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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION: BERGEN COUNTY
DOCKET No. F-30508-15

ANIM INVESTMENT COMPANY,
Plaintiff,

vs.

GEORGE SHALOUB and KATHLEEN
SHALOUB, et al.,

Defendants.

In the foreclosure action brought before this court, Defendants filed a Motion to Dismiss
Plaintiff’s Complaint with Prejudice on February 9, 2016, asserting that
the statute of limitations for the Plaintiff to commence the within foreclosure action has expired.
Plaintiff filed an opposition on March 4, 2016, and a Cross-Motion for Summary Judgment on
June 15, 2016.

Due to the relative recency of the enactment of the statute of limitations addressing
mortgage foreclosures in this State, there is little guidance presently available regarding analysis
of a litigant’s application to dismiss a Complaint based on a statute of limitation defense. After
extensively reviewing the existing case law and statutes, and giving due consideration to each
party’s arguments and submissions, the court finds that Plaintiff is now time-barred from filing a
foreclosure complaint and from obtaining a final judgment of foreclosure.

The following material facts are undisputed by both parties:

1. Defendants George Shalhoub and Kathleen Shalhoub borrowed $178,100 from Mina
Investment Company and on September 19, 1990, signed a Note.
2. That same day, Defendants George Shalhoub and Kathleen Shalhoub executed a
Mortgage in favor of MERS, as nominee for Mina Investment Company, covering
premises at 522 Cleveland Ave., River Vale, NJ. This Mortgage was recorded.
3. This Mortgage was assigned to Anim Investment Company, by assignment dated October
14, 1997.
4. Defendants defaulted on November 1, 1990 and remains in default.
5. Notice of Intention in form complying with the requirements of the statute was sent by
plaintiff’s servicer on February 12, 2015 (more than 30 days prior to the commencement
of suit).
6. Suit was commenced on September 2, 2015.
7. Defendant’s motion for Summary Judgment was filed on February 9, 2016.

Initially, both parties agreed and set forth arguments based on the assumption that the
applicable statute of limitations for mortgage foreclosures is twenty (20) years. N.J.S.A. 2A:50-
56.1(c). Under N.J.S.A. 2A:50-56.1(c), an action to foreclose a residential mortgage cannot be
commenced after twenty years from the date on which the mortgagor defaulted. Based on that
assumption, Plaintiff argued that the date of default is the maturity date stated in the Mortgage,
October 1, 1995, and that the running of the statute of limitations pursuant to N.J.S.A. 2A:50-
56.1(c) commenced on the maturity date stated on the Mortgage, providing him until October 1,
2015, to file timely Complaint. Conversely, Defendants argued that the date of default is
November 1, 1990, the date Defendants failed to make their first monthly payment.

Accordingly, Defendants argued that the running of the twenty (20) year statute of limitations
commenced on November 21, 1990, twenty days after they failed to make their first monthly
payment, resulting in the expiration of statute of limitations on November 22, 2010. Plaintiff
filed the Complaint on August 31, 2015.1

Plaintiff argued that the twenty-year limitations period did not begin to run until the
maturity date, as the Mortgage contained a standard language that gives the option to the
mortgagee to declare a default and accelerate the principal balance: “the aforesaid principal sum,
together with interest and all arrearages of interest thereon shall, at the option of the said
Mortgagee, become and be due and payable immediately thereafter . . . .” (Ex. A to Defendants’
Motion) (emphasis added). Plaintiff asserted that the mortgage was never accelerated until the
maturity date. Defendants opposed Plaintiff’s argument by pointing to a Rider to the Mortgage
that that did not require the Plaintiff to send any separate notice to the Defendants accelerating
the principal, as acceleration under the Rider was automatic and self-actuating when the
Defendants started missing monthly payments: “There shall be an acceleration of the unpaid
principal balance in the event of any default under the Mortgage and the Note” (emphasis
added). (Ex. A to Defendants’ Motion, Rider to Mortgage at ¶ 8). Plaintiff argued that such
automatic acceleration was illegal under N.J.S.A. 2A:50-56(a) of the Fair Foreclosure Act, which
he argued prohibits an automatic acceleration, and which prohibits the acceleration of a
Mortgage prior to full compliance with the formal notice required by the statute.
After hearing oral argument on this issue, the court, unconvinced that the twenty year
statute of limitations set forth in subsection (c) applied, questioned which subsection of N.J.S.A.
2A:50-56.1 was in fact applicable, and whether the statute could be applied retroactively to a
Note and Mortgage executed in 1990, and a Complaint that was filed in 2015. As a result, the
court directed the parties to submit supplemental briefs and heard additional arguments as to
these issues.

The Fair Foreclosure Act was enacted in 1995 to protect residential mortgage debtors, in
furtherance of the public policy of this State that homeowners should be given every opportunity
to keep their homes. The Fair Foreclosure Act took effect on December 4, 1995, and applies to
actions commenced on or after December 4, 1995 (emphasis added). See First Am. Title Ins.
Co. v. Tilbury, DDS# 15-2-3840 (App. Div. 2003) (Fair Foreclosure Act did not apply to an
action commenced in 1987); Federal Nat’l Mortg. Ass’n v. Bracero, 297 N.J. Super. 105, 107
(Ch. Div. 1996).

Section 2A:50-56.1 of the Fair Foreclosure Act took effect on August 6, 2009, to codify
the New Jersey Appellate Division’s holding in Security National Partners v. Mahler, 336 N.J.
Super. 101, 104, 763 A.2d 804, 806 (App. Div. 2000), that a twenty (20) year limitations period
limits a mortgagee’s right to commence a foreclosure action, running from the date of the
debtor’s default. The statute does not state whether the effective date is measured against the
date of the mortgage, the default date, or the date of filing of the Complaint; the only authority
on this issue is that the parent Fair Foreclosure Act applies to actions commenced on or after
December 4, 1995. Prior to the enactment of N.J.S.A. 2A:50-56.1, New Jersey did not have a
statute of limitations addressing mortgage foreclosure actions, and courts applied a twenty year
limitations period based on the common law adverse possession period.

Defendants argue that N.J.S.A. 2A:50-56.1 applies retroactively to this case, as when the
legislature passed this statute, it was, for the first time, passing a statute of limitations that would
regulate the date by which a residential foreclosure complaint needed to be filed, and it sought to
address a problem that had not been addressed by legislation previously. The legislative intent of
retroactivity may thus be applied so as to make the statute workable or to give it the most
sensible interpretation. Defendants rely on Gibbons v. Gibbons, 86 N.J. 515 (1981), which dealt
with a statute addressing equitable distribution of marital assets. Defendants state that the court
in Gibbons looked to the situation in Rothman v. Rothman, 65 N.J. 219, 224 (1974), and found
itself “unable to believe that the legislature intended its grant of power to undertake an equitable
distribution of marital assets to apply solely to property acquired on or after the effective date of
the act.” Rothman, supra, 65 N.J. at 223-24. Similarly, Defendants argue this court should find
itself “unable to believe” that the law in question should be limited in its application to those
mortgages made, or to those mortgage defaults that occurred, only after the statute’s effective
date. If the court were to limit its application, Defendants argue there would be mortgages and
mortgage situations, such as the one in the case before the Court, for which there would be no
statute of limitations at all. Defendants also assert that in the absence of a clear expression of
legislative intent that the statute is to be applied prospectively, the court is to give due
consideration to the expectations of the parties. See Gibbons, supra, 86 N.J. at 523. Defendants
point out there is nothing before this court to suggest anything regarding the expectations of the
parties. Finally, the Defendants advance that the court in Gibbons applied the statute in question
retroactively as it also considered: “Another category of cases in which we have held that
statutes may be given retroactive application is that in which the statute is ameliorative or
curative.” Gibbons, supra, 86 N.J. at 523. Likewise, Defendants argue N.J.S.A. 2A:50-56.1 was

intended to be both ameliorative and curative, as previously there had been only uncertainty and
confusion as to statute of limitations relative to residential mortgage foreclosures.
To the extent that N.J.S.A. 2A:50-56.1 applies to this case only if given retroactive
application, this statute meets the criteria for retroactive application under Gibbons, Phillips v.
Curiale, 128 N.J. 608, 617, 608 A.2d 895 (1992), and In re D.C., 146 N.J. 50, 679 A.2d 634 (N.J.
1996). In New Jersey, a two-part test is used for determining whether a statute could be applied
retroactively:

The first part questions “whether the Legislature intended to give the statute retroactive
application.” The second part involves “whether retroactive application of that statute
will result in either an unconstitutional interference with ‘vested rights’ or a ‘manifest
injustice.’” In re D.C., supra, 146 N.J. 50 (quoting Phillips v. Curiale, 128 N.J. 608, 617,
608 A.2d 895 (1992)).

Elaborating on the two-part test, the court in In re D.C. specified:

In applying this test generally, there are three circumstances that will justify a retroactive
application of a statute: (1) where the Legislature has declared such an intent, either
explicitly or implicitly; (2) where the statute is curative; and (3) where the expectations of
the parties warrant retroactive application. 146 N.J. at 50-51; Gibbons, supra, at 522-23;
see Savarese v. New Jersey Auto. Full Ins. Underwriting Assoc., 235 N.J. Super. 298,
308, 562 A.2d 239 (1989) (finding an expressed intent to apply statute retroactively).

However, even if a statute is found to apply retroactively based on those factors, under
the second prong of the basic test, retroactive application must not “result in ‘manifest
injustice’ to a party adversely affected by such application.” Id. at 51; Gibbons, supra, 86
N.J. at 523.

The New Jersey Appellate Division’s holding in Security National Partners, which served
as the basis for enactment of N.J.S.A. 2A:50-56.1, provide some insight into the circumstances
surrounding mortgage foreclosures during that time:

This appeal involves an issue which one would expect to have been resolved decades–or
even a century–ago. It concerns the statute of limitations applicable to a mortgage
foreclosure and, while this opinion does not offer a vehicle to resolve all unsettled
questions concerning that issue, it does provide an opportunity to at least simplify and
perhaps provide some additional guidance concerning the applicable law. Security
National Partners, supra, 336 N.J. Super. at 103.

Although the legislature did not specify whether the statute should be applied
retroactively, N.J.S.A. 2A:50-56.1 is meant to be curative, and provide guidance on an issue that
was previously unaddressed. The Statement to Senate Number 250, a supplement to the Fair
Foreclosure Act, by New Jersey Assembly Financial Institutions and Insurance Committee, dated
October 6, 2008, provides insight into the legislature’s intent in codifying N.J.S.A. 2A:50-56.1.
Specifically, it states, “the bill is intended to address some of the problems caused by the
presence on the record of residential mortgages which have been paid or which are otherwise
enforceable.” It further states, “This bill would resolve the uncertainties surrounding this area of
law by providing a specific statute of limitations of 20 years from the date of the default by the
debtor.”

By any prospective or retroactive measure of effectiveness, N.J.S.A. 2A:50-56.1 applies
to the instant case. Plaintiff does not cite to any statute or case law to the contrary, offer any
reason why a retroactive application would result in manifest injustice, or submit why the
expectations of the Defendants do not warrant retroactive application. Critical to Plaintiff’s
position is that he argues N.J.S.A. 2A:50-56 of the Fair Foreclosure Act applies to this case,
while N.J.S.A. 2A:50-56.1 does not, seemingly based on the rationale that the latter was enacted
in 2009. Among other things, N.J.S.A. 2A:50-56 of the Fair Foreclosure Act requires all
foreclosing Plaintiffs to send Defendants a requisite Notice of Intent to Foreclose before filing a
Complaint. Both statutes supplement Chapter 50 of Title 2A of the New Jersey Statutes. No
explanation is provided as to why N.J.S.A. 2A:50-56 (effective December 4, 1995) is intended to
be binding on all mortgages, although it too, was enacted after when the Note and Mortgage
were executed, on September 19, 1990, other than stating that the statute is prospective in
operation. Plaintiff cannot argue that only one of the two supplementing statutes of the Fair
Foreclosure Act applies, when both were enacted after the Note and Mortgage were executed.
Thus, arguments against retroactive application of N.J.S.A. 2A:50-56.1 are unsupported and
contradictory.

Next, assuming N.J.S.A. 2A:50-56.1 can be applied retroactively to this case,
the statute of limitations relative to residential mortgage foreclosures provides:
An action to foreclose a residential mortgage shall not be commenced following the
earliest of:

a. Six years from the date fixed for the making of the last payment or the maturity date
set forth in the mortgage or the note, bond, or other obligation secured by the mortgage;
b. Thirty-six years from the date of recording of the mortgage, or, if the mortgage is not
recorded, 36 years from the date of execution, so long as the mortgage itself does not
provide for a period of repayment in excess of 30 years; or
c. Twenty years from the date on which the debtor defaulted, which default has not been
cured, as to any of the obligations or covenants contained in the mortgage or in the note,
bond, or other obligation secured by the mortgage.
[N.J.S.A. 2A:50-56.1.]

Under this statute, there are three triggering events which commence the running of the
statute of limitations period, after which a mortgage foreclosure action cannot be brought.
Whereas N.J.S.A. 2A:50-56.1(c) is triggered by nonpayment or default, N.J.S.A. 2A:50-56.1(a)
is triggered by the date fixed for making of the last payment or the maturity date. Here, the Note
and Mortgage states on its face: “[s]aid principal sum and the interest to be paid as follows:
$1,899.33 on the first day of November 1990, and a like sum on the first day of each and every
month thereafter, until the first day of October 1995, when the balance of the unpaid principal
and interest shall be due and payable.” (Ex. A to Defendants’ motion). It is undisputed that the
Defendants failed to make their first monthly payment.

Here, the mortgagors took out a five-year loan on September 19, 1990. The Note and
Mortgage specifies that the maturity date is October 1, 1995. Applying the plain language of the
limitations period described in subsection (a), an action to foreclose on the Mortgage is timely as
long as it is commenced no later than six years from October 1, 1995, the maturity date set forth
on the Note and Mortgage. Six years from the maturity date would provide Plaintiff until
October 1, 2001 to file a timely Complaint. See N.J.S.A. 2A:50-56.1(a). If the court were to
apply subsection (c), regardless of the date of default (October 1, 1995 or November 1, 1990),
the date by which Plaintiff may commence the foreclosure action is still subsequent to 2001. See
N.J.S.A. 2A:50-56.1(c). Thus, the earliest date triggered by the statue is October 1, 2001, six
years from the maturity date stated on the Note (emphasis added). It is immaterial what the date
of default is, as subsection (c) is not the applicable statute on this matter.

Plaintiff advances two arguments as to why subsection (a) of N.J.S.A. 2A:50-56.1 does
not apply to mortgage foreclosures: 1) the six year statute of limitations is consistent with
N.J.S.A. 12A:3-118(a) of the Uniform Commercial Code, which states a proceeding on the
underlying Note is governed by a six year statute of limitations which begins running from the
due date of the Note, subject to prior acceleration; and 2) subsection (c) is the applicable
subsection for mortgage foreclosures under Specialized Loan Servicing, LLC v. Washington,
2015 U.S. Dist. LEXIS 105794 (D.N.J. Aug 12, 2015).

Plaintiff first argues that because a foreclosure action is not a lawsuit on the Note,
N.J.S.A. 2A:50-56.1(a) is inapplicable. Plaintiff contends the legislature itself limited subsection
(a) of N.J.S.A. 2A:50-56.1 to lawsuits on the mortgage Note itself, for which he does not provide
authority. Contrary to Plaintiff’s argument, N.J.S.A. 2A:50-56.1(a) sets forth a six year statute
of limitations from the date of maturity. A foreclosure proceeding and its accompanying statute
of limitation is uniquely distinct and separate from a proceeding on the underlying Note under
N.J.S.A. 12A:3-118(a).

Elaborating on this issue, the court notes that the District Court in Hartman v. Wells
Fargo Bank, N.A. (In re Hartman), 2016 U.S. Dist. LEXIS 40470, (D.N.J. Mar. 28, 2016)
compared the difference between an action commenced on an obligation to pay and an action to
foreclose, finding:

[A]s noted by the Defendants, the statute’s silence with respect to the effect of
acceleration on the mortgage foreclosure limitations period is particularly significant
since New Jersey’s statute of limitations for negotiable instruments, N.J.S.A. 12A:3-
118(a), specifically addresses acceleration. N.J.S.A. § 12A:3-118(a) provides:
An action to enforce the obligation of a party to pay a note payable at a definite
time must be commenced within six years after the due date or dates stated in the
note or, if a due date is accelerated, within six years after the accelerated due date.
N.J.S.A. § 12A:3-118(a).

Thus, there is no doubt that the New Jersey legislature knows how to clearly draft a
statute that provides for the commencement of a statute of limitations from an accelerated
due date. The fact that the legislature did not include such language when it enacted
N.J.S.A. § 2A:50-56.1 is evidence that it did not intend for the six-year limitations period
to commence upon acceleration of a mortgage. Hartman v. Wells Fargo Bank, N.A. (In
re Hartman), 2016 U.S. Dist. LEXIS 40470, *10, 2016 WL 1183175 (D.N.J. Mar. 28,
2016).

Plaintiff’s argument would also be contrary to Security National Partners, which held that the
“claim that the foreclosure suit is governed by the same six-year statute of limitations [applying
to notes] is contrary to long settled case law and has no merit.” See Hartman, supra, at *15
(quoting Security National Partners, supra, 336 N.J. Super. at 104).
Second, Plaintiff relies on Specialized Loan Servicing, which he states is directly on
point. Plaintiff explains the District Court in that case held that a twenty (20) year statute of
limitations applied to plaintiff’s foreclosure action and that commencement date began to run on
the agreed maturity date.

The District Court in Specialized Loan Servicing addressed the issue of the term
“accelerated” in N.J.S.A. 2A:50-56.1(a), which was never clearly defined. 2015 U.S. Dist.
LEXIS 105794, at *12. The District Court found that neither the date of filing of the Complaint
nor the default date would constitute an acceleration of a mortgage. Id. at *14. To accept such an
interpretation would render N.J.S.A. 2A:50-56.1(c) “superfluous and insignificant,” and without
a functional purpose. Id. at *13. For those reasons, the District Court found that the maturity
date was not accelerated to the alleged dates of default or the date of the filing of the Complaint;
instead, the District Court held that the terms of the Note and Mortgage provided that the
Mortgage would mature on March 1, 2037, the date fixed for the making of the last payment. Id.
at *15. Additionally, Court opined that in that circumstance, the twenty year statute of limitations
promulgated under N.J.S.A. 2A:50-56.1(c) was the pertinent subsection to be applied in that
case, as it would trigger the earliest date under the statute. Id.

Based on the foregoing, Specialized Loan Servicing does not support Plaintiff’s
proposition that subsection (a) applies only to lawsuits for damages on the Note and 36 years or
20 years apply to the commencement of a foreclosure action in the Chancery Division. The
dispute between the parties in Specialized Loan Servicing concerned whether it was appropriate
to calculate the maturity date as accelerated for the purpose of applying the six year statute of
limitations under N.J.S.A. 2A:50-56.1(a), not whether subsection (a) is inapplicable to all
foreclosure actions. The case simply does not stand for the proposition that subsection (a) does
not apply at all to foreclosure matters. Further, Plaintiff offers no authority to evidence the
legislature’s intent that it limited section (a) to lawsuits on the Mortgage Note itself.

In Fed. Nat’l Mortg. v. Hartstein, the court recognized that “Since the creation of N.J.S.A.
2A:50-56.1, few cases have applied or interpreted the statute.” 2015 N.J. Super. Unpub. LEXIS
2198, *9 (Ch. Div. Sept. 14, 2015). The court cited to Garruto v. Cannici, in which the Appellate
Division affirmed the Superior Court’s decision to grant the defendant’s summary judgment
motion on the basis that plaintiff’s foreclosure action was barred by N.J.S.A. 2A:50-56.1. 2011
N.J. Super. Unpub. LEXIS 1436, 2011 WL 2409912 *1 (App. Div. June 6, 2011). In that case,
the defendant granted a purchase money mortgage to the Plaintiff on November 28, 1979. Id.
According to the terms of the Mortgage, the loan was to be paid in full on or before November
28, 1994. Id. at 2. The defendant argued that the six year statute of limitations under N.J.S.A.
2A:50-56.1(a) barred the plaintiff’s foreclosure action. The Appellate Division affirmed, finding
that under N.J.S.A. 2A:50-56.1(a), the plaintiff had until November 27, 2000, to commence the
foreclosure action, as the mortgage had reached its maturity date on November 28, 1994. Id. at 9.
The court further found that the plaintiff’s foreclosure action was barred under N.J.S.A. 2A:50-
56.1(c) because the defendant defaulted on August 10, 1984, and therefore, pursuant to N.J.S.A.
2A:50-56.1(c), the plaintiff had until September 9, 2004 to file the foreclosure complaint. Id.

The limitations period described in subsection (a) of N.J.S.A. 2A:50-56.1 is
unambiguously defined as six years from “the maturity date set forth in the mortgage or the
note.” The Court sees no reason why acceleration would change the commencement of the
limitations period from that date. Here, maturity date stated on the Note and Mortgage is
October 1, 1995. Applying the plain language of the limitations period described in subsection
(a), an action to foreclose on the Mortgage is timely as long as it is commenced no later than
October 1, 2001. See N.J.S.A. 2A:50-56.1(a). The Complaint was filed after the running of the
six year statute of limitations pursuant to N.J.S.A. 2A:50-56.1(a), and thus, is untimely. The date
of default is irrelevant.

The Supreme Court of New Jersey has noted that the purpose of a statute of limitations is
to ensure defendants a fair opportunity to defend against claims, to prevent parties from sitting
on their rights, and to promote repose. See Gantes v. Kason Corp., 145 N.J. 478, 486, 679 A.2d
106 (1996) (quoting Rivera v. Prudential Property & Casualty Ins. Co., 104 N.J. 32, 39, 514
A.2d 1296 (1986)).

The court finds that Plaintiffs are now time-barred from filing a foreclosure complaint
and from obtaining a final judgment of foreclosure. Defendants’ motion is granted, rendering
Plaintiff’s cross-motion moot. An order accompanies this decision.

1 Plaintiff contends that the Complaint was not filed sooner because this was a third lien on the property, and that there was not enough equity in the property to file a Complaint at an earlier date. The value of the property rose over the years, and all senior liens on the property have been satisfied.

 

 

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Market Watch-

Shares of Fannie Mae  and Freddie Mac have rallied this week as President-elect Donald Trump surrounds himself with advisors seen as sympathetic to shareholders of the two mortgage companies.

Fannie FNMA, +7.27%  and Freddie FMCC, +6.18%  were placed into federal conservatorship during the 2008 financial crisis, and in 2012 the Obama administration amended the terms of the 2008 agreement to sweep quarterly profits from the two enterprises, a move that’s been challenged in court by shareholders.

Ken Blackwell, who’s been tapped to lead the domestic transition team, wrote an op-ed in 2014 in which he called the Treasury arrangement “theft of private property.” In the piece, Blackwell noted that there is a “bipartisan consensus on how to wind down Fannie and Freddie.”

[MARKET WATCH]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

WaPO-

Eight-years after taxpayers rescued the U.S. financial system, some of the country’s largest banks, including JPMorgan Chase and Wells Fargo, continue to receive billions in bailout money, according to government data.

Wells Fargo is eligible for up to $1.5 billion in bailout funds over the next seven years. JPMorgan and Bank of America could receive $1.1 billion and $964 million respectively.

The continuous flow of funds is a remnant of the $700 billion bailout effort, known as the Troubled Asset Relief Program or TARP, put in place during the financial crisis. Some of that money, about $28 billion, was carved out to help distressed homeowners by paying banks to lower their interest rates and monthly payments.

[WASHINGTON POST]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII

JULIA WIECK, on behalf of herself CASE NO. 16-596
and all others similarly situated,
Plaintiff,

v.

CIT GROUP, INC., CIT BANK, N.A.,
FINANCIAL FREEDOM, SEATTLE
SPECIALTY INSURANCE SERVICES,
INC., and CERTAIN UNDERWRITERS
OF LLOYD’S, LONDON, and GREAT
LAKES REINSURANCE (UK), PLC,
Defendants

 

Wieck v Financial Freedom by DinSFLA on Scribd

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Biz Journal-

Mortgage servicing giant Ocwen Financial Corp. plans to lay off 54 employees in its Fort Washington facility by the end of the year, according to a WARN notice filed with the Pennsylvania Department of Labor and Industry.

The move was part of a reduction of force at various locations for the Florida-based company, though all but about 10 of the cuts were located in Fort Washington, which still has about 250 employees.

[BIZ JOURNAL]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Press Release

CONSENT ORDER

November 9, 2016

Contact: Richard Loconte, 212-709-1691

GOVERNOR CUOMO ANNOUNCES $28 MILLION FINE LEVIED AGAINST PHH MORTGAGE CORPORATION FOR SHODDY MORTGAGE ORIGINATION AND SERVICING PRACTICES

Independent, Third-Party Auditor Will be Engaged to Identify and Deliver Restitution to Impacted Borrowers

Governor Andrew M. Cuomo today announced that PHH Mortgage Corporation and its affiliate, PHH Home Loans LLC, will pay a $28 million fine and engage a third-party auditor as part of a consent order for violations of federal and New York laws designed to protect homeowners. The consent order between the two companies and the Department of Financial Services was reached following a series of examinations that uncovered persistent shortcomings in their mortgage origination and servicing practices, including discrepancies in how mortgage foreclosures were documented and processed.

“New Yorkers deserve peace of mind when shopping for a mortgage and this administration has zero tolerance for lenders who seek to cut corners and disregard the law at the expense of those seeking the American Dream in the Empire State,” said Governor Cuomo. “We remain committed to rooting out unscrupulous practices in the mortgage industry and will continue to act vigorously to protect homeowners in every corner of New York.”

The examinations revealed discrepancies in the origination of mortgage loans, including failing to give borrowers accurate good faith estimates on loans, imposing larger fees on unwary borrowers at closings and, in some cases, failing to provide documentation showing that borrowers received discounts for which they had bargained.

Additional findings resulting from multiple examinations of PHH companies over the last several years include:

• PHH Mortgage lacked formal and comprehensive policies and processes for executing foreclosure-related documents. Examiners found certain employees who executed foreclosure documents conducted little more than perfunctory reviews of materials prior to execution. Some employees lacked personal knowledge of facts to which they had sworn.
• PHH Mortgage did not adequately monitor the operations of outside vendors it engaged to perform mortgage servicing related tasks, including foreclosure attorneys whose actions on behalf of the company had a direct impact on borrowers in financial distress.
• PHH Home Loans failed to establish adequate controls to prevent mortgage loan originators employed by one PHH entity from originating loans in another PHH entity’s name, or to prevent employees whose mortgage loan originator licenses had expired or been withdrawn from taking loan applications.
• PHH Home Loans had inadequate controls to ensure that electronic signatures appearing on loan applications were those of the mortgage loan originators who actually took the application from the borrower.
• PHH Home Loans’ mortgage loan originator compensation plan failed to prevent against steering borrowers into risky or unnecessarily high-cost loans or basing a mortgage loan originator’s compensation on the terms of the particular loan brokered.

The independent third-party auditor, which will be subject to approval by the Department of Financial Services, will work to verify the identity of borrowers impacted by other improper closing costs so PHH can make refunds to those consumers. The auditor will also review PHH’s business practices to ensure compliance with mortgage origination and servicing laws and regulations.

Financial Services Superintendent Maria T. Vullo said, “Over the last decade, too many homeowners have suffered as a result of servicers placing profit above compliance with consumer protection laws.  Today’s action demonstrates New York’s commitment to making sure that consumers who have been wronged receive restitution and the parties that are responsible pay appropriate penalties and take necessary remedial action to ensure such behavior does not occur in the future.”

During follow-ups on previously identified deficiencies, examiners found certain weaknesses in PHH’s business practices persisted, and discovered that, in some instances, unlicensed individuals were allowed to originate mortgage loans and that PHH failed to retain copies of required pre-application disclosures to some customers. One sampling of files by examiners revealed documents demonstrating that some consumers failed to receive discounted rates they had been promised.

As further evidence of internal deficiencies, in January 2016 PHH disclosed that, due to a coding error in an automated invoice processing system, PHH had improperly assessed attorneys’ fees of $1.2 million against New York borrowers already facing the hardship of default.  Despite first discovering this error in June 2014, PHH delayed disclosing the issue to the Department for 18 months.  PHH has represented to the Department that it has made full financial restitution to borrowers affected by this error.

Reports of industry-wide irregularities into the foreclosure practices of mortgage loan servicers led to the first examination of PHH Mortgage by the Multistate Mortgage Committee, a group of several state regulators, including DFS, responsible for coordinating the examination and supervision of mortgage lenders and brokers operating in more than one state. Based in New Jersey, both of the PHH companies are licensed to originate loans in New York; PHH Mortgage is also authorized to service loans in the State.

Between 2012 and 2014, PHH Mortgage’s servicing portfolio in New York grew from more than 52,000 residential loans to more than 205,000 with an unpaid principal balance of nearly $39 billion. Nationally, the company’s servicing portfolio grew from 892,000 loans to more than 1.1 million residential loans with an unpaid principal balance of more than $227 billion.

PHH Mortgage and PHH Home Loans are headquartered in Mount Laurel, NJ. PHH Mortgage is a wholly-owned subsidiary of PHH Corporation, a publicly-traded company incorporated in Maryland.

Consumers who believe that they are owed refunds from PHH Companies for improper closing costs can contact DFS at (800) 342-3736 or at http://www.dfs.ny.gov/consumer/fileacomplaint.htm.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Politico-

Florida Attorney General Pam Bondi, the only statewide elected Republican who endorsed Donald Trump before the state’s GOP primary, secured a spot Friday on the executive committee of the president-elect’s transition team.

“I’m honored to serve President-elect Donald J. Trump in making this historic transition and assisting in finding the best individuals to bring change to Washington on day one, grow our economy, protect our children and families, and be unafraid to stand up for Americans,” Bondi said in a statement to POLITICO Florida.

Bondi joins a team of sixteen people, including members of Congress, Trump’s campaign CEO, three of the president-elect’s children and his son in law. Bondi’s name has also been floated as a possible U.S. attorney general nominee, though former U.S. attorney and New York City mayor Rudy Giuliani is considered a favorite.

[POLITICO]

 

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

.

Sunday – November 13, 2016

The United States has just experienced one of the most contentious Presidential Elections in United States History.

President-Elect Donald Trump ran on the platform of his wanting to represent the forgotten men and women of America who, angered by being disadvantaged by a system controlled by and for an elite established ruling class, propelled him into the Presidency.

Our radio show this weekend will send tearful messages to President Trump from America’s forgotten Homeowners and suggest how during his first 100 days if he is truly sincere he can begin to reverse one of the most disgraceful financial fraudulent insider rip offs in American history, in the hope that he or his staff will be listening.

Those who miss this important live broadcast can listen to it on the Past Broadcast Section of our Website at www.foreclosurehour.com shortly after it airs live on KHVH-AM News Radio in Honolulu and simultaneously throughout the United States on the iHeart Internet App.

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Denver Post-

Colorado’s Supreme Court is considering changes to courtroom rules that would ensure consumers can better challenge a foreclosure before their homes can be taken.

The court is holding a public hearing Thursday over changes to the state’s Rule 120 process, which gives homeowners the opportunity to contest a foreclosure by appearing in court, but is poorly understood and rarely used.

The most critical of several proposed changes would make sure a homeowner is actually heard by a judge. As it stands, the process requires a homeowner to provide a response within a set time after being notified of the Rule 120 hearing. If they don’t, a hearing is not held and the foreclosure order is usually rubber-stamped — even if the homeowner shows up in court at the previously scheduled time.

“What’s really different is that when you are told something is scheduled for a hearing, you won’t appear that day and meet shut doors,” said Frederick Skillern, a former district judge in the 18th Judicial District and chairman of the committee that drafted the changes. “If you’re told there’s a hearing, there will be a judge for you to talk to.”

[DENVER POST]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Fortune–

Message from Jamie Dimon

Dear colleagues,

We are going through a period of profound political and economic change around the world, and American citizens showed that deep desire for change in voting to elect Donald Trump as the 45th President of the United States. We have heard through democratic processes in both Europe and the United States the frustration that so many people have with the lack of economic opportunity and the challenges they face. We need to listen to those voices.

We have just been through one of the most contentious elections in memory, which can make it even harder to put our differences aside. But that makes it more important than ever to bind the wounds of our nation and to bring together Americans from all walks of life. Recognizing that our diversity is a core strength of our nation, we must all come together as fellow patriots to solve our most serious challenges.

Leaders from across the public, private and nonprofit sectors need to collaborate to find meaningful solutions that create economic growth and greater opportunity for all.

America is best when we come together with clear leadership, expertise and the political will to take on difficult challenges and get things done. No one should ever doubt the strength and resilience of our country and our democracy.

J.P. Morgan Chase has a proud history of supporting our communities and our countries. Through your outstanding efforts, we have built a great company that will continue to thrive – as we continue to focus on helping to serve our clients and communities. We will also continue to help address the important public policy issues of the day and the underlying economic challenges throughout the world.

I’m optimistic about America’s future and the role our company will continue to play as we help the nation address our challenges and move forward together. Jamie

image: Jamie-Dimon-REUTERS-Dylan-Martinez

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Open PDF in BrowserDownload This Paper

Date posted: November 4, 2016 ; Last revised: November 8, 2016

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

CNBC-

In the wake of Donald Trump’s upset victory, advisors have floated the idea of naming Jamie Dimon as treasury secretary, according to two people familiar with the matter, but one of them added that the JPMorgan chief has said he would not be interested in the role.

A Trump spokesperson could not immediately be reached for comment, and a spokesman for Dimon declined to elaborate beyond his past remarks that he would not be interested.

It was unclear who within Trump’s circle of advisors raised the idea or who else might be under consideration for treasury secretary. Trump campaign finance chief Steven Mnuchin, a former Goldman Sachs official, is reportedly considered to be the front runner.

[CNBC]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

MSN-

Should Bank of America and Wells Fargo be on the hook for potentially billions of dollars in tax revenue Miami and other cities lost after property values plunged in minority neighborhoods due to shoddy lending practices and foreclosures?

And if so, why can’t Miami sue for lost tourist revenue? Sales taxes? Why can’t the corner store sue the banks for the money its customers stopped spending when they lost their homes? Where does the chain of causation end?

Those were among the tough questions U.S. Supreme Court justices asked today in oral arguments over Bank of America v. Miami, which tests the limits of who can sue under the expansive Fair Housing Act.

[MSN]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

NJ LAW JOURNAL-

In a report released late Tuesday, bankruptcy examiner Donald Steckroth delved into the Mountainside-based firm’s relationship with 4S Technologies Inc., a software company formed in part by Zucker Goldberg managing partner Michael Ackerman in 2007.

Zucker Goldberg’s and 4S Technologies’ “finances are intricately intertwined,” said Steckroth, noting that 4S guaranteed a $4 million line-of-credit loan by Zucker Goldberg, and Zucker Goldberg in 2011 purchased $290,000 worth of equipment for 4S and “was paying virtually all of 4S’s expenses” in 2014 and 2015.

[NJ LAW JOURNAL]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

CNBC-

PORT ST. LUCIE, Fla. — At the Tradition community here, joggers share the sidewalks with skinny-legged cranes, young parents bring their toddlers to the town square to learn how to walk and the homes lining the pristine streets are selling for about half of what they did a decade ago.

A young mother, who wanted to be known just as Nicole, has decided to sit this presidential election out.

“There is just so much controversy on both sides of it. I don’t know who I would vote for, to be honest,” she said.

Nicole grew up in this Atlantic coast city and watched her parents suffer through the recession. Just more than 10 percent of homeowners in the city of roughly 170,000 lost their homes to foreclosure, according to Attom Data Solutions.

[CNBC]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

florida-bankruptcylawyerblog-

The Florida Supreme Court ruled in an important decision November 3 that will impact current and future mortgage foreclosure cases. The ruling in Bartram v. U.S. Bank (SC14-1265) directly affects Florida’s five-year statute of limitation in mortgage foreclosure cases. The ruling holds that the statue of limitations does NOT prevent a mortgage service from multiple, successive foreclosure lawsuits against a borrower.

This means that even if a prior foreclosure case was dismissed or the mortgage service lost at trial the mortgage service can commence another foreclosure against the borrower if the borrower defaults again within five years simply by setting a new default date.  Therefore homeowners are still obligated to pay their mortgage obligations even if a lender unsuccessfully attempted foreclosure in the past. A past dismissal will not prevent a future filing.

There appears to also be a bit of good news. The Florida Supreme Court also ruled that when a foreclosure is involuntarily dismissed, the borrower now has the right to resume making monthly payments to avoid a new default and subsequent foreclosure. What happens to all those missed payments? Good question with no answer at the moment.

[florida-bankruptcylawyerblog]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

 

LEWIS BROOKE BARTRAM, Petitioner,
v.
U.S. BANK NATIONAL ASSOCIATION, etc., et al., Respondents.
THE PLANTATION AT PONTE VEDRA, Petitioner,
v.
U.S. BANK NATIONAL ASSOCIATION, etc., et al., Respondents.
GIDEON M.G. GRATSIANI, Petitioner,
v.
U.S. BANK NATIONAL ASSOCIATION, etc., et al., Respondents.

Nos. SC14-1265, SC14-1266, SC14-1305.Supreme Court of Florida.November 3, 2016.Application for Review of the Decision of the District Court of Appeal — Certified Great Public Importance, Fifth District — Case No. 5D12-3823, St. Johns County.

Kendall B. Coffey, Jeffrey B. Crockett, and Daniel Frederick Blonsky of Coffey Burlington, P.L., Miami, Florida; Dineen Pashoukos Wasylik of Dineen Pashoukos Wasylik, P.A., Tampa, Florida; Thomas R. Pycraft, Jr. of Pycraft Legal Services, LLC, Saint Augustine, Florida; and Michael Alex Wasylik of Ricardo & Wasylik, PL, Dade City, Florida, for Petitioner Lewis Brooke Bartram

Paul Alexander Bravo of P.A. Bravo, Coral Gables, Florida, for Petitioner Gideon M.G. Gratsiani.

Joel Stephen Perwin of Joel S. Perwin, P.A., Miami, Florida, for Petitioner The Plantation at Ponte Vedra, Inc.

Michael Darren Starks and Kelly Overstreet Johnson of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, Florida; William Power McCaughan, Stephanie N. Moot and Karen Poy Finesilver of K&L Gates LLP, Miami, Florida; and David R. Fine of K&L Gates LLP, Harrisburg, Pennsylvania, for Respondent U.S. Bank National Association.

Lynn Drysdale of Jacksonville Area Legal Aid, Inc., Jacksonville, Florida; Thomas A. Cox of The National Consumer Law Center, Portland, Maine; J.L. Pottenger, Jr. of Jerome N. Frank Legal Services Organization, New Haven, Connecticut; and James C. Sturdevant of The Sturdevant Law Firm, San Francisco, California, for Amici Curiae National Association of Consumer Advocates, The National Consumer Law Center, and The Jerome N. Frank Legal Services Organization.

Steven Michael Siegfried, Nicholas David Siegfried, and Nicole Reid Kurtz of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A., Coral Gables, Florida; and Todd L. Wallen of The Wallen Law Firm, P.A., Coral Gables, Florida, for Amicus Curiae Community Associations Institute.

John Granville Crabtree, George Richard Baise, Jr., and Brian Carson Tackenberg of Crabtree & Associates, P.A., Key Biscayne, Florida; Alice Maria Vickers of Florida Alliance for Consumer Protection, Tallahassee, Florida; Kimberly Laura Sanchez of Community Legal Services of Mid-Florida, Orlando, Florida; Sarah Elizabeth Mattern of Brevard County Legal Aid, Inc, Rockledge, Florida; and Peter P. Sleasman of Florida Legal Services Inc., Newberry, Florida, for Amici Curiae Florida Alliance for Consumer Protection, Brevard County Legal Aid, and Consumer Umbrella Group of Florida Legal Services.

Andrew David Manko and John Stewart Mills of The Mills Firm, P.A., Tallahassee, Florida, for Amici Curiae Upside Property Investment, LLC, Signature Land, Inc., Upside Property Enterprises, Inc., and The Lynne B. Preminger Living Trust.

Major Best Harding and John R. Beranek of Ausley McMullen, Tallahassee, Florida; and John Russell Hargrove of Hargrove Pierson & Brown P.A., Boca Raton, Florida, for Amicus Curiae Baywinds Community Association, Inc.

Peter David Ticktin, Timothy Richard Quinones, and Kendrick Almaguer of The Ticktin Law Group, P.A., Deerfield Beach, Florida, for Amici Curiae Bradford and Cheri Langworthy, and The Ticktin Law Group, P.A.

Robert Rex Edwards and Jessica Pierce Quiggle of Robertson, Anschutz & Schneid, PL, Boca Raton, Florida; Melissa A. Giasi and Richard Slaughter McIver of Kass Shuler, P.A., Tampa, Florida; Shaib Yariel Rios and Curtis James Herbert of Brock and Scott PLLC, Fort Lauderdale, Florida; Andrea Rachael Tromberg of Gladstone Law Group, P.A., Boca Raton, Florida; Elizabeth Redchuk Wellborn of Elizabeth R. Wellborn, P.A., Deerfield Beach, Florida; Michelle Garcia Gilbert and Jennifer Lima-Smith of Gilbert Garcia Group, P.A., Tampa, Florida, for Amicus Curiae American Legal and Financial Network

Robert Mark Brochin, Joshua Charles Prever, and Brian Michael Ercole of Morgan, Lewis & Bockius LLP, Miami, Florida, for Amicus Curiae Mortgage Bankers Association.

David William Rodstein of Padula Hodkin, PLLC, Boca Raton, Florida, for Amicus Curiae US Financial Network.

PARIENTE, J.

The issue before the Court involves the application of the five-year statute of limitations to “[a]n action to foreclose a mortgage” pursuant to section 95.11(2)(c), Florida Statutes (2012).^[1] The Fifth District Court of Appeal relied on this Court’s reasoning in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), rejecting that the statute of limitations had expired. Because of the importance of this issue to both lenders and borrowers, the Fifth District certified to this Court a question of great public importance, which we have rephrased to acknowledge that the note in this case is a standard residential mortgage, which included a contractual right to reinstate:

DOES ACCELERATION OF PAYMENTS DUE UNDER A RESIDENTIAL NOTE AND MORTGAGE WITH A REINSTATEMENT PROVISION IN A FORECLOSURE ACTION THAT WAS DISMISSED PURSUANT TO RULE 1.420(B), FLORIDA RULES OF CIVIL PROCEDURE, TRIGGER APPLICATION OF THE STATUTE OF LIMITATIONS TO PREVENT A SUBSEQUENT FORECLOSURE ACTION BY THE MORTGAGEE BASED ON PAYMENT DEFAULTS OCCURRING SUBSEQUENT TO DISMISSAL OF THE FIRST FORECLOSURE SUIT?

We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

In this case, it is uncontroverted that the borrower, Lewis Brooke Bartram, also referred to as the mortgagor, stopped making payments on his $650,000 mortgage and note, both before and after the foreclosure action was brought and subsequently dismissed. For the reasons set forth in this opinion, we answer the rephrased certified question in the negative and hold, consistent with our reasoning in Singleton, that the mortgagee, also referred to as the lender, was not precluded by the statute of limitations from filing a subsequent foreclosure action based on payment defaults occurring subsequent to the dismissal of the first foreclosure action, as long as the alleged subsequent default occurred within five years of the subsequent foreclosure action. When a mortgage foreclosure action is involuntarily dismissed pursuant to Rule 1.420(b), either with or without prejudice, the effect of the involuntary dismissal is revocation of the acceleration, which then reinstates the mortgagor’s right to continue to make payments on the note and the right of the mortgagee, to seek acceleration and foreclosure based on the mortgagor’s subsequent defaults. Accordingly, the statute of limitations does not continue to run on the amount due under the note and mortgage.^[2]

Absent a contrary provision in the residential note and mortgage, dismissal of the foreclosure action against the mortgagor has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage. Accordingly, we approve the Fifth District’s opinion in U.S. Bank National Association v. Bartram, 140 So. 3d 1007 (Fla. 5th DCA 2014), and answer the rephrased certified question in the negative.

FACTS AND PROCEDURAL BACKGROUND

On November 14, 2002, Petitioners Lewis Bartram (“Bartram”) and his then-wife Patricia Bartram^[3] (“Patricia”), purchased real property in St. Johns County, Florida (the “Property”). Less than a year later, Patricia filed for dissolution of the couple’s marriage, which was officially dissolved on November 5, 2004. Pursuant to a prenuptial agreement the Bartrams had previously executed, the divorce court ordered Bartram to purchase Patricia’s interest in the Property.

In order to comply with the divorce court’s order, on February 16, 2005, Bartram obtained a $650,000 loan through Finance America, LLC, secured by a mortgage on the Property in favor of Mortgage Electronic Registration Systems, Inc., in its capacity as nominee for Finance America (the “Mortgage”). Finance America subsequently assigned the Mortgage to Respondent, U.S. Bank National Association (the “Bank”), as trustee and assignee. A day later, on February 17, 2005, Bartram executed a second mortgage (the “Second Mortgage”) to Patricia as security for a second mortgage note of $120,000.

The Mortgage was a standard residential form mortgage and required the lender to give the borrower notice of any default and an opportunity to cure before the mortgagee could proceed against the secured property in a judicial foreclosure action. Specifically, paragraph 22 of the Mortgage was an optional acceleration clause and provided that the lender was required to give the borrower notice that failure to cure the default “may result in acceleration of the sums secured” by the mortgagee and foreclosure of the property:

Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees and costs of title evidence.

(Emphasis added).

In addition to providing optional acceleration and foreclosure as a remedy for default, paragraph 19 of the Mortgage also granted the borrower a right to reinstate the note and Mortgage after acceleration if certain conditions were met, including paying the mortgagee all past defaults and other related expenses that would be due “as if no acceleration had occurred”:

Borrower’s Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower’s right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18.^[4]

(Emphasis added). The designated maturity date of the note was March 1, 2035.

On January 1, 2006, Bartram stopped making payments on the Mortgage, and never made payments on the Second Mortgage. Around the same time, Bartram also stopped paying homeowners’ association assessments to the Plantation at Ponte Vedra, Inc. (the “HOA”), the homeowners’ association of the development where the Property was located. The HOA subsequently placed a lien on the Property for nonpayment of the HOA assessments.

On May 16, 2006, the Bank filed a complaint to foreclose the Mortgage based on Bartram’s failure to make payments due from January of that year to the date of the complaint. The foreclosure complaint stated that all conditions precedent to the acceleration of the Mortgage and to the foreclosure of the Mortgage had been fulfilled or had occurred, and declared the full amount payable under the note and Mortgage to be due. Nearly five years later, on May 5, 2011, the foreclosure action was involuntarily dismissed after the Bank failed to appear at a case management conference.^[5] The Bank did not appeal the dismissal.

Following the dismissal of the foreclosure action, Bartram filed a motion to cancel the promissory note and release the lien on the mortgage. The trial court denied the motion in an order dated August 29, 2011, citing to its lack of jurisdiction in the matter since the May 5, 2011, involuntary dismissal under Rule 1.420(b) “was an adjudication on the merits and the case has been closed.”

Approximately a year later, after the dismissal of the foreclosure action and almost six years after the Bank filed its foreclosure complaint, Bartram filed a crossclaim against the Bank in a separate foreclosure action Patricia had brought against Bartram, the Bank, and the HOA. Bartram’s crossclaim sought a declaratory judgment to cancel the Mortgage and to quiet title to the Property, asserting that the statute of limitations barred the Bank from bringing another foreclosure action.^[6]

Bartram then moved for summary judgment on his crossclaim. The trial court found no genuine issue as to any material fact, granted summary judgment, quieted title in Bartram, found the Bank had no further ability to enforce its rights under the note and Mortgage that were the subject matter of the Bank’s dismissed foreclosure action, and cancelled the note and Mortgage. In doing so, the trial court released the Bank’s lien on the Property. The Bank subsequently filed a motion for rehearing, and after the trial court denied the Bank’s motion, appealed to the Fifth District.

Before the Fifth District, the Bank relied on this Court’s decision in Singleton for its position that the trial court’s dismissal “nullified [the Bank’s] acceleration of future payments; accordingly, the cause of action on the accelerated payments did not accrue and the statute of limitations did not begin to run on those payments, at least until default occurred on each installment.” Bartram, 140 So. 3d at 1009-10. The Bank acknowledged, however, that it could not seek to foreclose the Mortgage based on Bartram’s defaults prior to the first foreclosure action, but could seek foreclosure based on defaults occurring subsequent to the dismissal of the first foreclosure action. Id. at 1009. Bartram contended on appeal, joined by Patricia and the HOA, “that the cause of action for default of future installment payments accrued upon acceleration, thus triggering the statute of limitations clock to run, and because the Bank did not revoke its acceleration at any time after the dismissal, the five-year statute of limitations period eventually expired, barring the Bank from bringing another suit [to foreclose the Mortgage].” Id. at 1010 (citations omitted).

The Fifth District agreed with the Bank and held that if a “new and independent right to accelerate” exists in a res judicata analysis under Singleton, 882 So. 2d at 1008,then “there is no reason it would not also exist vis-à-vis a statute of limitations issue.” Id. at 1013. The Fifth District reasoned that a “new and independent right to accelerate” would mean that each new default would present new causes of action, regardless of whether the payment due dates had been accelerated in the first foreclosure action. Id. at 1013-14. Based on Singleton, the Fifth District explained, “a default occurring after a failed foreclosure attempt creates a new cause of action for statute of limitations purposes, even where acceleration had been triggered and the first case was dismissed on its merits.” Id. at 1014. The Fifth District accordingly reversed the trial court’s judgment, remanded the case to the trial court, and certified the question of great public importance we now address.

ANALYSIS

The rephrased certified question involves a pure question of law. Therefore, the standard of review is de novo. See Christensen v. Bowen, 140 So. 3d 498, 501 (Fla. 2014). In answering the rephrased certified question, we begin by reviewing this Court’s decision in Singleton, which the Fifth District and most courts throughout the state have held to be determinative of the rephrased certified question. We then discuss the cases, both state and federal, that concern successive mortgage foreclosure actions in a statute of limitations context decided after Singleton. In doing so, we examine whether our analysis in Singleton, which was decided on res judicata grounds, extends to the statute of limitations context present in this case. We then discuss the significance to our analysis, if any, of the involuntary dismissal of the foreclosure action pursuant to Rule 1.420(b) and the effect of the Mortgage’s reinstatement provision. Based on this analysis, we conclude by answering the rephrased certified question in the negative and approving the Fifth District’s decision in Bartram.

I. Singleton v. Greymar Associates

In Singleton, a mortgagee brought two consecutive foreclosure actions against a mortgagor. 882 So. 2d at 1005. The first foreclosure action was based on the mortgagor’s failure to make mortgage payments from September 1999 to February 2000 and “sought to accelerate the entire indebtedness against” the mortgagor. Id. & n.1. The first foreclosure action was dismissed with prejudice by the trial court after the mortgagee failed to appear at a case management conference. Id. After this involuntary dismissal, the mortgagee filed a second foreclosure action based on a separate default that occurred when the mortgagor failed to make mortgage payments starting in April 2000. Id. at 1005. The mortgagor contended that the dismissal of the first foreclosure action barred relief in the second foreclosure action, but the trial court rejected this argument and entered a summary final judgment of foreclosure for the mortgagee. Id.

The mortgagor appealed, and “the Fourth District affirmed the circuit court’s decision, finding that `[e]ven though an earlier foreclosure action filed by appellee was dismissed with prejudice, the application of res judicata does not bar this lawsuit. The second action involved a new and different breach.'” Id. (citing Singleton v. Greymar Assocs., 840 So. 2d 356, 356 (Fla. 4th DCA 2003)). Singleton petitioned this Court for jurisdiction, citing an express and direct conflict with Stadler v. Cherry Hill Developers, Inc., 150 So. 2d 468 (Fla. 2d DCA 1963). Id.

Stadler also involved two successive foreclosure actions where the first foreclosure action had been dismissed with prejudice. 150 So. 2d at 469. The mortgagee brought a second foreclosure action that was identical except for alleging a different period of default. That action was successful, and the mortgagor appealed. The Second District reversed the judgment of foreclosure entered on the basis of res judicata and concluded that the “election to accelerate put the entire balance, including future installments at issue.” Id. at 472. Therefore, even though different periods of default were asserted, the “entire amount due” was the same and thus the “actions are identical.” Id. Accordingly, the Second District concluded that res judicata barred the second foreclosure action. Id. at 473.

After analyzing the position of the two appellate courts, this Court agreed with the Fourth District that “when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata.” Singleton, 882 So. 2d at 1006-07. In support, we cited with approval the Fourth District’s reasoning in Capital Bank v. Needle, 596 So. 2d 1134 (Fla. 4th DCA 1992):

Our reading of the case law set out above leads us to conclude that a final adjudication in a foreclosure action that also prays for a deficiency judgment on the underlying debt may, but does not necessarily, bar a subsequent action on the debt. For instance, if the plaintiff in a foreclosure action goes to trial and loses on the merits, we do not believe such plaintiff would be barred from filing a subsequent foreclosure action based upon a subsequent default. The adjudication merely bars a second action relitigating the same alleged default. A dismissal with prejudice of the foreclosure action is tantamount to a judgment against the mortgagee. That judgment means that the mortgagee is not entitled to foreclose the mortgage. Such a ruling moots any prayer for a deficiency, since a necessary predicate for a deficiency is an adjudication of foreclosure. There was no separate count in the Capital Bank complaint seeking a separate recovery on the promissory note alone.

Accordingly, we do not believe the dismissal of the foreclosure action in this case barred the subsequent action on the balance due on the note.

Singleton, 882 So. 2d at 1007 (quoting Capital Bank, 596 So. 2d at 1138) (emphasis added).

Our holding in Singleton was based on the conclusion that an “acceleration and foreclosure predicated upon subsequent and different defaults present a separate and distinct issue” than a foreclosure action and acceleration based on the same default at issue in the first foreclosure action. Id. Indeed, we cited with approval another decision of the Fourth District, Olympia Mortgage Corp. v. Pugh, 774 So. 2d 863, 866 (Fla. 4th DCA 2000), which held—contrary to the Second District’s conclusion in Stadler—that an acceleration of debt in a mortgage foreclosure action did not place future installments at issue. As we explained, the unique nature of a mortgage compelled this result:

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. For example, we can envision many instances in which the application of the Stadler decision would result in unjust enrichment or other inequitable results. If res judicata prevented a mortgagee from acting on a subsequent default even after an earlier claimed default could not be established, the mortgagor would have no incentive to make future timely payments on the note. The adjudication of the earlier default would essentially insulate her from future foreclosure actions on the note—merely because she prevailed in the first action. Clearly, justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because he failed to prove the earlier alleged default.

Singleton, 882 So. 2d at 1007-08 (emphasis added).

Our recognition in Singleton that each new default presented a separate cause of action was based upon the acknowledgement that because foreclosure is an equitable remedy, “[t]he ends of justice require that the doctrine of res judicata not be applied so strictly so as to prevent mortgagees from being able to challenge multiple defaults on a mortgage.” Id. at 1008. Thus, the failure of a mortgagee to foreclose the mortgage based on an alleged default did not mean the mortgagor had automatically and successfully defeated his or her obligation to make continuing payments on the note.

II. Mortgage Foreclosure Cases Post-Singleton: Application to Statute of Limitations Context

In cases concerning mortgage foreclosure actions, since our decision in Singleton, both federal and state courts have applied our reasoning in Singleton in the statute of limitations context and have concluded that because of “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship,” an “adjudication denying acceleration and foreclosure” does not bar subsequent foreclosure actions based on separate and distinct defaults. See id. at 1007. As the Fourth District explained, under Singleton, a “new default, based on a different act or date of default not alleged in the dismissed action, creates a new cause of action.” Star Funding Sols., LLC v. Krondes, 101 So. 3d 403 (Fla. 4th DCA 2012). That is because, as the First District has also explained, this Court’s “analysis in Singleton recognizes that a note securing a mortgage creates liability for a total amount of principal and interest, and that the lender’s acceptance of payments in installments does not eliminate the borrower’s ongoing liability for the entire amount of the indebtedness.” Nationstar Mortg., LLC v. Brown, 175 So. 3d 833, 834 (Fla. 1st DCA 2015).

Other district courts of appeal have similarly applied our reasoning in Singleton to determine that the five-year statute of limitations did not bar a subsequent foreclosure action when the mortgagee had brought an initial foreclosure action that accelerated all sums due under the mortgage and note, on that same mortgage outside the statute of limitations window. For instance, in Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938, 947 (Fla. 3d DCA 2016), the Third District concluded that because the subject mortgage’s reinstatement provision granted the mortgagor the right to avoid foreclosure by paying only the past due defaults, that “despite acceleration of the balance due and the filing of an action to foreclose, the installment nature of a loan secured by such a mortgage continue[d] until a final judgment of foreclosure [was] entered and no action [was] necessary to reinstate it via a notice of `deceleration’ or otherwise.”

With reasoning similar to Beauvais, in Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954, 955 (Fla. 4th DCA 2014), a mortgagor challenged, on statute of limitations grounds, a second foreclosure action brought by the mortgagee when the mortgagee had voluntarily dismissed a prior foreclosure action based on a separate default. The Fourth District held that the mortgage was still enforceable because “the statute of limitations ha[d] not run on all of the payments due pursuant to the note,” specifically those payments missed after the initial alleged default. Id. In reaching this conclusion, the Fourth District relied on Singleton, and emphasized that “[w]hile a foreclosure action with an acceleration of the debt may bar a subsequent foreclosure action based on the same event of default, it does not bar subsequent actions and acceleration based upon different events of default.” Id. Similarly, in PNC Bank, N.A. v. Neal, 147 So. 3d 32, 32 (Fla. 1st DCA 2013), the First District held that an initial foreclosure action that sought acceleration and was dismissed with prejudice did not bar the mortgagee from “instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action.”

Federal district courts in the state have also applied Singleton to dismiss claims seeking cancellation of a mortgage and note that are premised on the expiration of the statute of limitations after an initial foreclosure action that sought acceleration was dismissed. In Dorta v. Wilmington Trust National Ass’n, No. 5:13-cv-185-Oc-10PRL, 2014 WL 1152917 (M.D. Fla. Mar. 24, 2014), the mortgagor brought an action seeking cancellation of the mortgage based on the expiration of the statute of limitations where the mortgagee previously accelerated payments and brought a foreclosure action that was ultimately dismissed without prejudice more than five years prior. Id. at *1-2. In dismissing the mortgagor’s complaint, the federal district court held that even when the initial foreclosure action is dismissed without prejudice, “where a mortgagee initiates a foreclosure action and invokes its right of acceleration, if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file later foreclosure actions . . . so long as they are based on separate defaults.” Id. at *6.

Similarly, in Torres v. Countrywide Home Loans, Inc., No. 14-20759-CIV, 2014 WL 3742141, at *1 (S.D. Fla. July 29, 2014), the federal district court dismissed a complaint that sought a declaration that the statute of limitations barred foreclosing on a mortgage after a prior foreclosure action where the mortgagee had sought acceleration of the note that had been dismissed. Relying on Singleton, the court noted that “each payment default that is less than five years old creates a basis for a subsequent foreclosure or acceleration action.” Id. at *4; see also Romero v. SunTrust Mortg., Inc., 15 F. Supp. 3d 1279 (S.D. Fla. 2014) (holding that the installment nature of the note remained in effect after dismissal of a foreclosure action where the mortgagee had sought acceleration); Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271 (S.D. Fla. 2013) (same).

We agree with the reasoning of both our appellate courts and the federal district courts that our analysis in Singleton equally applies to the statute of limitations context present in this case. As the Fifth District concluded, “[i]f a `new and independent right to accelerate’ exists in a res judicata analysis, there is no reason it would not also exist vis-à-vis a statute of limitations issue.” Bartram, 140 So. 3d at 1013. This conclusion follows from our prior reasoning that a “subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.” Singleton, 882 So. 2d at 1008. Therefore, with each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right, but not the obligation, to accelerate all sums then due under the note and mortgage.

Consistent with the reasoning of Singleton, the statute of limitations on the balance under the note and mortgage would not continue to run after an involuntary dismissal, and thus the mortgagee would not be barred by the statute of limitations from filing a successive foreclosure action premised on a “separate and distinct” default. Rather, after the dismissal, the parties are simply placed back in the same contractual relationship as before, where the residential mortgage remained an installment loan, and the acceleration of the residential mortgage declared in the unsuccessful foreclosure action is revoked.

III. Significance of an Involuntary Dismissal and Reinstatement Provision

Having reaffirmed our prior holding in Singleton and the application of its reasoning to a statute of limitations context, we finally consider whether the type of dismissal of a foreclosure action has any bearing on our analysis and the effect of the Mortgage’s reinstatement provision. In this case, the first foreclosure action was dismissed pursuant to Florida Rule of Civil Procedure 1.420, which provides for involuntary dismissals, and is the rule upon which the rephrased certified question is premised. Involuntary dismissal of a legal action by a court under Rule 1.420(b) terminates a court’s jurisdiction over that action and may be with or without prejudice. A dismissal under Rule 1.420(b) operates as an adjudication on the merits as long as the dismissal was not for “lack of jurisdiction or for improper venue or for lack of an indispensable party,” neither of which were a basis for the trial court’s dismissal of the Bank’s foreclosure action in this case.

The Fifth District determined that the involuntary dismissal was with prejudice but concluded that “the distinction is not material for purposes” of the statute of limitations analysis. See Bartram, 140 So. 3d at 1013 n.1. We agree. While a dismissal without prejudice would allow a mortgagee to bring another foreclosure action premised on the same default as long as the action was brought within five years of the default per section 95.11(2)(c), critical to our analysis is whether the foreclosure action was premised on a default occurring subsequent to the dismissal of the first foreclosure action. As the federal district court in Dorta reasoned, “if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file subsequent foreclosure actions—and to seek acceleration of the entire debt—so long as they are based on separate defaults.” 2014 WL 1152917 at *6 (emphasis added). Accord Espinoza v. Countrywide Home Loans Servicing, L.P., No. 14-20756-CIV, 2014 WL 3845795, at *4 (S.D. Fla. Aug. 5, 2014) (finding the issue of whether the initial foreclosure action was dismissed with or without prejudice a distinction that was “irrelevant” to its analysis of whether acceleration of a mortgage note barred a subsequent foreclosure action brought outside the statute of limitations period).

Whether the dismissal of the initial foreclosure action by the court was with or without prejudice may be relevant to the mortgagee’s ability to collect on past defaults. However, it is entirely consistent with, and follows from, our reasoning in Singleton that each subsequent default accruing after the dismissal of an earlier foreclosure action creates a new cause of action, regardless of whether that dismissal was entered with or without prejudice.

Our conclusion is buttressed by the reinstatement provision of the Residential Mortgage that by its express terms granted the mortgagor, even after acceleration, the continuing right to reinstate the Mortgage and note by paying only the amounts past due as if no acceleration had occurred. Specifically, the reinstatement provision in paragraph 19 of Bartram’s form residential mortgage gave Bartram “the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of . . . (c) entry of a judgment enforcing this Security Instrument,” as long as Bartram “(a) pa[id] the Lender all sums which then would be due under this Security Instrument and Note as if no acceleration had occurred.”

Under the reinstatement provision of paragraph 19, then, even after the optional acceleration provision was exercised through the filing of a foreclosure action—as it was in this case—the mortgagor was not obligated to pay the accelerated sums due under the note until final judgment was entered and needed only to bring the loan current and meet other conditions—such as paying expenses related to the enforcement of the security interest and meeting other requirements established by the mortgagee-lender to ensure the mortgagee-lender’s interest in the property would remain unchanged—to avoid foreclosure. “Stated another way, despite acceleration of the balance due and the filing of an action to foreclosure, the installment nature of a loan secured by such a mortgage continues until a final judgment of foreclosure is entered and no action is necessary to reinstate it via a notice of `deceleration’ or otherwise.” Beauvais, 188 So. 3d at 947. Or, as the Real Property Law Section of the Florida Bar has explained, “[t]he lender’s right to accelerate is subject to the borrower’s continuing right to cure.” Brief for The Real Property Probate & Trust Law Section of the Florida Bar at 8, Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016), 2015 WL 6406768, at *8. In the absence of a final judgment in favor of the mortgagee, the mortgagor still had the right under paragraph 19 of the Mortgage, the reinstatement provision, to cure the default and to continue making monthly installment payments.

Accepting Bartram’s argument that the installment nature of his contract terminated once the mortgagee attempted to exercise the mortgage contract’s optional acceleration clause—ignoring the existence of the mortgage’s reinstatement provision—would permit the mortgagee only one opportunity to enforce the mortgage despite the occurrence of any future defaults. As we cautioned in Singleton, “justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because he failed to prove the earlier alleged default.” 882 So. 2d at 1008. Following to its logical conclusion Bartram’s argument that acceleration of the loan was effective before final judgment in favor of the mortgagee-lender in a foreclosure action would mean that the mortgagor-borrower would owe the accelerated amount after the dismissal, effectively rendering the reinstatement provision a nullity, and—in most cases—leading to an unavoidable default.

IV. This Case

Here, the Bank’s first foreclosure action was involuntarily dismissed, and therefore there was no judicial determination that a default actually occurred. Thus, even if the note had been accelerated through the Bank’s foreclosure complaint, the dismissal of the foreclosure action had the effect of revoking the acceleration. By the express terms of the reinstatement provision, if, in the month after the dismissal of the foreclosure action, Bartram began to make monthly payments on the note, the Bank could not have subsequently accelerated the entire note until there were future defaults. Once there were future defaults, however, the Bank had the right to file a subsequent foreclosure action—and to seek acceleration of all sums due under the note—so long as the foreclosure action was based on a subsequent default, and the statute of limitations had not run on that particular default.

There have been many claims of unfair and predatory practices by banks and mortgage holders in the aftermath of the financial crisis that shook the country, and in particular, Florida. See, e.g., Pino v. Bank of N.Y., 121 So. 3d 23, 27 (Fla. 2013)(discussing allegations of fraudulent backdating of mortgage assignments); see also In re Amends. to Fla. Rules of Civ. Pro.—Form 1.996, 51 So. 3d 1140 (Fla. 2010)(noting the necessity for verification of ownership of the note or right to enforce the note in a foreclosure action because of “recent reports of alleged document fraud and forgery in mortgage foreclosure cases”). Some of these claims have included allegations that mortgage holders have precipitously sought foreclosure even though the mortgagor missed only one or two payments and attempted to cure their defaults. In this case, quite the opposite is true. Bartram raised no defense as to the terms of the Mortgage and note itself. His sole claim is that the Bank lost the right to seek foreclosure of the Mortgage based on distinct defaults that occurred subsequent to the dismissal of the initial foreclosure complaint.

After Bartram defaulted on the Mortgage, the Bank, in accordance with the terms of the mortgage contract, notified Bartram that failure to cure his past defaults would result in acceleration of the sums due under the mortgage and judicial foreclosure. When Bartram failed to cure the past defaults, the Bank filed its foreclosure complaint and exercised the optional acceleration clause. Yet, the reinstatement provision of the Mortgage afforded Bartram the opportunity to continue the installment nature of the loan by curing the past defaults. Until final judgment was entered in favor of the Bank, Bartram was not obligated to pay the accelerated loan amount. Dismissal of the foreclosure action therefore returned the parties to their pre-foreclosure complaint status. In considering the law, the facts, and equity, Bartram’s position simply has no validity.

CONCLUSION

The Fifth District properly extended our reasoning in Singleton to the statute of limitations context in a mortgage foreclosure action. Here, the Bank’s initial foreclosure action was involuntarily dismissed. Therefore, as we previously explained in Singleton, the dismissal returned the parties back to “the same contractual relationship with the same continuing obligations.” 882 So. 2d at 1007. Bartram and the Bank’s prior contractual relationship gave Bartram the opportunity to continue making his mortgage payments, and gave the Bank the right to exercise its remedy of acceleration through a foreclosure action if Bartram subsequently defaulted on a payment separate from the default upon which the Bank predicated its first foreclosure action. Therefore, the Bank’s attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults.

Accordingly, we approve the Fifth District’s decision in Bartram and answer the rephrased certified question in the negative.

It is so ordered.

LABARGA, C.J., and QUINCE, CANADY, and PERRY, JJ., concur.

POLSTON, J., concurs in result.

LEWIS, J., concurs in result only with an opinion.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF FILED, DETERMINED.

LEWIS, J. concurring in result only.

I am troubled by the expansion of Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), to potentially any case involving successive foreclosure actions. Other courts in this State have already broadly applied Singleton—a decision involving res judicata and dismissal with prejudice—to cases that were either dismissed for lack of prosecution or voluntarily dismissed by the note-holder, as well as to cases that concern the statute of limitations, without careful consideration of the procedural distinctions of each case. E.g., In re Anthony, 550 B.R. 577 (M.D. Fla. 2016); Dorta v. Wilmington Tr. Nat’l Ass’n, 2014 WL 1152917 (M.D. Fla. 2014); Romero v. Suntrust Mortg., Inc., 15 F. Supp. 3d 1279 (S.D. Fla. 2014); Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271 (S.D. Fla. 2013); Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954 (Fla. 4th DCA 2014); see also In re Rogers Townsend & Thomas, PC, 773 S.E.2d 101, 105-06 (N.C. Ct. App. 2015) (relying on Singleton in a case involving previous voluntary dismissals and the statute of limitations). Today’s decision will only continue that expansion, which I fear will come at the cost of established Florida law and Floridians who may struggle with both the costs of owning a home and uncertain behavior by lenders. I therefore respectfully concur in result only.

At its narrowest, Singleton simply held that “when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata.” 882 So. 2d at 1006-07 (emphasis supplied). However, as has been noted elsewhere, Singleton left several matters unanswered:

[T]he Supreme Court omitted explanation of 1) what constitutes a valid new default after the initial round of default, acceleration, foreclosure filing, and dismissal; 2) how the fact-finder below determines that a valid new default has occurred; and 3) what conditions constitute valid new default, including whether the lender must reinstate the original note and mortgage terms in the interim or serve a second notice of intent to accelerate. Moreover, the court in no way addressed the effect of the involuntary dismissal on the statute of limitations.

Andrew J. Bernhard, Deceleration: Restarting the Expired Statute of Limitations in Mortgage Foreclosures, Fla. B.J., Sept.-Oct. 2014, at 30, 32. Given the procedural posture of this matter and the relatively sparse record before this Court, the decision today fails to address evidentiary concerns regarding how to determine the manner in which a mortgage may be reinstated following the dismissal of a foreclosure action, as well as whether a valid “subsequent and separate” default occurred to give rise to a new cause of action. See Singleton, 882 So. 2d at 1008. Instead of addressing these concerns, the Court flatly holds that the dismissal itself—for any reason—”decelerates” the mortgage and restores the parties to their positions prior to the acceleration without authority for support. Majority op. at 3.

In this case, there is no evidence contained in the record before this Court to show whether the parties tacitly agreed to a “de facto reinstatement” following the dismissal of the previous foreclosure action.^[7] Further, despite the assumption of the majority of the Court to the contrary, the mortgage itself did not create a right to reinstatement following acceleration and the dismissal of a foreclosure action. The contractual right to reinstatement under the terms of this mortgage existed only under specific conditions,^[8] which do not appear to have been satisfied in the record before this Court. Parties, particularly those as sophisticated as the banks and other lenders that routinely engage in such litigation, should be required to present evidence that the mortgage was actually decelerated and reinstated, rather than require our courts to fill in the blank and assume that deceleration automatically occurred upon dismissal of a previous foreclosure action.

Instead, I find myself more closely aligned with the dissenting opinion of Judge Scales in Beauvais, 188 So. 3d at 954 (Scales, J., dissenting). A majority of the en banc Third District Court of Appeal reached the same conclusion as the majority of this Court does today regarding very similar facts. By contrast, Judge Scales, joined by three of his colleagues, raised several concerns that arise from the conclusion that a mortgage is automatically decelerated and reinstated following the dismissal of a foreclosure action for any reason.

First, Judge Scales pointed out that the mortgage in Beauvais, like the mortgage in this case, created the borrower’s right to reinstatement only under specific conditions, which did not include dismissal of a prior foreclosure action. Id. at 956-57 (“Neither the note nor the mortgage contain any provision reinstating the installment nature of the note if, after acceleration, a lender foreclosure action is dismissed.”). Further reviewing the clear terms of the mortgage, Judge Scales explained that the mortgage ceased to be an installment contract upon the exercise of the lender’s right to acceleration. Id. at 961-62. Thus, the conclusion that a court’s dismissal of a foreclosure action itself can end acceleration and reinstate the mortgage ignores basic principles of Florida contract law:

The majority opinion rewrites the parties’ note and mortgage to create a reinstatement provision—i.e., reinstating the installment nature of the note, as if acceleration never occurred, upon any dismissal of any lawsuit—that the parties did not include when drafting their documents. Singleton does not say this; the parties’ contract documents certainly do not say this; and Florida law is repugnant to the majority’s insertion of a provision into the parties’ private contract that the parties themselves most assuredly omitted. [FN. 23]

[FN. 23]: Brooks v. Green, 993 So. 2d 58, 61 (Fla. 1st DCA 2008)(holding that a court is without authority to rewrite a clear and unambiguous contract between parties).

Id. at 963.

Moreover, Judge Scales cogently explained that the overbroad construction of Singleton will undermine its limited holding. Singleton indicated that “an adjudication denying acceleration and foreclosure” should not bar a successive foreclosure predicated upon a “subsequent and separate alleged default.” 882 So. 2d at 1007, 1008. Yet, under the majority decisions of the Third District and this Court, any dismissal of a foreclosure action can support a successive foreclosure action. See Beauvais, 188 So. 3d at 963-64 (Scales, J., dissenting). The form dismissal in Beauvais should not constitute an “adjudication denying acceleration and foreclosure,” which could, at least according to Singleton, restore the parties to their respective pre-acceleration positions. Id. at 964 (quoting Singleton, 882 So. 2d at 1007). In light of the even more vague dismissal at issue in this case, I agree with Judge Scales’ warning that “[w]e should be reluctant to hold that a trial court’s form dismissal order visits upon the borrower and lender a host of critical, yet unarticulated, adjudications that fundamentally change the parties’ contractual relationship and are entirely unsupported by the existing law or by the record below.” Id. at 965.

Finally, the expansion of Singleton’s holding that res judicata “does not necessarily” bar the filing of successive foreclosure actions to the statute of limitations ignores critical distinctions between these two doctrines, at a serious cost to the statute of limitations and the separation of powers. As long recognized in this State, res judicata is a doctrine of equity not to “be invoked where it would defeat the ends of justice.” Id. at 967 n.31 (citing State v. McBride, 848 So. 2d 287, 291 (Fla. 2003); Aeacus Real Estate Ltd. P’ship. v. 5th Ave. Real Estate Dev., Inc., 948 So. 2d 834 (Fla. 4th DCA 2007)); see also Singleton, 882 So. 2d at 1008 (citing deCancino v. E. Airlines, Inc., 283 So. 2d 97, 98 (Fla. 1973)). However, “equity follows the law”; therefore, equitable principles are subordinate to statutes enacted by the Legislature, including the statute of limitations. May v. Holley, 59 So. 2d 636 (Fla. 1952); Beauvais, 188 So. 3d at 967-68 (Scales, J., dissenting) (citing Dobbs v. Sea Isle Hotel, 56 So. 2d 341, 342 (Fla. 1952); Cragin v. Ocean & Lake Realty Co., 133 So. 569, 573-74 (Fla. 1931)). This untenable extension of an equitable, judicial doctrine into an area of law expressly governed by legislative action veers perilously close to violating the separation of powers. Nonetheless, the majority opinion of this Court fails to recognize these concerns and justifies the imposition of Singleton’s equitable focus onto the statute of limitations by simply reviewing the decisions of federal and Florida courts that have reached this same conclusion without acknowledging the critical distinctions between res judicata and the statute of limitations.

I recognize the concern raised by this Court and others regarding the need to avoid encouraging delinquent borrowers from abusing the lending process by remaining in default after an initial foreclosure action is dismissed. See Singleton, 882 So. 2d at 1008; see also Fairbank’s Capital Corp. v. Milligan, 234 Fed. Appx. 21, 24 (3d Cir. 2007) (relying on Singleton and seeking to avoid “encourag[ing] a delinquent mortgagor to come to a settlement with a mortgagee on a default in order to later insulate the mortgagor from the consequences of a subsequent default”). Nonetheless, these legitimate policy concerns should not outweigh the established law of this State. In light of the narrow holding of Singleton, I fear that its expansion today to a case involving a previous dismissal (presumably) without prejudice and no clear reinstatement of the mortgage terms in either the note or the facts of this limited record will lead to inequitable results. Just as the courts should not encourage mortgage delinquency, so too should they avoid encouraging lenders from abusing Florida law and Floridians by “retroactively reinstating” mortgages after many of those lenders initially slept on their own rights to seek foreclosures. See Bernhard, supra, at 27. Therefore, I concur in result only.

[1] In addition to the briefs of the parties, we have also reviewed briefs submitted on behalf of the parties by the following amici curiae: the U.S. Financial Network, the Mortgage Bankers Association and the American Legal and Financial Network on behalf of Respondent and Bradford and Cheri Langworthy and the Titcktin Law Group, P.A., Baywinds Community Association, Upside Property Investment, LLC, the Florida Alliance for Consumer Protection, the Community Associations Institute, and the National Association of Consumer Advocates on behalf of Bartram.

[2] Our holding is consistent with the views of the excellent amici briefs submitted by the Real Property Probate & Law Section of The Florida Bar, The Business Law Section of The Florida Bar, and the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation at the request of the Third District in Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016). These amici briefs addressed the same issue presented by the rephrased certified question and limited their discussion to the terms of the standard form mortgage that is the subject of this case.

[3] Gideon Gratsiani was substituted as a party by order of this Court after Gratsiani purchased Patricia Bartram’s mortgage.

[4] Paragraph 18 concerned the transfer of the mortgaged property in a real estate sale without the Lender’s “prior written consent,” and required “immediate payment in full of of all sums secured by this Security Instrument” if breached.

[5] The Record does not indicate what action occurred, if any, in the first foreclosure action from the date the complaint was filed in 2006 until it was dismissed in 2011.

[6] On May 24, 2012, Bartram filed a motion for default against the Bank for failure to respond to his crossclaim, but the trial court never ruled on this motion.

[7] Moreover, the precise nature of the dismissal in this case is even more uncertain than the mortgage in Beauvais, which was dismissed without prejudice. See Deutsche Bank Tr. Co. Americas v. Beauvais, 188 So. 3d 938, 964 (Fla. 3d DCA 2016) (Scales, J., dissenting). The trial court below dismissed the first foreclosure action after indicating that it had informed the parties that “[f]ailure of the parties . . . to appear in person [at the case management conference] may result in the case being dismissed without prejudice.” Order of Dismissal, U.S. Bank Nat’l Ass’n v. Bartram, No. CA06-428 (Fla. 7th Cir. Ct. May 5, 2011) (emphasis added). However, the trial court’s order did not explicitly state whether this dismissal was with or without prejudice. Id. (“The Complaint to Foreclose Mortgage . . . is hereby dismissed.”). Further complicating the matter, the Fifth District below stated that this dismissal was with prejudice, but summarily determined “that the distinction is not material for purposes of the issue at hand.” U.S. Bank Nat’l Ass’n v. Bartram, 140 So. 3d 1007, 1013 n.1 (Fla. 5th DCA 2014).

[8] The mortgage note provides the following right to reinstatement:

Borrower’s Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower’s right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18.

See majority op. at 6-7.

 

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NJ-

WASHINGTON — Donald Trump charges Hillary Clinton with being in the pockets of special interests while relying on the same sources of donations.

Just like Clinton, Trump is filling his campaign coffers in part with money from employees of companies that make millions of dollars in political action committee contributions and spend millions of dollars to lobby the federal government, according to an analysis of data from the Center for Responsive Politics, a Washington-based research group.

Indeed, two sources of campaign cash appear on both candidates’ top 10 lists: Bank of America and Wells Fargo.

“Neither candidate can claim any sense of superiority over the other when it comes to their fundraising practices,” said Craig Holman, who lobbies on campaign finances for the Washington-based advocacy group Public Citizen. “They’re relying on the same old well-financed high money interests.”

[NJ.com]

image: pbs

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

NMP-

The contentious race to fill the vacant U.S. Senate seat in California has taken a new turn as candidate Rep. Loretta Sanchez accused her rival, state Attorney General Kamala Harris, of bungling the $25 billion National Mortgage Settlement.

According to a Los Angeles Times report, Sanchez’s campaign stated that Harris “failed to lead” when Gov. Jerry Brown diverted $300 million from the settlement and placed it in the state’s general fund. (A court later ruled the state to repay the diverted money.) In a press conference, Sanchez faulted Harris for not pursuing criminal charges against any financial services officer in relation to the settlement.

“Harris has not brought one single prosecution against any major bank executive,” she said.

For her part, Harris claimed to be frustrated by the lack of prosecution. “Clearly crimes occurred and people should go to jail,” she said. “But we went where the evidence took us.”

[National Mortgage Professional]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

ScotusBlog-

It sounds like a scene from “The Wire,” but with palm trees and swimming pools: Gangs run prostitution rings and criminals hide dead bodies in vacant houses. The illegal activities spill over into the rest of the neighborhood, leading to an overall increase in violent crime and stretching police officers and firefighters thin. Property values plummet, creating a vicious circle: Cities have fewer resources to combat these crimes, at the exact time when they need more.

The city of Miami was unwilling just to chalk up these problems to the global economic crisis. Instead, it believed that the root cause of the problems was both closer to home and more pernicious. Banks like Wells Fargo and Bank of America, it believed, were discriminating against African Americans and Latinos when issuing them mortgages, by making predatory loans that were more likely to lead to foreclosures. In 2013, the city went to federal court. It alleged that the banks had violated the Fair Housing Act, a 1968 civil rights law that bars discrimination in the sale, rental and financing of housing. And in doing so, Miami contended, the banks caused the city to lose money.

A federal trial court dismissed the city’s lawsuit, but the U.S. Court of Appeals for the 11th Circuit reversed and reinstated the case. Next week the Supreme Court will hear oral argument on a question that all sides agree is important: whether the Fair Housing Act allows lawsuits like the city’s, or whether – as the banks contend – Miami’s lawsuit instead goes far beyond what Congress intended when it enacted the FHA.

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