Bankruptcy Lanigan Logo

Bankruptcy Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789


E-Mail Eric A. Lanigan HereE-Mail Roddy B. Lanigan Here
real estate

mortgage workouts

Florida Appeals Court Kills Foreclosure Deadline

The Florida Appeals court kills foreclosure deadline through a ruling change that resets the five year time-frame allowed a creditor to sue for debt collection. A district court’s recent reinterpretation of Florida’s five-year foreclosure deadline is tough news for many homeowners with older foreclosure cases dragging in the courts or that have been dropped.

Florida law gives a creditor five years to sue to collect on a debt. That includes mortgage holders who sue to foreclose on a property. If a suit has not been filed within that time limit or is abandoned, denied or dismissed, the creditor is out of luck. Courts have previously ruled that the five-year clock starts with the first missed payment.

Florida Appeals Court Kills Foreclosure Deadline Impacting Several Florida Counties

That’s now changed for some Floridians.

The state’s Fifth District Court of Appeals has ruled that every missed payment restarts the 5 year foreclosure deadline period. That means a lender could sue at almost any point during the life of a mortgage, plus for five years after (calculated from when the final payment was due).

Central Florida counties, cities and towns affected:

The appellate court has jurisdiction over cases in the following counties:

  • Brevard
  • Citrus
  • Flagler
  • Hernando
  • Lake
  • Marion
  • Orange
  • Osceola
  • Putnam
  • St. Johns
  • Seminole
  • Sumter
  • Volusia

Here are the district courts that this appellate ruling involves. Included are Winter Park and the cities and towns of:

  • Brooksville
  • Bunnell
  • Bushnell
  • Daytona Beach
  • Deland
  • Inverness
  • Kissimmee
  • Melbourne
  • New Smyrna Beach
  • Ocala
  • Palatka
  • St. Augustine
  • Sanford
  • Tavares
  • Titusville
  • Viera

Foreclosure more than 6 years old?

Florida’s first big wave of foreclosures is now more than 6 years old, and some homeowners had counted on the five-year statute of limitations. If you were one of them, this would be the right time to schedule a foreclosure consultation with Eric Lanigan or Roddy Lanigan of Lanigan and Lanigan.

The appellate decision, announced April 25, 2014, was in the case of U.S. Bank vs. Bartram.

It revolves around a $650,000 mortgage taken out by a man in 2005. The next January, he stopped making payments to the bank and his ex-wife, who’d received a note for about $155,000 on the property as part of their divorce.

The bank filed for foreclosure in May 2006, saying it had met all conditions to accelerate the note’s payments and did so.

Bartram never denied he had defaulted and didn’t challenge the debt’s acceleration.

Foreclosure was first dismissed due to 5-year rule

In May 2011, a trial court dismissed the 2006 foreclosure because the bank had missed a case management conference and the case was nearly 5 years old. The bank never appealed the dismissal.

In 2012, after his ex-wife sued him to foreclose on her note, the man filed a claim against the bank. He contended it didn’t hold an interest in the property because its 2006 foreclosure had been dismissed. And he said that because it had been more than five years since he defaulted on the accelerated payments, the statute of limitations meant the bank couldn’t foreclose on the mortgage or try to collect the note’s unpaid part.

Bank wanted to collect on more recently missed payments

The bank replied that the statute of limitations didn’t bar it from trying to collect on payments missed in the most recent five years.

The trial court ruled for the man, canceling the note and mortgage, plus releasing the bank’s lien on the property. The court denied a rehearing, and the bank appealed.

The appellate court said the five-year deadline to collect on the mortgage was triggered each time a payment was missed after the first suit’s dismissal. The court used reasoning similar to the Florida Supreme Court’s reasoning on a related topic in the 2004 case of Singleton vs. Greymar Associates.

The current case was remanded (sent back) to the original trial court (Circuit Court for St. Johns County) for further action that follows the appellate court’s ruling.

Main question going to Florida Supreme Court

Finally, the appellate court certified to the state Supreme Court the case’s main question. It focuses on the effect of acceleration of payments due under a foreclosure that is dismissed: Does the acceleration trigger the statute of limitations and prevent n additional foreclosure action for payment defaults after the first dismissed suit.

The state’s top court has discretionary jurisdiction in cases whose questions are certified to be of great public importance. This ruling has the potential to affect thousands of mortgages throughout the state.

If you have questions about how this Florida foreclosure deadline ruling could affect your foreclosure situation, call Lanigan and Lanigan at 407-740-7379 to set an appointment at the Winter Park, Florida, office. If you’re out of state or out of the country, a phone call may be setup to discuss your Florida property and how this may affect you.

Previous post:

Next post: