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Notice to the Borrower

This issue has been discussed before, but it bears repeating: mail from the bank must go to the proper address. If it does, it could be problematic for the Bank and grounds to have the entire case dismissed.

Paragraph 22 of most mortgages require the mortgage servicer to provide notice to the borrower of any past due amounts before they file a foreclosure action. This is oftentimes referred to as the “Demand or Acceleration Letter”. The notice gives the borrower one more opportunity to bring the past due amounts current and avoid a lawsuit. Most of the time, the mortgage servicer or bank is required to mail this Demand Letter to the actual property address. We call this address the “notice address”. However, what happens when the Demand Letter is mailed to a different address?

All courts in Florida have now decided that the Demand Letter is what we call a condition precedent, meaning the bank must send the Demand Letter to the notice address prior to starting a foreclosure lawsuit. Failure to do so may result in the bank losing their case. I recently had a trial in Palm Beach whereby the Demand Letter was addressed to the wrong notice address. The property was a condominium, so everyone had unit numbers, and this particular Demand Letter went to the wrong unit number. The bank was more than happy to point out instances after the foreclosure lawsuit in which letters went to the same wrong address, but that does not change the fact that the letter went to an address other than the property/notice address.

After a half day of trial, this issue was brought before the Judges attention, and he ultimately agreed with our position. If the Demand Letter was sent to the wrong address, then there is insufficient evidence to show that the bank complied with their condition precedent. The case should not have been filed in the first place until that requirement was completed. Ultimately, the bank couldn’t prove that they satisfied that requirement and because we were able to show the Judge that the address was incorrect, the Judge dismissed the bank’s lawsuit.

Many homeowners think that a foreclosure should be simple – you either paid your mortgage or you didn’t. However, mortgages are complex contracts that may contain additional protections afforded to the borrower. If you’re facing foreclosure, come speak with Loan Lawyers and let us help identify ways to keep you in your home.