The Court of No Florida Foreclosures

In Florida the foreclosure process generally starts when you fail to make your mortgage payment on time. When you don't make your payment on time your lender may file a foreclosure suit. Once the suit is filed everything that happens next is generally controlled by the courts via the interpretations of Florida's foreclosure laws.

This process can take some strange and quirky turns as a creative attorney might bring up some good technical challenges. Some of these challenges might include things like questioning why there is a huge discrepancy between the foreclosure suit amount and the outstanding loan balance plus interest, penalties and fees. Other challenges may include a defense attorney that shows where lenders altered loan documents, or did not complete loan documents correctly, little things.

Hopefully these instances are rare but it appears these scenarios may be more common than you think. Could these rare scenarios get more prevalent and is there more to this? Florida tried the "Rocket Docket" approach last year. It hired contract judges and focused on cleaning up the backlog of uncontested foreclosures, and yet in Florida it still rains foreclosures.

Now to try to help speed up the foreclosure process again and to take away some of your rights as a default borrower, Florida Gov. Rick Scott, Rep. Dean Cannon and Sen. Mike Haridopolos might be entertaining ways to take the courts out of Florida foreclosures. This was tried during the 2011 session but did not gain any ground.  If this falls flat again it could be tucked into the state budget and voted on at the last-minute. Of all things, a Taj Mahal courthouse and private prisons have been known to be tucked into a state budget vote.

Side stepping the courts from the foreclosure process is not the right way to go.  There are too many instances of bank lending errors. Sloppy documentation and poor due diligence should not be an excuse to change Florida's laws to accommodate the banks that are forced to swallow a bitter pill. Likewise homeowners in default should not be able to live rent free while their foreclosure suit is stalled through legal procedures or technicalities.

Perhaps an answer is that default borrowers pay escrow companies or bonded third-party entities the monthly mortgage. If default borrowers refuse to pay then they would have to vacate the property under a court order. Having a continued vested financial stake in the outcome might reduce some of the frivolous techniques and let borrowers with legitimate lender liability claims continue their legal remedy. There is no need to throw out the entire system.

This mess is far from over and you should be skeptical of anyone who says we have turned the corner on this. Clouded titles, vanishing and tampered documents, imaginary title officers, and different loan closing dates are just some of the problems associated with an industry that begged and begged for less regulation.  Doesn't anyone study history anymore?

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