Fast-track foreclosure bill approved by House lawmakers

Article Courtesy of The Palm Beach Post

By Kimberly Miller

Published May 1, 2013

Florida lawmakers moved forward on two closely watched housing bills Monday, passing a plan to fast-track foreclosures, and agreeing to spend some of the state’s $200 million National Mortgage Settlement winnings on college dorm fees, Habitat for Humanity and domestic violence centers.

The House passed its plan to hasten the state’s foreclosure process in an 87 to 26 vote that sent it to the Senate for review. The bill, HB 87, has been debated in various forms during four consecutive legislative sessions.

Detractors say much of the language they opposed in the past has been removed, but they remain concerned about certain aspects, including a portion that would give a homeowner only monetary compensation if a home was taken in a fraudulent foreclosure.

“It makes it impossible for a (foreclosure) sale to be undone even if it was the result of a gross error,” foreclosure defense attorney Matt Weidner said after the vote. “It removes a fundamental and essential power that our judicial branch has to undo its own errors.”

House members also tentatively agreed to accept the Senate’s plan on how to spend $200 million that lawmakers snagged from Florida’s share of the $25 billion National Mortgage Settlement. The Senate unanimously approved the proposal Friday. The House could take its official vote today.

The Senate’s plan omits some of the more controversial aspects of the House’s version, including dedicating $45 million for mortgage down payments to assistant state attorneys, public defenders, rural health care workers, including doctors, and teachers in low performing schools.

About $9 million remains in the proposal to pay for two years of dormitory fees for current high school sophomores and juniors from low-income families. Other awards include $5.2 million for court technology to expedite foreclosures, $10 million to legal aid groups, $10 million to domestic violence shelters, $20 million to Habitat for Humanity and $40 million to the State Housing Initiatives Partnership, or SHIP.

SHIP helps very low- to moderate-income residents pay for emergency home repairs, closing costs and home ownership counseling. The House’s plan included no money for SHIP, which angered some members who didn’t think enough was being done to help struggling borrowers avoid foreclosure.

“These are good and reputable programs, but those dollars are to be used to keep people in their homes,” said Rep. Mike Fasano, R-New Port Richey, during a March committee meeting where he tried to amend the House bill to add money for SHIP.

SHIP is financed by documentary-stamp tax collections and administered by local municipalities. Palm Beach County would receive an estimated $7.5 million in SHIP dollars next year if the full fund — about $140 million — is left intact, according to the Florida Housing Coalition. Boca Raton, Boynton Beach, Delray Beach and West Palm Beach would receive a combined $2.36 million.

There was no debate Monday against accepting the Senate’s plan, SB 1852, to spend the $200 million.

The same can’t be said for the fast-track foreclosure bill, which prompted about 10 House members to speak.

Bill proponents, including sponsor Kathleen Passidomo, R- Naples, pointed to such homeowner protections as a reduction in the number of years a bank can pursue a deficiency judgment from five to one. Also, banks are required to have proof of ownership upfront or face sanctions.

But the bill also allows banks to call for a “show cause” order in cases where the property isn’t homesteaded. That means the homeowner would have to prove why the judge shouldn’t enter a foreclosure judgment immediately if the bank’s paperwork is properly documented.

“The thing that keeps me from getting to a ‘yes’ on this bill is the part that restricts due process rights,” said Rep. Joe Saunders, D-Orlando.

The House and Senate foreclosure plans differ slightly. The House removed a provision that would use more senior and retired judges to hear foreclosure cases while the Senate still has that language.