| 1 | The Civil Justice Committee recommends the following: |
| 2 |
|
| 3 | Council/Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | A bill to be entitled |
| 6 | An act relating to residential foreclosure proceedings; |
| 7 | creating s. 45.0311, F.S.; providing a definition; |
| 8 | providing requirements and procedures for disbursement of |
| 9 | surplus funds from a judicial sale; authorizing a court to |
| 10 | determine reasonable attorney's fees for motions to |
| 11 | disburse surplus funds; providing a right of certain |
| 12 | parties to petition a court to set aside certain deeds or |
| 13 | assignments under certain circumstances; entitling certain |
| 14 | parties to recover all fees and costs incurred in certain |
| 15 | surplus funds proceedings; providing for the court to |
| 16 | determine reasonable attorney's fees in such proceedings; |
| 17 | creating s. 48.184, F.S.; specifying a required notice |
| 18 | form to be served with a summons and complaint in actions |
| 19 | to foreclose an interest in a mortgagor's primary |
| 20 | dwelling; requiring the notice to be included in the |
| 21 | service of process; requiring certain verification of |
| 22 | service; amending s. 48.21, F.S.; specifying an additional |
| 23 | notice requirement for return of service of process forms |
| 24 | made for foreclosures of a mortgagor's primary dwelling; |
| 25 | authorizing a clerk of court to collect a fee for attempts |
| 26 | of service of process; requiring the clerk of court to use |
| 27 | fee proceeds for certain public education purposes; |
| 28 | amending s. 49.08, F.S.; requiring certain notices of |
| 29 | action to contain an additional notice of potential |
| 30 | surplus and application procedures information; creating |
| 31 | s. 501.2078, F.S.; providing definitions; providing a |
| 32 | civil penalty for knowingly using unfair or deceptive |
| 33 | homeowner victimization methods, acts, or practices in |
| 34 | residential foreclosure proceedings; specifying a time |
| 35 | period during which a person may not contact a homeowner |
| 36 | for certain purposes; specifying higher priority of an |
| 37 | order of restitution or reimbursement over imposition of a |
| 38 | civil penalty; providing for deposit of civil penalties |
| 39 | into the Legal Affairs Revolving Trust Fund of the |
| 40 | Department of Legal Affairs; allocating such funds for |
| 41 | certain purposes; creating s. 689.251, F.S.; requiring |
| 42 | documents transferring a mortgagor's primary dwelling to |
| 43 | disclose certain information; authorizing a seller to void |
| 44 | a transaction under certain circumstances; requiring the |
| 45 | seller to repay certain amounts to a purchaser, minus |
| 46 | certain amounts, under such circumstances; amending s. |
| 47 | 702.035, F.S.; providing that certain advertisements, |
| 48 | publications, or notices relating to foreclosure |
| 49 | proceedings must include the procedure for collecting |
| 50 | surplus funds or list a telephone number or website at |
| 51 | which the procedure will be explained; amending s. |
| 52 | 702.065, F.S.; prohibiting a court or clerk of court from |
| 53 | entering a default or default judgment against a mortgagor |
| 54 | in a proceeding to foreclose a mortgagor's primary |
| 55 | dwelling if a return of service does not contain a |
| 56 | required notice; amending s. 702.10, F.S.; including a |
| 57 | reference to a required notice for proceedings to |
| 58 | foreclose a mortgagor's primary dwelling in certain orders |
| 59 | to show cause in final judgment of foreclosure entries; |
| 60 | providing an effective date. |
| 61 |
|
| 62 | Be It Enacted by the Legislature of the State of Florida: |
| 63 |
|
| 64 | Section 1. Section 45.0311, Florida Statutes, is created |
| 65 | to read: |
| 66 | 45.0311 Disbursement of surplus funds.-- |
| 67 | (1) As used in this subsection, the term "surplus funds" |
| 68 | means all funds existing after all valid liens have been paid. |
| 69 | Any person claiming a right to disbursement of proceeds from a |
| 70 | judicial sale, other than the original mortgagor, shall produce |
| 71 | a deed satisfying the requirements of s. 689.251, if applicable, |
| 72 | or an assignment of the proceeds from the original mortgagor, or |
| 73 | homeowner if not the original mortgagor, executed with the |
| 74 | formality of a deed and acknowledged and conspicuously including |
| 75 | the assessed value of the property, a disclosure that the |
| 76 | assessed value may be lower than the actual value of the |
| 77 | property, the approximate amount of any debt encumbering the |
| 78 | property, the approximate amount of any equity in the property, |
| 79 | and a statement that the assignor does not need an attorney or |
| 80 | other representative to recover the surplus funds. The deed or |
| 81 | assignment shall conspicuously set forth all forms of |
| 82 | consideration paid for the rights to the property or the |
| 83 | assignment of the rights to any surplus funds. |
| 84 | (2) The court shall determine reasonable attorney's fees |
| 85 | charged for a motion to disburse surplus funds. |
| 86 | (3) A party who has executed an assignment or deed that |
| 87 | does not conform to the requirements of this section or s. |
| 88 | 689.251 has the right to petition the court presiding over the |
| 89 | foreclosure proceeding to set aside the nonconforming deed or |
| 90 | assignment. In any such proceeding in which the mortgagor, or |
| 91 | original homeowner if not the same as the mortgagor, is the |
| 92 | prevailing party, he or she is entitled to recover all fees and |
| 93 | costs incurred in connection with such proceeding. The court |
| 94 | shall determine reasonable attorney's fees in such proceedings. |
| 95 | Section 2. Section 48.184, Florida Statutes, is created to |
| 96 | read: |
| 97 | 48.184 Notice form for actions to foreclose an interest in |
| 98 | a mortgagor's primary dwelling.--In any action to foreclose an |
| 99 | interest in a mortgagor's primary dwelling, a notice, in |
| 100 | substantially the following form and printed on orange paper, |
| 101 | shall be served with the summons and complaint and shall be |
| 102 | included in the service of process. The return of service shall |
| 103 | verify that such notice was served with the summons and the |
| 104 | complaint: |
| 105 |
|
| 106 | (Caption of Action) |
| 107 | ATTENTION |
| 108 | TO ALL NAMED PARTIES LISTED |
| 109 | IN THIS FORECLOSURE LAWSUIT: |
| 110 |
|
| 111 | A FORECLOSURE ACTION HAS BEEN FILED AGAINST YOU FOR FAILURE TO |
| 112 | MAKE TIMELY MORTGAGE PAYMENTS ON YOUR RESIDENCE. IF A JUDGMENT |
| 113 | OF FORECLOSURE IS ENTERED AND YOUR PROPERTY IS SOLD AT PUBLIC |
| 114 | AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE THAT |
| 115 | BELONGS TO YOU AFTER PAYMENT OF LIENHOLDERS. |
| 116 |
|
| 117 | YOU MAY CLAIM THESE FUNDS YOURSELF. YOU ARE NOT REQUIRED TO HAVE |
| 118 | A LAWYER OR ANY OTHER REPRESENTATION AND YOU DO NOT HAVE TO |
| 119 | ASSIGN YOUR RIGHTS TO ANYONE ELSE IN ORDER FOR YOU TO CLAIM ANY |
| 120 | MONEY TO WHICH YOU ARE ENTITLED. |
| 121 |
|
| 122 | PLEASE CHECK WITH THE CLERK OF THE COURT, [INSERT INFORMATION |
| 123 | FOR APPLICABLE COURT] WITHIN TEN (10) DAYS AFTER THE SALE TO SEE |
| 124 | IF THERE IS ADDITIONAL MONEY FROM THE FORECLOSURE SALE THAT THE |
| 125 | CLERK HAS IN THE REGISTRY OF THE COURT. |
| 126 |
|
| 127 | IF THERE IS ADDITIONAL MONEY, YOU MAY ASK THE COURT TO INSTRUCT |
| 128 | THE CLERK TO GIVE YOU THE MONEY THAT BELONGS TO YOU. |
| 129 |
|
| 130 | IT IS POSSIBLE THAT YOU WILL BE CONTACTED BY COMPANIES OR |
| 131 | LAWYERS OFFERING TO HELP YOU COLLECT THIS MONEY OR OFFERING TO |
| 132 | HELP YOU WITH THE FORECLOSURE BY BUYING YOUR HOUSE, LENDING YOU |
| 133 | MONEY, OR TAKING AN ASSIGNMENT. THESE COMPANIES OR LAWYERS MAY |
| 134 | NOT CONTACT YOU UNTIL AFTER 30 DAYS AFTER YOU RECEIVED THIS |
| 135 | NOTICE. IF YOU WANT TO CHECK WHETHER THE PERSON OR COMPANY |
| 136 | CALLING YOU HAS A COMPLAINT HISTORY WITH THE STATE, YOU MAY CALL |
| 137 | [INSERT CONTACT INFORMATION, INCLUDING ANY HOT OR WEBSITE]. |
| 138 | [PLEASE CALL THE ATTORNEY GENERAL'S HOTLINE AT 1-866-9-NO-SCAM |
| 139 | (966-7226) OR GO TO WWW.MYFLORIDALEGAL.COM.] |
| 140 |
|
| 141 | IF YOU DECIDE TO SELL YOUR HOME OR HIRE SOMEONE TO HELP YOU |
| 142 | CLAIM THE ADDITIONAL MONEY, YOU SHOULD READ VERY CAREFULLY ALL |
| 143 | PAPERS YOU ARE REQUIRED TO SIGN, ASK SOMEONE ELSE, PREFERABLY AN |
| 144 | ATTORNEY WHO IS NOT RELATED TO THE PERSON OFFERING TO HELP YOU, |
| 145 | TO MAKE SURE THAT YOU UNDERSTAND WHAT YOU ARE SIGNING AND THAT |
| 146 | YOU ARE NOT TRANSFERRING YOUR PROPERTY OR THE EQUITY IN YOUR |
| 147 | PROPERTY WITHOUT THE PROPER INFORMATION. IF YOU CANNOT AFFORD TO |
| 148 | PAY AN ATTORNEY, YOU MAY CONTACT (INSERT LOCAL OR NEAREST LEGAL |
| 149 | AID OFFICE AND TELEPHONE PHONE NUMBER) TO SEE IF YOU QUALIFY |
| 150 | FINANCIALLY FOR THEIR SERVICES. IF THEY CANNOT ASSIST YOU, THEY |
| 151 | MAY BE ABLE TO REFER YOU TO A LOCAL BAR REFERRAL AGENCY OR |
| 152 | SUGGEST OTHER OPTIONS. THEIR MAILING ADDRESS IS: (INSERT |
| 153 | ADDRESS). IF YOU CHOOSE TO CONTACT (NAME OF LOCAL OR NEAREST |
| 154 | LEGAL AID OFFICE) FOR ASSISTANCE, YOU SHOULD DO SO AS SOON AS |
| 155 | POSSIBLE AFTER RECEIPT OF THIS NOTICE. |
| 156 | Section 3. Section 48.21, Florida Statutes, is amended to |
| 157 | read: |
| 158 | 48.21 Return of execution of process.--Each person who |
| 159 | effects service of process shall note on a return-of-service |
| 160 | form attached thereto, the date and time when it comes to hand, |
| 161 | the date and time when it is served, the manner of service, the |
| 162 | name of the person on whom it was served and, if the person is |
| 163 | served in a representative capacity, the position occupied by |
| 164 | the person. A failure to state the foregoing facts invalidates |
| 165 | the service, but the return is amendable to state the truth at |
| 166 | any time on application to the court from which the process |
| 167 | issued. On amendment, service is as effective as if the return |
| 168 | had originally stated the omitted facts. A failure to state all |
| 169 | the facts in the return shall subject the person effecting |
| 170 | service to a fine not exceeding $10, in the court's discretion. |
| 171 | When service of process is made for foreclosure of an interest |
| 172 | in a mortgagor's primary dwelling, the return of service form |
| 173 | shall include a confirmation that the notice required by s. |
| 174 | 48.184 is included in the service of process. The clerk of court |
| 175 | may collect a fee of $25 from any surplus funds remaining in the |
| 176 | court registry following a foreclosure sale for each attempt of |
| 177 | service upon the mortgagor. The fee may be collected after all |
| 178 | valid liens have been paid but before any surplus funds have |
| 179 | been distributed to a mortgagor. The clerk shall use the |
| 180 | proceeds of such fee solely for purposes of educating the public |
| 181 | as to the rights of homeowners regarding foreclosure |
| 182 | proceedings. |
| 183 | Section 4. Subsection (5) is added to section 49.08, |
| 184 | Florida Statutes, to read: |
| 185 | 49.08 Notice of action, form.--On filing the sworn |
| 186 | statement, and otherwise complying with the foregoing |
| 187 | requirements, the plaintiff is entitled to have issued by the |
| 188 | clerk or judge, not later than 60 days after filing the sworn |
| 189 | statement, a notice of action which notice shall set forth: |
| 190 | (5) Notice of a potential surplus and information advising |
| 191 | the defendant of the procedures to apply for the surplus, in |
| 192 | substantially the following form: |
| 193 |
|
| 194 | If you are the owner of real estate that is being |
| 195 | foreclosed, there may be money owed to you after the |
| 196 | sale. You may contact [insert contact information for |
| 197 | clerk's office until hotline and website are set up] |
| 198 | for information on what you need to do to get the |
| 199 | funds. You do not need to hire an attorney or other |
| 200 | representative to get this money. |
| 201 |
|
| 202 | Section 5. Section 501.2078, Florida Statutes, is created |
| 203 | to read: |
| 204 | 501.2078 Violations involving individual homeowners during |
| 205 | the course of residential foreclosure proceedings; civil |
| 206 | penalties.-- |
| 207 | (1) As used in this section: |
| 208 | (a) "Residential foreclosure proceeding" means any action |
| 209 | in a circuit court of this state in which a party seeks to |
| 210 | foreclose on a mortgage encumbering the mortgagor's primary |
| 211 | dwelling. |
| 212 | (b) "Homeowner" means any individual who is the owner of |
| 213 | the property subject to a residential foreclosure proceeding. |
| 214 | (2)(a) Any person who willfully uses, or has willfully |
| 215 | used, a method, act, or practice in violation of this part, |
| 216 | which method, act, or practice victimizes or attempts to |
| 217 | victimize homeowners during the course of a residential |
| 218 | foreclosure proceeding, and in committing such violation knew or |
| 219 | should have known that such conduct was unfair or deceptive, is |
| 220 | liable for a civil penalty of not more than $15,000 for each |
| 221 | such violation. The act of encumbering the dwelling subject to a |
| 222 | residential foreclosure proceeding with a substitute or |
| 223 | additional lien shall not constitute a violation of this |
| 224 | section. |
| 225 | (b) Any person desiring to contact a homeowner to offer to |
| 226 | help the homeowner collect any surplus money or to help with a |
| 227 | foreclosure by buying the homeowner's house, lend the homeowner |
| 228 | money, or take an assignment may not contact the homeowner until |
| 229 | after 30 days after the homeowner receives the notice provided |
| 230 | in s. 48.184. Any such contact before such 30-day period has |
| 231 | elapsed constitutes a violation of this part, subject to the |
| 232 | penalty provided in paragraph (a). |
| 233 | (3) Any order of restitution or reimbursement based on a |
| 234 | violation of this part committed against a homeowner in a |
| 235 | residential foreclosure proceeding has priority over the |
| 236 | imposition of any civil penalty for such violation pursuant to |
| 237 | this section. |
| 238 | (4) Civil penalties collected pursuant to this section |
| 239 | shall be deposited into the Legal Affairs Revolving Trust Fund |
| 240 | of the Department of Legal Affairs and allocated solely to the |
| 241 | Department of Legal Affairs for the purpose of preparing and |
| 242 | distributing consumer education materials, programs, and |
| 243 | seminars to benefit homeowners in residential foreclosure |
| 244 | proceedings or to further enforcement efforts. |
| 245 | Section 6. Section 689.251, Florida Statutes, is created |
| 246 | to read: |
| 247 | 689.251 Transfer of mortgagor's primary dwelling subject |
| 248 | to default.-- |
| 249 | (1) Any document other than a deed in lieu of foreclosure |
| 250 | prepared by or on behalf of a purchaser of legal or equitable |
| 251 | title to a mortgagor's primary dwelling when the mortgagor is in |
| 252 | default of his or her obligations must disclose, in the |
| 253 | instrument itself or in a separate writing executed by the |
| 254 | seller and the purchaser with the formality of a deed and |
| 255 | acknowledged by a notary public or civil notary of this state, |
| 256 | the assessed value of the property, that the assessed value may |
| 257 | be lower than the actual value of the property, the approximate |
| 258 | amount of any debt encumbering the property, and the approximate |
| 259 | amount of any equity in the property. The deed or assignment |
| 260 | shall conspicuously set forth any and all forms of consideration |
| 261 | paid for the rights to the property or the assignment of the |
| 262 | rights to any surplus funds. |
| 263 | (2) If such document fails to comply with the requirements |
| 264 | of subsection (1), the seller may void the transaction. If the |
| 265 | seller voids the transaction, the seller shall repay any |
| 266 | consideration paid by the purchaser to the seller, less, |
| 267 | however, all costs incurred by the seller as a result of the |
| 268 | purchaser's failure to comply with subsection (1), including |
| 269 | attorney's fees and costs. |
| 270 | Section 7. Section 702.035, Florida Statutes, is amended |
| 271 | to read: |
| 272 | 702.035 Legal notice concerning foreclosure proceedings; |
| 273 | procedure for collection of surplus funds.--Whenever a legal |
| 274 | advertisement, publication, or notice relating to a foreclosure |
| 275 | proceeding is required to be placed in a newspaper, it is the |
| 276 | responsibility of the petitioner or petitioner's attorney to |
| 277 | place such advertisement, publication, or notice. The |
| 278 | advertisement, publication, or notice shall be placed directly |
| 279 | by the attorney for the petitioner, by the petitioner if acting |
| 280 | pro se, or by the clerk of the court. The advertisement, |
| 281 | publication, or notice must state the procedure for collecting |
| 282 | surplus funds, if any, or list a telephone number or website at |
| 283 | which the procedure will be explained. |
| 284 | Section 8. Subsection (3) is added to section 702.065, |
| 285 | Florida Statutes, to read: |
| 286 | 702.065 Final judgment in uncontested proceedings where |
| 287 | deficiency judgment waived; attorney's fees when default |
| 288 | judgment entered.-- |
| 289 | (3) In a proceeding to foreclose a mortgage encumbering a |
| 290 | mortgagor's primary dwelling, a court or a clerk of the court |
| 291 | may not enter a default or default judgment against the |
| 292 | mortgagor if the return of service does not include evidence |
| 293 | that the notice required by s. 48.184 was served on the |
| 294 | mortgagor. |
| 295 | Section 9. Paragraph (a) of subsection (1) of section |
| 296 | 702.10, Florida Statutes, is amended to read: |
| 297 | 702.10 Order to show cause; entry of final judgment of |
| 298 | foreclosure; payment during foreclosure.-- |
| 299 | (1) After a complaint in a foreclosure proceeding has been |
| 300 | filed, the mortgagee may request an order to show cause for the |
| 301 | entry of final judgment and the court shall immediately review |
| 302 | the complaint. If, upon examination of the complaint, the court |
| 303 | finds that the complaint is verified and alleges a cause of |
| 304 | action to foreclose on real property, the court shall promptly |
| 305 | issue an order directed to the defendant to show cause why a |
| 306 | final judgment of foreclosure should not be entered. |
| 307 | (a) The order shall: |
| 308 | 1. Set the date and time for hearing on the order to show |
| 309 | cause. However, the date for the hearing may not be set sooner |
| 310 | than 20 days after the service of the order. When service is |
| 311 | obtained by publication, the date for the hearing may not be set |
| 312 | sooner than 30 days after the first publication. The hearing |
| 313 | must be held within 60 days after the date of service. Failure |
| 314 | to hold the hearing within such time does not affect the |
| 315 | validity of the order to show cause or the jurisdiction of the |
| 316 | court to issue subsequent orders. |
| 317 | 2. Direct the time within which service of the order to |
| 318 | show cause and the complaint must be made upon the defendant. |
| 319 | 3. State that the filing of defenses by a motion or by a |
| 320 | verified or sworn answer at or before the hearing to show cause |
| 321 | constitutes cause for the court not to enter the attached final |
| 322 | judgment. |
| 323 | 4. State that the defendant has the right to file |
| 324 | affidavits or other papers at the time of the hearing and may |
| 325 | appear personally or by way of an attorney at the hearing. |
| 326 | 5. State that, if the defendant files defenses by a |
| 327 | motion, the hearing time may be used to hear the defendant's |
| 328 | motion. |
| 329 | 6. State that, if the defendant fails to appear at the |
| 330 | hearing to show cause or fails to file defenses by a motion or |
| 331 | by a verified or sworn answer or files an answer not contesting |
| 332 | the foreclosure, the defendant may be considered to have waived |
| 333 | the right to a hearing and in such case the court may enter a |
| 334 | final judgment of foreclosure ordering the clerk of the court to |
| 335 | conduct a foreclosure sale. |
| 336 | 7. State that if the mortgage provides for reasonable |
| 337 | attorney's fees and the requested attorney's fees do not exceed |
| 338 | 3 percent of the principal amount owed at the time of filing the |
| 339 | complaint, it is unnecessary for the court to hold a hearing or |
| 340 | adjudge the requested attorney's fees to be reasonable. |
| 341 | 8. Attach the final judgment of foreclosure the court will |
| 342 | enter, if the defendant waives the right to be heard at the |
| 343 | hearing on the order to show cause. |
| 344 | 9. Require the mortgagee to serve a copy of the order to |
| 345 | show cause on the mortgagor in the following manner: |
| 346 | a. If the mortgagor has been served with the complaint and |
| 347 | original process, service of the order may be made in the manner |
| 348 | provided in the Florida Rules of Civil Procedure. |
| 349 | b. If the mortgagor has not been served with the complaint |
| 350 | and original process, the order to show cause, together with the |
| 351 | summons and a copy of the complaint and, in the case of a |
| 352 | proceeding to foreclose a mortgagor's primary dwelling, the |
| 353 | notice required by s. 48.184, shall be served on the mortgagor |
| 354 | in the same manner as provided by law for original process. |
| 355 |
|
| 356 | Any final judgment of foreclosure entered under this subsection |
| 357 | is for in rem relief only. Nothing in this subsection shall |
| 358 | preclude the entry of a deficiency judgment where otherwise |
| 359 | allowed by law. |
| 360 | Section 10. This act shall take effect July 1, 2005. |