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Florida: Borrower’s Property Surrender in Bankruptcy Creates a Rebuttable Presumption in Foreclosure Action

Posted By USFN, Tuesday, April 17, 2018
Updated: Monday, April 16, 2018

April 17, 2018 and May 1, 2018

by Robyn Katz
McCalla Raymer Leibert Pierce, LLC – USFN Member (Connecticut, Florida, Georgia, Illinois)

Florida Senate Bill 220 passed both houses of the legislature unanimously and was signed by the governor on March 19, 2018. This act relates to bankruptcy matters in foreclosure proceedings. It authorizes lienholders to use certain documents filed under penalty of perjury in the defendant’s bankruptcy case as an admission in the mortgage foreclosure case. SB 220 applies to foreclosure cases filed on or after October 1, 2018.

The act creates a rebuttable presumption that the defendant has waived any defense to the foreclosure if a lienholder submits documents filed in the bankruptcy case evidencing the debtor’s intent to surrender the subject property — provided those documents have not been withdrawn by the defendant. Additionally, if a final order is entered in the defendant’s bankruptcy case which discharges the defendant’s debts or confirms the repayment plan that provides for the surrender of a property, that also creates the same rebuttable presumption. The defendant is not precluded, however, from raising a defense in the foreclosure action based on an action or inaction of the lienholder that is subsequent to the filing of the document in the bankruptcy case which evidenced the defendant’s intention to surrender the mortgaged property to the lienholder.

This law will allow the plaintiff’s counsel in foreclosure proceedings to swiftly rebut defenses filed by borrowers who have surrendered the subject property in their bankruptcy case, as those defenses will be deemed as waived. Pleadings and orders entered in the bankruptcy cases can be reviewed to provide the state court with appropriate documentation evidencing the defendant’s intent to surrender the subject property.

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