Senate Bill sb2428

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    Florida Senate - 2005                                  SB 2428

    By Senator Campbell





    32-1146A-05                                        See HB 1311

  1                      A bill to be entitled

  2         An act relating to residential foreclosure

  3         proceedings; amending s. 45.031, F.S.;

  4         specifying an additional judicial sale

  5         notice-of-sale requirement for collecting

  6         surplus funds; creating s. 45.0311, F.S.;

  7         providing requirements and procedures for

  8         disbursement of surplus funds from a judicial

  9         sale; authorizing a court to determine

10         reasonable attorney's fees for motions to

11         disburse surplus funds; providing a right of

12         certain parties to petition a court to set

13         aside certain deeds or assignments under

14         certain circumstances; creating s. 48.184,

15         F.S.; specifying a required notice to be served

16         with a summons and complaint in actions to

17         foreclose an interest in residential real

18         estate; requiring the notice to be included in

19         the service-of-process; requiring certain

20         verification of service; amending s. 48.21,

21         F.S.; specifying an additional notice

22         requirement for return of service-of-process

23         forms made for foreclosures of residential real

24         estate; authorizing a clerk of court to charge

25         a fee for attempts to serve process; requiring

26         the clerk of court to use fee proceeds for

27         certain public education purposes; amending s.

28         49.08, F.S.; requiring certain notices of

29         action to contain an additional notice of

30         potential surplus and application procedures

31         information; amending s. 57.105, F.S.;

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         entitling certain parties to recover all fees

 2         and costs incurred in certain surplus-funds

 3         actions; providing for the court to determine

 4         reasonable attorney's fees in such actions;

 5         creating s. 501.2078, F.S.; providing

 6         definitions; providing a civil penalty for

 7         knowingly using unfair or deceptive homeowner

 8         victimization methods, acts, or practices in

 9         residential foreclosure proceedings; specifying

10         a period during which companies or attorneys

11         may not contact a homeowner for certain

12         purposes; specifying higher priority of an

13         order of restitution or reimbursement over

14         imposition of a civil penalty; providing for

15         deposit of civil penalties into the Legal

16         Affairs Revolving Trust Fund of the Department

17         of Legal Affairs; allocating such funds for

18         certain purpose; creating s. 689.251, F.S.;

19         requiring documents transferring an interest in

20         real estate to disclose certain information;

21         authorizing a seller to void a transaction

22         under certain circumstances; requiring the

23         seller to repay certain amounts to a purchaser,

24         minus certain amounts, under such

25         circumstances; amending s. 702.065, F.S.;

26         prohibiting a court or clerk of court from

27         entering a default or default judgment against

28         a mortgagor in a residential foreclosure

29         proceeding if a return of service does not

30         contain a required notice; amending s. 702.10,

31         F.S.; including a reference to a required

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         residential foreclosure proceeding notice in

 2         certain orders to show cause in final judgment

 3         of foreclosure entries; providing an effective

 4         date.

 5  

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

 7  

 8         Section 1.  Paragraph (f) is added to subsection (1) of

 9  section 45.031, Florida Statutes, to read:

10         45.031  Judicial sales procedure.--In any sale of real

11  or personal property under an order or judgment, the following

12  procedure may be followed as an alternative to any other sale

13  procedure if so ordered by the court:

14         (1)  SALE BY CLERK.--In the order or final judgment,

15  the court shall direct the clerk to sell the property at

16  public sale on a specified day that shall be not less than 20

17  days or more than 35 days after the date thereof, on terms and

18  conditions specified in the order or judgment. A sale may be

19  held more than 35 days after the date of final judgment or

20  order if the plaintiff or plaintiff's attorney consents to

21  such time. Any sale held more than 35 days after the final

22  judgment or order shall not affect the validity or finality of

23  the final judgment or order or any sale held pursuant thereto.

24  Notice of sale shall be published once a week for 2

25  consecutive weeks in a newspaper of general circulation, as

26  defined in chapter 50, published in the county where the sale

27  is to be held. The second publication shall be at least 5 days

28  before the sale. The notice shall contain:

29         (f)  If there are surplus proceeds, the procedure

30  required for collecting the surplus proceeds, or the phone

31  

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1  number for or the website at which the procedure will be

 2  explained.

 3  

 4  The clerk shall receive a service charge of up to $60 for

 5  services in making, recording, and certifying the sale and

 6  title that shall be assessed as costs. The court, in its

 7  discretion, may enlarge the time of the sale. Notice of the

 8  changed time of sale shall be published as provided herein.

 9         Section 2.  Section 45.0311, Florida Statutes, is

10  created to read:

11         45.0311  Disbursement of surplus funds.--

12         (1)  Any person claiming a right to disbursement of

13  proceeds from a judicial sale, other than the original

14  mortgagor, shall produce a deed satisfying the requirements of

15  s. 689.251, if applicable, or an assignment of the proceeds

16  from the original mortgagor, or homeowner if not the original

17  mortgagor, executed with the formality of a deed and

18  acknowledged and conspicuously including the assessed value of

19  the property, a disclosure that the assessed value may be

20  lower than the actual value of the property, the approximate

21  amount of any debt encumbering the property, the approximate

22  amount of any equity in the property, and a statement that the

23  assignor does not need an attorney or other representative to

24  recover the surplus funds. The deed or assignment shall

25  conspicuously set forth all forms of consideration paid for

26  the rights to the property or the assignment of the rights to

27  any surplus funds.

28         (2)  The court shall determine reasonable attorney's

29  fees charged for a motion to disburse surplus funds.

30         (3)  A party who has executed an assignment or deed

31  that does not conform with the requirements of this section or

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1  s. 689.251 has the right to petition the court presiding over

 2  the foreclosure proceeding to set aside the nonconforming deed

 3  or assignment.

 4         Section 3.  Section 48.184, Florida Statutes, is

 5  created to read:

 6         48.184  Notice form for actions to foreclose an

 7  interest in residential real estate.--In any action to

 8  foreclose an interest in real estate, a notice, in

 9  substantially the following form and printed on orange paper,

10  shall be served with the summons and complaint and shall be

11  included in the service of process. The return of service

12  shall verify that such notice was served with the summons and

13  the complaint:

14  

15  (Caption of Action)__________________

16  ATTENTION

17  TO ALL NAMED PARTIES LISTED

18  IN THIS FORECLOSURE LAWSUIT:

19  

20  A FORECLOSURE ACTION HAS BEEN FILED AGAINST YOU FOR FAILURE TO

21  MAKE TIMELY MORTGAGE PAYMENTS ON YOUR RESIDENCE. IF A JUDGMENT

22  OF FORECLOSURE IS ENTERED AND YOUR PROPERTY IS SOLD AT PUBLIC

23  AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE THAT

24  BELONGS TO YOU AFTER PAYMENT OF LIENHOLDERS.

25  

26  YOU MAY CLAIM THESE FUNDS YOURSELF. YOU ARE NOT REQUIRED TO

27  HAVE A LAWYER OR ANY OTHER REPRESENTATION AND YOU DO NOT HAVE

28  TO ASSIGN YOUR RIGHTS TO ANYONE ELSE IN ORDER FOR YOU TO CLAIM

29  ANY MONEY TO WHICH YOU ARE ENTITLED.

30  

31  

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1  PLEASE CHECK WITH THE CLERK OF THE COURT, [INSERT INFORMATION

 2  FOR APPLICABLE COURT] WITHIN TEN (10) DAYS AFTER THE SALE TO

 3  SEE IF THERE IS ADDITIONAL MONEY FROM THE FORECLOSURE SALE

 4  THAT THE CLERK HAS IN THE REGISTRY OF THE COURT.

 5  

 6  IF THERE IS ADDITIONAL MONEY, YOU MAY ASK THE COURT TO

 7  INSTRUCT THE CLERK TO GIVE YOU THE MONEY THAT BELONGS TO YOU.

 8  

 9  IT IS POSSIBLE THAT YOU WILL BE CONTACTED BY COMPANIES OR

10  LAWYERS OFFERING TO HELP YOU COLLECT THIS MONEY OR OFFERING TO

11  HELP YOU WITH THE FORECLOSURE BY BUYING YOUR HOUSE, LENDING

12  YOU MONEY, OR TAKING AN ASSIGNMENT. THESE COMPANIES OR LAWYERS

13  MAY NOT CONTACT YOU UNTIL AT LEAST 30 DAYS AFTER YOU RECEIVED

14  THIS NOTICE. IF YOU WANT TO CHECK WHETHER THE PERSON OR

15  COMPANY CALLING YOU HAS A COMPLAINT HISTORY WITH THE STATE,

16  YOU MAY CALL [INSERT CONTACT INFORMATION, INCLUDING ANY HOT OR

17  WEBSITE]. [PLEASE CALL THE ATTORNEY GENERAL'S HOTLINE AT

18  1-866-9-NO-SCAM (966-7226) OR GO TO WWW.MYFLORIDALEGAL.COM.]

19  

20  IF YOU DECIDE TO SELL YOUR HOME OR HIRE SOMEONE TO HELP YOU

21  CLAIM THE ADDITIONAL MONEY, YOU SHOULD READ VERY CAREFULLY ALL

22  PAPERS YOU ARE REQUIRED TO SIGN, ASK SOMEONE ELSE, PREFERABLY

23  AN ATTORNEY WHO IS NOT RELATED TO THE PERSON OFFERING TO HELP

24  YOU, TO MAKE SURE THAT YOU UNDERSTAND WHAT YOU ARE SIGNING AND

25  THAT YOU ARE NOT TRANSFERRING YOUR PROPERTY OR THE EQUITY IN

26  YOUR PROPERTY WITHOUT THE PROPER INFORMATION.

27         Section 4.  Section 48.21, Florida Statutes, is amended

28  to read:

29         48.21  Return of execution of process.--Each person who

30  effects service of process shall note on a return-of-service

31  form attached thereto, the date and time when it comes to

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1  hand, the date and time when it is served, the manner of

 2  service, the name of the person on whom it was served and, if

 3  the person is served in a representative capacity, the

 4  position occupied by the person. A failure to state the

 5  foregoing facts invalidates the service, but the return is

 6  amendable to state the truth at any time on application to the

 7  court from which the process issued. On amendment, service is

 8  as effective as if the return had originally stated the

 9  omitted facts. A failure to state all the facts in the return

10  shall subject the person effecting service to a fine not

11  exceeding $10, in the court's discretion. When service of

12  process is made for foreclosure of an interest in residential

13  real estate, the return-of-service form shall include a

14  confirmation that the notice required by s. 48.184 is included

15  in the service of process. The clerk of court may charge a fee

16  of $25 for each attempt of service upon a homeowner. The clerk

17  shall use the proceeds of such fee solely for purposes of

18  educating the public as to the rights of homeowners regarding

19  foreclosure proceedings.

20         Section 5.  Subsection (5) is added to section 49.08,

21  Florida Statutes, to read:

22         49.08  Notice of action, form.--On filing the sworn

23  statement, and otherwise complying with the foregoing

24  requirements, the plaintiff is entitled to have issued by the

25  clerk or judge, not later than 60 days after filing the sworn

26  statement, a notice of action which notice shall set forth:

27         (5)  Notice of a potential surplus and information

28  advising the defendant of the procedures to apply for the

29  surplus, in substantially the following form:

30  

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         "If you are the owner of real estate that is

 2         being foreclosed, there may be money owed to

 3         you after the sale. You may contact [insert

 4         contact information for clerk's office until

 5         hotline and website are set up] for information

 6         on what you need to do to get the funds. You do

 7         not need to hire an attorney or other

 8         representative to get this money."

 9         Section 6.  Subsection (8) is added to section 57.105,

10  Florida Statutes, to read:

11         57.105  Attorney's fee; sanctions for raising

12  unsupported claims or defenses; service of motions; damages

13  for delay of litigation.--

14         (8)  In any action under s. 45.0311(3) the mortgagor,

15  or original homeowner if not the same as the mortgagor, shall

16  be entitled to recover all fees and costs incurred in

17  connection with such action. The court shall determine

18  reasonable attorney's fees in such actions.

19         Section 7.  Section 501.2078, Florida Statutes, is

20  created to read:

21         501.2078  Violations involving individual homeowners

22  during the course of residential foreclosure proceedings;

23  civil penalties.--

24         (1)  As used in this section, the term:

25         (a)  "Residential foreclosure proceeding" means any

26  action in a circuit court of this state in which a party seeks

27  to foreclose on a mortgage and sell the residential property

28  covered by the mortgage.

29         (b)  "Homeowner" means any individual who is the owner

30  of the property subject to a residential foreclosure

31  proceeding.

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         (2)(a)  Any person who willfully uses, or has willfully

 2  used, a method, act, or practice in violation of this part,

 3  which method, act, or practice victimizes or attempts to

 4  victimize homeowners during the course of a residential

 5  foreclosure proceeding, and in committing such violation knew

 6  or should have known that such conduct was unfair or

 7  deceptive, is liable for a civil penalty of not more than

 8  $15,000 for each such violation.

 9         (b)  Any company or attorney desiring to contact a

10  homeowner to offer to help the homeowner collect any surplus

11  money or to help with a foreclosure by buying the homeowner's

12  house, lend the homeowner money, or take an assignment may not

13  contact the homeowner until at least 30 days after the

14  homeowner receives the notice provided in s. 48.184. Any such

15  contact before such 30-day period has elapsed constitutes a

16  violation of this part, subject to the penalty provided in

17  paragraph (a).

18         (3)  Any order of restitution or reimbursement based on

19  a violation of this part committed against a homeowner in a

20  residential foreclosure proceeding has priority over the

21  imposition of any civil penalty for such violation pursuant to

22  this section.

23         (4)  Civil penalties collected pursuant to this section

24  shall be deposited into the Legal Affairs Revolving Trust Fund

25  of the Department of Legal Affairs and allocated solely to the

26  Department of Legal Affairs for the purpose of preparing and

27  distributing consumer education materials, programs, and

28  seminars to benefit homeowners in residential foreclosure

29  proceedings or to further enforcement efforts.

30         Section 8.  Section 689.251, Florida Statutes, is

31  created to read:

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         689.251  Transfer of real estate subject to default.--

 2         (1)  Any document prepared by a purchaser of an

 3  interest in real property purporting to transfer such interest

 4  as described in s. 697.08(1) must disclose, in the instrument

 5  itself or in a separate writing executed by the seller and the

 6  purchaser with the formality of a deed and acknowledged by a

 7  notary public or civil notary of this state, the assessed

 8  value of the property, that the assessed value may be lower

 9  than the actual value of the property, the approximate amount

10  of any debt encumbering the property, and the approximate

11  amount of any equity in the property. The deed or assignment

12  shall conspicuously set forth any and all forms of

13  consideration paid for the rights to the property or the

14  assignment of the rights to any surplus funds.

15         (2)  If such document fails to comply with the

16  requirements of subsection (1), the seller may void the

17  transaction. If the seller voids the transaction, the seller

18  shall repay any consideration paid by the purchaser to the

19  seller, less, however, all costs incurred by the seller as a

20  result of the purchaser's failure to comply with subsection

21  (1), including attorney's fees and costs.

22         Section 9.  Subsection (3) is added to section 702.065,

23  Florida Statutes, to read:

24         702.065  Final judgment in uncontested proceedings

25  where deficiency judgment waived; attorney's fees when default

26  judgment entered.--

27         (3)  In a residential foreclosure proceeding, a court

28  or a clerk of the court may not enter a default or default

29  judgment against the mortgagor if the return of service does

30  not include evidence that the notice required by s. 48.184 was

31  served on the mortgagor.

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         Section 10.  Paragraph (a) of subsection (1) of section

 2  702.10, Florida Statutes, is amended to read:

 3         702.10  Order to show cause; entry of final judgment of

 4  foreclosure; payment during foreclosure.--

 5         (1)  After a complaint in a foreclosure proceeding has

 6  been filed, the mortgagee may request an order to show cause

 7  for the entry of final judgment and the court shall

 8  immediately review the complaint. If, upon examination of the

 9  complaint, the court finds that the complaint is verified and

10  alleges a cause of action to foreclose on real property, the

11  court shall promptly issue an order directed to the defendant

12  to show cause why a final judgment of foreclosure should not

13  be entered.

14         (a)  The order shall:

15         1.  Set the date and time for hearing on the order to

16  show cause. However, the date for the hearing may not be set

17  sooner than 20 days after the service of the order. When

18  service is obtained by publication, the date for the hearing

19  may not be set sooner than 30 days after the first

20  publication. The hearing must be held within 60 days after the

21  date of service. Failure to hold the hearing within such time

22  does not affect the validity of the order to show cause or the

23  jurisdiction of the court to issue subsequent orders.

24         2.  Direct the time within which service of the order

25  to show cause and the complaint must be made upon the

26  defendant.

27         3.  State that the filing of defenses by a motion or by

28  a verified or sworn answer at or before the hearing to show

29  cause constitutes cause for the court not to enter the

30  attached final judgment.

31  

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1         4.  State that the defendant has the right to file

 2  affidavits or other papers at the time of the hearing and may

 3  appear personally or by way of an attorney at the hearing.

 4         5.  State that, if the defendant files defenses by a

 5  motion, the hearing time may be used to hear the defendant's

 6  motion.

 7         6.  State that, if the defendant fails to appear at the

 8  hearing to show cause or fails to file defenses by a motion or

 9  by a verified or sworn answer or files an answer not

10  contesting the foreclosure, the defendant may be considered to

11  have waived the right to a hearing and in such case the court

12  may enter a final judgment of foreclosure ordering the clerk

13  of the court to conduct a foreclosure sale.

14         7.  State that if the mortgage provides for reasonable

15  attorney's fees and the requested attorney's fees do not

16  exceed 3 percent of the principal amount owed at the time of

17  filing the complaint, it is unnecessary for the court to hold

18  a hearing or adjudge the requested attorney's fees to be

19  reasonable.

20         8.  Attach the final judgment of foreclosure the court

21  will enter, if the defendant waives the right to be heard at

22  the hearing on the order to show cause.

23         9.  Require the mortgagee to serve a copy of the order

24  to show cause on the mortgagor in the following manner:

25         a.  If the mortgagor has been served with the complaint

26  and original process, service of the order may be made in the

27  manner provided in the Florida Rules of Civil Procedure.

28         b.  If the mortgagor has not been served with the

29  complaint and original process, the order to show cause,

30  together with the summons and a copy of the complaint, and in

31  the case of a residential foreclosure proceeding, the notice

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    Florida Senate - 2005                                  SB 2428
    32-1146A-05                                        See HB 1311




 1  required by s. 48.184, shall be served on the mortgagor in the

 2  same manner as provided by law for original process.

 3  

 4  Any final judgment of foreclosure entered under this

 5  subsection is for in rem relief only. Nothing in this

 6  subsection shall preclude the entry of a deficiency judgment

 7  where otherwise allowed by law.

 8         Section 11.  This act shall take effect July 1, 2005.

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