Sunday, May 12, 2013

What to Do When You Get a Florida Foreclosure Acceleration Letter

A common problem in the early stages of foreclosure involves the acceleration letter, also called the 30-day letter from the lender.

Find out more about this topic by viewing the video on this issue at the Lanigan&Lanigan YouTube channel.

This letter from the lender notifies you that you're in default. It sets forth requirements to cure the mortgage foreclosure and default. It's considered to be the Miranda rights of foreclosure.

Why Are You Getting This Letter?
You're getting the letter because you're behind on your mortgage. The document is approved and required by Fannie Mae and Freddie Mac setting forth the requirement that the bank must notify you of the default and their intent to accelerate.

Why is that important? It's important because the Florida courts have ruled recently and consistently that the banks must strictly comply with this provision of the mortgage. Now remember this is their mortgage, they put this provision in there and therefore they must strictly comply with it.

The other important thing about it is almost everyone of these letters is defective. If you followed strictly down the line of the requirements of the acceleration letter, usually the letter does not comply with the bank's own mortgage language.

If the 30-Day Letter is Defective
The remedy that the court must apply is dismissal of the foreclosure action. Not stop the foreclosure action so they can go back and send a new letter that fixes the mistake. Because remember the proper notification was a condition precedent to filing of the lawsuit. It's something that must be done before they have the right to file a foreclosure action.The proper remedy that the courts apply is to dismiss the foreclosure action.

Now does that suddenly mean that you have the house free and clear? No because that dismissal is what we call without prejudice. It means that the lender can refile the foreclosure action after they have complied with the proper acceleration letter. Now the significance of that is it will take a significant amount of time and because you have now won or are the prevailing party in the first foreclosure action you're entitled to recover all your fees and costs incurred in defending that first foreclosure action before the bank can file their second action.

Florida Five Year Statute of Limitations
If it has been more than five years since your last payment on the mortgage since you went into default fortunately for you, the statute of limitations in Florida is five years. They now have to refile the lawsuit and you now have an entirely new defense which a catastrophic defense from the bank's perspective. They cannot pursue the foreclosure action because the statute of limitations has run.

If the bank can't sue to collect on the note then they can't foreclose on the property. If there's no suit on the note, there can't be a foreclosure action. Therefore they can't proceed. They're frozen.

The next step would then be for the homeowner to file a quiet title action to remove the mortgage lien because the mortgage lien cannot be enforced so the end result there is no debt, no mortgage.

Don't Try Handling This Without An Attorney
You've got that acceleration letter, keep it. It could be vitally important in the defense of your foreclosure action. And if you've already gotten it, go find it because it's going to be a very important tool down the road if it's used properly.

Contact Eric Lanigan and and Roddy Lanigan, of Lanigan and Lanigan, a law firm in Winter Park, Florida  to invest in a consultation to review your foreclosure. Contact the office at 407-741-7379.