Mar 26, 2014 - ORLANDO, Fla. – March 26, 2014 – Florida was one of the first states to feel the effect of a national recession with job losses starting in April ...

Tuesday, May 21, 2013

Foreclosure Reform - Is the Fox Watching the Henhouse Again?

The Foreclosure Reform Bill awaiting Governor Scott's signature is designed to work through Florida's backlog of foreclosure cases. It could be one of those double edged swords. Below is a summary of the pending Foreclosure Reform Bill and staff analysis. Is it yet another example of the fox watching the henhouse? You decide.

CS/CS/HB 87: Mortgage Foreclosures

GENERAL BILL by Appropriations Committee ; Judiciary Committee ; Passidomo ; (CO-INTRODUCERS) Caldwell ; Cummings ; Moraitis ; Rodrigues

Mortgage Foreclosures; Revises limitations period for commencing action to enforce claim of deficiency judgment after foreclosure action; provides for applicability to actions commenced on or after specified date; provides time limitation for commencing certain actions; provides legislative intent; specifies required contents of complaint seeking to foreclose on certain types of residential properties with respect to authority of plaintiff to foreclose on note & location of note; authorizes sanctions against plaintiffs who fail to comply with complaint requirements; provides for nonapplicability to proceedings involving timeshare interests; requires court to treat collateral attack on final judgment of foreclosure on mortgage as claim for monetary damages; prohibits such court from granting certain relief affecting title to foreclosed property; provides for construction relating to rights of certain persons to seek specified types of relief or pursue claims against foreclosed property; limits amount of deficiency judgment; revises class of persons authorized to move for expedited foreclosure to include lienholders; defines "lienholder"; provides requirements & procedures with respect to order directed to defendants to show cause why final judgment of foreclosure should not be entered.

Last Action: 05/03/2013 Ordered enrolled -HJ 1470
Effective Date: upon becoming a law

CS/CS/HB 87 — Mortgage Foreclosures

by Appropriations Committee; Judiciary Committee; and Rep. Passidomo and others (CS/CS/SB 1666 by Judiciary Committee; Banking and Insurance Committee; and Senator Latvala)

This summary is provided for information only and does not represent the opinion of any Senator, Senate Officer, or Senate Office.
Prepared by Banking and Insurance Committee (BI)
Statute of Limitations on Certain Actions

The bill reduces the statute of limitations period for a lender to enforce a deficiency judgment following the foreclosure of a one-family to four-family dwelling unit from 5 years to 1 year, for any such deficiency action that commences on or after July 1, 2013, regardless of when the cause of action accrued.

The Foreclosure Complaint

The bill requires that in order to bring a complaint to foreclose a mortgage on residential real property designed principally for occupation by 1 to 4 families, including condominiums and cooperatives ... under part III of ch. 721, F.S., the complaint must establish that the plaintiff holds the original note or is a person entitled to enforce a promissory note. If a plaintiff has been delegated the authority to institute a foreclosure action on behalf of the person entitled to enforce the note, the complaint must describe with specificity the authority of the plaintiff and the document that grants such authority to the plaintiff.

A plaintiff in possession of the original promissory note must certify, under penalty of perjury, that the plaintiff possesses the original note. An “original note” or “original promissory note” is defined as the signed or executed promissory note, including a renewal, replacement, consolidation, or amended and restated note or instrument that substitutes for the previous promissory note. The term includes a transferrable record, but not a copy of any of the foregoing. The required certification must be submitted contemporaneously with the foreclosure complaint, and set forth the location of the note and other specified information. The original note and allonges must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.

A plaintiff seeking to enforce a lost, destroyed, or stolen instrument must attach to the complaint an affidavit executed under penalty of perjury, detailing the chain of all endorsements, transfers, or assignments of the promissory note, and setting forth the facts and documents showing that the plaintiff is entitled to enforce the instrument. Adequate protection as required under s. 673.3091(2), F.S., must be provided before final judgment.

Finality of Mortgage Foreclosure Judgment

The bill provides that an action to challenge the validity of a final judgment of mortgage foreclosure, or to establish or re-establish a lien or encumbrance of property is limited to monetary damages if all of the following apply:

The party seeking relief from the final judgment of mortgage foreclosure was properly served in the foreclosure lawsuit;
The final judgment of mortgage foreclosure was entered as to the property;
All applicable appeals periods have run as to the final judgment with no appeals having been taken or having been finally resolved; and
The property has been acquired for value by a person not affiliated with the foreclosing lender or the foreclosed owner, at a time in which no lis pendens regarding the suit is in the official county records.

The bill defines affiliates of the foreclosing lender to include any loan servicer for the loan being foreclosed, and any past or present owner or holder of the loan being foreclosed, and:

a parent entity, subsidiary, or other person who directly or indirectly controls, is controlled by, or under common control of any such entities; or
a maintenance company, holding company, foreclosure services company or law firm under contract with such entities.

The bill provides that the former owner can continue to pursue money damages against the lender. The claims of the former owner, however, cannot impact the marketability of the property of the new owner.

The bill provides that when a foreclosure of a mortgage occurs based upon enforcement of a lost, destroyed, or stolen note, a person who was not a party to the foreclosure action but claims entitlement to enforce the promissory note secured by the mortgage has no claim against the foreclosed property once it is conveyed to a person not affiliated with the foreclosing lender or the foreclosed owner. That person may still pursue recovery from any adequate protection given pursuant to s. 673.3091, F.S., or from the party who wrongfully claimed entitlement to enforce the promissory note, from the maker of the note, or any other person against whom a claim may be made.

Deficiency Judgments

The bill limits the amount of a deficiency judgment on owner-occupied residential property to the difference between the judgment amount and the “fair market value” on the date of the foreclosure sale. Similarly, the deficiency for a short sale may not exceed the difference between the outstanding debt and the fair market value of the property on the date of the sale.

Show Cause Procedure

The bill makes several revisions to the show cause process. The bill provides that after filing a complaint, the plaintiff may request an order to show cause for the entry of final judgment, and the court must immediately review the request and the court file in chambers without a hearing. If the complaint is verified, complies with the requirements in s. 702.015, F.S., and alleges a cause of action to foreclose on real property, the court must issue an order to show cause why a final judgment of foreclosure should not be entered to the other parties named in the action. The bill adds a number of elements that must be included in the court’s order to show cause that is sent to the other parties named in the action. The court must set a hearing no sooner than the later of 20 days after service of the order to show cause or 45 days after service of the initial complaint. The hearing is no longer required to be held within 60 days of the date of service, as required by current law. The bill specifies that the Legislature intends that the alternative show cause procedure may run simultaneously with other court proceedings.

The bill adds the requirement that the plaintiff must file the original note, establish a lost note, or show the court the obligation to be foreclosed is not evidenced by a promissory note, before the court can enter a final judgment of foreclosure after the court has found that all defendants have waived the right to be heard. If the hearing time is insufficient, the court may announce a continued hearing on the order to show cause.

The bill exempts foreclosures of owner-occupied residences from provisions authorizing the plaintiff to request the court to enter an order to show cause why it should not enter an order to make payments during the pendency of the foreclosure proceedings, or an order to vacate the premises.

Adequate protections for lost, destroyed, or stolen notes

The bill provides that the following may constitute reasonable means of providing adequate protection, if so found by the court:

A written indemnification agreement by a person reasonably believed sufficiently solvent;
A surety bond;
A letter of credit issued by a financial institution;
A deposit of cash collateral with the clerk of the court; or
Such other security as the court deems appropriate under the circumstances.

The bill provides that a person who wrongly claims to be the holder of a note or to be entitled to enforce a lost, stolen, or destroyed note is liable to the actual holder of the note for damages and attorney fees and costs. The bill specifies that the actual holder of the note can pursue any other claims or remedies it may have against the person who wrongly claimed to be the holder, or any person who facilitated or participated in the claim.

Application and Implementation of Bill

The Legislature finds that the act is remedial and not substantive in nature. The act applies to all mortgages encumbering real property and all promissory notes secured by a mortgage, regardless of when executed. The following sections are exempted from this general rule of application:

Section 702.015, F.S., only applies to cases filed on or after July 1, 2013.
The amendments to s. 702.10, F.S., and the entirety of s. 702.11, F.S., apply to causes of action pending on the act’s effective date.

The Legislature also requests the Supreme Court to amend the Rules of Civil Procedure to implement the expedited foreclosure process.

If approved by the Governor, these provisions take effect upon becoming law.

Vote: Senate 26-13; House 87-26

Wednesday, December 19, 2012

Credit Repair - Nameless 800 Project

Credit repair companies are popping up like whack a moles claiming they can raise your credit score and remove bad credit. As a good skeptic, you wonder whether these companies and their practices are legitimate. And you also may wonder, whether credit repair is something you can do yourself. Good questions. I'm happiest when consumers are well informed and inquisitive.

With interest rates at historic lows – less than 4% for a 30 year fixed mortgage – the allure of refinancing is strong indeed. The catch. Excellent credit is required. And nowadays good credit carries a score of at least 720. And since we are just barely crawling out of the Great Recession, many people took a financial beating and are happy to hang onto their property at all let alone maintain a decent credit score.

According to CreditScoreResource.com:

“One important thing to know about credit scores is that these scores are not permanent. In a few years they may change by a huge amount. A perfect example is how the good credit rating for mortgages has changed since the recent recession. Two years ago, many mortgage lenders considered borrowers with a credit score of 650 to be prime borrowers. This means that these borrowers were allowed to get prime mortgage loans which had low interest. Amazingly, in a time span of just two years, what they considered to be a credit score for prime loans jumped to 750. The same can be said about the generally accepted good credit score.”

You didn't imagine it – they definitely moved the goal posts.

However, as consumers, there is nothing we can do about it. If you want the peace of mind and buying power that a good credit score will bring, you have to play by the lenders rules. Back to our questions:

How to tell if a credit repair company is legitimate:

The Federal Trade Commission posts the following on their site – www.ftc.gov -

“Do yourself a favor and save some money, too. Don’t believe these claims: they’re very likely signs of a scam. Indeed, attorneys at the Federal Trade Commission, the nation’s consumer protection agency, say they’ve never seen a legitimate credit repair operation making those claims.

'Credit problems? No problem!'

'We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!'

'We can erase your bad credit — 100% guaranteed.'

'Create a new credit identity — legally.'”

So be careful of overblown unrealistic promises. And beware of upfront fees. Under the Credit Repair Organization Act (CROA), credit repair companies are required to explain:

your legal rights in a written contract that also details the services they'll perform
your three day right to cancel without any charge
how long it will take to get results
the total cost you will pay
any guarantees

Can you do it yourself? Is DIY credit repair possible or a good option?

Do it yourself credit repair is possible, and it is your right to do so. I am an advocate for pro se rights, the people's right to legal access, and the right to do it yourself. However, it depends on you – your comfortable level; the time you have available; and whether you are the type of person who will be diligent and persistent in a detail driven process.

The Federal Trade Commission's site explains step by step how to repair your own credit, along with other valuable information about how to protect yourself in the marketplace. If you're not the type of person to do it yourself, or just don't have the time, you can turn to a credit repair company. The Florida Association of Legal Document Preparers has recently partnered with a credit repair company. We are using one of our associates as a test case and we'll chronicle his/ her progress on this blog. Our associate shall remain nameless for his/ her privacy, and we'll refer to him/ her as Nameless 800 – 800 being the credit score goal.

So yesterday, Nameless 800 signed up. No upfront fees were requested except for a $15.00 credit monitoring fee. Nameless 800's initial credit score is around 570. There are no sign up fees except the $15. credit monitoring fee. After 30 days you'll be billed $99. processing fees IF credit repair progress has been made. As low as $25. per item removed.

We have seen many credit repair offers and this is the best offer we've seen so far. If you're interested in having your credit repaired sign up here:

Update March 20, 2013 -
We were completely disappointed in the company that we had hoped to recommend. All references to that company have been removed.

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Monday, May 5, 2014

Confused about Florida's real real estate recovery?

I used the search string - Florida real estate recovery 2014 -

and received the following collection of conflicting results:

Housing recovery will slow in 2014: Florida Realtors

Debt Repayment in Florida Hurt by Sluggish Real Estate ...

STORY: Foreign Buyers Drive Florida's Housing Recovery

Florida housing market heating up again - Chicago Tribune

Housing recovery radar: Where are the next hot spots?

There's economic optimism for 2014 …but not a lot - Miami ...

Top 10 real estate trends for 2014 - CBS News

Florida Home Prices and Home Values - Zillow

After a Slow Start, Florida's Housing Market Recovery Picks ...