Senate Bill sb0166

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    Florida Senate - 2006                                   SB 166

    By Senator Campbell





    32-218-06                                               See HB

  1                      A bill to be entitled

  2         An act relating to residential foreclosure

  3         proceedings; creating s. 45.0311, F.S.;

  4         providing a definition; providing requirements

  5         and procedures for disbursement of surplus

  6         funds from a judicial sale; authorizing a court

  7         to determine reasonable attorney's fees for

  8         motions to disburse surplus funds; providing a

  9         right of certain parties to petition a court to

10         set aside certain deeds or assignments under

11         certain circumstances; entitling certain

12         parties to recover all fees and costs incurred

13         in certain surplus funds proceedings; providing

14         for the court to determine reasonable

15         attorney's fees in such proceedings; creating

16         s. 48.184, F.S.; specifying a required notice

17         form to be served with a summons and complaint

18         in actions to foreclose an interest in a

19         mortgagor's primary dwelling; requiring the

20         notice to be included in the service of

21         process; requiring certain verification of

22         service; amending s. 48.21, F.S.; specifying an

23         additional notice requirement for return of

24         service of process forms made for foreclosures

25         of a mortgagor's primary dwelling; authorizing

26         a clerk of court to collect a fee for attempts

27         of service of process; requiring the clerk of

28         court to use fee proceeds for certain public

29         education purposes; amending s. 49.08, F.S.;

30         requiring certain notices of action to contain

31         an additional notice of potential surplus and

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1         application procedures information; creating s.

 2         501.2078, F.S.; providing definitions;

 3         providing a civil penalty for knowingly using

 4         unfair or deceptive homeowner victimization

 5         methods, acts, or practices in residential

 6         foreclosure proceedings; specifying a time

 7         period during which a person may not contact a

 8         homeowner for certain purposes; specifying

 9         higher priority of an order of restitution or

10         reimbursement over imposition of a civil

11         penalty; providing for deposit of civil

12         penalties into the Legal Affairs Revolving

13         Trust Fund of the Department of Legal Affairs;

14         allocating such funds for certain purposes;

15         creating s. 689.251, F.S.; requiring documents

16         transferring a mortgagor's primary dwelling to

17         disclose certain information; authorizing a

18         seller to void a transaction under certain

19         circumstances; requiring the seller to repay

20         certain amounts to a purchaser, minus certain

21         amounts, under such circumstances; amending s.

22         702.035, F.S.; providing that certain

23         advertisements, publications, or notices

24         relating to foreclosure proceedings must

25         include the procedure for collecting surplus

26         funds or list a telephone number or website at

27         which the procedure will be explained; amending

28         s. 702.065, F.S.; prohibiting a court or clerk

29         of court from entering a default or default

30         judgment against a mortgagor in a proceeding to

31         foreclose a mortgagor's primary dwelling if a

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1         return of service does not contain a required

 2         notice; amending s. 702.10, F.S.; including a

 3         reference to a required notice for proceedings

 4         to foreclose a mortgagor's primary dwelling in

 5         certain orders to show cause in final judgment

 6         of foreclosure entries; providing an effective

 7         date.

 8  

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

10  

11         Section 1.  Section 45.0311, Florida Statutes, is

12  created to read:

13         45.0311  Disbursement of surplus funds.--

14         (1)  As used in this subsection, the term "surplus

15  funds" means all funds existing after all valid liens have

16  been paid. Any person claiming a right to disbursement of

17  proceeds from a judicial sale, other than the original

18  mortgagor, shall produce a deed satisfying the requirements of

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

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

21  mortgagor, executed with the formality of a deed and

22  acknowledged and conspicuously including the assessed value of

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

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

25  amount of any debt encumbering the property, the approximate

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

27  assignor does not need an attorney or other representative to

28  recover the surplus funds. The deed or assignment shall

29  conspicuously set forth all forms of consideration paid for

30  the rights to the property or the assignment of the rights to

31  any surplus funds.

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




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

 2  fees charged for a motion to disburse surplus funds.

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

 4  that does not conform to the requirements of this section or

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

 6  the foreclosure proceeding to set aside the nonconforming deed

 7  or assignment. In any such proceeding in which the mortgagor,

 8  or original homeowner if not the same as the mortgagor, is the

 9  prevailing party, he or she is entitled to recover all fees

10  and costs incurred in connection with such proceeding. The

11  court shall determine reasonable attorney's fees in such

12  proceedings.

13         Section 2.  Section 48.184, Florida Statutes, is

14  created to read:

15         48.184  Notice form for actions to foreclose an

16  interest in a mortgagor's primary dwelling.--In any action to

17  foreclose an interest in a mortgagor's primary dwelling, a

18  notice, in substantially the following form and printed on

19  orange paper, shall be served with the summons and complaint

20  and shall be included in the service of process. The return of

21  service shall verify that such notice was served with the

22  summons and the complaint:

23  

24                       (Caption of Action)

25                            ATTENTION

26                   TO ALL NAMED PARTIES LISTED

27                   IN THIS FORECLOSURE LAWSUIT:

28  

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

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

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

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




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

 2  BELONGS TO YOU AFTER PAYMENT OF LIENHOLDERS.

 3  

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

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

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

 7  ANY MONEY TO WHICH YOU ARE ENTITLED.

 8  

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

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

11  SEE IF THERE IS ADDITIONAL MONEY FROM THE FORECLOSURE SALE

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

13  

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

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

16  

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

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

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

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

21  MAY NOT CONTACT YOU UNTIL AFTER 30 DAYS AFTER YOU RECEIVED

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

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

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

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

26  1-866-9-NO-SCAM (966-7226) OR GO TO WWW.MYFLORIDALEGAL.COM.]

27  

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

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

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

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

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




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

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

 3  YOUR PROPERTY WITHOUT THE PROPER INFORMATION. IF YOU CANNOT

 4  AFFORD TO PAY AN ATTORNEY, YOU MAY CONTACT (INSERT LOCAL OR

 5  NEAREST LEGAL AID OFFICE AND TELEPHONE PHONE NUMBER) TO SEE IF

 6  YOU QUALIFY FINANCIALLY FOR THEIR SERVICES. IF THEY CANNOT

 7  ASSIST YOU, THEY MAY BE ABLE TO REFER YOU TO A LOCAL BAR

 8  REFERRAL AGENCY OR SUGGEST OTHER OPTIONS. THEIR MAILING

 9  ADDRESS IS: (INSERT ADDRESS). IF YOU CHOOSE TO CONTACT (NAME

10  OF LOCAL OR NEAREST LEGAL AID OFFICE) FOR ASSISTANCE, YOU

11  SHOULD DO SO AS SOON AS POSSIBLE AFTER RECEIPT OF THIS NOTICE.

12         Section 3.  Section 48.21, Florida Statutes, is amended

13  to read:

14         48.21  Return of execution of process.--Each person who

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

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

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

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

19  the person is served in a representative capacity, the

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

21  foregoing facts invalidates the service, but the return is

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

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

24  as effective as if the return had originally stated the

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

26  shall subject the person effecting service to a fine not

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

28  process is made for foreclosure of an interest in a

29  mortgagor's primary dwelling, the return of service form shall

30  include a confirmation that the notice required by s. 48.184

31  is included in the service of process. The clerk of court may

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1  collect a fee of $25 from any surplus funds remaining in the

 2  court registry following a foreclosure sale for each attempt

 3  of service upon the mortgagor. The fee may be collected after

 4  all valid liens have been paid but before any surplus funds

 5  have been distributed to a mortgagor. The clerk shall use the

 6  proceeds of such fee solely for purposes of educating the

 7  public as to the rights of homeowners regarding foreclosure

 8  proceedings.

 9         Section 4.  Subsection (5) is added to section 49.08,

10  Florida Statutes, to read:

11         49.08  Notice of action, form.--On filing the sworn

12  statement, and otherwise complying with the foregoing

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

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

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

16         (5)  Notice of a potential surplus and information

17  advising the defendant of the procedures to apply for the

18  surplus, in substantially the following form:

19  

20  If you are the owner of real estate that is being foreclosed,

21  there may be money owed to you after the sale. You may contact

22  [insert contact information for clerk's office until hotline

23  and website are set up] for information on what you need to do

24  to get the funds. You do not need to hire an attorney or other

25  representative to get this money.

26         Section 5.  Section 501.2078, Florida Statutes, is

27  created to read:

28         501.2078  Violations involving individual homeowners

29  during the course of residential foreclosure proceedings;

30  civil penalties.--

31         (1)  As used in this section:

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1         (a)  "Residential foreclosure proceeding" means any

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

 3  to foreclose on a mortgage encumbering the mortgagor's primary

 4  dwelling.

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

 6  of the property subject to a residential foreclosure

 7  proceeding.

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

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

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

11  victimize homeowners during the course of a residential

12  foreclosure proceeding, and in committing such violation knew

13  or should have known that such conduct was unfair or

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

15  $15,000 for each such violation. The act of encumbering the

16  dwelling subject to a residential foreclosure proceeding with

17  a substitute or additional lien shall not constitute a

18  violation of this section.

19         (b)  Any person desiring to contact a homeowner to

20  offer to help the homeowner collect any surplus money or to

21  help with a foreclosure by buying the homeowner's house, lend

22  the homeowner money, or take an assignment may not contact the

23  homeowner until after 30 days after the homeowner receives the

24  notice provided in s. 48.184. Any such contact before such

25  30-day period has elapsed constitutes a violation of this

26  part, subject to the penalty provided in paragraph (a).

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

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

29  residential foreclosure proceeding has priority over the

30  imposition of any civil penalty for such violation pursuant to

31  this section.

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1         (4)  Civil penalties collected pursuant to this section

 2  shall be deposited into the Legal Affairs Revolving Trust Fund

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

 4  Department of Legal Affairs for the purpose of preparing and

 5  distributing consumer education materials, programs, and

 6  seminars to benefit homeowners in residential foreclosure

 7  proceedings or to further enforcement efforts.

 8         Section 6.  Section 689.251, Florida Statutes, is

 9  created to read:

10         689.251  Transfer of mortgagor's primary dwelling

11  subject to default.--

12         (1)  Any document other than a deed in lieu of

13  foreclosure prepared by or on behalf of a purchaser of legal

14  or equitable title to a mortgagor's primary dwelling when the

15  mortgagor is in default of his or her obligations must

16  disclose, in the instrument itself or in a separate writing

17  executed by the seller and the purchaser with the formality of

18  a deed and acknowledged by a notary public or civil notary of

19  this state, the assessed value of the property, that the

20  assessed value may be lower than the actual value of the

21  property, the approximate amount of any debt encumbering the

22  property, and the approximate amount of any equity in the

23  property. The deed or assignment shall conspicuously set forth

24  any and all forms of consideration paid for the rights to the

25  property or the assignment of the rights to any surplus funds.

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

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

28  transaction. If the seller voids the transaction, the seller

29  shall repay any consideration paid by the purchaser to the

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

31  

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




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

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

 3         Section 7.  Section 702.035, Florida Statutes, is

 4  amended to read:

 5         702.035  Legal notice concerning foreclosure

 6  proceedings; procedure for collection of surplus

 7  funds.--Whenever a legal advertisement, publication, or notice

 8  relating to a foreclosure proceeding is required to be placed

 9  in a newspaper, it is the responsibility of the petitioner or

10  petitioner's attorney to place such advertisement,

11  publication, or notice. The advertisement, publication, or

12  notice shall be placed directly by the attorney for the

13  petitioner, by the petitioner if acting pro se, or by the

14  clerk of the court. The advertisement, publication, or notice

15  must state the procedure for collecting surplus funds, if any,

16  or list a telephone number or website at which the procedure

17  will be explained.

18         Section 8.  Subsection (3) is added to section 702.065,

19  Florida Statutes, to read:

20         702.065  Final judgment in uncontested proceedings

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

22  judgment entered.--

23         (3)  In a proceeding to foreclose a mortgage

24  encumbering a mortgagor's primary dwelling, a court or a clerk

25  of the court may not enter a default or default judgment

26  against the mortgagor if the return of service does not

27  include evidence that the notice required by s. 48.184 was

28  served on the mortgagor.

29         Section 9.  Paragraph (a) of subsection (1) of section

30  702.10, Florida Statutes, is amended to read:

31  

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1         702.10  Order to show cause; entry of final judgment of

 2  foreclosure; payment during foreclosure.--

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

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

 5  for the entry of final judgment and the court shall

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

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

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

 9  court shall promptly issue an order directed to the defendant

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

11  be entered.

12         (a)  The order shall:

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

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

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

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

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

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

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

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

21  jurisdiction of the court to issue subsequent orders.

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

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

24  defendant.

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

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

27  cause constitutes cause for the court not to enter the

28  attached final judgment.

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

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

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

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




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

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

 3  motion.

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

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

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

 7  contesting the foreclosure, the defendant may be considered to

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

 9  may enter a final judgment of foreclosure ordering the clerk

10  of the court to conduct a foreclosure sale.

11         7.  State that if the mortgage provides for reasonable

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

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

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

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

16  reasonable.

17         8.  Attach the final judgment of foreclosure the court

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

19  the hearing on the order to show cause.

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

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

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

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

24  manner provided in the Florida Rules of Civil Procedure.

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

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

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

28  the case of a proceeding to foreclose a mortgagor's primary

29  dwelling, the notice required by s. 48.184, shall be served on

30  the mortgagor in the same manner as provided by law for

31  original process.

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    Florida Senate - 2006                                   SB 166
    32-218-06                                               See HB




 1  

 2  Any final judgment of foreclosure entered under this

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

 4  subsection shall preclude the entry of a deficiency judgment

 5  where otherwise allowed by law.

 6         Section 10.  This act shall take effect July 1, 2006.

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