High Court Considers Proposals to Fix Foreclosure Crisis
The Florida Supreme Court on Wednesday began considering proposals on how to best deal with the massive backlog of foreclosure cases weighing down courts and whether the solution should include mediation before cases go to court.
With nearly 300,000 foreclosures clogging the court system, “what this court system has is virtually a tsunami of these filings in residential mortgage foreclosures,” said Justice Barbara Pariente.
A task force appointed by Chief Justice Peggy Quince in August suggested a statewide mediation program for families facing foreclosure. Another proposal before the court comes from the Florida Bar, which is suggesting a couple of rule changes.
One would require that in all foreclosure actions lenders must verify they actually have the mortgage before going into court – so they don’t take up court time while locating a promissory note after they’ve filed a case.
Virginia Townes, who represented the Florida Bankers Association in a hearing Wednesday before the Supreme Court, said the rule change proposal was not helpful and would slow the process down even more because it would require more time from lawyers.
“It is a burden simply because it is one more step in an already crowded process,” she said.
The other rule change proposal would require lenders to get a court order to cancel a sale of a property. Currently, all the lenders have to do is not show up to cancel a sale. But many lenders and families reach an agreement last minute, said Fort Lauderdale attorney Marc Ben-Ezra, who represents lenders.
Ben-Ezra said he worried that causing a lender to get a court order would result in the unintended sale of property, when a family didn't need to be moved out of the home.
The Supreme Court task force, chaired by Judge Jennifer Bailey, favors mediation on foreclosure cases.
"There seemed to be general agreement among the plaintiffs' representatives that the means to address the backlog of pending foreclosure cases is to provide responsible borrowers and lenders the opportunity to have meaningful contact, thereby limiting foreclosure case volume," the report read.
Alan Bookman, a Pensacola lawyer, said the idea was not to favor one side over the other.“We're not trying to favor the homeowner over the lender,” he said. “That's not what we're trying to do. We're trying to create a level playing field.”