In a previous post we discussed the problem of zombie foreclosures in Florida. Zombie foreclosures are homes that are in some phase of the foreclosure process but have been vacated by their owners. Florida has the highest number of these types of properties in the nation, and lawmakers recently took action to resolve some of the issues that lead to this situation.
A new law recently passed by an overwhelming majority in the Florida House aimed at speeding the foreclosure process. The bill changes some procedural aspects of the foreclosure process, such as reducing the amount of time that banks and mortgage services have to try to collect from homeowners on deficiency judgements. Current law allows banks to take as long as five years, but the new measure reduces that to one year.
Advocates for homeowners were concerned that the bill would make it harder for homeowners to fight foreclosures, but lawmakers said that the new process will preserve owner's due process rights.
In addition to the reduced time period that banks have to pursue deficiency judgments, banks are also required to provide more details to the court showing that they own the mortgage in question. As we discussed in our previous post about debt collection practices and robo-signing, banks often prioritize speed over accuracy, which can lead to serious heartache and financial problems for borrowers.
Another measure within the bill that will hopefully reduce the backlog and help get Florida homes back on the market is funding for retired or semi-retired judges to hear foreclosure cases.
Source: Associated Press, "Florida bill passes to speed mortgage foreclosure system," Bruce Shreiner, April 30, 2013.