In Florida, a mortgage holder can only foreclose on your real property by filing a lawsuit and obtaining a foreclosure judgment. The judgment makes findings about the validity of the mortgage holder's lien, its right to foreclose, the amount you owe, and whether you're in default. The judgment generally sets a date for your property to be sold to satisfy all or part of the money you owe on the mortgage.
But what happens if your mortgage lender starts foreclosure proceedings, but then the court dismisses the case, or the lender voluntarily dismisses the case? Are you in the clear, or can the lender refile? Each case is different, and there are always exceptions, but in most cases, your mortgage holder can refile the case when your foreclosure case is dismissed in Florida.
The substantive or more complicated legal issues, such as standing, fair debt collection issues, which lienholder must be paid first, or whether the mortgage holder complied with the terms of the agreement are generally dealt with at summary judgment hearings or at trial, when everything is on the line.
When cases are dismissed, it often happens earlier in the process. Many dismissals result from failure to comply with procedural requirements, or from defects in the way the complaint was written. Below are some of the common reasons why a court might dismiss a foreclosure case.
Foreclosure cases can be dismissed because the complaint has technical defects. For example:
In most cases, the court dismisses the complaint with leave to amend. This allows the mortgage holder a set amount of time to file an amended complaint to correct the defects. However, in some cases, the court may choose to dismiss the case instead. This is more likely to happen when a lot of time has passed since the original filing, the defect is substantial, or there have already been multiple amendments to the complaint.
Dismissals may also result from the mortgage holder's failure to comply with a court order. This often involves a mortgage holder's failure to do something, such as filing an amended complaint or responding to discovery requests, within a set time period allowed by the court.
Sometimes, the case is dismissed at the mortgage holder's request for reasons that might not be readily apparent to you. The mortgage holder might have found a defect in its case that it didn't want exposed, or it was simply not prepared to move the case forward as fast as the court required.
In Florida, cases can be dismissed for failure to prosecute when the mortgage holder doesn't file any papers or take any action in the case for one year. A notice can be given after ten months, and if no papers are filed or orders are issued within 60 days after the notice, the case can be dismissed.
When a case is dismissed "without prejudice," it can almost always be refiled. If it was dismissed because the complaint had a defect, the mortgage holder will likely take the opportunity to correct the defect, but it doesn't have to. When a case is dismissed without prejudice, it can be refiled exactly as it was before.
Dismissals "with prejudice" are more final. When a case is dismissed with prejudice, it usually means it can't be refiled at all. But this is different with foreclosures. In 2004, the Florida Supreme Court ruled that in a foreclosure proceeding, each time you default on your obligation under the note and mortgage, the mortgage holder has a new right to sue you. If your foreclosure case is dismissed with prejudice for a procedural or technical matter, it is likely that it can be refiled as long as the mortgage holder sues using a different default date.
In Florida, the statute of limitations on a mortgage foreclosure is five years from the date of default. Because each missed payment can be a new default under the current state of the law in Florida, the action would not be barred by the Florida statute of limitations unless more than five years has passed using the default date that the mortgage holder is relying on in the complaint.
Your mortgage holder must pay your costs associated with the dismissed case, before the case can be refiled. If the mortgage holder fails to do this, the new filing is not permitted, and you can move to dismiss it.
If your mortgage holder can't comply with the procedural requirements for foreclosure, it's possible that it won't be able to refile the case. However, some procedures allow the mortgage holder to request additional relief from the court to correct defects in the mortgage holder's documents. Adding these additional requests makes the case more complicated, requires more proof, and might give you more opportunities to defend the action, but a new case might still be possible.
Some of the more common actions mortgage holders take to correct defects in their foreclosure cases include asking the court to:
If you need help defending against a foreclosure, it's a good idea to seek the advice of local lawyer to explore all possible alternatives that might be available in your particular situation. And if you want to learn about possible ways to avoid a foreclosure, like with a loan modification, short sale, or deed in lieu of foreclosure, consider also talking to a HUD-approved housing counselor.