Florida HB 87 / SB 1666, Homeowners, and the Foreclosure Inferno

Star Chamber Unfair

Florida HB 87 / SB 1666, Homeowners, and the Foreclosure Inferno

By Michael Collins

A bill passed last week by the Florida legislature offers efficiencies and advantages to banks that may launch a major increase in foreclosures in the state known for its volatile real estate market.  The only thing standing in the way is a veto by Governor Rick Scott.  (Image: Nathan Rein)

HB 87  shifts the burden of proof from the plaintiff, typically a bank, to the defendant, the homeowner.   If the bill is signed into law, homeowners must prove that the bank lacks the legal right to take your home within 20 to 45 days of the date that the bank served the foreclosure notice.   The reduced timeline restricts the ability to gather evidence from the bank and test it (Does the bank actually have a legal record of your mortgage?).  Without the time to discover evidence, homeowners are at a major disadvantage at the initial hearing or appealing a decision, presuming there are funds for an appeal.

The bank-friendly bill, H.B. 87, was passed by the Florida Senate 27 to 13 and House of Representatives 87 to 26 in partisan votes with Republicans in favor and Democrats opposed.  However, when Democrats in the Florida Senate had opportunities to stop the bill due to rules violations, none spoke up.  The party line vote was a sideshow that masked the bipartisan assent without objection to what may be the most pro-bank legislation in any major state.

The Down Market

There were 154,000 foreclosure filings this February in the United States.  Florida led the way with 32,000, according to a RealtyTrac data as reported by Florida Realtors.  For cities over 200,000 people, Florida had seven of the top ten cities in the nation for “default notices, scheduled actions, and repossessions,” the events that comprise foreclosure filings according to RealtyTrac.

The plunge in home values, job losses, a lack of new jobs, and flat wages all work against homeowners trying to keep a roof over their head.  When they fall behind, the banks make their move, Florida homeowners will find it even more difficult to protect their rights if this legislation is signed by Governor Rick Scott.

Citizen groups are urging a veto by the governor.

The Burden Falls on the Homeowner

Real estate foreclosures fall under state law. States are divided between judicial and non-judicial foreclosure laws.  The big bank advantages in non-judicial states are legion.  In judicial foreclosure states, homeowners still have some rights (if they can afford to exercise them).

Florida is a judicial foreclosure state.  Currently, the court system requires that banks (plaintiffs) prove their case.  Homeowners (defendants) have the right to challenge foreclosures presuming they have an adequate attorney.

If Governor Scott signs HB 87 into law, homeowners will face a new version of due process before the law.  In addition, several timing and evidence gathering impediments will stack the deck in favor of the banker plaintiffs.  Any hope for justice will become rare among citizens.

The essence of due process in our legal system is found in the burden of proof: “the necessity of proof always lies with the person who lays charges.”  The banks lay charges when they initiate foreclosure.  Therefore, the banks have the burden of proof.   Not in HB 87.

HB 87, Section 702.10, subsection (1) turns due process upside down.  (Lines 250-264, pp. 9, 10)

The plaintiff “may request an order to show cause for the entry of final judgment in a foreclosure.”  The court “shall immediately review the request and court file in chambers without a hearing.”  If “the court finds that the complaint is verified … the court shall promptly issue an order directed to the other parties named in the action to show cause why a final judgment of foreclosure should not be entered.”

The bank that initiates the action need only provide a written request.  That request is reviewed in chambers without any one challenging the evidence or logic (“without a hearing”). When the order is issued solely on the basis of the judge’s uninterrupted review in chambers, the homeowner assumes the burden of proof.  Show that this document is false the court orders.  Justice and basic concepts of law are sacrificed to allow banks greater ease and efficiency in taking possession of your home.

Another problem created for homeowners is found in timelines required to make a case against the foreclosure, as limited as the opportunity may be to have the case heard.

Under HB 87, Section 702.10 (1) (a) (1) (p. 10), a judge will review the complaint without a hearing then issue an order to show cause to the homeowner.   At that point, homeowners must show cause why they shouldn’t be foreclosed on at a hearing set within 20 to 45 days after service of process (lines 270-274).  The outside limit of the response is 45 days after the initial complaint.  This is a very short timeline particularly when dealing with homeowner discovery of evidence from a huge corporation like a bank.  The 45 day requirement is also in conflict with the Florida Rules of Civil Procedure.  Depositions require 30 day notice to witnesses.  Witnesses have 30 days to respond to written questions (interrogatories).

To have any chance to prevail, you need an attorney the day the bank files a complaint.  That’s not all you need on the first day of the foreclosure filing against you.  You must know who all the witnesses are and produce written questions sharp enough to get the required evidence.  The questions need to go out that very day in accord with the general rules of civil procedures.  If you do all this on day one, you may have time to obtain some discovery if the hearing has been set after 30 days and the bank doesn’t attempt to delay discovery, something which banks typically do.  Talk about the perfect storm.

HB 87 greatly reduces plaintiff requirements for proof of a mortgage agreement.  It is well known that the banks set up their own recording system for mortgages that bypassed normal recording requirements.  They did this in order to bundle and sell mortgages leading up the Wall Street crash of 2008. (See ForeclosureGate Deal ). When requested, banks are often at a loss to produce the basis for the mortgage agreement, original documents.  HB 87 loosens the documentation requirements to enforce contracts that may be just scraps of photocopied paper.  (See HB 87 702.015 (4) lines 125-137, p. 5)

HB 87 closes the door on any objections to errors in the foreclosure process in Section 702.036, (1) (a), lines 162-169 (pp. 6, 7) Finality of mortgage foreclosure judgment.

“In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment …, the court shall treat such request solely as a claim for monetary damages and may not grant relief that adversely affects the quality or character of the title to the property,”

Once the judge issues his/her order to show cause at the quickie hearing in favor of the bank and the 30 day period to file an appeal expires, the homeowner can produce undisputable proof that the bank had no right to be awarded the home.   In this case, the only damages available are monetary awards.  The issue of home ownership and title cannot be changed under the new law.  No amount of monetary damages will replace the value of a family home.

Once again, the perpetrators of the biggest transfer of wealth in history are given even more advantages, right where those advantages count, in the law.

Will Governor Scott sign legislation that lets banks take homes with a low standard of proof or will he respond to the needs of the people represented by those signing the petition for a veto ?  Nothing less than due process and all that implies is at stake.

Will the Democrats start looking more like the party of Lawton Chiles than Jeb Bush?

Will the media wake up to the cloak of secrecy and the motives for that cloak in time to alert the people?


This article may be reposted with attribution of authorship and a link to this article.



6 Responses to “Florida HB 87 / SB 1666, Homeowners, and the Foreclosure Inferno”
  1. Anne-Marie Henderson says:

    These bills are put in place to cover the lack of proper review by judges. The group consists of corrupt bankers, corrupt lawyers all being paid to cover the massive fraud committed against the public. As a victim of numerous corrupt lawyers and judges in FL.; I can testify that none of the cases brought before the judges were in fact true. They were a conspiracy of fabrications beginning with local Gov. Agencies, management companies in collusions with lawyers who could present fabricated cases before the courts knowing that the judges would adjudicate on their behalf. It was and is a form of TAKING UNDER THE COLOR OF THE LAW. Where are the FBI INVESTIGATIONS I sought for the last fourteen years? Each time I presented my evidence to any one representing our Gov. each defended or ignored the crimes. Even defending the groups involved in bombing my home in another State, taking land and property through fabricated claims. For standing up to the criminals my family and I have suffered a plethora of malevolence; physical attacks and tremendous financial losses. Attempts to destroy evidence by the groups were unsuccessful thanks to the wonders of INTERNET. I continued to present evidence into court but found redacted recordings of hearings, changed public court records from within the agency. When will those from within stand up against such dishonest fellow officers of the court? HOW DO WE STOP THE JUDICIAL CHARADE, STOP THE CRIMINALS, AND STOP THE DESTRUCTION OF OUR LIVES AND COMMUNITIES?

  2. J. Alonzo says:

    This article does not explain this bill properly. Yes its all done the fist fuck the sheeple, but if you read below the article written by a very good Florida Foreclosure defense lawyer, you will understand this bill a bit better. Will Scott sign it? Only if his boss ” The Banksters” give him a green light. Your words and letters mean nothing to him. PLEASE READ BELOW.

    Summarizing Florida’s New Legislation and a Plea to the People
    Posted on May 6th, 2013 by Mark Stopa
    You probably know by now that HB87 passed in the House and the Senate and will become law unless Governor Rick Scott vetoes it, which is not expected. This legislation changes the landscape of foreclosure defense in some significant ways. Let’s summarize (bearing in mind that this is purely a summary and there’s no substitute for knowing the precise language of the new bill or, better yet, hiring an experienced lawyer who does):

    1. Finality of Judgment: Once a final judgment is entered in a mortgage foreclosure case, the property is sold to a third-party, and the appeal time has run, the mortgagor is precluded from getting title to the property back, even if the foreclosure was wrongful. Instead of being able to ask for the judgment to be vacated under Fla.R.Civ.P. 1.540 up to a year after the judgment was entered – or, in some circumstances, many years post-judgment – the homeowner’s remedy is now limited to claims for money damages.

    For obvious reasons, the title insurance industry was the driving force behind this aspect of the bill. After all, if homeowners can’t make claims to get their foreclosed properties back, that’s a green light for title insurance companies to issue title insurance policies without fear of paying out claims.

    2. Order to Show Cause: Expedited Foreclosure: Any lienholder (to include condo associations and homeowners’ associations) can ask the Court to issue an Order to show cause, forcing the homeowner to come to court and convince the Court not to enter an expedited foreclosure judgment. If the homeowner doesn’t file the appropriate paperwork/defenses, a foreclosure judgment is entered at that hearing. This sounds bad, but it’s similar to the existing version of Fla. Stat. 702.10, except it now enables any lienholder (as opposed to just the bank) to request the show cause hearing.

    The condo and homeowners’ associations were the driving force behind this aspect of the bill. They believe this will give them leverage to accelerate the mortgage foreclosure lawsuit when the bank is slow to prosecute the case. Are they right? My thoughts are below.

    3. Order to Show Cause: Monthly Mortgage Payments: If a residential property is not owner-occupied, the plaintiff can ask the court to require the mortgagor to make normal monthly mortgage payments to the plaintiff during the foreclosure case. If those payments are not made, then the mortgagor is removed from possession of the property even before the case is over. If this happens, the homeowner can still defend the lawsuit, but will be removed from possession before the case is over.

    4. Statute of Limitations: On claims for deficiency, reduced to one year.

    5. Pleading requirements: The new bill imposed a few new pleading requirements for plaintiffs.

    (a) The foreclosure plaintiff must plead it is the “holder” or its specific factual basis to foreclose in its Complaint. This codifies what defense attorneys have been arguing in motions to dismiss for many months – it’s not enough to say you’re entitled to foreclose, you have to plead ultimate facts.

    (b) If the plaintiff is suing on behalf of another entity, it must identify the document which sets forth that authority.

    (c) The plaintiff must file a certification under oath, upon filing suit, that it possesses the original Note. If the note is lost, it must file an affidavit detailing the chain of assignments/transfers and must attach documents showing how ownership was acquired.

    My thoughts:

    I’ll spare you my rants here – of which there are many – about the process in which this bill was enacted and the small handful of people who drove the train. Instead, I’ll share my views on how these issues will play out in everyday practice.

    1. Finality of Judgment. I hate this provision, and I think it’s unconstitutional. After all, the Florida Supreme Court has the exclusive authority to create rules of practice and procedure in our courts, and it did so via Fla.R.Civ.P. 1.540. If that rule allows/requires a Final Judgment to be vacated even after the appeal time has lapsed, I don’t think the legislature is authorized to eliminate that Rule. That said, this provision won’t impact very many homeowners. Defend your case from the outset, file an appeal if you lose, and you won’t ever be in the position of having to worry about whether Rule 1.540 applies. Let’s move on.

    2. Order to Show Cause: Expedited Foreclosures: On paper, little has changed here. Fla. Stat. 702.10 has been in place for some time now, yet the banks rarely utilize it. On the rare instances they have, I’ve had a lot of success preventing the expedited foreclosure from being granted. Frankly, it’s not too hard, if you know what you’re doing. As a result, I don’t think much will change by allowing lienholders to invoke this procedure.

    What irks me is that the backers of this bill have no clue how this change will play out in everyday practice. It may sound great to some to allow a lienholder/association to request an expedited foreclosure hearing. However, suppose that happens, yet the bank doesn’t file the required paperwork for a judgment to be entered. Then what? Bear in mind, this type of thing happens all the time – an association wants a foreclosure case to go faster, but the bank refuses to prosecute the case … so it’s not hard to envision a lienholder/association pushing for an expedited hearing but the bank not filing the necessary paperwork at that hearing. Unfortunately, the statute poses no solution to this problem. The lienholder/association can cause the hearing to be set, and the court will be required to set the hearing, but how can a judgment be entered if the bank doesn’t provide the required paperwork? It can’t. That begs the question – why allow the expedited hearing, forcing the judges and court personnel to do more work and requiring homeowners to defend the expedited procedure, if there is no mechanism for making sure the required paperwork is filed?

    I tried to address these concerns with the legislature. In fact, I drafted a proposed amendment to the bill which would have allowed the foreclosure case to be dismissed without prejudice if the show cause hearing was set and the bank didn’t file the required paperwork. Was that included in the final version? Of course not. As a result, I fear we are looking at many hearings where the association wants a case to go forward, but it cannot because the bank doesn’t file what it needs to file … a sad irony when the purpose of the bill was to make things easier for the courts.

    3. Order to Show Cause: Monthly Mortgage Payments: Substantively, this is the biggest change. If you don’t live in your property, and you’re the mortgagor, the bank can force you to make monthly mortgage payments during the pendency of the case, failing which you lose possession of the property.

    A couple of things are infuriating about this aspect of the bill. First, do you notice how the homeowner is required to make monthly mortgage payments to the plaintiff even before the case is over, yet there is nothing in the statute which requires those payments to be given back to the homeowner in the event the homeowner prevails at the end of the case? Suppose, for example, a homeowner makes 12 monthly payments of $2,000 per month, then, at trial, proves the bank lacked standing to foreclose. Shouldn’t the homeowner get his $24,000 back? Of course! Incredibly, however, this brilliant piece of legislation is silent on this issue. Seriously, Legislature? The wrong plaintiff can sue, collect monthly payments, and not be obligated to return those payments upon losing the case?

    The sheer idiocacy of this aspect of the bill is obvious by comparing it to the tenant eviction statutes. If a tenant makes monthly rent payments into the court registry, then ultimately prevails against the landlord, the court orders that the money in the registry be returned to the tenant. Here, conversely, there is no mechanism in the statute for the homeowner to get his/her money back, even upon prevailing. The money isn’t held in the registry – it’s paid directly to the plaintiff, and there’s nothing which says the plaintiff has to pay the money back. I guess the legislature was too arrogant, shortsighted, or ignorant to realize a homeowner could win a foreclosure case at trial. Sigh.

    Second, it’s an awful irony that the associations were supposedly the impetus behind this aspect of the bill, yet they don’t realize they were shooting themselves in the foot by creating it. Just think about the dynamics at play here. If the homeowner doesn’t live in the house but is paying association dues, the dues are likely being paid with rent monies. That’s how it works – homeowners rent out the property and pay HOAs with that rent. If that rental stream gets taken away from the homeowner, do you think there’s a chance in hell he/she is going to keep paying the association? I don’t. And the banks sure aren’t going to pay those associations, as their obligations to the associations are limited by statute. So what will result here? Unpaid associations and more vacant/dilapidated houses. Brilliant! Just brilliant.

    My plea:

    There are a variety of reasons why this new legislation is probably unconstitutional. I touched on one or two of them above. However, I strongly urge all pro se homeowners to avoid making such arguments. Please. Don’t do it.

    Look … I’ve shared a lot of information on this website. I hope it goes without saying that I want to help everyone involved in this fight. This issue, however, is too big for any one homeowner to take on themselves. The problem, of course, is that if the wrong person is making this argument without knowing all of the legal arguments to make and/or how to make them, it can result in an appellate decision that is damaging for everyone. Please, folks – don’t ruin this for everyone. Let the handful of foreclosure defense lawyers who know what they’re doing work with some lawyers with experience arguing constitutional issues. We know what arguments to make and how to make them try to get this legislation declared unconstitutional. You don’t. This is a big fight, and we can win, but we have to go about the fight the right way.

    Mark Stopa

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    • Uncle Milt says:

      So, you are saying don’t sign the petition because it isn’t worth 10 seconds of time, and you say that the bill isn’t that bad according to a foreclosure defense attorney who wants to keep clients walking in the door. Great advice. Which bank do you work for?

      In reality, the bill’s changes to Florida Statutes § 702.10 now require that the homeowner has to raise a genuine issue of material fact which precludes the entry of summary judgment or otherwise constitutes a legal defense to foreclosure, and the homeowners have to do so within 20 to 45 days after service of process with no time to test the banksters’ allegations through discovery.

      This is a bill to “legalize” rocket dockets, and so far, the foreclosure defense attorneys and the great and powerful ACLU couldn’t stop rocket dockets in spite of the fact that they are prohibited by mountains of precedent. See for example, Robbins v. Robbins, 429 So.2d 424, 426-431 (Fla. 3rd DCA 1983). “Due process requirements must be met.” Id. at 429 citing, Shillitani v. United States, 384 U.S. 364, (1966). “A fundamental due process requirement is a hearing, one that may be neither sham nor pretense.” Id. citing, Palko v. Connecticut, 302 U.S. 319 (1937).

      By the way, right now, the courts ignore this controlling precedent by conducting rocket docket proceedings and they ignore facts and law which are supposed to preclude summary judgment. Occasionally, these illegal rulings are appealed and overturned due to evidence which was obtained during the discovery process. HB 87 effectively eliminates discovery, but everyone should do nothing except spend money on attorneys who will not be able to do anything for you now. Once again, great advice. LOL

      The best chance to preserve some semblance of justice is by signing the petition to veto this bill and by asking all of your contacts to do so as well.

  3. Walter says:

    Michael, thanks for this piece. If the Gov signs this, how are judges going to handle the thousands of contested foreclosures? Grant SJ en masse? Seems that this law would prohibit them from considering the merits of the individual cases on their dockets.

    • Thank you! My understanding is that the governor has 15 days to veto the legislation after the end of this session, May 3. He has not vetoed it. If he does nothing, 15 days after the end of the legislative term, May 18, HB 87 becomes law. All Scott has to do is nothing. Here’s the update site for Scott’s legislative action. http://www.flgov.com/bill-action/ HB 87 shoud be there with a note on “Date Presented” and “Governor’s Due Date.” Nothing there so they forgot or they “forgot” This is another example of preferentil treatment of baners. Hang in there and keep up the good fight.

  4. Rebecca says:

    Come on America. Can’t you see don’t you understand that no matter what we were told on wrongfully foreclosed they just lied
    Lol. Sure we will get our justice served. By Independant foreclosure review. United States treasury. Lol. Foreget their lies. This is life in America 2013. Face the facts. We were conned
    They won. The little dude gets jack shit

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