Governor Scott Signs Mortgage Foreclosure Bill

On June 7, 2013, Gov. Rick Scott signed HB 87 ("Bill"). With Scott’s signature, the Bill became effective. The Legislature intends for this Bill to help expedite the foreclosure process. Supporters of the Bill believe it addresses the problem of blighted neighborhoods from vacant properties locked in foreclosure litigation, cases becoming log jammed in the courts, and the difficulty of junior lien holders to enforce their liens. Detractors believe the Bill infringes on the Supreme Court’s procedural rulemaking authority and limits a homeowner who was wrongly foreclosed to monetary damages.

The Bill revises the limitations period for commencing an action to enforce a claim of deficiency judgment after foreclosure action from five years to one year. Additionally, the amount of deficiency is limited to the difference between the amount received in the foreclosure sale and the fair market value of the house at the time of the sale.

Another provision intended to improve the foreclosure process is stricter paperwork requirements for plaintiffs. Plaintiffs must certify that they have all of the correct paperwork proving the right to foreclose. If plaintiffs have all of the paperwork required to proceed with a foreclosure, the courts will have to hear less unnecessary challenges on false or misleading documentation. Also, the plaintiff faces the penalty of perjury if false documents are filed to show ownership of lost or misplaced documents.

Other provisions are designed to prevent either party from delaying proceedings. The Bill will allow anyone entitled to a lien to ask the court to move the process along when a bank is moving slowly. Banks would no longer be able to delay proceedings without cause when they know they will likely buy the property at a judicially ordered sale. Banks know that delays help to avoid liability for past due and continuing assessments owed to homeowners and condominium associations.

Additionally, the Bill will require borrowers to show a legitimate objection to delay a foreclosure. Currently, borrowers make objections in an effort to delay proceedings so that they can continue living in the home while not paying a mortgage. This provision is meant to protect the lender’s due process rights, but a borrower with a legitimate objection will still be given a hearing.

Gov. Scott told reporters, “It’s going to help make sure we have a timely foreclosure process so our families can make sure that they can keep their homes and make sure we get back to work. Home prices are up; new home construction is up, just like jobs are back.” Florida has one of the nation’s highest foreclosure rates. The average foreclosure case in Florida takes 858 days to make it through the court system.