Senate Bill 0532

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    Florida Senate - 1999                                   SB 532

    By the Committee on Fiscal Policy





    301-296A-99

  1                      A bill to be entitled

  2         An act relating to trust funds within the

  3         Department of Insurance; abolishing the Home

  4         Equity Conversion Mortgage Guaranty Fund and

  5         transferring its balance to the Treasurer's

  6         Administrative and Investment Trust Fund;

  7         re-creating the Treasurer's Administrative and

  8         Investment Trust Fund; carrying forward current

  9         balances and continuing current sources and

10         uses thereof; amending s. 697.205, F.S., and

11         repealing s. 697.203, F.S., relating to the

12         Home Equity Conversion Mortgage Guaranty Fund;

13         conforming provisions to the transfer of the

14         balance of the trust fund to the Treasurer's

15         Administrative and Investment Trust Fund;

16         providing effective dates.

17

18         WHEREAS, the Legislature wishes to transfer the Home

19  Equity Conversion Mortgage Guaranty Fund to the Treasurer's

20  Administrative and Investment Trust Fund, and

21         WHEREAS, the Legislature wishes to extend the life of

22  the Treasurer's Administrative and Investment Trust Fund,

23  which is otherwise scheduled to be terminated pursuant to

24  constitutional mandate, and

25         WHEREAS, the Legislature has reviewed the trust fund

26  before its scheduled termination date and has found that it

27  continues to meet an important public purpose, and

28         WHEREAS, the Legislature finds that the existing public

29  policy concerning the trust fund sets adequate parameters for

30  its use, NOW, THEREFORE,

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    Florida Senate - 1999                                   SB 532
    301-296A-99




  1  Be It Enacted by the Legislature of the State of Florida:

  2

  3         Section 1.  Effective July 1, 1999, the Home Equity

  4  Conversion Mortgage Guaranty Fund within the Department of

  5  Insurance, FLAIR number 46-2-369, is abolished and its entire

  6  balance is transferred to the Treasurer's Administrative and

  7  Investment Trust Fund.

  8         Section 2.  (1)  The Treasurer's Administrative and

  9  Investment Trust Fund within the State Treasury, FLAIR number

10  46-2-725, which is to be terminated pursuant to Section 19(f),

11  Article III of the State Constitution on November 4, 2000, is

12  re-created.

13         (2)  All current balances of the trust fund are carried

14  forward and all current sources and uses of the trust fund are

15  continued.

16         Section 3.  Section 697.205, Florida Statutes, is

17  amended to read:

18         697.205  Recoveries from the trust fund.--

19         (1)(a)  Any person is eligible to seek recovery from

20  the Treasurer's Administrative and Investment Trust Home

21  Equity Conversion Mortgage Guaranty Fund if:

22         1.  Such person was the mortgagee of a home equity

23  conversion mortgage which was foreclosed upon termination, and

24  the proceeds from the foreclosure sale were insufficient to

25  repay the full loan amount due;

26         2.  Such person has caused to be issued a writ of

27  execution upon a decree rendered pursuant to chapter 702, and

28  the officer executing the writ has made a return showing that

29  no real or personal property of the judgment debtor can be

30  found which is liable to be levied upon in satisfaction of the

31  decree or that the amount realized on the sale of the judgment

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    Florida Senate - 1999                                   SB 532
    301-296A-99




  1  debtor's property pursuant to such execution was insufficient

  2  to satisfy the judgment;

  3         3.  Such person has made all searches and inquiries

  4  which are reasonable to ascertain whether the judgment debtor

  5  possesses real or personal property or other assets subject to

  6  being sold or applied in satisfaction of the judgment, and

  7  such person through her or his search has discovered no

  8  property or assets or has discovered property and assets and

  9  taken all necessary action and proceedings for the application

10  of such property and assets in satisfaction of the judgment

11  but the amounts thereby realized were insufficient to satisfy

12  the judgment;

13         4.  Such person has applied any amounts recovered from

14  the judgment debtor, or from any other source, to the

15  deficiency decree; or

16         5.  The mortgage on which recovery is sought was

17  insured pursuant to s. 697.204 prior to July 1, 1993.

18         (b)  Any person who meets all of the conditions

19  prescribed in subsection (1) may apply to the department for

20  payment to be made to such person from the Treasurer's

21  Administrative and Investment Trust Home Equity Conversion

22  Mortgage Guaranty Fund in an amount equal to the unsatisfied

23  portion of such person's deficiency decree.  In no event shall

24  Such amount may not exceed the difference between the amount

25  of the proceeds from a foreclosure sale and the loan amount

26  due, including principal and interest.

27         (c)  Upon receipt by the mortgagee of the payment from

28  the Treasurer's Administrative and Investment Trust Home

29  Equity Conversion Mortgage Guaranty Fund, the mortgagee shall

30  assign to the department any additional right, title, and

31  interest in the judgment, to the extent of such payment.

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    Florida Senate - 1999                                   SB 532
    301-296A-99




  1         (2)

  2         (a)  If In the event that a search is made by the

  3  mortgagee to determine all of the debtor's real and personal

  4  property which may be applied towards payment of the debt and

  5  it is determined that foreclosure of the home equity

  6  conversion mortgage would not result in recovering any

  7  significant additional assets of the debtor which may be used

  8  to satisfy the mortgage, the mortgagee may still be able to

  9  recover from the fund without having to foreclose, provided

10  that such mortgage was insured pursuant to s. 697.204 prior to

11  July 1, 1993.

12         1.  Such recovery shall be provided for by rule adopted

13  under promulgated pursuant to s. 697.203; shall be conditioned

14  on the mortgagee acquiring the mortgaged property by deed; and

15  shall be based on a reasonable appraised value of the

16  property.  The rules adopted promulgated for such recovery

17  shall include provisions for requiring the mortgagee to

18  determine the total assets of the debtor; provisions for

19  determining whether foreclosure would result in recovering any

20  additional assets of the debtor which may be used to satisfy

21  the mortgage; and provisions for determining what constitutes

22  a reasonable appraised value of the property.

23         2.  The maximum recovery to be allowed by this section

24  shall be the difference between the loan amount due, including

25  principal and interest, and the appraised value of the

26  property.

27         (b)  Any person who meets all of the conditions set by

28  rule for recovery under this subsection may apply to the

29  department for payment to be made to such person from the

30  Treasurer's Administrative and Investment Trust Home Equity

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    Florida Senate - 1999                                   SB 532
    301-296A-99




  1  Conversion Mortgage Guaranty Fund in an amount equal to the

  2  maximum recovery as provided in this section herein.

  3         Section 4.  Section 697.203, Florida Statutes, is

  4  repealed.

  5         Section 5.  This act shall take effect July 1, 1999,

  6  except that section 2 shall take effect November 4, 2000.

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  9                          SENATE SUMMARY

10    Abolishes the Home Equity Conversion Mortgage Guaranty
      Fund within the Department of Insurance and transfers its
11    balance to the Treasurer's Administrative and Investment
      Trust Fund. Re-creates the Treasurer's Administrative and
12    Investment Trust Fund.

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