Florida lawmakers say homeowners can’t have legal representation

05 Jun Florida lawmakers say homeowners can’t have legal representation

A new Florida law will make it virtually impossible for a homeowner to obtain an attorney to fight a foreclosure in state court or bankruptcy court. Pack your bags. Game over. Banks win.

The new Florida Statutes Section 501.1377, which becomes effective October 1st, is so outrageous that one can only assume it passed because none of Florida’s legislators read it, including Governor Charlie Christ, who signed it on May 28th, and Attorney General Bill McCollum, whose Mortgage Fraud Task Force had a hand in drafting it.

Now, obviously homeowners facing foreclosure need protection from opportunists and scam artists, commonly referred to as “equity purchasers.” However, consumer attorneys provide a last line of protection for the homeowner by defending him in foreclosure proceedings and seeking protection in bankruptcy court.

The new law defines a “foreclosure-rescue consultant” as a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services. “Foreclosure-related rescue services” means any good or service related to, or promising assistance in connection with stopping, avoiding, or delaying foreclosure proceedings concerning residential real property or curing or otherwise addressing a default or failure to timely pay with respect to a residential mortgage loan obligation.

The original bill included, as an exception to the definition, “A person licensed to practice law in this state when rendering foreclosure-related rescue services in the course of his or her practice as an attorney at law.” However, on March 6, 2007, the Committee on Financial Institutions voted to recommend a strike-all amendment. The amendment, “Narrows the exemptions for entities that are considered a ‘foreclosure-rescue consultant’ by removing lawyers, real estate brokers, and mortgage brokers.” See House of Representatives Staff Analysis dated March 14, 2008. The final version signed by Governor Christ removes attorneys as an exception to the definition. Therefore, attorneys are subject to the law.

So what if attorneys are required to comply with the new law? After all, more regulation of lawyers can never be bad, right? Wrong. This law actually prevents lawyers from helping homeowners in crisis!


Under the new law, attorneys cannot represent a homeowner in state court or bankruptcy court without first having the client sign a very specific retainer agreement. Every lawyer does this anyway, so that is not a big deal. However, the client must be given one day to review the agreement before signing it and another three days after the agreement is signed to rescind it. The client cannot waive these time periods.

On its face, this minimum, mandatory 4 day period seem reasonable, but it has a disastrous effect. A homeowner served with a foreclosure complaint has twenty (20) days to file a responsive pleading, and since a lawyer will not file a responsive pleading until the mandatory period runs, the law effectively shortens the period for timely responding by at least four (4) days!

Even worse, a client seeking bankruptcy protection is under the same 4 day period. If a person’s home is scheduled to be sold at a sheriff’s sale, only a Chapter 13 bankruptcy can stop it. If that person seeks the assistance of an attorney within four days of the sale, the attorney cannot help, and the house will be sold!


If the waiting period provision were removed from the new law, lawyers would STILL no longer represent homeowners in state court or bankruptcy court because under the new law, an attorney cannot charge or collect a single penny from a client until all legal services are completed. Furthermore, the law essentially requires a lawyer to front all litigation or bankruptcy related expenses. Once again, on its face, it seems like good news for consumers, but what lawyer is going to front the costs or litigate against a mortgage company or file a bankruptcy without getting paid along the way? Not a single one.

Is this really what Governor Christ and Florida legislators had in mind when they enacted the new Florida Statutes Section 501.1377? Call or email Governor Christ and ask him.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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