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.
Now that the holidays are behind us and we’re well into the new year, news that will impact the foreclosure market in 2012 is starting to cross our desk. So what headlines were we talking about this week?
This week we blogged about the Federal Reserve finally coming around and looking out for the homeowners, instead of the banks. A 26-page white paper released by The Fed offered up their suggestions on how to fix the broken housing market. They also finally came to the conclusion that government MUST come down harder on lenders. Some of the ideas offered up by The Fed may be tough for Congress to swallow, but we believe they have a good chance of keeping more people in their homes.
We particularly liked the idea of turning more foreclosed and vacant properties into rental homes (so much better for the neighborhoods) and the need to offer principal reduction to more homeowners. Roy Oppenheim expands on this issue in his latest “From The Trenches” video.
Foreclosures were in steep decline across the country in 2011, including a 67 percent drop here in Broward County, according to RealtyTrac. Thanks to the ‘robo-signer’ scandal, lenders were suddenly much more careful about bringing foreclosure cases to the courts. While that is likely to continue in 2012, Roy Oppenheim told the Sun-Sentinel that things could start to pick up.
“It’s going to pick up, but it’s not going to be insane like it was,” he explained.
Palm Beach County also saw a significant drop last year, 58 percent, while Florida was down 63 percent, RealtyTrac reported.
Broward County homeowners now face an additional hurdle when trying to complete a loan modification or short sale to avoid a Florida foreclosure.
In Sun-Sentinel reporter Paul Owers’ blog House Keys, Owers discusses the ramifications of Broward County now requiring 10 days’ notice to cancel residential foreclosure auctions according to an administrative order signed by Broward Chief Judge Victor Tobin.
Prior to the Administrative Order, Broward foreclosure auctions could be cancelled only hours before the sale. Now, homeowners looking to cancel a home foreclosure in Broward County are forced to file a motion and be scheduled for a hearing at least 10 business days before the foreclosure sale date.
Oppenheim Law Real Estate Attorney and Legal Bogger Roy Oppenheim was quoted in the article saying, “This will have unintended consequences. Clearly, the homeowner gets the short end of the stick here.”
Effectively, this order limits the time homeowners have to negotiate a short sale or loan modification before their home is put up for auction. Before the order, these deals could be completed up to the last minute.
This order appears to be an attempt to eliminate the backlog of foreclosure cases by limiting the number of homeowners who cancel their foreclosure auctions.
“Roy Oppenheim gets it, and I agree with him,” said Ronald Scott Kaniuk in a comment to the blog. “Courts throughout the state are trying to expedite foreclosures in the mistaken belief that completing foreclosures – even if the process is flawed, improper or ill-advised – is better than having cases continue to proceed on a normal track like any other litigation.”