Currently in Florida, it takes an average of 600 days for the foreclosure process to be completed. This figure is the average among both contested and uncontested cases. Last year a bill designed to speed up the process faced protests and consumer outcry and did not pass. This week, Rep. Kathleen Passidomo proposed a new bill, HB 87, which is a more moderate version. But, it still aims at speeding up and cleaning up the foreclosure procedure.
The problem with the bill is ensuring that consumers have enough time and receive their right to due process. Florida, which already has the nation’s highest foreclosure rate, saw foreclosure filings jump 20% in 2012. Approximately one in five Florida mortgages are currently delinquent. And, more than half of those have not yet entered the foreclosure process, according to Lender Processing Services.
Banks had slowed their foreclosures over the past 2 years due to accusations of employees' “robo-signing” foreclosure filings. But, now they are looking to speed things back up. The bill proposes strict paperwork requirements for lenders, fast-track foreclosure procedures, and a shield against some tricky legal scenarios. Additionally, it requires lenders to certify that they have the correct paperwork proving that they have the right to foreclose. The bill also gives condominium associations the right to speed up a foreclosure when the bank is taking too long. The associations suffer due to units facing foreclosure paying a lack of maintenance. However, banks may intentionally move slowly on foreclosure to stall becoming responsible for the costs of the property that they eventually hope to acquire.
Another aspect of HB 87 concerns banks and homeowners who have already lost their homes through foreclosure. If the foreclosure is found to be wrongful, banks have to return the home to the original buyer. This can be a problem, that is if an unsuspecting third party already bought the home. House Bill 87 would allow wronged homeowners to be compensated monetarily only; they would not be able to get their house back. This aspect of the bill benefits only the banks.
Additionally, HB 87 includes a provision that would limit banks’ ability to pursue homeowners for additional debt after a foreclosure. Current law gives banks 5 years to pursue the deficiency judgment. The bill reduces that time period to one year.
This is the third attempt in the past three years by lawmakers to push foreclosure reform. If you are a Floridian who opposes this bill you should contact your representatives in both the House and Senate as soon as possible.
If you have questions about foreclosure, loan modification, bankruptcy, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.
