Florida 4th DCA Reverses Opinion that Lis Pendens Expires at Final Judgment of Foreclosure

Previously as discussed here, Florida’s 4th DCA held that the lis pendens expired at final judgment of foreclosure. This meant that any liens filed between the final judgment of foreclosure and the foreclosure auction/sale date were not extinguished by the foreclosure sale and remained on the property. This causes controversy as parties (like city liens, contractor liens, etc) could simply wait until after the final judgment of foreclosure and then file their lien making it survive the foreclosure auction; which typically wiped out all junior liens to the one being foreclosed.

In the case after final judgment of foreclosure but before the sale, the town filed numerous liens upon the property. A third party purchaser bought the property at the bank foreclosure. The purchaser filed a lawsuit to remove the town liens, but judgment was granted in favor of the town holding that the liens on the property survived as the lis pendens terminated at the final judgment of foreclosure.

The 4th DCA revised it’s decision finding the the recording of a lis pendens operates as a bar to the enforcement of all interests and liens, even if they were unrecorded liens or interest existed before or after the final judgment of foreclosure. The Court held that the final judgment of foreclosure is not the final resolution in a foreclosure proceeding, but rather the foreclosure auction. Further, the lis pendens statute references the occurrence of the judicial sale.

Doing so ends a potential controversy that a junior interest or lien could wait until after final judgment to record its lien and have it survive the foreclosure auction upon the property taxable to the new owner of the property.

Mortgage Borrower Cannot Sue Under FDCPA For Receiving Mortgage Statement Including Amounts Possibly Barred by Statute of Limitations

In a recent Middle District of Florida federal case, Garrison v. Caliber Home Loans, Inc., Case No. 6:16-cv-978-Orl-37DCI, a mortgage borrower sued their lender after receiving a mortgage statement showing that the full balance of the mortgage was still in effect.  Borrower’s contention was that as the foreclosure case brought in 2009 was dismissed in 2014, per the recent Bartram decision and independent default reasoning that the bank could name a new default but only within 5  years going back from current date, that the amounts beyond 5 years  back were not collectible.  Which said argument makes sense; those amounts likely are not collectible in a future foreclosure action (although there is no case law on the issue yet).

The borrower alleged that attempting to collect an uncollectible debt was a Fair Debt Collection Practices Act violation and sued under federal law in federal court for these alleged violations.

The court found that statute of limitations was a defense to foreclosure, but not an independent cause of action that one could sue upon.  While the borrower may be able to defend the amount due in a subsequent foreclosure action, it was not a FDCPA violation to send a mortgage statement showing the full mortgage balance still due.  The borrowers remedy was to use this argument as a defense if lender tried to foreclose and reduce the amount of the judgment owed to lender.