In prior posts we examined several components of HB 87, the bill which became law in Florida this past summer. In this post we will review a few more aspects of the new law.
The law creates statute 702.036 which was designed to give finality to the foreclosure process by protecting a good faith purchaser, through foreclosure, from later challenges to title. Entitled “Finality of mortgage foreclosure judgment,” the statute provides that if four criteria are met, the mortgagor/homeowner will not be permitted to challenge the new owner’s title to the property. Those conditions are: (1) the mortgagor/homeowner must have been properly served, (2) the original homeowner must have lost the home via a final judgment of foreclosure, (3) the appeals period has expired, and (4) the property has been purchased by someone not related to the foreclosing lender or the original homeowner. The original borrower still may have a remedy against the foreclosing lender arising from an improper foreclosure. However the statute now limits this remedy to a claim for money damages, thereby protecting the title of a party acquiring the property at foreclosure sale.
The law revised the existing “show cause” procedure, a process designed to significantly speed up cases in which there were no real defenses. Originally a procedure available to a mortgagee, the new procedure is now applicable to any “lienholder” on the property. Presumably this will allow condominium and homeowner’s associations to avail themselves of this means of expediting a foreclosure case. The second part of the show cause statute which allows lenders to seek an order requiring the borrower to make monthly loan payments during the foreclosure proceeding in cases where the borrower is raising defenses, has been extended to apply to all types of mortgage loans except those involving owner occupied residential property. See my January 29, 2013 post Minimizing Delay in Owner Occupied Commercial Real Estate Foreclosures on this blog for more on that part of the statute.