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Jacqueline Alicia Salcines

STATUTE OF LIMITATIONS FOR PROMISSORY NOTES AND DEFICIENCY BALANCES

Statute-of-limitations-241x300.jpgFrequently in my practice I am asked by borrowers seeking foreclosure defense and mortgage modifications, what the Statute of Limitations is with regard to mortgages and notes entered into by borrowers who have now stopped making mortgage payments. The new word on the street that is quickly penetrating neighborhoods and water coolers alike is Statute of Limitations, and those that have had the good fortune of being advised by their attorney that their lender or note holder has not sued within the period of time required by law and they may now own the house free and clear, are spreading the news like wildfire.

If a lender fails to bring suit within the prescribed "statute of limitations, the borrower may technically keep the house free and clear of any mortgage encumbrance. Perhaps a word seldom used by many in this community except lawyers or those in banking and business sectors, now the word Statute of Limitations has become a household word that everyone is curious about.

The Statute of Limitations in Florida, which means the time the bank has to take you to court after nonpayment of your mortgage note, is FIVE YEARS (5) from the time you stopped making mortgage payments and went into default. For further clarification, if you made your last mortgage payment on January 1, 2008... if the lender has not filed suit against you by January 1, 2013, then the lender may be forever barred from pursuing that debt against you. This is where the skill and expertise of a knowledgeable real estate attorney is absolutely crucial to analyze every detail of the loan and payments and make sure that the bank is forever barred from pursuing that mortgage debit against you.

Deficiency balances are a separate matter. A deficiency balance is the amount of mortgage left over (unsatisfied) or unpaid AFTER the property is either sold at the foreclosure auction or in a short sale and property closing. If a property sells at auction for $150,000.00 but the bank had obtained a judgment against you, the borrower, for $200,000.00, the a $50,000.00 "deficiency balance" remains unsatisfied and collectible.

If your property has been foreclosed, then the Statute of Limitations starts the date of the foreclosure sale.

if your property was sold in short sale or other closing, the Statute of Limitations begins to toll as soon as the lender obtains their money from the proceeds of the sale.

If the property was returned to the lender through a deed in lieu of foreclosure, the Statute of Limitations will start from the date the Quit Claim Deed is recorded.

As with all matters dealing with Florida Statutes and governing law, homeowners are encouraged to seek the advice of a qualified real estate attorney to analyze your mortgage documents and provide the best possible advise for your situation.

Contact the Law Offices of Jacqueline A. Salcines, PA for a thorough review of your mortgage, note and closing documents to see what you may be eligible for.

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