Florida's Fifth Circuit Court of Appeal's January 14, 2018 opinion in Velden v. Nationstar Mortgage clarifies how much a Mortgage Lender can collect if it misses the five-year statute of limitations deadline to file suit after the Borrower's breach of the mortgage contract by missing a payment.
A lender typically has five years after a borrower first defaults on a loan to sue for foreclosure. The Velden opinion holds that a lender can foreclose anew with each new missed payment giving the lender the right to accelerate the loan, and demand immediate full repayment or foreclose. The Borrower's argument to the contrary was that if the Lender does not sue within five-years of the Borrower's first missed payment, the statute of limitations had run and the lender could no longer foreclose. The Fifth Circuit rejected that argument, instead holding that each missed payment gives the Lender a new opportunity to foreclose.
The Velden opinion does give Borrower's a "win," as well though: if a missed payment occurred more than five-years before the foreclosure suit is filed, the Lender cannot collect damages for a missed payment pre-dating the five-year statute of limitation period. Therefore, while the loan balance can be accelerated anew, the balance due cannot include missed payments that have been past due more than five-years before the acceleration.
A concurring opinion by Judge Brian D. Lambert sought to keep all missed payments in play.
There remains disagreement amongst Florida appellate courts, and even some of the Justices on Florida's Supreme Court, as whether the statute of limitations should even begin to run until the actual due date of the promissory note which the mortgage secures. Those notes commonly do not become due for 15-years, or 30-years, after the loan is made. We can look forward to additional litigation regarding this issue until it is finally and conclusively resolved by Florida's Supreme Court.