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Can A Mortgage Foreclosure Sale Be Unwound After It Is Final?


If the mortgage lender forecloses on your home and auctions off the property, your options for “unwinding” the sale are quite limited under Florida law. Section 702.036 of the Florida Statutes–known as the Finality of Mortgage Foreclosure statute–protected bona fide third party purchasers from challenges to their title to the foreclosed property. Outside of some narrowly defined exceptions, the former owner can only seek monetary damages for a wrongful foreclosure–they cannot ask a court to give them the property back.

Florida Law Limits Most Wrongful Foreclosure Actions to Monetary Damages Only

A recent decision from the Florida Third District Court of Appeals, Vista Financial Group, LLC v. Bank of New York Mellon, illustrates how the statute works in practice. The plaintiffs in this case were the owner and junior lienholder of the property in question. In 2009, the defendant mortgage holder brought a foreclosure action against the property. After receiving a foreclosure judgment, the defendant purchased the property at auction and resold it to a third-party couple.

Four years later, the plaintiffs filed a wrongful foreclosure lawsuit. They sought to undo the foreclosure judgment and the sale to the third party, as well as monetary damages. The third-party couple moved to dismiss under the Finality of Mortgage Foreclosure statute. A Florida circuit court judge granted that motion, prompting the plaintiffs to appeal to the Third District.

But the appellate court agreed with the trial judge’s reading of the law. The court explained that under the statute, third-party purchasers of a wrongfully foreclosed property are protected from suit if they were not “affiliated with the foreclosing lender.” An affiliation in this context does not include “the mere act of purchasing a property from an imperfect foreclosure auction.”

In other words, the couple who purchased the property had no prior relationship with the lender, and their decision to purchase the property from the lender did not create an affiliation. As such, they were protected from any legal claims seeking to challenge their title to the property, even if the lender wrongfully foreclosed upon the property.

This does not mean, however, that the plaintiffs will necessarily walk away with nothing. If they can prove wrongful foreclosure on the part of the lender, they may be entitled to monetary damages. But they cannot get the property back.

Speak with a Florida Foreclosure Defense Attorney Today

As noted above, there are exceptions to the “finality” rule. One was alluded to in the Third District’s decision. A mortgage sale can be unwound if the property was acquired by a “person affiliated with” the foreclosing lender. Another exception is for cases where the party seeking relief was never properly served with the original foreclosure lawsuit.

If you are looking to fight a foreclosure action, it is important to take prompt action to assert your rights without delay. An experienced Sarasota foreclosure defense lawyer can help. Contact the offices of Suncoast Civil Law today to schedule a confidential case evaluation with a member of our legal team.