HB 65

1	A bill to be entitled
2	An act relating to residential foreclosure proceedings;
3	creating s. 45.0311, F.S.; providing a definition;
4	providing requirements and procedures for disbursement of
5	surplus funds from a judicial sale; authorizing a court to
6	determine reasonable attorney's fees for motions to
7	disburse surplus funds; providing a right of certain
8	parties to petition a court to set aside certain deeds or
9	assignments under certain circumstances; entitling certain
10	parties to recover all fees and costs incurred in certain
11	surplus funds proceedings; providing for the court to
12	determine reasonable attorney's fees in such proceedings;
13	creating s. 48.184, F.S.; specifying a required notice
14	form to be served with a summons and complaint in actions
15	to foreclose an interest in a mortgagor's primary
16	dwelling; requiring the notice to be included in the
17	service of process; requiring certain verification of
18	service; amending s. 48.21, F.S.; specifying an additional
19	notice requirement for return of service of process forms
20	made for foreclosures of a mortgagor's primary dwelling;
21	authorizing a clerk of court to collect a fee for attempts
22	of service of process; requiring the clerk of court to use
23	fee proceeds for certain public education purposes;
24	amending s. 49.08, F.S.; requiring certain notices of
25	action to contain an additional notice of potential
26	surplus and application procedures information; creating
27	s. 501.2078, F.S.; providing definitions; providing a
28	civil penalty for knowingly using unfair or deceptive
29	homeowner victimization methods, acts, or practices in
30	residential foreclosure proceedings; specifying a time
31	period during which a person may not contact a homeowner
32	for certain purposes; specifying higher priority of an
33	order of restitution or reimbursement over imposition of a
34	civil penalty; providing for deposit of civil penalties
35	into the Legal Affairs Revolving Trust Fund of the
36	Department of Legal Affairs; allocating such funds for
37	certain purposes; creating s. 689.251, F.S.; requiring
38	documents transferring a mortgagor's primary dwelling to
39	disclose certain information; authorizing a seller to void
40	a transaction under certain circumstances; requiring the
41	seller to repay certain amounts to a purchaser, minus
42	certain amounts, under such circumstances; amending s.
43	702.035, F.S.; providing that certain advertisements,
44	publications, or notices relating to foreclosure
45	proceedings must include the procedure for collecting
46	surplus funds or list a telephone number or website at
47	which the procedure will be explained; amending s.
48	702.065, F.S.; prohibiting a court or clerk of court from
49	entering a default or default judgment against a mortgagor
50	in a proceeding to foreclose a mortgagor's primary
51	dwelling if a return of service does not contain a
52	required notice; amending s. 702.10, F.S.; including a
53	reference to a required notice for proceedings to
54	foreclose a mortgagor's primary dwelling in certain orders
55	to show cause in final judgment of foreclosure entries;
56	providing an effective date.
57
58	Be It Enacted by the Legislature of the State of Florida:
59
60	Section 1.  Section 45.0311, Florida Statutes, is created
61	to read:
62	45.0311  Disbursement of surplus funds.--
63	(1)  As used in this subsection, the term "surplus funds"
64	means all funds existing after all valid liens have been paid.
65	Any person claiming a right to disbursement of proceeds from a
66	judicial sale, other than the original mortgagor, shall produce
67	a deed satisfying the requirements of s. 689.251, if applicable,
68	or an assignment of the proceeds from the original mortgagor, or
69	homeowner if not the original mortgagor, executed with the
70	formality of a deed and acknowledged and conspicuously including
71	the assessed value of the property, a disclosure that the
72	assessed value may be lower than the actual value of the
73	property, the approximate amount of any debt encumbering the
74	property, the approximate amount of any equity in the property,
75	and a statement that the assignor does not need an attorney or
76	other representative to recover the surplus funds. The deed or
77	assignment shall conspicuously set forth all forms of
78	consideration paid for the rights to the property or the
79	assignment of the rights to any surplus funds.
80	(2)  The court shall determine reasonable attorney's fees
81	charged for a motion to disburse surplus funds.
82	(3)  A party who has executed an assignment or deed that
83	does not conform to the requirements of this section or s.
84	689.251 has the right to petition the court presiding over the
85	foreclosure proceeding to set aside the nonconforming deed or
86	assignment. In any such proceeding in which the mortgagor, or
87	original homeowner if not the same as the mortgagor, is the
88	prevailing party, he or she is entitled to recover all fees and
89	costs incurred in connection with such proceeding. The court
90	shall determine reasonable attorney's fees in such proceedings.
91	Section 2.  Section 48.184, Florida Statutes, is created to
92	read:
93	48.184  Notice form for actions to foreclose an interest in
94	a mortgagor's primary dwelling.--In any action to foreclose an
95	interest in a mortgagor's primary dwelling, a notice, in
96	substantially the following form and printed on orange paper,
97	shall be served with the summons and complaint and shall be
98	included in the service of process. The return of service shall
99	verify that such notice was served with the summons and the
100	complaint:
101
102	(Caption of Action)
103	ATTENTION
104	TO ALL NAMED PARTIES LISTED
105	IN THIS FORECLOSURE LAWSUIT:
106
107	A FORECLOSURE ACTION HAS BEEN FILED AGAINST YOU FOR FAILURE TO
108	MAKE TIMELY MORTGAGE PAYMENTS ON YOUR RESIDENCE. IF A JUDGMENT
109	OF FORECLOSURE IS ENTERED AND YOUR PROPERTY IS SOLD AT PUBLIC
110	AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE THAT
111	BELONGS TO YOU AFTER PAYMENT OF LIENHOLDERS.
112
113	YOU MAY CLAIM THESE FUNDS YOURSELF. YOU ARE NOT REQUIRED TO HAVE
114	A LAWYER OR ANY OTHER REPRESENTATION AND YOU DO NOT HAVE TO
115	ASSIGN YOUR RIGHTS TO ANYONE ELSE IN ORDER FOR YOU TO CLAIM ANY
116	MONEY TO WHICH YOU ARE ENTITLED.
117
118	PLEASE CHECK WITH THE CLERK OF THE COURT, [INSERT INFORMATION
119	FOR APPLICABLE COURT] WITHIN TEN (10) DAYS AFTER THE SALE TO SEE
120	IF THERE IS ADDITIONAL MONEY FROM THE FORECLOSURE SALE THAT THE
121	CLERK HAS IN THE REGISTRY OF THE COURT.
122
123	IF THERE IS ADDITIONAL MONEY, YOU MAY ASK THE COURT TO INSTRUCT
124	THE CLERK TO GIVE YOU THE MONEY THAT BELONGS TO YOU.
125
126	IT IS POSSIBLE THAT YOU WILL BE CONTACTED BY COMPANIES OR
127	LAWYERS OFFERING TO HELP YOU COLLECT THIS MONEY OR OFFERING TO
128	HELP YOU WITH THE FORECLOSURE BY BUYING YOUR HOUSE, LENDING YOU
129	MONEY, OR TAKING AN ASSIGNMENT. THESE COMPANIES OR LAWYERS MAY
130	NOT CONTACT YOU UNTIL AFTER 30 DAYS AFTER YOU RECEIVED THIS
131	NOTICE. IF YOU WANT TO CHECK WHETHER THE PERSON OR COMPANY
132	CALLING YOU HAS A COMPLAINT HISTORY WITH THE STATE, YOU MAY CALL
133	[INSERT CONTACT INFORMATION, INCLUDING ANY HOT OR WEBSITE].
134	[PLEASE CALL THE ATTORNEY GENERAL'S HOTLINE AT 1-866-9-NO-SCAM
135	(966-7226) OR GO TO WWW.MYFLORIDALEGAL.COM.]
136
137	IF YOU DECIDE TO SELL YOUR HOME OR HIRE SOMEONE TO HELP YOU
138	CLAIM THE ADDITIONAL MONEY, YOU SHOULD READ VERY CAREFULLY ALL
139	PAPERS YOU ARE REQUIRED TO SIGN, ASK SOMEONE ELSE, PREFERABLY AN
140	ATTORNEY WHO IS NOT RELATED TO THE PERSON OFFERING TO HELP YOU,
141	TO MAKE SURE THAT YOU UNDERSTAND WHAT YOU ARE SIGNING AND THAT
142	YOU ARE NOT TRANSFERRING YOUR PROPERTY OR THE EQUITY IN YOUR
143	PROPERTY WITHOUT THE PROPER INFORMATION. IF YOU CANNOT AFFORD TO
144	PAY AN ATTORNEY, YOU MAY CONTACT (INSERT LOCAL OR NEAREST LEGAL
145	AID OFFICE AND TELEPHONE PHONE NUMBER) TO SEE IF YOU QUALIFY
146	FINANCIALLY FOR THEIR SERVICES. IF THEY CANNOT ASSIST YOU, THEY
147	MAY BE ABLE TO REFER YOU TO A LOCAL BAR REFERRAL AGENCY OR
148	SUGGEST OTHER OPTIONS. THEIR MAILING ADDRESS IS: (INSERT
149	ADDRESS). IF YOU CHOOSE TO CONTACT (NAME OF LOCAL OR NEAREST
150	LEGAL AID OFFICE) FOR ASSISTANCE, YOU SHOULD DO SO AS SOON AS
151	POSSIBLE AFTER RECEIPT OF THIS NOTICE.
152	Section 3.  Section 48.21, Florida Statutes, is amended to
153	read:
154	48.21  Return of execution of process.--Each person who
155	effects service of process shall note on a return-of-service
156	form attached thereto, the date and time when it comes to hand,
157	the date and time when it is served, the manner of service, the
158	name of the person on whom it was served and, if the person is
159	served in a representative capacity, the position occupied by
160	the person. A failure to state the foregoing facts invalidates
161	the service, but the return is amendable to state the truth at
162	any time on application to the court from which the process
163	issued. On amendment, service is as effective as if the return
164	had originally stated the omitted facts. A failure to state all
165	the facts in the return shall subject the person effecting
166	service to a fine not exceeding $10, in the court's discretion.
167	When service of process is made for foreclosure of an interest
168	in a mortgagor's primary dwelling, the return of service form
169	shall include a confirmation that the notice required by s.
170	48.184 is included in the service of process. The clerk of court
171	may collect a fee of $25 from any surplus funds remaining in the
172	court registry following a foreclosure sale for each attempt of
173	service upon the mortgagor. The fee may be collected after all
174	valid liens have been paid but before any surplus funds have
175	been distributed to a mortgagor. The clerk shall use the
176	proceeds of such fee solely for purposes of educating the public
177	as to the rights of homeowners regarding foreclosure
178	proceedings.
179	Section 4.  Subsection (5) is added to section 49.08,
180	Florida Statutes, to read:
181	49.08  Notice of action, form.--On filing the sworn
182	statement, and otherwise complying with the foregoing
183	requirements, the plaintiff is entitled to have issued by the
184	clerk or judge, not later than 60 days after filing the sworn
185	statement, a notice of action which notice shall set forth:
186	(5)  Notice of a potential surplus and information advising
187	the defendant of the procedures to apply for the surplus, in
188	substantially the following form:
189
190	If you are the owner of real estate that is being
191	foreclosed, there may be money owed to you after the
192	sale. You may contact [insert contact information for
193	clerk's office until hotline and website are set up]
194	for information on what you need to do to get the
195	funds. You do not need to hire an attorney or other
196	representative to get this money.
197
198	Section 5.  Section 501.2078, Florida Statutes, is created
199	to read:
200	501.2078  Violations involving individual homeowners during
201	the course of residential foreclosure proceedings; civil
202	penalties.--
203	(1)  As used in this section:
204	(a)  "Residential foreclosure proceeding" means any action
205	in a circuit court of this state in which a party seeks to
206	foreclose on a mortgage encumbering the mortgagor's primary
207	dwelling.
208	(b)  "Homeowner" means any individual who is the owner of
209	the property subject to a residential foreclosure proceeding.
210	(2)(a)  Any person who willfully uses, or has willfully
211	used, a method, act, or practice in violation of this part,
212	which method, act, or practice victimizes or attempts to
213	victimize homeowners during the course of a residential
214	foreclosure proceeding, and in committing such violation knew or
215	should have known that such conduct was unfair or deceptive, is
216	liable for a civil penalty of not more than $15,000 for each
217	such violation. The act of encumbering the dwelling subject to a
218	residential foreclosure proceeding with a substitute or
219	additional lien shall not constitute a violation of this
220	section.
221	(b)  Any person desiring to contact a homeowner to offer to
222	help the homeowner collect any surplus money or to help with a
223	foreclosure by buying the homeowner's house, lend the homeowner
224	money, or take an assignment may not contact the homeowner until
225	after 30 days after the homeowner receives the notice provided
226	in s. 48.184. Any such contact before such 30-day period has
227	elapsed constitutes a violation of this part, subject to the
228	penalty provided in paragraph (a).
229	(3)  Any order of restitution or reimbursement based on a
230	violation of this part committed against a homeowner in a
231	residential foreclosure proceeding has priority over the
232	imposition of any civil penalty for such violation pursuant to
233	this section.
234	(4)  Civil penalties collected pursuant to this section
235	shall be deposited into the Legal Affairs Revolving Trust Fund
236	of the Department of Legal Affairs and allocated solely to the
237	Department of Legal Affairs for the purpose of preparing and
238	distributing consumer education materials, programs, and
239	seminars to benefit homeowners in residential foreclosure
240	proceedings or to further enforcement efforts.
241	Section 6.  Section 689.251, Florida Statutes, is created
242	to read:
243	689.251  Transfer of mortgagor's primary dwelling subject
244	to default.--
245	(1)  Any document other than a deed in lieu of foreclosure
246	prepared by or on behalf of a purchaser of legal or equitable
247	title to a mortgagor's primary dwelling when the mortgagor is in
248	default of his or her obligations must disclose, in the
249	instrument itself or in a separate writing executed by the
250	seller and the purchaser with the formality of a deed and
251	acknowledged by a notary public or civil notary of this state,
252	the assessed value of the property, that the assessed value may
253	be lower than the actual value of the property, the approximate
254	amount of any debt encumbering the property, and the approximate
255	amount of any equity in the property. The deed or assignment
256	shall conspicuously set forth any and all forms of consideration
257	paid for the rights to the property or the assignment of the
258	rights to any surplus funds.
259	(2)  If such document fails to comply with the requirements
260	of subsection (1), the seller may void the transaction. If the
261	seller voids the transaction, the seller shall repay any
262	consideration paid by the purchaser to the seller, less,
263	however, all costs incurred by the seller as a result of the
264	purchaser's failure to comply with subsection (1), including
265	attorney's fees and costs.
266	Section 7.  Section 702.035, Florida Statutes, is amended
267	to read:
268	702.035  Legal notice concerning foreclosure proceedings;
269	procedure for collection of surplus funds.--Whenever a legal
270	advertisement, publication, or notice relating to a foreclosure
271	proceeding is required to be placed in a newspaper, it is the
272	responsibility of the petitioner or petitioner's attorney to
273	place such advertisement, publication, or notice. The
274	advertisement, publication, or notice shall be placed directly
275	by the attorney for the petitioner, by the petitioner if acting
276	pro se, or by the clerk of the court. The advertisement,
277	publication, or notice must state the procedure for collecting
278	surplus funds, if any, or list a telephone number or website at
279	which the procedure will be explained.
280	Section 8.  Subsection (3) is added to section 702.065,
281	Florida Statutes, to read:
282	702.065  Final judgment in uncontested proceedings where
283	deficiency judgment waived; attorney's fees when default
284	judgment entered.--
285	(3)  In a proceeding to foreclose a mortgage encumbering a
286	mortgagor's primary dwelling, a court or a clerk of the court
287	may not enter a default or default judgment against the
288	mortgagor if the return of service does not include evidence
289	that the notice required by s. 48.184 was served on the
290	mortgagor.
291	Section 9.  Paragraph (a) of subsection (1) of section
292	702.10, Florida Statutes, is amended to read:
293	702.10  Order to show cause; entry of final judgment of
294	foreclosure; payment during foreclosure.--
295	(1)  After a complaint in a foreclosure proceeding has been
296	filed, the mortgagee may request an order to show cause for the
297	entry of final judgment and the court shall immediately review
298	the complaint. If, upon examination of the complaint, the court
299	finds that the complaint is verified and alleges a cause of
300	action to foreclose on real property, the court shall promptly
301	issue an order directed to the defendant to show cause why a
302	final judgment of foreclosure should not be entered.
303	(a)  The order shall:
304	1.  Set the date and time for hearing on the order to show
305	cause. However, the date for the hearing may not be set sooner
306	than 20 days after the service of the order. When service is
307	obtained by publication, the date for the hearing may not be set
308	sooner than 30 days after the first publication. The hearing
309	must be held within 60 days after the date of service. Failure
310	to hold the hearing within such time does not affect the
311	validity of the order to show cause or the jurisdiction of the
312	court to issue subsequent orders.
313	2.  Direct the time within which service of the order to
314	show cause and the complaint must be made upon the defendant.
315	3.  State that the filing of defenses by a motion or by a
316	verified or sworn answer at or before the hearing to show cause
317	constitutes cause for the court not to enter the attached final
318	judgment.
319	4.  State that the defendant has the right to file
320	affidavits or other papers at the time of the hearing and may
321	appear personally or by way of an attorney at the hearing.
322	5.  State that, if the defendant files defenses by a
323	motion, the hearing time may be used to hear the defendant's
324	motion.
325	6.  State that, if the defendant fails to appear at the
326	hearing to show cause or fails to file defenses by a motion or
327	by a verified or sworn answer or files an answer not contesting
328	the foreclosure, the defendant may be considered to have waived
329	the right to a hearing and in such case the court may enter a
330	final judgment of foreclosure ordering the clerk of the court to
331	conduct a foreclosure sale.
332	7.  State that if the mortgage provides for reasonable
333	attorney's fees and the requested attorney's fees do not exceed
334	3 percent of the principal amount owed at the time of filing the
335	complaint, it is unnecessary for the court to hold a hearing or
336	adjudge the requested attorney's fees to be reasonable.
337	8.  Attach the final judgment of foreclosure the court will
338	enter, if the defendant waives the right to be heard at the
339	hearing on the order to show cause.
340	9.  Require the mortgagee to serve a copy of the order to
341	show cause on the mortgagor in the following manner:
342	a.  If the mortgagor has been served with the complaint and
343	original process, service of the order may be made in the manner
344	provided in the Florida Rules of Civil Procedure.
345	b.  If the mortgagor has not been served with the complaint
346	and original process, the order to show cause, together with the
347	summons and a copy of the complaint and, in the case of a
348	proceeding to foreclose a mortgagor's primary dwelling, the
349	notice required by s. 48.184, shall be served on the mortgagor
350	in the same manner as provided by law for original process.
351
352	Any final judgment of foreclosure entered under this subsection
353	is for in rem relief only. Nothing in this subsection shall
354	preclude the entry of a deficiency judgment where otherwise
355	allowed by law.
356	Section 10.  This act shall take effect July 1, 2006.

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