This case is before the Court on the following:
1. Defendant's Motion to Dismiss Amended Complaint and Memorandum in Support Thereof (Doc. No. 17), filed on May 13, 2011;
2. Plaintiff's Response to Defendant's Motion to Dismiss Amended Complaint and Memorandum in Support Thereof (Doc. No. 18), filed on May 27, 2011; and
3. Defendant's Reply to Plaintiff's Response to Defendant's Motion to Dismiss (Doc. No. 22), filed on June 27, 2011.
Plaintiff brought this lawsuit to set aside a foreclosure sale of a property that he allegedly owned. (Doc. No. 14, ¶¶ 2-8.) Unfortunately for all involved, foreclosure cases have become a significant burden on Florida's state courts, which have hundreds of thousands of cases pending before them. See Roger Bull, Trimmed-Down Version of Florida's Foreclosure Court to Remain in Service, Fla. Times-Union (Jacksonville), May 24, 2011, available at 2011 WLNR 10336977 (noting the "more than 300,000 pending foreclosure cases" in Florida at the time of publication). Far fewer foreclosure cases end up in federal court.
The Single Family Mortgage Foreclosure Act
This case is before the Court because the United Stated Department of Housing and Urban Devolvement ("HUD") held a mortgage on Plaintiff's property. (Doc. No. 17, Ex. D.) Pursuant to the Single Family Mortgage Foreclosure Act of 1994, 12 U.S.C. § 3751, et seq., HUD may use a non-judicial process to foreclose on such mortgages. Congress enacted the Single Family Mortgage Foreclosure Act so that HUD would have a uniform foreclosure remedy separate and apart from those remedies provided by State law. Id. § 3751. The foreclosure remedy envisioned by Congress is entirely non-judicial; it is concise and efficient; and the discretion to use it is exercised solely by the Secretary of HUD.*fn1 Id. §§ 3751(a)(5), 3753.
If the borrower breaches a covenant or condition in the mortgage agreement, HUD may direct a designated "foreclosure commissioner" to file and serve a "Notice of Default and Foreclosure Sale" and commence a non-judicial foreclosure sale. 12 U.S.C. §§ 3755(a), 3756, 3757. Service is loosely defined under the Act. The notice is "deemed duly given upon mailing, whether or not received by the addressee and whether or not a return receipt is received or the notice is returned." Id. § 3758(2)(C).
So long as the commissioner complies with a few statutory requirements, the foreclosure commissioner may proceed with the foreclosure sale at the place and time designated in the notice. See id. § 3758(a) (prescribing the location, manner and time for foreclosure sales). The foreclosure commissioner has wide discretion to proceed with, cancel, or adjourn the foreclosure sale. Id. § 3760. Once a foreclosure sale is complete, the foreclosure commissioner distributes the proceeds of the sale, id. § 3762, transfers title to the property to the purchaser, id. § 3763, and records the foreclosure and sale in the official property records of the county in which the property is located, id. § 3764.
The final, recorded documents contain statements which, by statute, are prima facie evidence of "(1) the date, time, and place of the foreclosure sale; (2) that the mortgage was held by the Secretary . . .; (3) the particulars of the foreclosure commissioner's service of the notice of default and foreclosure sale in accordance with [the Act]; (4) the date and place of filing the notice of default and foreclosure sale; (5) that the foreclosure was conducted in accordance with the provisions of [the Act] and with the terms of the notice of default and foreclosure sale; and (6) the sale amount." Id. The sale is also conclusive. The Act bars all claims upon or with respect to the property sold for (1) any person to whom the notice was mailed, (2) any person claiming any interest in the property subordinate to that of the mortgage if that person had actual knowledge of the foreclosure sale, (3) any person claiming any non-recorded interest in the property which arose before the filing date of the notice, and (4) any person claiming an interest in the property pursuant to a statutory lien or an encumbrance which arose after the filing of the foreclosed mortgage. Id. § 3765.
The Secretary's Foreclosure in this Case
The mortgage foreclosed by HUD in this case was originally executed by Richard Meeks in favor of Allied Mortgage Capital Corp. (Doc. No. 14, Ex. D.) It was recorded on March 15, 1999. (Id.) The mortgage was immediately assigned to Wendover Funding Corp., which assignment was also recorded on March 15, 1999. (Id. Ex. E.) About six years later, on July 12, 2005, Wendover recorded an assignment of its interest in the mortgage to HUD in the Duval County property records. (Id. Ex. F.) The foreclosure commissioner mailed to Plaintiff, as well as Mr. Meeks and another individual, Notices of Default and Foreclosure Sale for the property. (Id. Ex. G.) The Notices were ...