One question I get a lot in our law practice is “If I lose the foreclosure case and I appeal, is the foreclosure sale automatically cancelled?”
Pursuing an appeal after suffering a foreclosure judgment can be challenging and complicated. The main reason is the foreclosure sale that is looming after losing the foreclosure case.
Under Florida law, you begin the process of appealing a foreclosure judgment by filing a short, simple document called a Notice of Appeal. This initiates the appeal process but does not automatically cancel the foreclosure sale.
So how do you move forward with the appeal if you have a foreclosure sale coming up and you can get kicked out of your home?
Here’s how it works in practice:
Once you file the Notice of Appeal, you file a Motion to Stay in the circuit court, requesting that the foreclosure sale be cancelled or “stayed” pending the completion of the appeal. Then you would request a hearing on your Motion for Stay.
Here are the circuit judge’s main options:
- Grant a stay without conditions, meaning that the sale will be cancelled without you having to pay any additional money. When this happens, the sale will most likely remain cancelled unless the circuit judge changes his or her mind later;
- Grant a stay with conditions. This means the circuit judge can grant a stay and cancel the sale conditioned upon you taking some specific action. For example, the judge could order you to deposit regular mortgage payments into the registry of the court to keep the sale cancelled during the appeal. If you do not do so, the sale can be reset. Even if you make all of the mortgage payments during the pendency of the appeal, if you lose the appeal, the bank would get to keep the money, so you’re out of the money and you lose the property as well; and
- The third option the circuit judge has is to deny the stay, which means the sale would go forward.
If the judge denies the stay or imposes impractical or impossible conditions, you can then file an Emergency Motion for Review of the circuit court’s stay order. The court of appeals will usually act quickly on these motions and has the authority to affirm the ruling by the circuit court, to reverse the circuit court’s order, or to modify the order.
So what happens if the circuit court denies the stay and the court of appeals denies the stay as well? The foreclosure sale would then go forward but whether the Plaintiff moves forward with an eviction will most likely hinge on whether the property sells to a third-party at the auction or whether it reverts back to the Plaintiff at the auction because nobody bid high enough at the auction.
If the property sells to a third-party, the third-party purchaser will most likely move forward with an eviction once they take title to the property.
If the Plaintiff is a large institutional lender like Wells Fargo or Bank of America and the property reverts back to the Plaintiff at the foreclosure auction, the Plaintiff will most likely not pursue an eviction until the appeal is complete.
This is because large, institutional lenders do not like to take the risk that you win the appeal, title reverts back to you, and then you sue for any damages due to the lender’s actions.
As you can see, prosecuting a foreclosure appeal and obtaining a stay of the foreclosure sale can be a complex endeavor. It is always wise to retain competent counsel to represent you throughout this process.
Ryan C. Torrens, Esq.
Consumer litigation attorney