Bill Text: FL S1706 | 2022 | Regular Session | Comm Sub
Bill Title: Servicers and Lenders of Residential Mortgage Loans
Spectrum:
Status: (Failed) 2022-03-14 - Died in Judiciary [S1706 Detail]
Download: Florida-2022-S1706-Comm_Sub.html
Florida Senate - 2022 CS for SB 1706
By the Committee on Banking and Insurance; and Senators Garcia
and Taddeo
597-02840-22 20221706c1
1 A bill to be entitled
2 An act relating to servicers and lenders of
3 residential mortgage loans; amending s. 494.001, F.S.;
4 revising and providing definitions; creating s.
5 494.00163, F.S.; requiring that periodic statements
6 for residential mortgage loans follow specified laws;
7 specifying that certain entities are not exempt from
8 such laws; defining the term “small mortgage
9 servicer”; creating s. 494.00164, F.S.; prohibiting a
10 mortgage servicer from assessing certain charges or
11 fees relating to lender-placed insurance on a borrower
12 unless specified requirements are met; defining the
13 term “lender-placed insurance”; providing notice
14 requirements relating to such assessment; requiring
15 mortgage servicers to take specified actions after
16 receiving certain evidence relating to hazard
17 insurance coverage; requiring certain written notices
18 to be sent by first-class mail; creating s. 494.00225,
19 F.S.; requiring mortgage servicers and mortgage
20 lenders to assume duties and obligations relating to
21 previously approved first lien loan modifications,
22 foreclosure prevention alternatives, and other loan
23 modifications under certain circumstances; creating s.
24 494.0027, F.S.; defining terms; prohibiting mortgage
25 servicers and mortgage lenders from commencing certain
26 civil actions, recording specified notices, or
27 conducting foreclosure sales unless specified
28 conditions are met; requiring mortgage servicers and
29 mortgage lenders to establish single points of contact
30 and provide to borrowers direct means of communication
31 with the single points of contact upon request;
32 providing requirements and duties for single points of
33 contact and for mortgage servicers and mortgage
34 lenders relating to single points of contact;
35 requiring mortgage servicers and mortgage lenders to
36 send written acknowledgment of application receipt to
37 foreclosure prevention alternative applicants in
38 specified manners within a specified timeframe;
39 providing requirements for statements, documents, and
40 information that mortgage servicers and mortgage
41 lenders must send to applicants under various
42 circumstances; providing timelines for mortgage
43 servicers and mortgage lenders to commence civil
44 actions against residential mortgage loan borrowers;
45 providing that mortgage servicers and mortgage lenders
46 are not required to evaluate foreclosure prevention
47 alternative applications under certain circumstances;
48 providing an exception; prohibiting mortgage servicers
49 and mortgage lenders from charging specified fees;
50 creating ss. 627.4055 and 635.0215, F.S.; defining
51 terms; prohibiting insurers and insurance agents from
52 engaging in certain acts relating to lender-placed
53 insurance for residential mortgage loan guaranty;
54 creating s. 702.013, F.S.; defining terms; prohibiting
55 mortgage servicers and mortgage lenders from
56 commencing certain civil actions, recording specified
57 notices, or conducting foreclosure sales unless
58 specified conditions are met; providing an exception;
59 requiring mortgage servicers and mortgage lenders to
60 establish single points of contact and to provide to
61 borrowers direct means of communication with the
62 single points of contact upon request; providing
63 requirements and duties for single points of contact
64 and for mortgage servicers and mortgage lenders
65 relating to single points of contact; requiring
66 mortgage servicers and mortgage lenders to send
67 written acknowledgment of application receipt to
68 foreclosure prevention alternative applicants in
69 specified manners within a specified timeframe;
70 providing requirements for statements, documents, and
71 information that mortgage servicers and mortgage
72 lenders must send to applicants under various
73 circumstances; providing timelines for mortgage
74 servicers and mortgage lenders to commence civil
75 actions against residential mortgage loan borrowers;
76 providing that mortgage servicers and mortgage lenders
77 are not required to evaluate foreclosure prevention
78 alternative applications under certain circumstances;
79 providing an exception; prohibiting mortgage servicers
80 and mortgage lenders from charging specified fees;
81 amending ss. 494.00115 and 494.0025, F.S.; conforming
82 cross-references; providing an effective date.
83
84 Be It Enacted by the Legislature of the State of Florida:
85
86 Section 1. Present subsections (12) through (26) and (27)
87 through (38) of section 494.001, Florida Statutes, are
88 redesignated as subsections (13) through (27) and subsections
89 (29) through (40), respectively, new subsections (12) and (28)
90 are added to that section, and subsection (1) of that section is
91 amended, to read:
92 494.001 Definitions.—As used in this chapter, the term:
93 (1) “Borrower” means:
94 (a) A person obligated to repay a mortgage loan and
95 includes, but is not limited to, a coborrower or cosignor; or
96 (b) A natural person who is a mortgagor under a residential
97 mortgage loan.
98 (12) “Foreclosure prevention alternative” means a
99 modification of a residential mortgage loan term.
100 (28) “Mortgage servicer” means a person or entity that
101 directly services, or is contracted as a subservicing agent to a
102 master servicer to service, a residential mortgage loan or
103 manages a residential mortgage loan, which services or
104 management may include, but is not limited to, the following
105 responsibilities:
106 (a) Interacting with the borrower; managing the borrower’s
107 loan account daily, including, but not limited to, collecting
108 and crediting loan payments that include principals and
109 interests paid, and generating periodic billing and account
110 statements; and managing the borrower’s escrow account, if
111 applicable; or
112 (b) Enforcing the note and security instrument as the
113 current owner of the promissory note or as the authorized agent
114 of the current owner of the promissory note.
115 Section 2. Section 494.00163, Florida Statutes, is created
116 to read:
117 494.00163 Residential mortgage loans; periodic statements.—
118 (1) Periodic statements for residential mortgage loans in
119 the state must follow all the provisions set forth in 12 C.F.R.
120 s. 1026.41.
121 (2) A servicer of a reverse mortgage or a small mortgage
122 servicer is not exempt from the requirements of 12 C.F.R. s.
123 1026.41. As used in this section, the term “small mortgage
124 servicer” means a mortgage servicer that, together with any
125 affiliates, services up to 5,000 residential mortgage loans, all
126 of which have the mortgage servicer or its affiliate as the
127 creditor or assignee.
128 Section 3. Section 494.00164, Florida Statutes, is created
129 to read:
130 494.00164 Lender-placed insurance.—
131 (1) A mortgage servicer may not assess any premium charge
132 or fee related to lender-placed insurance on a borrower unless
133 the servicer has a reasonable basis to believe that the borrower
134 has failed to comply with the mortgage loan contract’s
135 requirement to maintain hazard insurance and the requirements of
136 this section are met. As used in this section, the term “lender
137 placed insurance” means hazard insurance obtained by a mortgage
138 servicer on behalf of the owner or assignee of a mortgage loan
139 that insures the property securing such loan. The term “lender
140 placed insurance” does not include hazard insurance required by
141 the Flood Disaster Protection Act of 1973, or, if the borrower
142 agrees, hazard insurance obtained by a borrower but renewed by
143 the borrower’s servicer at its discretion.
144 (2) A mortgage servicer may not assess any premium charge
145 or fee related to lender-placed insurance on a borrower unless
146 all of the following occur:
147 (a) The mortgage servicer, at least 45 days before
148 assessing on a borrower a charge or fee related to lender-placed
149 insurance, delivers to such borrower written notice containing
150 all of the following:
151 1. The date of the notice, the mortgage servicer’s name and
152 mailing address, the borrower’s name and mailing address, and
153 the physical address of the property.
154 2. In bold type, a statement requesting the borrower to
155 provide hazard insurance information for the borrower’s
156 property. The statement must identify the property by its
157 physical address.
158 3. A statement specifying:
159 a. The borrower’s hazard insurance is expiring, has
160 expired, or provides insufficient coverage, as applicable;
161 b. The mortgage servicer does not have evidence of hazard
162 insurance coverage for the property; and
163 c. If applicable, the type of insurance for which the
164 servicer lacks evidence of coverage.
165 4. In bold type, a statement that hazard insurance is
166 required on the borrower’s property, and that the mortgage
167 servicer has purchased or will purchase, as applicable, hazard
168 insurance at the borrower’s expense.
169 5. In bold type, a statement that insurance the mortgage
170 servicer has purchased or purchases may cost significantly more
171 than hazard insurance purchased by the borrower and may provide
172 less coverage than hazard insurance purchased by the borrower.
173 6. A clear and conspicuous statement requesting the
174 borrower to promptly provide the mortgage servicer with evidence
175 of hazard insurance coverage for the property, including a
176 description of the requested insurance information and how the
177 borrower may provide such information.
178 7. The mortgage servicer’s telephone number for borrower
179 inquiries.
180 8. If applicable, a statement advising the borrower to
181 review additional information provided in the same transmittal.
182 (b) The mortgage servicer, at least 15 days before
183 assessing on a borrower a premium charge or fee related to
184 lender-placed insurance, delivers to the borrower a written
185 notice that:
186 1. If a mortgage servicer has not received hazard
187 information after delivering the notice required by paragraph
188 (a), includes:
189 a. The date of the notice;
190 b. In bold type, a statement that the notice is the second
191 and final notice;
192 c. The information required for the notice under paragraph
193 (a), except for the date of that notice; and
194 d. In bold type, the cost of the lender-placed insurance,
195 stated as an annual premium, or, if a servicer does not know the
196 cost of lender-placed insurance, a reasonable estimate of such
197 cost.
198 2. If a mortgage servicer received hazard insurance
199 information after delivering the notice required under paragraph
200 (a) to the borrower, but has not received evidence demonstrating
201 that the borrower has had sufficient hazard insurance coverage
202 in place continuously, includes:
203 a. The date of the notice;
204 b. In bold type, a statement that the notice is the second
205 and final notice;
206 c. The information required by subparagraphs (a)1., 2., 5.,
207 7., and 8.;
208 d. In bold type, the cost of the lender-placed insurance,
209 stated as an annual premium, or, if a servicer does not know the
210 cost of lender-placed insurance, a reasonable estimate of such
211 cost;
212 e. A statement that the mortgage servicer received the
213 hazard insurance information that the borrower provided;
214 f. A statement that requests the borrower to provide the
215 information that is missing; and
216 g. A statement that the borrower will be charged for
217 insurance the servicer has purchased or purchases for the period
218 of time during which the servicer is unable to verify coverage.
219 (c) By the end of the 15-day period beginning on the date
220 the written notice described in paragraph (b) is delivered to
221 the borrower the mortgage servicer has not received, from the
222 borrower or otherwise, evidence demonstrating that the borrower
223 has continuously had in place hazard insurance coverage that
224 complies with the loan contract’s requirements to maintain
225 hazard insurance.
226 (3) A mortgage servicer may not assess any premium charge
227 or fee related to renewing or replacing lender-placed insurance
228 on a borrower unless all of the following occur:
229 (a) The mortgage servicer, at least 45 days before
230 assessing on a borrower a premium charge or fee related to
231 renewing or replacing lender-placed insurance, delivers to such
232 borrower written notice containing all of the following:
233 1. The date of the notice, the mortgage servicer’s name and
234 mailing address, the borrower’s name and mailing address, and
235 the physical address of the property;
236 2. In bold type, a statement requesting the borrower to
237 update the hazard insurance information for the borrower’s
238 property. The statement must identify the property by its
239 physical address;
240 3. A statement that the mortgage servicer previously
241 purchased insurance on the borrower’s property and assessed the
242 cost of the insurance to the borrower because the servicer did
243 not have evidence that the borrower had hazard insurance
244 coverage for the property;
245 4. A statement specifying:
246 a. The hazard insurance the mortgage servicer previously
247 purchased is expiring or has expired, as applicable; and
248 b. In bold type, because hazard insurance is required on
249 the borrower’s property, the servicer intends to maintain
250 insurance on the property by renewing or replacing the insurance
251 it previously purchased;
252 5. In bold type, a statement that insurance the servicer
253 has purchased or purchases may cost significantly more than
254 hazard insurance purchased by the borrower, that such insurance
255 may provide less coverage than hazard insurance purchased by the
256 borrower;
257 6. The cost of the lender-placed insurance, stated as an
258 annual premium, except if a mortgage servicer does not know the
259 cost of the lender-placed insurance, a reasonable estimate shall
260 be provided;
261 7. A statement that if the borrower purchases hazard
262 insurance, the borrower should promptly provide the servicer
263 with insurance information;
264 8. A description of the requested insurance information and
265 how the borrower may provide such information;
266 9. The mortgage servicer’s telephone number for borrower
267 inquiries; and
268 10. If applicable, a statement advising the borrower to
269 review additional information provided in the same transmittal.
270 (4) Within 15 days after receiving evidence demonstrating
271 that the borrower has had hazard insurance coverage in place
272 that complies with the loan contract’s requirements to maintain
273 hazard insurance, a mortgage servicer must:
274 (a) Cancel the lender-placed insurance the servicer
275 purchased to insure the borrower’s property; and
276 (b) Refund to such borrower all lender-placed insurance
277 premium charges and fees paid by such borrower for any period of
278 overlapping insurance coverage and remove from the borrower’s
279 account all lender-placed insurance charges and related fees for
280 such period that the servicer has assessed to the borrower.
281 (5) The written notices required by this section must be
282 sent by first-class or express mail.
283 Section 4. Section 494.00225, Florida Statutes, is created
284 to read:
285 494.00225 Residential mortgage loan modifications to avoid
286 foreclosure; transfers of duties and obligations of mortgage
287 servicers and mortgage lenders.—If a borrower of a residential
288 mortgage loan has been approved in writing for a first lien loan
289 modification, a foreclosure prevention alternative under s.
290 494.0027, or other loan modification to avoid foreclosure and if
291 the servicing of the borrower’s mortgage loan is transferred or
292 sold, the mortgage servicer or mortgage lender to whom the
293 mortgage loan is transferred or sold shall assume all duties and
294 obligations related to such previously approved first lien loan
295 modification, foreclosure prevention alternative, or other loan
296 modification.
297 Section 5. Section 494.0027, Florida Statutes, is created
298 to read:
299 494.0027 Foreclosure prevention alternatives for
300 residential mortgage loans.—
301 (1) As used in this section, the term:
302 (a) “Complete application” means an application for a
303 foreclosure prevention alternative for which the borrower has
304 provided all documents required by the mortgage servicer or
305 mortgage lender within the reasonable timeframe specified by the
306 mortgage servicer or mortgage lender.
307 (b) “Single point of contact” means a person who has, or a
308 team of personnel of which each member has, the ability,
309 authority, and responsibility to:
310 1. Communicate the process by which a borrower may apply
311 for an available foreclosure prevention alternative and the
312 deadline for any required submission to be considered for the
313 foreclosure prevention alternative.
314 2. Coordinate receipt of all documents associated with the
315 available foreclosure prevention alternatives and notify the
316 borrower of any missing document necessary to complete an
317 application for a foreclosure prevention alternative.
318 3. Have access to current information and sufficient
319 personnel to timely, accurately, and adequately inform the
320 borrower of the current status of the foreclosure prevention
321 alternative.
322 4. Ensure that the borrower is considered for all
323 foreclosure prevention alternatives offered by, or through, the
324 mortgage servicer or mortgage lender and for which the borrower
325 is or may be eligible.
326 5. Have access to the person who has the ability and
327 authority to stop the foreclosure process when necessary.
328 (2)(a) A mortgage servicer or mortgage lender may not
329 commence a civil action for the recovery of any debt, or for the
330 enforcement of any right, under a residential mortgage loan
331 which is not barred by this chapter or chapter 702 or any other
332 provision of law, record a notice of default or a notice of
333 sale, or conduct a foreclosure sale if a borrower submits an
334 application for a foreclosure prevention alternative offered by
335 or through the borrower’s mortgage servicer or mortgage lender,
336 unless one of the following has occurred:
337 1. The borrower fails to submit all documents or
338 information required to complete the application within the
339 allotted timeframe authorized by the mortgage servicer or
340 mortgage lender, which must be at least 30 calendar days after
341 the date of the initial acknowledgment of receipt of the
342 application sent to the borrower.
343 2. The mortgage servicer or mortgage lender makes a written
344 determination that the borrower is not eligible for a
345 foreclosure prevention alternative, and any appeal period under
346 subsection (5) has expired.
347 3. The borrower does not accept a written offer for a
348 foreclosure prevention alternative within 30 calendar days after
349 the date of the offer.
350 4. The borrower accepts a written offer for a foreclosure
351 prevention alternative, but defaults on or otherwise breaches
352 the borrower’s obligations under the foreclosure prevention
353 alternative.
354 (b)1. If a borrower requests a foreclosure prevention
355 alternative, the mortgage servicer or mortgage lender shall
356 promptly establish a single point of contact and provide to the
357 borrower one or more direct means of communication with the
358 single point of contact.
359 2. A single point of contact must remain assigned to the
360 borrower’s account until the mortgage servicer or mortgage
361 lender determines that all foreclosure prevention alternatives
362 offered by, or through, the mortgage servicer or mortgage lender
363 have been exhausted or the borrower’s account becomes current.
364 3. The mortgage servicer or mortgage lender shall ensure
365 that a single point of contact refers and transfers the borrower
366 to an appropriate supervisor upon the borrower’s request, if the
367 single point of contact has a supervisor.
368 4. If the responsibilities of a single point of contact are
369 performed by a team of personnel, the mortgage servicer or
370 mortgage lender shall ensure that each member of the team is
371 knowledgeable about the borrower’s situation and current status
372 in the process of seeking a foreclosure prevention alternative.
373 (3) Within 7 business days after receiving an application
374 for a foreclosure prevention alternative or any document in
375 connection with a foreclosure prevention alternative application
376 for a residential mortgage loan, a mortgage servicer or mortgage
377 lender shall send to the borrower, by first-class mail or, if an
378 electronic mail address is provided, by electronic mail, written
379 acknowledgment of the receipt of the application or document.
380 (a) Upon receipt of an application for a foreclosure
381 prevention alternative, the mortgage servicer or mortgage lender
382 shall include in the initial acknowledgment of receipt of the
383 application:
384 1. A description of the process for considering the
385 application, including, without limitation, an estimate of when
386 a decision on the application will be made and the length of
387 time the borrower will have to consider an offer for a
388 foreclosure prevention alternative.
389 2. A statement of any deadlines that affect the processing
390 of an application for a foreclosure prevention alternative,
391 including, without limitation, the deadline for submitting any
392 missing document.
393 3. A statement of the expiration dates for any documents
394 submitted by the borrower.
395 (b) If a borrower submits an application for a foreclosure
396 prevention alternative but does not initially submit all the
397 documents or information required to complete the application,
398 the mortgage servicer or mortgage lender shall include in the
399 initial acknowledgment of receipt of the application:
400 1. A statement of any deficiency in the borrower’s
401 application and allow the borrower at least 30 calendar days to
402 submit any missing document or information required to complete
403 the application.
404 2. All the information required under subparagraphs (a)1.,
405 2., and 3.
406 (4) If a borrower accepts an offer for a foreclosure
407 prevention alternative for a residential mortgage loan, the
408 mortgage servicer or mortgage lender shall provide the borrower
409 with a copy of the complete agreement of the foreclosure
410 prevention alternative signed by the mortgage lender or an agent
411 or authorized representative of the mortgage lender.
412 (5) If a borrower submits a complete application for a
413 foreclosure prevention alternative for a residential mortgage
414 loan and the borrower’s application is denied, the mortgage
415 servicer or mortgage lender shall send to the borrower a written
416 statement of:
417 (a) The reason for the denial.
418 (b) The length of time the borrower has to request an
419 appeal of the denial, which must be at least 30 calendar days.
420 (c) Instructions regarding how to appeal the denial,
421 including, without limitation, how to provide evidence that the
422 denial was in error.
423 (6) If a borrower of a residential mortgage loan submits a
424 complete application for a foreclosure prevention alternative
425 and the borrower’s application is denied, the mortgage servicer
426 or mortgage lender may not commence a civil action for the
427 recovery of any debt, or for the enforcement of any right, under
428 a residential mortgage loan which is not barred by this chapter
429 or chapter 702 or any other provision of law, record a notice of
430 default or a notice of sale, or conduct a foreclosure sale until
431 the later of:
432 (a) Sixty calendar days after the borrower is sent the
433 written statement required by subsection (5); or
434 (b) If the borrower appeals the denial, the later of:
435 1. Fifteen calendar days after the denial of the appeal;
436 2. If the appeal is successful, 14 calendar days after a
437 foreclosure prevention alternative offered after the appeal is
438 declined by the borrower; or
439 3. If a foreclosure prevention alternative offered after
440 the appeal is accepted, the date on which the borrower fails to
441 timely submit the first payment or otherwise breaches the terms
442 of the offer.
443 (7) A mortgage servicer or mortgage lender is not required
444 to evaluate a foreclosure prevention alternative application
445 from a borrower of a residential mortgage loan who has already
446 been evaluated or afforded a fair opportunity to be evaluated
447 for a foreclosure prevention alternative or who has been
448 evaluated or afforded a fair opportunity to be evaluated
449 consistent with the requirements of this section, unless:
450 (a) There has been a material change in the borrower’s
451 financial circumstances since the date of the borrower’s
452 previous application.
453 (b) The change in paragraph (a) is documented by the
454 borrower and submitted to the mortgage servicer or mortgage
455 lender.
456 (8) A mortgage servicer or mortgage lender may not charge
457 or collect:
458 (a) An application fee, processing fee, or other fee for a
459 foreclosure prevention alternative; or
460 (b) Late fees for periods during which:
461 1. A foreclosure prevention alternative is under
462 consideration or a denial is being appealed;
463 2. The borrower is making timely payments under a
464 foreclosure prevention alternative; or
465 3. A foreclosure prevention alternative is being evaluated
466 or exercised.
467 Section 6. Section 627.4055, Florida Statutes, is created
468 to read:
469 627.4055 Lender-placed insurance for residential mortgage
470 loan guaranty.—
471 (1) As used in this section, the term:
472 (a) “Affiliate” has the same meaning as in s. 624.10.
473 (b) “Lender-placed insurance” means insurance obtained by a
474 mortgage servicer or mortgage lender when a borrower of a
475 residential mortgage loan does not maintain valid or sufficient
476 insurance upon the mortgaged real property as required by the
477 terms of the mortgage agreement.
478 (c) “Mortgage servicer” has the same meaning as in s.
479 494.001.
480 (d) “Person affiliated” means an affiliate or affiliated
481 person, as those terms are defined in s. 624.10.
482 (2)(a) An insurer or insurance agent may not:
483 1. Issue lender-placed insurance on a mortgaged property if
484 the insurer or insurance agent or an affiliate of the insurer or
485 insurance agent owns, performs the servicing for, or owns the
486 servicing right to, the mortgaged property.
487 2. Except for payment to a mortgage lender for any loss
488 resulting from a mortgage default or property foreclosure:
489 a. Compensate any mortgage lender, insurer, investor, or
490 mortgage servicer, including, but not limited to, through
491 payment of commissions, on a lender-placed insurance policy
492 issued by the insurer or insurance agent.
493 b. Make any payment, including, but not limited to, payment
494 of expenses, to any mortgage lender, insurer, investor, or
495 mortgage servicer for the purpose of securing lender-placed
496 insurance business or related outsourced services.
497 c. Share lender-placed insurance premium or risk with the
498 mortgage lender, investor, or mortgage servicer that obtained
499 the lender-placed insurance.
500 d. Offer contingent commissions, profit sharing, or other
501 payments dependent on profitability or loss ratios to any person
502 affiliated with lender-placed insurance.
503 (b) An insurer or insurance agent may not provide free or
504 below-cost outsourced services to a mortgage lender, insurance
505 producer, investor, or mortgage servicer or outsource its own
506 functions to a mortgage lender, insurance producer, investor, or
507 mortgage servicer on an above-cost basis.
508 Section 7. Section 635.0215, Florida Statutes, is created
509 to read:
510 635.0215 Lender-placed insurance for residential mortgage
511 loan guaranty.—
512 (1) As used in this section, the term:
513 (a) “Affiliate” has the same meaning as in s. 624.10.
514 (b) “Lender-placed insurance” has the same meaning as in s.
515 627.4055(1).
516 (c) “Mortgage servicer” has the same meaning as in s.
517 494.001.
518 (d) “Person affiliated” means an affiliate or affiliated
519 person, as those terms are defined in s. 624.10.
520 (2)(a) An insurer or insurance agent may not:
521 1. Issue lender-placed insurance on a mortgaged property if
522 the insurer or insurance agent or an affiliate of the insurer or
523 insurance agent owns, performs the servicing for, or owns the
524 servicing right to, the mortgaged property.
525 2. Except for payment to a mortgage lender for any loss
526 resulting from a mortgage default or property foreclosure:
527 a. Compensate any mortgage lender, insurer, investor, or
528 mortgage servicer, including, but not limited to, through
529 payment of commissions, on a lender-placed insurance policy
530 issued by the insurer or insurance agent.
531 b. Make any payment, including, but not limited to, payment
532 of expenses, to any mortgage lender, insurer, investor, or
533 mortgage servicer for the purpose of securing lender-placed
534 insurance business or related outsourced services.
535 c. Share lender-placed insurance premium or risk with the
536 mortgage lender, investor, or mortgage servicer that obtained
537 the lender-placed insurance.
538 d. Offer contingent commissions, profit sharing, or other
539 payments dependent on profitability or loss ratios to any person
540 affiliated with lender-placed insurance.
541 (b) An insurer or insurance agent may not provide free or
542 below-cost outsourced services to a mortgage lender, insurance
543 producer, investor, or mortgage servicer or outsource its own
544 functions to a mortgage lender, insurance producer, investor, or
545 mortgage servicer on an above-cost basis.
546 Section 8. Section 702.013, Florida Statutes, is created to
547 read:
548 702.013 Foreclosure prevention alternatives for residential
549 mortgage loans.—
550 (1) As used in this section, the term:
551 (a) “Complete application” has the same meaning as in s.
552 494.0027(1).
553 (b) “Foreclosure prevention alternative” has the same
554 meaning as in s. 494.001.
555 (c) “Mortgage servicer” has the same meaning as in s.
556 494.001.
557 (d) “Single point of contact” has the same meaning as in s.
558 494.0027(1).
559 (2)(a) A mortgage servicer or mortgage lender may not
560 commence a civil action for the recovery of any debt, or for the
561 enforcement of any right, under a residential mortgage loan
562 which is not barred by this chapter or chapter 494 or any other
563 provision of law, record a notice of default or a notice of
564 sale, or conduct a foreclosure sale, if a borrower submits an
565 application for a foreclosure prevention alternative offered by,
566 or through, the borrower’s mortgage servicer or mortgage lender,
567 unless one of the following has occurred:
568 1. The borrower fails to submit all documents or
569 information required to complete the application within the
570 allotted timeframe authorized by the mortgage servicer or
571 mortgage lender, which must be at least 30 calendar days after
572 the date of the initial acknowledgment of receipt of the
573 application sent to the borrower.
574 2. The mortgage servicer or mortgage lender makes a written
575 determination that the borrower is not eligible for a
576 foreclosure prevention alternative, and any appeal period under
577 subsection (5) has expired.
578 3. The borrower does not accept a written offer for a
579 foreclosure prevention alternative within 30 calendar days after
580 the date of the offer.
581 4. The borrower accepts a written offer for a foreclosure
582 prevention alternative, but defaults on or otherwise breaches
583 the borrower’s obligations under the foreclosure prevention
584 alternative.
585 (b)1. If a borrower requests a foreclosure prevention
586 alternative, the mortgage servicer or mortgage lender shall
587 promptly establish a single point of contact and provide to the
588 borrower one or more direct means of communication with the
589 single point of contact.
590 2. A single point of contact must remain assigned to the
591 borrower’s account until the mortgage servicer or mortgage
592 lender determines that all foreclosure prevention alternatives
593 offered by, or through, the mortgage servicer or mortgage lender
594 have been exhausted or the borrower’s account becomes current.
595 3. The mortgage servicer or mortgage lender shall ensure
596 that a single point of contact refers and transfers the borrower
597 to an appropriate supervisor upon the borrower’s request, if the
598 single point of contact has a supervisor.
599 4. If the responsibilities of a single point of contact are
600 performed by a team of personnel, the mortgage servicer or
601 mortgage lender shall ensure that each member of the team is
602 knowledgeable about the borrower’s situation and current status
603 in the process of seeking a foreclosure prevention alternative.
604 (3) Within 7 business days after receiving an application
605 for a foreclosure prevention alternative or any document in
606 connection with a foreclosure prevention alternative application
607 for a residential mortgage loan, a mortgage servicer or mortgage
608 lender shall send to the borrower, by first-class mail or, if an
609 electronic mail address is provided, by electronic mail, written
610 acknowledgment of the receipt of the application or document.
611 (a) Upon receipt of an application for a foreclosure
612 prevention alternative, the mortgage servicer or mortgage lender
613 shall include in the initial acknowledgment of receipt of the
614 application:
615 1. A description of the process for considering the
616 application, including, without limitation, an estimate of when
617 a decision on the application will be made and the length of
618 time the borrower will have to consider an offer for a
619 foreclosure prevention alternative.
620 2. A statement of any deadlines that affect the processing
621 of an application for a foreclosure prevention alternative,
622 including, without limitation, the deadline for submitting any
623 missing document.
624 3. A statement of the expiration dates for any documents
625 submitted by the borrower.
626 (b) If a borrower submits an application for a foreclosure
627 prevention alternative but does not initially submit all the
628 documents or information required to complete the application,
629 the mortgage servicer or mortgage lender shall include in the
630 initial acknowledgment of receipt of the application:
631 1. A statement of any deficiency in the borrower’s
632 application and allow the borrower at least 30 calendar days to
633 submit any document or information required to complete the
634 application.
635 2. All the information required under subparagraphs (a)1.,
636 2., and 3.
637 (4) If a borrower accepts an offer for a foreclosure
638 prevention alternative for a residential mortgage loan, the
639 mortgage servicer or mortgage lender shall provide the borrower
640 with a copy of the complete agreement of the foreclosure
641 prevention alternative signed by the mortgage lender or an agent
642 or authorized representative of the mortgage lender.
643 (5) If a borrower submits a complete application for a
644 foreclosure prevention alternative for a residential mortgage
645 loan and the borrower’s application is denied, the mortgage
646 servicer or mortgage lender shall send to the borrower a written
647 statement of:
648 (a) The reason for the denial.
649 (b) The length of time the borrower has to request an
650 appeal of the denial, which must be at least 30 calendar days.
651 (c) Instructions regarding how to appeal the denial,
652 including, without limitation, how to provide evidence that the
653 denial was in error.
654 (6) If a borrower of a residential mortgage loan submits a
655 complete application for a foreclosure prevention alternative
656 and the borrower’s application is denied, the mortgage servicer
657 or mortgage lender may not commence a civil action for the
658 recovery of any debt, or for the enforcement of any right, under
659 a residential mortgage loan which is not barred by this chapter
660 or chapter 494 or any other provision of law, record a notice of
661 default or a notice of sale, or conduct a foreclosure sale until
662 the later of:
663 (a) Sixty calendar days after the borrower is sent the
664 written statement required by subsection (5); or
665 (b) If the borrower appeals the denial, the later of:
666 1. Fifteen calendar days after the denial of the appeal; or
667 2. If the appeal is successful, 14 calendar days after a
668 foreclosure prevention alternative offered after the appeal is
669 declined by the borrower; or
670 3. If a foreclosure prevention alternative offered after
671 the appeal is accepted, the date on which the borrower fails to
672 timely submit the first payment or otherwise breaches the terms
673 of the offer.
674 (7) A mortgage servicer or mortgage lender is not required
675 to evaluate a foreclosure prevention alternative application
676 from a borrower of a residential mortgage loan who has already
677 been evaluated or afforded a fair opportunity to be evaluated
678 for a foreclosure prevention alternative or who has been
679 evaluated or afforded a fair opportunity to be evaluated
680 consistent with the requirements of this section, unless:
681 (a) There has been a material change in the borrower’s
682 financial circumstances since the date of the borrower’s
683 previous application.
684 (b) The change in paragraph (a) is documented by the
685 borrower and submitted to the mortgage servicer or mortgage
686 lender.
687 (8) A mortgage servicer or mortgage lender may not charge
688 or collect:
689 (a) Application fees, processing fees, or other fees for a
690 foreclosure prevention alternative; or
691 (b) Late fees for periods during which:
692 1. A foreclosure prevention alternative is under
693 consideration or a denial is being appealed;
694 2. The borrower is making timely payments under a
695 foreclosure prevention alternative; or
696 3. A foreclosure prevention alternative is being evaluated
697 or exercised.
698 Section 9. Paragraphs (a), (b), and (c) of subsection (5)
699 of section 494.00115, Florida Statutes, are amended to read:
700 494.00115 Exemptions.—
701 (5) As used in this section, the term “hold himself or
702 herself out to the public as being in the mortgage lending
703 business” includes any of the following:
704 (a) Representing to the public, through advertising or
705 other means of communicating or providing information, including
706 the use of business cards, stationery, brochures, signs, rate
707 lists, or promotional items, by any method, that such individual
708 can or will perform the activities described in s. 494.001(25)
709 s. 494.001(24).
710 (b) Soliciting in a manner that would lead the intended
711 audience to reasonably believe that such individual is in the
712 business of performing the activities described in s.
713 494.001(25) s. 494.001(24).
714 (c) Maintaining a commercial business establishment at
715 which, or premises from which, such individual regularly
716 performs the activities described in s. 494.001(25) s.
717 494.001(24) or regularly meets with current or prospective
718 mortgage borrowers.
719 Section 10. Paragraph (d) of subsection (4) of section
720 494.0025, Florida Statutes, is amended to read:
721 494.0025 Prohibited practices.—It is unlawful for any
722 person:
723 (4) In any practice or transaction or course of business
724 relating to the sale, purchase, negotiation, promotion,
725 advertisement, or hypothecation of mortgage loan transactions,
726 directly or indirectly:
727 (d) To misrepresent a residential mortgage loan, as
728 described in s. 494.001(26)(a) s. 494.001(25)(a), as a business
729 purpose loan.
730 Section 11. This act shall take effect July 1, 2022.
