• Ryan Torrens

You're on the deed, but not on the mortgage! Can you fight the foreclosure?

Updated: Dec 10, 2019

Sometimes we represent folks who are on the deed to a property, but they are not on the mortgage. Often this is because they purchased the property at a homeowners association foreclosure auction, and now the first mortgage company is coming through with its foreclosure.

The banks have been hell-bent recently to try to throw these folks out of court so the banks can quickly foreclose and auction off the home. The argument goes like this: "Judge, the Second District's ruling in Pealer v. Wilmington Trust (Fla. 2d 2017) says you can't defend against a foreclosure unless you are on the loan documents. This Defendant only holds title. The Court should strike their pleadings and enter a default judgment."

It is easy for a homeowner or even a defense attorney to get thrown off guard by this potentially fatal argument. It sounds convincing! Here's the problem for the banks: it's WRONG. Let me briefly explain why.

The opinion in Pealer is a special concurrence which the other members of the appellate panel did not sign on to. It is well-settled law here in Florida that a concurring opinion is not controlling authority. See, e.g., Miller v. State (Fla. 2d DCA 2008). The Pealer decision is not the majority opinion, but a special concurrence to a per curiam affirmance. A per curiam affirmance is simply when the appellate court affirms the trial court's ruling without opinion. In legal jargon we call it a "PCA." PCAs also have no precedental value. See, e.g., Gould v. State (Fla. 2d DCA 2007).

So the special concurrence in Pealer is not controlling legal authority, as much as the banks wish that it was. We do, however, have wonderful appellate decisions, such as Benzrent 1, LLC v. Wilmington Savings Fund Society, LLC (Fla. 3d DCA 2019), which says that an owner of a property, who acquires the property before the bank's lis pendens is recorded, is entitled to fight the foreclosure. 3709 Flagler Drive Prodigy Land Trust v. Bank of America, N.A. (Fla. 4th DCA 2017) says the same thing.

If you are the owner of a property (but not on the mortgage) and you find yourself a Defendant in a foreclosure proceeding, I would be sure to have copies of Benzrent 1 and 3709 Flagler at the ready.

Remember, cases such as Benzrent 1 and 3709 Flagler will only help you if you acquired title to the property before the foreclosing bank recorded its lis pendens. Lis pendens means "action pending" in Latin and is a document that is filed with the foreclosure lawsuit to place all potential interested parties on notice that there is litigation regarding the subject property. If you acquired title to the property after the bank recorded its lis pendens, you will most likely not be very successful defending the foreclosure, given the current state of the case law.

If you acquired your title to the property before the recording of the lis pendens, you are indeed entitled to challenge the foreclosure, no matter what the big banks might say to the contrary.

Have a great evening and thanks for reading.


Ryan Torrens

Foreclosure defense attorney

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