Methods to Amend Foreclosures in Florida By Sarah Parr

Editor's note: Sarah Parr is a Central Florida-based writer who blogs about foreclosure issues.  She can be reached by e-mail at sarah@floridaforeclosedlawyer.com

Lawmakers, real estate professionals and consumer advocates in Florida are currently drafting plans to change Florida’s status as one of the only states in the country that still sees increases in foreclosure activity. The Florida legislature is currently discussing a few ideas to amend the foreclosure process, creating debate among many people with different solutions. The ideas are varied and have multiple angles.

Expedite the process

The “Fair Foreclosure Act,” also known as House Bill 87, aims to accelerate Florida’s lengthy judicial-foreclosure process. Proponents argue that the bill protects borrowers by requiring banks and lenders to comprehensively prove they own a mortgage before they can file any foreclosure action. If enacted, the bill would also allow third-party lien holders, such as condo or homeowner associations, to push foreclosures through a faster process rather than through the standard court arrangement. The legislation allows borrowers 20 days to provide defense against the foreclosure action. After a final judgment in foreclosure is reached, the bill would give banks and lenders one year instead of the present five years to go after borrowers for losses from a foreclosure.

House Bill 87 has produced the most discussion of the proposed measures, as Winter Park foreclosure attorneys might tell you. Opponents claim the legislature seems more preoccupied with processing foreclosures quickly and less concerned about protecting homeowner rights. They also claim that 20 days is not enough time for homeowners to seek out attorneys for protection from foreclosure and provide sturdy defenses. Conversely, supporters assert the Florida foreclosure process is too prolonged, causing misery for everyone involved. Supporters say speeding up the process would also be favorable for Florida real estate’s future success, as homes in foreclosure limbo can be eyesores that bring surrounding property values down.

Senate Bill 1666 proposes allowing retired justices or judges to consent to temporary duty to help hear some of the backlogged foreclosure cases in Florida. The legislation would also allow second publication of the notice of sale of a home to be published online in lieu of publication in any other form of media. This changes the requirement that a second notice of pending foreclosure must occur in a print media advertisement, a move some say is unfair to low-income homeowners and seniors who could only find out about an impending foreclosure sale through a newspaper notice.

Provide more protection for consumers

House Bill 1777 proposes creating a homeowner bill of rights, like a similar measure recently enacted in California, in the event of late mortgage payments. California’s law is meant to protect homeowners from predatory lenders and further regulate the mortgage industry. California has already seen a large decrease in the amount of foreclosure filings in January since it went into effect on January 1, according to CNN.

Aid current homeowners in distress

Four bills, proposed and sponsored by Senator Darren Soto (D-Orlando), seek to aid homeowners struggling with foreclosure or mortgage issues. Senate Bills 1226 and 371 would require that lenders can only file a deficiency judgment one year after a final foreclosure judgment, and would only have two years to collect any outstanding debt. Presently, debt collectors can chase after borrowers for up to two decades. Senate Bill 1236, also known as the “Mortgage Principal Reduction Act,” would require the Florida Housing Finance Corporation to gain access to $100 million of the federal government’s Hardest-Hit Program in order to begin a mortgage principal reduction program for Floridians with properties in foreclosure. Soto’s final proposed bill, the “Short Sale Debt Relief Act,” would make deficiency judgments unenforceable on a short sale if the original debt was 20 percent or greater than fair market value.

Based on all of the proposals presented, Florida will probably see changes in its foreclosure handlings soon. Advocates will still fight for more recovery in the housing market.