On July 1, 2013, many revisions to the Florida foreclosure statutes went into effect. While many of the new provisions are technical in nature and primarily effect attorneys practicing foreclosure law, the overall effect is a dramatic change in the foreclosures process and the rights of struggling homeowners. Also, most of the changes are retroactive, so they apply to foreclosures that are active and even closed. Below is a summary of a few of the most important changes:
• Deficiency judgments. In the past, lenders had five (5) years from the date of foreclosure auction or short sale in order to file suit to recover the deficiency. The new law changes the time a lender can seek a deficiency to one (1) year from the sale date. This change is retroactive and applies to all foreclosures, short sales and deeds in lieu of foreclosure. For underwater properties that were sold or foreclosed on in the past five years, there is a savings provision which allows lenders until July 1, 2014 to file suit for a deficiency. Therefore, if you lost a home to foreclosure or completed a short sale within the past five years, the lender has until July 1, 2014 to file suit to obtain a deficiency judgment.
•Finality of Foreclosure. In the past, if the bank improperly foreclosed, the former homeowner could seek to unwind the foreclosure and get the property back. The new law protects purchasers of foreclosed property, as it eliminates the ability of the previous homeowner to unwind the foreclosure in most circumstances once the property is sold to a party unrelated to the lender. Under the new law, if a former homeowner challenges a foreclosure, and the property is no longer owned by the bank, the homeowner is only entitled to recover money damages. This change is also retroactive, so homeowners that were wrongfully foreclosed upon can no longer seek to unwind the foreclosure sale in most circumstances. Many experts believe this provision may be challenged as unconstitutional.
• Finally, the new laws require foreclosure suits filed after July 1, 2013, to contain additional facts and documentation in an attempt to force foreclosure attorneys to ensure they can prove their case at the time the case is filed. This change is designed to eliminate delay caused by homeowners challenging foreclosure complaints as improperly filed. As such, the new laws may greatly increase the speed at which a foreclosure suit is completed. The days of being able to live in a home rent free for years due to delays in the foreclosure process may be quickly coming to an end.
With the passing of these new laws, it is more important than ever for a homeowner that is delinquent on a mortgage to start strategizing immediately to determine the best course of action to preserve his/her financial future.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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