Hasta la vista, your honor. The Florida Bankers Association has proposed a new approach to deal with the backlog of foreclosure proceedings in the state's courthouses: skip the courts and proceed immediately to the sale.
The banking trade group -- a significant lobbying force in the state capital -- is shopping a bill that would allow "non-judicial" foreclosures as a way to speed up the process that can take as long as 18 months, according to the St. Petersburg Times. The bill would kick troubled homeowners out of their homes in as little as three months, and allow banks to continue pursuing homeowners for unpaid mortgage debt long after they've been foreclosed upon.
With Orwellian flair, the bankers have called the bill The Florida Consumer Protection and Homeowner Credit Rehabilitation Act.
The proposal comes just a month after the Florida Supreme Court mandated a statewide mediation program between lenders and homeowners aimed at averting foreclosures -- a program the bankers' proposal would nullify.
The mediation order, championed by Alex Sink, Florida's chief financial officer and a Democratic candidate for governor, would increase communication between lenders and homeowners and possibly lead to a loan modification rather than proceed with the foreclosure. Mediation programs that foster face-to-face meetings between lenders and borrowers are in place in several states and have proved successful in resolving issues that can lead to foreclosure.
Under Florida's program, all foreclosure cases involving residential property will be referred to mediation. The Collins Center, a non-profit organization, began managing the mediation program last year. It has plenty of experience in resolving dispute. The center ran a successful hurricane claims mediation program to help homeowners settle claims disputes with their insurance companies.
A mediation session costs $750: $350 goes to the mediator, who is certified by the state supreme court and has gone through a one-day training program, $125 pays for a financial advisor and the rest of the funds are used to administer the program.
Florida had one of the highest foreclosure rates in 2009. A task force headed by Jennifer D. Bailey, a Miami-Dade County circuit judge, likened backed-up caseload in Florida courts to a traffic jam on a major highway following an emergency hurricane evacuation order. The task force concluded that one of the best ways to reduce congestion was managed mediation at the beginning of a foreclosure case, and expedited sales when properties are abandoned or empty.
The task force also acknowledged the need for consumer education and access to information, including certified foreclosure counselors, court records and dockets, which it said could be made available on a web site.
Still, the bankers have some precedent on their side: 37 other states, including California, Texas and Georgia, allow non-judicial foreclosure.
