Editor's note: To clarify, this story reports statistics that 75,000 houses in Collier County and 1.7 million in Florida were vacant. The American Community Survey, part of the census, considers a housing unit vacant if no one is living in it at the time of the interview. Units occupied two months or fewer out of the year also are considered vacant.
What House Bill 213 does
■ Allows any lien holder — not just the lender that filed the initial foreclosure lawsuit — to push a case along through an expedited process in which the judge is asked to issue a show-cause order. The show-cause order is a rarely used mechanism in foreclosure cases by which a judge compels the defendant to explain why a judge shouldn’t issue a summary foreclosure judgment. If no defense is entered, the judge can enter a foreclosure judgment.
■ Reduces the statute of limitations on deficiency judgments from five years to one. In other words, lenders would have only one year to seek outstanding payments over the value of the property. This provision is seen as a major relief for consumers.
■ Provides new sections in the law relating to foreclosing on abandoned property, offering steps to determine whether a property is abandoned in order to move the case into expedited foreclosure.
■ Requires the plaintiff to provide documentation that proves it is entitled to a foreclosure judgment, such as an original promissory note or documents establishing a lost note.
GOLDEN GATE ESTATES _ At 1240 31st St. SW in Golden Gate Estates, the roof is rotting through.
A neighbor said she doesn't know when the owners left, but they probably stopped paying for upkeep when they stopped paying their mortgage. The wood-frame, two-story house needs $20,000 in repairs before someone else can move in.
Code enforcement officials said homes like this erode the tax base, shelter drug dealers and breed mosquitoes in murky swimming pools. The foreclosure filing spree has waned, but the overwhelming case load it created still clogs Florida courts.
Now, two out of every five houses, 75,000 properties, are vacant in Collier County.
Florida's 1.7 million empty houses are ball and chain for the state's economy, and Realtors say the market is ready to absorb them.
"It's all new beginnings when you get a new homeowner in," said Teddianne Wantz, a real estate agent who lives on 31st Street Southwest. "We want to see them sold."
So do lawmakers in Tallahassee, who this year are steps away from enacting the first major streamline to the state's foreclosure process in nearly 20 years.
Rep. Kathleen Passidomo, a Naples real estate attorney, said her bill, HB 213, will prod lenders to move ahead with cases and help lift 368,000 Florida foreclosures off dockets and onto the market.
The Senate version is up for a floor vote this coming week, the last scheduled week of the 2012 legislative session. If it passes that chamber and the governor signs it, the law would take effect July 1 and apply to all existing and future cases.
One main reason foreclosures in Florida take 676 days, more than twice the national average, is big banks, according to foreclosure defendants, lawmakers and government officials. Banks like Citibank and Bank of America often lack legitimate documentation, and after they clear the mortgage from their books as a loss, they have little incentive to pursue a speedy judgment.
HB 213 would allow any lien holder, including homeowners' associations, to force foreclosure cases into a rarely used expedited track created in 1993. Even the expedited process is cumbersome, Passidomo said, but HB 213 seeks to make it more appealing — slashing one of two hearings and raising the bar on defendants, who under today's law can stop a fast-track foreclosure just by showing up.
Florida's banking lobby fought the bill from the outset because of its biggest consumer protection: a provision that reduces from five years to one year the length of time lenders have to seek payment for the outstanding loan balance over the value of the home.
Homeowners and consumer advocates also despise it. Bus loads of them demonstrated in the Capitol. Siding with the protesters, state Rep. Darren Soto, D-Orlando, railed against it Wednesday on the House floor, the same day 14 of his fellow Democrats joined in passing it, 94-17.
"While no one will die as a result of this bill, the lesson is the same," Soto said. "Justice demands due process and fairness when we're dealing with taking people's property."
Yet others say HB 213 will do nothing at all. The banks don't want to move forward. Homeowners in default have often moved on or are content to live in the house for free.
"It's been a good thing, staying without paying," said Debbie Minick, 52, who lives on 31st Street Southwest in Golden Gate Estates. In September 2009, her husband died and she stopped making payments. Finally, on Feb. 14, her foreclosure became final. She has until April to move out.
"You always know it's going to happen," she said. "But the longer you have to get your act together, the better."
While homeowners associations gain rights under the proposed law, they aren't all enthusiastic. It costs money to enter the legal fray.
"I'm happy they're doing something, but throwing people out of a house wouldn't be the first thing that I would want to do," said Mark Teaters, founder of the Homeowners Association of Golden Gate Estates.
Those defending foreclosure are convinced HB 213 weakens due process.
Malcolm Doney, a foreclosure activist in Fort Myers, and others say they intend to fight the bill.
"If this bill becomes law, there's going to be a major, major push from all over the place to declare this thing totally unconstitutional," Doney said.
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He started a petition that adds 100 signatures per day, he said.
"We have a foreclosures process which has been in effect over half a century," said Peter Gaddy, president of the Golden Gate Estates Area Civic Association. "To speed up that process and eliminate an important court hearing is inappropriate, particularly given the economic times we're living in right now."
In Golden Gate Estates, residents of 31st Street Southwest see the housing crisis every day. The rotting yellow house at 1240 is the kind of blight they manage to tune out, said Wantz, the real estate agent across the street.
Two years ago, the bank filed its complaint and the homeowner received notice. The foreclosure auction was just three months ago, said Bruce Barron, a manager for Novelli International Real Estate, which sells properties, like this one, owned by Freddie Mac.
Cases like 1240 31st St. SW pass through the courtroom of Collier Circuit Judge Ramiro Mañalich, who since last summer estimates he has processed some $550 million worth of property. He handles Collier County's foreclosure cases.
All 6,000 of them.
"You're trying to balance and make sure there's due process given to all the parties and at the same time trying to do something to this extraordinary case load," he said.
Mañalich has a system, dividing days between quick, uncontested cases and longer hearings. On Tuesday, he presided over 41 five-minute summary judgment hearings. On Friday, he was scheduled for an hour of discovery in a Deutche Bank case.
Lee County, which captured national attention at the height of the crisis in 2008, is faring better thanks partly to its controversial "rocket docket." It's still 8,132 cases behind.
For every case buried in the backlog, there are neighbors anxious for results.The city of Naples has maintained the land around a vacant property at 355 4th Ave. S. for three years. Neighbors have called police 23 times since spring 2009 when they began to suspect vagrants were staying in the abandoned six-unit, one-story structure.
"We know there have been people there. We've seen them walking in," said Joan Gavin, president of the condominium association for Cambridge Club next door. "We called police last spring when we saw sleeping bags up front."
The land is prime real estate, just a block from Fifth Avenue South and three blocks from the Gulf. Gavin said the sooner the property can clear all the foreclosure red tape, the sooner it can be sold and rehabilitated by a new owner.
"That would be wonderful," she said. "Those rentals were always beautifully cared for."