Florida Foreclosure Process - Foreclosure Process in Florida Blog & KNZ News and Notes
The Florida foreclosure process has brought to light innumerable questionable practices by attorneys. Both banks’ and homeowners’ attorneys have faced accusations of improper conduct, ranging from knowingly filing false documents, failing to attend hearings, or a host of other problems in the foreclosure process in Florida. These practices were discussed extensively in a recent law review article by one of our attorneys. One of the criticisms Zacks made is that state legislators and the state bar were relatively slow in reacting to warning signs of the problematical conduct.
Now, as evidence that legislators can swiftly and effectively mitigate attorney misconduct, the Colorado legislature has passed a bill that requires banks to certify the charges they have assessed throughout the foreclosure. Reporter David Migoya of The Denver Post published a number of articles documenting systematic overcharging by banks’ and servicers’ foreclosure attorneys. Accused of overcharging for fees like service of process, posting of notices, and accused of simple fee inflating, the practice was brought to less than a year ago, and the legislature has already acted. It is a pity that Florida legislators did not act more speedily when robo-signing and troubling attorney practices were brought to light a few years ago.
This leads us once again to urge for the careful judicial scrutiny in foreclosures we believe these cases require. We have documented on our Florida Foreclosure Process blog the numerous ways in which court administrators and legislators have sought to speed up the Florida foreclosure process. Yet in light of the recent Colorado misconduct which came to light years after robo-signing dominated the national headlines, this stress on efficiency should not gain primacy over careful scrutiny.
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When discussing the Florida foreclosure process timeline on our blog, we have repeatedly highlighted the positive externalities of an extended foreclosure process in Florida when compared with, say, a non-judicial foreclosure state in which homeowners can be evicted after just a few months. Notably, we have cited empirical evidence that shows that keeping families in homes eliminates the crime, blight, and depressed home values we often think of as being associated with the foreclosure process in Florida. Thus, we have argued that court administrators, legislators, and other bean counters should be less concerned with speeding up the Florida foreclosure timeline and should be more concerned with how to keep occupied homes occupied.
Today we can point to even more positive externalities of an extended foreclosure process: helping families get their balance sheets back to even. Economists at the Federal Reserve Bank of Philadelphia have completed a study showing that homeowners experiencing a longer foreclosure process are more likely to become current on their credit card debts. Thus, they are in a better position to cure, reinstate, or modify their home loans in the future, making the community they live in less likely to face the negative side effects of a vacant property.
This is yet another empirical study that shows that the Florida foreclosure timeline should not be our paramount concern. Again, we have already pointed to studies showing that it is vacancy, and not a foreclosure case itself, that causes crime and blight. Here, then, is even more evidence to show that a longer foreclosure process can help families remain in their homes with a better chance of keeping their properties. Families keep homes, communities don't deal with vacant bank owned homes, and everyone is better off. We can only hope, yet we are skeptical, that legislators and court administrators, in their blind rush to set every foreclosure case for a quick judgment, actually pay attention to what empirical data says, rather than chasing what merely "feels" like the correct course of action.
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KNZ law is pleased to announce that Florida foreclosure attorney Dustin Zacks has prevailed on an appeal of a foreclosure trial. In the case of Lurtz v. the Bank of New York Mellon, the Fourth District Court of Appeals ruled that Zacks' arguments were correct and that a new trial should be held. The appellate issue revolved around an issue that continually pops up in the foreclosure process in Florida: the setting of foreclosure trials en masse in an effort to accelerate the Florida foreclosure process timeline.
Here, the lower court ordered the case to trial before an answer (the defendant's main pleading) was filed. Then, trial was held less than 20 days after the answer was filed. Under the Florida Rules of Civil Procedure, this was technically incorrect, and trial should not have taken place. The Fourth District agreed with Zacks' arguments and his reading of the rules, and ordered a new trial.
This is an important issue for homeowners wondering about the Florida foreclosure timeline and the Florida foreclosure process in general. Notably, because the rule regarding setting trials has been held to be one in which trial courts must strictly comply, homeowners and their advocates should be entitled to assume that lower courts will follow the rule. Preparation for trial is obviously hampered when litigants expect trial courts to follow the strict compliance with setting trials. Thus, when litigants expect the trial court to reset trial for a date in compliance with the rules of civil procedure, they are prejudiced in having to go to trial when judges disregard the rules and proceed on with trial. This should certainly not be construed as a criticism of any one particular judge; rather, other districts have noted the problem as well.
As we have noted on this blog, one of Zacks' law review articles compiled empirical data on the externalities of foreclosures. Studies show that it is vacancies - and not the actual filing or pending nature of a foreclosure lawsuit itself - that breeds crime, blight, and depressed property values. Thus, legislation and court administration aimed at speeding up the foreclosure process in Florida has the wrong goal in mind. Speed of the process should not be our goal: keeping families in homes is the only guaranteed eliminator of the ugly externalities of foreclosures. Thus, we can only hope that legislators, judges, and court administrators will recognize that a blind rush towards a foreclosure auction might feel like the right solution, but it is not good for the community at large.
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The foreclosure process in Florida has produced many side effects. Among them is the legacy of forced evictions; blighted and vacant properties. All across the state, the effort to hasten the pace of the Florida foreclosure timeline has escalated eviction speed and had produced vacant properties at an alarming rate. Many townships and municipalities have been forced to reckon with bank owned properties that sit vacant.
Vacancies have been empirically proven to be associated with increased crime, blight, and depressed home values. Now, we bring you news of Little Egg Harbor Township, outside of Atlantic City, New Jersey. This township has been given the power by the state legislature to fine banks for their failure to properly upkeep their properties. Local authorities noted that many of the victims of bank failures were largely seniors and economically depressed families and neighborhoods.
With this in mind, we raise the issue of the foreclosure timeline in the Florida foreclosure process. The timeline for foreclosure in Florida has been noted as one of the longest in the nation. As a result, court administrators and legislators have carped that the Florida foreclosure timeline needs to be sped up. However, such shortsighted complaining fails to recognize the empirical data associated with vacancies, and fails to reckon with bank misconduct in failing to properly keep up properties. It is avoiding vacancies and evictions by any means necessary, rather than blindly speeding up the Florida foreclosure process timeline that will have empirically proven positive effects.
Far too often, courts are apt to disallow discovery into the circumstances surrounding assignments of mortgages that are used as evidence at foreclosure trials. Zacks' research argues that due to the pervasive misconduct of many foreclosure law firms, assignments should be freely challengeable by homeowners, even if those homeowners are not parties to the assignments and are not intended beneficiaries.
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