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Florida Banking Law Blog Legal developments impacting banking, finance and loan enforcement in Florida

Tag Archives: Debt and Judgment Collection

An Exception to the Fair Market Value Rule: Use the Foreclosure Sales Price for a Deficiency after a Third Party Purchaser

Posted in Commercial Lending, Debt and Judgment Collection, Residential Foreclosure, Special Assets Litigation

If the value of a foreclosed property is less than the loan amount, lenders may seek a deficiency judgment from borrowers and guarantors after the foreclosure sale. In most cases, the lender is the sole bidder at the sale and takes title to the collateral property, so the court must determine the fair market value… Continue Reading

Case Update: Authority to Endorse Note and Mortgage IS Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

In our August 29, 2013 post, we reported on a shift in the case law regarding the self-authentification of the authority to endorse a note and mortgage. Subsequently, however, the court in Bennett v. Deutsche Bank National Trust Company granted the bank’s motion for rehearing, and summarily reversed its previous decision. In the subsequent opinion… Continue Reading

Status as a Debtor not Enough to Confer Appellate Standing

Posted in Bankruptcy, Debt and Judgment Collection

“Standing” is a legal term of art that refers to a party’s ability to bring a cause of action, to intercede in one or to appeal the court’s judgment. To prove appellate standing in a bankruptcy proceeding, a party must show that “he was directly and adversely affected pecuniarily by the order of the bankruptcy… Continue Reading

Collecting Deficiency on Wholly-Unsecured Nonrecourse Loan (in Chapter 11)

Posted in Bankruptcy, Debt and Judgment Collection

Some of you who read the title of this post may have done a quick double-take, as it is well established that lenders may not collect a deficiency on a nonrecourse loan under state law. However, the Bankruptcy Code provides some relief to a holder of a wholly unsecured nonrecourse loan when the debtor files… Continue Reading

Detroit Judge Clears Way for Largest Municipal Bankruptcy in Country’s History

Posted in Debt and Judgment Collection

The oral summary of Bankruptcy Judge Steven Rhodes’s opinion lasted roughly ninety minutes, and the forthcoming written opinion is rumored to be over one hundred and forty pages in length. In making his decision the Detroit bankruptcy judge green-lighted the City’s hopeful recovery through Chapter 9 bankruptcy. The court noted that “this once-proud city cannot… Continue Reading

Georgia Non-Judicial Power of Sale Foreclosure – Overview of Procedures

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Residential Foreclosure, Residential Real Estate Lending

Given our geographic proximity, it is not uncommon for Florida banks to do business in Georgia or with clients owning property in Georgia. This geographic proximity, however, does not lend itself to equivalence of foreclosure procedures. This is because, unlike Florida, Georgia recognizes non-judicial foreclosures. Indeed, power of sale foreclosures, as they are called, are… Continue Reading

What is an Allonge?

Posted in Commercial Lending, Debt and Judgment Collection, Residential Foreclosure, Special Assets Litigation

Given the importance of the allonge in establishing a bank’s standing in commercial foreclosure cases, you may be surprised that the term “allonge” is nowhere to be found in Florida’s Commercial Code. In one case, the court describes an allonge as “simply an elegant-sounding legal term for a supplemental attachment to a note in which endorsements… Continue Reading

BAPCPA Backfires: Unsecured Creditor’s Returns Decrease in Post-BAPCPA Landscape

Posted in Bankruptcy, Debt and Judgment Collection

A new study published by the American Bankruptcy Institute has found that the aggregate effect of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which was passed in part to improve creditor returns in consumer bankruptcy proceedings, has actually had the opposite effect since the Act’s sweeping changes to the consumer bankruptcy… Continue Reading

Chapter 20 in the Eleventh Circuit: Modification of Secured Claims Impermissible Without Discharge

Posted in Debt and Judgment Collection

Nearly a year ago to the day, we published a post regarding the uncertainty that bankruptcy practitioners and lenders faced when a Chapter 7 debtor received a discharge, and subsequently filed a Chapter 13 petition to strip wholly unsecured liens (The Threat of Lien Stripping in “Chapter 20″ Bankruptcy). So-called “Chapter 20” filings had firmly divided… Continue Reading

When the FDCPA and the Bankruptcy Code Conflict: Which Controls?

Posted in Bankruptcy, Commercial Lending, Debt and Judgment Collection

As most lenders and banking litigators understand, courts construe the language of the Fair Debt Collection Protection Act (FDCPA) very broadly. As we have discussed in previous posts, an initial communication to collect a debt must contain specific language that “the debt collector is attempting to collect a debt and that any information obtained will… Continue Reading

Managing Litigation Cost – Florida’s Expedited Foreclosure Procedure

Posted in Debt and Judgment Collection, Loan Workouts, Special Assets Litigation

This article is the final article of a series and is excerpted from my book entitled Mortgage Foreclosure and Loan Collection: A Practical Guide for Lenders which is now available at Amazon.com. Here, we discuss Florida’s show cause procedure as a means of expediting mortgage foreclosure cases and therefore reducing cost. On average, a Florida… Continue Reading

Managing Litigation Cost – Discovery and Summary Judgment Motions

Posted in Debt and Judgment Collection, Loan Workouts, Special Assets Litigation

This article is the second of a series and is excerpted from my book entitled Mortgage Foreclosure and Loan Collection: A Practical Guide for Lenders which is now available at Amazon.com. Here, we discuss the impact of the discovery process and summary judgment motions on litigation cost. The discovery process can be a very expensive… Continue Reading

The Shell Game: Bankrupt Debtor’s Concealment of Pre-Petition Claims

Posted in Bankruptcy, Debt and Judgment Collection

Part I:  The Setup:  Treatment of Prepetition Causes of Action in Bankruptcy Proceedings In commercial lending, as in law, no single practice area exists independently of another. Bankruptcy law often intersects with contract law and even personal injury law when debtors find themselves as the plaintiff or defendant in a prepetition civil action. It is… Continue Reading

Authority to Endorse Note and Mortgage Not Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

This post is no longer current.  The Third Circuit reversed its opinion in Bennett and held that authority is self-authenticating.  For more on the revised opinion, please see our updated post. Establishing the authority to foreclose a note and mortgage is simple when the note and mortgage are held by the original lender. In today’s… Continue Reading

Managing Litigation Cost: Pre-Lawsuit File Review

Posted in Debt and Judgment Collection, Loan Workouts, Special Assets Litigation

In today’s environment, clients are more cost-conscious than ever and this is in direct conflict with the ever-increasing cost of litigation. There are, however, some common sense ways in which a case can be managed in order to help minimize the associated fees and costs. This article is the first of a series and is… Continue Reading

HB 87 – Florida’s Foreclosure Bill Becomes Law

Posted in Debt and Judgment Collection, Special Assets Litigation

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

Caveat Creditor: Courts Split Regarding Abrogation of Absolute Priority Rule for Individual Chapter 11 Debtors

Posted in Bankruptcy, Commercial Lending, Debt and Judgment Collection

Although the 2005 BAPCPA amendments appeared to be a boon for creditors, at least with respect to Chapter 7 claims, individual Chapter 11 debtors immediately seized upon a perceived ambiguity in Congress’ language with regards to cramdown, which may ultimately prove costly for creditors. Generally, a plan of reorganization can be confirmed in one of… Continue Reading

Lack of Permanent Visa May Preclude Invocation of Florida Homestead Exemption

Posted in Bankruptcy, Commercial Lending, Debt and Judgment Collection

Creditors often find themselves at the crossroads of multiple disciplines of law, such as the intersection of bankruptcy and tort law. Less commonly, however, creditors may find themselves at the intersection of bankruptcy and immigration, but the ramifications of this meeting of laws are significant, especially when a debtor’s immigration status may significantly affect the… Continue Reading

Post-Judgment Recovery of Attorney’s Fees and Costs

Posted in Debt and Judgment Collection, Special Assets Litigation

One 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 Litigation

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

HB 87 – Florida’s Foreclosure Bill Is Back (Part 2)

Posted in Debt and Judgment Collection, Special Assets Litigation

In 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 Litigation

I 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