In short: Usually not. Once the appeal time has run and an unaffiliated buyer has paid for the property while no lis pendens for the challenge was recorded, section 702.036 limits a challenge to the foreclosure judgment to a claim for money damages. In Nationstar v. Diaz, the lender’s own judgment left out $319,496.36 in deferred principal, and the property sold to an outside bidder for $533,900. On September 20, 2017, the Third District affirmed the denial of Nationstar’s motion to vacate, holding the judgment was not void.
The Facts
Nationstar Mortgage sued Vincent Diaz and Deisel Diaz in Miami-Dade County. According to the opinion, its complaints claimed $428,128.73 in principal and did not plead another $319,496.36 owed under a streamline modification as non-interest-bearing deferred principal.
Nationstar moved for an order to show cause under the expedited foreclosure procedure, attaching a proposed final judgment for $428,128.73 and setting a hearing for October 7, 2015. On August 25, 2015, before the defendants were served with the order to show cause, the trial court signed that proposed judgment. No one moved for rehearing or appealed it.
Nationstar then tried to fix the amount. It moved to amend the judgment, withdrew that motion, and moved to vacate for mistake or excusable neglect. The trial court denied that motion in December 2015, and Nationstar did not appeal. Nationstar next moved to vacate the judgment as void. It did not ask for a stay. The property was sold for $533,900 to AG 07 Investments, LLC, which had no connection to the lender or the owners, and no lis pendens about Nationstar’s challenge was on record at the time of the sale. The trial court denied the void-judgment motion after a June 24, 2016 hearing, and Nationstar appealed (No. 3D16-1927).
At oral argument, the panel asked whether the appeal was moot because title had passed to an unrelated buyer and the sale money had been paid out. Nationstar said it only wanted an evidentiary hearing to prove the omission was a mistake. The buyer argued section 702.036 controlled, and that a lis pendens on the challenge was not recorded until months after the sale.
The Decision
The Third District affirmed in a written opinion on September 20, 2017. The court held the judgment was not void. A judgment is generally void only if the court lacked subject matter or personal jurisdiction, or the judgment violated due process. Here, Deisel Diaz consented, Vincent Diaz never defended, and the judgment was exactly the one Nationstar proposed, in the amount its amended complaint demanded. The court affirmed the earlier mistake and excusable neglect ruling without discussion, finding no abuse of discretion.
The court then addressed section 702.036, while noting it did not need to reach it. All four of the statute’s conditions were met: proper service, a final judgment as to the property, expired appeal periods with no appeal, and a purchase for value by an unaffiliated buyer with no lis pendens on record. So at most, the court said, the trial court could have treated Nationstar’s request “solely as a claim for monetary damages.”
The Law
section 702.036 protects the finality of foreclosure judgments. When a party tries to set aside or challenge a foreclosure judgment and the statute’s conditions are met, the court must treat the request solely as a claim for money damages and may not grant relief that harms the title of an unaffiliated buyer for value.
Current law (2026): the statute was amended in 2023. The rule now appears in section 702.036(2), with the same four conditions: proper service in the foreclosure, entry of the final judgment, expiration or final resolution of all appeals, and purchase for value by an unaffiliated person at a time when no lis pendens for the challenge was recorded.
rule 1.540(b)(1) allows relief for mistake or excusable neglect if the motion is filed within a reasonable time and not more than one year after the judgment. A void judgment may be attacked under rule 1.540(b)(4), but voidness is narrow. The expedited show-cause procedure Nationstar used is in section 702.10, and the lis pendens statute is section 48.23.
Lessons
- Check the judgment amount against the loan history before the judgment is signed. Lenders and borrowers alike live with the numbers in it.
- If you are challenging a foreclosure judgment, record a lis pendens on the challenge and ask for a stay before the sale. Once an outside buyer takes title, section 702.036 can limit you to money damages.
- A ruling on a motion to vacate is appealable. Nationstar did not appeal the first denial, and the court affirmed it without discussion.
- A judgment entered exactly as a party proposed is very hard for that party to call void.
- Section 702.036 cuts both ways. It protects third-party buyers against lenders as well as borrowers.
Source: Nationstar Mortgage, LLC v. Diaz, No. 3D16-1927 (Fla. 3d DCA Sept. 20, 2017) (opinion); ACIS docket.
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
Foreclosure Judgment Omitted Deferred Principal: Does § 702.036 Bar Relief After the Sale?
Read the Law on FloridaRules.net
The statutes and court rules discussed in this article, free to read on FloridaRules.net:
Go Deeper
- How to Vacate a Default or Final Judgment in Florida: Rule 1.540 and Its Limits
- The Florida Foreclosure Sale: Timing, Redemption, Surplus Funds, and When You Have to Move
- Florida’s New Foreclosure Bill…The Legislative Branch Has Stripped Judges of Their Inherent Power
Frequently Asked Questions
Can a foreclosure judgment be set aside after the house is sold?
Sometimes, but not against an unaffiliated buyer once section 702.036 applies. If the borrower was properly served, the appeal time ran, and an outside buyer paid for the property with no lis pendens on the challenge, the court can award only money damages.
What if the foreclosure judgment has the wrong amount?
Raise it before the judgment is signed or by a timely motion for rehearing or appeal. A motion for mistake under rule 1.540(b)(1) must come within a year, and in Nationstar v. Diaz the trial court’s denial of that motion was affirmed.
When is a foreclosure judgment void in Florida?
Generally only when the court lacked subject matter or personal jurisdiction, or the judgment was entered in violation of due process. The Diaz court found none of those because the judgment was the one Nationstar itself proposed.
Do I need a lis pendens to challenge a foreclosure judgment?
If you want to protect your claim to the property against a later buyer, yes. Under section 702.036, a buyer who takes title when no lis pendens for the challenge is recorded can be protected, leaving only a money claim.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
Read the law yourself, free: every Florida statute and court rule is on floridarules.net.
This article is general information about Florida law, not legal advice about your situation. Reading it, watching the videos, or contacting the firm does not create an attorney-client relationship. Every case turns on its own facts, and past results do not guarantee a similar outcome. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
