The typical home mortgage comprises two closely related transactions. The first is a contract between the borrower and the lender under which the lender agrees to pay the borrower money in exchange for a promise to repay that money with interest. This is the note. As a condition for entering into that contract, the lender requires the borrower to give the lender a security interest in their property. This is the mortgage. The borrower is the mortgagor and the lender is the mortgagee.
The lenders’ right under the mortgage is like a non-possessory property interest that the borrower effectively repurchases with each payment on the principal of the loan. While the note gives the lender an “in personam” right against the borrower, the security interest gives the lender an “in rem” right against the property. Hence, destruction of the property — say by a hurricane or fire — might destroy the value of the lender’s in rem right, but will not destroy its in personam right to collect the full value of the loan from the borrower even though the property no longer exists.
Now, if the homeowners want a chance to save their homes, it’s necessary and imperative to have the mortgage transaction analyzed. Because the FDIC found that 83% of the mortgage transactions have problems, and 76% of the appraisals as well.
There’s only one firm in the country that provides that mortgage transaction analysis service–Mortgage Fraud Examiners www.mortgagefraudexaminers.com
In an opinion issued today, Florida’s Fifth District Court of Appeal joined other Florida appellate courts in holding that the five-year statute of limitations to bring an action to enforce a promissory note and/or mortgage does not prohibit a lender from collecting amounts more than five years past due.
In Grant v. Citizens Bank, N.A., slip op., Case No. 5D17-726 (Fla. 5th DCA Dec. 26, 2018), the Fifth District, sitting en banc, examined whether the trial judge erred in awarding to a foreclosing lender interest that had accrued more than five years prior to acceleration and the filing of the foreclosure complaint. The court noted that while Florida has a five-year statute of limitations to foreclose, the impact of the statute of limitations is simply that acceleration and foreclosure must be based on a default that occurred within the five year period prior to filing the foreclosure action. Each missed monthly installment payment constitutes a new default on which foreclosure may be based. Furthermore, forbearance from accelerating the note upon a borrower’s default does not constitute waiver of the lender’s right to subsequently seek all sums due and owing. Therefore, even if the lender does not file an action on a note or mortgage until more than five years after the borrower’s initial default, the lender may still recover amounts more than five years past due so long as the action commences within five years of maturity or a subsequent missed installment payment.
In reaching this conclusion, the Fifth District receded from its previous opinions in Velden v. Nationstar Mortgage, LLC, 234 So. 3d 850 (Fla. 5th DCA 2018) and U.S. Bank, N.A. v. Diamond, 228 So. 3d 177 (Fla. 5th DCA 2017), cases in which the court concluded that the statute of limitations prohibited the collection of amounts more than five years past due. With Grant, the Fifth District now joins the Third and Fourth District Courts of Appeal in holding that a lender is entitled to recover all outstanding payments upon maturity or acceleration, even those that came due more than five years earlier. See Bank of Am., N.A. v. Graybush, 253 So. 3d 1188 (Fla. 4th DCA 2018); Gonzalez v. Fed. Nat’l Mortg. Ass’n, — So. 3d —, 2018 WL 3636467 (Fla. 3d DCA Oct. 1, 2018).
The First and Second Districts have not directly addressed the interaction between the statute of limitations and the amounts a lender may collect. Given that neither those appellate courts nor the Florida Supreme Court has spoken on the topic, and now that there is no longer interdistrict conflict between the Third, Fourth, and Fifth Districts on the issue, trial courts in all districts of Florida are bound by the Grant, Graybush, and Gonzalez opinions. Thus, lenders throughout the state of Florida are able to recover all amounts owed to them—not just those that accrued within the previous five years.
Neil Garfield has repeatedly asserted on his blog that all a borrower needs to do is send a rescission notice to the creditor in order to effectuate a rescission, whether or not a TILA violation occurred. And he has tried to con ignorant borrowers into paying $3000 for his useless “TILA RESCISSION PACKAGE” of related legalistic puffery.
Here’s proof that Garfield’s theory of TILA rescission, and of the SCOTUS Jesinoski opinion, is plain wrong.
In 2018 the Jesinoskis appealed the District Court ruling against them, and the 8th Circuirt Court of Appeals held this:
<blockquote>On remand, the district court granted summary judgment, concluding the signed acknowledgment created a rebuttable presumption that the Jesinoskis had received the required number of copies. The court also concluded the Jesinoskis failed to generate a triable question of fact rebutting the presumption. We affirm.</blockquote>
<a href=”https://scholar.google.com/scholar_case?case=13589908972768400499″ rel=”noopener” target=”_blank”>JESINOSKI v. Countrywide Home Loans, Inc., 883 F. 3d 1010 – Court of Appeals, 8th Circuit 2018</a>
You can interpret this to mean that a TILA violation is a condition precedent to TILA rescission. No violation = NO RESCISSION.
What a Mess Mark Stopa Made
Look at this mess. Florida Foreclosure Pretense Defense Attorney Mark Stopa loses his bar license, and a well-intentioned attorney takes over his business. The below email had an attached letter that includes the Florida Supremes’ order suspending Stopa from the practice of law and says his law firm has been dissolved.
It happened because Stopa cheated Foreclosure Defense clients.
Here is Mark Stopa getting hammered in court for bad behavior.
- Here’s the referee report denouncing Stopa’s reprehensible conduct.
- Here’s the record of Stopa screwing over clients.
- Here’s the Florida Supreme Court order suspending Stopa from the practice of law.
- Here’s the Bar record showing Stopa will lose the right to practice law after exhausting his appeals.
- Here is the email message that attorney Richard Mockler has sent to Stopa’s actual and intended victims in an effort to recruit them as clients.
Date: Fri, Aug 17, 2018, 12:55 PM
Subject: Important Time Sensitive Message
Dear Client, Attached is an important letter concerning your case with Stopa Law Firm, P.A. Please review attached letter and stipulation. It is important that you respond. We thank you for your attention to this matter.
———- END of Forwarded message ———
Why Foreclosure Defense Attorneys Deserve Censure
Now it’s time for a little honesty. Mark Stopa and thousands of attorneys like him deserve censure and public humiliation because of their horrific record of cheating their desperate foreclosure victim clients out of money and an honest advocacy. Such attorneys have built their practice on pretending to defend clients against foreclosure, but without doing any research to discover precisely who injured the clients in the loan transaction and how the injuries happened.
If they had done honest research, they would have discovered that upwards of 90% of home loan borrowers have suffered appraisal fraud, mortgage fraud, contract breaches, regulatory violations, legal errors in their documents, servicing abuse, and/or legal malpractice by the attorneys they hired to help save their home.
Why Typical Foreclosure Defense Attorneys Cannot Help Mortgage Borrowers in Trouble
Even the attorney taking over Stopa’s failed practice thought he could help keep foreclosure victims IN their homes.
But, he concluded that he can’t keep the clients in their homes. He could only do what Stopa did – delay the client’s loss of the home while charging absurd annual and/or monthly fees for the hand-holding until the inevitable foreclosure final judgment and sale of the home occurs.
Why? Because Stopa and other Foreclosure Pretense Defense attorneys NEVER do the full investigation required to prove that someone injured the borrower in the loan transaction. And so, they DO NOT KNOW whether and how the borrower got injured. Therefore, they cannot take legal action against the perps to win compensation for their mortgage victim clients.
SO, they can only DEFEND by seeking a dismissal without prejudice for failure to fulfill conditions precedent to foreclosing, or for lack of standing, or tolling of the statute of limitations. That means the right creditor will correct his errors and foreclose again, this time winning a final judgment.
What It Takes to Win Compensation
Unless the practitioner PROVES someone involved in the loan transaction or associated activities INJURED the borrower who faces foreclosure for breaching the note, then the vast majority of such borrowers will lose their homes to foreclosure, and the pretender defender attorney will merely delay the process while bilking the foreclosure victim out of monthly payments for the privilege.
In order to discover such injuries, a professional team must analyze the background story of the loan and examine every document in the loan transaction from day one to present time, including litigation documents, servicer correspondence, closing papers, appraisal, loan application, forbearance agreements, loan modification efforts, etc. Few if any (NONE that I know of) foreclosure pretense defense attorneys have such skill. Even if some had the skill, they would charge upwards of $15,000 to $20,000 at their hourly rates to do the examination, analysis, and reporting, which take 40 to 60 hours. What foreclosure victims can afford that?
Why Foreclosure Pretender Defenders Commit Legal Malpractice
The foregoing explains why foreclosure defense attorneys only pretend to defend against foreclosure, and never win actual compensation for their client’s injuries. And yet, those attorneys hold themselves out as experts in the law.
Think about this. The creditor accused the borrower of breach of contract by failing to make timely payments. Doesn’t it make sense that the defending attorney should investigate the circumstances and documents related to the contract in order to find out whether the contract is valid and whether the client suffered injuries in it?
An attorney commits legal malpractice who takes on such a client and fails to perform a comprehensive investigation and go on the attack for the injuries discovered. And that can justify a legal malpractice action against attorneys like Mark Stopa. But again, what foreclosure victim can afford such an action?
The Ultimate Solution for Mortgage Victims
The only solution to the above dilemma lies in finding an affordable mortgage examination service. The borrower should buy that service, and use the information in the examination report as the basis for demanding settlements from the injurious parties, or for filing actions for fraud, breach of contract, and breach of regulatory laws. In the vast majority of situations, the injurious parties far prefer settling with the borrower than fighting the borrower in a court case that the borrower will surely win.
For more information on the right way to attack the validity of the loan, see http://mortgageattack.com, and fill in the contact form.
Consumer Advocate and Mortgage Attack Maven
727 669 5511