Bill Text: FL S1236 | 2013 | Regular Session | Introduced

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Bill Title: Mortgage Principal Reduction Program

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-05-03 - Died in Judiciary [S1236 Detail]

Download: Florida-2013-S1236-Introduced.html

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       Florida Senate - 2013                                    SB 1236
       
       
       
       By Senator Soto
       
       
       
       
       14-00235-13                                           20131236__
    1                        A bill to be entitled                      
    2         An act relating to the mortgage principal reduction
    3         program; creating the “Mortgage Principal Reduction
    4         Act”; defining terms; requiring that the Florida
    5         Housing Finance Corporation apply to the United States
    6         Department of the Treasury by a specified date to
    7         request funds not to exceed a specified amount from
    8         the federal Hardest-Hit Fund program to establish a
    9         new state program to reduce the principal on mortgages
   10         for persons whose homestead property in this state is
   11         in foreclosure; requiring the corporation to use the
   12         allocated funds to purchase delinquent mortgages on
   13         such property from lenders at a discount to reduce the
   14         mortgage principal amount due on the mortgage;
   15         creating an application process and corporate
   16         procedures; specifying that only members of The
   17         Florida Bar and HUD-certified counselors working for a
   18         non-profit entity may assist program applicants in
   19         applying for or program participants in servicing a
   20         loan created by the program; requiring that the
   21         corporation submit monthly reports to the Office of
   22         the Governor, the President of the Senate, and the
   23         Speaker of the House of Representatives; providing an
   24         effective date.
   25  
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Mortgage principal reduction program.—
   29         (1) SHORT TITLE.—This act may be cited as the “Mortgage
   30  Principal Reduction Act.”
   31         (2) DEFINITIONS.—As used in this section, the term:
   32         (a) “Corporation” means the Florida Housing Finance
   33  Corporation.
   34         (b) “Department” means the United States Department of the
   35  Treasury.
   36         (c) “Hardest-Hit Fund” means the program authorized under
   37  the federal Emergency Economic Stabilization Act of 2008, Pub.
   38  L. No. 110-343, to assist this and other states in foreclosure
   39  prevention efforts.
   40         (d) “Program applicant” means a person who has applied for
   41  but has as yet not reached an agreement with the corporation to
   42  repay the current mortgage purchased by the corporation.
   43         (e) “Program participant” means a person who has entered
   44  into a contract with the corporation to repay the mortgage with
   45  the mortgage principal reduced.
   46         (3)(a) MORTGAGE REDUCTION PROGRAM.—No later than October 1,
   47  2013, the corporation shall apply to the department requesting
   48  that it allocate to this state an additional $100 million from
   49  the Hardest-Hit Fund to establish a new state program that is
   50  designed to reduce the loan principal on mortgages for persons
   51  whose homestead property in this state is in foreclosure.
   52         (b) The corporation shall use allocated funds to purchase
   53  from lenders, at a discount, delinquent mortgages that cover
   54  homestead property located in this state which are in
   55  foreclosure. The corporation shall reduce the mortgage principal
   56  on the purchased mortgages, coordinate with the mortgagee, and
   57  establish a reasonable repayment plan for the mortgagee.
   58         (c) The corporation shall establish and determine
   59  eligibility to participate in the mortgage principal reduction
   60  program. An applicant is eligible for participation if he or
   61  she:
   62         1. Demonstrates financial hardship;
   63         2. Owns homestead property that is the subject of an active
   64  foreclosure suit;
   65         3. Owns a homestead property in this state which has a
   66  mortgage value that is equal to or exceeds 25 percent of the
   67  fair market value; and
   68         4. Has the ability to repay the new, reduced loan.
   69         (d) The corporation may:
   70         1. Charge interest on a loan to a program applicant;
   71  however the interest rate may not exceed 2 percent per annum;
   72         2. Contract with a private mortgage servicing company to
   73  service the loan; and
   74         3. Transfer a loan to a private lending entity for fair
   75  market value upon the original terms and conditions of the loan,
   76  which are not subject to change by subsequent mortgage holders.
   77         (e) Only members of The Florida Bar and HUD-certified
   78  counselors working for a nonprofit entity may assist a program
   79  applicant in applying for a principal reduction loan or a
   80  program participant in servicing a loan created by this program.
   81         (f) The corporation may make changes to the mortgage
   82  principal reduction program as are required by the department.
   83         (g)1. The corporation shall submit a monthly report
   84  describing the status of the mortgage principal reduction loan
   85  process and program to the Office of the Governor, the President
   86  of the Senate, and the Speaker of the House of Representatives.
   87  The first monthly report is due on December 31, 2013.
   88         Section 2. This act shall take effect July 1, 2013.