HB 653

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


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