In most cases when a bank is getting ready to file a foreclosure suit against a homeowner, the bank is require to fulfill what are called “conditions precedent,” which are actions the bank legally has to take before it files the action for foreclosure.
One of the most common is the requirement under Paragraph 22 of the standard Fannie Mae/Freddie Mac mortgage to mail the homeowner a notice of default at least 30 calendar days prior to the filing of the foreclosure case.
Another common condition precedent is related to Federal Housing Administration (“FHA”)-backed mortgages. This is the requirement under most FHA mortgages to invite the homeowner to a face-to-face meeting to discuss a resolution of the mortgage account. This needs to be done prior to filing the suit for foreclosure. The fact that these actions need to be taken before the suit is filed makes them conditions precedent.
If the bank does not comply with these conditions precedent, the foreclosure can be dismissed but make sure you do not make any procedural mistakes along the way.
In its lawsuit, the foreclosing bank must allege that it has satisfied all conditions precedent.
When you respond to this allegation in your answer to the lawsuit, if you have reason to believe the bank did not comply, do not just write “Denied.” Make sure to write down the specifics. For example, you could write “Denied. Defendant specifically states that the Plaintiff failed to satisfy the condition precedent set forth in Paragraph 22 of the subject mortgage by failing to mail a notice of default at least 30 days prior to the filing of this lawsuit.”
If you do not deny this allegation with specificity, the Court could find that you waived the defense. Why? Because Florida Rule of Civil Procedure 1.120(c) requires that allegations of satisfaction of conditions precedent be denied with specificity.
We always recommend that you use a “belt and suspenders” approach and not only deny the allegation with specificity but that you also raise this defense as an affirmative defense. For example, “As a first affirmative defense, Defendant states that the Plaintiff failed to satisfy the condition precedent set forth in Paragraph 22 of the subject mortgage by failing to mail a notice of default at least 30 days prior to the filing of this lawsuit. As a result of this failure, Plaintiff’s action should be dismissed.”
Plaintiff’s failure that it has satisfied conditions precedent can be fatal to Plaintiff’s foreclosure case. Don’t do the bank a favor by accidentally waiving the defense.
Ryan C. Torrens, Esq.
Consumer litigation attorney