Florida HB 87, Homeowners, and the Foreclosure Inferno

by Nathan Rein
A bill passed last week by the Florida legislature offers efficiencies and advantages to banks that may launch a major increase in foreclosures in the state known for its volatile real estate market.  The only thing standing in the way is a veto by Governor Rick Scott.  (Image: Nathan Rein)

HB 87  shifts the burden of proof from the plaintiff, typically a bank, to the defendant, the homeowner.   If the bill is signed into law, homeowners must prove that the bank lacks the legal right to take your home within 20 to 45 days of the date that the bank served the foreclosure notice.   The reduced timeline restricts the ability to gather evidence from the bank and test it (Does the bank actually have a legal record of your mortgage?).  Without the time to discover evidence, homeowners are at a major disadvantage at the initial hearing or appealing a decision, presuming there are funds for an appeal.

The bank-friendly bill, H.B. 87, was passed by the Florida Senate 27 to 13 and House of Representatives 87 to 26 in partisan votes with Republicans in favor and Democrats opposed.  However, when Democrats in the Florida Senate had opportunities to stop the bill due to rules violations, none spoke up.  The party line vote was a sideshow that masked the bipartisan assent without objection to what may be the most pro-bank legislation in any major state.

The Down Market

There were 154,000 foreclosure filings this February in the United States.  Florida led the way with 32,000, according to a RealtyTrac data as reported by Florida Realtors.  For cities over 200,000 people, Florida had seven of the top ten cities in the nation for "default notices, scheduled actions, and repossessions," the events that comprise foreclosure filings according to RealtyTrac.

The plunge in home values, job losses, a lack of new jobs, and flat wages all work against homeowners trying to keep a roof over their head.  When they fall behind, the banks make their move, Florida homeowners will find it even more difficult to protect their rights if this legislation is signed by Governor Rick Scott.

Citizen groups are urging a veto by the governor.

The Burden Falls on the Homeowner

Real estate foreclosures fall under state law. States are divided between judicial and non-judicial foreclosure laws.  The big bank advantages in non-judicial states are legion.  In judicial foreclosure states, homeowners still have some rights (if they can afford to exercise them).

Florida is a judicial foreclosure state.  Currently, the court system requires that banks (plaintiffs) prove their case.  Homeowners (defendants) have the right to challenge foreclosures presuming they have an adequate attorney.

If Governor Scott signs HB 87 into law, homeowners will face a new version of due process before the law.  In addition, several timing and evidence gathering impediments will stack the deck in favor of the banker plaintiffs.  Any hope for justice will become rare among citizens.

The essence of due process in our legal system is found in the burden of proof: "the necessity of proof always lies with the person who lays charges."  The banks lay charges when they initiate foreclosure.  Therefore, the banks have the burden of proof.   Not in HB 87.

HB 87, Section 702.10, subsection (1) turns due process upside down.  (Lines 250-264, pp. 9, 10)

The plaintiff "may request an order to show cause for the entry of final judgment in a foreclosure."  The court "shall immediately review the request and court file in chambers without a hearing."  If "the court finds that the complaint is verified " the court shall promptly issue an order directed to the other parties named in the action to show cause why a final judgment of foreclosure should not be entered."

The bank that initiates the action need only provide a written request.  That request is reviewed in chambers without any one challenging the evidence or logic ("without a hearing"). When the order is issued solely on the basis of the judge's uninterrupted review in chambers, the homeowner assumes the burden of proof.  Show that this document is false the court orders.  Justice and basic concepts of law are sacrificed to allow banks greater ease and efficiency in taking possession of your home.

Another problem created for homeowners is found in timelines required to make a case against the foreclosure, as limited as the opportunity may be to have the case heard.

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