Archive for December 4th, 2012

Par. 22 Notice – Content Matters!

The wars are continuing on the front lines of foreclosure cases, only with a twist.

As I explained here, it is possible for homeowners facing foreclosure to get their cases dismissed by proving that the bank failed to provide the “notice and cure” letter required by paragraph 22 of the mortgage.  Some plaintiffs’ firms have responded to such motions with affidavits, basically saying “we sent the letter.”  In their view, proof they sent the letter ends the analysis, as it proves compliance with this condition precedent, precluding dismissal for failure to comply with conditions precedent.  Are the banks right?  Does proving the letter was sent comply with paragraph 22, defeating a homeowner’s attempt to dismiss a case?

Hehehe.  Of course not!   It’s not enough merely to send the letter.  The contents of the letter must set forth what paragraph 22 requires it to set forth.  To illustrate, on November 28, 2012, the Second District reversed a summary judgment of foreclosure, explaining:

Although MSMC argues that it provided the Judys with proper notice of default, the notices failed to specify that the Judys committed a breach.  And failure to specify the default as required by the mortgage terms requires reversal because MSMC did not meet its burden in refuting the Judys’ affirmative defense of insufficient notice of default. 

Judy v. MSMC Venture, LLC, Case No. 2D11-1896 (Fla. 2d DCA Nov. 28, 2012).

Bear in mind, specifying “the default” – the issue in the Judy case – is just one of the requirements of paragraph 22.  The letter must also specify (i) the action required to cure the default; (ii) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; (iii) that failure to cure the default by the date specified may result in acceleration, foreclosure by judicial proceeding, and sale of the property; (iv) the borrower has a right to reinstatement; and (v) the borrower has a right to assert in the foreclosure proceeding the non-existence of a default or any other defenses to foreclosure.

By addressing the contents of a paragraph 22 letter, and ruling the contents were insufficient as a matter of law, the Second District has explained that it’s not good enough for banks to merely assert that they sent a paragraph 22 letter.  They must be able to show that the content of said letter comports with all requirements of paragraph 22.  Where the plaintiff does not comply, the plaintiff cannot and should not be permitted to foreclose.  In fact, where a defendant proves the letter does not comply, the case should be outright dismissed for failure to comply with conditions precedent to foreclosure.

Mark Stopa

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