In prior posts we analyzed the main components of HB 87, the bill introduced in the Florida legislature which proposed significant changes to certain aspects of Florida’s mortgage foreclosure process. The bill was signed into law by Governor Scott and was effective as of June 7, 2013. In this and future posts we will review the key aspects of the new law.

The new law limits the time within which an action to enforce a deficiency claim can be brought in cases involving a note secured by a mortgage against a one to four family residential dwelling. The new statute of limitations for those cases filed after July 1, 2013 is one year from the day after certificate of title is issued in a mortgage foreclosure case or the day after a deed in lieu of foreclosure is “accepted” by the mortgagee. What constitutes acceptance by the mortgagee is not clarified in the law so the conservative approach, absent any case law on the issue, would be to treat the date of the deed as the date of acceptance. For a lender simply suing on the note or guarantees without pursuing foreclosure, the statute of limitations remains five years. This change in the law is not applicable to commercial loans.

The law now requires that foreclosure complaints involving one to four family residential dwellings (including condominiums and cooperatives) must now contain certain specific allegations that the plaintiff is the holder of the original note at the time the suit is commenced. In addition, the complaint must specify the factual basis by which the plaintiff is the person with standing to enforce the obligation. A party that has been “delegated the authority to institute a mortgage foreclosure action” must identify the document that grants the authority to act on behalf of person entitled to enforce the note. Presumably this will include loan servicers who are bringing foreclosure actions. While the statute is silent on the issue, the better practice would be to attach as an exhibit to the complaint a copy of the document granting the authority which is being referenced. If the plaintiff has the original note in its possession, it now must file an affidavit certifying its possession. This must be filed at the time the complaint is filed and must comply with the informational requirements of the statute copies of the original note and all allonges must be attached to the certification (and, by implication, the complaint as well). The statute requires the original note and all allonges be filed with the court prior to foreclosure or judgment on the note. In cases where the original note is lost, the plaintiff must attach to the complaint an affidavit detailing the chain of endorsements, transfers or assignments of the note and setting forth facts to show that the plaintiff is entitled to enforce the instrument with copies of all documents evidencing the plaintiff’s entitlement attached to the affidavit. Interestingly, the new law says the court shall require of the lender “adequate protection” under F.S. 673.3091(2) before entering final judgment. Neither the new law nor F.S. 673.3091 describes what is to constitute “adequate protection.”