Months ago the Florida Supreme Court issued a seminal opinion that decided whether or not banks could re-foreclose on a mortgage after they had accelerated the amount owed and had the case dismissed. In Bartam v. U.S. Bank, the Florida Supreme Court said that yes, the bank’s could re-foreclose so long as it was within the statute of limitations to enforce any installment payment due on a loan.  This will likely result in a new wave of foreclosure filings throughout Florida on cases that many thought could never be revived.

Silver Lining for Homeowners Post-Bartram

While this is not the best news for many homeowners, there are some silver linings from the Bartram decision that might be very good news for many homeowners.  In Bartram, the Florida Supreme Court specifically states that the bank can re-foreclose based on a default occurring after the date of the original dismissal.  The implication being that the bank cannot foreclose on a default that occurs prior to the date of the original dismissal. Any payments that were due and owing (lest the amount accelerated) prior to the date of the dismissal of the first case, may not be collectable in a subsequent foreclosure action.  This defense, res judicata, was not original thought to have applied to the majority of foreclosure cases. But it turns out that many of the involuntary dismissals will result in a significant portion of a homeowners debt not being collectable.

It remains to be seen exactly how this decision will be interpreted by the circuit and district courts throughout Florida.  But one thing remains clear, Homeowners that are being foreclosed on by a bank, especially if its a second foreclosure, would be wise to contact an attorney to learn more about their rights and their possible defenses.