HB 213, the Florida Fair Foreclosure Act

Proponents of HB213 claim the bill will help clear the foreclosure backlog. Opponents say any improvements will be at the expense of homeowners’ rights; that more judges are needed instead.

Palm Coast, FL – February 14, 2012 – Florida legislators are debating HB 213, the Florida Fair Foreclosure Act. Bill sponsors claim it will go a long way towards clearing out Florida’s foreclosure backlog. Foreclosure defense attorneys think it’s a bad bill which threatens homeowners’ rights.
Clearly Florida has a problem. Potential foreclosure hangs over underwater borrowers. Many are already in default. Reportedly, Florida has the third highest number of underwater mortgaged properties in the country.

Florida is a judicial foreclosure state as are about 40 percent of the other states. Judicial foreclosures have to pass before a Judge. About half of the states are non-judicial. The remaining ten percent use both methods.
HB 213 keeps the judicial foreclosure in place, but makes several changes:
It allows all lien holders, not just banks, to expedite the foreclosure procedure. The likely beneficiaries are homeowner and condo associations. Currently banks are liable to condo associations for the lesser of 12 months past due assessments or one percent of the original mortgage amount. That means that the associations are left holding the bag for long past due assessments. Other condo owners end up covering the loss.
It reduces the time a bank can go after a foreclosed homeowner for a deficiency judgment from five to two years. This change will be welcomed by bankruptcy lawyers whose clients are trying to go on with their life and repair their credit scores, only to be hit again with a deficiency judgment five years later.
Foreclosure defense attorneys object with much in the proposed bill. They claim HB 213 hinders the borrower’s ability to obtain evidence through the discovery process and service of process. Lenders will only be required to certify that they are in possession of the original note. This appears to be a shield against the "prove you own the note and have standing to foreclose" defense. The borrower will have no recourse. Lenders risk only judicial sanctions.
Foreclosure defense attorneys claim the biggest impediment to more timely foreclosures is the insufficient number of judges assigned to the task.
The Florida Fair Foreclosure Act; a well chosen bill title, but is it an honest title? Time will tell. Borrowers are the party least represented by lobbyists in Tallahassee; out of sight and out of mind.
Read >>> Florida Fair Foreclosure Act [PDF 5MB]
1 reply
  1. Lewis Roberts
    Lewis Roberts says:

    bankruptcy lawyers


    I think you might need to clarify your statement that this will be welcomed by bankruptcy lawyers.

    If someone files bankruptcy and surrenders a home and the mortgages, the lender cannot pursue the discharged debtor for a deficiency.

    It would not matter if the time frame was 1 year or 100 years. Once the debt has been discharged in bankruptcy, there is no deficiency to pursue.

    Clients who have filed bankruptcy are already improving their credit scores and going on with their lives – with no concern for a deficiency judgment.

    If a lender pursued one on a discharged debtor, it would be a discharge violation.

    The real problem is that the debtor has discharged the debt, but is still the owner of the home until the foreclosure is finished.

    The lenders are in no hurry to take the property back.

    So sometimes debtors have moved away and the house sits empty while still in the owner’s name.

    I hope that clears it up a bit.

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