Equal Credit Opportunity Act

Happy New Year! We sincerely hope that 2015 brings you great success and many new quality loans. One of the most important things a lender can do when writing a new loan is consider the available assets of a borrower, just in case the loan becomes non-performing. Historically, lenders have been less inclined to require a non-borrowing spouse to guaranty a loan, for fear of repercussions under the Equal Credit Opportunity Act. In an opinion on January 7, 2015, Florida’s 4th District Court of Appeal has provided a little clarity and an opportunity for a lender to better secure itself at loan inception. The case of Richardson v. Everbank, 2015 WL 71850 (Fla. 4th Dist. 2015), citing several cases from around the country, states that it is sound commercial practice for the creditor to require a spouse to guarantee a debt where assets relied upon in the credit application were jointly owned. The Court determined that the spouse’s guarantee may have been fiscally responsible and prudent so the bank could reach the property listed in the financial statement in the event of a default.

Remember that each loan is unique and requires independent analysis. We strongly urge you to seek legal counsel prior to closing such transaction. If you have further questions or if we can be of any assistance, please do not hesitate to contact us.

Change to Florida Rules of Civil Procedure Governing Mortgage Foreclosures

The Florida Supreme Court adopted an amendment to the Florida Rules of Civil Procedure which is effective immediately.  The amendment creates a new rule, namely Fla. R. Civ. Pro. 1.115 – Pleading Mortgage Foreclosures.  In addition to the previous requirement that a Complaint for mortgage foreclosure on residential property be verified, the new rule also requires

  • A heightened pleading requirement of specificity (similar to the Civil Procedure rule governing pleading fraud) concerning the factual basis by which the lender is entitled to enforce the instrument (standing);
  • If the Plaintiff has been delegated authority to institute the action on behalf of another person or entity entitled to enforce the note (i.e. pursuant to a servicing agreement), the Complaint shall describe the authority conferred and identify with specificity the document granting such authority;
  • A detailed certification, under penalty of perjury, contemporaneously filed with the Complaint that the Plaintiff is in possession of the ‘original promissory note,’ which is defined as the “signed or executed promissory note rather than a copy of it.”  A copy of the promissory note, together with all allonges, must be attached to the certification.
  • If the Plaintiff is seeking to reestablish a lost or destroyed instrument, a separate affidavit, executed under penalty of perjury, must also be attached to the Complaint, which shall set forth the specific facts regarding the Plaintiff’s ability to enforce the lost instrument.

Please be aware of these new requirements for any mortgage foreclosures filed in the State of Florida.  If you have further questions or if we can be of any assistance, please do not hesitate to contact us.

New Release

October 6, 2014 – In an effort to keep clients and firm contacts abreast of recent changes in Florida law, Ellison Lazenby, PLLC would like to pass along important information regarding a recent changes in creditors’ rights law that could affect all creditors seeking to enforce judgments in Florida. Specifically, a recent change in Florida law that provides judgment creditors a new collection tool.  Many jurisdictions have subscribed to the Uniform Fraudulent Transfer Act, which allows for property which is fraudulently transferred by a judgment debtor to another person to be recovered by the judgment creditor through instituting a legal proceeding against the transferee of such property.  A question arose when the transferred asset was disposed, destroyed, devalued, or was otherwise not able to be recovered.  Could a new money judgment be entered against a transferee, or was the judgment creditor stuck with yet another worthless piece of paper?

The Florida legislature has clarified existing Florida law[1] finding that, through a proceedings supplementary to execution, a judgment creditor may obtain a money judgment against any initial or subsequent transferees of property found to be a fraudulent transfer under Florida’s version of the Uniform Fraudulent Transfer Act.  Such remedy is available to a judgment creditor irrespective of whether the transferee has retained the fraudulently transferred property.

In step with this change, Florida is also looking to further amend its Proceedings Supplementary statute.  Jason Ellison is currently involved in a joint task force which has been charged with proposing modifications and additional clarifications to this developing area of the law.  As the law continues to develop, the attorneys of Ellison Lazenby, PLLC will continue to monitor and pass along important changes as they are made. If you have any questions related to this, or any other creditors’ rights issues, please do not hesitate to contact either William Lazenby or Jason Ellison.