A bill to speed up Florida’s groggy foreclosure was approved by the Florida House on Monday after a 87-26 vote.
The third attempt at foreclosure reform in three years, HB 87 creates new options for expedited foreclosures and tightens up filing standards for banks. A companion bill in the Senate stalled in the committee process.
Opponents claimed HB 87 would harm homeowners and favor banks, who have been accused of engaging in questionable foreclosure practices.
“We’ve got to be extremely careful with regulating foreclosures,” said Rep. Jose Javier Rodriguez, D-Miami. “Many of these proposals go too far.”
Bill sponsor Rep. Kathleen Passidomo, R-Naples, said the bill would help streamline the slow foreclosure system. The mortgage foreclosure system needs to operate justly and "expeditiously" she said.
The bill would give condo associations an opportunity to speed up foreclosures by participating in a “show cause” hearing in which a judge can close out a case more quickly.
Supporters said the bill would help return Florida’s real estate market back to normalcy after six years of problems.
“Florida’s number one in foreclosures,” Rep. Charles McBurney, R-Jacksonville. “And that’s not a distinction we wish to have.”
The bill states that homeowners who lose their home in a fraudulent foreclosure cannot get it back if another party bought the property from the bank. The “show cause” provision would allow condo associations to speed up the foreclosure process on homeowners who have not paid their condo dues.
Opponents pointed to the “show cause” proposal as a potential assault on the due process rights of homeowners.
Passidomo defended the bill was a consumer-friendly attempt to clean up the foreclosure process, which has been plagued by fraud and delays.
The bill would also restrict banks’ ability to go after homeowners for additional debts after a foreclosure—cutting down the statute of limitations from five years to one year. The proposal makes banks prove they have the necessary documents before they file a foreclosure.
According to RealtyTrac, Florida ranks as the top state in the nation for foreclosures and seven of the top 10 cities in the U.S. are in Florida.
Part of the reason for the high foreclosure rate is the lengthy judicial foreclosure process in Florida, where banks must go to court to repossess a delinquent property.
Florida’s average foreclosure process takes 853 days, ranking only behind New York and New Jersey. The national average is 414 days.