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3rd DCA Reverses Course On Foreclosure Statute of Limitations

For the past several years there has been confusion among Florida courts about how the statute of limitations works in foreclosure cases. The main point of contention is the point when a bank becomes time-barred from filing a new foreclosure case after the first foreclosure case is dismissed.

In Florida, people have five years to collect an overdue debt. The debt could be a medical bill, credit card, or a mortgage. If the person owed the debt does not take any action to collect it within five years of the time that it became due, the statute of limitations is over and that person or entity will never be able to collect the debt.

In the context of mortgage foreclosure, there has been a debate between the state’s district courts of appeal about when this statute begins to run if there have been multiple foreclosure cases. In the Florida’s Third District Court of Appeal (3rd DCA), which covers Miami-Dade and Monroe Counties, the counties’ trial courts previously followed an appellate case called Deutsche Bank Trust Co. Americas v. Beauvais.

In Beauvais, the bank filed for foreclosure against Harry Beauvais in January of 2007, alleging that he had failed to make payments on his mortgage beginning in September of 2006. That case was dismissed because the bank failed to appear at a case management conference. Over five years later, in December of 2012, the bank filed a new foreclosure case based on Beauvais’ missed payment from October of 2006.

In the second foreclosure case, Beauvais and his homeowner association argued that Deutsche Bank’s case was barred by the statute of limitations because the bank had failed to pursue a foreclosure within five years of the time that the loan went into default and was accelerated. The trial court agreed, and held that Deutsche Bank could not pursue its foreclosure. The bank then appealed the decision to the 3rd DCA. The appellate court confirmed the trial court’s decision, and held that absent a withdrawal of the loan acceleration, the suit was time-barred.

Deutsche Bank requested a rehearing by a full panel of appellate judges. After an en banc hearing, the 3rd DCA reversed its decision based on a 2004 Florida Supreme Court case. The full panel of appellate judges held that multiple foreclosure actions were permitted, and that the statute of limitations does not prohibit the bank from filing a new foreclosure action based on a new default date.

Essentially, this ruling allows banks in the Miami area to avoid the statute of limitations entirely by filing a foreclosure lawsuit based on any missed payment within the previous five years. Homeowners whose foreclosure cases were dismissed long ago can still be sued for foreclosure if their loan is in default.

The new Beauvais ruling may not be the law for long. The state’s District Courts of Appeal are in conflict about this issue, and the Florida Supreme Court is expected to decide on how the foreclosure statute of limitations works within the next few months.

For now, homeowners who are in default should not rely on the statute of limitations to protect their homes. If your mortgage loan is in default, you need to speak with an experienced foreclosure attorney as soon as possible.

At Loan Lawyers, our attorneys can help you create a plan to defend your home from foreclosure. We can review the status of your loan and any pending foreclosure cases, and advise you of your legal rights and options.

To schedule your free and confidential case review, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).