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  1. #1
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    Mar 2013
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    Default Statute of Limitations on Deficiency from Foreclosure

    My question involves a mortgage in the state of: Florida

    Hi, I'm currently working with a local attorney which I'm not all that happy with because of several reasons so I decided to try to do some research of my own and found this forums. Either way, here's my situation:

    September 2008 = Stopped sending my mortgage payment
    January 2009 = Got served with foreclosure package
    June 2011 = Case dismissed due to lack of prosecution
    July 2012 = Second foreclosure case was open (with different case #)
    As of today = Case is still open

    I'm about 6 months away from reaching the 5 years from the point where I stopped sending my mortgage payments and my intentions are to try to keep my house under the 5 year Statue of Limitation. Please pardon my ignorance or lack of legal vocabulary but what my attorney told me is that after I have reached those 5 years I could file a case with the court and very possibly keep my house and don't owe any mortgage amount, only whatever amount is due on taxes since I would have been forgiven a debt I had and the IRS considers that as an income so if the day of tomorrow I sell or refinance the property then I would have to take care of the taxes owed.

    Note: During my first foreclosure I sent my bank 3 consecutive payments as I was trying to do a loan modification and I was under a 3 months trial period process which at the end they declined.

    My questions are: (If the information I was provided by my attorney is correct)

    When exactly does the 5 years start counting?
    - From the date I received the letter from my bank stating I was past due 30 days
    - From the date I received and signed the first initial foreclosure package
    - From the date the second foreclosure case started

    Does the payments sent during the 3 month trial period while in the first foreclosure affect in any way the count on this 5 years?

    What happens if I come out winning the case based on the 5 years Statue of Limitation?
    - How long until I receive the property's paperwork? (Title or Deed which I assume would mean that I own the property out right)
    - What is the tax percentage I would have to pay back to the IRS and based on what amount?

    I apologize for asking this many questions but I would like to be informed as much as possible about this as I mentioned earlier I'm not happy with my attorney and one of the main reasons is the lack of communication and/or information in regards to my case and this Statue of Limitation.

    Thanks in advance for your time and help!

  2. #2
    Join Date
    Jan 2006
    Posts
    27,024

    Default Re: Florida 5 Years Statue of Limitation

    I'm about 6 months away from reaching the 5 years from the point where I stopped sending my mortgage payments and my intentions are to try to keep my house under the 5 year Statue of Limitation. Please pardon my ignorance or lack of legal vocabulary but what my attorney told me is that after I have reached those 5 years I could file a case with the court and very possibly keep my house and don't owe any mortgage amount, only whatever amount is due on taxes since I would have been forgiven a debt I had and the IRS considers that as an income so if the day of tomorrow I sell or refinance the property then I would have to take care of the taxes owed.
    Passing the statute of limitations does not mean the debt is forgiven. It simply means the lender cannot seek obtain a judgment for the debt through the courts. Even if it was, it does not mean the creditor has to release their security interest on the home. If you refuse to pay the debt, they can foreclose. They may not be able to collect the debt but they can still foreclose on the house and take possession of the home. The debt and the lien on the house are two very separate issues.

  3. #3
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    Mar 2013
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    4

    Default Re: Florida 5 Years Statue of Limitation

    Quote Quoting jk
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    Passing the statute of limitations does not mean the debt is forgiven. It simply means the lender cannot seek obtain a judgment for the debt through the courts. Even if it was, it does not mean the creditor has to release their security interest on the home. If you refuse to pay the debt, they can foreclose. They may not be able to collect the debt but they can still foreclose on the house and take possession of the home. The debt and the lien on the house are two very separate issues.
    Ok, I'm confused now. So past the 5 years legally (through the courts) they can't go after the debt but they could still go after the property itself? Have there been any other cases in Florida where the owner was forgiven the debt and at the same time was able to win the lien over to the point where there was legally nothing else the bank could do to get the property back? The reason why I'm asking is because at the end of the day I do not want to loose the house and the way the attorney made it look was that if every went well I was going to be able to keep my property on top of not having any additional mortgage payments.

  4. #4
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    Jan 2006
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    27,024

    Default Re: Florida 5 Years Statue of Limitation

    bottom line:

    unless the lender releases the lien, which generally requires a payment adequate to satisfy the amount owed to them, they can foreclose on the mortgage and take possession of the home.

    btw: any payment usually restarts the clock on the statute of limitations. I haven't checked your situation specifically because it is really irrelevant in the end given your line of questioning.

  5. #5
    Join Date
    Mar 2013
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    Default Re: Florida 5 Years Statue of Limitation

    Quote Quoting jk
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    bottom line:

    unless the lender releases the lien, which generally requires a payment adequate to satisfy the amount owed to them, they can foreclose on the mortgage and take possession of the home.

    btw: any payment usually restarts the clock on the statute of limitations. I haven't checked your situation specifically because it is really irrelevant in the end given your line of questioning.
    Ok, so hypothetically they might agree for a settlement... in regards to those 3 payments restarting the clock, any advise on where to find out for sure if that's the case or not?

  6. #6
    Join Date
    Sep 2010
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    9,270

    Default Re: Florida 5 Years Statue of Limitation

    Actually, there are some quirks to Florida law on this Jk. Fail to timely prosecute the foreclosure may bar them from being able to foreclose. There's a lot of intricacies to this. There's not enough information here (and short of us being able to read the note, probably will not me) for us to determine if this is truly time barred. The OP should take everything to a lawyer. Of course, barring foreclosure action doesn't mean the lien goes away, but they indeed may be barred from foreclosing.

    The case history on this is amusing. One of the appellate cases attributes the closing statement to either St. Thomas More or George Costanza.

  7. #7
    Join Date
    Mar 2013
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    4

    Default Re: Florida 5 Years Statue of Limitation

    Quote Quoting flyingron
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    Actually, there are some quirks to Florida law on this Jk. Fail to timely prosecute the foreclosure may bar them from being able to foreclose. There's a lot of intricacies to this. There's not enough information here (and short of us being able to read the note, probably will not me) for us to determine if this is truly time barred. The OP should take everything to a lawyer. Of course, barring foreclosure action doesn't mean the lien goes away, but they indeed may be barred from foreclosing.

    The case history on this is amusing. One of the appellate cases attributes the closing statement to either St. Thomas More or George Costanza.
    Without going into very specific details about the case, if the attorney knows his way around... it is a possibility that after the 5 years not only they won't be able to claim the debt but they could also loose the right to claim the property back? All I'm trying to know is if I'm been jerked around by my attorney or if there's really a possibility that what he is telling me is true.
    On a side note, he claims to have plenty of experience and have won many cases by doing this process. (then again it can just be a sales speech).

    Thanks to all of you for the time and opinions provided!

  8. #8
    Join Date
    Sep 2010
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    9,270

    Default Re: Florida 5 Years Statue of Limitation

    They may not be able to FORECLOSE, the security instrument stays there meaning that you couldn't sell the house without paying them off in the process. There appears to be another statutory limit on the security instrument (much longer). Again, it is intricate. You need to run it by a lawyer to see if you have a chance.

  9. #9
    Join Date
    May 2013
    Posts
    1

    Default Re: Statute of Limitations on Deficiency from Foreclosure

    Could you please send me your lawyer's info? We have been having similar troubles and I would love to ask him a few questions. I hope it works out the best for you.

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