In two prior posts, we analyzed the main components of HB 87, the bill introduced in the Florida legislature which proposed significant changes to certain aspects of Florida’s mortgage foreclosure process. Last week, the bill was signed into law by Governor Scott. There are, of course, both proponents and opponents to this new law but… Continue Reading
Category Archives: Special Assets Litigation
Subscribe to Special Assets Litigation RSS FeedAttention All REO Officers: Florida’s Commercial Landlord/Tenant Laws May Apply to You!
Posted in Banking Operations, Special Assets LitigationWhen foreclosing mortgages on commercial properties in Florida, banks are often able to choose whether to keep or remove the tenants after foreclosure. The decision to keep or remove a tenant usually depends on the financial value that the tenant adds to the property. For instance, having a reputable business as a tenant with a… Continue Reading
Post-Judgment Recovery of Attorney’s Fees and Costs
Posted in Debt and Judgment Collection, Special Assets LitigationOne of the issues faced by a judgment creditor in pursuing collection of the judgment is the amount of attorney’s fees and costs that will be incurred in the collection efforts. They can be substantial and are generally not recoverable. There are, however, a few statutory provisions which may facilitate recovery of fees and costs… Continue Reading
Municipal Liens vs. Mortgages: Florida’s Supreme Court Rules on Superpriority Issue
Posted in Debt and Judgment Collection, Special Assets LitigationIn my April 18th post, I discussed the recent trend of municipalities enacting ordinances designed to give their code enforcement liens “superpriority” over prior-recorded mortgages. Basically, the municipalities have sought to achieve for their liens the same priority as that afforded liens for unpaid real estate taxes. In 2011, the 5th District Court of Appeal… Continue Reading
Magistrates to Handle Florida Residential Foreclosure Actions – Florida Supreme Court Amends Rule 1.490 and Significantly Changes Landscape of Residential Foreclosure Litigation
Posted in Debt and Judgment Collection, Residential Foreclosure, Special Assets LitigationIt is no secret that Florida consistently ranks among the worst states in the union in regards to the mire of the residential mortgage foreclosure case backlog. From 2007 to 2013, approximately 1.5 million foreclosure cases have been filed in Florida alone. As of February 2013, nearly 360,000 cases remained pending in Florida courts, and… Continue Reading
HB 87 – Florida’s Foreclosure Bill Is Back (Part 2)
Posted in Debt and Judgment Collection, Special Assets LitigationIn a prior post, we discussed two of the four main components of HB 87, the foreclosure reform bill presently under consideration in Florida. The remaining sections of the bill which merit consideration involve a revised “show cause” procedure and provisions designed to protect third parties who have purchased foreclosed property. The bill proposes to… Continue Reading
Municipal Liens vs. Mortgages: Which Has Priority?
Posted in Debt and Judgment Collection, Special Assets LitigationI have recently encountered several situations in which local governments are claiming, under ordinances they have enacted, that their liens and fines have “superpriority” status over existing mortgages, regardless of when the liens were recorded and whether or not the mortgage holder ever was given notice of the liens. It seems that these claims are… Continue Reading
HB 87 – Florida’s Foreclosure Bill is Back
Posted in Debt and Judgment Collection, Special Assets LitigationOn February 7, the House Civil Justice Subcommittee voted to pass Florida’s newest bill designed to improve the efficiency of mortgage foreclosures: House Bill 87. While it is still early in the legislative process, this is a good time to examine the four main components of the bill. First, the new bill limits the time… Continue Reading
Florida Deficiency Proceedings: Establishing the Value of the Property
Posted in Debt and Judgment Collection, Special Assets LitigationFollowing a foreclosure sale, a secured creditor may seek a monetary judgment for the deficiency amount that remains owed to it by the borrower. If the creditor was the successful bidder at the foreclosure sale, it has the burden of proving that the fair market value of the property foreclosed upon, as of the date… Continue Reading
New Equity Auctions
Posted in Bankruptcy, Special Assets LitigationSeventh Circuit holds that new equity in a Chapter 11 debtor must be auctioned…and that a creditor may credit bid. In a Chapter 11 bankruptcy, if the debtor’s owners want to continue to own the debtor after confirmation, they must (1) pay the unsecured creditors in full; or (2) get the consent of the unsecured… Continue Reading
Foreclosure Strategies for Second Mortgage Holders
Posted in Debt and Judgment Collection, Special Assets LitigationLenders holding second mortgages will, assuming the first mortgage is in default, face decisions as to how to best protect their interests in the property. These questions typically come to the forefront when the first mortgage holder files a foreclosure suit and names the second mortgage holder as a defendant. The bank in second position… Continue Reading
Florida Deficiency Proceedings: Effect of Bids at the Foreclosure Sale
Posted in Debt and Judgment Collection, Special Assets LitigationDuring a deficiency proceeding, once a creditor introduces the foreclosure sale price, the borrower technically has the burden of presenting evidence to establish the fair market value of the property. In the absence of such evidence, the trial court has the power to act upon the assumption that the sale price reflects the fair market… Continue Reading
Use of FDIC Special Powers: Knowledge by the FDIC or its Assignees is Irrelevant
Posted in Special Assets LitigationIn previous posts, we introduced the protections afforded the FDIC by the D’Oench Doctrine and 12 U.S.C. § 1823(e), which bar claims and defenses against the FDIC and its assignees by private parties based on improperly documented “agreements” (the term has been interpreted broadly) with failed banks. The policy underlying this bar is to prevent such… Continue Reading
Use of FDIC Special Powers: The Expanded Scope of the Term “Agreement”
Posted in Special Assets LitigationIn previous posts, we introduced the protections afforded the FDIC by the D’Oench Doctrine and 12 U.S.C. § 1823(e), which bar claims and defenses against the FDIC and its assignees by private parties based on improperly documented agreements with failed banks. Parties sometimes attempt to get around the special powers hurdle by challenging the breadth… Continue Reading
Minimizing Delay in Owner Occupied Commercial Real Estate Foreclosures
Posted in Debt and Judgment Collection, Special Assets LitigationThis article is an update of an article which some of our blog readers may have received by email. Based on recent experience that I have had with this statute in circuit court, I have revised the original article. On average, a Florida foreclosure can take nearly two years from service of process to final… Continue Reading
Use of FDIC Special Powers by Assignees of the FDIC
Posted in Special Assets LitigationCourts have extended the protections afforded the FDIC by the D’Oench Doctrine and 12 U.S.C. § 1823(e) to successors or assignees of the FDIC as receiver of the failed banks. This is a logical expansion when considered in light of the public policy underlying these special powers. If a borrower were allowed to assert claims… Continue Reading
The Status of Florida Foreclosures
Posted in Debt and Judgment Collection, Special Assets LitigationRecently, The Wall Street Journal published an editorial discussing the status of mortgage foreclosure litigation. The purpose of the article was to extol the alleged benefits of non-judicial foreclosure over judicial foreclosure. Without getting into the politics or relative merits of the contrasting systems, let’s take a quick look at some of the reported statistics… Continue Reading
Use of FDIC Special Powers: Overview
Posted in Special Assets LitigationLast month, the Federal Deposit Insurance Corporation reported that 470 financial institutions have failed since 2007. It is no wonder, then, that many institutions are embroiled in litigation involving loans made by failed banks and subsequently assigned to them by the FDIC. Borrowers often try to raise defenses against the acquiring institutions based on allegations… Continue Reading
Using Contempt Power to Force Repatriation of Offshore Trust Assets
Posted in Bankruptcy, Special Assets LitigationOffshore asset protection trusts (OAPT) typically have the following characteristics: (1) the trust is governed by the laws of a foreign jurisdiction that does not recognize the judgments or orders of courts of the United States; (2) the trustee is a foreign entity that cannot be sued in the United States because it lacks sufficient… Continue Reading
Legal Standing to Bring a Mortgage Foreclosure Lawsuit
Posted in Debt and Judgment Collection, Special Assets LitigationThe importance of demonstrating legal standing as a condition precedent to filing a mortgage foreclosure lawsuit cannot be overstated. In simple terms, “standing” refers to one’s legal right to bring a lawsuit. If the plaintiff does not have standing at the time a foreclosure case is filed, there can be serious consequences including dismissal of… Continue Reading
A New Case Helps Lenders Avoid Foreclosure Delays Caused by Guarantors
Posted in Banking Operations, Debt and Judgment Collection, Special Assets LitigationIn many foreclosure cases, the strategy of the borrower is simply to delay the case. Typically, the borrower hopes that delay will allow time to either work out a settlement with the lender or find a third party buyer for the mortgage property. In commercial foreclosures, the foreclosing lender typically includes as defendants the guarantors… Continue Reading
Creditors Who Want to Execute on a Money Judgment Need Not Foreclose First
Posted in Banking Operations, Special Assets LitigationIn a typical foreclosure action in Florida, a creditor forecloses the real property first, the court determines the fair market value of the property as of the date of the foreclosure sale (usually through a deficiency hearing under Fla. Stat. §702.06), and then the creditor pursues a money judgment under a breach of note or… Continue Reading
Appraisal Dates and Deficiency Judgments: Is Close Good Enough?
Posted in Special Assets LitigationIn Florida, the legal standard for a mortgagee to obtain a deficiency judgment following foreclosure is to establish the difference between the amount of the indebtedness and the fair market value of the foreclosure property as of the date of the foreclosure sale. The amount of the indebtedness is typically established by means of the… Continue Reading
Florida Deficiency Proceedings: Who Can Testify as to Value of Property
Posted in Special Assets LitigationThe central issue for a lender which seeks to obtain a monetary judgment following a foreclosure is the value of the property that was foreclosed. A lender typically engages an appraiser to value the property as of the date of the foreclosure sale and to testify at a deficiency proceeding. To counter the lender’s valuation,… Continue Reading