I have always used the word “glacial” as a term to describe something that moves incredibly slowly. Most glaciers move at a pace that is so slow, the movement is invisible to the naked eye and requires a time lapse video to be recognized. The typical glacier makes a snail’s pace seem like Usain Bolt.
However, on a recent trip to Alaska I learned that some glaciers have brief “surges” that advance the glacier forward at a rate of up to 300 feet in a moment’s notice, and nearly 100 times faster than normal. Surges can last a few months. Many factors in nature combine to cause the surge, and once they have balanced out the surge ends and then the glacier returns to its normal speed of something a little less Bolt-like.
I never thought I would see anything here in Florida that even slightly resembled a glacier. As it turns out I was wrong. Florida has its very own glacier right here, and it comes in the form of foreclosure jurisprudence.
Foreclosure law has long been regarded as one of the slowest areas of jurisprudence to change in Florida as well as in the rest of the U.S. Yet, within the last few years since the foreclosure crisis began, real estate law has been the subject of much turbulence and change. House Bill 87 and the Rocket Dockets combined as a force of nature, causing a glacial surge right here in Florida as far as foreclosure law is concerned.
The Florida Legislature has given assistance to the courts in an effort to surge foreclosures through the system via House Bill 87, which provides several provisions for ways in which to accelerate the foreclosure process. The provisions allow for a jump-start to foreclosures and an expedited foreclosure process. For instance, once a lender files a foreclosure action, the homeowner has only a couple of weeks in which to raise a valid defense. A victorious lender must seek its deficiency judgment against the homeowner within one year following the foreclosure, where the former rule was that they had five years. Each of the provisions is meant to lead to faster rulings on foreclosure cases than the 900-day average currently in place.
The Future Glacial Pace in Foreclosure Law—Snail or Bolt?
All of the changes to foreclosure law in Florida leave many unanswered questions. There will likely be legal and constitutional challenges to the new law and I believe that ultimately this law will end up causing further delays in the foreclosure process. At that point, the surge will end and maybe we will be back near the old glacial pace with which this state and the rest of us have been so familiar.
Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law along with his wife, Ellen in 1989 in Fort Lauderdale, Florida, and is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook.
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Last month, Nevada’s governor signed into law a bill that is supposed to make it easier for banks to foreclose on delinquent loans.
The Nevada bill changed a key provision in a 2011 law, which had forced banks to prove they could legally foreclose on a home by requiring bank employees to sign an affidavit saying they have personal knowledge of the property’s document history. If they didn’t they could face felony charges for making false representations.
Under the newly passed law, a bank’s affidavit can be based solely on a review of internal lending records and either title work or filings with the local county recorder.
Nevada law has unintended consequences
Why the change of heart? Well, it appears the Nevada bill passed in 2011 had some unintended consequences in that many lenders were pulling back on foreclosures leaving a dearth of inventory.
In a recent article, “Foreclosure squeeze crimps Las Vegas real-estate market,” reporter Nick Timiraos details how the 2011 law “backfired” and that instead of foreclosures working their way through the system and coming onto the market, the demand has pushed up prices making it harder for potential buyers to re-enter the market. With so few existing homes on the market, many builders are re-entering the market, but jacking up prices and making it difficult for many to buy.
Consequently, the only thing the Nevada law accomplished was to delay the recovery of the housing market.
Florida’s law mirrors Nevada
Why is this relevant to Florida? The Nevada law is just another example of how laws meant to resolve the foreclosure crisis are doing just the opposite. In the case of HB 87, there is a “show cause” provision that shifts the burden of proof from the lender who must show why they are entitled to foreclose, to the homeowner, who must now prove why the bank is not entitled to foreclose.
This would result in yet another unintended consequence by inviting further bank fraud and creating more problems by denying Florida homeowners their right to due process.
The Florida law also is riddled with numerous other potential constitutional issues such as illegal takings claims and allowing retired senior judges to continue to hear foreclosure cases without facing re-election or re-appointment.
While Florida’s law is still in its infancy, Nevada’s two-year-old law only goes to show that efforts to push foreclosures through the system rapidly instead might do little more than slow an already fragile recovery.
From The Trenches
Real estate attorney and foreclosure defense attorney, Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law along with his wife Ellen in 1989 in Fort Lauderdale, Florida, and is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook.
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The following article was written for HousingWire by Kerri Ann Panchuk on June 18, 2013, and is being republished in the South Florida Law Blog with comments from real estate and foreclosure defense attorney Roy Oppenheim .
When Florida’s Governor Rick Scott signed House Bill 87 – the so-called foreclosure Rocket Docket bill – he had no idea he was opening another can of worms and potentially giving foreclosure defense attorneys more tools in their arsenal to delay foreclosures.
The bill was passed into law to deal with Florida’s drawn-out and troublesome foreclosure process. HB 87 aimed to streamline the foreclosure process, enacting reforms at the legislative level to jump-start foreclosures and expedite the process in one of the states hit hardest by the foreclosure crisis. (Click here to read more about the changes).
But while the bill has created procedural demands that challenge attorneys on both sides of a foreclosure, the bill itself could ultimately fail in its quest to speed up foreclosures in Florida, says foreclosure defense attorney Roy Oppenheim with Oppenheim Law.
Along with the many procedural changes, Oppenheim says the bill built in a series of potential constitutional violations that a foreclosure defense attorney could easily utilize as a tool to aid homeowners when challenging a foreclosure.
“They have given us new quivers in our satchel to use against the banks,” Oppenheim told HousingWire. “There is ambiguity, and it’s created confusion.”
Oppenheim says opportunities for constitutional challenges are scattered throughout the bill—namely in the fact that there is an allocation of judiciary responsibilities to the legislative branch in some cases. In addition, potential property rights issues are peppered throughout the bill, creating potential due process, equal protection or illegal takings claims under the Constitution. Other parts of the bill are retroactive, which is another constitutional issue, Oppenheim said.