More than five years after Florida courts were inundated with foreclosure cases, some of those sued have found a way to stay in their homes without paying their mortgages, thanks to a law called the statute of limitations.
Some Florida courts have ruled lenders cannot bring foreclosures if certain criteria are met: the lender must have already filed for foreclosure, demanded payment of all the money borrowed, and lost its foreclosure case. Then, if it failed to file another action within five years of the first lawsuit, the lender can no longer foreclose and evict the residents, some courts have ruled.
Other state courts, though, disagree.
The Florida Supreme Court has set aside Oct. 6 to hear oral arguments on the matter and could issue an order resolving the issue once and for all.
Real estate lawyers caution not everyone involved in a foreclosure case will have the same outcome. And those who do not pay will not own their homes free and clear, in almost all cases.
But for now, NBC 6 Investigators found, there are people living in their homes without paying their mortgages – and they may be able to continue doing it.
Nick Matthews was 19 years old when he borrowed nearly $190,000 in 2007 for an apartment converted into a condominium near Dadeland in Kendall. Within weeks, he said, he couldn’t work.
“I got into a serious accident, couldn’t use my leg for eight months and then the economy just popped, the bubble burst,” he said.
By the time he healed sufficiently from the dirt bike accident, his job as a computer technician for a mortgage office was gone. The housing economy collapsed, taking the mortgage company he worked for with it.
He said he was unable to make a mortgage payment on the 648-square-foot, one-bedroom, one-bath, 50-year-old unit, for which the property appraiser now assigns a market value of less than $60,000. His lender filed for foreclosure just seven months into the loan.
But, when it was set for trial in February 2011, no attorney for the lender, Chase Home Finance, showed up in court, and a judge dismissed it.
Then, in March 2013, a woman posing as a water company employee knocked on his door and, when he opened it, handed him a new foreclosure lawsuit.
Matthews hired the law firm of Roy Oppenheim, which last October persuaded a judge to dismiss the case because the statute of limitations had run out in 2012, five years after the first foreclosure was filed.
“We learned that there’s an actual statute of limitations on this kind of thing, five years from the initial filing,” Matthews said. “And this was well past five years at that point so it’s like what are they doing?”
Oppenheim said he has seen the pattern before.
“I look at this as really kind of a bad version of Groundhog Day. I look at this as Freddy Krueger constantly coming after you time and time again,” said Oppenheim, who has helped several clients remain in their homes without paying mortgages because lenders failed to obtain a judgment against them within five years.
“After the five years is up, you’re SOL -- it’s a statute of limitation -- and you have no second bite of the apple,” Oppenheim said.
Asked if he feels he’s done anything wrong, Matthews said, “No, not necessarily. They took two cracks at me already. I mean what more should they be allowed to do? It seems kind of un-American, honestly, if they can keep coming at me for something they’ve already lost on twice.”
Susan Rodolfi, who used to invest in real estate, bought her home near Coconut Grove in 2001. After her business dried up with the financial crisis in 2008, she had trouble making payments.
“I would fall back a little, but I would make up a little bit. There was a lot of back and forth with the bank,” Rodolfi said.
But in 2009, her lender filed a foreclosure action, demanding full payment of $277,000.
Rodolfi stopped paying her mortgage altogether, for a while putting the funds in her lawyer’s escrow account, while trying to negotiate a modification.
But when a new payment plan was finally agreed to, the lender failed to send it to her until after the first payment was already due, on Aug. 1, 2010.
“I couldn’t sign that, it was an invalid contract at that point,” Rodolfi said.
So she said she and her lawyer tried to continue working with the lender, to no avail.
She recounts years of frustrating confusion in dealings with lenders. For instance, she said, “They claim my property is a six-bedroom, four-bath, and it’s not; it’s merely a three-bedroom, two-bath.”
When it came time for the lender to prove its foreclosure case in court last June, the attorney for Nationstar Mortgage failed to appear and a judge dismissed the action.
Before the five year anniversary of the foreclosure action passed, though, the lender sought to reinstate the foreclosure and the judge agreed – a decision Rodolfi is now appealing.
If she wins, and the Florida Supreme Court's decision goes against the banks, she like Matthews could be living in her home without mortgage payments and without fear of foreclosure and eviction.
“I’d like to get my life back in order,” Rodolfio said, “my credit back in order and continue to be able to do some business I’d like to do.”
Even if the homeowners prevail in the Supreme Court, though, it’s not likely the court will allow them to have their homes free and clear of all liens and claims by the banks. In almost all cases, Oppenheim said, the homeowners could not cleanly transfer title to the properties without agreeing to pay the lenders some or all of the proceeds of the sale.
And, now that the tidal wave of foreclosures has subsided, Oppenheim said it’s more likely banks who truly have a right to the property will have their act together in court and present evidence to prove their cases.
So he does not recommend stopping payments on your mortgage in hopes the statute of limitations will expire.