A statute of limitations is a statute prescribing a period of limitation for the initiation of filing of certain kinds of legal actions. Florida has a five year statute of limitations regarding foreclosures and a one year statute of limitations for a deficiency judgment after foreclosure against a homeowner. On its face, Fla. Stat. § 95.11 would mean that a foreclosure action must be brought within five years of default, and an action for a deficiency judgment must be brought within one year of the issuance of the certificate of title.
Fla. Stat. § 95.11 mandates that the five-year statute of limitations on a foreclosure action begins to run from the date of default, which is the date of last payment. This period typically runs continuously, unless the homeowner makes additional payments or files for bankruptcy, which temporarily suspend or toll the running of the statute. Once the uninterrupted five-year period passes from the date of default, the holder of a mortgage may no longer sue to foreclose its interest.
However, lenders in countless Florida cases have argued that each month a payment is missed is a new default date, thus “resetting” the statute of limitations and commencing a new five-year limitations period. In the last year and a half, Florida courts have considered the answer to the question whether the five-year statute of limitations is tolled or suspended in this circumstance, culminating in a decision by the state's highest court.
In November of 2016, the Supreme Court of Florida affirmed the decision of the Fifth District Court of Appeal in Bartram v. U.S. Bank, N.A., SC14-1265 (Fla. Nov. 3, 2016), holding that a lender is not barred by Fla. Stat. § 95.11 from filing a subsequent foreclosure action based on a payment default after the involuntarily dismissal of a first foreclosure action, as long as the subsequent default occurred within five years of the newly-filed action. This holding was limited by the court to cases that were involuntarily dismissed and where the mortgage at issue contains a clause granting the mortgagor the right to reinstate the loan after acceleration. The court also determined that whether the initial foreclosure action was dismissed with or without prejudice was immaterial to its conclusion.
As a result of the decision in the Bartram case, Florida homeowners must face the fact that mortgage servicers may immediately file new foreclosure actions on any loans that are in default if there was an involuntarily dismissed prior foreclosure action, and the terms of the mortgage include a clause allowing reinstatement of the loan after acceleration. The likely result of Bartram is that a slew of new foreclosure actions will be initiated, and thousands of loans in a holding pattern due to prior dismissals will be foreclosed. The assistance of a professional in these circumstances is essential.At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to the payment of their mortgage. If you are facing foreclosure and require assistance with this and loss mitigation, contact our office today by calling (888) FIGHT-13 (344-4813) and see how we can help.