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As the state with the largest inventory of backlogged foreclosures, Florida also has one of the longest foreclosure timelines in the country. In 2013, the State Legislature took steps to remedy the slow pace and mounting backlog by passing House Bill 87, also known as the Florida Fair Foreclosure Act (FFFA). The bill expanded the foreclosure process, thereby making it impossible for Fort Lauderdale and Hollywood homeowners to recover their property after a judgment lien in certain instances. The law also requires lenders to produce the mortgage note when filing their mechanic’s lien and places new limits on deficiency judgments in Broward County.
In the Sunshine State, foreclosures are handled judicially; therefore, the lender who wishes to begins the process must file a mechanic’s lien in state court. After a complaint is file with the court, the complaint and a summons are served to the borrower. If the lender wins the court case, the judge will enter a judgment of foreclosure, and the property can be sold to satisfy the borrower’s debt.
Florida’s Fair Foreclosure Act has been criticized by many as being unfair to distressed homeowners. The law’s expansions allow third-party lien holders such as homeowner associations to expedite the foreclosure process. As a result, the homeowner may have less time to seek a loan modification. The law also states that foreclosure judgments are final. Legal remedy, limited to monetary compensation, may be sought if the homeowner was not properly served in the foreclosure action, a final judgment was entered, the appeals period has been exhausted, and the home has been purchased by a party who is unaffiliated with the lender and previous owner.
Legislators who favored Florida’s Fair Foreclosure Act argued the law would offer consumers protection by requiring banks and lenders to prove they own a mortgage before filing a foreclosure action. Before the 2013 law was enacted, lenders could simply file a foreclosure action without proving they actually owned the note on the property. The absence of requiring proof led to many wrongful foreclosures against homeowners. Today, lenders must produce a promissory note or other document as evidence of current ownership of the note. While courts may accept the documents on their face as true, homeowners may offer contrary proof that the mortgage does not belong the lender whose Fort Lauderdale mechanic’s lien attorney has filed action in Broward County court.
The 2013 foreclosure act also reduces the statute of limitations on deficiency judgments. A lender may pursue a personal judgment against the homeowner for the difference between the amount the house is actually worth and the amount the homeowner owes on the mortgage. This type of award is known as a deficiency judgment. Prior to enactment of FFFA, the statute of limitations for filing a deficiency action was five years. The new law reduced the time frame to one year. Moreover, deficiency judgments may not exceed the difference between the foreclosure judgment and the fair market value of the house on the day it was sold.
The Florida Fair Foreclosure Act made changes that impact the overall timeline of a foreclosure as well as who may file a claim against a homeowner. Therefore, distressed homeowners should contact a knowledgeable Broward County construction lien lawyer very early in the foreclosure process to increase the likelihood of remaining in their home and to ensure their rights are protected from the beginning.