| 1 | A bill to be entitled |
| 2 | An act relating to judicial sales procedure; providing a |
| 3 | short title; amending s. 45.031, F.S.; providing a |
| 4 | timeframe for the sale of property under an order or |
| 5 | judgment when the property was secured through a subprime |
| 6 | loan; defining "subprime loan"; requiring a mortgagor to |
| 7 | establish a prima facie case in the motion or pleading; |
| 8 | providing requirements with respect to such pleading; |
| 9 | providing for expiration of the provisions; requiring |
| 10 | specified notice; providing an effective date. |
| 11 |
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| 12 | WHEREAS, the Florida Legislature finds that the subprime |
| 13 | mortgage lending industry has grown rapidly in Florida during |
| 14 | the last few years, and |
| 15 | WHEREAS, the Center for Responsible Lending has estimated |
| 16 | that one in five subprime loans will end up in foreclosure, and |
| 17 | WHEREAS, Florida ranks second in the country in the highest |
| 18 | number of properties currently in foreclosure, and |
| 19 | WHEREAS, foreclosures strip Florida families of their most |
| 20 | valuable asset, decrease the value of property in the proximity |
| 21 | of foreclosures, and result in a loss of tax revenue that |
| 22 | supports vital public services such as police, firefighters, |
| 23 | public schools, and other services that support local |
| 24 | communities, and |
| 25 | WHEREAS, abandoned and neglected homes that have been |
| 26 | foreclosed upon attract crime and further add to the devaluation |
| 27 | of surrounding property, and |
| 28 | WHEREAS, many homeowners facing foreclosure report that |
| 29 | their lender never offered them an opportunity for loan |
| 30 | modification, and |
| 31 | WHEREAS, the Fannie Mae Foundation and Freddie Mac have |
| 32 | determined that one-third to one-half of borrowers with subprime |
| 33 | mortgage loans could have qualified for a loan with better |
| 34 | terms, and |
| 35 | WHEREAS, Florida's judicial system is overwhelmed with |
| 36 | foreclosure filings that are the result of subprime mortgage |
| 37 | lending, and |
| 38 | WHEREAS, incentives for parties to resolve foreclosure |
| 39 | disputes are in the best interests of Florida taxpayers, NOW, |
| 40 | THEREFORE, |
| 41 |
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| 42 | Be It Enacted by the Legislature of the State of Florida: |
| 43 |
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| 44 | Section 1. This act may be cited as the "Florida |
| 45 | Foreclosure Relief Act." |
| 46 | Section 2. Subsection (1) of section 45.031, Florida |
| 47 | Statutes, is amended to read: |
| 48 | 45.031 Judicial sales procedure.--In any sale of real or |
| 49 | personal property under an order or judgment, the procedures |
| 50 | provided in this section and ss. 45.0315-45.035 may be followed |
| 51 | as an alternative to any other sale procedure if so ordered by |
| 52 | the court. |
| 53 | (1) FINAL JUDGMENT.-- |
| 54 | (a) In the order or final judgment, the court shall direct |
| 55 | the clerk to sell the property at public sale on a specified day |
| 56 | that shall be not less than 20 days or more than 35 days after |
| 57 | the date thereof, on terms and conditions specified in the order |
| 58 | or judgment. A sale may be held more than 35 days after the date |
| 59 | of final judgment or order if the plaintiff or plaintiff's |
| 60 | attorney consents to such time. The final judgment shall contain |
| 61 | the following statement in conspicuous type: |
| 62 |
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| 63 | IF THIS PROPERTY IS SOLD AT PUBLIC AUCTION, THERE MAY BE |
| 64 | ADDITIONAL MONEY FROM THE SALE AFTER PAYMENT OF PERSONS WHO ARE |
| 65 | ENTITLED TO BE PAID FROM THE SALE PROCEEDS PURSUANT TO THIS |
| 66 | FINAL JUDGMENT. |
| 67 |
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| 68 | IF YOU ARE A SUBORDINATE LIENHOLDER CLAIMING A RIGHT TO FUNDS |
| 69 | REMAINING AFTER THE SALE, YOU MUST FILE A CLAIM WITH THE CLERK |
| 70 | NO LATER THAN 60 DAYS AFTER THE SALE. IF YOU FAIL TO FILE A |
| 71 | CLAIM, YOU WILL NOT BE ENTITLED TO ANY REMAINING FUNDS. |
| 72 | (b) A sale of property may not be held less than 110 days |
| 73 | or more than 125 days after the date of final judgment or order |
| 74 | if the mortgagor or mortgagor's attorney demonstrates that the |
| 75 | property was secured through a subprime loan. "Subprime loan" |
| 76 | means: |
| 77 | 1. For an adjustable rate loan secured by a first lien on |
| 78 | a dwelling that can increase in interest rate but not decrease |
| 79 | in interest rate below the fully indexed rate at the time of |
| 80 | origination, a loan for which the annual percentage rate is |
| 81 | greater than 2 percentage points above the weekly average yield |
| 82 | on 5-year United States Treasury securities as of the 15th day |
| 83 | of the month immediately preceding the loan closing. |
| 84 | 2. For all other loans secured by a first lien on a |
| 85 | dwelling, a loan for which the annual percentage rate is greater |
| 86 | than 3 percentage points above the weekly average yield on 5- |
| 87 | year United States Treasury securities as of the 15th day of the |
| 88 | month immediately preceding the loan closing. |
| 89 | 3. For loans secured by a subordinate lien on a dwelling |
| 90 | or a mortgage secured solely by a security interest in a |
| 91 | manufactured home, a loan for which the annual percentage rate |
| 92 | is greater than 5 percentage points above the weekly average |
| 93 | yield on 5-year United States Treasury securities as of the 15th |
| 94 | day of the month immediately preceding the loan closing. |
| 95 | 4. For all loans in which the total loan amount is $30,000 |
| 96 | or more, the total points and fees on the loan, excluding up to |
| 97 | 2 bona fide discount points, paid by the borrower at or before |
| 98 | the closing exceed 3 percent of the total loan amount; for all |
| 99 | loans in which the total loan amount is less than $30,000, the |
| 100 | total points and fees on the loan, excluding up to 2 bona fide |
| 101 | discount points, paid by the borrower at or before closing |
| 102 | exceed the lesser of $900 or 6 percent of the total loan amount. |
| 103 | (c) A mortgagor must establish a prima facie case in the |
| 104 | motion or pleading. Such pleading must establish that: |
| 105 | 1. The mortgagor is the owner of the property subject to |
| 106 | foreclosure; |
| 107 | 2. The real property subject to foreclosure is the |
| 108 | principal residence of the mortgagor; |
| 109 | 3. The mortgagor owns no other real estate; |
| 110 | 4. The real property is a residential building containing |
| 111 | less than six dwelling units; and |
| 112 | 5. The real property is subject to a mortgage, second |
| 113 | mortgage, or home equity loan which is, or is likely to become, |
| 114 | the subject of foreclosure. |
| 115 |
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| 116 | Paragraphs (b) and (c) shall expire on May 1, 2010, unless |
| 117 | reenacted by the Legislature prior to that date. |
| 118 | (d) If the mortgagor or mortgagor's attorney demonstrates |
| 119 | that the property being foreclosed upon is secured through a |
| 120 | subprime loan, a notice shall be sent by the plaintiff to the |
| 121 | defendant's last known address containing contact information |
| 122 | for loan counseling services certified by the United States |
| 123 | Department of Housing and Urban Development. |
| 124 | (e)(b) If the property being foreclosed on has qualified |
| 125 | for the homestead tax exemption in the most recent approved tax |
| 126 | roll, the final judgment shall additionally contain the |
| 127 | following statement in conspicuous type: |
| 128 |
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| 129 | IF YOU ARE THE PROPERTY OWNER, YOU MAY CLAIM THESE FUNDS |
| 130 | YOURSELF. YOU ARE NOT REQUIRED TO HAVE A LAWYER OR ANY OTHER |
| 131 | REPRESENTATION AND YOU DO NOT HAVE TO ASSIGN YOUR RIGHTS TO |
| 132 | ANYONE ELSE IN ORDER FOR YOU TO CLAIM ANY MONEY TO WHICH YOU ARE |
| 133 | ENTITLED. PLEASE CHECK WITH THE CLERK OF THE COURT, (INSERT |
| 134 | INFORMATION FOR APPLICABLE COURT) WITHIN TEN (10) DAYS AFTER |
| 135 | THE SALE TO SEE IF THERE IS ADDITIONAL MONEY FROM THE |
| 136 | FORECLOSURE SALE THAT THE CLERK HAS IN THE REGISTRY OF THE |
| 137 | COURT. |
| 138 |
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| 139 | IF YOU DECIDE TO SELL YOUR HOME OR HIRE SOMEONE TO HELP YOU |
| 140 | CLAIM THE ADDITIONAL MONEY, YOU SHOULD READ VERY CAREFULLY ALL |
| 141 | PAPERS YOU ARE REQUIRED TO SIGN, ASK SOMEONE ELSE, PREFERABLY AN |
| 142 | ATTORNEY WHO IS NOT RELATED TO THE PERSON OFFERING TO HELP YOU, |
| 143 | TO MAKE SURE THAT YOU UNDERSTAND WHAT YOU ARE SIGNING AND THAT |
| 144 | YOU ARE NOT TRANSFERRING YOUR PROPERTY OR THE EQUITY IN YOUR |
| 145 | PROPERTY WITHOUT THE PROPER INFORMATION. IF YOU CANNOT AFFORD TO |
| 146 | PAY AN ATTORNEY, YOU MAY CONTACT (INSERT LOCAL OR NEAREST |
| 147 | LEGAL AID OFFICE AND TELEPHONE NUMBER) TO SEE IF YOU QUALIFY |
| 148 | FINANCIALLY FOR THEIR SERVICES. IF THEY CANNOT ASSIST YOU, THEY |
| 149 | MAY BE ABLE TO REFER YOU TO A LOCAL BAR REFERRAL AGENCY OR |
| 150 | SUGGEST OTHER OPTIONS. IF YOU CHOOSE TO CONTACT (NAME OF LOCAL |
| 151 | OR NEAREST LEGAL AID OFFICE) FOR ASSISTANCE, YOU SHOULD DO SO |
| 152 | AS SOON AS POSSIBLE AFTER RECEIPT OF THIS NOTICE. |
| 153 | (f)(c) A copy of the final judgment shall be furnished by |
| 154 | the clerk by first class mail to the last known address of every |
| 155 | party to the action or to the attorney of record for such party. |
| 156 | Any irregularity in such mailing, including the failure to |
| 157 | include this statement in any final judgment or order, shall not |
| 158 | affect the validity or finality of the final judgment or order |
| 159 | or any sale held pursuant to the final judgment or order. Any |
| 160 | sale held more than 35 days after the final judgment or order |
| 161 | shall not affect the validity or finality of the final judgment |
| 162 | or order or any sale held pursuant to such judgment or order. |
| 163 | Section 3. This act shall take effect July 1, 2008. |