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Foreclosure Defense Florida

My Loser Argument of The Week- Is a Spouse Entitled to a Notice of Default?

I’ve had my posterior region handed to me on several key arguments because, quite frankly, I did not do my job correctly. Now, the second part of that is that even after exhaustive legal research, there is a lack of current case law that supports my argument, but that’s just the technical problem.   The real issue is I failed to support my argument to withstand proper legal inquiry.   So I want to turn several out to the larger community and see whether anyone else can take a better crack at these things.

Issue #1- In Florida, a spouse is a necessary party in a homestead foreclosure.   A spouse is a necessary party to the mortgage being foreclosed, she signs the contract. The Florida Constitution protects spouses from forced sale, even after the primary spouse’s death.   I think each party to the mortgage, each spouse, must receive a letter of default as a condition precedent to foreclosure.   Now, the banks assert the provision that “Notice to one borrower is notice to all” but they conveniently forget the rest of the sentence, “(u)nless Applicable Law provides otherwise”.

So help me out people, does the Applicable Law, starting with Florida’s Constitutional homestead protections, require that a spouse in a homestead mortgage receive a notice of default?   Remember, the purpose of those “innocent spouse” protections are so that a spouse has notice before the other spouse’s conduct (concealed from the innocent spouse and kids) divests the family of the homestead….

So chew on this argument and please give me feedback….should we all just walk away and not make this argument again or should it be fought for?

When a mortgage contains a clause which provides that a lender ” shall” give notice to a borrower before accelerating the amounts due, this language creates a condition precedent which must be satisfied before a lender is entitled to a foreclosure judgment.   See Konsulian v. Busey Bank, 61 So. 3d 1283 (Fla. 2d DCA 2011); Laurencio v. Deutsche Bank, 65 So. 3d 1190 (Fla. 2d DCA 2011); Bryson v. BB&T, 36 Fla. L. Weekly D2582a (Fla. 2d DCA 2011); Goncharuk v. HSBC Mortgage Servicing, Inc., 62 So. 3d 680 (Fla. 2d DCA 2011); Taylor v. Bayview Loan Servicing, 74 so 3d 1115 (Fla. 2d DCA 2011); Wroblewski v. American Home Mortgage, 68 So. 3d 431 (Fla. 5th DCA 2011); Frost v. Regions Bank, 15 So.3d 905, 906 (Fla. 4th DCA 2009).
Indeed, where such a clause resides in a mortgage, and a foreclosing lender fails to give such notice, dismissal is the proper remedy.   See Rashid v. Newberry Federal Savings and Loan Association (Rashid II), 526 So. 2d 772 (Fla. 3d DCA 1988).
” [O]nly when the option [to accelerate a debt] is exercised in an effective manner does acceleration take place.” Florida Zippo, Inc. v. Prudential Insurance Company of America, 579 So.2d 192 (Fla. 3rdDCA 1991).

Argument

Further, to the extent that this provision is ambiguous, the Florida Supreme Court states that courts ” are obligated to construe the ambiguity against the draft and in favor of the [defendant]” Auto-Owners Insurance Co. v. Anderson, 756 So.2d 29, at 36 (Fla. 2000).

Requiring Notice only be Sent to One Borrower is Expressly Prohibited by Applicable Florida Law
Florida’s constitution places the spouse of homestead property into a heightened position:

Florida Constitution, Article 10, Section 4.”ƒHomestead; exemptions.””

(c)The homestead shall not be subject to devise if the owner is survived by spouse or minor   child, except the homestead may be devised to the owner’s spouse if there be no minor               child. The owner of homestead real estate, joined by the spouse if married, may                   alienate the homestead by mortgage, sale or gift and, if married, may by deed                   transfer the title to an estate by the entirety with the spouse. If the owner or spouse is                 incompetent, the method of alienation or encumbrance shall be as provided by law.                   Emphasis added.

The purpose of homestead law is to ” protect and preserve the interest of the family in the family home” and ” promote the stability and welfare of the state by securing to the householder a home, so that the homeowner and his or her heirs may live beyond the reach of financial misfortune and the demands of creditors who have given credit under such law” ” [I]t is clear that the homestead provision is to be liberally construed in favor of maintaining the homestead property.” Snyder v. Davis, 699 So.2d 999 (Fla. 1997)

  1. Further, with regards to the rights of the spouse, courts have consistently held that ” the owner of mortgaged property is an indispensable party to an action to foreclose a mortgage on that property.” Further, courts have held that ” it was improper to allow a foreclosure against [one spouse’s] interest alone.” Lambert v. Dracos, 403 So.2d 481 (Fla. 1st DCA 1981).

9 Comments

  • Chris says:

    Matt? Why is it even an issue? Did the spouse deliberatly hide it from the other spouse? Was the spouse unable to comprend what it was saying. Did the sub-servicer send the letter? Was it a bank? Bills come once a month to one person, I am not sure that a default letter would have to. Would innocent spouse act fall in there somewhere? Did they have the money to address the default letter? If it was a sub-servicer acting on behalf of a Trustee, has the sub-servicer RECORDED their POWER OF ATTORNEY in the OFFICAL LAND RECORDS. If it’s Deutsche and there is a POA, I can tell you how and why it probably is fake. Does the Trust even exist? Did the Notice of Default disclose that it was a Trust……… Trustees have special rules as you know.

  • Chris says:

    The entity that sent out the Notice of Default. Do they even have a right too? Are they the real servicers? If it is SPS or Ocwen…………highly suspect or AHS…………. Does the Trust still exist? If it does, was it an REIMC? Cause if it was…………the loan can’t be in there anymore, impossible. to be in the REIMC a mortgage must be current according to the IRS. Did they make up a bogus Corporate Assignment of Morgage. Again, impossible if it went into an earlier Trust.

  • Chris says:

    The entity that sent out the Notice of Default. Do they even have a right too? Are they the real servicers? If it is SPS or Ocwen…………highly suspect or AHS…………. Does the Trust still exist? If it does, was it an REIMC? Cause if it was…………the loan can’t be in there anymore, impossible. to be in the REIMC a mortgage must be current according to the IRS. Did they make up a bogus Corporate Assignment of Morgage. Again, impossible if it went into an earlier Trust. MERS involved?

  • Angelo says:

    @Matt
    Check out these two NY Appellate decisions(2nd Dept.), they might be what your looking for.
    First Natl. Bank of Chicago v Silver
    https://www.nycourts.gov/reporter/3dseries/2010/2010_02511.htm
    Aurora Loan Servs., LLC v Weisblum
    https://www.nycourts.gov/reporter/3dseries/2011/2011_04184.htm
    I have the Appellate brief’s and replies if you need them, just email me.

    • i know the notice is required, but there is no case law i can point to and the judge just didn’t buy it….but frankly i made a whimper puppy argument on this point….i was hoping for some servicing or federal regs on notice in addition to the provisions cited, but for now, i’m stuck….great work on your cases…Florida is a wasteland.

  • Patel says:

    I believe foreclosure is on the Mortgage not on the promissory note(contarary to suing on the Note).
    Acceleration, condition precedent, Notice of default are in the mortgage contract to which both spouses are the signatories.
    Who makes payments/contributes to equity in the property is immaterial. Moreover Fla. Statute 61.075 requires additional burden on “the Party” claiming (presumpting to the contarary),one can try throwing 2012 Fl. S.Ct. lines referencing the presumption in re:Nader, that the default/acceleration notice was given to one spouse, equals giving notice to both, thereby denying the other spouse the right to early redemption of his/her equity pursuant to a Lender’s contractual obligation. Remember, “My client is not a dead-beat homeowner, but equity holder, and has a right to redeem his/her equity” line you heard in the court.

  • ralph fisher says:

    Matt,
    I have a similar argument that I’m making in a case in Pasco County, Florida wherein the first page of the mortgage has my client’s name clearly written in underneath the word “borrower”. She isn’t a signatory on the note but the mortgage doesn’t make an acception to the notice requirement in paragraph 22 for people in her situation. She did sign the mortgage and we are claiming that she should’ve received notice of the default and an acceleration notice because she is labelled as a borrower on the face of the mortgage. I’ll let you know what happens at the MSJ hearing we are setting on the issue.

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