Florida Fair Lending Act
The Florida Fair Lending Act, Chapter 494, Florida Statutes, prohibits predatory tactics on high cost home loans, including:
* Charging prepayment penalties for longer than three years
* Increased interest on loans going into default
* Balloon payments on loans that mature in less than 10 years
* Extending credit regardless of a borrower’s ability to pay
* Making direct payments to home improvement contractors
* Calling a loan due even though the borrower has complied with the terms of the loan
* Refinancing a loan during the first 18 months, unless there is a benefit to the borrower
* Offering to originate a loan at the borrower’s home without a prearranged appointment
* Charging late fees that exceed five percent of the payment
The law also requires lenders to disclose certain facts about the loan at least three days prior to closing the deal, including:
* A mortgage will be placed on the borrower’s home, and they could lose the home in the event of foreclosure.
* Interest rates and terms can vary, depending on the lender or broker.
* Borrowers should consider consulting a HUD approved credit counseling agency or a financial advisor regarding financing of their home.
* Debt consolidation can be a useful tool if the borrower does not take on additional short-term debts.
* Loan applicants do not have to accept the loan, even though they have filled out an application.
Bankruptcy
Individuals can file for bankruptcy in a federal court under Chapter 7 (”straight bankruptcy”, or liquidation) or Chapter 13 (a “consumer reorganization”, or debt adjustment case). (Although individuals can technically file Chapter 11 bankruptcies, those filings are rare. They typically happen if the individual’s debt load is too high for a chapter 13 and they do not qualify for a chapter 7).
In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most liens, however (such as real estate mortgages and security interests for car loans), survive. Many types of unsecured debt are legally discharged by the bankruptcy proceeding, but there are various types of debt that are not discharged in a Chapter 7. Common exceptions to discharge include child support, income taxes less than 3 years old and property taxes, student loans (unless the debtor prevails in a difficult-to-win adversary proceeding brought to determine the dischargeability of the student loan), and fines and restitution imposed by a court for any crimes committed by the debtor. Spousal Support is likewise not covered by a bankruptcy filing nor are property settlements through divorce. Despite the non-dischargeability of these debts, they must be listed on your bankruptcy schedules, as all debts (and all assets) must be listed.
Condo Deposit Recovery
There are various legal requirements that a Florida condo developer must comply with in order to offer for sale condo units and if your developer fails to carefully follow some of these legal requirements, you may be able to terminate your contract for purchase.
For example, under the Interstate Land Sales Full Disclosure Act (”ILSFDA”) or Florida law, you may have the right to terminate the contract for your pre-construction condominium or home and receive all, or part of your deposit back. ILSFDA places certain requirements and responsibilities upon developers to make disclosures relating to the condition of real property. ILSFDA also contains anti-fraud provisions which impose civil liability to developers who make false or misleading promises. In the booming real estate market of the past decade, consumers paid large deposits for condo units only to experience delays of up to three (3) years between the signing of a contract and closing. Also many contracts for the pre-construction purchase of condo contain provisions that attempt to eliminate all your rights for the benefit of the developer, this may cause the contract to become voidable and allow you to receive your deposit back from the developer, contact us to review your pre-construction contract.
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