(InsideFlorida.org)
Fannie Mae and Freddie Mac wrote the Uniform Mortgage Instruments. These contracts are used in the sale and purchase of almost every home in the United States with a mortgage. These Uniform Mortgages provide that attorney's fees belong to the lenders.[1]
These provisions have two results. The first is to protect banks and mortgage companies from incurring attorney's fees when they are sued on their mortgage loans.
The second is to make homeowners liable to pay including the lender's attorney's fees when they sue on the mortgage loans they take.
Some States have made attorney's fees availability a much more balanced remedy. Some States make attorney's fees available whenever contracts of virtually any kind -- not just mortgages -- authorize attorney's fees for a large corporation. The way they do this is to make attorney's fees available to other parties to a contract whenever one party has written its contract to allow itself to collect attorney's fees in a suit filed by other parties to that contract.[2]
Parenthetically, in many or most such cases, it is the large corporate party that wrote the contract.
Florida Statute Section 57.105(7) is an example of fee-availability-shifting laws. On its face, the Florida statute applies to "contracts" which authorize attorney's fees for only one party to the contract:
(7) If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This subsection applies to any contract entered into on or after October 1, 1988.[3]
To be continued. Attorney's fees are discussed in §§ 13:12 through 13:14 in 2 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith (3d ed. and 2020 Supps. Thomson Reuters West).
Please read the disclaimer. ©2020 Dennis J. Wall. All rights reserved.
[1] See, e.g., Dennis J. Wall, Lender Force-Placed Insurance Practices § 4.4, titled Attorneys and Lender Force-Placed Insurance Practices, at 134-37 (American Bar Ass'n Pub. 2015).
[2] I have proposed exactly this remedy as a solution to part of the lender force-placed insurance practices problem. Wall, Lender Force-Placed Insurance Practices, supra, § 7.12, titled Workers Are Worth Their Wages: Paying the Fees of Homeowners' Attorneys in the Great Recession, at 276-80.
[3] Fla. Stat. § 57.105(7).
Comments