Florida Trial Judge Fumbles Chance To Vacate Foreclosure Judgment Granted While Valid Forbearance Agreement In Effect; Relief Obtained On Appeal

From a recent ruling from Florida's 4th District Court of Appeal:

• On March 7, 2008, Aurora [Loan Services, LLC] filed a complaint against the Elliotts to foreclose on their mortgage. The Elliotts received the summons and complaint on March 11, 2008. According to their verified motion, on March 11, 2008, Lisa Elliott contacted Aurora's attorney, as directed in a letter attached to the complaint. The attorney instructed they call Aurora directly. The Elliotts did so and they then began a workout agreement. Lisa Elliott, in the verified motion, stated that they reached a proposed "Special Forbearance Agreement" with Aurora, dated June 27, 2008.

• Due to the Elliotts' failure to file any [court] papers [in the foreclosure action], Aurora moved for an entry of default against the Elliotts, which was entered on May 21, 2008. Further, on May 21, 2008, Aurora filed a Motion for Summary Judgment and Motion for Attorneys Fee's and Memorandum (along with supporting affidavits).

• Lisa Elliott stated in the verified motion that they discovered the entry of default for the first time on August 27, 2008. They filed their Verified Motion to Vacate Default with Proposed Answer and Affirmative Defenses on September 3, 2008. At the hearing on September 24, 2008, the trial court denied the Elliotts' verified motion to vacate default and granted Aurora's motion for summary judgment. The court then entered the final judgment of foreclosure.(1)

For the Florida appeals court's unanimous decision, and supporting legal rationale, vacating this foreclosure judgment (holding that the lower court abused its discretion in denying the homeowners' motion to vacate the default), see Elliott v. Aurora Loan Services, Case #4D08-4362 (4th Dist., April 7, 2010).

(1) To the foreclosing lender's credit, it agreed to stay the case and cancel the foreclosure sale (which was set for November 26, 2008) pending this appeal, thereby obviating the need for the homeowner to cough up the necessary cash to post a (probably unaffordable) appeal bond to halt the sale while the appeal proceeded.