On February 7, the House Civil Justice Subcommittee voted to pass Florida’s newest bill designed to improve the efficiency of mortgage foreclosures: House Bill 87. While it is still early in the legislative process, this is a good time to examine the four main components of the bill.
First, the new bill limits the time within which a lender may pursue a deficiency judgment “…related to a note secured by a mortgage against residential property…” to a period of one year running from the 11th day after the foreclosure sale or the day after the lender has accepted a deed in lieu of foreclosure.
Another component of the bill requires Lenders to have their documentation accounted for prior to filing a foreclosure action so that the Lender can notify the Court of the status of the original loan documents which ostensibly will expedite the process. If enacted, the bill will require foreclosure complaints to contain affirmative allegations that the plaintiff is the holder of the original note and to specifically allege the “…factual basis…” for supporting the plaintiff’s right to enforce the note. Further, if the plaintiff has physical possession of the original note, it will be required to file with the court a certification stating that it has possession of the original note, providing the physical location of the note, stating the names and titles of those signing the certification, and stating the date and time the location of the note was verified. In the alternative, if the note has been lost or destroyed, the plaintiff must file an affidavit attached to the complaint detailing a clear chain of all endorsements or assignments of the note, setting forth facts showing that the plaintiff is entitled to enforce the lost or destroyed note pursuant to F.S. 673.3091, and including as exhibits copies of the note, any allonges to the note, audit reports showing physical receipt of the original note, or other evidence of acquisition and possession of the note. Under the proposed bill, failure to comply with these requirements could result in sanctions from the court.
The remaining components of HB 87 involve a new “show cause” procedure and also limits damage claims by third parties who have purchased a residential property at foreclosure sale. These will be discussed in a future post in The Florida Banking Law Blog.