By Gary Blankenship
A bill seeking to speed foreclosures in Florida while also demanding better documentation from lenders has cleared its initial review in the House of Representatives.
Rep. Kathleen Passidomo, R-Naples, told the House Civil Justice Subcommittee on January 25 that HB 213 combined parts of her bill with a similar one proposed by Rep. Gregory Steube, R-Sarasota, to find a way to attack the backlog of foreclosure cases. It does not, she said, allow nonjudicial foreclosures.
“The bill gives the parties to a foreclosure action the tools they need to expedite the foreclosure case but at the same time guarantee their rights,” Passidomo said.
One provision of the bill drew criticism from Rep. Darren Soto, D-Orlando. The section allows a judge in orders for summary judgment proceedings to decide “whether a preponderance of the evidence and the arguments presented support entry of a final judgment of foreclosure, and, if so, the court shall enter a final judgment of foreclosure ordering the clerk of the court to conduct a foreclosure sale.”
The provision is much more lax than the current standard, which requires judges to give the benefit of the doubt to any arguments raised by defendants.
Passidomo said it was intended to weed out frivolous defenses.
“Oftentimes, people file any old response, which says nothing. This gives the court a chance to look at the . . . response and determine if it is a valid response,” she said. “Right now someone could file a piece of paper and say the sky is blue and that would kick it into a trial.”
Passidomo added, “The courts are going to be involved. They’re going to look at it at all steps of the process.”
Other changes in the bill include:
• Any lienholder — such as a homeowner or condominium association — may initiate the new faster alternative foreclosure procedure.
• The judge can issue the order to show cause to the defendants after reviewing the file in chambers and without a hearing.
• The statute of limitations for seeking a deficiency judgment after a foreclosure would be shortened from five to two years.
• Notice by publication would not be allowed except for abandoned properties that meet specified criteria.
• The alternative foreclosure procedure in F.S. §701.20 would be streamlined, with the judge having more authority, including to decide the merit of proffered defenses.
• Paperwork requirements for plaintiffs would be toughened, to include proving that the plaintiff has the mortgage note or is the rightful owner of the note. According to the staff analysis of the bill, “Every complaint in a foreclosure proceeding must contain affirmative allegations expressly made by the plaintiff that the plaintiff is the holder of the original note or must allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note. The plaintiff must file either the original promissory note or certification that the plaintiff is in physical possession of the original note, unless it is lost, destroyed or stolen. In such a case, the complaint must contain an affidavit that details a clear chain of all assignments, sets forth facts showing the plaintiff is entitled to enforce the note, and includes exhibits providing evidence of the acquisition, ownership and possession of the note.” Problems with missing notes and questionable paperwork were major parts of the robo-signing scandal that caused filing foreclosures to plummet starting in late 2010. The bill provides that a plaintiff can be sanctioned for not following the new provisions concerning the note, but that failure is not grounds to set aside a foreclosure sale.
• Mandatory case management for foreclosure cases would be created. That, among other things, would allow a judge to enter defaults against nonresponding defendants. Any party can request a case management conference, where the court must set a schedule for proceeding with the case.
The bill would be effective on July 1 and would apply to all future and pending foreclosure cases.
A Senate version, SB 1890, which contains different ways of speeding cases, has been filed and referred to the Judiciary and Banking and Insurance committees but had not been heard as this News went to press.
Lawmakers have been discussing extra funds for the courts next year to attack an estimated 368,000 backlogged foreclosure cases. (See story in the February 1 News.)