This is how it starts…

The FBA introduce a watered down version of the The Florida Consumer Protection and Homeowner Credit Rehabilitation Act (a must read) to the senate and then follow it up with a cowardly approach with a broader bill in the House.

“Another version of the bill will be filed in the House, according to Anthony DiMarco, the FBA executive vice president and director of government affairs. He declined to identify what legislator had agreed to introduce a broader bill in the House”.

That’s right. Two bills, one in the Senate one in the House… Both must be stopped.

Now why would the FBA want to withhold that information? Hmmm…

One of the most concerning sections of this bill;

702.209 Abandonment of homestead.—
  530  (1) Notwithstanding any exemption of homestead property
  531  from the scope of this part, any homestead property that has
  532  been abandoned by the mortgagor of the property is subject to
  533  foreclosure pursuant to this part if the owner of the property
  534  has abandoned the mortgaged property.
  535  (2) A secured creditor may deem property formerly held as
  536  homestead to be abandoned if the property owner:
  537  (a) Affirmatively represents in writing an intent to
  538  abandon the property.
  539  (b) Affirmatively acts in a manner that manifests the
  540  intent to surrender the property owner’s interest in the
  541  property to the secured creditor.
  542  (c) Establishes a homestead in a property other than the
  543  property subject to the secured creditor’s security interest.
  544  (d) Enters into a contract to lease the secured property
  545  for a period of more than 1 year.
  546  (e) Leaves the secured property vacant for a period of more
  547  than 3 months and does not provide for the maintenance or
  548  physical security of the property during that time.
  549  (f) Fails to pay ad valorem taxes and maintain property
  550  insurance on the property for a period of 1 year.

I can see the “lenders” interpretations of these rules. Like in the case reported yesterday where the bank told a judge that Berta had abandoned the home, could not be found and might even be dead when that was clearly not the case.

ALL THEY HAVE TO DO IS CLAIM THE HO– USE IS ABANDONED AND IT WILL BE SOLD BEFORE YOU EVEN REALIZE IT

Daily Business Review

By: Paola Iuspa-Abbot

If Florida bankers triumph in Tallahassee this year, distressed owners of homes and commercial properties could no longer have a chance to fight foreclosure — unless they have the money and the drive to sue their bank.

Owners facing foreclosure now can defend themselves simply by responding to a suit filed by a lender. The bank pays for the filing fees and has to prove to a circuit judge that it has the legal right to seize the property.

Under a law proposed by the Florida Bankers Association, the industry’s lobbying group, the process would be removed from the judicial system and the cost of suing and the burden of proof would fall on the owner.

Opponents like West Palm Beach homeowner Lisa Epstein claim the proposal would severely restrict owners’ due process rights.

Epstein, who is facing foreclosure on her home, said she expected nothing less from lenders.

“I am not surprised because I know the bankers’ underlying motivation,” she said. “But it was shocking and appalling as an American citizen who values the Constitution and the Bill of Rights.”

Epstein, a cancer nurse at a West Palm Beach hospital and a mother of a 2-year-old girl, has mounted a grass-roots campaign to defeat the bill.
Editors Note: This is the watered down version that is sponsored by Senator Michael S. “Mike” Bennett

The activist, who declined to provide details on her foreclosure, sends e-mails weekly to other distressed homeowners and real estate professionals. She also posts comments on her blog ForeclosureHamlet.org to urge people to write to legislators to oppose the legislation.

A version of the FBA proposal that deals only with non-homesteaded properties and abandoned homesteads was introduced in the state Senate by Sen. Michael Bennett, R-Bradenton. Another version of the bill will be filed in the House, according to Anthony DiMarco, the FBA executive vice president and director of government affairs. He declined to identify what legislator had agreed to introduce a broader bill in the House.

The legislative session starts March 2.

Surge in Cases

The number of foreclosure cases in South Florida has more than doubled since the real estate market collapsed more than three years ago. Foreclosure filings jumped from at least 52,670 in 2007 in the tri-county area, to at least 93,130 in 2008 and about 107,500 last year, according to data compiled by the Daily Business Review.

Although the number of cases have grown, court administrators have had to lay off staff to compensate for dwindling revenue.

Bankers argue foreclosures could be completed much faster if they were treated as an administrative procedure and taken away from a cash-strapped and overburdened court system already clogged by thousands of foreclosure suits.

It can take up to two years for a foreclosure case to move through the legal system, DiMarco said.

Although cases take longer when borrowers mount vigorous defenses against a lender, more than 80 percent of foreclosure suits go uncontested, foreclosure defense lawyers said.

Before the real estate meltdown, foreclosure suits could be completed in about six months. Even with the surge in cases, foreclosures could take between six months and a year to be completed under a nonjudicial process, DiMarco predicted.

A nonjudicial foreclosure process would be less expensive to lenders, but bankers tout other advantages of the proposed change.

Abandoned properties could get new owners much more quickly. That would help clean up neighborhoods marred by neglected foreclosed properties, DiMarco said.

It would also help cash-strapped condo associations collect fees on units that spend months in limbo as the foreclosures drag on, he said.

“The first way to get out of a hole is stop digging,” DiMarco said. “The sooner we can get title to homes that are going in default, the faster we can get out of the home crisis.”

The biggest winners stand to be the banks.

“We are trying to speed up the process so we can get [the delinquent mortgages] off our books,” DiMarco said.

The proposed law would seek to include some incentives for distressed owners. For example, if an owner wants to mediate the case, a lender will be required to schedule a meeting promptly. Note: Already required.

Another incentive: lenders will not be allowed to seek a deficiency judgment against owners of homesteaded properties unless the owners had their loans modified and again fell behind on their payments.

That is a drastic departure from the current rules on deficiency balances, or the difference between the mortgage amount and the value of the property on the day of the foreclosure auction.

Today, lenders have up to five years to file a judgment against a property owner to collect any deficiency balance.

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