Expedited Foreclosure Bill Passes in Florida

At first blush, any law that talks about 'expedited foreclosure' would seem to be something that works against homeowners. However, in this case, the law, passed with bipartisan support in both houses of the Florida legislature, has a number of items that, in fact, work to the benefit of the homeowner who is facing foreclosure and unable to avoid it by any means at all. It only applies in the cases of when homeowners are not contesting the foreclosure, and, along with the lender, is seeking a speedy resolution to the specific foreclosure on their home. However, to the benefit of the homeowner, there are two very important details that are part of the law, and definitely benefit the homeowner. First, if there is a potential deficiency judgment that may be filed against the homeowner, it must be done in one year from date of foreclosure. Previously,a lender had up to five years to file such an action. For those of you unfamiliar with such an action, a deficiency judgment occurs in cases when the lender forecloses and, after sale of the home by them, nets less that they are owed. For example, you owe $300,000 and lose your home to foreclosure. When the bank sells it, they net only $175,000. The difference, $125,000 in this case, is the deficiency and the bank may legally sue you for that amount. So you've not only lost your home, you now face also owing them the difference that they couldn't get out of the home when they sold it. Not all states allow deficiencies, but many do. This law forces the bank to act more quickly or, if they fail to do so, terminates their right to come after you for a deficiency if they try after a year has passed from the foreclosure. The other benefit in the new law for homeowners is that a lender must prove it has the underlying promissory note from the loan before filing a foreclosure action. That note is the legal evidence of a debt that gives the lender the right to foreclose when you default on the mortgage. Often in the past, banks would say they had the right (and the note) to foreclose when in actual fact, they either couldn't find the note (for any number of reasons) or had lost it. No proof of note, no right to foreclose. With this law, the lender must show it actually physically possesses the note, or they cannot prevail in a foreclosure action. So, the word here is, if you're facing an unavoidable foreclosure, can't get a loan mod or do a short sale, check with your attorney about the protections this new law may provide you. If you can't afford a lawyer, call Legal Aid. That's what they're there for. Good Luck.