Language in almost every single Mortgage requires that your lender send an “Acceleration Letter” or “Notice of Intent to Accelerate” or more commonly known as the “Default Letter” with very specific language before they can foreclose or initiate foreclosure against you in court for non-payment or default of a mortgage. Standard Fannie Mae and Freddie Mac mortgages contain this language in paragraph 22 of the mortgage instrument. However, depending on who was your lender and the type of loan, the language may be found elsewhere.
The reason this is important is that the law affords the homeowner a chance to reinstate the loan, and bring it current before the foreclosure is started. It also alerts or puts the homeowner that has defaulted on their mortgage, that the lender bank can take their home away in order to satisfy the debt that is owed under the Note and Mortgage.
The specific requirements of the acceleration notice are spelled out in Paragraph 22 of the mortgage. That is the notice must:
- specify that the borrower is in default;
- specify the action required to fix or cure the default;
- specify the date, not less than 30 days from the date of the letter, by which the default must be cured; and,
- specify that failure to pay the loan and cure the default, may result in the full balance being owed at once (acceleration).
The most overlooked requirement by the lenders is that they fails to clearly state that the action required to cure the default is pay “a specific amount”. Even if payment becomes due during the default, the borrower must know the exact amounts necessary, including late fees or otherwise, to bring the loan current. The lender usually omits this or includes the wrong amount.
Or, the lender states “call us to obtain the exact amount owed” The mortgage requires that the letter itself identify “the action that is required”.
In Florida, many lenders either do not sent this letter, do not send the letter with the correct language, or the wrong entity sends it. The loan may have already been assigned and the letter comes from a prior owner of the note that no longer has the right to collect on the loan.
This error by the lender, results in immediate affirmative defenses that the borrower can claim in order to defend the foreclosure lawsuit and protect themselves so they do not lose the home or property.
If you face foreclosure and are unsure whether your lender has provided you with the correct acceleration notice, contact us today to review it and provide accurate legal advice as to your defenses against foreclosure.
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