Florida mortgage laws and their effects on foreclosure

United States of America

Florida

Florida mortgage laws and their effects on foreclosure

Mortgage Laws

Are you thinking of taking a mortgage loan in the U.S. 'Sunshine State' - Florida and want to know about the laws relating to mortgage there? We provide you information on Florida mortgage laws here.

If the Sunshine State is to be the address of your dream house, you need to be well aware of the laws prevalent there. Here we provide you the important laws governing mortgage in Florida.

The Florida Mortgage Law is mainly governed by state statutes. Florida Statutes Chapter 3D-40, deals with Rules Regulating Mortgage.

Florida mortgage laws state that each natural person who acts as a mortgage broker must be licensed.
It is a must to file a lawsuit in the court for mortgage foreclosure.
Under Florida equity law all mortgages shall be foreclosed in equity.
The court shall arrange for separate trial for all countered claims against the foreclosing mortgage.
The foreclosing claim shall be tried by the court without a jury.
An action for a deficiency must be filed within four years after foreclosure sale.

Mortgage and Real Estate laws in Florida are categorized under Title XL of the Florida Statute as Real and Personal Property. The Statute was enacted in 1983. There are basically four chapters which deal with mortgage laws.

Chapter 697 or Instruments deemed mortgages and the nature of a mortgage: In most of the counties mortgages are accepted, while deeds of trust are less popular. This chapter defines mortgage and also some of its types like balloon mortgage and line-of-credit. The Future Advance Statute deals with the agreements dealing with mortgages. It also contemplates in which cases and how, recording of a mortgage should take place. Witnesses are not required for the execution of a mortgage.
Chapter 698 also called Chattel Mortgage: This chapter involves a discussion on the 'power of sale' and the transfer of title. Essentially the title is not transferred in the case of a mortgage; only in the event of default does the question of title transfer occur.
Chapter 701 or Assignment and Cancellation of Mortgages: This chapter includes a unique procedure of 'execution of satisfaction'. When the loan amount is fully paid, the lender must execute a satisfaction in certificate which should be recorded and issued within 60 days of the final repayment. If the lender does not do so, he is guilty of misdemeanor of the second degree and is fixed for same.
Chapter 702 or Foreclosure of mortgagee, Agreements for deeds and Statutory Liens: In the state of Florida all mortgages are foreclosed in equity. All mortgages except multifamily residential property of more than 4 dwelling units are foreclosed judicially.

In Florida, in case of a joint mortgage, any one of the joint owners in case of default can accelerate one's share of principal and interest accrued on the mortgage. The other party may or may not join in this action.

In connection with liens, Chapter 95.281 is also important. It deals with the maturity date of the mortgage. If the maturity date is evident on the face of a mortgage agreement, then the lien terminates in 5 years time. But if it is not, then the mortgage terminates 20 years after the date of closing of the mortgage.

Current trend predominant in Florida mortgage market

Related Forum Discussion

Adverse Possession - State of Florida

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