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Decline in South Florida Foreclosures Might Not Be Good News

According to a recent article in the Sun Sentinel, foreclosure cases in South Florida continue to decline. A report from RealtyTrac, cited by the Sun Sentinel, lists 1,529 new foreclosure cases in Palm Beach County from January 2014 through April 2014, 54 percent fewer than a year earlier. That might sound like an encouraging development, but Florida’s foreclosure rate was still the highest in the nation in April. Further, some lawyers believe many new foreclosures are forthcoming and that the decline is merely a consequence of a temporary backlog resulting from a new Florida law.

House Bill 87

Signed by Governor Rick Scott in June 2013, House Bill 87’s purpose is to streamline and expedite the foreclosure process in Florida, which has traditionally been among the lengthiest in the nation. Among other changes, the bill imposes higher standards for lenders’ paperwork, which must now be in order prior to filing a foreclosure complaint and must show that the lender has the right to foreclose. These new requirements, some lawyers say, are temporarily slowing down the process of new foreclosure filings, but that doesn’t mean Florida residents are in the clear. We can expect an influx of new foreclosure complaints as time goes on and as lenders adjust to the new filing requirements.

While Governor Scott’s goal of establishing a timely foreclosure process might be admirable, and while the heightened standards for lenders’ paperwork could be a positive change, many opponents of House Bill 87 are concerned that the bill is unfair to homeowners. Some go so far as to say it violates homeowners’ due process rights.

An article in the South Florida Business Journal outlines some of these concerns. For one, lenders in foreclosure cases can now seek “show cause” hearings, in which summary judgment standards are used to speed up the case’s resolution. If the lender does not seek a “show cause” hearing, homeowners associations and condominium associations with liens on unpaid property can seek a “show cause” hearing themselves. At those hearings, defendants must quickly raise a valid defense if they wish to prevent the foreclosure, which would be difficult for many defendants in that situation. House Bill 87 also prevents homeowners who wrongfully lost homes to foreclosure from getting their homes back. Those homeowners would instead be awarded monetary compensation.

Some opponents of House Bill 87 say that requiring homeowners to prove in their initial court pleadings that they do not deserve to lose their homes is unfair to homeowners. Others say that House Bill 87 essentially punishes the homeowner and rewards the lender, providing the latter with a sort of Get Out of Jail Free card despite its questionable lending and foreclosure practices.

So while new foreclosure cases in South Florida are temporarily down, that decline is not necessarily cause for celebration. The very same law that might be responsible for the temporary decline in new foreclosure cases, House Bill 87, also has the potential to negatively affect homeowners who are going through the foreclosure process. It is therefore more important than ever for Florida homeowners to understand the foreclosure process and how new laws impact them. Consult with an attorney at the West Palm Beach based Law Offices of Larry E. Bray, P.A. for help.

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