Make us your home page
Instagram

'Faster foreclosures' law unintentionally slows Florida filings

The controversial Florida law intended to whisk foreclosures through court has instead led thousands to pile up, prolonging the agony of the state's housing crisis, new court data show.

When the "faster foreclosures" law first took effect in July, Florida courts saw 4,386 new foreclosures, plummeting 70 percent below the state's average of 15,000 filings a month.

The plunge was even more severe in Hillsborough, Pinellas and Pasco counties, where banks filed 465 new foreclosures, down from an average of more than 2,000 a month.

Attorneys say the law, which was supported by banks and became the state's most prominent foreclosure shift since the housing crisis, has fallen victim to unintended consequences.

The law demands banks prove they own the mortgages and have the right to foreclose in return for a quicker case. But defense lawyers say banks have struggled to abide by the strict new rules, including tracking the ownership of some of the millions of mortgages chopped up and shuffled around amid the financial meltdown.

"This is a lesson (for the banks) to be careful what you wish for," St. Petersburg defense lawyer Matt Weidner said. "What it illustrates is how incomplete and inconsistent the banks' records truly are."

Bank representatives defend the slowdown as only a brief breather for their attorneys, who they said are beginning to learn the new law and are eager to do it right.

"Any time you add a new anything, it takes time to change," said Florida Bankers Association head state lobbyist Anthony DiMarco. "You can't change an ocean liner in the middle of the ocean and turn it around like it's a speedboat."

The huge slowdown in what has long served as one of the nation's epicenters of distressed homes could pile onto the state's logjam of more than 300,000 pending foreclosures, nearly 50,000 of which span Tampa Bay.

The longer those homes stay in limbo, the longer neighbors must worry over overgrown lawns, vandalism and sunken property values. The housing market will struggle to return to normal until banks — through foreclosure, short sales or other means — unload the backlog of distressed homes.

It's unclear when banks' court activity could snap back to normal. In Pinellas, new foreclosures fell from 825 in June to 150 in July, the deepest dive since the housing crash. They nudged back up a little last month, to about 330, but are still a third of where they were last year.

Signed by Gov. Rick Scott in June, HB 87 was designed to let banks that met tight, new paperwork requirements speed up the legal process between mortgage default and repossession. Florida has one of the slowest foreclosure timetables in the country, with the average case taking about 900 days, RealtyTrac data show.

The fast-track bill also allows condo associations to hurry along cases where banks are proceeding too slowly and gives lenders legal protections if they are sued for wrongful foreclosure.

Rep. Kathleen Passidomo, the Naples Republican who sponsored the bill, said she doubted the sudden slowdown was due to banks' lack of preparation. She credited an improving economy, more bank-homeowner cooperation and summertime vacations.

"Banks have spent the last year and a half going through all their files," Passidomo said. "They knew this was coming. It didn't just happen overnight."

But neither the shift into summer nor the rebounding of the housing market has led to a drop of this magnitude since the housing crash, court data show. New filings also plunged in 2011, but that was part of a voluntary freeze by banks in the wake of the "robo-signing" scandal, during which many foreclosures were found to have been hustled improperly into court.

Parts of the foreclosure machine are still moving full speed ahead. Tampa Bay judges closed or dismissed about 2,500 cases in July, close to an average month. Nearly 1,400 auctions of foreclosed homes were scheduled in Pinellas in the past two months. And a squadron of statewide judges are devoted to resolving the most stagnant of foreclosures, including some that are four years old.

Banks have come under fire, too, for pushing foreclosures with too much speed. The state of Illinois on Monday sued Safeguard Properties, a property management company that also works with banks in Florida, claiming the company wrongly bullied hundreds of people out of their homes.

"We get beaten up back and forth for trying to do it too slow, too fast, and this is the same thing," said DiMarco, the bank lobbyist. "We don't want to do it, but when it happens, it needs to be quick."

As bank attorneys recalibrate their efforts to move foreclosures back into action, housing advocates say courts, homeowners and neighborhoods will be the ones suffering due to indefinite foreclosure delays.

"This law comes in the middle of chaos in the mortgage industry right now," Weidner said. Lenders weren't "prepared for the monstrous mess this has caused."

Contact Drew Harwell at (727) 893-8252 or dharwell@tampabay.com.

Foreclosure filings in 2013

AreaFeb.MarchAprilMayJuneJuly
Florida14,03715,13412,33214,36714,4974,386
Hillsborough816871614851870199
Pinellas/Pasco1,0571,2536361,1741,256266

Source: Florida Office of the State Courts Administrator

'Faster foreclosures' law unintentionally slows Florida filings 09/10/13 [Last modified: Tuesday, September 10, 2013 11:18pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. New owners take over downtown St. Petersburg's Hofbräuhaus

    Retail

    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.
[SCOTT KEELER  |  TIMES]

  2. Boho Hunter will target fashions in Hyde Park

    Business

    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  3. Gallery now bringing useful art to Hyde Park customers

    Business

    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  4. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers

    Business

    Banking

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]
  5. Cooking passion spurs owner to pull open AJ's Kitchen Drawer

    Business

    TAMPA — After graduating from the University of Tampa in May 2016, AJ Albrecht spent four months traveling around Southeast Asia and Australia.

    AJs Kitchen Drawer offers a wide variety of unique kitchenware items, such as handcrafted knives and wooden items, as well as local gourmet products. Photo by Danielle Hauser