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House Bill 1523 to Shorten Foreclosure Process to 90 Days

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.”

Under current Florida law, a lender can take back a home only if it files a foreclosure lawsuit and is granted one from a judge. There are nearly 500,000 pending foreclosure cases in Florida“ among the worst in the nation. Because of the backlog, foreclosures can take months or years.

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.

Critics say the bill is bad news for struggling homeowners because it significantly shortens the foreclosure process, making it more difficult to save their houses. But supporters say this is good for neighbors weary over long-vacant houses in their community.

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.”

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Written by Rae Catanese, Realtor

Licensed Realtor since 2002, Tampa Bay’s own Rae Catanese regularly gives expert advice and insider tips about the Tampa Bay real estate market via her blog, The Tampa Real Estate Insider. If you are thinking of buying or selling a home in the Tampa, St. Petersburg or Clearwater areas-then this blog is for you. I typically post articles once a week. To make sure you don’t miss my newest posts, you can subscribe here! Have a real estate question? Email me here!

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2 Comments

  1. Rae Catanese

    I’m seeing a lot of this going on. Great comments!

  2. Michael Freeman

    This bill would very much help some homeowners. In early 2007, I looked at my finances and said there is no way that I can stay in my house. I then listed it and it didnt sell. I applied with Bank of America to do a Deed In Lieu of Foreclosure. They assured me that I qualified, I then moved out and found other living arrangements. 1 year later they tell me that I cant do deed in lieu bc of a lien was just placed on for unpaid property taxes while they delayed. Three years later the property is still vacant, Declined significantly in value and has lots of taxes due and they still havent foreclosed when I have asked numerous times that they foreclose and sale to mitigate damages. This is a 600k house just wasting away and now they will probably try for a deficiency judgement when it is their delay that has made it decline in value and build property taxes.

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