Florida proposed legislation - HB 87 and SB 1666 - which backers claim will clear the backlog of foreclosure cases in Florida instead invites bank fraud and creates more problems by putting speed ahead of justice.
The backlog is blamed on foot dragging by homeowners. In reality, banks are to blame due to federal directives to pursue loss mitigation alternatives or by voluntarily slowing down the process to explore settlement options in the interests of both parties and the market.
However long it takes to conclude a foreclosure in Florida, given the magnitude of bank fraud, forgery and abuses that the banks admitted to, we should exempt this category of civil court cases from “time to complete” requirements.
Public policy decisions should not be based on unverified, incorrect and misleading information, particularly when that data is provided by the same industry that admitted wrongdoing.
The next problem behind any push for foreclosure reform is that the market is improving. Florida home prices have rebounded, due in part to the fact that banks and homeowners are managing the backlog of foreclosures.
Short sales and negotiated resolutions which yield higher returns than faster foreclosures would disappear under the proposed legislation.
Only institutional buyers will win. When they buy in bulk, they exclude Realtors who profit from short sales and other end user transactions. Instead of supporting this legislation, Florida’s Realtors should take California’s lead and oppose attempts to speed up foreclosures.