The Great Impasse: Foreclosures in Florida

by 05 Feb 2013
The Florida housing market has all the ingredients needed for a solid recovery: Rising, yet reasonable median prices in several markets, a healthy number of pending sales, interest by foreign real estate investors, great weather, etc. There is, however, a pesky matter that prevents a full-blown recovery. A formidable backlog of foreclosures that must be resolved through the court system hangs heavily in the humid air of the Sunshine State. Judge Judy Works Cheap A recent audio story in National Public Radio's Morning Edition quoted retired Florida Judge Judy Pittman Biebel from Panama City as saying that retired jurists are working cheap to get through the dismaying foreclosure pipeline. Judge Biebel was enticed out of retirement by a $350 per day offer to sit in the 13th Judicial Circuit Court in Hillsborough County for a week. According to NPR, Judge Biebel moves swiftly through the foreclosures, focusing on motions in one day and bench trials the next, but these are only a portion of the pending cases. With one out of every 32 homes in Florida at some stage of the judicial foreclosure process in Florida during 2012, there may be no end in sight for the housing market in the Sunshine State. A Cumbersome Process Leads to Indignation Florida is home to both foreclosure mills and skilled foreclosure defense attorneys who clash in and out of the courtroom. Judges see questionable high-pressure tactics and Inspector Clouseau-like incompetence by mortgage lenders, servicers and the foreclosure mills as culprits in the impasse. Some lenders, however, are quick to blame foreclosure defense attorneys. NPR interviewed the president of a small credit union who is anxious to foreclose on a property that has been delinquent since 2008. The borrowers stopped paying more than two years ago, but a foreclosure law firm has prevented the bank from taking possession. Now that home prices are appreciating in Florida, the credit union would like to resolve the matter, but Judge Judy Biebel gave the occupying borrowers a couple of extra months to surrender the home. Although median home prices in Florida are expected to continue rising in 2013, the situation could quickly change. This worries credit unions, banks and servicers that want to take advantage of the recovery and expedite their distressed assets, but there is not much that can be done short of foreclosure reform in the Florida legislature. Until then, Florida will probably remain the state with the highest foreclosure rate in the Union.


Should CFPB have more supervision over credit agencies?