We are still waiting for the Florida Supreme Court to decide this issue that it has previously decided before. It may seem obvious that when the Statute of Limitations has run you are SOL even on a valid claim. But in the grand effort to prevent “free houses” the Florida 3rd DCA in Beauvais came up with alternative theories. Presently we wait for the The Florida Supreme Court to decide the issue once and for all.
To simplify it, the issue is basically what is the effect of an acceleration letter. For a long time, it has always been treated as a legal act that has consequences for both the borrower and the lender. The 3rd DCA has basically changed that. It says the acceleration letter can be used against the borrower but otherwise it means nothing when we consider the rights of the “lender.” of course we know that none of these Plaintiffs are “lenders” in any sense of the word, but that is not the point here.
It has always been the law that acceleration means what it says and that it has the legal effect of what it says. If sent, it means that the entire balance has become due and the statute of limitations starts ticking from the time the acceleration letter was sent. That gives the bank 5 long years (Florida statute of limitations) to finalize its claim.
The 3rd DCA has come up with a novel rationalization, to wit: that the acceleration letter is good for a foreclosure action seeking the entire amount due but it becomes irrelevant for all other purposes — like when the borrower wins the case. That means that the purported lender can sue on those payments that became due after the statute of limitations had run out as of the date of the default or the date of acceleration — this is not clear from their decision. The problem with this theory of course is that once notice of acceleration is given, there are no payments due except the entire principal balance, interest etc.
Besides being wrong on legal theory the 3rd DCA essentially was (a) making bad law for other future cases in which this type of legal reasoning is used and (b) it keeps the court’s dockets filled with “new” foreclosure cases that were screwed up by the “banks.” That means that the doctrines relating to finality are being brushed aside, opening the door for all kinds of claims by Plaintiffs who already lost their case.
If the shoe was on the other foot the same court would be talking about finality and how the homeowner, even if they had prior claims, should have brought them before or cannot complain that they lost the first time around. And that is unequal treatment under the law.
Filed under: foreclosure