Chapter 5-9 Reformation

5-9 Reformation

Often, the first time a mortgage loan receives scrutiny by an attorney is during the foreclosure process. Accordingly, it is not unusual for the careful practitioner to identify errors in the mortgage or subject deed. Florida law permits for the "reformation" of the mortgage, deed or other loan instruments, provided that the error was a mutual mistake.⁶³ Reformation should be pleaded in the complaint and the foreclosure judgment should reflect the correction to the instrument to be made. It is unfortunately common, however, for even the careful practitioner to fail to recognize the need for reformation until after the foreclosure judgment is entered.

As previously stated, when reviewing title documents in preparation for drafting a foreclosure complaint, the attorney is tasked with ensuring that the mortgage's description of the property matches the deed, and ensuring that any and all parties that could potentially claim an inferior interest to the property are included as parties' defendant. The attorney generally enlists the assistance of a title company to provide a title search and/or a foreclosure commitment report. However, if there were to be an error in the legal description of both the deed and mortgage (or if the title company did not recognize the error in the foreclosure commitment), it is possible for the error to not be recognized until after the foreclosure judgment is entered. In such a case, the foreclosure judgment, the foreclosure sale, and the Certificate of Title may be vacated.⁶⁴ This is because "the sale was premised upon the erroneous legal description and other potential bidders may have acted in reliance on that description."⁶⁵ Importantly, however, vacatur is not necessarily required where the original deed and mortgage contained correct legal descriptions, and the error did not exist until the rendition of the final judgment of foreclosure. In such circumstances, the Court may simply correct the final judgment of foreclosure for scrivener's error pursuant to Florida Rule of Civil Procedure 1.540(a).⁶⁶ This is not the case in situations where the error in the legal description was substantive and existed in the mortgage documents or the deed. In cases, Rule 1.540(a) relief is generally not available.⁶⁷

In the case of errors which predate the foreclosure judgment, however, vacatur of the sale is often required. Such errors are often discovered only when a title company's underwriters are scrutinizing the documents...