into a foreclosure lawsuit that had already been continued once – that’s emblematic of a system gone awry.
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While waiting for my foreclosure trial to begin in Lee County this afternoon, the judge announced in open court that the parties (in the case before mine) should be aware of the Order granting a stay pending appeal in Green Tree Servicing, LLC v. Veilleux, Lee County Case No. 08-CA-16469. I immediately thought to myself “hey, that’s my case – I drafted that Order!” Apparently, that Order is the template the Lee County judges use when granting a stay pending appeal in a foreclosure case, as the judge brought it up on his own.
Take a look at the Order. It required my client to maintain the property during the appeal (which she was doing anyway), pay property taxes during the appeal, get homeowners insurance during the appeal (or, alternatively, pay $2,500 into the court registry), and pay $7,500 into the Court registry. That might sound like a lot for this homeowner to do, but think of it this way … she lost the foreclosure trial and her home was set to be sold, yet gets to live in the property without paying the mortgage during the pendency of the appeal, and she did not have to post a bond, either. Plus, if she wins the appeal (and I like her chances), then all of the money in the registry will be returned to her.
If the Lee County judges (a county that’s not exactly known as being friendly to foreclosure defense, mind you) think this Order is a good template, then anyone seeking a stay pending appeal in a foreclosure case should at least be aware of this Order. See also Fla.R.Civ.P. 9.310. Yes, I’ve had occasion to get a stay with fewer requirements, but judges have a lot of discretion on the conditions to impose for a stay, and this Order should give you a good idea of what some bank-friendly judges are looking for to give a stay.
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I get a lot of calls from homeowners wanting help on appeals, and unfortunately I have to turn many of them away. You see, going to the appellate courts is expensive (even after I throw in the standard Stopa discount for Florida consumers), it’s very hard to win, and many homeowners fail at the procedural requirements that are necessary to prevail on appeal (e.g. timely appeal, timely motion for rehearing, transcript of the trial proceedings).
One homeowner’s fact pattern, however, grabbed my attention. This homeowner proved at trial that the original promissory note was sitting in a court file in a totally different lawsuit – filed by a totally different plaintiff – at the time suit was filed against her. As a result, it seemed clear to me the bank lacked standing at the inception of the case, so I took the appeal and filed this Initial Brief. The bank responded with an Answer Brief that surprised me (though after so many years of doing this, I guess I shouldn’t be surprised). The bank didn’t even try to counter my argument that it was not the “holder” when it filed suit, but how could it? The note was in a different court file with a different plaintiff. Rather, the bank argued it had standing via an Assignment of Mortgage. As I explained in this Reply Brief, however, that assignment could not convey standing because the assignor had already assigned the Note and Mortgage to a totally different entity two years prior, and the assignment only transferred the Mortgage, not the Note.
I do a lot of appellate writing, and I’m constantly trying to help consumers and prospective clients understand what it takes to win on appeal. The Fourth District hasn’t ruled yet (so perhaps I’m counting my eggs before they hatch), but this is my explanation of what it takes. The original Note in this case was sitting in a totally different court file, filed by a totally different plaintiff, at the time my client was sued for foreclosure, and when the bank tried to change course and rely on an assignment, I showed that assignment was insufficient to transfer the Note and Mortgage to that Plaintiff for two different, clear-cut reasons.
I guess what I’m saying is this … don’t give up on your appeals, folks. Just know that winning requires a transcript of the trial proceedings, a timely notice of appeal, and a fact pattern as compelling as this one.
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“Home is a notion that only nations of the homeless fully appreciate and only the uprooted comprehend.” Wallace Stegner, Angle of Repose.
Last month, I pledged to hand out $2,000 in cash each month for the rest of the year to the homeless. This month, my journey took me to downtown Tampa – the place where I’ve had more foreclosure cases than anywhere else. Upon arriving, instead of just handing out hundreds right away, I stood. I watched. I watched several men near Stetson with all of their worldly belongings in backpacks on the ground. I watched several other men near the Salvation Army on Estelle St. huddled around a plastic chess board, a few of them sleeping in the dirt, their clothes clearly not washed for a long time.
Watching them, it reminded me of that quote (above). Re-read it. Think about it. Do you know what it’s like to be homeless? Do judges? Do Plaintiffs’ attorneys? Does anyone involved in foreclosure-world know what it’s like (other than the homeowners themselves)? To fear being thrown on the street? I’ll admit it – I don’t. Oh, I counsel those in that situation, and I try to empathize with their plight. But do I *really* know what that feels like? No. That was clear to me as I watched those men, lying on the ground, dirty, hungry, and homeless.
This month, I didn’t hand out $2,000 in cash to these men I encountered. I handed out $2,100. The extra $100 wasn’t my money – it was a from a client, a wonderful man who sent me money with this letter. Read the letter. No, really – read it. That letter … that’s what it’s all about, folks. If you can’t relate to those for whom we’re fighting, then pay it forward. If you’re reading this blog, chances are you’re far better off than many others in the foreclosure crisis. Thank you, Clay Peck. Thank you for your kind words and your inspiration.
Years from now, when the foreclosure mess is all over, I don’t want people to remember Mark Stopa as the smartest or the best. I want people to know I cared. I want people to remember I always left a piece of myself, everywhere I went. Every hearing, every case, every argument, every brief … I tried. I might not truly comprehend the plight of the homeless, but I want everyone who crosses my path to know I care. Because, more than anything, that’s what’s missing in foreclosure-world nowadays.
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I won a trial today because the bank couldn’t prove it complied with the face-to-face counseling requirements in 24 CFR 203.604. I’ve gotten numerous foreclosure lawsuits dismissed on this argument, and it’s past time I share the argument on this blog.
Most mortgages I encounter in foreclosure-world are Fannie Mae mortgages which include the standard, paragraph 22 language. For all such mortgages, this argument does *not* apply. Unfortunately, there is no obligation to provide face-to-face counseling or to satisfy the requirements of 24 CFR 203.604 unless we’re dealing with an FHA Mortgage.
Of the 10% or so of mortgages that aren’t Fannie Mae mortgages, most are FHA mortgages. Hence, this argument applies, by my estimate, to less than 10% of all mortgage foreclosure cases in Florida. That might not seem like a lot, but if you think about the many thousands of cases pending, countless homeowner can benefit by understanding this argument. (I’m only licensed to practice law in Florida, but it certainly seems to me like this argument would work just as well in other states, particularly when you look at the out-of-state cases I’ve cited, below.)
So how do you know if you have an FHA Mortgage? Easy. Most FHA Mortgages will plainly say ”FHA” on the bottom of each page. Also, if it’s an FHA Mortgage, it will likely refer to the Regulations of the Secretary of Housing and Urban Development in paragraph 9 of the Mortgage and paragraph 6 of the Note. In particular, paragraph 9 of that Mortgage will look something like this …
9. Grounds for Acceleration of Debt.
(a) Default. Lender may, except as limited by regulations issued by the Secretary in the case of payment defaults, require immediate payment in full of all sums secured by this Security Instrument …
(d) Regulations of HUD Secretary. In many circumstances Regulations issued by the Secretary will limit lender’s rights, in case of payment defaults, to require immediate payment in full and foreclose if not paid. This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary.
Meanwhile, if your Mortgage is an FHA Mortgage, paragraph 6 of the Note that secures that Mortgage will likely look something like this …
6. BORROWER’S FAILURE TO PAY …
(b) Default. If Borrower defaults by failing to pay in full any monthly payment, then lender may, except as limited by Regulations of the Secretary in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest. … In many circumstances regulations issued by the Secretary will limit lender’s right to require immediate payment in full in the case of payment defaults. This Note does not authorize acceleration when not permitted by HUD Regulations. As used in this Note, “Secretary” means the Secretary of Housing and Urban Development and his or her designee.
That language might sound like Greek to you. Who is the Secretary? And what are the Regulations of the Secretary of Housing and Urban Development? Well, those regulations are hundreds of pages long. One regulation, however, is very simple – barely one page. 24 CFR 203.604 requires the lender provide face-to-face counseling before accelerating and before filing suit. (You don’t need to be a lawyer to find that regulation – just google it. 24 CFR 203.604.) In my experience, the face-to-face counseling required by this regulation almost never happens. It’s supposed to, but it doesn’t. (I know, it’s shocking that banks don’t do what they’re supposed to do.) As a result, this gives homeowners with an FHA mortgage an excellent defense in a foreclosure case, i.e. the lender did not comply with a condition precedent to suit – the face-to-face counseling requirements of 24 CFR 203.604.
Like any other defense in foreclosure-world, this is hardly foolproof. I believe it requires competent counsel to raise the argument properly. That said, I’ll try to take you through the argument so you can understand it.
Like most defenses, raising this issue starts at the pleading stage. When a bank alleges in its Complaint that it complied with all conditions precedent, the homeowner must specifically deny this condition precedent in his answer to preserve the issue. Once the homeowner does so, it becomes the bank’s burden at trial to prove compliance with this condition precedent, i.e. prove it provided the counseling. See Sheriff of Orange County v. Boultbee, 595 So. 2d 985 (Fla. 5th DCA 1992).
There are five exceptions to the bank’s obligation to provide this counseling, and they’re set forth right in the regulation. The face-to-face counseling is not required if: (1) the mortgagor does not reside in the property; (2) the mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either; (3) the mortgagor has clearly indicated he will not cooperate in the interview; (4) a repayment plan consistent with the mortgagor’s circumstances is entered into to bring the mortgagor’s account current thus making a meeting unnecessary, and payments thereunder are current; or (5) a reasonable effort to arrange such a meeting is unsuccessful.
Exceptions 3 and 4 rarely come up, and, in my experience, they’re difficult for the bank to prove. Exception 2, the bank not having an office within 200 miles, never comes up if the Plaintiff is Bank of America or Wells Fargo – those banks have offices virtually everywhere. It sometimes comes up if the Plaintiff is US Bank, though. That said, note that the language in the regulation is broad – within 200 miles of the mortgagee, its servicer, or a branch office of either. As a result, most foreclosure plaintiffs won’t be able to avail themselves of this exception.
Exception 1 will preclude investors from using this as a defense, but the timing here is important. It doesn’t matter if the homeowner still lives in the property at the time of trial or at the time the case was filed – the key question is whether the homeowner lived in the property within 30 days after default or within 30 days of suit being filed. See 24 CFR 203.604(b). If so, then this exception won’t save the bank, either.
Most often, if the bank did not perform the required counseling, it will try to argue it made a “reasonable effort” to do so. However, a “reasonable effort” is defined in subsection (d) as requiring both a letter be sent by certified mail offering the counseling and that the bank make a trip to see the mortgagor at the mortgaged property. In my experience, the banks sometimes send a letter offering the counseling, but the letter is often not sent by certified mail, and the trip to see the mortgagor almost never happens. As a result, this exception often won’t save the bank, either.
In many cases – the vast majority of cases, in my experience – the bank can’t show that any of the five exceptions apply. As a result, that leaves the parties arguing only a legal issue, i.e. whether face-to-face counseling is actually a condition precedent or operates as a defense to a mortgage foreclosure lawsuit in the first place.
Unfortunately, there are no Florida appellate court decisions on this point (though I’m confident that will change in the coming months). That said, I think the law is relatively clear in this regard. Since the parties’ contract – the Note and the Mortgage – require compliance with HUD regulations, the bank can’t just ignore that contract term before filing suit. To rule otherwise would fly in the face of basic contract law. That’s why a few cases from other states which have ruled on the issue explained how face-to-face counseling is a valid defense for homeowners with an FHA mortgage. See Lacy-McKinney v. Taylor, Bean & Whitaker Mortg. Corp., 937 N.E. 2d 853 (Ind. 2010); Pfeifer v. Countrywide Home Loans, Inc., 211 Cal. App. 4th 1250 (Cal. 2012).
Lacy and Pfeifer aren’t the only two decisions to rule this way, but they’re my favorites. In each case, the court explains why face-to-face counseling is (and must be) a valid defense for homeowners facing foreclosure. The analysis starts with understanding the very nature of FHA mortgages. You see, FHA mortgages are insured by the U.S. Government. That’s you and me. As such, these loans were essentially risk-free loans for the bank. If the homeowner paid, then the bank got a performing loan. If the homeowner defaulted, then the government would pay the bank in full upon foreclosure. Risk free. As these courts explained, if the government is going to foot the bill to these banks, in full, then it’s only fair that the government can impose regulations requiring these banks to do certain things in order to avail themselves of that full payment. One such regulation is, yes, the face-to-face counseling requirement of 24 CFR 203.604.
These decisions also eliminate many of the arguments the bank lawyers like to make in opposition. For instance, I often encounter bank lawyers who try to say that the HUD regulations are between the banks and the government and homeowners can’t raise them as a defense. Sorry, but that’s wrong – particularly where the bank is required to comply with those regulations in the very contract (Note and Mortgage) it signed with the homeowner.
Likewise, the bank lawyers like to argue the HUD regulations don’t create a “private right of action,” i.e. don’t allow a homeowner to sue. There are cases supporting this position, but they are a red herring. We aren’t asserting this HUD regulation as a plaintiff in a lawsuit. We aren’t bringing a private right of action. We are merely asserting this as a defense in a foreclosure case, and Lacy and Pfeifer both make clear homeowners are perfectly entitled to do so.
I have won foreclosure cases before about 12 different judges based on this argument. It may seem novel/unique, and the judge before whom I argued it today had never heard it before. But if you lay out the argument like this, and you have an FHA mortgage, I see no reason why you can’t prevail. At its core, this is really a simple argument. The parties’ own contract required compliance with HUD regulations. Face-to-face counseling is required by one such regulation. Where the bank didn’t provide the counseling, and none of the five exceptions apply, the bank can’t foreclose.
This might be my favorite defense in foreclosure cases, even moreso than paragraph 22. I just wish I had more cases with an FHA mortgage!
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The statute of limitations has been a hot topic in recent weeks among consumer advocates in Florida, ever since a published decision from Florida’s appellate courts. I haven’t blogged about it yet because, frankly, it’s taken me some time to really figure out exactly how I want to say this. Well, I’ve figured it out.
The application of the statute of limitations in Florida is much more significant than most of the arguments we see in foreclosure-world. This is bigger than my paragraph 22 defense or some of the other, cutting-edge arguments I’ve discussed previously on this website. In fact, as I see it, Florida’s treatment of the statute of limitations is the ultimate litmus test for the integrity of our entire judicial system.
The way the statute of limitations operates, in my view, is (or, well, should be) abundantly clear in the mortgage foreclosure context. When a bank accelerates the balance due under the Note/Mortgage, that starts the clock on the running of the statute of limitations (five years in Florida – see Fla. Stat. 95.11(2)(c)). If five years pass after that acceleration, and the bank has not filed a lawsuit, the statute of limitations bars foreclosure on that mortgage. That means, absent other liens or encumbrances on the property, it’s a free house.
Sound too good to be true? It’s not. Or, well, it shouldn’t be. You see, the statute of limitations bars relief in virtually any legal context imaginable. If anyone wants to file a civil lawsuit in Florida and does so after the statute of limitations has run, the relief requested would be 100% barred (so long as that defendant raises the statute of limitations as a defense). It doesn’t matter how righteous that plaintiff’s cause, it doesn’t matter how damaged/injured that plaintiff may be … the statute of limitations is a black-and-white rule which all judges lack discretion to ignore, no matter how sympathetic the plaintiff. Breach of contract, fraud, negligence, virtually any criminal case except murder – you pursue it after the statute has run, you’re out of luck.
The concept of a “free house” might turn some people off (particularly those who chose to keep paying their mortgage during the Great Recession). I get that. But where the law works this way in every other context – preventing plaintiffs from obtaining relief when they waited too long to file suit - why should it be any different when it comes to a bank foreclosing on a mortgage? If the bank doesn’t file suit soon enough, then bank can’t foreclose that mortgage, even if it means the homeowner gets (or should get) to keep that house without fear of that mortgage being foreclosed.
Lest you think this is purely an academic or hypothetical discussion, let me assure you – it’s not. I have procured free houses for clients via the statute of limitations. Not often, and no, I don’t want to start getting flooded with calls for this (for reasons which I’ll explain more, below), but I’ve done it. It can work, at least in theory. In fact, it should work on a wide-scale basis – throughout Florida. You see, banks have been so, indescribably inept at prosecuting their own cases, there are many hundreds, perhaps many thousands of foreclosure cases throughout Florida for which the statute of limitations is (or should be) a defense. Yes, I’m talking a complete bar to foreclosure … on thousands of properties. Perhaps many thousands.
You must think there’s a catch. Sadly, there is (and I’ll get to that), but there shouldn’t be. Let’s go through the legal analysis.
Under Fla. Stat. 95.11(2)(c), the statute of limitations for mortgage foreclosure is five years. That’s simple enough, but what starts the running of that five year clock? Well, that depends on whether the bank has “accelerated” the balance due under the Note/Mortgage. ”Acceleration” may sound like a complicated term, but it’s really not. Acceleration does *not* mean the date a homeowner stopped paying the mortgage or the date the bank first sent a letter. Rather, “acceleration” is where the mortgage holder took some “clear and unequivocal” action to declare the full amount due under the Note/Mortgage. Typically, that means the date the bank fist filed suit to foreclose that mortgage (as virtually every foreclosure complaint I’ve ever seen includes language reflecting the bank accelerated the balance due).
Let’s back up a step. The payment obligations set forth in the Notes/Mortgages with which we deal in foreclosure-world are called installment contracts. In an installment contract, the borrower is obligated to pay not just one payment, but numerous payments on a regular and ongoing basis – the normal, monthly mortgage payments. If the borrower defaults on payment(s) and the bank does not accelerate the balance due, then the statute of limitations only operates to bar the monthly payments that should have been made more than five years ago. Let’s give an example. Suppose you stopped paying your mortgage in February of 2008, but your bank is totally asleep at the wheel and has never done anything at all to demand payment, file suit, or do anything else to accelerate the balance due. Unless your Note/Mortgage has an automatic acceleration clause (possible, but rare), that means the statute of limitations bars the bank from suing you for the February 15, 2008 payment and every payment through May 15, 2009 (because five years from May 15, 2009 is May 15, 2014), but the payments that were due on June 15, 2009 and thereafter are not barred (I’m writing this blog on June 1, 2014), nor are all payments thereafter. In fact, the five-year statute would not even have begun for all payments due as of today through the maturity of the loan in 2034.
If the bank accelerates the balance due, however, that totally changes the analysis. When the bank “accelerates” the balance due under the Note/Mortgage, that is the bank’s way of saying “you have defaulted, and we aren’t waiting for the future payment deadlines to demand payment. Instead, we are declaring all amounts that would have been owed in the future, i.e. all amounts that would have been paid through 2034, to be due *right now*.” That act of acceleration is what triggers the bank’s attempt to foreclose.
Let’s use that same example (i.e. you stopped paying your mortgage in February of 2008), but instead of the bank sitting by and doing nothing, suppose it accelerated the balance due on May 15, 2008, then did not file suit in the ensuing five years. On that fact pattern, based on what I believe is a very simple application of the statute of limitations under basic case law, any attempts by the bank to foreclose that mortgage should be barred by the statute of limitations. Unlike the prior example, where the bank could take the position that more payments were due in the future, there are no more payments due after May 15, 2008 because the bank accelerated all future payments and declared them due on that date. It doesn’t matter that the Note/Mortgage had payment obligations running through the year 2034 – when the bank accelerated the balance due on May 15, 2008, it declared all of the future sums due as of May 15, 2008. So when five years passed after May 15, 2008 without the bank filing suit, the statute of limitations should bar foreclosure of that mortgage. In other words, the “acceleration” of the balance due acts to move up (or “accelerate”) the maturity date of the Mortgage.
(Significant aside – the statute of limitations does not require a lawsuit to be finished within the operative time period, merely filed.)
Up to this point, I’ve given this argument without any case citations because, frankly, I think the law is just that clear. In my view, it’s not even reasonably debatable. Unfortunately, this is a highly politicized judicial climate in which we now live. If you’ve read this blog previously, you know I’ve lamented this concept in the past, i.e. how a small number of uber-wealthy investors associated with Fannie Mae (people like Bill Clinton) are essentially controlling the manner in which foreclosure cases are handled on the ground level by pressuring the Florida Supreme Court and Florida legislature (which, in turn, pressure our circuit court judges) to push through foreclosure cases as quickly as possible so those investors can buy foreclosed houses in bulk for 15-20 cents on the dollar. Anyway, the climate being what it is, banks aren’t going to lie down on the statute of limitations and lose the ability to foreclose on thousands of mortgages without a fight. So they crafted an argument contrary to that set forth above.
Before I get to the bank’s argument, I want you to read all of the case law on the issue. That’s where I became convinced I was right – not just from Florida law, but from all of the case law from all of the jurisdictions showing how the statute of limitations works in this context.
Under a long line of Florida cases, once a bank accelerates the balance due on a Note/Mortgage, that triggers the running of the five-year statute of limitations in Fla. Stat. 95.11(2)(c), which statute bars foreclosure if suit is not filed in the ensuing five years. See Travis Co. v. Mayes, 160 Fla. 375 (Fla. 1948) (“The rule is also settled that when a mortgage in terms declares the indebtedness due upon default of certain of its provisions or within a reasonable time thereafter, the Statute of Limitations begins to run immediately after the default takes place or the time intervenes.”); American Bankers Life Assurance Co. of Fla. v. 2275 West Corp., 905 So. 2d 189 (Fla. 3d DCA 2005) (reversing foreclosure judgment and remanding with instructions to grant judgment for homeowners based on the statute of limitations); Central Home Trust Company of Elizabeth v. Lippincott, 392 So.2d 931 (Fla. 5th DCA 1980) (“The statute of limitations may commence running earlier on an installment note for payments not yet due, if the holder exercises his right to accelerate the total debt because of a default or other reason. … To constitute an acceleration after default, where the holder has the option to accelerate, the holder or payee of the note must take some clear and unequivocal action indicating its intent to accelerate all payments under the note, and such action should apprise the maker of the fact that the option to accelerate has been exercised. Examples of acceleration are a creditor’s sending written notice to the debtor, making an oral demand, and alleging acceleration in a pleading filed in a suit on the debt.”); USX Corp. v. Schilbe, 535 So. 2d 719 (Fla. 2d DCA 1989) (“foreclosure of the mortgage is time barred by section 95.11(2)(c) and the enforceable life of the mortgage lien ended by operation of section 95.281 prior to the commencement of their action”); Greene v. Bursey, 733 So. 2d 1111 (Fla. 4th DCA 1999) (“Where the installment contract contains an optional acceleration clause, the statute of limitations may commence running earlier on payments not yet due if the holder exercises his right to accelerate the total debt because of a default.”); Locke v. State Farm Fire & Cas. Co., 509 So. 2d 1375 (Fla. 1st DCA 1987) (“It has been held that the statute of limitations on a mortgage foreclosure action does not begin to run until the last payment is due unless the mortgage contains an acceleration clause. In the instant case, the mortgage, which provides for installment payments with the last payment due in May, 2008, contains an optional acceleration clause. In such a case no acceleration occurs until the holder of the mortgage exercises his right to accelerate.”); Monte v. Tipton, 612 So. 2d 714 (Fla. 2d DCA 1993) (“The statute of limitations on a mortgage foreclosure action does not begin to run until the last payment is due unless the mortgage contains an acceleration clause. Mrs. Tipton did not exercise her right to accelerate until she demanded the total principal balance and interest by letter dated March 12, 1991, less than two months prior to filing suit.”); Spencer v. EMC Mortg. Corp., 97 So. 3d 257 (Fla. 3d DCA 2012) (“The complaint alleges that the full unpaid principal amount was due by virtue of a default on July 1, 1997. [The bank’s] officer swore in his affidavit that default occurred on July 1, 1997, and ‘the then title holder to the Note accelerated payment of the entire amount due and owing on the Note and Mortgage.’ It appears on the face of the existing record, then, that acceleration likely occurred over five years before this lawsuit was filed in late November 2002.”).
As if those Florida cases were not clear enough, under the jurisprudence of virtually every state in America (or every state where I’ve found case law, anyway), where an installment contract has an acceleration clause, and that acceleration takes place, the statute of limitations begins to run at that point. (Yes, I realize this string-cite is obnoxiously long, but that’s the point.) See Smith v. FDIC, 61 F.3d 1552 (11th Cir. 1995) (“Under Florida law, when promissory note secured by mortgage contains an optional acceleration clause, foreclosure cause of action accrues, and statute of limitations begins to run, on date acceleration clause is invoked or on stated date of maturity, whichever is earlier.”); Wheel Estate Corp. v. Webb, 679 P.2d 529 (Ariz. 1983) (statute of limitations barred suit on installment contract); Navy Federal Credit Union v. Jones, 930 P.2d 1007 (Ariz. 1996) (exercise of optional acceleration clause barred claim under statute of limitations); In re. Bennett, 292 B.R. 476 (N.D. N.Y. 2003) (“Under New York law, statute of limitations on claim for breach of installment note which contained optional acceleration clause began to run when lender elected to exercise the acceleration clause, rather than upon the earlier, initial default on an installment payment.”); City of Lincoln v. Herschberger, 725 N.W. 2d 787 (Neb. 2007) (“We conclude that the statute of limitations began to run on the date the acceleration clause was exercised. Because the City’s petition was filed less than 5 years after the City exercised its right to acceleration, the City’s claim against the Hershbergers is not barred by the statute of limitations.”); Sparta State Bank v. Covell, 495 N.W. 2d 817 (Mich. 1993) (“when an installment contract does not contain an acceleration clause, claims based upon a breach of the installment contract accrue, and the statute of limitations begins to run, as each separate installment falls due. In the absence of an acceleration clause, claims on an installment contract do not accrue until the installment becomes due. However, a different result is reached when an installment contract contains an acceleration clause and the acceleration clause is exercised.”); Cadle Co. v. Prodoti, 716 A.2d 965 (Conn. 1998) (“It is undoubtedly true that the statute of limitations clock begins to run irreversibly when an optional acceleration clause is exercised by a demand of full payment before all installments become due.”); Clayton Nat’l, Inc. v. Guldi, 307 A.D. 2d 982 (N.Y. 2003) (statute of limitations barred foreclosure suit filed in 2000 where prior suit filed in 1992); Holy Cross Church of God in Christ v. Wolf, 44 S.W. 3d 562 (Tex. 2001) (“Promissory note holder’s agreement that predecessor had accelerated note and that the statute of limitations began to run on that date amounted to a judicial admission of the acceleration date in a response to a summary judgment motion and in a counter-motion for summary judgment.”); Loiacono v. Goldberg, 240 A.D. 2d 476 (N.Y. 1997) (“Once mortgage debt is accelerated, entire amount is due, and statute of limitations begins to run on entire mortgage debt.”); Ferrari v. Citation Securities, Inc., 2000 WL 329068 (Tex. 2000) (“If a lender accelerates a note, the statute of limitations begins to run from the date of an effective acceleration.”); Lavin v. Elmakiss, 302 A.D. 2d 638 (N.Y. 2003); Ryerson v. Hemar Ins. Corp. of America, 200 S.W. 3d 170 (Missouri 2006) (“Lender’s assignee’s cause of action for payment on an installment note accrued, and ten-year statute of limitations began to run, when borrower defaulted and lender accelerated payments due on the note, effectively causing the last installment payment due and owing.”); Oaklawn Bank v. Alford, 845 S.W. 2d 22 (Ark. 2000) (“After appellee defaulted and appellant accelerated the debt, appellant’s cause of action on the debt evidenced by the note did not depend upon any further contingency or condition precedent. … We, therefore, agree with the circuit judge in his finding that the statute of limitations began to run when appellant accelerated the debt and that it barred appellant’s complaint.”); Burney v. Citigroup Global Markets Realty Corp., 244 S.W. 3d 900 (Tex. 2008) (statute of limitations began to accrue upon acceleration, barred foreclosure); Hassler v. Account Brokers of Larrimer County, 274 P.3d 547 (Col. 2012) (“ if an obligation that is to be repaid in installments is accelerated either automatically by the terms of the agreement or by the election of the creditor pursuant to an optional acceleration clause—the entire remaining balance of the loan becomes due immediately and the statute of limitations is triggered for all installments that had not previously become due”); American Mut. Building & Loan Co. v. Kesler, 137 P.2d 960 (Idaho 1943) (“Where mortgagee availed itself of benefits of acceleration clause in mortgage, future installments were immediately matured for all purposes, and statute of limitations then began to run against unmatured installments and continued to run against past due installments.”); Evans v. Kilgore, 21 So. 2d 842 (Ala. 1945) (“A mortgagee’s election to mature entire indebtedness, evidenced by notes secured by mortgage, as of date on which first of notes became due, matured all notes for all purposes on such date, so that action for balance due thereon was barred by statute of limitations six years thereafter.”); Uland v. Nat’l City Bank of Evansville, 447 N.E. 2d 1124 (Ind. 1983) (“Where note contained optional acceleration clause and bank, by virtue of letter sent to maker, who was in default in monthly note payments, exercised option to accelerate payments, but parties thereafter entered into agreements to reinstate note, initial exercise of option to accelerate was thereby revoked, and ten-year statute of limitations commenced to run only at time note was due, rather than on earlier date of exercise of option to accelerate.”); EMC Mortg. Corp. v. Patella, 279 A.D. 2d 604 (N.Y. 2001) (“Six-year limitations period applicable to foreclosure action brought by original mortgagee started to run when mortgagee notified mortgagors that their debt was being accelerated, and continued to run when that action was dismissed, so that subsequent foreclosure action brought by mortgage’s assignee was untimely, where original mortgagee did not revoke its election to accelerate.”); Driessen-Rieke v. Steckman, 409 N.W. 2d 50 (Minn. 1987) (“Creditors’ call on debentures, as provided under debenture agreement, advanced maturity date on underlying debts secured by debentures; thus, statute of limitations for foreclosure on mortgage that had been issued by debtor when call was made, in return for creditors’ forbearance for 45 days, began to run from date of mortgage plus 45-day grace period, and creditors’ subsequent foreclosure action was time barred”); Asset Acceptance, LLC v. Morgan, 2007 WL 949251 (Mich. 2007) (“If an acceleration clause is exercised, the entire unpaid balance under the contract becomes due, and the statute of limitations period no longer runs separately after each installment becomes due.”); Baseline Financial Services v. Madison, 278 P.3d 321 (Ariz. 2012) (“When an installment contract contains an optional acceleration clause, an action as to future installments does not accrue until the holder exercises the option to accelerate.”); Koeppel v. Carlandia Corp., 21 A.D. 3d 884 (N.Y. 2005) (“We agree with the Supreme Court that this action is barred by the six-year statute of limitations applicable to an action to foreclose a mortgage. The six-year statute of limitations began to run upon the acceleration of the mortgage debt.”); U.S. Leasing Corp. v. Everett, Creech, Hancock & Herzig, 363 S.E. 2d 665 (N.C. 1988) (“A cause of action for breach of contract accrues at time of breach which gives rise to right of action for purposes of applying limitations period, and, in case of obligation payable by installments, statute of limitation runs against each installment individually from time it becomes due, unless creditor exercises a contractual option to accelerate debt in which case statute begins to run from date acceleration clause is invoked.”).
Strung together in this manner, the weight of these cases is overwhelming. Florida. Arizona. New York. Texas. Connecticut. North Carolina. Michigan. Minnesota. Alabama. Idaho. Colorado. Everywhere I looked, courts were applying the statute of limitations in the same way I described above. Perhaps more powerful than sheer volume of these cases, though - and the number of different jurisdictions from which they emanate – was the absence of *any* case law to the contrary. No court in any state was allowing foreclosure in the face of the statute of limitations where a bank accelerated and five years passed (or however many years under that state’s statute) without the bank filing suit. None.
I found this argument so powerful, with the cases listed out in this format, that’s exactly how I presented the argument when the bank argued against the statute of limitations in a recent quiet title lawsuit I filed in federal court.
In the face of all of these authorities – numerous, long-standing cases from across the country – bank lawyers in Florida have begun arguing the statute of limitations does not apply in the manner I’ve described. They rely principally on a case called Singleton v. Greymar Assocs., 882 So. 2d 1004 (Fla. 2004). Though that case might appear persuasive at first blush since it comes from the Florida Supreme Court, the obvious problem is that the decision does not even mention the statute of limitations! Yes, bank lawyers throughout Florida have been trying to prevent the statute of limitations from operating in the way I’ve described above – in the face of all of these case authorities – by relying on a case that does not even mention the statute of limitations.
Singleton stands for the proposition that a bank can file suit for foreclosure even where a prior suit was dismissed with prejudice because the payment obligations under the Note/Mortgage are continuing obligations. That sounds contrary to our standard beliefs about dismissals “with prejudice” because it is. Typically, when a plaintiff’s lawsuit is dismissed “with prejudice,” that means the plaintiff can’t sue again. What’s different about foreclosure cases, though, is the nature of an installment contracts. Using my example above, if the homeowner stopped paying in February of 2008, the bank accelerated the balance due in May of 2008 and filed suit, if that suit is dismissed with prejudice that same month, then the bank is prevented from ever obtaining relief regarding the non-payments in February, March, April, and May of 2008. However, the monthly payment obligations continue through 2034, and, under Singleton, nothing stops the bank from filing another suit regarding those, future payments (if not made).
Confronted with the possibility of losing hundreds if not thousands of mortgages due to application of the statute of limitations, bank lawyers started arguing Singleton did not bar suit even when more than five years passed after the bank accelerated the balance due under the Note/Mortgage. In other words, the banksters wanted Florida courts to treat the statute of limitations as if it did not exist. Acceleration? Five years passed? Pfft. We can still sue under Singleton because the dismissal of the foreclosure suit operated to “nullify” the acceleration or “de-celerate” the balance due.
I think this argument is total hogwash and completely devoid of any merit whatsoever. Again, the only case the banksters rely upon for this position – Singleton – did not even mention the statute of limitations. Any lawyer knows there is an enormous difference between being able to sue again after a dismissal with prejudice (particularly when filing suit less than five years post-acceleration) and being able to sue after passage of the statute of limitations. In other words, the doctrine of res judicata (the legal concept when a case is dismissed with prejudice) is totally different than the statute of limitations. That’s why, again, banks could cite *NO CASE* supporting this position in the context of the statute of limitations – not just from Florida, but anywhere.
A few weeks ago, that all changed. In U.S. Bank v. Bartram, Florida’s Fifth DCA applied Singleton in the statute of limitations context, ruling the statute of limitations did not bar mortgage foreclosure even where the bank accelerated the balance due, then did not file suit in the ensuing, five-year period. Candidly, I find this analysis so distorted, and so contrary to established law (above) that it’s hard to know where to begin. But let’s start with a concept you’ve all heard me talk about many times – paragraph 22.
You know about paragraph 22 of the standard, Fannie Mae mortgage because I have blogged about the banks’ obligation to give this notice many times. But paragraph 22 does more than require this notice – that’s the paragraph of the mortgage which allows acceleration and foreclosure in the first place. You see, if an installment contract had no right to accelerate, the banks could not accelerate the balance due – they could only sue for the monthly payments not made. It’s only because paragraph 22 sets forth the right to accelerate and foreclose that the banks can accelerate the balance due, i.e. declare future payments immediately due and payable. So it’s obviously important that the parties’ contract spell out this right. Yet guess where the banks’ right to “de-celerate” the balance due (or to “nullify” the acceleration) is contained in the mortgage? Nowhere! The contract, i.e. the Note/Mortgage, say nothing about de-celeration because it doesn’t exist. It’s a made-up term, made up by the banksters and their lawyers to try to frivolously avoid losing a bunch of mortgages to the statute of limitations. There’s nothing in the Note/Mortgage about giving notice to the homeowner about “de-celeration,” either (or the right to resume making normal, monthly payments that would come with de-celeration) because, again, the concept does not exist.
Sadly, even though this entire concept does not exist – either in case law or the parties’ contract – the Bartram court let these banks get away with it. With respect to anyone who disagrees, I find it terribly wrong – just WRONG – for anyone to suggest a bank can make up a contractual term – literally, just make it up (and for a court to allow them to get away with it) – simply to create the result that it wants to create, i.e. being able to ignore the statute of limitations and foreclose. If that sounds harsh, re-read all of those cases. And show me something to the contrary – go ahead, I dare you. (In fairness, there is one scenario under the law where de-celeration can take place – where the homeowner resumes making monthly mortgage payments and the banks allow it. That’s how any contract works – if the parties agree to resume making monthly payments, then it’s their contract, so they can. Absent that, however, the acceleration remains in place.)
Ahh, yes, say the banksters … but when that first suit is de-celerated, it’s not the bank trying to de-celerate, it’s the court doing so (by dismissing the case). Again, that’s wrong. There no case law saying that a court dismissing a case operates to de-celerate the balance due and prevent the running of the statute of limitations. In fact, the cases hold precisely the opposite. Quite simply, where the balance due is accelerated by filing suit and that suit is then dismissed, the statute of limitations runs from when that suit was first filed. See Wood v. Fitz-Simmons, 2009 WL 580784 (Ariz. 2009) (“An affirmative act by the lender is necessary to revoke the acceleration of a debt once that option has been exercised. And, where a debt has been accelerated by the filing of a lawsuit, a trial court’s dismissal of the action is not by itself sufficient to revoke the acceleration and extend the limitations period.”); Federal Nat’l Mortg. Ass’n v. Mebane, 208 A.D. 2d 892 (N.Y. 1994) (“Contrary to Metmor’s contention, although a lender may revoke its election to accelerate all sums due under an optional acceleration clause in a mortgage provided that there is no change in the borrower’s position in reliance thereon, the record is barren of any affirmative act of revocation occurring within the six-year Statute of Limitations period subsequent to the service of the complaint in the prior foreclosure action, wherein the holder of the mortgage notified the borrowers of its election to accelerate. It cannot be said that a dismissal by the court constituted an affirmative act by the lender to revoke its election to accelerate.”); Clayton Nat’l, Inc. v. Guldi, 307 A.D. 2d 982 (N.Y. 2003) (“Contrary to the plaintiff’s contention, the dismissal of the 1992 action for lack of personal jurisdiction did not constitute an affirmative act by the lender to revoke its election to accelerate.”). Again, the banks have no case law to the contrary, as none exists. But that didn’t stop the Bartram court from ruling how it did … sigh.
The only good aspect of Bartram is that it certified the question to the Florida Supreme Court. At least that way we’ll get a decision, once and for all, from our highest court. For me, the Florida Supreme Court’s ruling in that case will be the ultimate litmus test for the integrity of our entire judicial system. Is the system irretrievably broken? Is it so influenced by politics that the Court won’t follow well-established law existing for dozens of years throughout numerous jurisdictions? Is the pressure/pull from the Fannie Mae cronies so great that a bank-oriented result is going to happen regardless of case precedent? I suppose only time will tell. Regardless of what happens, though, I know what the result should be, and so do the banksters. Again – here’s the memo.
So what do I say to all of the homeowners in Florida who want to know if the statute of limitations is a viable defense? Well, my confidence in how the statute applies is the same now as high as it was before Bartram, but my confidence in our courts to rule that way is obviously much less. I suppose we’ll just have to see what happens.
Thank you to the colleague who helped me put this research/memo together. (You know who you are.) Your fine work was appreciated.
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This past Friday, I had several hearings in foreclosure cases before a judge in St. Petersburg before whom I appear regularly. There is mutual respect between this judge and I, and we each do our best to make our respective experiences as pleasurable and, dare I say, fun, as possible. Anyway, during the course of these hearings, the judge joked that I must drive a Porsche or a Maserati given all the foreclosure cases I’ve gotten dismissed over the years. While I know it was purely said in good fun, this disappointed me.
You see, I don’t drive a fancy car. I drive a Toyota Prius with 130,000 miles. More than that, though, the judge’s comment disappointed me because if that’s the perception I’ve left with the judge – that I’m in it for the fees, money, and fancy cars, then I’m doing it wrong. I know the judge was just kidding around, but still … the hint of that perception must change. And it will change, starting now.
You see, I don’t do what I do for the fees. Sure, I have to run a business and pay staff, and of course, I like/need to make money for myself and my family. For me, though, foreclosure defense is about fighting for justice. About ensuring the integrity of the judicial system even as the powers that be try to push foreclosures through the system at lightning speed. About helping people. About creating law in ways that will help consumers. About keeping people in their homes and preventing homelessness.
To help prove that point, and leave no doubt about my intentions (among judges whom I appear or anyone else), I have a new plan. Starting this month (on a random date of my choosing), I’m going to take $2,000 cash – all hundreds – and hand it out to randomly-selected homeless people, in my sole discretion, in Williams Park in St. Petersburg (a known hangout for homeless in St. Pete, just blocks from where the judge made his comments). And I’m going to do the same thing in other, randomly-chosen places throughout Florida once per month for the rest of the year. That’s $2,000, once per month, cash, in hundreds, handed out to homeless people as I see fit – for the rest of 2014.
I’m going to help people. I’m going to help the homeless. I’m going to make sure everyone knows that’s why I’m in this. And, yes, I’m going to keep driving my Prius (until it will drive no more).
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