FL Supreme Court Extends Statue of Limitation on Foreclosures

foreclosure2s

Last week the Florida Supreme Court announced a ruling that threatens more homeowners with foreclosure actions.

Generally, lenders have five years to foreclose on the home due to the statute of limitations.  In the past if the court dismissed a foreclosure action without prejudice the lender could still refile but needed to do so within the five years.  However, some cases are dismissed after the statute of limitations has already passed therefore prohibiting lenders from re-filing.

Last week the Supreme Court ruled that the five-year timeline for a foreclosure “resets” when a case is dismissed.  That means lenders now have another chance to foreclose on homeowners who had their case dismissed, providing they try again within the next five years.

“When a mortgage foreclosure action is involuntarily dismissed … the effect is revocation of the acceleration, which then reinstates the (borrower’s) right to continue to make payments,” Justice Barbara Pariente wrote in the opinion. Homeowners who missed a number of mortgage payments can then keep their home if they begin making payments again.  But under the ruling, that also gives lenders the right to foreclose again “based on (any) subsequent defaults,” she wrote.

Some foreclosure experts think the ruling will lead to a new wave of foreclosures as it could affect tens of thousands of homeowners in South Florida alone.