In April of 2014, one of Florida’s appellate courts handed down a ruling in U.S. Bank v. Bartram that effectively gutted the statute of limitations in foreclosure cases—meaning that even if you beat the bank in court on your foreclosure, they could simply file a new case, no matter how long the first case had been pending, and try, try again—virtually without limit. In a surprise ruling, a different appellate court has reaffirmed the statute of limitations, with an opinion that sharply narrows the application of Bartram: Deutsche Bank v. Beauvais [PDF], 40 Fla. L. Weekly D1 (Fla. 3d DCA Dec. 17, 2014).

The court explained its own ruling here:

The lender’s acceleration of the debt triggered the commencement of the statute of limitations, and because the installment nature of the loan payments was never reinstated following the acceleration, there were no “new” payments due and thus there could be no “new” default following the dismissal without prejudice of the initial action. The filing of the subsequent action, after expiration of the statute of limitations, was therefore barred. We reverse, however, that portion of the order which canceled the note and mortgage and quieted title in favor of the Association.

A couple of important points to note:

1. The party who got the note canceled was not the borrower but the homeowner’s association who was trying to get the bank out of the way so it could own the property free and clear.

2. The court found a significant distinction between this case and Bartram, that the prior trial court in Bartram dismissed with prejudice—meaning it was a final decision in the case—and the prior trial court in Beauvais dismissed without prejudice—meaning it was not a final decision. Ironically, a final dismissal with prejudice allows the bank to try again, but a dismissal without prejudice—if the case was old enough—does not.

3. Despite holding that the statute of limitations had run, the court reversed the trial court’s cancellation of the note and mortgage. It held that the lien was still in effect, even if it couldn’t be enforced. (Essentially, the bank could have its cake, but no one could ever eat it.) This means that as of now, filing a quiet title action on statute of limitations grounds is not supported by law in Florida.

This decision is likely to go to the Florida Supreme Court. But in the meantime, it offers some relief for homeowners who have been locked in battle with their banks for years, since most foreclosure cases, when they are dismissed, they are dismissed without prejudice. If you get that first case dismissed, and it was filed more than five years ago, you may have a solid defense under the Beauvais case that can stop them from ever taking your home in a foreclosure action.

We’re reviewing this case and its importance for all our clients

Ocwen Financial Services, LLC, the company that millions of Americans are forced to deal with when handling their mortgage loan transaction, welcomed the New Year by admitting, once and for all, that its records on countless home mortgage transactions simply could not be trusted. As part of a settlement agreement with the New York State Department of Finance, Owen and its related companies admitted that they had been, for years, backdating notice letters, mishandling loan modification applications, failing to honor loan modification agreements, and when customer called to complain, they were simply training people to read the scripts… with feeling.

The order has the force of law in New York, and because Ocwen stipulated to it, may be considered an admission of wrongdoing by other courts. The settlement itself only directly benefits New Yorkers—for example, the payments for borrowers under the settlement only go to New York borrowers—but the detailed descriptions of Ocwen’s wrongdoing may serve as possible defenses or even grounds for potential lawsuit by borrowers in Florida and other states.

Each of our clients with Ocwen matter should know that we are evaluating each case to determine how this Consent Order affects your rights.

Here’s a copy of the order itself: Ocwen Consent Order [PDF]

Some of the most amazing admissions come in paragraphs 14–18 of the Consent Order:

14. In the course of its review, the Compliance Monitor determined that Ocwen’s information technology systems are a patchwork of legacy systems and systems inherited from acquired companies, many of which are incompatible. A frequent occurrence is that a fix to one system creates unintended consequences in other systems. As a result, Ocwen regularly gives borrowers incorrect or outdated information, sends borrowers backdated letters, unreliably tracks data for investors, and maintains inaccurate records. There are insufficient controls in place— either manual or automated—to catch all of these errors and resolve them.

15. For example, Ocwen’s systems have been backdating letters for years. In many cases, borrowers received a letter denying a mortgage loan modification, and the letter was dated more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter. In other cases, Ocwen’s systems show that borrowers facing foreclosure received letters with a date by which to cure their default and avoid foreclosure—and the cure date was months prior to receipt of the letter. Ocwen’s processes failed to identify and remedy these errors.

16. Moreover, Ocwen failed to fully investigate and appropriately address the backdating issue when an employee questioned the accuracy of Ocwen’s letter dating processes and alerted the company’s Vice President of Compliance. Ocwen ignored the issue for five months until the same employee raised it again. While Ocwen then began efforts to address the backdating issue, its investigation was incomplete and Ocwen has not fully resolved the issue to date, more than a year after its initial discovery.

17. Ocwen’s core servicing functions rely on its inadequate systems. Specifically, Ocwen uses comment codes entered either manually or automatically to service its portfolio; each code initiates a process, such as sending a delinquency letter to a borrower, or referring a loan to foreclosure counsel. With Ocwen’s rapid growth and acquisitions of other servicers, the number of Ocwen’s comment codes has ballooned to more than 8,400 such codes. Often, due to insufficient integration following acquisitions of other servicers, there are duplicate codes that perform the same function. The result is an unnecessarily complex system of comment codes, including, for example, 50 different codes for the single function of assigning a struggling borrower a designated customer care representative.

18. Despite these issues, Ocwen continues to rely on those systems to service its portfolio of distressed loans. Ocwen’s reliance on technology has led it to employ fewer trained personnel than its competitors. For example, Ocwen’s Chief Financial Officer recently acknowledged, in reference to its offshore customer care personnel, that Ocwen is simply “training people to read the scripts and the dialogue engines with feeling.” Ocwen’s policy is to require customer support staff to follow the scripts closely, and Ocwen penalizes and has terminated customer support staff who fail to follow the scripts that appear on their computer screens. In some cases, this policy has frustrated struggling borrowers who have complex issues that exceed the bounds of a script and have issues speaking with representatives at Ocwen capable of addressing their concerns. Moreover, Ocwen’s customer care representatives in many cases provide conflicting responses to a borrower’s question. Representatives have also failed in many cases to record in Ocwen’s servicing system the nature of the concerns that a borrower has expressed, leading to inaccurate records of the issues raised by the borrower.

In short, Ocwen has been a virtual dumpster fire of broken promises and falsified records. Only time will tell whether the company can survive this latest round of misdeeds.

Fortify Yourself—the Lesson of Castillo de San Marcos

December 11, 2014
Thumbnail image for Fortify Yourself—the Lesson of Castillo de San Marcos

What can a centuries-old Spanish fort teach you about banking law? Plenty, if you take the time to study it. The Castillo de San Marcos in St. Augustine, Florida, is the oldest European fortification in the continental United States. Built starting in 1672 by Spanish naval forces who then occupied the area, the purpose of […]

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Is the Florida State University Student Conduct process rigged?

November 23, 2014

As we head into the last few weeks of the college football season, controversy still surrounds Florida State University quarterback Jameis Winston, who is about to face student conduct proceedings to address the choices he’s made off the field. Some fear that the student conduct code proceedings, which are completely controlled by the university, are […]

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Are banks secretly selling poison properties to an unsuspecting public?

November 23, 2014

Imagine a home filled with poison gas, sealed airtight for three, four, even five years. Imagine the last owners of that home, forced to flee with nothing but the clothes on their backs — contaminated clothes they would have to throw in the dumpster as soon as they bought replacements. Imagine that the bank forecloses […]

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How can I stop the calls from bill collectors?

September 29, 2014

What can you do to STOP THE CALLS? What can you do when debt collectors or banks or credit cards ruin your peace of mind by calling constantly, maybe about debt you didn’t even have, or got discharged, or paid off long ago? Do you know that federal law and Florida law offer major protections […]

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Dyck O’Neal and Vantium Capital are coming after deficiency judgments.

July 24, 2014

The foreclosures that wouldn’t die: deficiency judgment claims hit hard after the house is long gone. All across Florida, former homeowners who lost their homes to foreclosure years ago are getting a nasty surprise: brand-new court papers demanding money for so-called “deficiency judgments.” Even though you lost the house—or gave it up—long ago, someone is […]

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Save your job, save yourself thousands of dollars, clean up your credit: Mike Wasylik Interviews Credit Education Consultant Laurie Zoock

July 22, 2014

Florida Foreclosure Defense Lawyer Michael Alex Wasylik interviews Credit Education Consultant Laurie Zoock about credit scores and credit reporting. You’ll learn a ton of useful information in just 63 minutes: How to dispute inaccurate information on your credit report Why the credit reporting agencies make MORE MONEY if they report false, negative information about you […]

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Don’t make this deadly foreclosure mistake—find out what to do instead.

June 29, 2014

One of the most frustrating things we see in the foreclosure field is the person we could have helped, if only they had come to us before making some fatal mistake that killed their case, blew their defenses, and lost the home we could have saved for them. In this short video, you’ll learn: The […]

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Critical foreclosure information for Realtors and real estate agents and brokers

May 15, 2014

If you’re a real estate professional—whether you’re a Realtor, a broker, or an agent–or you work with someone who is—then you need to hear what Florida Foreclosure Defense Attorney Mike Wasylik has to say about handling foreclosures. Here are three things you’ll learn: The surprising way some well-meaning agents break Florida law handling foreclosures The […]

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