Courtesy of The Sun Sentinel
By Kathleen Haughney
September 23, 2011
-- Floridians facing foreclosure could be stripped of their homes faster and
have routine access to the courts limited under a proposal likely to come
before Gov. Rick Scott and the Legislature in the coming months.
Bankers see it as a speedy and efficient way to manage foreclosure cases and
get tens of thousands of Florida properties in ownership limbo back on the
market, helping pull the state out of its economic doldrums.
In contrast, foreclosure defense lawyers and consumer
activists see the plan as removing judicial oversight from a system that has
proven to be riddled with fraud and abuse, and leaving ordinary homeowners
defenseless before some of the state's most powerful financial interests.
"Obviously there's a lot of fraud being perpetrated by the banks in
these cases," said Michael Redman, a Palm Beach County resident who
founded the Website 4closurefraud.org to chronicle Florida's ongoing
foreclosure crisis. "At this point in the game, it's almost ridiculous
to take it out of the court system."
But the Florida Bankers Association, which has pushed the plan over the past
few years, has key allies. Scott voiced support for the
proposal at a Florida Bar convention this summer and told reporters
Wednesday he is still interested in it. Some lawmakers have already jumped
"Well, I want to make sure that we have an efficient process, so we
don't create a reason for banks or whoever lends money not to lend money in
Florida," Scott said. "When you talk to people that are in the
system now they say it's 600 days to get through foreclosure. All that does
is create another incentive for people to not lend money when we want people
to lend money to our state.
"I don't know the answer yet, but I want to look at the process,"
Scott said. "I want to get more information before I make a
According to RealtyTrac, a foreclosure tracking firm, Florida had the third
highest foreclosure rate in the nation and was second in the number of
foreclosure cases filed in 2010. On average, the firm said, the foreclosure
process takes 676 days.
Usually the lender reclaims possession; other times, homeowners get to keep
Currently, Florida is one of only 20 states to handle the foreclosure
process through the courts. In California and Nevada, which have also been
plagued by high foreclosure rates, foreclosure proceedings are primarily
conducted outside court in about four months, though a judge can get
involved if one of the parties deems it necessary.
Typically in states using a non-judicial system, the mortgage contract is
based on a deed that includes a clause allowing banks to begin foreclosure
proceedings without going to court. The bank gives notice to the homeowner
and if the homeowner did not respond, the bank can reclaim the property.
Lawmakers and the Florida Bankers Association have pushed in the past for
Florida to become a non-judicial foreclosure state but have come up short,
with concerns about rampant fraud by some lending institutions trumping
Legislation has not been filed yet this year on the issue, but legislative
leaders inTallahassee seem interested. Legislative economist Amy Baker gave
a presentation on the issue this week to the House Civil Justice
Subcommittee and Katie Betta, a spokeswoman for House Speaker Dean Cannon,
said that Cannon, R-Winter Park, has said he is open to it, but cautioned
that the "devil is in the details."
"That's going to be a big issue this year. It's already shaping up to
be," said state Rep. Darren Soto, D-Orlando, a member of the civil
justice subcommittee who is opposed to taking judges out of routine
foreclosure proceedings. "When we're talking about the property right
being paramount, we need to make sure due process is exhibited," Soto
Anthony DiMarco, a lobbyist for the Florida Bankers Association, which
represents more than 300 banks and financial institutions, said the
association has not finalized its legislative agenda for 2012, but that it
has generally supported the change in the past because it believes the
faster homes can be repossessed by lenders, the better off the economy will
New buyers will move into the houses and apartments and start paying taxes,
plus condo or homeowners association fees, he said.
"We have to get to the bottom to get out of this recession and the
sooner we can do this the better," DiMarco said.
But defense attorneys say the existing system needs more oversight by the
courts, not less. Lawyers in the past few years have reported numerous cases
where documents used to support foreclosures were missing or forged. The
result has been a process that is not always fair to the homeowner, they
"Anything that takes away oversight isn't necessarily a good thing, not
necessarily for homeowners in foreclosure or the market in general,"
said Chris Immel, a foreclosure lawyer in Palm Beach County. "We
routinely see documents that just don't add up."
DiMarco argues, however, that with reputable financial institutions, that
shouldn't be a problem. Most cases, even when going through the courts,
result in foreclosure, he said, but a non-judicial route would get to that
end result quicker.
In states that already settle matters outside of the courts, homeowners are
still given notice and time by lenders to settle the issue. If there is a
mistake, they should be able to notify their bank and straighten out the
problem, DiMarco said.
But if the bank is acting irresponsibly, DiMarco added, lawyers and judges
should become involved.
"I think the end result is going to be the same and it will just be
done a little quicker," he said. "Other states have not seemed to
have had a problem."