Foreclosure Bills in Florida’s House and Senate

A special thank you to our friend Sarah Parr for bringing us this crucial information regarding Foreclosure Bills here in Florida.

Foreclosure Bills in Florida’s House and Senate

By Sarah Parr

Florida has had a difficult time getting its housing market stabilized. A slow recovery is happening as prices rise and more people are buying real estate, but the housing crisis still resonates. There was a recent 3.11 percent increase in foreclosure activity, RealtyTRAC reported in its year-end report. Many notable advocates want to slow down the amount of foreclosure activity and ensure Florida experiences a full recovery from foreclosures. Lawmakers are currently drafting various measures for consideration, and the public and media debate from all sides of the issue. The proposed legislation could greatly change the way foreclosures are dealt with in Florida.

A controversial measure to speed up foreclosures

House Bill 87 intends to decrease the amount of time it takes for a foreclosure case to work its way through Florida’s judicial system. Under the bill, banks and lenders would have to fully prove they own a mortgage before beginning foreclosure. The bill would also allow other lien holders, such as homeowner or condo associations, to handle foreclosures in a faster way than the original judicial procedure. Borrowers would be given 20 days to defend a foreclosure action against them. The bill would give banks and lenders one year instead of the present five years to go after borrowers for losses from a foreclosure after a final judgment.

House Bill 87 has spurred the most debate from the general public, as St. Cloud foreclosure lawyers might tell you. Opponents of the bill claim this bill proves that some lawmakers would rather pump out foreclosures as fast as possible, rather than work on protecting the rights of homeowners. Twenty days is not enough time for homeowners to provide a good defense, they also claim. Alternatively, proponents say the lengthy judicial-foreclosure process creates misery for everyone involved. They say homes in foreclosure limbo can be eyesores that bring surrounding property values down, so speeding up the foreclosure process would be favorable for a prosperous future.

More protections for homeowners in distress

Senator Darren Soto (D-Orlando) proposed and sponsored a few bills that intend to help underwater homeowners. Senate Bills 1226 and 371 would require that lenders only file a deficiency judgment one year after a final foreclosure judgment, and only have two years to collect any unsettled debt. Right now, debt collectors can contact past borrowers for up to two decades. The “Mortgage Principal Reduction Act” would require the Florida Housing Finance Corporation to start a mortgage principal reduction program for those with properties in foreclosure by using $100 million of the Hardest-Hit Fund.

If the original debt on a given property was 20 percent or greater than fair market value, the “Short Sale Debt Relief Act” would make deficiency judgments unenforceable on a short sale.

Publication of foreclosure notices

Under Senate Bill 1666, second publication of the notice of sale of a home could be published online in lieu of publication in any other form of media.  This alters 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 a forthcoming foreclosure sale through a newspaper notice. The bill would also allow senior justices or judges to consent to temporary duty to help in Florida’s busy courtrooms.

If the above proposed legislation is any indication, Florida will likely see changes to its judicial-foreclosure process soon.