Are You Using this Tool to Recover Collateral?

SVL QUARTERLYMarch 2020LAW FIRM

By Jim Sorenson

We continue to see situations where our clients are unable to locate a motor vehicle or boat that is

under lien to the Credit Union. One of the available tools under Florida law is the ability to place a hold or a stop on a motor vehicle registration or vessel registration. This right exists under Section 320.1316, Florida Statutes. The Department of Highway Safety and Motor Vehicles (DHSMV) has a procedure for demanding the surrender of a motor vehicle or a vessel. This procedure, if followed, will prevent a registered owner of a vehicle or vessel from being able to renew their registration or obtain a replacement license plate. DHSMV is not widely advertising this procedure, and many lower-level employees are unfamiliar with the process.

This procedure is available when the loan secured by the vehicle or vessel is in default. For a lienholder to add a stop or hold on a vehicle or vessel registration, it must complete two steps. First, a lienholder must complete a Notice to Surrender Motor Vehicle/Vessel, HSMV form 82192, and mail it to the registered owner(s). This form alerts the registered owner that the vehicle must be immediately surrendered and allows the lienholder to specify an address and time for the surrender. We suggest that you serve this notice via certified mail, return receipt requested. You should retain a copy of this letter for your records with the return receipt. A copy of this form can be found on the DMV’s website at the following link: https://www.flhsmv.gov/pdf/forms/82192.pdf.

Second, if the registered owner fails to surrender the vehicle, the lienholder must complete HSMV form 82191. If you search for this form on the DHSMV

website, you will not find this form. I have not been able to get a clear answer on why this form is not readily available on the DHSMV website. Instead, this form is only available at the local tax collector’s office, and a representative must go to the local tax collector’s office to complete this form. You may have to speak to a supervisor at the local tax collector’s office to get the proper help.

When you go to the tag office, be prepared to pay any applicable fees and provide them with a copy of the Form 82192 sent to the registered owner, along with copies of the proof of mailing the form.

A registered owner may dispute the Surrender Notice and registration stop by filing a court action pursuant to Section 320.1316, Florida Statutes. If the registered owner files a legal challenge and loses, the lender is entitled to recover attorney’s fees and court costs. If the registered owner files a legal challenge and wins, the registered owner is entitled to recover attorney’s fees and court costs as to the lender.

Please do not hesitate to contact my office, should you have any questions regarding this procedure.

In this Edition

DMV Registration Stop . . . . . . . . . . . . . . . . . . . . . . . . 1

Due on Sale Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Bringing Joy to the Community . . . . . . . . . . . . . . . . . . 3

“See Us” At . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Attorney Spotlight on Zaydee Portomene . . . . . . . . . . 4

Staff Spotlight on Melody Cantrell . . . . . . . . . . . . . . . 4

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Due on Sale Clause – Often Overlooked and Rarely UtilizedIn Florida, most residential mortgages include a

due on sale provision. This provision provides that transferring ownership of the property without the prior written consent of the lender constitutes a default. Upon default, the lender may elect to accelerate the underlying loan balance and proceed with foreclosure. Generally, a transfer of ownership arises when the borrower signs a deed that transfers ownership to a trust, family member, or other 3rd party. A transfer also arises when the borrower passes away. In Florida, property is not held in abeyance and instead automatically passes upon death to heirs or a beneficiary named in a trust or will. However, it is important to note that the Garn St. Germain Act precludes enforcement of a due on sale provision when the transfer in ownership is a result of the borrower passing away. The Florida Third District Court of Appeal recently addressed another scenario where the due on sale provision can arise.

In Bank of N.Y. Mellon Corp. v. Hernandez, 2020 Fla. App. LEXIS 624, *7, 45 Fla. L. Weekly D 192, 2020 WL 355885, the Court addressed the application of the due on sale provision following a foreclosure by a condominium association. In Hernandez, the borrower failed to pay the condominium assessments and as a result was foreclosed upon by the condo association. The mortgage lender who held a first mortgage did not oppose the foreclosure. Upon completion of the condo foreclosure, the lender enforced the due on sale provision and accelerated the underlying loan balance and proceeded with foreclosure. The borrower opposed the foreclosure and argued that the due on sale provision is only applied in situations where the borrower

voluntarily transfers ownership. The Court was not inclined to follow the borrower’s interpretation and instead found that the mortgage clearly provided that the due on sale provision was triggered upon a sale or transfer, regardless of whether it was voluntary or involuntary.

While it is not uncommon to see properties voluntarily transferred because of estate

planning or other reasons, the application of the due on sale provision in these situations is rarely enforced. The main reason for this may be that the monthly payments are being kept current. Another is that these transfers in ownership do not have an impact on the lender’s security interest, as the transfers are subject to the already existing mortgage lien. However, just because the loan is current does not mean that you cannot enforce the due on sale provision, provided the transfer is not protected by the Garn St. Germain Act. One advantage to proceeding under the due on sale provision, as opposed to a payment default, is that the lender is not subject to the requirements of the CFPB 120-day rulei. Instead, the lender may provide the borrower with 30-Day notice to cure as provided for in most mortgage loans. If the borrower fails to cure the default within the time provided, the lender may immediately proceed with the filing of a foreclosure.

Each mortgage and set of facts can be different. If you have questions about the due on sale provision, or other aspects of a mortgage or foreclosure, please do not hesitate to contact one of the lawyers at SVL for legal advice.

——————————— i 12 CFR §1024.41(f)(1)(ii)

By Stephen Orsillo

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––– REGISTER TODAY! –––

SVL SOURCEXPO 2O2O July 22-24th, 2020 • Florida Mall Hotel • Orlando, Florida

Contact Whitney Whitaker • 850-633-5831 or whitneyw@svllaw.com

https://svllaw.com/sourcexpo-2020/

Collections • Bankruptcy • Foreclosure

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Bringing Joy to the CommunitySorenson Van Leuven adopted two families over the holiday season through the Big Bend Community Based

Care. This is the third year in a row that our firm has participated in this and we love how much joy we bring these families. Our team contributed an abundant amount of fun toys for the children and other necessities on their wish lists. We are so happy that the families’ holiday season was special.

“See Us” at . . .

• National Credit Union Collections Alliance Conference, April 15-17, 2020, Las Vegas, Nevada

• Southeast Credit Union Conference & Expo, June 17-19, 2020, Orlando, Florida

2O2O

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Zaydee is one of our newest attorneys at Sorenson Van Leuven. She joined our team on August 26th. Zaydee was born and raised in Havana, Cuba. She realized she was interested in law from her mother, who was an attorney. Zaydee spent most of her childhood at her mom’s law office and as she grew up in this work environment, Zaydee learned that she loved helping others and wanted to follow in her mom’s footsteps.

Zaydee began her college career in Cuba and came to the United States after 3 years. She obtained her Bachelor’s degree in Criminal Justice in 2015 from Florida International University in Miami and her law school degree in 2019. We are excited to have her apart of our team!

Away from the office, Zaydee loves to binge watch TV shows on Netflix, spend time with friends and family, go shopping, and escape to the beach. Her family lives in Miami, so you can find Zaydee visiting them every holiday or long weekend throughout the year. Zaydee also loves to travel. Her favorite place is Italy, which she has been to many times since 2014. She just recently went there over the holidays and absolutely loves the history, the culture, and

exploring all of the museums. Thank you Zaydee for sharing so much about your

background and family. We look forward to learning more about you in the years to come at Sorenson Van Leuven.

Attorney Spotlight – Zaydee Portomene

Melody was almost born in Germany, but her father was re-stationed to Missouri only two months before she was born. She will jokingly refer to herself as an “army brat” when talking about her childhood. She lived in Missouri, Kansas, and Texas before her family moved to Tallahassee when she was 8.

Melody just celebrated her 7th anniversary with the team! She is a post-judgment legal assistant and is always ready to answer any post-judgment related questions that other legal assistants might have.

When she’s not at work Melody enjoys playing Uno with her friends every Friday night and spending time with her family. Melody loves reading and has lost count of how many times she has re-read Harry Potter. Most importantly she loves to spend time with her son, Channing, who is 7 years old and is a straight-A student!

Thank you for all your hard work Melody. We are so lucky to have you as part of our team!

Staff Spotlight – Melody Cantrell

Visit: SVLLaw.com or Call: (866)295-8585