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.
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