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.
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.