A foreclosure bill that would require a homeowner to present a sound defense or face an immediate judgment in some cases moved closer to a full legislative hearing Monday with the blessing of the Senate Judiciary Committee. Many organizations are taking sides on this controversial issue.
By Kimberly Miller, Palm Beach Post Staff Writer
A quickie foreclosure bill that would require a homeowner to present a sound defense or face an immediate judgment in some cases moved closer to a full legislative hearing Monday with the blessing of the Senate Judiciary Committee.
Monday’s vote marked the farthest a proposal to streamline Florida’s strained foreclosure process has advanced in the Legislature since the housing collapse, but it’s in no way a done deal, lawmakers and lobbyists say.
The 5-2 approval of Senate Bill 1890 came with hesitation from some committee members and firm opposition from homeowners and foreclosure defense attorneys. One man, who called the sponsors of the bill a “disgrace” during public comment, brought blown-up images of his own foreclosure documents that he said show evidence of fraud.
The plan, which contains some consumer protection language, such as reducing the time a bank could pursue a homeowner for unpaid mortgage debt from five years to one year, has earned support from the Real Property Probate and Trust Law section of the Florida Bar.
But the Florida Bankers Association has yet to take a position, and it is flatly opposed by the Florida Consumer Action Network.
“We cannot support this bill because it places too much of the burden of repairing the foreclosure problem on the backs of homeowners and (community) associations,” said Alice Vickers, a network attorney.
House sponsor Rep. Kathleen Passidomo, R-Naples, and Senate sponsor Jack Latvala, R-St. Petersburg, said Monday that they will work through constituent concerns this week to get matching bills. They are seeking approval in the plan’s two remaining Senate committee stops. The House version of the bill (HB 213) has one committee stop left.
“This bill won’t solve everything overnight,” Passidomo said. “It will take a while for these things to sort themselves through, but if we do nothing, how many years will we be in this situation?”
The House and Senate foreclosure proposals aim to streamline foreclosures by allowing any lienholder to hasten a foreclosure case if a property is abandoned or the homeowner does not respond with a defense within 20 days of being served.
Currently, only the bank that owns the primary lien can file for what is called a “show cause” order in which a homeowner must show why the bank doesn’t have a foolproof case. If a judge sides with the bank, a final foreclosure judgment can be issued immediately.
In most cases, even a weak defense is enough to have a judge stop the show cause proceeding and force the traditional foreclosure process to occur, said Pete Dunbar, legislative counsel for the Real Property, Probate and Trust Law section of the Florida Bar.
That’s why most properties affected by the proposals would be abandoned or ones where the homeowner doesn’t respond to the foreclosure, Dunbar said.
“We’re dealing with a statute that was written decades ago and that never contemplated the situation we face today,” Dunbar said about current foreclosure law.
Consumer advocates, however, have several concerns with the bill, including a restriction that would allow a homeowner only monetary restitution if property was taken fraudulently. Passidomo said the provision is to protect future owners of the home from having to defend their claim to title.
Also, the bill requires the lender to prove on the front end their right to file for foreclosure – a rule already on the books, but not enforced, lawyers said Monday.
Lynn Drysdale, an attorney with the Jacksonville-based Legal Aid Society, said the banks also already have the power to foreclose more quickly, but choose not to.
Sen. David Simmons, R-Altamonte Springs, said he’s heard similar concerns.
“The judges are saying that they can easily move these cases along but when they come in the attorneys aren’t prepared,” said Simmons, a member of the Senate Judiciary Committee who voted to approve the bill. “It’s the attorneys the banks hired that aren’t doing the jobs they need to do to move the cases along.”