Lawmakers
and consumer advocates are currently seeking to change Florida’s status as one
of the few states in the country that is still seeing an increase in
foreclosure activity. There are multiple
proposals currently floating around in the Florida legislature that
have people on all ends of the issue debating.
“Fair
Foreclosure Act”
House
Bill 87, also known as the “Fair Foreclosure Act,” is currently moving through
committees in the House. Supporters of the bill argue that the bill protects
borrowers by requiring banks and lenders to prove they own a mortgage before filing
any action towards foreclosure. If passed, the bill would also allow
third-party lien holders, such as condo or homeowner associations, to push
foreclosures through a faster process rather than through the usual court
proceeding with the lender. Borrowers would then be allowed 20 days to provide
defense against the foreclosure action. After a final judgment in foreclosure
is reached, the bill would give banks and lenders one year instead of the present
five years to go after borrowers for losses from a foreclosure.
HB
87 has generated the most discussion of all proposed measures. Critics claim
that the legislature seems more concerned with processing foreclosures as fast
as they can and less concerned about protecting the well-being and rights of homeowners.
They also say that 20 days is not enough time for homeowners to seek out
attorneys and provide reasonable foreclosure
defenses. On the contrary, supporters claim Florida’s judicial-foreclosure
process is too drawn out, creating misery among those involved. Supporters say accelerating
the process would also be beneficial for the future of Florida’s real estate,
as homes in foreclosure limbo are sometimes eyesores that push surrounding
property values down.
Senate
Bill (SB) 1666
Senate
Bill 1666 would allow retired justices or judges to consent to temporary duty
to help go through the backlog of foreclosure cases in Florida. The legislation
would also allow second publication of the notice of sale of a home to be
published on a publicly accessible website of the clerk of court in lieu of being
published in any other form of media.
This changes the requirement that a second notice of pending foreclosure
occur in a print newspaper advertisement, a move some say is unfair to low
income homeowners who could only find out about a potential foreclosure sale through
a print newspaper notice.
House
Bill (HB) 1777
HB
1777 would establish a homeowner bill of rights, like a similar measure enacted
in California early this year, in the event of late mortgage payments.
California’s law is meant to protect homeowners from predatory lenders and
further regulate lending practices. California has already seen a steady
decrease in the amount of foreclosure filings since it went into effect on
January 1, CNNMoney
reports.
Senate
Bills 1236, 1226, 371 and 1228
Four
bills, proposed and sponsored by Senator Darren Soto (D-Orlando), seek to remedy
homeowners’ distress. SB 1226 and 371 would mandate that lenders can only file
a deficiency judgment one year after a final foreclosure judgment, and would
only have two years to collect outstanding debt. Presently, collectors are
legally allowed to contact borrowers about debts for up to two decades. SB
1236, also known as the “Mortgage Principal Reduction Act,” would require the
Florida Housing Finance Corporation to apply for $100 million of the federal
government’s Hardest-Hit Program in order to begin a mortgage principal
reduction program for Florida residents with properties are in foreclosure. Soto’s
final proposed bill, 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 fair market value.
Based
on all of the proposals presented, Floridians will likely see changes to the
foreclosure process soon. Everyone who
has an opinion on what needs to be done most likely wants to see more
improvement in the housing market.
