Article Courtesy of The Sun
By Paul Owers
December 7, 2016
Delinquent South Florida homeowners could be getting
long-delayed foreclosure notices after a court ruling cleared the way
for lenders to revive cases that have stalled for years.
The Florida Supreme Court ruled last month that lenders can refile
foreclosure cases against owners still in default, even if the cases
started more than five years ago, beyond the statute of limitations.
gives banks more privileges to bring cases back to
life," said Jerry Tepps, a foreclosure defense lawyer in
Among those worried about what happens next is Adam
Broder, who paid $386,000 for a two-bedroom condominium
in Delray Beach in April 2005, just before the housing
He stopped making payments in 2009, he said, and hoped
to get a mortgage modification. Instead, his lender, BAC
Home Loans Servicing, filed a foreclosure action that
BAC later dismissed voluntarily, records show.
The case has been in limbo for seven years.
"I just want to settle at this point and get on with my
life," said Broder, 36. "But the ruling gives [BAC] as
much room as they want to start all over again."
A ruling by the Florida Supreme Court gives
lenders the authority to refile foreclosure cases against owners
still in default, even if the cases started more than five
It's unclear how many other Florida homeowners will face foreclosure as
a result of Bartram v. U.S. Bank National Association.
Craig Waters, a spokesman for the Florida Supreme Court, said officials
aren't counting on a significant increase in foreclosures as a direct
result of the ruling. Waters said it was unusual for Florida judges to
throw out cases based on the statute of limitations, even before the
opinion was released.
For the 2016-2017 fiscal year, the Office of the State Courts
Administrator estimates that nearly 61,900 foreclosures will be filed
statewide — and the courts office doesn't project that number to
increase during the next five years.
Still, attorneys and industry analysts say they expect the Bartram
ruling will lead to hundreds or thousands of refiled cases that were on
hold until the Florida Supreme Court ruling.
"Banks have been keeping a bunch of cases in their back pockets," said
Thomas Ice, a real estate attorney in Royal Palm Beach. "They're saying,
'Let's wait and see what happens in Bartram before we start spinning our
Even if the foreclosure caseload increases, it almost certainly wouldn't
jeopardize Florida's housing recovery, said Daren Blomquist, a vice
president of ATTOM Data Solutions, a real estate research firm in
Blomquist said the extra cases actually would be good for the market
because banks would finally resolve open foreclosures and put more homes
up for sale. "In a market starved for inventory, this would be welcomed
by buyers and investors," he said.
During the housing meltdown that began in 2006, lenders filed
foreclosures by the tens of thousands, but cases often were dismissed on
legal technicalities by lenders or judges. In some instances, mortgage
companies didn't have witnesses in place for trial; in others, the
judges ruled that homeowners were improperly served foreclosure papers.
Lenders later refiled cases, sometimes after lengthy delays, prompting
homeowners to challenge the statute of limitations as a defense.
The uncertainty continued to drag out foreclosures, and critics argued
delinquent borrowers were benefiting by getting to stay in homes for
free while the cases played out.
"Is it fair for the people who maybe got two or three jobs to make their
mortgage payments?" said Guy Cecala, publisher of the Inside Mortgage
The Florida Supreme Court heard the Bartram case in 2015 and issued its
ruling on Nov. 3.
Homeowners who have been delinquent for longer than five years can
expect to start hearing again from their lenders, said Roy Oppenheim, a
real estate attorney in Weston.
Oppenheim said he's advising clients not to call their mortgage
companies to find out the status of the cases.
"Keep your head down and your mouth shut," he said. "If [the lenders]
find you, then do whatever you have to do to defend yourself."
Although the court's ruling favors lenders, it does provide hope to
owners who want to keep their homes, said Ice, the Royal Palm Beach
attorney. While lenders can refile cases that were started more than
five years ago, they can't collect on missed payments beyond five years,
He cited as an example a hypothetical homeowner who defaulted in 2007.
The foreclosure was filed in 2008 but later dismissed. In refiling the
case now, the lender can collect only the missed payments going back to
2011. The missed payments from 2007-2010 are wiped out.
Ice said homeowners and their attorneys should make sure the lenders
aren't trying to collect more past-due payments than they're allowed.
What's more, he said, lenders may be willing to settle these older cases
rather than go through the hassle and expense of foreclosure.
"Nobody's getting a free home, but you're in a much better position now
to negotiate a settlement to keep your house," Ice said.
Anthony DiMarco, a spokesman for the Florida Bankers Association, said
the court ruling brings clarity to the issue and provides an avenue for
lenders to be repaid, even if homeowners have been delinquent for many
DiMarco agreed that there is room for negotiation.
"I can't speak for every lender, but [in general] they want to work with
you to modify the loan as best they can to keep you in the home," he
said. "That's the No. 1 goal."