Banks seek swifter process as foreclosures climb

Article Courtesy of The News-Journal

By BOB KOSLOW

Published February 15, 2010

DAYTONA BEACH -- The new year started with no relief from the high number of foreclosure filings across Volusia and Flagler counties and the state.

And the mounting number of cases sparked a battle between bankers who want a nonjudicial process to speed the cases through the system and those seeking to protect homeowner rights.

In January, lenders filed default, auction and repossession notices on 1,904 properties in Volusia and Flagler counties, according to the California firm RealtyTrac.

That total is 52 percent higher than the 1,253 filings in January 2009. It also is the third highest monthly total in the past two years. December 2009 was the highest, with a combined total of 2,376 filings.

To ease the burden on the courts, the Florida Bankers Association is lobbying legislators to create a nonjudicial foreclosure process similar to those in 37 other states.

"It can take 12 to 28 months for a foreclosure to clear the Florida courts," said Alex Sanchez, president of the bankers association. "We're an easy target for people to say the bankers just want to get their hands on the property, and that's just not true. Foreclosure is a last resort. We want to work with Florida families to keep them in their homes, but sometimes foreclosure is required."

However, before the bankers' bill could be filed, two state legislators filed bills Tuesday to preempt such an effort.

A "Foreclosure Bill of Rights" was filed in the state Legislature by Sen. Dave Aronberg, D-Greenacres, and Rep. Darren Soto, D-Orlando, to preclude banks and other mortgage holders from foreclosing on a homesteaded property without going through the judicial process.

"Homeowners have seen their property values plummet thanks in large part to risky Wall Street behavior," Aronberg said in a Democratic Party news release. "Meanwhile, the same institutions doling out big bonuses are now seeking to evict residents from their own homes without giving them their day in court. This bill gives Florida homeowners an equal footing and the legal means to defend their own property."

Foreclosures have been a nagging problem locally and statewide.

There were 255 foreclosure filings in Flagler County in January, up 51 percent from the 169 filings in January 2009. One in every 192 housing units received a foreclosure notice, ranking the county 17th among the states 67 counties.

In Volusia County, there were 1,649 foreclosure filings in January, up 52 percent from the 1,084 filed in January 2009. The county's foreclosure rate of one in every 151 housing units ranked the county ninth.

There were 47,069 foreclosure filings in January statewide, up more than 15 percent from the 40,770 filings in January 2009.

Sanchez said a nonjudicial foreclosure process could shrink the number of abandoned homes that depress home values and strain government budgets. It could also move foreclosed condos to market faster so association fees can be collected.

It would also help the courts manage other legal matters.

But, at what cost, asked Kellie Killibrew, a DeLand real estate attorney.

"Homeowners are not savvy at all," she said. "They don't understand the process. Many clients want to give (the home) back, and often you can't get (the lenders) to take it back.

"They are getting better now that we have the mandatory mediation. That is one of the best things to have come about. It enables us to talk face to face and not go through the automated system, the call center, where no one knows what they are doing."