HB 1311

1
A bill to be entitled
2An act relating to residential foreclosure proceedings;
3amending s. 45.031, F.S.; specifying an additional
4judicial sale notice-of-sale requirement for collecting
5surplus funds; creating s. 45.0311, F.S.; providing
6requirements and procedures for disbursement of surplus
7funds from a judicial sale; authorizing a court to
8determine reasonable attorney fees for motions to disburse
9surplus funds; providing a right of certain parties to
10petition a court to set aside certain deeds or assignments
11under certain circumstances; creating s. 48.184, F.S.;
12specifying a required notice form to be served with a
13summons and complaint in actions to foreclose an interest
14in residential real estate; requiring the notice to be
15included in the service of process; requiring certain
16verification of service; amending s. 48.21, F.S.;
17specifying an additional notice requirement for return of
18service of process forms made for foreclosures of
19residential real estate; authorizing a clerk of court to
20charge a fee for attempts of service of process; requiring
21the clerk of court to use fee proceeds for certain public
22education purposes; amending s. 49.08, F.S.; requiring
23certain notices of action to contain an additional notice
24of potential surplus and application procedures
25information; amending s. 57.105, F.S.; entitling certain
26parties to recover all fees and costs incurred in certain
27surplus funds actions; providing for the court to
28determine reasonable attorney fees in such actions;
29creating s. 501.2078, F.S.; providing definitions;
30providing a civil penalty for knowingly using unfair or
31deceptive homeowner victimization methods, acts, or
32practices in residential foreclosure proceedings;
33specifying a time period during which companies or
34attorneys may not contact a homeowner for certain
35purposes; specifying higher priority of an order of
36restitution or reimbursement over imposition of a civil
37penalty; providing for deposit of civil penalties into the
38Legal Affairs Revolving Trust Fund of the Department of
39Legal Affairs; allocating such funds for certain purpose;
40creating s. 689.251, F.S.; requiring documents
41transferring an interest in real estate to disclose
42certain information; authorizing a seller to void a
43transaction under certain circumstances; requiring the
44seller to repay certain amounts to a purchaser, minus
45certain amounts, under such circumstances; amending s.
46702.065, F.S.; prohibiting a court or clerk of court from
47entering a default or default judgment against a mortgagor
48in a residential foreclosure proceeding if a return of
49service does not contain a required notice; amending s.
50702.10, F.S.; including a reference to a required
51residential foreclosure proceeding notice in certain
52orders to show cause in final judgment of foreclosure
53entries; providing an effective date.
54
55Be It Enacted by the Legislature of the State of Florida:
56
57     Section 1.  Paragraph (f) is added to subsection (1) of
58section 45.031, Florida Statutes, to read:
59     45.031  Judicial sales procedure.--In any sale of real or
60personal property under an order or judgment, the following
61procedure may be followed as an alternative to any other sale
62procedure if so ordered by the court:
63     (1)  SALE BY CLERK.--In the order or final judgment, the
64court shall direct the clerk to sell the property at public sale
65on a specified day that shall be not less than 20 days or more
66than 35 days after the date thereof, on terms and conditions
67specified in the order or judgment. A sale may be held more than
6835 days after the date of final judgment or order if the
69plaintiff or plaintiff's attorney consents to such time. Any
70sale held more than 35 days after the final judgment or order
71shall not affect the validity or finality of the final judgment
72or order or any sale held pursuant thereto. Notice of sale shall
73be published once a week for 2 consecutive weeks in a newspaper
74of general circulation, as defined in chapter 50, published in
75the county where the sale is to be held. The second publication
76shall be at least 5 days before the sale. The notice shall
77contain:     (f)  If there are surplus proceeds, the procedure
78required for collecting the surplus proceeds, or the phone
79number for or the website at which the procedure will be
80explained.
81
82The clerk shall receive a service charge of up to $60 for
83services in making, recording, and certifying the sale and title
84that shall be assessed as costs. The court, in its discretion,
85may enlarge the time of the sale. Notice of the changed time of
86sale shall be published as provided herein.
87     Section 2.  Section 45.0311, Florida Statutes, is created
88to read:
89     45.0311  Disbursement of surplus funds.--
90     (1)  Any person claiming a right to disbursement of
91proceeds from a judicial sale, other than the original
92mortgagor, shall produce a deed satisfying the requirements of
93s. 689.251, if applicable, or an assignment of the proceeds from
94the original mortgagor, or homeowner if not the original
95mortgagor, executed with the formality of a deed and
96acknowledged and conspicuously including the assessed value of
97the property, a disclosure that the assessed value may be lower
98than the actual value of the property, the approximate amount of
99any debt encumbering the property, the approximate amount of any
100equity in the property, and a statement that the assignor does
101not need an attorney or other representative to recover the
102surplus funds. The deed or assignment shall conspicuously set
103forth all forms of consideration paid for the rights to the
104property or the assignment of the rights to any surplus funds.
105     (2)  The court shall determine reasonable attorney fees
106charged for a motion to disburse surplus funds.
107     (3)  A party who has executed an assignment or deed that
108does not conform with the requirements of this section or s.
109689.251 has the right to petition the court presiding over the
110foreclosure proceeding to set aside the nonconforming deed or
111assignment.
112     Section 3.  Section 48.184, Florida Statutes, is created to
113read:
114     48.184  Notice form for actions to foreclose an interest in
115residential real estate.--In any action to foreclose an interest
116in real estate, a notice, in substantially the following form
117and printed on orange paper, shall be served with the summons
118and complaint and shall be included in the service of process.
119The return of service shall verify that such notice was served
120with the summons and the complaint:
121
122(Caption of Action)                         
123ATTENTION
124TO ALL NAMED PARTIES LISTED
125IN THIS FORECLOSURE LAWSUIT:
126
127A FORECLOSURE ACTION HAS BEEN FILED AGAINST YOU FOR FAILURE TO
128MAKE TIMELY MORTGAGE PAYMENTS ON YOUR RESIDENCE. IF A JUDGMENT
129OF FORECLOSURE IS ENTERED AND YOUR PROPERTY IS SOLD AT PUBLIC
130AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE THAT
131BELONGS TO YOU AFTER PAYMENT OF LIENHOLDERS.
132
133YOU MAY CLAIM THESE FUNDS YOURSELF. YOU ARE NOT REQUIRED TO HAVE
134A LAWYER OR ANY OTHER REPRESENTATION AND YOU DO NOT HAVE TO
135ASSIGN YOUR RIGHTS TO ANYONE ELSE IN ORDER FOR YOU TO CLAIM ANY
136MONEY TO WHICH YOU ARE ENTITLED.
137
138PLEASE CHECK WITH THE CLERK OF THE COURT, [INSERT INFORMATION
139FOR APPLICABLE COURT] WITHIN TEN (10) DAYS AFTER THE SALE TO SEE
140IF THERE IS ADDITIONAL MONEY FROM THE FORECLOSURE SALE THAT THE
141CLERK HAS IN THE REGISTRY OF THE COURT.
142
143IF THERE IS ADDITIONAL MONEY, YOU MAY ASK THE COURT TO INSTRUCT
144THE CLERK TO GIVE YOU THE MONEY THAT BELONGS TO YOU.
145
146IT IS POSSIBLE THAT YOU WILL BE CONTACTED BY COMPANIES OR
147LAWYERS OFFERING TO HELP YOU COLLECT THIS MONEY OR OFFERING TO
148HELP YOU WITH THE FORECLOSURE BY BUYING YOUR HOUSE, LENDING YOU
149MONEY, OR TAKING AN ASSIGNMENT. THESE COMPANIES OR LAWYERS MAY
150NOT CONTACT YOU UNTIL AFTER 30 DAYS AFTER YOU RECEIVED THIS
151NOTICE. IF YOU WANT TO CHECK WHETHER THE PERSON OR COMPANY
152CALLING YOU HAS A COMPLAINT HISTORY WITH THE STATE, YOU MAY CALL
153[INSERT CONTACT INFORMATION, INCLUDING ANY HOT OR WEBSITE].
154[PLEASE CALL THE ATTORNEY GENERAL'S HOTLINE AT 1-866-9-NO-SCAM
155(966-7226) OR GO TO WWW.MYFLORIDALEGAL.COM.]
156
157IF YOU DECIDE TO SELL YOUR HOME OR HIRE SOMEONE TO HELP YOU
158CLAIM THE ADDITIONAL MONEY, YOU SHOULD READ VERY CAREFULLY ALL
159PAPERS YOU ARE REQUIRED TO SIGN, ASK SOMEONE ELSE, PREFERABLY AN
160ATTORNEY WHO IS NOT RELATED TO THE PERSON OFFERING TO HELP YOU,
161TO MAKE SURE THAT YOU UNDERSTAND WHAT YOU ARE SIGNING AND THAT
162YOU ARE NOT TRANSFERRING YOUR PROPERTY OR THE EQUITY IN YOUR
163PROPERTY WITHOUT THE PROPER INFORMATION.
164     Section 4.  Section 48.21, Florida Statutes, is amended to
165read:
166     48.21  Return of execution of process.--Each person who
167effects service of process shall note on a return-of-service
168form attached thereto, the date and time when it comes to hand,
169the date and time when it is served, the manner of service, the
170name of the person on whom it was served and, if the person is
171served in a representative capacity, the position occupied by
172the person. A failure to state the foregoing facts invalidates
173the service, but the return is amendable to state the truth at
174any time on application to the court from which the process
175issued. On amendment, service is as effective as if the return
176had originally stated the omitted facts. A failure to state all
177the facts in the return shall subject the person effecting
178service to a fine not exceeding $10, in the court's discretion.
179When service of process is made for foreclosure of an interest
180in residential real estate, the return of service form shall
181include a confirmation that the notice required by s. 48.184 is
182included in the service of process. The clerk of court may
183charge a fee of $25 for each attempt of service upon a
184homeowner. The clerk shall use the proceeds of such fee solely
185for purposes of educating the public as to the rights of
186homeowners regarding foreclosure proceedings.
187     Section 5.  Subsection (5) is added to section 49.08,
188Florida Statutes, to read:
189     49.08  Notice of action, form.--On filing the sworn
190statement, and otherwise complying with the foregoing
191requirements, the plaintiff is entitled to have issued by the
192clerk or judge, not later than 60 days after filing the sworn
193statement, a notice of action which notice shall set forth:
194     (5)  Notice of a potential surplus and information advising
195the defendant of the procedures to apply for the surplus, in
196substantially the following form:
197
198If you are the owner of real estate that is being
199foreclosed, there may be money owed to you after the
200sale. You may contact [insert contact information for
201clerk's office until hotline and website are set up]
202for information on what you need to do to get the
203funds. You do not need to hire an attorney or other
204representative to get this money.
205
206     Section 6.  Subsection (8) is added to section 57.105,
207Florida Statutes, to read:
208     57.105  Attorney's fee; sanctions for raising unsupported
209claims or defenses; service of motions; damages for delay of
210litigation.--
211     (8)  In any action under s. 45.0311(3) the mortgagor, or
212original homeowner if not the same as the mortgagor, shall be
213entitled to recover all fees and costs incurred in connection
214with such action. The court shall determine reasonable attorney
215fees in such actions.
216     Section 7.  Section 501.2078, Florida Statutes, is created
217to read:
218     501.2078  Violations involving individual homeowners during
219the course of residential foreclosure proceedings; civil
220penalties.--
221     (1)  As used in this section:
222     (a)  "Residential foreclosure proceeding" means any action
223in a circuit court of this state in which a party seeks to
224foreclose on a mortgage and sell the residential property
225covered by the mortgage.
226     (b)  "Homeowner" means any individual who is the owner of
227the property subject to a residential foreclosure proceeding.
228     (2)(a)  Any person who willfully uses, or has willfully
229used, a method, act, or practice in violation of this part,
230which method, act, or practice victimizes or attempts to
231victimize homeowners during the course of a residential
232foreclosure proceeding, and in committing such violation knew or
233should have known that such conduct was unfair or deceptive, is
234liable for a civil penalty of not more than $15,000 for each
235such violation.
236     (b)  Any company or attorney desiring to contact a
237homeowner to offer to help the homeowner collect any surplus
238money or to help with a foreclosure by buying the homeowner's
239house, lend the homeowner money, or take an assignment may not
240contact the homeowner until after 30 days after the homeowner
241receives the notice provided in s. 48.184. Any such contact
242before such 30-day period has elapsed constitutes a violation of
243this part, subject to the penalty provided in paragraph (a).
244     (3)  Any order of restitution or reimbursement based on a
245violation of this part committed against a homeowner in a
246residential foreclosure proceeding has priority over the
247imposition of any civil penalty for such violation pursuant to
248this section.
249     (4)  Civil penalties collected pursuant to this section
250shall be deposited into the Legal Affairs Revolving Trust Fund
251of the Department of Legal Affairs and allocated solely to the
252Department of Legal Affairs for the purpose of preparing and
253distributing consumer education materials, programs, and
254seminars to benefit homeowners in residential foreclosure
255proceedings or to further enforcement efforts.
256     Section 8.  Section 689.251, Florida Statutes, is created
257to read:
258     689.251  Transfer of real estate subject to default.--
259     (1)  Any document prepared by a purchaser of an interest in
260real property purporting to transfer such interest as described
261in s. 697.08(1) must disclose, in the instrument itself or in a
262separate writing executed by the seller and the purchaser with
263the formality of a deed and acknowledged by a notary public or
264civil notary of this state, the assessed value of the property,
265that the assessed value may be lower than the actual value of
266the property, the approximate amount of any debt encumbering the
267property, and the approximate amount of any equity in the
268property. The deed or assignment shall conspicuously set forth
269any and all forms of consideration paid for the rights to the
270property or the assignment of the rights to any surplus funds.
271     (2)  If such document fails to comply with the requirements
272of subsection (1), the seller may void the transaction. If the
273seller voids the transaction, the seller shall repay any
274consideration paid by the purchaser to the seller, less,
275however, all costs incurred by the seller as a result of the
276purchaser's failure to comply with subsection (1), including
277attorney's fees and costs.
278     Section 9.  Subsection (3) is added to section 702.065,
279Florida Statutes, to read:
280     702.065  Final judgment in uncontested proceedings where
281deficiency judgment waived; attorney's fees when default
282judgment entered.--
283     (3)  In a residential foreclosure proceeding, a court or a
284clerk of the court may not enter a default or default judgment
285against the mortgagor if the return of service does not include
286evidence that the notice required by s. 48.184 was served on the
287mortgagor.
288     Section 10.  Paragraph (a) of subsection (1) of section
289702.10, Florida Statutes, is amended to read:
290     702.10  Order to show cause; entry of final judgment of
291foreclosure; payment during foreclosure.--
292     (1)  After a complaint in a foreclosure proceeding has been
293filed, the mortgagee may request an order to show cause for the
294entry of final judgment and the court shall immediately review
295the complaint. If, upon examination of the complaint, the court
296finds that the complaint is verified and alleges a cause of
297action to foreclose on real property, the court shall promptly
298issue an order directed to the defendant to show cause why a
299final judgment of foreclosure should not be entered.
300     (a)  The order shall:
301     1.  Set the date and time for hearing on the order to show
302cause. However, the date for the hearing may not be set sooner
303than 20 days after the service of the order. When service is
304obtained by publication, the date for the hearing may not be set
305sooner than 30 days after the first publication. The hearing
306must be held within 60 days after the date of service. Failure
307to hold the hearing within such time does not affect the
308validity of the order to show cause or the jurisdiction of the
309court to issue subsequent orders.
310     2.  Direct the time within which service of the order to
311show cause and the complaint must be made upon the defendant.
312     3.  State that the filing of defenses by a motion or by a
313verified or sworn answer at or before the hearing to show cause
314constitutes cause for the court not to enter the attached final
315judgment.
316     4.  State that the defendant has the right to file
317affidavits or other papers at the time of the hearing and may
318appear personally or by way of an attorney at the hearing.
319     5.  State that, if the defendant files defenses by a
320motion, the hearing time may be used to hear the defendant's
321motion.
322     6.  State that, if the defendant fails to appear at the
323hearing to show cause or fails to file defenses by a motion or
324by a verified or sworn answer or files an answer not contesting
325the foreclosure, the defendant may be considered to have waived
326the right to a hearing and in such case the court may enter a
327final judgment of foreclosure ordering the clerk of the court to
328conduct a foreclosure sale.
329     7.  State that if the mortgage provides for reasonable
330attorney's fees and the requested attorney's fees do not exceed
3313 percent of the principal amount owed at the time of filing the
332complaint, it is unnecessary for the court to hold a hearing or
333adjudge the requested attorney's fees to be reasonable.
334     8.  Attach the final judgment of foreclosure the court will
335enter, if the defendant waives the right to be heard at the
336hearing on the order to show cause.
337     9.  Require the mortgagee to serve a copy of the order to
338show cause on the mortgagor in the following manner:
339     a.  If the mortgagor has been served with the complaint and
340original process, service of the order may be made in the manner
341provided in the Florida Rules of Civil Procedure.
342     b.  If the mortgagor has not been served with the complaint
343and original process, the order to show cause, together with the
344summons and a copy of the complaint, and in the case of a
345residential foreclosure proceeding, the notice required by s.
34648.184, shall be served on the mortgagor in the same manner as
347provided by law for original process.
348
349Any final judgment of foreclosure entered under this subsection
350is for in rem relief only. Nothing in this subsection shall
351preclude the entry of a deficiency judgment where otherwise
352allowed by law.
353     Section 11.  This act shall take effect July 1, 2005.


CODING: Words stricken are deletions; words underlined are additions.