Florida’a 5 Year Foreclosure Statute of Limitations Eroded by the 5th DCA in U.S. Bank vs. Bartram

In last week’s ruling in U.S. Bank National Association vs. Bartram, the key issue was when the clock started ticking on the five-year deadline for the statute of limitations on foreclosure.

Many foreclosure defense attorneys agree that happens at the time of acceleration, when the bank decides after a series of missed payments that the entire loan amount is due.  That typically occurs on the date on the demand letter send to the borrower, or 30-32 days after the date that demand/acceleration letter was dated..

Bartram’s foreclosure was filed in May 2006 by the Law Offices of David J. Stern, which closed in March 2011 after allegations of wrongdoing. In May of 2011, the court dismissed the foreclosure after the bank missed a case management conference.

Eventually, the court canceled the note and mortgage and said the bank could no longer enforce its right to collect the debt.

But on appeal, the 5th DCA was decided the five-year deadline to collect started anew when each mortgage payment was missed. That essentially means the bank is under no deadline to refile for the life of the mortgage, typically 30 years, plus 5 years.

This may also result in banks restarting foreclosures on cases that it thought were to long gone to file new foreclosures on.  This ruling essentially gives banks unlimited time to refile foreclosure cases; until it is overruled by a higher court; such as the Florida Supreme Court, although unlikely.

Florida defense attorneys argue that this ruling is incorrect in many ways.  Most notably, if the bank accelerates that loan, says all of the future payments are due, how could these future payments be the basis of new defaults?  There is some Florida case law that mentions the concept of “deceleration,” or that if the ban dismisses the case, future payments again become due under the loan monthly which can be the basis of a new default and not barred by the statute of limitations.

Full opinion here

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