2d DCA Adds Insult to Injury on Statute of Limitations

Message to homeowners: Heads I win, tails you lose. Between Bartram and Desylvester the recurrent theme emerges as doctrine: If the homeowner wins a case the skids are greased for the bank to win the next round. The winner is treated as the party who SHOULD have lost and the loser is treated as the party who SHOULD have won. This fight is far from over.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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“Following the Florida Supreme Court’s recent decision in Bartram v. U.S. Bank, N.A., 41 Fla. L. Weekly S493, 2016 WL 6538647 (Fla. Nov. 3, 2016), courts were left to interpret how Bartram would affect lenders’ reliance on breach letters issued more than five years prior to a foreclosure proceeding initiated after the dismissal of a prior action. Florida’s Second District Court of Appeal answered this very question in its opinion in Desylvester v. Bank of New York Mellon, et al., which indicates that lenders need not send a new breach letter in subsequent foreclosure actions filed after the dismissal of a prior foreclosure if the borrower has failed to cure the initial default.
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In Desylvester, the Second District Court of Appeal affirmed the entry of final judgment of foreclosure in favor where the bank initiated a successive mortgage foreclosure action premised on the same date of default alleged in a prior foreclosure action, including “all subsequent payments due thereafter.” Consistent with the Bartram decision, the Court’s opinion confirms that, following the dismissal of a prior foreclosure action, a mortgagee is not barred from filing a subsequent action premised on a “separate and distinct” date of default––including a borrower’s continuing state of default––under the same note and mortgage.”
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An ounce of truth and a lot of craziness. I think Bartram stands for the proposition that the statute of limitations does bar actions for payments due before the beginning of the current statutory period. As I suspected we have the Florida Supreme Court thinking they fixed a problem by legislating from the bench — returning the parties back to their original positions except for payments barred by the statute of limitations.
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The second DCA has muddied the waters further in Desylvester v Bank of New York Mellon. The courts are continuing to search and twist looking for a hook on which they can hang their preconceived notion of how the case should turn out — i.e., for the banks. Dozens of SCOTUS decisions say these courts (not just in Florida) are getting it wrong and overstepping constitutional boundaries resulting in unfair consequences. This fight is not over.
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The 2d DCA here stretches the problematic view of the Florida Supreme Court in Bartram v US Bank. A default letter was sent for an alleged default that is now barred by the SOL. I suppose it might be logical to say that the creditor could still file a foreclosure action for the payments that are not barred by the SOL. But this court goes further and says that the original default letter can still be used as the basis of the new foreclosure action.
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The court is skipping over obvious ramifications of the Bartram decision whether you think that decision was right or wrong. If the parties are returned to their original position except for the payments barred by SOL, then the homeowner still has a right to a default letter that spells out the real number, as amended by application of the SOL, that is required to reinstate, and the disclosure of how that number was computed. Removing that requirement is removing (1) a basic element of the alleged “contract” (i.e., the mortgage instrument, paragraph 22 in most such instruments) and (2) the application of statutory laws governing the conditions precedent to filing foreclosure.
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The 2d DCA opinion is plainly wrong and wrongful. Again pushing aside the notions that foreclosure is an action in equity that should only be used as a last resort, the Court has essentially stripped the homeowner of basic protections provided by statute and provided by law. The Bartram decision was bad enough. The 2d DCA decision is basically reloading the gun for what is at best a questionable party to foreclose, placing the homeowner on his/her knees and cocking the gun for the bank or servicer — neither of whom have any right to even be in court.. Under Desylvester the losing party in the first foreclosure is treated as the winner and the winning party is treated as the loser.
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All of which prompts the the larger essential question: With the courts undermining due process at every turn in ruling for the banks under a political theory that the fall of the big banks will bring down the world order, how is anyone left going to trust in our institutions? And assuming the current polls and trends continue, what will be left of our society that will be worth saving?

Bartram: The Missing Links

Why did the Plaintiff lose in its “standard foreclosure”?

The decision on acceleration is essentially this: If the banks do it, it doesn’t count.

While Bartram didn’t turn out the way we want, there are two paths that nobody is talking about — logistics and res judicata.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The Florida Supreme Court decision in Bartram reinforces the absurd — that after losing in trial court, the pretender lender can sue over and over again for “new defaults.” The court has re-written the alleged “loan contract” to mean that a loss in court means that their acceleration of the entire loan becomes de-accelerated, meaning that acceleration is merely an option hanging in the wind that doesn’t really mean anything. The decision might have consequences when the same logic is applied to other actions taken pursuant to contract. The decision on acceleration is essentially this: If the banks do it, it doesn’t count.
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But two things remain outstanding, one of which the court mentioned in its opinion. Why did the Plaintiff lose in its “standard foreclosure”? The issues that were litigated as to the money and/or documentary trail have been litigated and are subject to res judicata. The Plaintiff, if it is the same Plaintiff, is barred from relitigating them.
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If Plaintiff failed to prove ownership of the loan and was using fabricated void assignments and endorsements, the lifting of the statute of limitations should not help them in attempting to bring future litigation. Many other such issues were undoubtedly raised in the original case. The Plaintiff would be forced to argue that while the issues were raised, they were not actually litigated and a judgment was not entered based upon those issues.
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The Florida Supremes took away the Statute of Limitations, up to a point (see below) but gave us the right remedy — res judicata. Even if a new Plaintiff appears, the questions remain as to how the alleged loan papers got to them remain open, as well as whether the paper represented any actual loan contract absent an actual lender.
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And then there are the logistics that I don’t think were considered in its decision. According to the Bartram decision the act of acceleration vanishes if the Plaintiff loses. The statute of limitations does apply for past due payments that are more than 5 years old. That means, starting with the date of the lawsuit (not the demand), you count back 5 years and all payments due before that are barred by the SOL.
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So if a Plaintiff loses the foreclosure, it can bring the action again based upon missed payments that were due within the SOL period. Of course if the Defendant won because the Plaintiff had no right or authority to collect on the DEBT, the action should be barred by res judicata. But putting that issue aside, there are other problems.
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“Servicing” of a designated “loan account” is actually done by multiple IT platforms. The one used for foreclosure comes out of LPS/Black Knight in Jacksonville, Florida. This is the entity that  fabricates documents and business records for foreclosure. It is not the the actual system used for servicing that deals in reality with the alleged borrower and accepts payments and posts them. It is incomplete. This system intentionally does not have all the documents and all the “business records” relating to the loan. For example there is no document or report that shows who was and probably still is receiving payments as though the loan were performing perfectly.
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The decision on when and if to foreclose is always performed by LPS/Black Knight in order to prevent multiple servicers, trustees, banks and “lenders” from suing on the same loan, which has happened in the past. LPS assigns the loan to a specific party who is then named by Plaintiff. And LPS creates all the fabricated paperwork to make it look like that party is the right Plaintiff and that the business records produced by LPS can be presented as the business records of the party whose name was rented for the purpose of foreclosure. It is LPS documents that are produced in court, not the records of the named Plaintiff.
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So here is a sample simple scenario that will illustrate the logistical problem created by the Florida Supremes: LPS issues a notice of default letter naming the claimant as XYZ, as trustee for XYZ series 2006-19B Pass Through Trust Certificates. Previously XYZ lost the foreclosure action by failing to prove that it had any relationship with the loan. The Notice of Default and right to reinstate issued by LPS on behalf of XYZ must be for payment that was within the SOL. This action of course waives the payments, fees etc that are barred by the SOL. It also assumes that the date of the letter AND THE LAWSUIT will be within the SOL period. So for example, if the last payment was on December 1, 2006 and the letter refers to a missed payment starting with January 1, 2012, the letter is proper. But if suit is not commenced until January 2, 2017, the letter is defective and the lawsuit is barred by the SOL. Further the doctrine of res judicata bars any cause of action that was litigated previously.
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All of this leads to a court determination of what issues were previously raised, when they were raised and whether the Final Judgment in favor of the homeowner means anything.

Florida Supreme Court Considers Clearing up Conflicts on Statute of Limitations

For further information please call 954-495-9867 or 520-405-1688

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http://www.dailybusinessreview.com/home/id=1202719316326/Florida-Supreme-Court-to-Visit-LenderFriendly-Foreclosure-Rulings?mcode=1202617073880&curindex=0&slreturn=20150203104522

“Kafaesque” is the term being applied to the state of Florida law on foreclosures. If you have commercial property then you have rights, but if it is your home, then maybe you don’t. Due process has been shattered for homeowners while complete strangers take their homes with the cooperation of Judges who are struggling with the caseload and their own bias about how damaging it would be if debts were not paid. What they are missing is that none of the people foreclosing own any debt and nobody is going to get paid as a result of the foreclosure except third parties with breadcrumbs, if any, left to the actual source of funds for the origination or acquisition of the loans.

Depending upon where you live in Florida the results are different. If you beat the foreclosing party in court, then at least one court thinks that the “bank” can re-foreclose on a subsequent default on a loan and default they failed to prove. Florida’s rule HAD BEEN clear. Banks get one chance to foreclose and if the case goes against them, they get nothing in foreclosure and if the statute of limitations has run they can’t collect on the note either. They can’t come back over and over again until they a get a judge who thinks they got it right. And it didn’t matter before whether the property was commercial or residential.

So now because various districts have interpreted the law differently, the Supreme Court must decide what it had already decided. It is reviewing teh Bartram case and will consider the arguments of all sides. For me, the issue is simple. If the borrower wants to file claims against the lender and he is barred by the statute of limitations, he is done regardless of the merits. What is good for the goose was good for the gander until the courts starting bending the rules to the breaking point. They should be corrected by the Florida Supreme Court.

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