A bill aimed at streamlining the foreclosure process is more than just reducing the backlog of cases in the court system and rebuilding the real estate market, state Sen. Garrett Richter said Monday.
Reducing the number of abandoned homes is also a matter of safety, the Naples Republican said, noting that a Clay County detective was killed Feb. 16 while investigating a narcotics case at a home under foreclosure.
That was an abandoned property that turned into a crack house and killed a policeman, Richter said after the committee he chairs, the Senate Banking and Insurance Committee, approved in a 6-4 vote on Monday SB 1890, which would expedite the process on foreclosure against abandoned property as well as some cases where the residents are still in the contested property.
The bill, supported by groups such as the Florida Chamber of Commerce and the Florida Land Title Association, is designed to shorten the waiting period for many of the states foreclosure cases. According to Irvine, Calif.-based RealtyTrac, since 2007 banks have repossessed slightly more than 358,000 of the 1.3 million homes in Florida that have received a foreclosure filing.
Mark Wilson, Chamber president and CEO, said the bill will help rebuild the economy and create small-business jobs by giving a boost to the real estate market.
This is bigger than one industry, Wilson said.As our economy tries to recover, we recognize there is a lot of pain in home foreclosure. But the delays that are built into the current system are drawing out that pain across the entire economy.
Critics, such as the Florida Consumer Action Network, claim the bill would leave many homeowners contesting foreclosure filing, lacking certainty their case will be heard adequately in court.
The bill requires banks to produce evidence or a sworn affidavit that they are entitled to the foreclosure and certify the status of the home loan. The bill also limits the time frame for a lender to file suit against a borrower to one year, down from five.
Florida Bankers Association spokesman Anthony DiMarco expressed concerns about that new time frame, but vowed he would continue to work with legislators before the bill reaches the Senate floor.
Sen. Steve Oelrich, R-Gainesville, in voting against the bill, said among his concerns -- besides such a complicated issue being brought up late in the session -- was the reduction in time to a single year.
He said two years may be more acceptable, adding that he wants assurances that many of the speeded-up cases will not return a year or two later in lawsuits that further clog the courts.
What I dont want is 20,000 mortgages to go through and two years from now we have 15,000 of them coming back and haunting us, Oelrich said. You talk about the courts being backed up.
Rep. Kathleen Passidomo, R-Naples, author of the House version of the bill and a real estate attorney, said the goal is to give all parties involved in a foreclosure the ability to move cases through the court system.
The really important part of this bill is the ability of any lien holder, including the condominium and homeowners' associations, to ask the court to issue this, showing cause to the borrower or defendant as to why a judgment should not be entered, Passidomo said. Assuming they do this through the quick process, it would help the property owners because it would get through the foreclosure quicker.
She said the idea is to require the lenders to file claims once all their paperwork is in order.
Passidomo said the courts have been tied up handling incorrect filings.
I think its actually going to help the courts, she said.
Sen. Jack Latvala, R-St. Petersburg, sponsor of the bill, said the states real estate market has suffered due to a backlog of foreclosure cases in the court system that take an average of 367 days to clear.
What that is doing is having an adverse effect on homeowners' associations, where people are paying extra because so many units and homeowners are not paying and its taking a toll on our neighborhoods, Latvala said. Youve all seen neighborhoods with homes that are in disrepair, yards that are grown up.
Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.
