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. (To get tips on what to do—and what not to do—when facing a foreclosure, see Foreclosure Do's and Don'ts.)
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 are 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. If you are able to have the case dismissed, it never gets to judgment and your property is safe unless the lender can file again. (Learn more about Florida foreclosure procedures.)
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.
Technical defects. Foreclosure cases can be dismissed because there are technical defects within the complaint filed by the lender. Examples include:
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.
Failure to comply with court orders. Dismissals may also result from the mortgage holders 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.
Voluntary dismissals. Sometimes, the case is dismissed at the mortgage holder’s request for reasons that may not be readily apparent to you. The mortgage holder may have found a defect in its case that it did not want exposed or it was simply not prepared to move the case forward as fast as the court required.
Failure to prosecute. 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 there was a defect in the complaint, 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 re-filed exactly as it was before.
Dismissals with prejudice are more final. When a case is dismissed with prejudice, it usually means it cannot 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.
Example. Your mortgage holder files a foreclosure action based on your failure to make the payment due in February. The complaint is defective because the mortgage holder fails to attach a copy of the note to the complaint. Even after the judge has given the mortgage holder more time to correct that defect, the mortgage holder does not comply and the judge dismisses the case with prejudice. The mortgage holder is barred from filing the exact same case but if a different default date is used, it is a new suit and is permitted.
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. (To learn more, see Florida Foreclosure Statute of Limitation.)
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 cannot comply with the procedural requirements for foreclosure, it is possible that it cannot refile the case. However, there are procedures that can allow the mortgage holder to request additional relief from the court to correct defects in the mortgage holders documents. Adding these additional requests makes the case more complicated, requires more proof, and may give you more opportunities to defend the action, but a new case may still be possible.
Some of the more common actions mortgage holders take to correct defects in their foreclosure cases include asking the court to: