4th DCA Clarifies It’s Position on Association Foreclosure Interacting with Mortgage Foreclosure

Recently, the 4th DCA ruled that the foreclosure by the HOA was void for lack of jurisdiction and that the lender’s foreclosure was the property place to adjudicate all liens on the property, as discussed here.

The Court, upon re-hearing, withdrew this prior opinion and clarified it’s position.  Opinion here.

Upon re-hearing the Court held that the Association’s foreclosure foreclosure and judgment, filed after the mortgage holder’s lis pendens, was not in fact void.  The Court found that the basis for the Association’s lien was the Declaration of Covenants; which was recorded long before either the Association or lender filed lis pendens to foreclose.  Thus, the lender was on notice that the Association could file and foreclosure a lien based on violation of the governing recorded covenants.

The Court further held that “the association in Quadomain was attempting to foreclose its lien against the bank’s interest, as well as that of the homeowner, unlike the present case where the Association only foreclosed against the delinquent homeowner.”  Meaning that the lender’s interest would have been wiped out by interpreting the Quadomain ruling as it had.

The Court found that protecting the purpose of a lis pendens in protecting lender from liens unrecorded the time of filing, would not be served by allowing the homeowner to assert priority over the association’s interest.

Homeowners with both lender and association issues should contact an experienced attorney who is following the newest case law as it may change completely in a matter of a few weeks, as seen here, removing possible defenses or prior wins (or losses).   Contact us today for your FREE consultation!

Washington State Supreme Court Finds Banks Right To Enter And Secure Property ILLEGAL

In a ruling this month, the Washington Supreme Court found Nationstar’s actions to enter a property changing the locks to secure it after being deemed empty and abandoned illegal – a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.

The mortgage industry is currently coping with the significance of this ruling, which found that provisions standard in mortgage documents which allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned conflict with state law.

The court held that they violate state law, which prohibits lenders from taking possession of property before foreclosure.  This could equally apply to any state as the reasoning was that until the bank takes formal possession via the foreclosure process, that the bank was committing a trespass and theft.

Counsel for the homeowners is planning to seek damages that include the fair rental value of the class members’ properties between the time the locks were changed and the time the foreclosures were eventually completed — a period that typically spanned eight to 10 months, meaning damages could easily reach into the tens of millions of dollars

Washington appears to be the first state in the nation that has invalidated the provisions, the plaintiffs’ lawyers say, and consumer advocates say other states could follow suit or that the ruling could inspire additional class-action lawsuits.

If you have had your foreclosing bank change the locks and lock you out of the home you were living in at the time, contact u today for a consultation to see if a similar case can be filed on your behalf.