Res Judicata, what a wonderful phrase!
It turns out coincidentally that Hakuna Matata, from Disney’s Lion King, and res judicata actually mean the same thing. Hakuna Matata is a Swahili phrase which when literally translated roughly means “no worries for the rest of your days.” Res judicata is a legal term meaning “a matter judged”; it is the principle that a legal matter may not, generally, be re-litigated once it has been judged on the merits. You may be wondering, “How does res judicata mean no worries for the rest of my days?” The answer is simple; res judicata is getting you out of lender jail when it comes to the mortgage and housing arenas. Thanks to res judicata you will no longer be responsible for past-due mortgage payments that were incurred before the dismissal of an original foreclosure suit.
In a recent decision, GMAC Mortgage, LLC v. Edward Whiddon, the First District Court of Appeal in Florida affirmed the trial court ruling that it was improper for a lender to file a second foreclosure action alleging the same date of default as a previously dismissed action on account of res judicata. This means that if a foreclosure action is dismissed with prejudice, a homeowner is no longer liable for those previous past due payments, and any actions for collections based on prior interest are barred. By applying res judicata, the court places the lender and the borrower back in their original positions by reinstating the installment nature of the contract, even though the homeowner is no longer liable for those previous past due payments.
This gives homeowners the option to make payments on the remainder of the loan as if they had never defaulted. Its res judicata—such a wonderful phrase!