Florida was perhaps the state affected most by the national housing crisis, and the number of foreclosure cases crowding current Florida state court dockets is proof. The Florida Fair Foreclosure Act (“FFFA”) was enacted in an attempt to provide an expedited foreclosure process, and shorten a difficult and stressful experience.
Because Florida is a judicial foreclosure state, foreclosures must be filed and processed in Florida state court. While the Florida Fair Foreclosure Act did not change this aspect of the process, it made significant changes that all Florida homeowners facing foreclosure must know.
Prior to the enactment of the FFFA, lenders could file foreclosure actions without having to prove ownership of the promissory note. During the recent crisis, the tendency of lenders to file foreclosure actions without an underlying promissory note or allonge evidencing an endorsement was strongly criticized, esepecially as this practice led to a multitude of wrongful foreclosures.
Thus, under the FFFA, the owner of the loan must prove its right to foreclose by filing additional items along with the foreclosure complaint, including a certification that the plaintiff is in possession of the original promissory note, or if the note has been lost, a lost note affidavit with a clear chain of all endorsements, transfers, or assignments of the promissory note. Thus, with this provision, the Florida Act helps to ensure that the proper party is pursuing the foreclosure.
Lenders in Florida may pursue a deficiency judgment against a homeowner when foreclosed property sells for an amount less than the outstanding loan balance. The FFFA reduces the time lenders have to pursue these actions from five years to one year for residential properties with no more than four dwelling units. It is also important to note that a deficiency judgment may not be greater than the difference between the judgment amount and the fair market value of the property on the day of sale, provided that the property is owner-occupied and residential.The Florida Fair Foreclosure Act makes it possible for any lienholder to petition a court for an expedited foreclosure. This means that a homeowner's time to seek loss mitigation may be limited. At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to the payment of their mortgage. If you are facing foreclosure and require assistance with this and loss mitigation, contact our office today by calling (888) FIGHT-13 (344-4813) and see how we can help.