And just what does “de-acceleration” mean?
From the Florida Bar Journal, (with important implications across all of foreclosures):
Mortgages in Florida are property liens securing the payment of debt, memorialized in a promissory note. Judicial foreclosure is the primary remedy available to recoup unpaid mortgage debt.3 Thus, at its simplest, a mortgage foreclosure is an action in breach of a promissory note, requesting judicial sale of property secured by the note through the mortgage. Modern notes and mortgages are most often installment contracts, whereby a new payment is due each month until the note and mortgage reach a maturity date.4 As such, the statute of limitations for an action on a written contract or foreclosure on a mortgage applies to enforcement of the note and mortgage. Florida law provides a five-year statute of limitations for both.5 The five-year limitations period for foreclosure begins when the foreclosure claim accrues against the borrower.
Further, if a lender takes affirmative action to accelerate the note and mortgage, then the application and accrual of the statute of limitations for recovering under the note and mortgage also evolve. Rather than accruing with each defaulted installment, one unified limitations period accrues immediately on all of the installment payments, i.e., triggering the limitations period for the entire principal balance through maturity.13 Thus, if the mortgage gives the lender an option to accelerate the entire debt balance after a defaulted payment, a single claim for the entire remaining balance can and does accrue when the lender exercises the contractual right to accelerate.14 It is of some debate in Florida whether the acceleration of the note and mortgage debt and the accrual of the statute of limitations may thereafter be undone by reinstatement of the original installment terms or dismissal of the foreclosure complaint alleging acceleration.15 Whether there can be a deceleration of the accelerated note and mortgage to restart the clock remains unanswered by Florida state courts.
Deceleration and Involuntary Dismissal
Beginning with Singleton v. Greymar Assocs., 882 So. 2d 1004 (Fla. 2004), courts have been pouring the foundation of deceleration in Florida. In Singleton, the Florida Supreme Court held that an involuntary dismissal with prejudice of a mortgage foreclosure action did not preclude by res judicata a later foreclosure action based on a subsequent default involving the same note and mortgage. The court held against res judicata preclusion because the dismissal with prejudice only had the effect of adjudication on the merits as to the first date of default, leaving the lender free to assert foreclosure and acceleration as to the subsequent default. The court stated:
[A borrower] may prevail in a foreclosure action by demonstrating that she [or he] was not in default on the payments alleged to be in default, or that the [lender] had waived reliance on the defaults. In those instances, the [lender and borrower] are simply placed back in the same contractual relationship with the same continuing obligations. Hence, an adjudication denying acceleration and foreclosure under those circumstances should not bar a subsequent action a year later if the [borrower] ignores [his or] her obligations on the mortgage and a valid default can be proven. . . . This seeming variance from the traditional law of res judicata rests upon a recognition of the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship. . . . If res judicata prevented a [lender] from acting on a subsequent default even after an earlier claimed default could not be established, the [borrower] would have no incentive to make future timely payments on the note….17
The court reasoned that “clearly, justice would not be served if the [lender] was barred from challenging the subsequent default payment solely because he [or she] failed to prove the earlier alleged default.”18 The court held that a later valid default provided a new and independent right to accelerate the note for a later foreclosure action, which was not precluded by the prior adjudication.19