In an effort to alleviate the foreclosure crisis, Florida’s Legislature recently passed a foreclosure bill (House Bill 87) that will significantly impact Miami-Dade and Broward County homeowners facing foreclosure. From a homeowner’s perspective, the biggest problem with Florida’s latest foreclosure law is that it speeds up the foreclosure process by requiring the homeowner to prove to the Court in an “order to show cause hearing” that the foreclosure should be stopped. On the other hand, the biggest relief to the homeowner is that the Bank will only have one year to pursue a deficiency judgment (i.e. the difference between what the homeowner owes on the loan and what the home sells for at a foreclosure sale). Other important aspects of Florida’s latest foreclosure law, which all homeowners facing foreclosure in Miami and Broward County should know about, include:
Foreclosure Deficiency Judgments: The time frame for the Bank to pursue a deficiency judgment against the homeowner has been drastically shortened from five (5) years to one (1) year. That means that the Bank only has one year to pursue a collection action against the homeowner for the amount that the Homeowner actually owed on the loan and what the house ultimately sold for in the foreclosure sale. If the Bank does not initiate a collection action against the Homeowner within one year, the Bank loses the right to collect the deficiency judgment.
Tightened Paperwork Requirements: Banks are now required to initially identify in their foreclosure complaint whether they are in possession of the mortgage note and/or their factual basis for bringing a foreclosure action without being in possession of the mortgage note. If the Bank is in possession of the promissory note, the Bank must file a copy of the promissory note with the foreclosure complaint. If the Bank fails to file the promissory note with the foreclosure complaint then there may be grounds to file a motion to dismiss the foreclosure lawsuit.
Speedy Foreclosure Process/Show Cause Hearing: The Bank is entitled to a “show cause hearing” within 20 days of serving the foreclosure lawsuit. At the show cause hearing, the homeowner must prove to the Court that the foreclosure should be stopped. If the homeowner or the homeowner’s foreclosure lawyer fails to appear at the show cause hearing, the court may enter a final judgment of foreclosure at that time.
Final Judgments: Homeowners who have been victims of fraud and have had their homes foreclosed on will not be able to regain possession of their home once it is sold at a foreclosure sale on the grounds that they were defrauded. The only remedy available to these particular homeowners is money damages (i.e. dollars).
Florida’s new foreclosure law is 95% pro-bank and only 5% pro-homeowner. In light of the congested courthouses in Miami-Dade and Broward County, however, it is no surprise that Florida is getting tougher on foreclosure and foreclosure defense. The new foreclosure law requires that homeowners facing foreclosure, even those homeowners who are pursuing a short-sale or a loan modification, react quickly by filing the appropriate defenses to avoid a foreclosure sale. Under the new foreclosure law, homeowners in Miami-Dade and Broward County that do not actively defend a foreclosure lawsuit will undoubtedly lose their homes faster than homeowners in the years before.
In order to stop foreclosure, homeowners will need to quickly develop a clear-cut strategy. Whether that strategy involves a short sale, loan modification, or bankruptcy will be dependent upon the unique circumstances of the homeowner. Under the new foreclosure law, it is even more important for homeowners to work with an experienced foreclosure defense lawyer who understands the foreclosure process in Miami-Dade and Broward County.
If you have questions and are looking for answers to legal problems in Miami-Dade or Broward County, contact Jordan Pascale, P.L. at 305-501-2836 or visit us at JordanPascale.com.