In a prior post, we discussed two of the four main components of HB 87, the foreclosure reform bill presently under consideration in Florida. The remaining sections of the bill which merit consideration involve a revised “show cause” procedure and provisions designed to protect third parties who have purchased foreclosed property.
The bill proposes to expand certain aspects of F.S. 702.10(1), an existing statute which establishes a procedure by which a court can require defendants in a real estate foreclosure action to “show cause” why a foreclosure judgment should not be entered, in effect, streamlining the process in certain cases. The bill allows not only a mortgagee, but also any defendant who is a lienholder, including homeowner’s and condominium associations, to request a show cause hearing. The apparent intent is to keep mortgagees from delaying foreclosure cases by making the show cause procedure available to other parties in the lawsuit.
Another change is to F.S. 702.10(2), which establishes a basis by which a mortgagee can request that the mortgagor show cause as to why it should not be required to make payments during the foreclosure case. The existing law is limited only to non-residential mortgage foreclosures. HB 87 expands its application to include residential property that is not owner-occupied.
The final major component of HB 87 purports to protect the interests of third parties who have acquired title to foreclosed property from subsequent lawsuits which could adversely impact their claim to title. The aim of the legislation is to prevent situations where someone later seeks to set aside or otherwise challenge the validity of the foreclosure judgment. The bill would mandate that many of those claims be treated as claims for monetary damages only and not claims which could challenge the title to the real property.
It is still early in the legislative process and there appears to be both significant support for, and opposition to, the bill. We will keep readers updated as to the bill’s progress.