Thinking of Living for Free? New Law to Expedite Foreclosures….
By SHANNON BEHNKEN | The Tampa Tribune
A controversial bill in the legislature would speed up foreclosures in Florida and remove the process from the court system. “This would have a profound and dramatic change on the foreclosure landscape,” said John Byrne, a Tampa lawyer with Byrne Law Group. “This bill was filed very late and slid under the radar. I see zero benefits to homeowners.”
House bill 1523 would change that by allowing lenders to skip legal proceedings unless the borrower requests the foreclosure goes through the courts. The process could take as little as 90 days.
There are 30 other states that have a non-judicial foreclosure process, allowing some lenders to foreclose on properties in as little as a month. The bill is sponsored in by Tom Grady, R-Naples. The Naples area is one of Florida’s hardest-hit by foreclosure.
Grady has said in published reports that the bill would “expedite the resolution” in foreclosure cases, providing needed protections for lenders and property owners. It would also require mortgage holders to prove that an owner is in default, he has said.
Part of the bill says that borrowers will not be liable for the unpaid portion of the loan if they act in good faith during the foreclosure process. But Byrne and other lawyers who represent homeowners in foreclosure actions say this bill takes away a homeowner’s rights to due process. “I think this is intended to keep these cases out of court because it’s easier for lenders,” Byrne said.
While a homeowner can request their case go to court, Byrne said they have only 20 days to do that and would have to file a lawsuit. That, he said, could cost $1,700. While it’s true the bill would streamline the process for banks, Alex Sanchez, president of the Florida Bankers Association, said it would also make it easier on the court system.
“The judges are overwhelmed with foreclosures,” Sanchez said. “We actually have homeowners writing to us, asking us to speed up the process so abandoned homes can be sold to someone who can afford it and can fix it up.”
Florida has always been a judicial foreclosure state, Byrne said. Unless a state passes a law making foreclosure a non-judicial process, a lender must go through the court system to take possession.
Homeowners in states with non-judicial foreclosure systems don’t have as long to try to work something out with their lender. In Georgia, for example, lenders can foreclose in as little as 30 days. Critics of the bill in Florida fear that could happen in the Sunshine State too.
But just as Georgia has a reputation for being strict on delinquent homeowners, Florida is known for being lenient, said Kevin Caiaccio, of The Caiaccio Law Firm in Atlanta.
“Maybe our system is too much in favor of the lender and your system is too much too much the other way,” said Caiaccio, a real estate attorney. “You need to strike a balance because you are taking people’s property away. But it’s not fair to homeowners who do pay to allow other owners to live for free.”
Georgia’s law wasn’t looked at that closely, Caiaccio said, until the economic downturn. Now, there are proposals in the Georgia legislature, he said, that would soften the law. One would give the borrower more time get caught up on their loan before a foreclosure. Another would allow the borrower to buy back the property after the lender takes it back.
“The law is becoming more controversial,” he said. “In this environment, there are some people wanting reform.”