Fla. courts will lose money for foreclosure cases

05/14/2015

Fla. courts will lose money for foreclosure cases

TALLAHASSEE, Fla. – May 12, 2015 – Florida's foreclosures courts are bracing for the loss of millions of dollars dedicated to tackling a once-formidable backlog of home repossession cases that has plummeted 66 percent in two years.

More than $21 million budgeted statewide in 2013 for added judicial muscle expires June 30. The special allotment, which came from the National Mortgage Settlement, allowed the state's 20 circuit courts to increase foreclosure court technology and add senior judges, case managers and magistrates.

The loss of funds could mean short-term turmoil for homeowners as foreclosure cases are divvied out to other divisions with judges who may not be familiar with foreclosure law, defense lawyers said.

The longer-term impact may be an advantage to borrowers who are more likely to have a single judge dedicated to hearing their case.

But while pending foreclosure cases have been whittled statewide from 329,171 in 2013 to 109,706 as of January, Florida Supreme Court Chief Justice Jorge Labarga said in a letter to lawmakers this month that it would be hasty to declare the housing market completely healed.

"The February 2015 Revenue Estimating Conference has determined that the foreclosure crisis is not over, identifying a 'shadow inventory' of more than 100,000 delinquent mortgages that will most likely add to the courts' backlog over the next three years," Labarga said.

In Palm Beach County, two full time senior judges and up to 23 full time case managers will disappear when the extra money expires, said Palm Beach County Chief Judge Jeffrey Colbath.

As of January, about 6,730 foreclosures were still sitting on Palm Beach County dockets. That's higher than foreclosure rates pre-housing crisis, but down from an estimated 55,000 cases in 2010.

"The legislature gave us enough money to get to the five-yard line, but it would have been nice to get across the goal line," Colbath said. "We will no longer be able to handle the cases in the manner and efficiency with which we have done the past two years."

Broward County Chief Judge Peter Weinstein said the falling number of foreclosure cases doesn't always tell the full story about the courts' burden. Cases may end up disposed, but turn up again if a foreclosure sale gets canceled because of a loan modification or faulty advertising, or the case gets kicked back from appeals court.

Broward County had 11,222 foreclosures pending as of January, according to the Florida State Courts Administrator.

Weinstein also is concerned that homeowners representing themselves will be lost in the system without case managers.

"People who come in and are self-representing don't know where to turn," Weinstein said. "While our case managers cannot give legal advice, they help the public get hearings set up and direct people where to go."

But Royal Palm Beach-based attorney Tom Ice, whose firm was on the front lines of foreclosure defense when cases first mounted, said he sees many positives for homeowners when the extra money runs out.

He likens the current judge situation to a "wheel of fortune" where you aren't sure whose courtroom you would be in. Judges who had never heard motions in a specific case before may have had no idea what it took to get to that point, or they wouldn't want to tread on another judge's ruling even if circumstances had changed.

"Consistency is really important," Ice said. "It's been a pot luck and you don't know how to prepare properly when you aren't sure who will be hearing the case."

Copyright © 2015 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by Tribune Content Agency, LLC.  

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