Equitable Foreclosure Defense

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Common Florida Foreclosure Defenses

Equitable Defenses

Estoppels - The general elements of estoppel are: (a) representation by the party to be estoppel as to some material fact, where that party later attempts to assert a contrary fact; (b) reasonable reliance on that representation by the party claiming the estoppel; and (c) a detrimental change in the position of the party claiming the estoppel, which was caused by the reasonable reliance on the other party's representation.

A Florida court may deny the right to accelerate and foreclose based on estoppel. The party asserting the defense of estoppel bears the burden of proof in Florida.

A common example of an estoppel defense is where the borrower routinely made payments late and the lender continued to accept the late payments. It is generally agreed a lender can defeat such an estoppel defense by sending the borrower/ mortgagor a letter stating that in the future late payments will not be accepted and that lender will demand strict compliance with the terms of the loan.

Waiver - The Florida foreclosure defense of waiver arises from the international or voluntary relinquishment of a known right. Waiver, like estoppel, can be implied and thus a mortgagee needs to be careful that its conduct does not mislead a mortgagor/borrower into acting different from that called for by the terms of the loan documents. Example of this is a Florida Court refused to allow foreclosure for non-payment of an interest penalty, when in fact the mortgagee accepted the regular payments for four years without reference to or demanding the interest penalty.

Merger - The doctrine of merger relates to the situation where the holder of the mortgage lien and the holder of the fee simple estate become combined. In such a situation, the mortgage lien merges into the fee and the owner may then own the land free and clear of the mortgage. Thus, when a mortgagee accepts a deed in lieu of foreclosure, the defense of merger may follow.

Laches - The Florida equitable defense of laches may apply where the mortgagee has slept on his rights, such as a lender being too slow to initiate foreclosure.

Unclean Hands - A Florida court may refuse to enforce the mortgage where the mortgagee is without unclean hands.

Other Common Florida Foreclosure Defenses
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