QUIET TITLE MORTGAGE FORECLOSURE DEFENSE MERITLESS IN FLORIDA
In an expected move by Florida courts, the scheme of filing a quiet title action to eliminate a lender’s claim of a lien through its mortgage has been deemed “meritless”. The situation revolves around Fidelity Land Trust and Sunshine State Land Trust, both companies that received deeds from hopeful homeowners that paid the companies to “eliminate” their mortgages.
The Palm Beach Post reported that the concept was based on the Trust not having notice of the unrecorded mortgage transfer (assignment), and therefore not being subject to the mortgage. Not reported was the underlying concept about which I wrote in QUIET TITLE ELIMINATION OF MORTGAGE ATTACKED BY FLORIDA AS DECEPTIVE. This other “legal concept” was to sue the lender, usually the original lender and not the assignee (since there is no recorded notice of any assignment) and then take a default, since the 20 days allowed to answer the Complaint is not enough time to get the original lender to determine to whom the summons and complaint should be forwarded to (the new lender), and for that new lender to answer. Thus with the default the Trust then seeks to get a judgment on saying that the mortgage does not exist.
The courts have now stated that there is no legal basis for either of the two ways of obtaining “clear title”. The attorney for the companies was further warned in Federal Court that further “baseless” lawsuits brought by the attorney will warrant that the Federal Court bring disciplinary proceedings against the attorney.
The Post reported that over 80 properties in Palm Beach County Florida are held by the Trust. This gives the real property owners real problems – in that without ownership of the property, the homeowner cannot undertake a “real” mortgage foreclosure settlement though a loan modification, short sale or deed in lieu of foreclosure. Ironically, getting the title back to the real homeowner requires a quiet title action – but one that is legitimate – to declare the invalidity of the transfer to the Trust.
Quiet Title actions do have legitimate uses, including the use to eliminate the lien of a mortgage that has become unenforceable by reason of a failure of the bank to enforce its remedies after the statute of limitations to initiate a lawsuit of foreclosure has past.
Check with your local real estate attorney for the options that may be available in each situation.
© 2013 Richard P Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com – FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW – We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.