In a recent article for the Daily Business Review, a highly-regarded legal industry publication, Miami Foreclosure Attorney Bruce Jacobs of Jacobs Keely weighs in on the issue of why lenders can’t flout the statute of limitations.
The piece, “Statute of Limitations Applies to Everyone, Even Lenders,” stems from the mortgage foreclosure case of Bartram v. U.S. Bank, for which the Florida Supreme Court will hear oral arguments on appeal from the 5th DCA on November 4th.
Statutes of limitations exist in both criminal and civil law for purposes of keeping the law both fair and predictable and preserving the court’s order. So for example, in personal injury cases, claimants have up to four years to file a claim, after which point the right to sue expires. For written contracts (which includes mortgages) the statute of limitations is five years. A claimant who waits any longer than that loses out on the right to have that case heard – regardless of whether damages are $10 or $10 million.
However in the Bartram case, defense has made a deeply troubling assertion in claiming lenders should be granted a judicial exception in mortgage contract cases. The primary issue raised is this: At what point is the timer set on filing a mortgage foreclosure action? Prior to the 5th DCA’s decision, it began with the bank’s first foreclosure filing and ended five years after that point. In fact, that’s the law in pretty much every other state that has a statute of limitations on foreclosure actions. What the bank is attempting to do in Bartram is to arbitrarily (and to their favor, of course) declare a new default date, even after the passage of five years since the original acceleration.
As it now stands, there are some very limited exceptions to the statute of limitations. Those include things like capital crimes (i.e., murder) or cases where someone doesn’t learn they were exposed to a toxic substance until years later when they are diagnosed with a terminal disease. Now, bankers want this same exception.
In the Bartram case, U.S. Bank filed a mortgage foreclosure lawsuit against a homeowner in May 2006. However, the law firm that filed the case on behalf of the bank was hit in 2011 with allegations of wrongdoing in the “robo-signing” scandal. A few months later, which was almost five years to the date of the original filing, the plaintiff bank missed a case management conference. Trial court decided to dismiss the foreclosure case.
Trial court ultimately issued a summary judgment in favor of homeowner, based on the expiration of the five-year statute of limitations. Bank appealed, and two years after that, the 5th DCA granted the bank’s request. Appellate justices ruled that a new five-year timeline started with each missed mortgage payment.
There might be merit to this finding, except that it misses the key point that once a lender accelerates a mortgage, no more payments are due.
What this ruling would due is gut the statute of limitations on Florida’s mortgage foreclosure system. Essentially, lenders will have the right to “reset” the statute of limitations clock at any point. This could open the door to a flood of new cases, still lingering from the 2008 crisis.
Our Miami foreclosure lawyers take a strong stance on this because essentially what it comes down to is legislating from the bench.
To read more on this topic, access the Daily Business Review article here.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
Statute of Limitations Applies to Everyone, Even Lenders, Oct. 21, 2015, By Bruce Jacobs, Daily Business Review
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Miami Herald: Florida Renters Vulnerable to Eviction With Little Notice, Sept. 11, 2015, Miami Foreclosure Defense Lawyer Blog