Florida Foreclosure Bill

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Major changes to Florida’s current residential foreclosure process are being considered and “homeowner protections for consumers” are in the spotlight. The original House Bill 1523 has been shelved, and instead SB 2270 is moving ahead at breakneck speed. I am referring to the “Non-Judicial Foreclosure Law for Non-Residential Properties” which allows lenders to skip legal proceedings unless the borrower requests that the foreclosure go through the courts. Currently, Florida law requires a lender to file a foreclosure lawsuit and a judge to grant the foreclosure.

More specifically, the Florida Bankers Association encourages the addition of three letters, “NON”, to be placed in front of the word “Judicial” in connection with the Florida foreclosure process. In this bill, they are proposing to change Florida law that currently requires foreclosures to be adjudicated through the courts to a new law that would allow foreclosures to bypass the court system entirely to become a state of NON-judicial foreclosure.

Comments from the Florida Bankers Associations to the Florida Supreme Court Foreclosure Task Force may shed some light on the situation:

“It is a fact of business that virtually all paper documents related to a promissory note and mortgage become electronic files almost immediately after the loan is closed. Individual loans, like electronic data, are compiled into portfolios that are transferred to the secondary market, often as mortgage-backed securities.

“The reason that ‘many companies file missing note counts as a standard alternative pleading in the lawsuit’ is because the physical document was deliberately redacted to avoid confusion immediately after it was converted to an electronic file.”

What this also means is that Florida:

* join the current 37 states that allow non-judicial foreclosures without any protection for the owner?

* Will you allow bankers to bully the judiciary as they have already done to the executive and legislative branches?

* will the $1,900 foreclosure lawsuit filing fee shift from the executing agency to the financially strapped, perhaps newly unemployed Floridian family trying to defend their home?

* transfer the “burden of proof” in a foreclosure action from the executing bank to the homeowner?

* will eliminate the right to due process granted by the Constitution of the United States:

o Right to a fair and public trial conducted in a competent manner

o Right to be present at trial

o Right to an impartial jury

o Right to be heard in self-defense

In reality, this bill (if passed) would not help with the existing backlog of foreclosures because it will apply only to new cases. If there is a “silver edge” to the passage of this bill, it would begin to shorten the time that homes remain vacant and abandoned in our neighborhoods and communities. The projected timeline for a “new” foreclosure would be thirty to ninety days.

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