Redemption Rights and Deeds in Lieu of Foreclosure:
SB 1778, titled the “Redemption Procedures Improvement Act,” would substantially revise Florida law governing mortgage foreclosure, redemption rights, and deeds in lieu of foreclosure. The bill expands who may cure a default and stop a foreclosure sale, allowing the defendant, property owner, or holder of a subordinate interest to pay the debt, transfer the lien to substitute security, or make a partial tender and transfer the remaining lien to substitute collateral. It also authorizes courts to enter orders confirming that redeemed or transferred property is released free and clear of the satisfied lien.
The bill also limits waiver of redemption rights and imposes detailed disclosure requirements before any waiver or transfer of mortgaged property can be enforced. It creates a new process for transferring liens to cash deposits or surety bonds, including procedures for increasing or reducing security and for releasing security when a lien is satisfied or time-barred. In addition, it amends secured-transactions law to require longer notice periods for certain dispositions of pledged entity interests tied to mortgaged real estate, and it changes mortgage law to make clear that mortgages are liens rather than title transfers.
The bill would amend sections 45.0315, 679.612, 697.02, and 702.01 of the Florida Statutes and create new sections 45.0316 and 702.011. Its practical effect would be to strengthen redemption protections for mortgagors and junior interest holders, regulate deeds in lieu of foreclosure, and bar strict foreclosure or other contractual devices that would let a mortgagee obtain title outside a judicial sale except under the bill’s detailed transfer-and-satisfaction procedures. It would also affect clerks of court, lenders, borrowers, lienholders, and title/foreclosure practitioners by adding notice, disclosure, escrow, and court-approval requirements.
The bill’s stated purpose and structure suggest a consumer- and equity-protective approach, emphasizing informed consent, anti-fraud safeguards, and preservation of borrower equity. Because there were no committee transcripts or recorded votes provided, the available history shows no documented floor or committee debate in the materials supplied. The bill ultimately died in the Senate Banking and Insurance committee, indicating it did not advance despite being introduced as a remedial foreclosure-reform measure.
The main points of contention likely centered on the bill’s restriction of lender remedies and its prohibition on strict foreclosure or title transfer by contract, forbearance, or escrowed deed outside the bill’s procedures. Lenders and mortgagees may view the added disclosures, waiting periods, and judicial oversight as burdensome or as limiting negotiated workout options, while borrower advocates would likely support the protections against overreach, fraud, and loss of equity. Another likely issue is the bill’s retroactive/remedial application to existing mortgages and related agreements, which could raise concerns about interference with existing contractual arrangements.