| 1 | A bill to be entitled |
| 2 | An act relating to homestead property foreclosure actions; |
| 3 | providing a short title; specifying application to |
| 4 | homestead property; providing procedural requirements and |
| 5 | limitations for plaintiffs, defendants, and courts in |
| 6 | certain foreclosure actions; specifying document |
| 7 | production requirements; requiring mediation; specifying |
| 8 | settlement negotiation requirements; providing criteria |
| 9 | for commercial reasonableness of renegotiated loans; |
| 10 | requiring the Department of Business and Professional |
| 11 | Regulation to adopt rules relating to appraisal methods; |
| 12 | providing for forbearance liens under certain |
| 13 | circumstances; providing lien limitations; providing for |
| 14 | satisfaction of such liens; requiring the Supreme Court to |
| 15 | determine certain forms; specifying application to certain |
| 16 | foreclosure actions; providing for future repeal; |
| 17 | providing an effective date. |
| 18 |
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| 19 | Be It Enacted by the Legislature of the State of Florida: |
| 20 |
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| 21 | Section 1. (1) This act may be cited as the "Foreclosure |
| 22 | Bill of Rights." |
| 23 | (2) This act shall apply exclusively to actions to |
| 24 | foreclose a mortgage on real estate used and owned as a |
| 25 | homestead as defined in s. 196.012, Florida Statutes. |
| 26 | (3) In any action to foreclose a mortgage on homestead |
| 27 | property, a defendant may invoke the protections of this section |
| 28 | by filing and serving a notice to invoke the Foreclosure Bill of |
| 29 | Rights, which shall include a sworn statement that the property |
| 30 | in foreclosure is the defendant's homestead property. The form |
| 31 | for a notice to invoke shall be provided to the defendant, |
| 32 | together with the summons and complaint, with the original |
| 33 | service of process for the foreclosure action. The Supreme Court |
| 34 | shall determine the form of the notice to invoke. |
| 35 | (4) After the protections of this section have been |
| 36 | invoked by a defendant, a plaintiff is not entitled to a final |
| 37 | judgment against that defendant until all of the requirements of |
| 38 | this section have been satisfied. |
| 39 | (5) If a default is entered against a defendant, the |
| 40 | defendant is not entitled to the protections of this section |
| 41 | until the default is set aside. |
| 42 | (6)(a) Within 45 days after the filing and service of the |
| 43 | notice to invoke, the plaintiffs shall provide for a new |
| 44 | appraisal of the property in foreclosure. Such appraisal shall |
| 45 | consider ordinary transactions, short sales, and foreclosure |
| 46 | sales of similarly situated properties within a reasonable |
| 47 | surrounding area in determining the actual current market value |
| 48 | of the property. The Department of Business and Professional |
| 49 | Regulation shall adopt rules necessary to develop appraisal |
| 50 | methods that accurately determine the actual current market |
| 51 | value of the property. |
| 52 | (b) Within 60 days after filing the notice to invoke, each |
| 53 | plaintiff shall provide to the defendant the results of all |
| 54 | appraisals conducted pursuant to paragraph (a), together with |
| 55 | true copies of all closing documents relating to the mortgage |
| 56 | under foreclosure, including, but not limited to: |
| 57 | 1. Any loan application used to determine the defendant's |
| 58 | creditworthiness. |
| 59 | 2. Any settlement statement. |
| 60 | 3. The mortgage being foreclosed. |
| 61 | 4. Any promissory note related to the mortgage. |
| 62 | 5. Any assignments of the mortgage or note. |
| 63 | (c)1. If any closing document is not in the actual |
| 64 | possession of the plaintiff, the plaintiff, in order to comply |
| 65 | with paragraph (b), must make reasonable efforts to obtain the |
| 66 | documents and, if the documents cannot be obtained, serve on the |
| 67 | defendant an affidavit detailing the efforts made to obtain the |
| 68 | documents, the person or entity in whose possession the |
| 69 | documents are believed to be, and the last known address, |
| 70 | location, and telephone number of the person or entity in whose |
| 71 | possession the documents are believed to be. The plaintiff shall |
| 72 | file a certificate of compliance with the requirements of this |
| 73 | paragraph. The Supreme Court shall determine the form of the |
| 74 | certificate. |
| 75 | 2. Within 30 days after the filing and serving of the |
| 76 | certificate of compliance under subparagraph 1., the defendant |
| 77 | shall provide to the plaintiff a sworn financial affidavit, a |
| 78 | copy of the defendant's tax returns for the immediately |
| 79 | preceding 3 years, and a copy of the defendant's bank statements |
| 80 | for the immediately preceding 3 months. Upon motion, the court |
| 81 | may issue any protective orders deemed to be necessary and, in |
| 82 | the interest of justice, to protect the privacy rights of the |
| 83 | defendant. The Supreme Court shall determine the form of the |
| 84 | financial affidavit. |
| 85 | (7) By agreement of the parties or with prior court |
| 86 | approval, including by administrative order, service of any |
| 87 | documents under this section may be made in electronic format or |
| 88 | upon such other terms as may be agreed to or ordered in the |
| 89 | interests of justice and judicial economy. |
| 90 | (8) All actions to foreclose a mortgage shall be subject |
| 91 | to court-ordered mediation pursuant to s. 44.102, Florida |
| 92 | Statutes. The mediation shall be coordinated and scheduled by |
| 93 | the parties no sooner than 60 days after completion of all other |
| 94 | requirements of this section. |
| 95 | (9) The plaintiffs shall make a good faith effort to |
| 96 | negotiate a settlement, which shall include efforts to |
| 97 | renegotiate the loan at a principal equivalent to the actual |
| 98 | market value as determined under paragraph (6)(a). In |
| 99 | determining good faith, the court shall consider: |
| 100 | (a) Whether a renegotiated loan is commercially |
| 101 | reasonable. |
| 102 | (b) Whether the plaintiff has made any offer. |
| 103 | (c) The reasonableness of any offer made. |
| 104 | (d) Any other factor the court deems relevant. |
| 105 | (10) In determining the commercial reasonableness of a |
| 106 | renegotiated loan, the court shall consider the following |
| 107 | factors: |
| 108 | (a) The income, savings, and other assets of the |
| 109 | defendants. |
| 110 | (b) The reasonableness of the terms of the original loan, |
| 111 | including whether issues of fraud are presented in the |
| 112 | negotiation and closing of the original loan. |
| 113 | (c) Whether the loan term can be extended. |
| 114 | (d) Whether the interest rate can be reduced. |
| 115 | (e) Whether the repayment terms can be changed. |
| 116 | (f) The creditworthiness of the defendants, other than as |
| 117 | affected by the foreclosure and any related nonpayments. |
| 118 | (11)(a) If the loan is refinanced with a reduced principal |
| 119 | at the property's actual market value, the plaintiff shall be |
| 120 | entitled to a forbearance lien on the property for an amount |
| 121 | equal to the difference between the original principal and the |
| 122 | new principal. The forbearance lien shall not grant any other |
| 123 | right to foreclose on the property or otherwise collect the |
| 124 | moneys other than as provided in this act. |
| 125 | (b) The forbearance lien shall be recorded in the public |
| 126 | records of the county in which the property is located. The |
| 127 | Supreme Court shall determine the form of the forbearance lien. |
| 128 | (c)1. Upon the first resale, refinance, or transfer by |
| 129 | operation of law or otherwise, the beneficiary of the |
| 130 | forbearance lien shall be entitled to any proceeds of the |
| 131 | resale, refinance, or transfer in excess of the renegotiated |
| 132 | loan balance to be applied to satisfaction of the lien. |
| 133 | 2. Upon any subsequent resale, refinance, or transfer by |
| 134 | operation of law or otherwise, the beneficiary of the |
| 135 | forbearance lien shall have the right to foreclose the lien. |
| 136 | (12) The clerks of the circuit courts shall provide forms, |
| 137 | together with instructions in English and Spanish, to pro se |
| 138 | defendants seeking assistance in any foreclosure action. Such |
| 139 | forms shall be provided at no cost to the defendants. The |
| 140 | Supreme Court shall determine the content of the forms and |
| 141 | instructions to be provided. |
| 142 | (13) This act applies to foreclosure actions initiated on |
| 143 | or after July 1, 2009, and to all active foreclosure actions in |
| 144 | which a final judgment has not been rendered as of July 1, 2009. |
| 145 | (14) This act expires July 1, 2014. |
| 146 | Section 2. This act shall take effect July 1, 2009. |