Surprise! Lenders must comply with Pre-Foreclosure Notice Requirements.

In Samaroo v. Wells Fargo Bank, Adam J. Knight and Henry W. Hicks successfully argued that a lender was required to comply with pre-foreclosure notice requirements contained in standard mortgages used throughout Florida. 137 So.3d 1127 (Fla. 5th DCA 2014). The Samaroo case has quickly become a boon to foreclosure defendants throughout Florida arguing that form bank notices simply fail to comply with the clear terms of the mortgage.

Paragraph 22 of the standard Fannie Mae/Freddie Mac mortgage requires a lender to provide notice to borrowers prior to acceleration and foreclosure. This notice must contain the following information:

(1) The notice must specify the default
(2) The notice must specify the action required to cure the default
(3) The notice must provide a date, not less than 30 days away, by which the borrower can cure the default;
(4) The notice must state that failure to cure the default may result in acceleration and foreclosure by judicial proceeding; and
(5) The notice must advise the borrower of the right to reinstate the loan after acceleration and the right to assert defenses to acceleration and foreclosure in any judicial proceeding.

In Samaroo, Adam J. Knight argued to the Fifth District Court of Appeal that the notice provided to the Samaroos was defective by failing to advise the Samaroos of their right to reinstate the loan after acceleration. The Fifth District agreed and stated “it is apparent in comparing the letter to the requirements of paragraph 22 that it does not comply with the notice requirements set forth in paragraph 22 of the mortgage. Importantly, it does not inform the Samaroos of their right to reinstate after acceleration.”

In one short and sweet paragraph, the Fifth District explicitly rejected Wells Fargo’s substantial compliance argument. The Fifth District stated that “Wells Fargo contends that it “substantially” complied with the contractual notice requirements, an argument we cannot credit. None of the cases cited by Wells Fargo involved compliance with pre-acceleration notice requirements contained in a mortgage. Its own mortgage specified the important information that it was bound to give its borrower in default, and it simply failed to do so.”

The Samaroo decision has been a game changer in foreclosure defense cases throughout Florida by being the first case to address substantial compliance and one of the only cases in Florida expressly addressing the language contained in a bank’s notice of default.

If you are in foreclosure, we are here to help and we would be happy to speak with you about your individual situation. Please contact us for more information.

Hicks | Knight, P.A.
400 N Ashley Drive, STE 1500
Tampa, Florida 33602