With overloaded courts and drawn-out timelines, most are in agreement that the state's foreclosure process is in desperate need of change. The longer foreclosed and abandoned homes sit, the slower Florida's housing market recovers. In the meantime, condo and homeowners associations are not getting paid. Properties are not being maintained, leading to blighted neighborhoods.

  

The current judicial foreclosure process in Florida takes anywhere from one to two years, due to the backlog of cases in our state's judicial system. These years come after the months and months that a bank may work with its customers to modify mortgages or arrange short sales before the foreclosure action is initiated. The proposal for non-judicial foreclosures would reduce this lag time to about four to 12 months, after the time bankers have tried to work out a payment plan. This is worlds apart from the notion of a bank tossing occupants out on the street the day after a payment was due.

 

Some argue this proposal does away with due process in the court system for foreclosure cases. The reality is that lawyers present stacks of cases to a judge for entry of final judgment giving judges little time to consider the particulars of each and every case. Is that due process in our court system?

 

Over the past two years, banks have been stuck between a rock and a hard place. Condo and homeowners associations want banks to foreclose more quickly while consumer advocates voice concerns about banks foreclosing too fast. What is ideal? What is the best timeline?

Our bankers want to keep people in their homes. Banks, in conjunction with federal government programs, are voluntarily modifying mortgages and work with customers for months before a foreclosure notice is filed. Often, modified loan agreements are established; however, there are increasingly more situations in which homeowners simply give up. They completely stop making payments and just walk away from their mortgages, abandoning both their homes and their responsibilities. This is just not right.

  

Some homeowners in Florida are making decisions to "strategically default" by staying in their homes, stop making payments and save their money to start anew somewhere else. In scenarios such as this, what should a bank do?
  
For some counties in Florida, there is an estimate that nearly 50 percent of foreclosures are not even homesteaded properties. In coastal communities the percentage may be even higher. These are second homes, rental properties or investment properties left from flippers looking to make a quick buck. These flippers artificially increased prices and don't deserve any sympathy. The only flippers we want to see in Florida are in the Seaquarium.

   
Banks do not want to be in the property management business. It is in a bank's best interest to have someone living in and maintaining the property, which is the bank's only collateral. The sooner a Florida family is living in the home, the better. This is true from the bank's perspective, but is also true for neighbors forced to look at an eyesore worried about lower property values, for cities and counties required to pay for maintenance until the bank takes title and for homeowners associations that need to meet their communities' needs.

 
Florida should join the 37 other states that allow non-judicial foreclosures, including many of our neighbor states. As ground zero for the country's mortgage meltdown, in part due to the highest levels of mortgage fraud, Florida banks are forced to deal with legal issues and property maintenance, all while also juggling regulatory scrutiny and stimulating the economy by lending. Our state needs the solution of non-judicial foreclosures, and we need it soon.

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COMMENT

I can sometimes only wonder if these bankers really believe the garbage they produce -- or how much money it takes to make people say things they can hardly believe if they are halfway educated!

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