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Plaintiff filed a complaint for foreclosure on September 29, 2010.  Plaintiff alleged in its Complaint that:

The Mortgage Note and Mortgage are in default. The required installment payment of June 1, 2010, was not paid, and no subsequent payments have been made. The Mortgage is contractually due for June 1, 2010, payment. The last payment received was applied to the May 1, 2010, installment, and no subsequent payments have been applied to the loan.  [Plaintiff’s Complaint ¶6.]

The Defendants filed their answer on February 8, 2011 denying that the Mortgage Note and Mortgage are in default.

At trial, the defendant testified that in October of 2009 she contacted Plaintiff to discuss a mortgage modification.  A representative of Plaintiff,  informed her that her account had to be 90 days in default before they will consider a loan modification. Relying on this statement, the defendant  did not make her mortgage payments from November 2009 through January 2010.

Defendant further testified that she was told by another of Plaintiff’s representatives,  that she would begin a temporary modification period requiring reduced payments for February 1, 2010, March 1, 2010 and April 1, 2010.  Defendant testified that she timely made each of these payments.

Defendant testified that in June 2010, she received a notice that she was being denied for a permanent loan modification. As a result, on June 23, 2010 she contacted Plaintiff to see how much she owed. A representative of Plaintiff informed the Defendant that if she paid $6,774.84 the loan would be current through July 2010 making August 1, 2010 the next due payment. Defendant then made this payment telephonically with Plaintiff’s representative during the same phone call.

Defendant further testified that she received a letter dated July 19, 2010 which claimed that she owed $1,969.40 in past due amounts.  She again contacted Plaintiff regarding the amounts claimed to be due and was again told not to make a payment for 90 days so that she could be considered for a loan modification. Approximately 60 days later, Plaintiff filed the instant foreclosure.

The witness for the Plaintiff, provided no testimony to rebut the testimony of the Defendant  in relation to the representations of Plaintiff during the various aforesaid phone calls. The lender’s witness testified only based on the payment history introduced at trial that the last payment applied to the account was for May 2010 and no further payments had been received.

The Court found that the Defendant’s  testimony regarding the June 23, 2010 phone call and payment is un-rebutted and thus must be accepted.   Plaintiff is bound by the representation made by its representative to Defendant on June 23, 2010 that the loan would be brought current through July 31, 2010 if she made payment in the amount of $6,774.84.  Therefore, the Court found that the subject loan was current through July 31, 2010. This is contrary to Plaintiffs allegation in its Complaint that the loan was in default as of June 1, 2010. Thus, Plaintiff has failed to prove that the loan was in default on the date alleged in its Complaint.

Additionally, per paragraph 7 of the Complaint, Plaintiff’s cause of action is based on an alleged acceleration of the full amount of the loan. Paragraph 22 of the subject mortgage requires that prior to an acceleration of the full amount of the loan, the Defendants must be provided with a notice of the Plaintiff’s intent to accelerate the loan 30 days in advance.

Plaintiff introduced its alleged Notice of Intent to Accelerate dated July 19, 2010. Plaintiff’s Trial Exhibit #4. This Notice, however, is not effective because the loan was current on July 19, 2010 due to the payment made on June 23, 2010 in the amount of $6,774.84. Therefore, Plaintiff did not have the contractual right to accelerate the loan. No subsequent notice of intent to accelerate was introduced by Plaintiff. Therefore, Plaintiff has failed to prove that it provided an effective notice of intent to accelerate more than 30 days prior to acceleration of the loan, a necessary condition precedent to acceleration and bringing the instant action. Bryson v. BB&T, 75 So. 3d 783, 785-786 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D2582a].

“As a matter of substantive law, it is a good defense to foreclosure on an accelerated basis that the mortgagor tenders payment of defaulted items, after the default but before the notice of mortgagee’s election to accelerate has been given.” Delandro v. America’s Mortgage Servicing, Inc., 674 So. 2d 184, 186 (Fla. 3d DCA 1996) [21 Fla. L. Weekly D1201a] (quoting Campbell v. Werner, 232 So. 2d 252 (Fla. 3d DCA 1970). See also Yelen v. Bankers Trust Co., 476 So. 2d 767, 769 (Fla. 3d DCA 1985(“A tender of arrears, made before the lender has declared the entire amount due, prevents the lender’s acceleration of the mortgage).

Per paragraph 8 of the Plaintiff’s Complaint, $138,507.19 was due in principal as of May 2010. Therefore, the subject loan is hereby current with a balance going forward of $138,507.19 with the next contractual monthly payment due on November 1, 2012. Said payment shall be the $923.57 in principal and interest reflected in the Note plus lawful escrow amounts. Any amounts currently held in suspense by Plaintiff shall be applied towards the outstanding principal balance.

The Court further found that it would be inequitable for the Defendants to be assessed any interest, late charges or other fees as a result of the alleged default.

The court entered judgment for the defendant awarding  her costs and fees,  while also specifying that plaintiff shall not assess defendant any costs or fees related to the foreclosure

WELLS FARGO BANK, N.A., v. WESTBROOK, et. al., Circuit Court, 7th Judicial Circuit in and for St. Johns County. Case No. CA10-2659, Division 55. October 17, 2012. Edward Hedstrom, Judge. Counsel: Ronald R. Wolfe and Associates, P.L., Tampa, for Plaintiff. Pycraft Legal Services, LLC, St. Augustine, for Defendants.

20 Fla. L. Weekly Supp. 400b

Online Reference: FLWSUPP 2004WEST