Not Substantial Compliance. “Compliance.”

By Mark Stopa

Virtually every day in Florida courtrooms, I’m arguing that the letters banks send under paragraph 22 of most mortgages must comply with the specific terms set forth in paragraph 22.  Not “substantially comply,” but “comply.”

Today, the Second District issued yet another decision which supports my interpretation.  The case of DiSalvo v. Suntrust Mortgage, Inc. isn’t directly on point, as the decision turned on the bank’s failure to prove it sent the letter at all, not the content of the letter.  But take a look at this sentence of the opinion:

“First, a mortgagee’s right to the security for a mortgage is dependent upon its compliance with the terms of the mortgage contract, and it cannot foreclose until it has proven compliance.  See F.A. Chastain Constr., Inc. v. Pratt, 146 So. 2d 910 (Fla. 3d DCA 1962).”

Notice the term “compliance” – not once, but twice?  Not “substantial compliance,” but “compliance”?

This decision is yet another instance, along with the many other cases in which I’ve set forth on this blog, where a Florida appellate court had a chance to say the standard for the paragraph 22 letter is “substantial compliance” but declined to do so.  Hence, it seems clear that “compliance” is the standard here.

With each new decision that comes out, the argument that the banks need only “substantially comply” with paragraph 22 gets weaker and weaker.

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