Members of The Florida Bar express deep concern with the section's support of Senate Bill 1666 and House Bill 87


Members of The Florida Bar express deep concern with the section’s support of Senate Bill 1666 and House Bill 87

Members of The Florida Bar express deep concern with the section’s support of Senate Bill 1666 and House Bill 87

The Florida Bar News-

We write as members of The Florida Bar and in some cases as members of the Real Property, Probate and Trust Law Section to express our deep concern with the section’s support of Senate Bill 1666 and House Bill 87, which propose to materially change the rules governing foreclosures in Florida.

The proposed amendments are in complete derogation to fundamental tenets of due process and property rights. The passing of this legislation would completely disregard the evidence code, allowing courts to presume liability with only a prima facie showing by the plaintiff, and without opportunity of homeowners to conduct discovery into possible abuses by the banking industry that often result in out-of-court settlements between lenders and homeowners, or a rash of voluntary dismissals by the banks.

This proposed legislation would effectively undo 250 years of American jurisprudence, returning us to a legal dark age. Furthermore, certain proposed amendments would apply retroactively, creating ex post facto provisions which violate both our state and federal constitutions.

The proposed legislation favors banks, retired judges, homeowners’ associations and title insurance companies, and disfavors homeowners and newspapers. While banks support the bills because they provide them with an expedited procedure of foreclosure, many of these procedures will effectively reduce the financial incentive for lenders to participate in short sales and negotiated settlements that are helping restabilize the Florida real estate economy.

SB 1666 proposes to dramatically increase the use of retired senior judges, an issue that has profound constitutional implications. Article V of Florida’s Constitution requires that judges who reach the age of 70 retire and cease to maintain full case loads. The Florida Constitution also requires judges who preside over cases reside in the communities in which they serve and face the will of the voting public through retention votes. The proposed legislation completely ignores these fundamental protections. Foreclosure judgments entered by these senior judges will perpetually be attacked as unconstitutional, which will create unsettled cases for potentially decades, making matters ultimately worse. Overburdening of the district courts of appeal that are already struggling to keep up is not sound policy.

These bills are more interested in protecting the banking and the title insurance industries than protecting the larger interests of the Constitution, the judicial system as a whole, and the rights of homeowners. The “Finality of Foreclosure” provisions in these bills prevent homeowners from ever getting their home back even after a fraudulent foreclosure is overturned; rather, the homeowner would be entitled to economic damages only. No matter how blatant the fraud, no matter how obvious the forgery, no matter what errors are committed, once a judgment is entered, the wronged homeowner could never get that property back again.

We see no reason why there should be a special legislative exemption for an industry that has collected billions from policy premiums paid by homeowners over the years to protect them from defective title. Effectively, the Legislature would be giving the industry a huge subsidy by providing this unnecessary protection.

Should this legislation pass, the negative consequences to homeowners would far outweigh any alleged benefits to lenders, the title insurance industry, and the court system. The quantum of harm to consumers and to our legal system as a whole should shock any attorney. For example, one provision allows the retroactive application of the law to existing cases. As attorneys, even the thought of ex post facto laws should cause grave concern, creating a very dangerous slippery slope in the future in other areas of the law. If passed, these bills will change the standard in the middle of a case and subject the litigants to a new legal standard that did not exist when the case was filed. Next, the bills propose to shift the burden of proof to defendant homeowners. The plaintiff in all suits has the burden of proof to substantiate its allegations. The bills usurp the role of appellate courts by providing safe harbor for lender mortgage fraud by making foreclosure judgments final. The bills also overturn a long-standing law that only requires depositing of payments into a court’s registry where agreed upon, by the parties, in the mortgage to instead now require that any homeowner who is not occupying his or her home pay his or her mortgage in full or immediately lose possession.

Homeowners, who are already fighting an uphill battle in defending foreclosures, would effectively have little chance at defending their rights at a preliminary hearing where the banks need only show a prima facie case to foreclose. Bank fraud and robo-signing, which have primarily been exposed through discovery during the foreclosure process, will likely remain buried should the proposed summary procedures be permitted, and would not have been uncovered in the first place had these laws been in place at the time. These fast and loose procedures build a house of cards that could eventually collapse without the proper procedural and substantive safeguards in place. The more than 30,000 dismissals (in 2012 alone) for incomplete or fraudulent documentation is indicative of the banks’ own acknowledgment of their legal shortfalls.


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