Tuesday, July 11, 2017

Reversing Earlier Trial Judge's Ruling, Florida Appeals Court Nixes Attempt By Winning Bidder At Foreclosure Auction To Snatch Away Sale's Surplus Proceeds From Foreclosed Former Homeowner

In Marion County, Florida, the Florida Record reports:
  • A case involving property owners who claimed a lower court incorrectly paid out surplus funds following a foreclosure has been remanded to a lower court, according to a recent opinion from the 5th District Court of Appeal.(1)

    The case began when Federal National Mortgage Association (FNMA) foreclosed on the property owned by Carlos M. Rodriguez and Rafael Rodriguez. The property was subsequently sold to Luzupozo LLC after the final judgment. There weren’t any lienholders listed in the case, according to court records.

    Funds remained with the court clerk after FNMA’s judgment was satisfied. The clerk gave the Rodriguezes and their assignee, National Equity Recovery Services (NERS), the surplus funds within 60 days, court documents state. More than 60 days after that, Luzupozo requested that the court releases the surplus to pay liens from FNMA’s mortgage.

    The trial court granted the request that Luzupozo should receive the extra money, according to court records.

    The Rodriguez family and the NERS appealed the judgment.

    The appeals court in its ruling cited Section 45.032 of Florida Statutes, which defines the owner as "as the person who appears to be the owner of the property 'that is the subject of the foreclosure proceedings on the date of the filing of the lis pendens'" and says the property owner should receive “surplus funds after the payment of subordinate lienholders who have timely filed a claim.”

    Based on this, the appeals court said the court clerk should hold the surplus pending a court order within 60 days of providing disbursements. If the owner claims the amount during that time, the court should pay it to the owner, less any relatable service charges.

    The appeals court wrote the Rodriguezes were considered the owners, and there were no subordinate lienholders so the Rodriguezes were entitled to the surplus.

    The appeals court reversed the lower court’s decision and remanded the case so the surplus amount would go back into the court system for additional proceedings.
Source: Florida appeals court sends case involving surplus funds to lower court.
(1) Rodriguez v. Federal National Mortgage Association, Case No. 5D17-196 (Fla. App. 5-DCA, June 23, 2017).