SARASOTA - With Florida still slowly recovering from the housing market crash, state lawmakers consider bills that will fast-track foreclosures. But the bill could cost homeowners the right to go to trial to defend against a foreclosure.
Banks and realtors like the idea. It will get foreclosures though the system faster and back on the market in the state that now leads the country in foreclosures. They rose 20% in Florida last year.
“These properties are left in great disrepair,” says Jo Ellyn Yturraspe of Coldwell Banker Real Estate.
The average foreclosure case takes more than 18 months. Trying to cut that, lawmakers have proposed a bill to accelerate the process. It would make lenders prove they had the right to foreclose, but it would also force distressed homeowners to show why a foreclosure should go to trial.
“I think it's fabulous that finally people are paying attention and trying to do something,” says real estate attorney Anne Weintraub. She says called distressed properties need to clear the system for the housing market to rebound.
Just one problem, she says. “It's just not constitutional.”
She says the mortgage is a contract between a borrower and a bank. And state lawmakers can't change terms of those contracts after the fact. “We've seen so many abuses by lenders, we simply can't shove it down the borrower's throat and say, 'hey, guess what. we're going to take these rights away from you, and you're stuck.'”
But Yturraspe says people can't stop paying their mortgages and not expect to lose their homes. If it's going to happen, better for the process to go faster. “It does catch some people by surprise but I really believe that it's for the better of the economy to get these properties moving.”
The proposed law also provides that if a bank did wrongly foreclose on someone, the bank would have to pay money damages, but the person would not be able to get his home back. A tougher bill passed the house last year, but failed in the senate, after a march on the capital to protest it.