By Tracy M. Evans, Associate, Saxon, Gilmore, Carraway & Gibbons, P.A.
On June 7, 2013, Governor Rick Scott approved and signed HB 87 which provides significant changes to Florida’s foreclosure laws. The bill was created with the intent to help eliminate the growing Florida foreclosure case backlog. Some of the changes enacted by the bill are favorable to creditors, while other changes will likely prove beneficial to homeowners contesting foreclosures. The majority of the changes implemented by the bill apply to existing mortgages and pending foreclosure cases. The following is a summary of the changes implemented by the bill:
Alternative Foreclosure Procedure
HB 87 contains several amendments to Fla. Stat. s. 702.10. This section previously created the “show cause” process as an alternative to standard foreclosure procedure intended to expedite foreclosures where no legitimate defenses are raised. After filing a complaint, the Plaintiff may request an order requiring the defendants to show cause as to why a final judgment should not be entered. HB 87 expands the provisions of this section. One important change requires the court to issue the order to show cause without a hearing if the court’s mandatory review of the file reveals the complaint is verified and alleges a proper cause of action.
HB 87 also reduces the statute of limitations to file a deficiency action in a residential foreclosure from five years to one year. In addition, in foreclosures of owner-occupied residential properties, any deficiency decree is limited to the difference between the judgment and the fair market value of the property on the sale date.
Lost, Destroyed or Stolen Notes
The bill also adds s. 702.11 which provides a list of reasonable means to establish adequate protection under s. 673.3091, when re-establishing a lost, destroyed or stolen note. These means of establishing adequate protection include a written indemnification agreement, a surety bond, a letter of credit issued by a financial institution, a deposit of cash collateral with the clerk of court, or such other security as the court deems appropriate.
In addition, with respect to lost, destroyed or stolen notes, the bill creates s. 702.015 which requires the plaintiff to attach to the complaint an affidavit detailing a clear chain of assignments or endorsements of the promissory note and setting forth the necessary facts and documentation to establish the plaintiff’s entitlement to enforce the lost instrument.
Pleading Requirements in Residential Foreclosures
Newly created s. 702.015 also sets forth specific pleading requirements in residential foreclosures complaints, including the need to establish that the plaintiff is the holder of the note or a person entitled to enforce the note. If the plaintiff is foreclosing on behalf of the person entitled to enforce the note, the complaint must specifically describe the authority and supporting documentation which grants the plaintiff the authority to foreclosure. Further, the plaintiff is required to file and certify under penalty of perjury that the plaintiff is in possession of the original note at the time of filing the complaint.
Finality of Judgment
HB 87 also creates s. 702.036 for the protection of a bona fide purchaser of property at a foreclosure sale. Under certain conditions and circumstances, this section limits a party seeking relief from a foreclosure judgment to monetary damages, and prevents a reversal of title awarded at the foreclosure sale.
More information regarding HB 87 can be found at: http://www.myfloridahouse.gov/sections/bills/billsdetail.aspx?BillId=49274
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