HB 581

1	A bill to be entitled
2	An act relating to mortgage foreclosures; amending s.
3	95.281, F.S.; specifying a limited statute of limitations
4	for certain deficiency judgments; requiring claims for
5	deficiency connected with a foreclosure action to be filed
6	within a time certain after a foreclosure sale; providing
7	an exception for participation in the Florida Mortgage
8	Foreclosure Diversion Program; providing exception
9	criteria; creating s. 95.285, F.S.; establishing the
10	Florida Mortgage Foreclosure Diversion Program;
11	authorizing mortgagees to obtain an extension of the
12	statute of limitations on mortgage deficiencies under
13	certain circumstances; authorizing mortgagees to offer
14	mortgagors opportunities to participate in the program;
15	providing mortgagee and mortgagor program participation
16	criteria, procedures, and requirements; specifying duties
17	and limitations of mortgagors and mortgagees under the
18	program; providing for continued participation in the
19	program after certain deadlines; specifying participation
20	in the program as consent to additional rights and
21	privileges for mortgagees and voluntary waiver of rights
22	by mortgagors; providing an effective date.
23
24	Be It Enacted by the Legislature of the State of Florida:
25
26	Section 1.  Subsection (1) of section 95.281, Florida
27	Statutes, is amended, subsection (5) is renumbered as subsection
28	(6), and a new subsection (5) is added to that section, to read:
29	95.281  Limitations; instruments encumbering real
30	property.-
31	(1)  The lien of a mortgage or other instrument encumbering
32	real property, herein called mortgage, except those specified in
33	subsection (6) (5), shall terminate after the expiration of the
34	following periods of time:
35	(a)  If the final maturity of an obligation secured by a
36	mortgage is ascertainable from the record of it, 5 years after
37	the date of maturity.
38	(b)  If the final maturity of an obligation secured by a
39	mortgage is not ascertainable from the record of it, 20 years
40	after the date of the mortgage, unless prior to such time the
41	holder of the mortgage:
42	1.  Rerecords the mortgage and includes a copy of the
43	obligation secured by the mortgage so that the final maturity is
44	ascertainable; or
45	2.  Records a copy of the obligation secured by the
46	mortgage from which copy the final maturity is ascertainable and
47	by affidavit identifies the mortgage by its official recording
48	data and certifies that the obligation is the obligation
49	described in the mortgage;
50
51	in which case the lien shall terminate 5 years after the date of
52	maturity.
53	(c)  For all obligations, including taxes, paid by the
54	mortgagee, 5 years from the date of payment. A mortgagee shall
55	have no right of subrogation to the lien of the state for taxes
56	paid by the mortgagee to protect the security of his or her
57	mortgage unless he or she obtains an assignment from the state
58	of the tax certificate. Redemption of the tax certificate shall
59	be insufficient for subrogation.
60	(5)(a)  All claims for a deficiency in connection with a
61	deficiency judgment entered on or after October 1, 2010, are
62	subject to a 6-month statute of limitations beginning upon entry
63	of the judgment and all claims for a deficiency in connection
64	with a foreclosure action in accordance with chapter 702 must be
65	filed within 6 months after the foreclosure sale date or such
66	claims are void as a matter of law, subject to the exception
67	provided in paragraph (b).
68	(b)  Any mortgagee who in good faith participates in the
69	foreclosure diversion program under s. 95.285, shall have 5
70	years from:
71	1.  The date of a foreclosure sale to pursue a deficiency
72	judgment with respect to any deficiency arising out of a
73	foreclosure action pursuant to chapter 702; or
74	2.  The date of a partial payoff of a mortgage loan to
75	pursue a deficiency which arises in connection with and is
76	incident to a short-sale payoff of such mortgage loan, and in
77	connection with such short-sale payoff the mortgagee releases
78	and satisfies its mortgage lien on the property.
79	(6)(5)  This section does not apply to mortgages or deeds
80	of trust executed by any railroad or other public utility
81	corporation or by any receiver or trustee of them or to liens or
82	notices of liens under chapter 713.
83	Section 2.  Section 95.285, Florida Statutes, is created to
84	read:
85	95.285  Florida Mortgage Foreclosure Diversion Program.-
86	(1)  A mortgagee may obtain an extension of the statute of
87	limitations on mortgage deficiencies by consenting to
88	participate in the Florida Mortgage Foreclosure Diversion
89	Program as provided in this section.
90	(a)  Prior to filing any action for foreclosure or in the
91	case of a pending foreclosure action, at any time prior to the
92	entry of the foreclosure judgment, the mortgagee may offer any
93	mortgagor the opportunity to participate in the program.
94	(b)  Within 60 days after declaring a mortgage loan to be
95	in default, the mortgagee shall initiate participation in the
96	program by delivering to the mortgagor a written diversion offer
97	to voluntarily participate in the program, together with
98	information describing the terms of participation as follows:
99	1.  A statement that clearly describes the program in which
100	the mortgagee shall identify and be bound to a preapproved
101	short-sale price, as well as a specified partial mortgage loan
102	payoff, which shall be binding upon the mortgagor for a period
103	of 1 year after the date of entering the program, and that, in
104	exchange for this commitment by the mortgagee, the mortgagor
105	shall voluntarily extend the statute of limitations from 6
106	months to 5 years and further agree to waive the right of
107	discharge of a deficiency judgment, if any, in any bankruptcy
108	proceeding voluntarily filed by the mortgagor within 24 months
109	after the final judgment date or date of closing on a short
110	sale.
111	2.  Provide the name, current telephone numbers, and e-mail
112	and physical mailing addresses of such employees, agents, or
113	delegates of the mortgagee possessing the authority to
114	negotiate, authorize, and bind the mortgagor to the terms and
115	requirements embodied in the program and to release and satisfy
116	any mortgage lien.
117	(c)  If a mortgagee submits a diversion offer to a
118	mortgagor, the mortgagor shall have 45 days after receiving the
119	diversion offer to accept such offer in writing and, as a
120	condition precedent to participation in the program, provide to
121	the mortgagee the following:
122	1.  Documentation evidencing that the mortgagor has
123	retained an attorney in this state to assist the mortgagor with
124	completing the program documentation requirements.
125	2.  Documentation evidencing that the mortgagor has
126	retained a real estate broker licensed in this state to assist
127	the mortgagor with selling the property at the short-sale price,
128	including, but not limited to, providing a copy of the listing
129	agreement between the real estate broker and the mortgagor.
130	3.  A financial hardship affidavit, consisting of the
131	mortgagor's assets, owned individually or jointly or held for
132	the benefit of the mortgagor, liabilities, income, and living
133	expenses, and such affidavit shall be signed under penalty of
134	perjury and acknowledged before a notary public.
135	4.  An estimated HUD-1 Settlement Statement, which sets
136	forth the following:
137	a.  The sales price the mortgagor proposes to sell the
138	property.
139	b.  Any outstanding monetary encumbrances or liens that are
140	customarily reflected on the settlement statement, including,
141	but not limited to, any condominium or homeowners' association
142	fees and assessments, code enforcement liens, construction
143	liens, liens for outstanding real estate taxes or similar liens,
144	and estoppel fees. Reliance in good faith by a settlement agent
145	on the statements of a mortgagor shall not subject the
146	settlement agent to liability.
147	c.  The amount that the mortgagor proposes as the payoff
148	amount of any outstanding mortgage encumbering the property.
149	5.  A title commitment or opinion concerning title from an
150	attorney licensed in this state that indicates all requirements
151	to convey marketable title to a third party.
152	6.  Tax returns and financial statements, including, but
153	not limited to, any statement concerning bank accounts of any
154	nature or any account that contains securities or other similar
155	investments, together with such additional financial
156	documentation as the mortgagee may reasonably request.
157	(d)  The mortgagor shall update its financial information
158	when reasonably requested by the mortgagee or when the mortgagor
159	experiences a material change in circumstances. In no event
160	shall the mortgagor be required to provide updated financial
161	documentation more frequently than once every 30 days, except as
162	authorized by this section.
163	(2)  Upon receipt of the mortgagor's acceptance package,
164	the mortgagee shall refrain from all collection or foreclosure
165	activity for a suspension period consisting of a minimum of 1
166	year after the date of acceptance or as otherwise agreed between
167	the mortgagee and mortgagor.
168	(3)  Within 30 days after the mortgagor's acceptance of the
169	diversion offer, the mortgagee shall provide the mortgagor the
170	amount of a preapproved price or short-sale price and the
171	partial payoff amount of the mortgage payoff the mortgagee will
172	accept to release and satisfy its mortgage or liens encumbering
173	the property.
174	(a)  In no event shall the short-sale price be greater than
175	the current appraised value of the property or the outstanding
176	balance of the mortgage loan, whichever is less. The mortgagee
177	shall have the option to update the short-sale price and the
178	partial payoff amount the mortgagee is willing to accept based
179	upon market conditions, not more frequently than once every 6
180	months. The mortgagee shall promptly deliver to the mortgagor
181	the good faith documentation that supports its proposed short-
182	sale price, including any updates to the short-sale price. Good
183	faith documentation shall include, but not be limited to, a
184	current appraisal by an appraiser licensed in this state who is
185	located in the county in which the property is located.
186	(b)  The partial payoff amount shall be ratably reduced by
187	any condominium or homeowners' association fees and assessments
188	and property taxes that accrue or are recalculated after the
189	date of the diversion offer. However, in no event shall the
190	mortgagee be required to consent to release any lien when the
191	aggregate amount of condominium or homeowners' association fees
192	and assessments exceeds the amounts for which the mortgagee
193	would be liable as set forth in s. 718.116 or s. 720.3085, as
194	applicable.
195	(4)  Except in the case where aggregate condominium or
196	homeowners' association fees and assessments exceed the amounts
197	authorized by chapter 718 or chapter 720, the mortgagee shall,
198	within 15 days after receiving from the mortgagor a copy of any
199	bona fide written contract setting forth a sales price equal to
200	or in excess of the mortgagee's approved short-sale price or,
201	alternatively, a payoff amount to the mortgagee equal to or in
202	excess of the partial payoff amount, deliver to the mortgagor a
203	final payoff letter confirming the short payoff amount and
204	setting forth the amount of a deficiency, if any, the mortgagee
205	claims is still due and owed by the mortgagor. The failure of
206	the mortgagee to provide the final payoff letter within the 15-
207	day period shall not prevent the mortgagor from proceeding with
208	closing on and transferring the property and shall relieve the
209	mortgagor of any obligation to the mortgagee for a deficiency
210	judgment or any unpaid portion of the mortgage loan.
211	(5)  The mortgagor and mortgagee must consent in writing to
212	the following as conditions to participation in the program:
213	(a)  The mortgagor agrees to maintain the property in good
214	condition pending the short sale or foreclosure of the property
215	and to commit no waste on the property.
216	(b)  The mortgagor agrees to waive any right to discharge a
217	deficiency judgment or debt owed to the mortgagee in bankruptcy
218	for a period of 24 months after date of the short-sale closing
219	or foreclosure sale.
220	(c)  The mortgagor waives any rights concerning exemption
221	from garnishment.
222	(6)  The mortgagee is under no obligation to provide a
223	final payoff letter or release its mortgage lien for any offer
224	that is less than its stated short-sale price or that results in
225	a mortgage loan payoff amount less than partial payoff amount.
226	Nothing in this section prevents a mortgagee from accepting less
227	than its stated short-sale offer.
228	(7)  Upon mutual written consent of the mortgagee and the
229	mortgagor, the parties may continue to participate in the
230	program beyond the initial suspension period. For each
231	additional suspension period of 1 year that the mortgagee and
232	the mortgagor participate in the program, the statute of
233	limitations for pursuing and collecting a deficiency shall be
234	extended an additional year. The parties may participate in the
235	program for such time as they both mutually agree, but in no
236	event may the total statute of limitations exceed 7 years in the
237	aggregate.
238	(8)  In consideration of the additional rights and
239	privileges afforded to mortgagees and the voluntary waiver of
240	rights by mortgagors participating in the program, participation
241	in the program constitutes consent by both parties to the
242	requirements and remedies set forth in this section.
243	Section 3.  This act shall take effect July 1, 2010.

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