Archive for September 16th, 2013

Oral Argument on Par. 22 … 35 Years in the Making

I have an oral argument before Florida’s Second District Court of Appeal tomorrow morning.  The issue before the appellate court is whether the lower court was correct in dismissing a bank’s foreclosure lawsuit where the requisite pre-suit notice did not comply (or, to use the bank’s proffered term, “substantially comply”) with the terms of paragraph 22 of the subject mortgage.

Paragraph 22 is something I’ve been discussing for a long time on this blog.  While I’ve argued it hundreds of times before Florida’s circuit court judges, this argument is the first of its kind in a Florida appellate court … at least in the context of a homeowner getting a case dismissed at summary judgment for paragraph 22 noncompliance.  Yes, there are published decisions which have reversed a Final Judgment of Foreclosure where the bank did not comply with paragraph 22, but none which expressly authorize an outright dismissal of the bank’s lawsuit for failure to comply.  For me, that’s the logical next step in the argument – one on which I’ve prevailed in many dozens of Florida foreclosure cases and one I which I hope to succeed in tomorrow’s case.

The interesting thing about this argument is that, even though it appears new and novel, it’s actually not.  In fact, this argument has been around since before I was born.

Just a few days ago, a homeowner came to me to defend a foreclosure lawsuit on a mortgage that was entered and recorded in 1982.  Yes, 1982.  The mortgage was a “short form” mortgage created by Federal Home Loan Mortgage Corp., and that “short form” mortgage incorporated by reference a “Master Form” Mortgage recorded in the Official Records of Hillsborough County on February 29, 1976 at OR Book 3093, Page 1749.  If that sounds complicated, it’s not.  All it means is that each specific “short form” mortgage, i.e. each homeowner’s particular mortgage, includes as a part of that mortgage the terms and provisions set forth on the Master Form.

As I perused the Master Form Mortgage, I quickly noticed the bolded paragraph contained in paragraph 18.  Do you recognize it?  You should.  It’s virtually identical to the standard ”paragraph 22″ that we see in so many Fannie Mae mortgages nowadays.

Yes, what we now know as paragraph 22 has existed in countless mortgages in Florida since at least February of 1976.   Hence, the argument may seem novel, but this issue has been around for 35(+) years.

As I see it, 35(+) years is enough time for binding precedent from an appellate court to be created that says “The bank’s obligations under a contract mean something.  We agree a foreclosure lawsuit must be dismissed where the bank’s paragraph 22 notice did not say what it was required to say.”

I’ll post the videos of the oral argument if I can get my hands on them.  Wish me luck.

Mark Stopa

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