The foreclosure process can be difficult and stressful for all parties involved. Over the years, Florida continues to see an increase in the number of foreclosure cases.
To aid with this issue, the government developed the Florida Fair Foreclosure Act. There are a few ways that this act affects mortgages.
Proof of ownership
In 2013, the Florida Fair Foreclosure Act went into effect. One of the main changes that the act instituted was lenders having to show proof of ownership of the property before they are able to file for foreclosure. This must be shown in the form of a promissory note stating the legal transfer of the debt to the lender. By instituting this measure, the government helps to limit the number of wrongful foreclosure filings and abuse of the system.
A provision of the act allows for the petitioning of an expedited foreclosure process. This shortens the amount of time that homeowners have to seek assistance to avoid foreclosure. It is important for homeowners to be aware of this and to try to seek modifications or loans in advance if they know they need assistance.
Statute of limitations
A deficiency is the difference between the amount a homeowner owes on a home and the actual value of the house. Previously, lenders had up to five years to pursue deficiency payments on a home. Under the new act, they have a year's time to seek the payment, and they cannot seek more than the difference of the judgment amount and the fair market value of the home on the day of sale.
These are the major ways that the FFFA may affect mortgages. For parties on either side of the mortgage, these changes may have a large effect, especially if they do not plan for it properly. Whichever side people may find themselves on, they should take some time to review the law and seek counsel to determine their best options moving forward.