Foreclosure activity across both the state and the nation showed peaks and valleys during 2016, but many experts suspect that 2017 may bring heightened activity for Florida. This prediction is largely tied to a ruling made by the state’s Supreme Court just before the holiday season. Whether or not this will indeed be the case is hard to predict, but it is important for mortgagers to understand the ruling and its potential impact nonetheless.
In November 2016, the Florida’s Supreme Court issued a ruling concerning the state’s statute of limitations on foreclosure actions. Prior to the ruling, a lender was allowed to bring a foreclosure action which was dismissed by the courts within the 5-year statute of limitations, as long as the borrower remained in default. The statute of limitations to bring foreclosure action in Florida is enacted when a lender accelerates the promissory note following the borrower’s default. While this all still remains to be true, the ruling introduces a key difference in the process.
Now, when a dismissal occurs, the acceleration of the mortgage is revoked. Thus, the statute of limitations clock is set back to zero. The Florida Supreme Court also noted that following a dismissal, both parties will return to the same contractual agreement as prior to the action. However, without a foreclosure alternative, it is likely that the homeowner will remain in default. Therefore, the bank is essentially able to select a default date that best suits it.
How Mortgagers Can Protect Themselves
While it is important to be aware of this recent developing, it does not impact the many alternatives available to mortgagers to avoid foreclosure. Some of those options include: a short sale, a loan modification, or a deed in lieu of foreclosure. If every homeowner were to seek out quality legal representation, there would be no reason to expect an increase in foreclosure activity as a result of the ruling.
If you have or may soon default on your mortgage, a Miami foreclosure defense attorney at Graham Legal is here to answer any questions you might have. Call our office today to schedule a free consultation.