Foreclosure bill clears Fla. Senate panel

Florida Senate panel OKs bill aimed at speeding up foreclosures but faces criticism

Associated Press

TALLAHASSEE, Fla. (AP) -- For the second year in a row, Florida lawmakers on Wednesday debated a proposal to speed up the state's residential mortgage foreclosure process and make it fairer to homeowners.

But critics on the panel and in the audience, including former Lt. Gov. Jeff Kottkamp, raised alarms about a provision that would allow notices of sale of foreclosed homes to be published only on the Internet.

Advocates for newspapers and senior citizens, among others, said that would reduce the chance of such notices being seen.

Nonetheless, the Senate's Banking and Insurance committee cleared the bill (SB 1666) by an 8-2 vote.

The collapse in the real estate market that began in 2008 resulted in millions of foreclosures across the country. Those cases quickly swamped an already overworked court system. Florida still has about a quarter of the nation's foreclosures, according to surveys.

More problems arose when it was learned that paperwork in many foreclosures was the product of "robo-signers," people hired to sign documents in assembly-line fashion, often without knowing what's in them. Such documents included affidavits that a bank actually owns the mortgage on a property being foreclosed when the original paperwork can't be found. Many cases of mistaken and outright fraudulent filings were then found.

Sen. Gwen Margolis, a Miami Democrat, expressed surprise about the Internet-only provision to the bill's sponsor, Sen. Jack Latvala, a Republican from Clearwater.

She wanted to know why he wasn't "willing to compromise on ... issues that are important to the people and really have created quite a stir here today."

Latvala responded that he'd continue to work on it, insisting more people use the Internet than read newspapers. But, referring to newspapers, he added, "Do we need to ... keep an industry alive that's having problems? Is that our place? I don't know."

Latvala's bill, among other things, also includes provisions for:

— Reducing the statute of limitations, or amount of time, for banks to go after foreclosed homeowners on deficiency judgments from five years to one year. Deficiencies are the difference between the money obtained from selling a foreclosed home and what the original homeowner still owes on it.

— Requiring banks to prove in more detail that they own the mortgage or explain why they can't prove ownership.

— Creating a process for others besides mortgage-holders to ask the court to speed up foreclosure cases.

— Creating legal protections for people who buy foreclosed homes in good faith, not knowing of defaulted mortgages or problems with titles.

— Allowing senior, or semi-retired, judges to also hear foreclosure matters for at least the next three years to relieve the backlog, estimated at 371,000 cases. Those judges will be paid $350 per day.

Other opponents of the bill said a faster process will trample on the rights of homeowners already being hounded by banks and their attorneys.

Booker T. Perry retired after 25 years as a firefighter in Central Florida, only to have to go through a foreclosure and divorce at the same time. At one point, his bank — unknown to him at the time — was wrongly sending his paperwork to his wife's divorce lawyer.

Under this bill, he said, there'll be less time to catch mistakes. And "if there are flaws," Perry said, "the case shouldn't move forward."

The Senate bill next stops at the Judiciary committee. A companion bill is in the House.

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Follow James L. Rosica on Twitter: www.twitter.com/jlrosica

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