Judgment Against Senior Mortgagee by Junior Mortgagee

Today, the Fourth District Court of Appeal for Florida in Wells Fargo Bank, N.A. v.  Tan, Case No. 4D20-613, held that Fla. Stat. 702.036 barred the Court from granting relief as it related to a Senior Mortgagee seeking to vacate a judgment that was entered against them by a Junior Mortgagee.  For a little more background on this holding, “a non-party purchased the real property at issue and executed a mortgage in favor of Bear Stearns Residential Mortgage Corporation. Bear Stearns assigned the mortgage to Wells Fargo. The non-party later sold the property to Chi Peng Tan, who executed a mortgage in favor of First Magnus Financial Corporation.

First Magnus filed a foreclosure complaint against multiple defendants, including Tan and Wells Fargo. A judgment was entered that foreclosed all interests, including the interest held by Wells Fargo. The record shows that Wells Fargo recorded its mortgage before First Magnus recorded its mortgage.”

This is case is not yet final.

Relevant Portion of Fla. Stat. 702.036 states:

(1)(a)  In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment of foreclosure of a mortgage or to establish or reestablish a lien or encumbrance on the property in abrogation of the final judgment of foreclosure of a mortgage, the court shall treat such request solely as a claim for monetary damages and may not grant relief that adversely affects the quality or character of the title to the property, if:

1. The party seeking relief from the final judgment of foreclosure of the mortgage was properly served in the foreclosure lawsuit as provided in chapter 48 or chapter 49.
2. The final judgment of foreclosure of the mortgage was entered as to the property.
3. All applicable appeals periods have run as to the final judgment of foreclosure of the mortgage with no appeals having been taken or any appeals having been finally resolved.
4. The property has been acquired for value, by a person not affiliated with the foreclosing lender or the foreclosed owner, at a time in which no lis pendens regarding the suit to set aside, invalidate, or challenge the foreclosure appears in the official records of the county where the property was located