Foreclosures Guest Writer Sarah Parr!

Three Notable Foreclosure Proposals

By Sarah Parr

Consumer advocates, real estate professionals and lawmakers are currently debating ways to change Florida’s status as the state with the most foreclosures in the nation. Florida lawmakers recently drafted a handful of legislation that is currently making its round in the Florida House and Senate, creating debate among people from all sides of the issue. The proposed laws could noticeably change the way foreclosures are administered in Florida.

Measures to speed up foreclosure process

A representative from the Florida House of Representatives proposed House Bill 87 as a solution to Florida’s prolonged judicial-foreclosure process. Supporters of the bill say it sticks up for consumers by requiring banks and lenders to prove they own a mortgage in detail before they can file any kind of foreclosure action. Homeowners are given up to 20 days to provide a defense against foreclosure, which some Kissimmee foreclosure attorneys say isn’t enough time. 

Under House Bill 87, banks and lenders would only be given one year instead of five years to collect losses from a foreclosure after a final foreclosure judgment is decided. The bill would also allow other lien holders, such as condo or homeowner associations, to ask the court to move foreclosures through an advanced process rather than through a judicial procedure. 

Senate Bill 1666 would allow retired justices or judges to agree to temporary duty in order to help decrease the court backlog of foreclosure cases in Florida. Compared with the nationwide average of 13 months, foreclosures in Florida take 29 months to process on average, creating a backlog of cases. Court administrator Lisa Goodner stated Florida has a backlog of more than 360,000 cases in the courts as of the end of January. 

Homeowner bill of rights

Another bill aims to give consumers more power. House Bill 1777 proposes establishing a homeowner bill of rights in the event of late mortgage payments, modeled after a few laws created and passed by California’s legislature. The goal of California’s laws is to protect homeowners from predatory lenders and further regulate mortgage servicers. Processes known as “dual-tracking” and “robo-signing” are prohibited, and consumers have better ability to sue for fraudulent practices. California has seen a significant decrease in the amount of foreclosure starts since enacting the bill of rights legislation this year.

Measures for more consumer protection

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 reasonable market value. Deficiency judgments occur when courts rule in favor of lenders if they can show that borrowers owe more on a mortgage than on the total price of a property. Senate Bills 1226 and 371 would require that lenders only file deficiency judgments up to a year after final foreclosure judgments, and have two years to collect any outstanding debt. Currently, debt collectors can chase after borrowers for up to 20 years. 

The foreclosure process in Florida will likely see some changes soon. Regardless of what happens to the foreclosure process, many people want the foreclosure crisis to finally come to an end.