TALLAHASSEE, Fla. – Nov. 4, 2016 – A Florida Supreme Court ruling announced yesterday threatens more homeowners with foreclosure actions.
In general, lenders have five years to foreclose on a home thanks to the state's statute of limitations. In some cases, however, the courts have dismissed a foreclosure action, making it difficult for banks to finalize the foreclosure in time since the process must begin again.
Yesterday, though, the Supreme Court ruled that the five-year timeline for a foreclosure "resets" when a case is dismissed. That means lenders now have another chance to foreclose on homeowners who had their case dismissed, providing they try again within the next five years. The case consolidated three separate cases involving "standard residential mortgages."
Some foreclosure experts think the ruling will lead to a new wave of foreclosures.
"Basically, banks are getting a do-over," says Jonathan Kline, a foreclosure-defense attorney in Westin, Fla. He predicts an uptick in state foreclosures over the next 12 to 24 months, and says it could affect "tens of thousands" of homeowners in South Florida alone.
"When a mortgage foreclosure action is involuntarily dismissed … the effect is revocation of the acceleration, which then reinstates the (borrower's) right to continue to make payments," Justice Barbara Pariente wrote in the opinion. Homeowners who missed a number of mortgage payments can then keep their home if they begin making payments again. But under the ruling, that also gives lenders the right to foreclose again "based on (any) subsequent defaults," she wrote.
A bank's "attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults," the opinion says.
Source: Florida Politics, Jim Rosica, Nov. 3, 2016
The Supreme Court's decision is posted online.
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