Roy Diaz’s above-linked article could generate more readership for you if you allowed people to register and comment. I submit these comments because the topic needs discussion.
The point Roy makes, that courts merely want to enforce a contract, while true, simply does not address two serious, glaring problems:
1. The Legislature provided a foreclosure limitation of Five years. That constitutes more than ample time to sue for foreclosure of a mortgage loan in default. Acceleration constitutes an arbitrary but binding and optional change of the terms of the note from a monthly payment scheme till maturity into an immediate payment of the entire balance plus accrued escrow, interest, and legal fees. Thus, at acceleration, the plaintiff has a full 5 years to sue for foreclosure sale of the mortgaged property, even though the loan balance, etc., remains collectable for 20 years.
2. The vast majority of mortgage notes lack validity because of appraisal fraud, mortgage broker fraud, and a variety of other injuries to the borrower perpetrated at the inception of the loan or during servicing of the loan.
Unfortunately, Roy did not address point 2 at all, but he should have.
Mortgagors in foreclosure hire an attorney to help them defeat the foreclosure. Attorneys know they deal with a contract dispute, and they know that government and lenders colluded in a nationwide predatory lending scheme that collapsed the economy and destroyed homeowner equities, driving many into job loss and foreclosure. But they don’t attack the predatory team members, such as the lender who underwrote the bad loan, or the appraiser, mortgage broker, title company, realtor, and lawyers who facilitated it. Instead, they tell the feckless mortgagor that they’ll drag out the foreclosure as long as possible, and they often don’t even bother showing up at the summary judgment hearing. And such dilatory efforts violate the rules regulating the Florida Bar, and the Bar should discipline such attorneys who engage in them.
In other words, no defense will prevail against foreclosure of a valid mortgage note, but a mortgage loan that lacks validity constitutes fair, juicy game for an aggressive contract breach and tort attorney.
For a crystal clear example of how an attorney should attack a predatory lender, see the Brown v. Quicken Loans case which I have documented here:
Why don’t Florida foreclosure defense lawyers follow suit?
Because they follow a different business model, one recommended by arch Kool-Aid Drinker Neil Garfield. The vast majority, or maybe ALL, of foreclosure defense attorneys in Florida charge their foreclosure victim clients $1000 to $20,000 down and $300, $500, or $1000 per month (whatever they think they can get) to file cookie-cutter or copy-machine pleadings and then abandon the client at the last minute, OR earn a fat commission for setting up a loan mod or short sale. They don’t examine the mortgage for evidence of injuries, and they don’t mount an attack for the injuries they discovered because it takes way too much work, resources, and skill to do it properly.
With the failing, flailing foreclosure defense model they use, they might handle 200 clients at a time and make $20,000 to $50,000 each. By contrast, they could only handle 5 or 10 clients in a full-bore mortgage attack action, and in most cases they would have to finance the action because most foreclosure victims, though badly injured, do not have the up-front money to fight a legal battle.
Thus, the dispute and debate over the statute of limitation constitutes a smoke screen that obscures the real issue – foreclosure victims have kool-aid-drinkers for their attorneys – lawyers who know they cannot save the house from foreclosure but who bilk their clients for a sideshow that inevitably leads the client to loss of the house. Meanwhile, most of those clients suffered real injuries at the inception of the loan, and the lawyers’ legal malpractice will leave the injuries undiscovered while the client loses the house.
A mortgage examination by a competent professional could provide those attorneys with proof of injuries to the client. In my opinion, an attorney’s failure to get the mortgage examined constitutes legal malpractice because I know, and every attorney should know, that numerous causes of action underlie most mortgage loans of the past 15 years. Litigation consultant Storm Bradford, the nation’s premier mortgage examiner knows this from personal experience, and he shared his view of the issue with me today:
“We have done well over a thousand mortgage examinations since 2007. In every exam we have ever done there was at least something that could be negotiated with the bank or used in a lawsuit against the injurious parties.”
Storm Bradford, Mortgage Fraud Examiners.
I personally believe judges have a duty to “do the right thing” in equity proceedings like foreclosures. Even so, the Legislature, not the judiciary, has the authority to make the law, and the law (Florida Statute chapter 96) provides 5 years for commencement of a foreclosure action.
95.11 Limitations other than for the recovery of real property.—
(2) WITHIN FIVE YEARS.—Actions other than for recovery of real property shall be commenced as follows: (c) An action to foreclose a mortgage.
Plaintiffs nearly always come forward with an action within 5 years after breach of the note. But when they do a bad job with the complaint, the court dismisses the action with prejudice. Any more recent breach restarts the Limitation clock. If the Plaintiff does not file a new action within 5 years of the most recent breach, the Statute of Limitations prohibits the court from hearing the case.
Plaintiffs have argued that even though they accelerated the note properly, making the full balance due and payable at once, the originally scheduled payment stream also remains due, and that extends their window of opportunity to 5 years after the term of the note. Their opponents argue that acceleration slams that window of opportunity shut because it converts the original schedule of, for example, 360 monthly payments into a single payment due immediately. But they argue that it remains due immediately forever, until the court orders a final judgment of foreclosure.
This has become a sticky mess. I believe government precipitated it by requiring lenders to drag out foreclosures through offering loan modifications, and Plaintiffs made foreclosures even worse by failing to show up with the real person entitled to enforce the note, having the actual, correctly indorsed note, in-hand. That opened the door for foreclosure defendants to demand dismissal of the case for lack of standing. And all of that backed up the courts and the plaintiffs in a very messy snarl of litigation.
The Florida Supreme Court does have to sort out this mess. But the fact remains that borrowers should attack the lenders, appraisers, mortgage brokers, title companies, and others who injured them at the inception of the loan. THAT, Mortgage Attack, constitutes the best defense against foreclosure, and it moots the issue now before the Supreme Court.