Residential foreclosures are still a problem for many home owners in Florida, particularly here in Broward County, Miami-Dade County, and Palm Beach County. To make matters worse, some banks are still committing wrongful acts during the foreclosure process which can result in the banks having to reimburse a homeowner their costs, including attorney’s fees, to defend themselves.
When May A Bank Be Required To Pay the Borrower’s Legal Fees and Expenses in A Foreclosure Suit?
Whether or not the bank will be required to reimburse the borrower for any legal fees and expenses in the foreclosure action will depend upon the circumstances of their case. Here are 2 fact patterns where a bank can be required to pay a homeowner’s costs for their foreclosure defense.
1. Bank Voluntarily Dismisses the Foreclosure Lawsuit
In any civil case, if the party that brought the lawsuit decides to stop the proceedings, then they can do so by filing a “notice to dismiss.”
In Florida, if the bank voluntarily dismisses the foreclosure action, then the borrower may be able to recover the expenses to defend him or herself.
Why? The answer is explained in the case of Bis V. US Bank Nat. Ass’n, 172 So. 3d 971 (Fla. Dist. Ct. App. 2015).
Bis v. U.S. Bank: Voluntary Dismissal of the Foreclosure, Fees and Costs
In 2015, homeowners Steven and Eugenia Bis took their foreclosure case to the Florida Court of Appeals to appeal the trial judge’s denial of their request for the bank to pay their attorneys’ fees and court costs.
In part, their appeal was successful. The court ruled that the couple could get the bank to cover the legal expenses they incurred in defending against the foreclosure. However, the bank would not be forced to reimburse them for their attorneys’ fees.
Here’s what happened: Several years ago, the bank, U.S. Bank National Association (“the Bank”), filed a foreclosure lawsuit against the couple after they were unable to resolve their differences during settlement negotiations. They hired a lawyer and fought the Bank over the foreclosure.
The case was progressing like most foreclosure lawsuits, including the discovery process. Then, on the day of the foreclosure trial, the Bank arrived with a notice of voluntary dismissal of the foreclosure lawsuit. The Bis’ were glad the case was dismissed, but they wanted to get their costs covered by the bank.
So, the Bis’ filed a request with the Florida judge that the Bank be forced to pay both their legal fees and costs.
Florida Rule of Civil Procedure 1.420(d)
The appeals court found that the Bank had followed Florida Rule of Civil Procedure 1.420 which provides that costs are to be assessed in the action that is the subject of the voluntary dismissal. See, Wilson v. Rose Printing Co., 624 So.2d 257, 258 (Fla.1993).
Unfortunately, this rule does not provide for attorneys’ fees. So, the borrowers could get their costs reimbursed by the Bank but not their legal fees.
2. Sanctions against the Mortgagor Bank
If the lender wrongfully files a foreclosure lawsuit against the borrower, then the mortgagee (bank or lender) may be forced to reimburse the borrower for their legal fees and court costs by way of the court assessing sanctions against the bank.
This scenario is explained in the case of Snow v. Rosse, 455 So.2d 615, 617 (Fla.Dist.Ct.App.1984).
The Case of Snow v. Rosse: Sanctions in a Foreclosure Lawsuit
In this case, the borrowers claimed they made their mortgage payments as was required under their promissory note, but the mortgagees filed for foreclosure anyway. The borrowers provided proof that they had sent mortgage checks, but there was fraudulent activity on the part of the mortgagees. What happened was that the mortgagees didn’t cash the borrowers’ checks.
The trial court rules that under Florida Statute 57.105, the borrowers could be awarded their attorneys’ fees after they were victorious in defeating the foreclosure lawsuit filed against them. In this case, the award of attorneys’ fees and court costs was considered a sanction against a party who has undertaken wrongful actions; in this case, holding onto mortgage checks and then trying to foreclose was considered a wrongful act.
What Should You Do?
In Florida, there are instances where a homeowner can have their foreclosure defense costs, including legal fees, covered by the bank. Those situations are case specific. One such case is where the bank fails to properly deposit your mortgage payment checks, another is where the bank has voluntarily dismissed its lawsuit.
If you believe you have grounds to recover your foreclosure costs from a bank or other foreclosing party, a good piece of advice is to talk with an experienced Florida real estate lawyer to learn whether or not your facts qualify to have the bank reimburse your costs for defending yourself. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.
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