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Bartram v. U.S. Bank, N.A.

Due to the recent decision of the Supreme Court of Florida in Bartram v. U.S. Bank, N.A., banks and other mortgage holders may be able to re-file residential mortgage foreclosure actions in the Florida courts, even if their prior foreclosure actions were dismissed after trial.

Occasionally, a bank’s foreclosure action may be dismissed by order of the court at trial or otherwise, often due to some initially unforeseen technicality or a lack of evidence on the part of the bank discovered by the careful eye of an experienced foreclosure defense attorney. If the mortgage loan account is not properly resolved after the dismissal of the original foreclosure action (such as through reinstatement or loan modification), however, the bank may be able to re-file for foreclosure under certain circumstances.

In the case of Bartram v. U.S. Bank, N.A., the Supreme Court of Florida considered the following question of great public importance as to standard residential mortgages that include a contractual right to reinstatement:

“Does acceleration of payments due under a residential note and mortgage with a reinstatement provision in a foreclosure action that was dismissed pursuant to Rule 1.420(b), Florida Rules of Civil Procedure, trigger application of the statute of limitations to prevent a subsequent foreclosure action by the mortgagee based on payment defaults occurring subsequent to dismissal of the first foreclosure suit?”

Pursuant to Section 95.11(2)(c), Florida Statutes, the statute of limitations on a lawsuit for mortgage foreclosure is five (5) years. In other words, if a borrower defaults on mortgage loan payments, the bank or other entity claiming to hold the mortgage must file its lawsuit to foreclose the mortgage no later than five (5) years from the alleged default date, or the bank or other such entity is forever time-barred from filing the foreclosure lawsuit.

Following the Bartram decision, the five-year statute of limitations still remains, but with an interesting twist that is less-than-favorable to borrowers. If the bank had previously sued a borrower in foreclosure but its lawsuit was subsequently dismissed, the bank may re-file for foreclosure if the borrower defaults again on the mortgage loan and the bank timely files the new foreclosure lawsuit within five (5) years of the new default date.

The Supreme Court of Florida explained its reasoning as follows. Standard residential mortgages contain an acceleration clause, meaning that if the borrower defaults on mortgage payments, the bank is contractually authorized to accelerate the outstanding balance of the mortgage loan at the time of default. In other words, the bank may choose to accelerate the mortgage loan and sue the borrower for the entire amount still owed on the mortgage loan.

If the bank’s foreclosure lawsuit is dismissed by the court, however, the acceleration of the mortgage loan balance is revoked as a result of the dismissal, thus reinstating the borrower’s right to continue making mortgage loan payments. This also means that the statute of limitations ceases to run on the outstanding balance of the mortgage loan as to the date of default alleged in the original foreclosure lawsuit. Therefore, once the original foreclosure lawsuit is dismissed by the court, if the borrower defaults again on mortgage payments that come due after the date of dismissal of the original foreclosure lawsuit, the bank may re-file for foreclosure so long as the bank files the new foreclosure lawsuit within five (5) years of the new default date.

If the bank re-files for foreclosure more than five (5) years after the new default date, the borrower should likely prevail in having the new foreclosure lawsuit dismissed due to the bank untimely re-filing for foreclosure beyond the five-year statute of limitations.

If you are being sued again for foreclosure on the same mortgage loan after the Court already dismissed the bank’s prior foreclosure lawsuit, contact Loan Lawyers, LLC to discuss your options. We look forward to representing you.

  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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