Homeowners facing foreclosure should prepare for speedier judgment than they might expect.
Last week, Gov. Rick Scott approved legislation intended to expedite the foreclosure process, which led the Pinellas-Pasco Circuit to make changes that will affect lenders and buyers.
Currently, the average Florida foreclosure case lasts about 900 days. Chief Judge Thomas McGrady said that under the new system, parties should expect a resolution within a year.
"(Homeowners) need to be aware that if they get served with a foreclosure case, they need to act and act immediately," McGrady said, adding that they should take every opportunity for mediation.
Under the new law, which went into effect June 7, borrowers have to quickly develop a defense. Once the lender files the paperwork, the court will issue a "show cause" order. The borrower will then have between 20 and 45 days to explain why the court should not enter a judgment.
"Theoretically, the whole process could be over in 60 days," McGrady said of the time between when a lender files a lawsuit and when the house goes to sale.
The changes also affect consumers who may have a chance to keep their house.
The circuit's mediation program between homeowners and lenders has changed. Buyers who want to participate in mediation must now file a motion stating as much. Previously, the parties had to elect not to participate
Under the opt-in program, the lender will continue to pay the initial mediation fee.
Additionally, the new law makes it impossible for borrowers who were victims of a wrongful or fraudulent foreclosure to get their houses back. Instead, they will receive monetary compensation.
To handle the circuit's 29,000 backlogged cases on top of new cases, Pinellas County will launch a foreclosure division — similar to one in Pasco — in September. The division will deal exclusively with backlogged cases, while the civil courts take on new foreclosure cases.
The division will be funded with state money, but no new judges will be hired.
That means the new division, in addition to other required changes, will cause strain on other civil cases, McGrady said.
Lenders will feel the brunt of the changes, McGrady said, but an expedient foreclosure process is also hard on the homeowner.
"For some people, anything that delays the procedure can be a wonderful thing," he said. "For some, in essence, they're living (in their homes) for free."
Lauren Carroll can be reached at (727) 893-8913 or [email protected] Follow her on Twitter @LaurenFCarroll.