A Speedy Foreclosure in Florida – Proper Utilization of Statute 702.10

It takes on average 600 days for a party to litigate a foreclosure through trial in Florida.  Successful summary judgment motion practice may squeeze that time down to as little as 180 days.  Even better, under the proper conditions, a diligent plaintiff can shorten foreclosure time down to less than 60 days by properly utilizing Florida Statute 702.10.  If you’re interested in bypassing the foreclosure log-jam to obtain a speedy foreclosure – read on.

Nicknamed “fast-track” foreclosure, Florida Statute 702.10 was enacted in 1993 to provide a procedure for a speedy foreclosure.  The Statute is split into two options: one for residential homesteads and the other for non-residential properties.  The two procedures are basically the same; the main difference is the outcome.

The foreclosure procedure starts when a plaintiff files a complaint.  The fast-track procedure begins when the plaintiff immediately follows-up the complaint filing with a request for an Order to Show Cause, pursuant to section 702.10(1).  Upon receiving this request, the court shall review the complaint looking only to ensure that it is verified (which is a recent requirement to all foreclosure complaints) and alleges a cause of action to foreclose.  If satisfied, the court shall promptly issue an Order to Show Cause and set a hearing date.  The Order is directed to the defendant, and requires him to show why a final judgment should not be entered against him or her.  In other words, the burden of proof is shifted to the defendant to show that there is sufficient reason why foreclosure is not proper.

The hearing must be set for a date within 20 to 60 days after serving the order on defendant.  The Order to Show Cause may be served along with the complaint and the original service.  The burden in now with the defendant to assert a defense and prepare for the hearing, which may be as little as 20 days out.  If the defendant fails to file a defense prior to the hearing and fails to present a defense at the hearing, the court may enter final judgment ordering the clerk of court to conduct a foreclosure sale.  Even if a defense is presented, the plaintiff may argue at the hearing that the defense is insufficient.  Muss v. Lennar, 673 So.2d 84 (Fla. 4^th DCA 1996).

In Muss, the court granted final judgment in favor of the plaintiff at the show cause hearing, because the defendant’s response to the Order to Show Cause was insufficient. Id. at 85.  Therefore, a plaintiff may possibly obtain a foreclosure judgment in less than 60 days by properly utilizing the fast-track procedures provided in Florida Statute 702.10(1).

The second fast-track option, section 702.10(2), pertains to “non-residential” property foreclosures.  This option may apply to property that is residential and not homestead but whose debt is commercial in character.  The procedure under 702.10(2) is substantially similar to 702.10(1), but there are some minor differences, especially in the outcome.  Unlike the first option, this non-residential option asks the defendant to show why an order to make payments to the lender or an order to immediately vacate the premises should not be granted.  This option was not designed to reduce the timeline to final judgment.  Instead, this part of the Statute was designed to protect the rights of the commercial mortgage holder during the course of the foreclosure action by providing the right to receive mortgage payments and/or the right to protect the value of the security by taking possession prior to the final judgment.

Proper application of Florida Statute 702.10(1) provides a speedy foreclosure under the right conditions, but there are some concerns.  If the defendant decides to “lawyer-up” and fabricates a valid defense, the fast-track option may not dispense a speedy foreclosure judgment.  Additionally, neither the Statute, nor caselaw, addresses whether junior lienors, such as a 2^nd mortgage or an HOA lien, may be foreclosed out by a fast-track final judgment.  Also, the Statute does specify that only “in rem” relief shall be provided under this procedure.  Thus a separate proceeding is required to secure a deficiency judgment if the proceeds from the foreclosure sale are not enough to satisfy the judgment amount.  Nevertheless, skilled utilization of Florida Statute 702.10 may be your ticket to a fast-track foreclosure, bypassing the Florida foreclosure log-jam.