New Law Affects the Timeframe to Cancel Mortgages in Florida
Effective July 1, 2016, lenders will have less time to cancel a mortgage in Florida once it is paid in full. Furthermore, open-end mortgages must now be cancelled within a specified time of the borrower’s request for cancellation.
Specifically, the Florida legislature has amended Section 701.03 of Florida Statutes and reduced by 15 days the time a mortgagee or assignee has in which to cancel a mortgage after it is paid in full. Previously, lenders had 60 days after satisfaction on the mortgage to cancel it in the manner provided by law; that time period will be shortened to 45 days.
An exception applies in the case of open-end mortgages that are paid in full. Those must be cancelled within 45 days of receipt of written notice from the borrower of the intent to close the mortgage. Section 701.03 previously did not address open-end mortgages. The new law does not apply to open-end mortgages existing before July 1, 2016, if the loan agreement otherwise contains procedures for canceling the mortgage.
The amendment to Section 701.03 was signed by Gov. Rick Scott on March 10, 2016.