Florida District Appellate Court decision (December 5, 2014).

This case involved claims by a foreclosing mortgage lender that it was entitled to limited liability under Florida’s safe harbor statutes for a homeowners association’s past unpaid assessments against the condominium that the lender had foreclosed on. The lower court found the foreclosing lender, who was not a direct assignee of the original lender, liable for all past due assessments against the condominium because it was not the “original lender” or its successor or assignee. The lender appealed contending that the subject statute affords safe harbor protection to “all subsequent assignees of the first mortgage holder,” and not just the first assignee. The homeowners association contended that the safe harbor statute only protects the “first mortgagee” or its assignee and that the lender in this case was not protected because it was not a direct assignee of the original lender.

The appellate court reversed the lower court decision finding that, regardless of whether or not there had been a formal assignment of the original mortgage, the lender was both a first mortgagee and an assignee of the first mortgagee by operation of law, because it owned the subject loan. As such, the foreclosing lender was entitled to the safe harbor protections afforded by the statute in question and was not liable for all unpaid past assessments owed by the prior owner of the condominium.

See case decision: Beltway_Capital,_LLC_v._Gree