Residential MortgageCompliance Monitor

Florida Legislature Enacts Foreclosure Provisions

by: Lee Greenberg, Esq.

The state of Florida recently enacted several foreclosure provisions under House Bill No. 87 which become effective immediately.

House Bill No. 87 revised the limitations period for commencing an action to enforce a claim of a deficiency judgment after a residential mortgage foreclosure action. The existing law provides a five year statute of limitations period for any action founded on a written contract. However, the new foreclosure law states that an action to enforce a claim of a deficiency related to a note secured by a residential mortgage must be filed within one year. The one year limitations period begins either the day after the court issues the mortgagee a certificate of non-redemption or the day after the mortgagee accepts a deed in lieu of foreclosure from the mortgagor.

In addition, the new legislation includes foreclosure complaint provisions which apply to residential properties. Under the law, a court may sanction a plaintiff for failing to comply with any of the following foreclosure complaint provisions:

  • Complaints must include affirmative allegations that the plaintiff is either the holder of the original note secured by the mortgage or the factual basis by which the plaintiff is a person entitled to enforce the note.
  • If the complaint is filed by a plaintiff delegated authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the complaint must describe the authority of the plaintiff and identify the document that grants the plaintiff such authority.
  • If a plaintiff is in possession of the original promissory note, the plaintiff must file a certification with the court, along with the complaint for foreclosure, stating that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession and the time and date on which the possession was verified. Copies of the note and any attachments must be included with the certification. The original note and any attachments must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.
  • If a plaintiff is seeking to enforce a lost, destroyed or stolen instrument, the plaintiff is required to: attach an affidavit to the complaint which details a clear claim of all endorsements, transfers or assignments of the promissory note; set forth facts showing that the plaintiff is entitled to enforce the lost, destroyed or stolen instrument; and include any available copies of the original note and attachments, audit reports showing receipt of the original note, or other evidence of acquisition, ownership and possession of the original note.

Furthermore, the new foreclosure law requires courts to treat requests to challenge the validity of a final judgment of foreclosure, or to establish or reestablish a lien on the property in abrogation of the final judgment of foreclosure, as a claim for monetary damages. Courts may not grant relief that adversely affects the quality or character of the title to the property if the party seeking relief from the final judgment of foreclosure was properly served in the foreclosure lawsuit, the final judgment of foreclosure was entered as to the property, all appeals periods have run as to the final judgment of foreclosure, and the property was acquired for value, by a person not affiliated with the foreclosing lender/owner at a time in which no pending lawsuits challenging the foreclosure exist.

 
House Bill No. 87 states that following the foreclosure of a mortgage based upon the enforcement of a lost, destroyed or stolen note, a person who is not a party to the underlying foreclosure action but who claims to be the person entitled to enforce the note secured by the foreclosed mortgage, has no claim against the foreclosed property after it is conveyed for valuable consideration to a person not affiliated with the foreclosing lender/owner. However, the person entitled to enforce the note is not precluded from pursuing recovery by other means. Also, any person who wrongly claims to be entitled to enforce a lost, stolen, or destroyed note and causes the mortgage secured thereby to be foreclosed will be held liable to the actual holder of the note for actual damages suffered together with attorney fees and costs.
 
Lastly, the law provides lienholders with the ability to move for expedited foreclosure through the request of an order to show cause for the entry of final judgment in a foreclosure action. The definition of lienholder includes the plaintiff and defendant to the action who holds a lien encumbering the property, as well as a defendant who may file a lien against the real property subject to the foreclosure by virtue of its status as a condominium association, cooperative association, or homeowners’ association.
 
 
About the Author:
Lee Greenberg, Esq., is Vice President & Senior Counsel at Bankers Advisory, Inc. and oversees compliance educational services. He is a graduate of the University of Colorado at Boulder and received his Juris Doctor from the New England School of Law. He is admitted to the Massachusetts Bar Association. He can be reached at lee@bankersadvisory.com

Tags: , State Mortgage Compliance | Comments Off on Florida Legislature Enacts Foreclosure Provisions

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Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.

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Residential Mortgage Compliance Monitor is an educational resource for financial institutions, providing announcements, legislative summaries, and policy changes issued by state and national regulators. Announcements also cover mortgage lending rules of HUD, Fannie Mae, Freddie Mac, and other mortgage agencies.