In a rather surprising move, the Second District Court of Appeal (2nd DCA) has ruled (full opinion here) that a bank DOES NOT have to send a borrower written notice prior to filing foreclosure of assignment of their mortgage to another bank.
The basis for this argument lies in FL Statute 559.715 which states in part: “. . . the assignee must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt. The assignee is a real party in interest and may bring an action to collect a debt that has been assigned to the assignee and is in default.”
In plain English, when a creditor assigns your debt to another creditor, that new creditor is supposed to mail you notice 30 days before filing a lawsuit to collect that debt. Foreclosure defense lawyers have equated this collecting a debt to foreclosing of a mortgage seeking to collect the money on the loan. They have argued that 559.715 should be a condition precedent, a requirement to be done before filing the foreclosure, or else the foreclosure should be dismissed.
The 2nd DCA recently held that 559.715 was NOT a defense to foreclosure and the bank foreclosing is NOT required to send the borrower a written notice of assignment of the mortgage 30 days before the foreclosure is filed.
The Court reasoned that the intent of the statute was to streamline collections of consumer debts that are often sold to debt collectors; to ensure that only one creditor is collecting any one debt. In this case the Court found that only 1 bank forecloses in foreclosure and do not assign the debt to debt collectors where there could be multiple parties trying to collect.
The court also found that the standard form mortgage states that the bank can assign the note and mortgage without any prior notice to the borrower, and thus the contract already stated the conditions fully.
The 2nd DCA upheld the judgment against the borrowers in this case and the case will return to the trial court for the auction date to continue.