Florida lawmakers hope to speed up foreclosures and get the housing markets back above water in the Sunshine State.
Yesterday, we revealed that Florida has the somewhat dubious honor of having the most metro areas likely to experience housing declines in 2013. In large part, this ongoing housing issue is largely due to Florida’s extremely arduous foreclosure process, which currently has a timeline of more than 600 days. Furthermore, nearly a fifth of all Florida mortgages are currently delinquent, and half of all those loans are not even in the foreclosure process yet. As a result, the property market in the state is in limbo and attempts at recovery are suffering. Florida lawmakers are taking what some might call harsh measures in an attempt to push foreclosure reform bills through their state legislature and speed up the process, hoping that a faster foreclosure will ultimately mean a faster recovery. State representative Kathleen Passidomo, who introduced the bill, hopes that the measure will ultimately result in condominium associations being able to speed the foreclosure process when banks are in the way and stalling foreclosures to limit maintenance fees and expenses. She also hopes to make the foreclosure process a shorter one for distressed homeowners, as the bill would cut the number of years banks have to pursue deficiency judgments in the wake of a foreclosure from five to one[1].
Similar legislation proposed last year in Florida was met with such a hue and cry that the attempt was dropped. Now, however, lawmakers believe that the situation has become much direr as homes sit in “limbo” and deteriorate along with the property values around them. “Unfortunately, if you don’t have an income or you can’t afford to pay anything, [your] property can’t just sit in limbo forever,” explains Passidomo[2]. The bill does allow for fast-track foreclosure procedures – called the “rocket docket foreclosure” by critics – but it also contains strict paperwork requirements for lenders to prevent a recurrence of 2010’s robo-signer scandal. Opponents of the legislation take issue with the bill’s failure to protect homeowners who lost their homes through wrongful foreclosure. The proposal eliminates any possibility of recouping the home itself if the property has already been sold to an unsuspecting third party.
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