In case you haven’t somehow already heard, we have had a mortgage foreclosure crisis in this country since 2007. The State of Florida has had more than its share of mortgage foreclosure filings, that, quite frankly, have overwhelmed the Florida State Court System.

As the Florida State Courts struggled to process these actions, so, too, did the lenders. The result was mass misfilings by the attorneys representing the lenders, and subsequently the necessity of these lenders voluntarily dismissing thousands of these foreclosure cases with an eye toward refiling the case at a future date. Similarly, the Courts involuntarily dismissed innumerable foreclosure actions, that were misfiled, with an eye toward clearing overcrowded dockets.

In Florida, as in all states in this country, we have laws that time bar litigation of all kinds, including mortgage foreclosures. The law is called the Statute of Limitations. The Statute of Limitations on mortgage foreclosure is five years, yet, many of these mortgage foreclosure cases are not being deemed time barred even though they are being filed beyond the five year statute of limitations. The lenders are alleging that the Statute of Limitations is extended in these cases on a theory known as “deceleration”…an act of undoing a mortgage note’s acceleration, and the start of the running of the statute of limitations. If acceleration can be undone, then the Note and Mortgage effectively becomes an installment agreement maturing over the term of the mortgage (25-30 years) with the statute of limitations commencing to run as each installment is in default.

Mortgages in Florida are property liens which secure the payment of a debt evidenced by a promissory note. Foreclosure of the mortgage is the primary remedy to recoup unpaid mortgage debt. Simply, then; a mortgage foreclosure action is one for breach of a promissory note which asks for the sale of real property which secures the note. The five year statute of limitations period begins when the claim accrues against the borrower. Discouragingly, the present state of the law in Florida has supported the lenders’ claim that their cause of action on a note and mortgage accrue for each date the borrower fails to make a payment.. therein creating a separate five year statute of limitations for each and every unpaid installment. If the lender opts to accelerate the entire debt in the event of a default on any one payment, and if exercised, a single claim for the entire remaining balance can and does accrue if the lender exercises its right to accelerate. The lender accelerates by serving a Notice of Intent upon the borrower in default. If such notice is served, then the start of the statute of limitations for recovery on the note and mortgage also evolves. Remarkably, Florida courts have continued to permit banks to refile foreclosure cases, despite their failures in proving their cases based on earlier alleged defaults, and notwithstanding the lender’s clear prior election to accelerate the entire loan. Banks continue to be given a clean slate to pursue recovery on the basis of subsequent defaults involving the same note and mortgage.

The statute of limitations exists in all legal matters that come before the courts. The purpose of the statute of limitations encourages the alienability of real property, protecting persons from unexpected enforcement of stale claims brought by Plaintiff’s who have slept on their rights, and ensures fairness by not allowing enforcement of old claims against parties who must now shield themselves from old liabilities with faded memories, lost, discarded, or misplaced record and missing or deceased witnesses. Indulging banks in their agenda of extending the statute of limitations in foreclosure actions ignores the purpose of the statute of limitations altogether.

Justice is not served by removing the statutory bar to foreclosure actions by creating fictions to protect delinquent litigants. The issue of the statute of limitations with respect to foreclosure actions is thankfully being heard by the Florida Supreme Court at the end of this year. Let’s hope they get it right!