Legal News for Credit Union Managers Since 1990
« Garnishment Funds: Property of Bankruptcy Estate
Garnishee Defendant Judgment: No Violation of Automatic Bankruptcy Stay »
18
Feb
2022

Fatally Defective Mortgage Acceleration Notice

This Court ruled that the lender’s Notice of Mortgage Acceleration Notice was fatally defective.
 
Here, Gerardo Pico borrowed money from First Union National Bank of Florida and secured the loan with a mortgage on his real estate.
 
The loan was two months in default and the bank notified debtor that he must cure the arrearage or the entire balance would be accelerated.

The debtor did tender payment of the full arrearage and late payment fees to the bank, however, prior to his tendering payment of the arrearage, and unbeknownst to the debtor, the bank internally accelerated the entire balance, which was then more than $18,000.

The bank proceeded with a foreclosure action against debtor, even though debtor timely made the next loan payment.

In response to the foreclosure action, debtor filed a motion to quash the action based upon the fact that the bank did not notify debtor of its decision to accelerate the balance owing.

The bank relied upon language in the loan documentation that stated it had the right to declare the entire unpaid debt immediately due and payable without giving the debtor any advance notice.

The court, however, held that after the bank’s notice to debtor requiring the arrearage to be cured, the bank was obligated to take some clear and unequivocal action indicating its intent to accelerate the balance. Hence, the court held the acceleration was a nullity and without any effect.

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Friday, February 18th, 2022 at 9:05 am and is filed under Mortgages, Secured Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Your comment

Powered by WP Hashcash

  • Recently Posted Articles written by: Charels R. Harroun, Attorney at Law

    • Defective Notice to Sell Collateral Defeats Collection of Deficiency
    • Credit Union Assessed Punitive Damages
    • Attorney Fees Assesses Against Bankrupt Debtor
    • Automatic Stay Violation: Costs Assessed Against Credit Union
    • Credit Union Lien Survives Chapter 7 Discharge
    • Constructive Discharge: Credit Union Violates Employee’s Rights
    • Right to Cancel – Truth-In-Lending Violation
    • Mechanics Lien Extinguished Credit Union Security Interest
    • Cashier Checks: Bank Liable to Credit Union
    • Reopening Bankruptcy Case Denied
    • Board Member Loses Suit Against Credit Union

  • Website Builder

2009-2020 Copyright Harroun, P.C. | Credit Union Legal Newsletter powered by WordPress and Uchilla
Subscribe: Entries (RSS) and Comments (RSS)