Florida court backs foreclosure despite servicer reversing four payments without explanation

Here is where it gets interesting. Despite the reversals, the couple kept paying every month through April 2017, and Bank of America kept cashing those checks. Then in May 2017, the servicer returned that month’s payment, saying it fell short because it did not include the four reversed payments. The wife walked into a Bank of America branch twice to pay. The bank turned her away. 

BNY Mellon filed to foreclose in January 2021. The trial court sided with the couple. On appeal, the majority flipped it. 

Each missed monthly payment is a separate default under Florida law. Whatever happened with the 2015 reversals, no payments came in from June 2017 onward, and the couple admitted they could not bring the loan current when suit was filed. “A dispute over the proper accounting of payments with a bank or servicer does not, without more, excuse a borrower’s obligation to make timely payments,” the court wrote. 

Unclean hands did not survive either. That defense requires conduct “akin to fraud” – something “sneaky, unscrupulous, or tricky.” The majority acknowledged the bank’s handling was far from ideal. “We in no way condone how Bank of America or the Bank prosecuted this action,” the court wrote. “But we conclude that not being ‘nice’ or doing what we consider to be unwise or imprudent is insufficient to prove that the Bank acted with unclean hands.” 

On remand, the court directed removal of the four reversed payments, pre-June 2017 interest, and pre-July 2017 fees from the judgment.