On December 31, 2020, in Page v. Deutsche Bank Trust Company Americas, No. SC19-1137, the Florida Supreme Court quashed the Fourth DCA’s ruling that the borrower was not entitled to attorney’s fees due to the banks failure to prove standing, and approved the decisions made in Madl v. Wells Fargo Bank, N.A., 244 So. 3d 1134 (Fla. 5th DCA 2017) and Harris v. Bank of New York Mellon, 2018 WL 6816177 (Fla. 2d DCA 2018). 
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In Page, the lower court held that the bank did not prove standing at the time the complaint was filed, but did establish standing at trial. The Fourth DCA ruled that the borrower who successfully argues that the bank lacked standing at the time the suit was filed cannot rely on the contract to obtain attorney’s fees under Fla. Stat. section 57.105(7). 

The Fourth DCA in Page certified conflict with the Fifth DCA’s decision in Madl and the Second DCA’s decision in Harris. Both Madl and Harris held that a prevailing borrower is entitled to attorney’s fees if it is established that plaintiff became subject to the unilateral fee provision in the contract. In other words, if plaintiff lacks standing at the time the suit was filed, but subsequently establishes standing at trial, then the borrower is entitled to attorney’s fees under section 57.105(7). By contrast, in Page, the Fourth DCA did not give weight to the fact that the plaintiff subsequently established standing at trial.  

On December 9, 2020, in Accardi v. Regions Bank, No. 4D20-0662, the Fourth DCA held that the one-year statute of limitations specified in section 95.11(5)(h), Fla. Stat., applies to a motion for deficiency judgment brought within an existing mortgage foreclosure action. The Court also determined the limitation period began with the issuance of the Certificate of Title. 

On December 31, 2020, the Florida Supreme Court amended Florida Rule of Civil Procedure 1.510, that goes into effect May 2021.

The amended rule adopts the federal summary judgment standard. Prior to the amendment, Florida courts and the federal courts had not been aligned in their controlling summary judgment standard.
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Prior to this amendment, there were two relevant differences between the Florida and the Federal summary judgment standards:

1. Florida courts have required the moving party to conclusively disprove the non-movant’s theory of the case in order to eliminate any issue of fact. By contrast, the U.S. Supreme Court has held that there is no express or implied requirement in the federal rule that the moving party must negate the opponent’s claim. Under the newly adopted federal summary judgment standard, the extent of the moving party’s burden varies depending on who bears the burden of persuasion at trial; and 
2. Florida had a more lenient standard for what constitutes a genuine issue of material fact. Prior to the amendment, the existence of any competent evidence created an issue of fact, however credible or incredible, substantial or trivial, it precluded summary judgment, so long as the “slightest doubt” was raised. (Citations omitted). By contrast, the U.S. Supreme Court has described the federal test as whether the evidence is such that a reasonable jury could return a verdict for the non-moving party. (Citations omitted). A party opposing summary judgment must do more than simply show that there is some metaphysical doubt as to material fact. 

On December 22, 2020, Congress passed the Consolidated Appropriations Act, 2021 (“CAA”), which was signed into law by the President on December 27, 2020. Aside from providing stimulus payments, the CAA also amends some provisions of the bankruptcy code, particularly related to Chapter 13. Much like with the Cares Act, it will be too soon to tell the Court’s practical application. However, the below provides a summary on what is affected and items that PLG will continue to keep its pulse on.

Early Discharge Under §1328(i)
Subsection (i) was added to §1328 which provides in part that the court may grant a discharge to a debtor if:

1. The debtor defaults on not more than 3 monthly payments due on a residential mortgage under section 1322(b)(5) (i.e. the cure and pay provision) on or after March 13, 2020, to the trustee or a creditor caused by a material financial hardship due, directly or indirectly, by the coronavirus disease 2019 (COVID-19) pandemic; or
2. The plan provides for the curing of a default and maintenance of payments on a residential mortgage under section 1322(b)(5); and
3. The debtor has entered into a forbearance agreement or loan modification agreement with the holder or servicer.

Let’s break this down even further. A careful reading suggests that this does not necessarily limit application to principal residence since the language only says residential mortgage. It is entirely possible for this to apply to rental property that is secured by a mortgage. In addition, must the plan be confirmed for this apply? Although not specified, one can infer that the plan must be confirmed in order to provide for treatment under §1322(b)(5).

Perhaps the most confusing and questionable aspect is a reading of numbers 2 and 3 together. This means that a debtor, who has a plan providing for cure & pay and who has entered into a loan modification agreement or forbearance agreement (regardless of COVID-19) may receive a discharge having not completed payments under the plan.

Interesting enough, there is no mention as to when the forbearance or loan modification agreement must have been entered into. It may be entirely possible for a debtor to obtain a loan modification prior to filing bankruptcy, then file a bankruptcy and propose a cure & pay plan and then receive a discharge.
What also makes this provision unclear is that it defeats the entire purpose of §1322(b)(5). That section is intended to allow debtors to cure defaults on mortgages so that they come out of bankruptcy without arrears. If debtors are allowed to receive an early discharge and the debtors do not complete payments under the plan, then this may defeat the purpose of filing bankruptcy (aside from getting a discharge) since debtors are not able to the “fresh start” that the code provides for—at least in terms of their mortgage.

On the other hand, this may be a good vehicle for a debtor who has a loan modification or forbearance agreement but has racked up a lot of unsecured debt. It should also be noted that this provision sunsets after one year.

Forbearance Claims
The CAA provides that an eligible creditor, which is defined as a servicer of a federally backed mortgage loan, may file a supplemental claim for the amount that was not received by an eligible creditor during the forbearance period. This is intended to allow a debtor to cure the forborne amount under the plan. The claim must include:

1. The relevant terms of the modification or deferral;
2. For a modification or deferral that is in writing, a copy of the modification or deferral; and
3. A description of the payments to be deferred until the date on which the mortgage loan matures

Section 502(b)(9) was also amended to clarify that a forbearance claim is deemed timely filed if the claim is filed before the date that is 120 days after the expiration of the forbearance period.
Although it is not mandatory for this claim to be filed, it is recommended since a creditor may have to waive any amounts that are not accounted for via the filing of this supplemental claim. This usually comes about when responding to a notice of final cure or motion to deem current. This provision sunsets after one year.

Plan Modifications
§1329 was amended to ad subsection (e) which provides in part that after a creditor files a forbearance claim (described above), the debtor has 30 days to file a request to modify the plan to address the forbearance claim. In the event the debtor fails to do so, after notice, the court, on a motion of the court of a motion of the United States Trustee, the trustee, a bankruptcy administrator, or any party in interest, may request a modification of the plan to provide for the proof of claim.

This means that a creditor, such as a mortgage servicer or lender, may request a modification of the plan to provide for the proof of claim addressing the forbearance amount. The creditor may (and should) request reimbursement for its fees in having to engage in this course of action.

One of the questions yet to be determined is what occurs when a debtor defaults on the forbearance agreement? Will the courts require that the creditor modify the plan to account for the supplemental claim before seeking stay relief? Or will the creditor be allowed to move for relief without modifying the plan (assuming the debtor, trustee and no other party in interest requests a modification). This may vary amongst each jurisdiction. This provision sunsets after one year.

Effective date: December 7, 2020
The changes outlined below will be implemented in the PROMCHAMPS system on December 28, 2020.  PROCHAMPS will implement the requirements outlined below for the City of Greenacres, FL on the implementation date noted above. Please update information accordingly. Please make note of the following pending changes:

• Requirements:
  • Pre-Filing (default) Occupied/Vacant – removed
• Renewals:
  • ​6 months/Anniversary (changed from 12 months/Anniversary)
  • Each individual property on the registry that has been registered for twelve (12) months or more prior to July 1, 2020 shall have thirty (30) days to renew the registration and pay the non-refundable semi-annual registration fee. Properties registered less than twelve (12) months prior to July 1, 2020 shall renew the registration every six (6) months from the expiration of the original registration renewal date and shall pay the nonrefundable semi-annual registration fee.
• Late Fee:
  • Properties that have not been registered within 30 (thirty) days of when the registration is required will be charged a 10% late fee, every 30 days, which is due and payable at the time of registration.  This also applies to renewals that are not addressed within 30 days of the renewal date.

Please review further details about the changes within the document attached and any additional forms required at PROCHAMPS.com.