In our first blog topic about the proposed Florida Fair Foreclosure Act, Miami Foreclosure Lawyer Blog looked at why this potential law is going to be disastrous for Miami homeowners saddled with foreclosure.
Our second post on this issue will look at two changes to the law that are going to make the foreclosure process in Florida that much more difficult for homeowners and one-sided in favor of banks.
Miami Foreclosure Defense has been a hot topic in recent years as our nation’s economy has collapsed along with the real estate market. Homeowners are desperate to save their homes and they have had to battle banks tooth and nail to get a fair shake at saving their home.
Now, Florida legislators — no doubt aided by generous campaign donations and high-dollar lobbying by the largest banks in the nation — are proposing a change to the foreclosure law.
It is being billed as a way to speed up the process and quickly process the backlog of 261,000 cases — by The Palm Beach Post’s estimate — of foreclosure cases in our system. But what this bill, if it becomes law, will do is actually strip away homeowner’s rights and give the banks and lending institutions a larger advantage in taking away people’s homes and doing what they want to do — seek deficiency judgments against homeowners.
A deficiency judgment means that when a house goes through foreclosure and the foreclosure is granted, the bank then sells the house at public auction. Say the amount owed on the loan is for $200,000 and the bank sells the house for $45,000. That means what is owed by the borrower is $155,000. A bank can legally go after a person for the $155,000, even though they have already taken away a person’s home.
The first two possible changes if the bill becomes law discussed in the previous blog is that lenders can foreclose without going to public auction if the owed amount is 120 percent of the value of the property. If a borrower challenges the final foreclosure order, they now can only get monetary damages and have no option to win back the home.
The two changes we will discuss in this blog are:
- A final judgment must be entered in uncontested foreclosure cases within 45 days instead of the current 90-day period.
- If the bank loses the note, which happens with frequency, they will have to explain why they still have authority to foreclose, citing the specific document that gives them the authority.
The first change is bad because it gives homeowners potentially even less time to challenge cases and find flaws in the bank’s paperwork. With 90 days as the current standard, speeding up the process simply gives homeowners less of a fair chance.
The second change is the big problem. This change could be potentially devastating to homeowners as it would give banks the ability to show a piece of paper that proves they should be able to take the house, rather than providing to the court the actual note that provides proof that the bank owns the house.
With all the problems banks have had with the Mortgage Electronic Registration Systems and poorly documented loans, this bill appears to give banks the ability to show a replacement document — manufactured, created after the fact or not, to prove they own the house. The Post says that banks can now be vague and this forces them to be more specific. But it still is an opportunity for them to skirt their duties of giving homeowners a fair chance at keeping their homes.
The banks are ruthless and this piece of legislation will simply give them more power to bear down on homeowners; and it will give judges less power to hold them accountable. It’s exactly what banks want and what homeowners should fear. Call your local legislator to protest the Florida Fair Foreclosure Act.
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.
More Blog Entries:
Banks Fool Miami Homeowners Who Participate in Loan Modification Program: September 3, 2011
Florida legislature trying to bust foreclosure backlog — again, by Kimberly Miller, The Palm Beach Post