In April 2014, the Fifth District Court of Appeal made a ruling that would have a major impact on homeowners. In the U.S. Bank v. Bartram case, it decided that each default occurring after a failed foreclosure attempt would create a new cause of action for lenders, allowing them to extend the five-year statute of limitations so they could collect home mortgage debt after the window to file closed.
What’s more, the same remains true even when the process of accelerations has been initiated and the first case has been dismissed due to lack of merit. This process ejects the foreclosed homeowner and puts the property back on the market, allowing the lender to recover his or her investment. Additionally, the ruling could reopen thousands of cases that were initially dismissed because of mortgage fraud.
So, what does this exactly mean for homeowners moving forward?
Lenders Can Initiate a Second Foreclosure Action
If a lender’s first foreclosure action has been dismissed and five years have passed, the lender can initiate a second foreclosure action if the homeowner defaulted sometime after the first one. In short, the statute of limitations that originally protected homeowners won’t prevent lenders from initiating new actions against them – the first time a Florida appellate court has clearly stated that.
Homeowners Could Face a Financial Fight After a ForeclosureUnfortunately for homeowners, the Bartram decision favors lenders heavily. Even after facing and fighting through a foreclosure, homeowners could continue to be responsible for the debt they owe lenders and deal with it well into the future.
It’s important that all homeowners in this situation talk to an experienced real estate attorney. Trying to save your home alone could spell trouble in the future.