Foreclosure Fast-Tracking Bill Has Homeowners Worried About Being Shoved Out
FlaglerLive | February 20, 2012
A controversial bill backers say would speed up the foreclosure process and help jumpstart the economy made its Senate debut Monday amid concerns that the measure could leave some homeowners unjustly out in the cold.
By a 5-0 vote, the Senate Judiciary Committee approved a measure (SB 1890) which combines the contents of two House proposals, HB 213 and HB 1149, that are traveling in that chamber and supported by banks, builders and other lenders. (See the bill’s text below.)
Backers of the proposal say they are targeting the 30 percent of foreclosed properties that sit abandoned, reducing neighborhood property values and raising public safety concerns. By reducing the time it takes to get those properties unencumbered and available, supporters say, the state’s housing industry — and the economy — will rebound more quickly.
“This is the underbelly of one of the things that is keeping our economy from recovering,” said Sen. John Thrasher, R-St. Augustine.
Critics, however, say the bills as written go much further than reducing the inventory of abandoned homes. Whether intentional or not, the proposals adversely affect homeowners still trying to stay in homes that were purchased in many cased during the pre-recession, white-hot period of easy credit, interest only mortgages and escalating home prices.
“This bill places too much burden of repairing this problem on the backs of consumers and homeowners,” said Alice Vickers, attorney for the Consumer Action Network.
On Monday, Sen. Jack Latvala, R-St. Petersburg, introduced the Senate version, deferring detailed questions to his House counterparts, specially Rep. Greg Steube, R-Parrish, and a real estate attorney.
For consumers, the bill would reduce the length of time lender can go after a borrower following a foreclosure sale from five years down to one year. Backers say the change will allow homeowners to get on with their lives.
Other provisions, however, are more lender friendly, including relaxing the restrictions on foreclosing on abandoned property and placing limits on the damages in foreclosure cases to monetary damages.
“The best way to help Florida’s economy is to get beyond this foreclosure crisis,” said Anthony DiMarco, senior vice president for the Florida Bankers Associations.
But some committee members said that while it’s important to wipe bad mortgages off the books, consumer protections need to be paramount, citing recent incidents of robo-signing and other examples of mortgage fraud that came to light after the housing crash.
“It should be a long process to take someone’s property,” said Sen. Oscar Braynon, D-Miami Gardens.
The Senate bill now travels to Senate Banking and Insurance and is likely to see substantive changes before it reaches the floor.
–Michael Peltier, News Service of Florida