A Florida Supreme Court ruling announced earlier this week threatens more homeowners with foreclosure actions. Generally speaking, lenders have five years to foreclose on a home thanks to the state’s statute of limitations. In some cases, however, the courts have dismissed a foreclosure action, making it difficult for banks to finalize the foreclosure in time since the process must start again.
Florida Supreme Court modifies foreclosure’s time frame
Yesterday, though, the Supreme Court ruled that the five-year timeline for a foreclosure “resets” whenever a case is dismissed. Which means lenders now have another chance to foreclose on homeowners that had their case dismissed, providing they try again within the next five years. The case consolidated three separate cases involving “standard residential mortgages.”
Some foreclosure experts think the ruling can result in a whole new wave of foreclosures.
“Basically, banks are getting a do-over,” says Jonathan Kline, a foreclosure-defense attorney in Westin, Fla. He predicts an uptick in state foreclosures over the next 12 to 24 months, and says it could affect “tens of thousands” of homeowners in South Florida alone.
“When a mortgage foreclosure action is involuntarily dismissed … the effect is revocation of the acceleration, which then reinstates the (borrower’s) right to continue to make payments,” Justice Barbara Pariente wrote in the opinion. Homeowners who missed a number of mortgage payments are able to keep their home if they begin making payments again. But within the ruling, that also gives lenders the right to foreclose again “based on (any) subsequent defaults,” she wrote.
A bank’s “attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults,” the opinion says.
Who knows what effects this will have here in the Tampa Bay and Surrounding areas, Nick & Cindy Davis are both Certified Distressed Property Experts (CDPE) as well as Short Sale Foreclosure Resource Certified (SFR) we have assisted over 225 families negotiate a short sale. If you are need of assistance, feel free to give us a call at 813-300-7116 or simply click here and we will be in touch.