Bank of America Attempts To Foreclose On A House That They Approved For Short Sale
In a bizarre case out of Florida’s 3rd District Court of Appeals, Bank of America attempted to foreclose on a house that they had approved a short sale on and allowed to close.
In 2012, Bank of America filed a foreclosure action against Paul Everett and Carmell S. Johnson-Everett and recorded a lis pendens. During the foreclosure action, BofA approved a short sale of the Everetts’ property to William Bymel in May 2013.
Prior to the closing of the short sale, BofA approved the settlement statement that was prepared by the settlement agent. In June 2013, the short sale transaction closed and the Everetts executed a warranty deed naming Bymel as the purchaser of the real property. The warranty deed was later recorded and the settlement agent initiated a wire transfer to Bank of America of the short sale proceeds. Bank of America refused the wire transfer and thereafter, the settlement agent attempted to resolve the matter with Bank of America.
Four months after the closing, in October 2013, Bank of America sent a second letter to the Everetts stating that it was approving the short sale to Bymel.
As requested by Bank of America, the Everetts executed this letter although the short sale had previously closed and the Everetts had already transferred the property to Bymel in June 2013.
On December 5, 2013, Bank of America contacted the settlement agent acknowledging that it had received certain documents but indicated that there had not been a final approval. Bank of America informed the settlement agent that one of its settlement associates would be in contact within five days.
Bymel moved on December 6, 2013, to continue the non-jury foreclosure trial scheduled for December 10, 2013, and also moved to intervene in the foreclosure action pursuant to Florida Rule of Civil Procedure 1.230. Bymel asserted that he has a superior interest in the real property because he is the present owner of the real property as a result of the short sale approved by Bank of America. Bymel further asserted that he reasonably anticipated that Bank of America would dismiss the foreclosure action, discharge the notice of lis pendens, and record a satisfaction of mortgage shortly after the closing of the short sale, thereby clearing title to the real property.
The trial court denied Bymel’s motion to continue the trial and motion to intervene. Bymel’s appeal followed. Bymel contends that the trial court abused its discretion in denying his motion to intervene. Under the facts of this case, 3rd DCA agreed. Rule 1.230 provides: “Anyone claiming an interest in pending litigation may at any time be permitted to assert a right by intervention, but the intervention shall be in subordination to, and in recognition of, the propriety of the main proceeding unless otherwise ordered by the court in its discretion.” As stated earlier, Bymel claims that he has an interest in the pending litigation because he is the current owner of the real property that is the subject of Bank of America’s foreclosure action.