House committee passes quickie foreclosure bill

Article Courtesy of The Palm Beach Post
By Kimberly Miller

Published February 10, 2012

 

A bill that would hasten Florida's foreclosure process while reducing the time banks could pursue a homeowner for loan debt won a tepid approval from the Florida House Economic Affairs Committee this morning.

 

The proposal, HB 213, is derided by homeowner advocates who fear it will leave borrowers with less defenses against bank repossession. But supporters claim it would only allow quickie foreclosures in cases where homes are abandoned, when the action isn't challenged, or when a judge rules the homeowner has no legitimate reason to block a bank takeover.

  

Rep. Kathleen Passidomo, R-Naples, is sponsoring the bill. She defended it Wednesday against critics who claim it takes foreclosures out of the judicial system.

  

"Firstly, and let me put everyone's mind at rest and contrary to the e-mails and calls you've been getting, this bill is not a non-judicial foreclosure bill," Passidomo said. "This bill expedites the judicial process while at the same time guaranteeing the rights of citizens."

  

Florida's courts have a backlog of about 368,000 foreclosure cases, according to State Courts Administrator Lisa Goodner, who expects hundreds of thousands of additional cases to add to the log jam in the next few years.

  

According to a report released Wednesday by real estate analytics firm CoreLogic, nearly 12 percent of Florida's homes with mortgages are in foreclosure, ranking it tops in the nation for foreclosure inventory. An estimated 17 percent of Florida home loans are 90 days or more behind on payments.

  

While the committee approved the bill in a 12 to 4 vote, members grilled Passidomo about protections in the bill for homeowners and voiced concerns about how a home would be determined abandoned.

  

The bill says a process server can determine a home is abandoned if two of a handful of conditions are met, such as windows and doors are boarded up or broken, trash or debris has accumulated, the home is deteriorating and interviews with at least two neighbors indicate the home is abandoned. The court must also contact utilities companies to find out if there is service going to the home. 

  

"It doesn't say to what level trash or debris needs to have accumulated," said Rep. Evan Jenne, D-Fort Lauderdale. "I have some folks in my district that if you walked into their house right now there would be a pizza box, a dozen beer bottles and some chip bags."

  

Homeowner advocates also oppose a provision that requires a borrower to quickly put up a defense as to why the foreclosure shouldn't proceed. A judge rule whether the defense is legitimate or not. If not, the judge could immediately enter a final judgment.

  

"We are concerned about the burden of proof being put on the homeowner," said Alice Vickers, an attorney with the Consumer Action Network. "It places a homeowner in the position of trying to try a case as if it is a final trial within 20 days of service of process."

 

The bill does require banks to have all of their paperwork in order, including information on the note and assignments of mortgage, before a foreclosure is filed. It also would give banks only two years, instead of the current five, to file for a deficiency judgment against the borrower.

 

Wednesday's approval sends the proposal to the House Judiciary Committee for a vote. A similar Senate bill, SB 1890, is being sponsored by Sen. Jack Latvala, R-St. Petersburg. His proposal, however, has stalled in the Senate Judiciary Committee.


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LEGISLATIVE SESSION 2012