Rare dispute within Florida Bar over quickie foreclosures

Article Courtesy of The Palm Beach Post

By Kimberly Miller

Published April 16, 2013

A rare public brawl is escalating between members of the Florida Bar and one of the organization’s most powerful sections over legislation aimed at speeding the state’s lengthy foreclosure process.

The dispute, which heated up this week in letters published in the online version of The Florida Bar News, has even drawn super lobbyist Ron Book into the fray.

Book, whose clients include Florida Power & Light, AutoNation and Sun Life Stadium, was hired by Florida Consumer Justice Advocates, a group of attorneys opposing the legislation, which they believe favors banks.

On the other side is the Florida Bar’s Real Property, Probate and Trust Law Section, represented by another prominent lobbyist, Peter Dunbar. The section says the legislation balances the rights of homeowners with the need to reduce the backlog of foreclosures in Florida’s courts.

In the sometimes surly letters, opponents accuse supporters of sacrificing due process for the sake of expediency, and protecting the title insurance industry over consumers. Supporters lob back the accusation that “some groups oppose foreclosure reform and support inaction for the sole purpose of delaying foreclosure.”

After spending six consecutive months as the highest ranked state in the nation for foreclosure activity, Florida was bumped to runner-up in March by Nevada, according to a new RealtyTrac report.

Still, the Sunshine State is grappling with a 366,250-case backlog in its foreclosure courts and expects an additional 680,000 cases in the next three years.

Attorneys on both sides of the legislation said they’ve never seen the level of division the bills have caused within the Bar’s ranks.

“It was with a very heavy heart and hand that we decided to oppose the very organization that we are members of,” said South Florida foreclosure defense attorney Roy Oppenheim, who signed the letter opposing the bills with other local lawyers including Royal Palm Beach-based Tom Ice. “But if they think we’re going to stand by and let this happen, they’re crazy.”

But Dunbar said the bills are tame compared to previous proposals and that several parts have been amended to be more beneficial to consumers.

“That makes it even more suspect why people think this is a bad bill,” he said.

While the legislation decreases the amount of time a bank can pursue a homeowner for unpaid mortgage debt, it also restricts a homeowner who is wrongfully foreclosed on from getting his home back if it has already been purchased by a third party. While that’s been a rare occurrence, the borrower could only get monetary damages under the bills.

The bills also create a program that would use more retired and senior judges to hear foreclosure cases. Bill opponents fear that senior judges, who aren’t elected, won’t be held accountable for their actions and that their rulings could be challenged as unconstitutional.

West Palm Beach attorney Jerry Aron, who is chairman for the Ad Hoc Foreclosure Reform Committee of the Real Property, Probate and Trust Law Section, said the decision to support the bills was publicly debated, carefully weighed and ultimately approved by a 240-member executive council. He disagrees with the arguments against using senior judges.

“It would be wonderful if the existing judges were sufficient to handle the workload, but they just aren’t,” Aron said. “It’s hard to come up with a better solution than to use these retired judges who understand the judiciary and are willing to take on the added work.”

This is the fourth consecutive legislative session where lawmakers have discussed bills to speed the foreclosure process.

Attorneys opposing the bills said they mustered forces now because they have a better chance of passing after the $25 billion National Mortgage Settlement reached last year.

“We are not about getting people free houses, and that message is not being heard,” said St. Petersburg foreclosure defense attorney Matt Weidner.

Donations from like-minded attorneys paid for Book’s services and so far Weidner said his group has won at least one concession. Homeowners living in their properties are exempt from the fast-track foreclosure provision.

The current version also omits some of the ideas that were most controversial in past years, such as language that allowed a bank to determine whether a home is abandoned and then fast-track a foreclosure.

“Trying to fix things by cutting corners can make things worse,” said Oppenheim.

Nova Southeastern legal ethics Professor Robert Jarvis said it’s unusual that the Bar’s section chose to take a position on what he said could be a substantive legal change. Barring a homeowner from regaining property “cuts off a historic right,” Jarvis said.

“I think the Bar should have stayed out of this one,” he said.

The Senate’s version of the foreclosure bill, SB 1666, has passed one committee and is scheduled to be heard next by the Judiciary Committee on Monday. The House’s version, HB 87, has passed three committees and is scheduled to be heard in one more before a full vote.