SB 1706 — Servicers and Lenders of Residential Mortgage Loans

periodic statements.— (1) Periodic statements for residential mortgage loans in the state must follow all the provisions set forth in 12 C.F.R.

1024.371026.41. and 12 C.F.R.

(2) A servicer of a reverse mortgage or a small mortgage servicer is not exempt from the requirements of 12 C.F.R.

Section 494.00164, Florida Statutes, is created to read:

494.00164 Lender-placed insurance.— (1) A mortgage servicer may not assess any premium charge or fee related to lender-placed insurance on a borrower unless the servicer has a reasonable basis to believe that the borrower has failed to comply with the mortgage loan contract’s requirement to maintain hazard insurance and the requirements of this section are met.

As used in this section, the term “lender- placed insurance” means hazard insurance obtained by a mortgage servicer on behalf of the owner or assignee of a mortgage loan that insures the property securing such loan.

The term “lender- placed insurance” does not include hazard insurance required by the Flood Disaster Protection Act of 1973, or, if the borrower agrees, hazard insurance obtained by a borrower but renewed by the borrower’s servicer at its discretion.

(2) A mortgage servicer may not assess any premium charge or fee related to lender-placed insurance on a borrower unless Page 5 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 all of the following occur:

(a) The mortgage servicer, at least 45 days before assessing on a borrower a charge or fee related to lender-placed insurance, delivers to such borrower written notice containing all of the following:

1.

The date of the notice, the mortgage servicer’s name and mailing address, the borrower’s name and mailing address, and the physical address of the property.

2.

In bold type, a statement requesting the borrower to provide hazard insurance information for the borrower’s property.

The statement must identify the property by its physical address.

3.

A statement specifying:

a.

The borrower’s hazard insurance is expiring, has expired, or provides insufficient coverage, as applicable;

b.

The mortgage servicer does not have evidence of hazard insurance coverage for the property;

and c.

If applicable, the type of insurance for which the servicer lacks evidence of coverage.

4.

In bold type, a statement that hazard insurance is required on the borrower’s property, and that the mortgage servicer has purchased or will purchase, as applicable, hazard insurance at the borrower’s expense.

5.

In bold type, a statement that insurance the mortgage servicer has purchased or purchases may cost significantly more than hazard insurance purchased by the borrower and may provide less coverage than hazard insurance purchased by the borrower.

6.

A clear and conspicuous statement requesting the borrower to promptly provide the mortgage servicer with evidence Page 6 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 of hazard insurance coverage for the property, including a description of the requested insurance information and how the borrower may provide such information.

7.

The mortgage servicer’s telephone number for borrower inquiries.

8.

If applicable, a statement advising the borrower to review additional information provided in the same transmittal.

(b) The mortgage servicer, at least 15 days before assessing on a borrower a premium charge or fee related to lender-placed insurance, delivers to the borrower a written notice that:

1.

If a mortgage servicer has not received hazard information after delivering the notice required by paragraph (a), includes:

a.

The date of the notice;

b.

In bold type, a statement that the notice is the second and final notice;

c.

The information required for the notice under paragraph (a), except for the date of that notice;

and d.

In bold type, the cost of the lender-placed insurance, stated as an annual premium, or, if a servicer does not know the cost of lender-placed insurance, a reasonable estimate of such cost.

2.

If a mortgage servicer received hazard insurance information after delivering the notice required under paragraph (a) to the borrower, but has not received evidence demonstrating that the borrower has had sufficient hazard insurance coverage in place continuously, includes:

a.

The date of the notice;

Page 7 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 b.

In bold type, a statement that the notice is the second and final notice;

c.

The information required by subparagraphs (a)1., 2., 5., 7., and 8.;

d.

In bold type, the cost of the lender-placed insurance, stated as an annual premium, or, if a servicer does not know the cost of lender-placed insurance, a reasonable estimate of such cost;

e.

A statement that the mortgage servicer received the hazard insurance information that the borrower provided;

f.

A statement that requests the borrower to provide the information that is missing;

and g.

A statement that the borrower will be charged for insurance the servicer has purchased or purchases for the period of time during which the servicer is unable to verify coverage.

(c) By the end of the 15-day period beginning on the date the written notice described in paragraph (b) is delivered to the borrower the mortgage servicer has not received, from the borrower or otherwise, evidence demonstrating that the borrower has continuously had in place hazard insurance coverage that complies with the loan contract’s requirements to maintain hazard insurance.

(3) A mortgage servicer may not assess any premium charge or fee related to renewing or replacing lender-placed insurance on a borrower unless all of the following occur:

(a) The mortgage servicer, at least 45 days before assessing on a borrower a premium charge or fee related to renewing or replacing lender-placed insurance, delivers to such borrower written notice containing all of the following:

Page 8 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 1.

The date of the notice, the mortgage servicer’s name and mailing address, the borrower’s name and mailing address, and the physical address of the property;

2.

In bold type, a statement requesting the borrower to update the hazard insurance information for the borrower’s property.

The statement must identify the property by its physical address;

3.

A statement that the mortgage servicer previously purchased insurance on the borrower’s property and assessed the cost of the insurance to the borrower because the servicer did not have evidence that the borrower had hazard insurance coverage for the property;

4.

A statement specifying:

a.

The hazard insurance the mortgage servicer previously purchased is expiring or has expired, as applicable;

and b.

In bold type, because hazard insurance is required on the borrower’s property, the servicer intends to maintain insurance on the property by renewing or replacing the insurance it previously purchased;

5.

In bold type, a statement that insurance the servicer has purchased or purchases may cost significantly more than hazard insurance purchased by the borrower, that such insurance may provide less coverage than hazard insurance purchased by the borrower;

6.

The cost of the lender-placed insurance, stated as an annual premium, except if a mortgage servicer does not know the cost of the lender-placed insurance, a reasonable estimate shall be provided;

7.

A statement that if the borrower purchases hazard Page 9 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 insurance, the borrower should promptly provide the servicer with insurance information;

8.

A description of the requested insurance information and how the borrower may provide such information;

9.

The mortgage servicer’s telephone number for borrower inquiries;

and 10.

If applicable, a statement advising the borrower to review additional information provided in the same transmittal.

(4) Within 15 days after receiving evidence demonstrating that the borrower has had hazard insurance coverage in place that complies with the loan contract’s requirements to maintain hazard insurance, a mortgage servicer must:

(a) Cancel the lender-placed insurance the servicer purchased to insure the borrower’s property;

and (b) Refund to such borrower all lender-placed insurance premium charges and fees paid by such borrower for any period of overlapping insurance coverage and remove from the borrower’s account all lender-placed insurance charges and related fees for such period that the servicer has assessed to the borrower.

(5) The written notices required by this section must be sent by first-class or express mail.

Section 4.

494.0027, or other loan modification to avoid foreclosure and if thePage servicing10 of the26 borrower’sCODING: mortgage loan is transferred or sold, the mortgage servicer or mortgage lender to whom the mortgage loan is transferred or sold shall assume all duties and obligations related to such previously approved first lien loan modification, foreclosure prevention alternative, or other loan modification.

Section 4.

Section 494.0027, Florida Statutes, is created to read:

494.0027 Foreclosure prevention alternatives for residential mortgage loans.— (1) As used in this section, the term:

(a) “Complete application” means an application for a foreclosure prevention alternative for which the borrower has provided all documents required by the mortgage servicer or Page 5 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 mortgagethe lenderservicing withinof the reasonableborrower’s timeframemortgage specifiedloan byis transferred or sold, the mortgage servicer or mortgage lender.lender to whom the mortgage loan is transferred or sold shall assume all duties and obligations related to such previously approved first lien loan modification, foreclosure prevention alternative, or other loan modification.

Section 5.

Section 494.0027, Florida Statutes, is created to read:

494.0027 Foreclosure prevention alternatives for residential mortgage loans.— (1) As used in this section, the term:

(a) “Complete application” means an application for a foreclosure prevention alternative for which the borrower has provided all documents required by the mortgage servicer or mortgage lender within the reasonable timeframe specified by the mortgage servicer or mortgage lender.

Have access to current information and sufficient personnel to timely, accurately, and adequately inform the borrowerPage of11 the current status of the26 foreclosureCODING: prevention alternative.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 borrower of the current status of the foreclosure prevention alternative.

(2)(a) A mortgage servicer or mortgage lender may not commence a civil action for the recovery of any debt, or for the enforcement of any right, under a residential mortgage loan which is not barred by this chapter or chapter 702 or any other provision of law, record a notice of default or a notice of sale, or conduct a foreclosure sale,sale if a borrower submits an Pageapplication 6for a foreclosure prevention alternative offered by or through the borrower’s mortgage servicer or mortgage lender, unless one of 20the CODING:following has occurred:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer or mortgage lender, unless one of the following has occurred:

The borrower does not accept a written offer for a foreclosure prevention alternative within 30 calendar days after thePage date12 of the26 offer.CODING:

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words underlined are additions.

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 the date of the offer.

A single point of contact must remain assigned to the borrower’s account until the mortgage servicer or mortgage lender determines that all foreclosure prevention alternatives offered by, or through, the mortgage servicer or mortgage lender Pagehave 7been ofexhausted 20or CODING:the borrower’s account becomes current.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ have been exhausted or the borrower’s account becomes current.

(3) Within 7 business days after receiving an application for a foreclosure prevention alternative or any document in connection with a foreclosure prevention alternative application for a residential mortgage loan, a mortgage servicer or mortgage lender shall send to the borrower, by first-class mail or, if an electronicPage mail13 address is provided, by electronic mail, written acknowledgment of the26 receiptCODING: of the application or document.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 electronic mail address is provided, by electronic mail, written acknowledgment of the receipt of the application or document.

A statement of any deadlines that affect the processing of an application for a foreclosure prevention alternative, including, without limitation, the deadline for submitting any Pagemissing 8document. of 20 CODING:

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Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ missing document.

(4) If a borrower accepts an offer for a foreclosure preventionPage alternative14 for a residential mortgage loan, the mortgage servicer or mortgage lender shall provide the borrower with a copy of the26 completeCODING: agreement of the foreclosure prevention alternative signed by the mortgage lender or an agent or authorized representative of the mortgage lender.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 prevention alternative for a residential mortgage loan, the mortgage servicer or mortgage lender shall provide the borrower with a copy of the complete agreement of the foreclosure prevention alternative signed by the mortgage lender or an agent or authorized representative of the mortgage lender.

(c) Instructions regarding how to appeal the denial, Pageincluding, 9without oflimitation, 20how CODING:to provide evidence that the denial was in error.

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Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ including, without limitation, how to provide evidence that the denial was in error.

orPage 2.15 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 2.

Page(a) 10There has been a material change in the borrower’s financial circumstances since the date of 20the CODING:borrower’s previous application.

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words underlined are additions.

Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ (a) There has been a material change in the borrower’s financial circumstances since the date of the borrower’s previous application.

or 3.Page 16 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 3.

Section 5.6.

Page494.001. 11 of 20 CODING:

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Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ 494.001.

Issue lender-placed insurance on a mortgaged property if:if the insurer or insurance agent or an affiliate of the insurer or insurance agent owns, performs the servicing for, or owns the servicing right to, the mortgaged property.

a.

The insurer or insurance agent or an affiliate of the insurer or insurance agent owns, performs the servicing for, or owns the servicing right to, the mortgaged property;

or b.

The mortgage servicer or mortgage lender has not complied with 12 C.F.R.

s.

1024.37.

Make any payment, including, but not limited to, payment ofPage expenses,17 to any mortgage lender, insurer, investor, or mortgage servicer for the purpose of securing26 lender-placedCODING: insurance business or related outsourced services.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 of expenses, to any mortgage lender, insurer, investor, or mortgage servicer for the purpose of securing lender-placed insurance business or related outsourced services.

(b) An insurer or insurance agent may not provide free or below-cost outsourced services to a mortgage lender, insurance Pageproducer, 12investor, ofor 20mortgage CODING:servicer or outsource its own functions to a mortgage lender, insurance producer, investor, or mortgage servicer on an above-cost basis.

WordsSection stricken7. are deletions;

words underlined are additions.

Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ producer, investor, or mortgage servicer or outsource its own functions to a mortgage lender, insurance producer, investor, or mortgage servicer on an above-cost basis.

Section 6.

Issue lender-placed insurance on a mortgaged property if:if the insurer or insurance agent or an affiliate of the insurer or Page 18 of 26 CODING:

a.Words stricken are deletions;

Thewords insurerunderlined orare insuranceadditions. agent or an affiliate of the insurer or insurance agent owns, performs the servicing for, or owns the servicing right to, the mortgaged property;

Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 insurance agent owns, performs the servicing for, or b.owns the servicing right to, the mortgaged property.

The mortgage servicer or mortgage lender has not complied with 12 C.F.R.

s.

1024.37.

Pageb. 13 of 20 CODING:

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Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ b.

Section 7.8.

494.0027(1).Page 19 of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 494.0027(1).

(2)(a) A mortgage servicer or mortgage lender may not Pagecommence 14a civil action for the recovery of 20any CODING:debt, or for the enforcement of any right, under a residential mortgage loan which is not barred by this chapter or chapter 494 or any other provision of law, record a notice of default or a notice of sale, or conduct a foreclosure sale, if a borrower submits an application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer or mortgage lender, unless one of the following has occurred:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2022 SB 1706 37-00545B-22 20221706__ commence a civil action for the recovery of any debt, or for the enforcement of any right, under a residential mortgage loan which is not barred by this chapter or chapter 494 or any other provision of law, record a notice of default or a notice of sale, or conduct a foreclosure sale, if a borrower submits an application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer or mortgage lender, unless one of the following has occurred:

4.Page 20 of 26 CODING:

The borrower accepts a written offer for a foreclosure prevention alternative, but defaults on or otherwise breaches the borrower’s obligations under the foreclosure prevention alternative.

(b)1.

If a borrower requests a foreclosure prevention alternative, the mortgage servicer or mortgage lender shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the Page 15 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 single4. point of contact.

The borrower accepts a written offer for a foreclosure prevention alternative, but defaults on or otherwise breaches the borrower’s obligations under the foreclosure prevention alternative.

(b)1.

If a borrower requests a foreclosure prevention alternative, the mortgage servicer or mortgage lender shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.

(3) Within 7 business days after receiving an application for a foreclosure prevention alternative or any document in connection with a foreclosure prevention alternative application for a residential mortgage loan, a mortgage servicer or mortgage lender shall send to the borrower, by first-class mail or, if an electronic mail address is provided, by electronic mail, written acknowledgmentPage of21 the receipt of the26 applicationCODING: or document.

(a) Upon receipt of an application for a foreclosure prevention alternative, the mortgage servicer or mortgage lender shall include in the initial acknowledgment of receipt of the application:

1.

A description of the process for considering the application, including, without limitation, an estimate of when a decision on the application will be made and the length of Page 16 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 timeacknowledgment of the borrowerreceipt willof havethe toapplication consideror andocument. offer for a foreclosure prevention alternative.

(a) Upon receipt of an application for a foreclosure prevention alternative, the mortgage servicer or mortgage lender shall include in the initial acknowledgment of receipt of the application:

1.

A description of the process for considering the application, including, without limitation, an estimate of when a decision on the application will be made and the length of time the borrower will have to consider an offer for a foreclosure prevention alternative.

(4) If a borrower accepts an offer for a foreclosure prevention alternative for a residential mortgage loan, the mortgagePage servicer22 or mortgage lender shall provide the borrower with a copy of the26 completeCODING: agreement of the foreclosure prevention alternative signed by the mortgage lender or an agent or authorized representative of the mortgage lender.

(5) If a borrower submits a complete application for a foreclosure prevention alternative for a residential mortgage loan and the borrower’s application is denied, the mortgage servicer or mortgage lender shall send to the borrower a written Page 17 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 statementmortgage of:servicer or mortgage lender shall provide the borrower with a copy of the complete agreement of the foreclosure prevention alternative signed by the mortgage lender or an agent or authorized representative of the mortgage lender.

(5) If a borrower submits a complete application for a foreclosure prevention alternative for a residential mortgage loan and the borrower’s application is denied, the mortgage servicer or mortgage lender shall send to the borrower a written statement of:

If the appeal is successful, 14 calendar days after a foreclosurePage prevention23 alternativeof offered26 afterCODING: the appeal is declined by the borrower;

or 3.

If a foreclosure prevention alternative offered after the appeal is accepted, the date on which the borrower fails to timely submit the first payment or otherwise breaches the terms of the offer.

(7) A mortgage servicer or mortgage lender is not required to evaluate a foreclosure prevention alternative application Page 18 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 from a borrower of a residential mortgage loan who has already been evaluated or afforded a fair opportunity to be evaluated for a foreclosure prevention alternative oroffered whoafter hasthe beenappeal evaluatedis ordeclined affordedby a fair opportunity to be evaluated consistent with the requirementsborrower; of this section, unless:

or 3.

If a foreclosure prevention alternative offered after the appeal is accepted, the date on which the borrower fails to timely submit the first payment or otherwise breaches the terms of the offer.

(7) A mortgage servicer or mortgage lender is not required to evaluate a foreclosure prevention alternative application from a borrower of a residential mortgage loan who has already been evaluated or afforded a fair opportunity to be evaluated for a foreclosure prevention alternative or who has been evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of this section, unless:

A foreclosure prevention alternative is being evaluated orPage exercised.24 of 26 CODING:

Section 8.

Paragraphs (a), (b), and (c) of subsection (5) of section 494.00115, Florida Statutes, are amended to read:

494.00115 Exemptions.— (5) As used in this section, the term “hold himself or herself out to the public as being in the mortgage lending business” includes any of the following:

(a) Representing to the public, through advertising or Page 19 of 20 CODING:

Florida Senate - 2022 CS for SB 1706 37-00545B-22597-02840-22 20221706__20221706c1 other means of communicating or providingexercised. information, including the use of business cards, stationery, brochures, signs, rate lists, or promotional items, by any method, that such individual can or will perform the activities described in s.

Section 9.

Paragraphs (a), (b), and (c) of subsection (5) of section 494.00115, Florida Statutes, are amended to read:

494.00115 Exemptions.— (5) As used in this section, the term “hold himself or herself out to the public as being in the mortgage lending business” includes any of the following:

(a) Representing to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or promotional items, by any method, that such individual can or will perform the activities described in s.

Section 9.10.

(4) In any practice or transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement, or hypothecation of mortgage loan transactions, directlyPage or25 indirectly:of 26 CODING:

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Florida Senate - 2022 CS for SB 1706 597-02840-22 20221706c1 directly or indirectly:

Section 10.11.

Page 2026 of 2026 CODING: