In 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
Tag Archives: Banking Operations
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
Usury in Florida: Intent is Key
Posted in Banking OperationsUsury under Florida law is largely a matter of intent. It is not fully determined by the fact that the lender actually received more than law permits but by the existence of a corrupt purpose in the lender’s mind to charge more than the legal interest permitted by law for the money lent. In cases… Continue Reading
Transfers of Real Property for Estate Planning and Other Purposes and Their Effect on the Mortgage Lender
Posted in Commercial Real Estate Lending, Residential Real Estate LendingI receive frequent inquiries from bank clients who are concerned because their mortgage borrower has requested permission to transfer the collateral real property to another entity. These requests commonly are made for estate planning purposes (though other reasons are often cited) and may involve transferring the property to other entities such as a trust. The… Continue Reading
Usury in Florida; Generally
Posted in Banking OperationsUnder Florida law, usury is defined as the willful and knowing charge or receipt of interest in excess of 18% per year for credit transactions involving less than $500,000 or between 25% and 45% per year in a credit transaction involving more than $500,000. The usurious nature of a contract is determined from the date… 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
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
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
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
Avoid Potential Lender Liability for Setting Off Against an Account
Posted in Banking Operations, Debt and Judgment CollectionA lender’s ability to set off against a borrower’s account can be a valuable tool for lenders, but care must be exercised to safeguard against potential liability. If setoff is exercised against a checking account, there is a likelihood that checks drawn on the account prior to the setoff (or prior to notice to the… Continue Reading
A Lender’s Right to Set Off Against an Account
Posted in Banking Operations, Debt and Judgment CollectionUnder Florida common law, a bank may set off the balance of an obligation owed to it by its depositor (e.g., a loan) against a general deposit made by the depositor (e.g., the balance of a checking or savings account) which has been accepted by the bank in good faith and in the ordinary course… Continue Reading
How Does a Bank’s Claim For Set-Off Fare in the Face of a Garnishment?
Posted in Banking Operations, Debt and Judgment Collection, Special Assets LitigationIn Florida, it is well established that a bank has a common law right of set-off against funds held in a depositor’s account if the depositor has defaulted under a loan from the bank. This allows the bank the option to apply the funds in the depositor’s account as needed to pay the outstanding obligation… Continue Reading