Florida's foreclosure backlog among nation's worst

A crushing backlog of foreclosure cases has pushed Florida's courts to request a one-time payment of $9.6 million to help purge the system and quicken a market recovery. The Florida State Courts Administration estimates 500,000 property foreclosures are pending. Without additional resources to clear the cases, judges fear the bottleneck will continue to drag down home values, which aren't expected to stabilize until the glut of foreclosures moves through the system.

It's routine in Florida for foreclosures to take more than a year to settle.

A Barclays Capital report last week estimated that banks and mortgage investors held about 645,800 foreclosed US homes in January, up 4.6 percent from December. That is down significantly from the peak of 845,000 in November 2008.

States with the largest number of foreclosures are Florida, Arizona, Nevada, California, and Michigan.Florida has one of the highest foreclosure backlogs nationally, even singling out South Florida saying it is "remarkable" that the area may only be 18 percent finished with liquidating its delinquent property loans through foreclosure.

Florida's lawmakers are considering the court's appeal for more money, which would come from the State Courts Revenue Trust Fund, and pay for additional case managers and retired senior judges. The money would be doled out to district circuit courts based on their foreclosure case loads. They'll be more cases coming in while they're working on this, and there just doesn't seem to be any relief in sight.

Some housing analysts predict another wave of foreclosures this year as unemployment persists and interest-only and adjustable rate mortgages awarded in 2005 reset.


Two bills (HB 1523, SB 2270) would allow lenders to foreclose on properties without going through the courts.  According to RealtyTrac, a housing information provider in Irvine, Calif., 30 states allow non-judicial foreclosures.  The bills, sponsored in the House by Tom Grady, R-Naples, and in the Senate by Mike Bennett, R-Bradenton, are not identical, but are generally aimed at allowing lenders to skip legal proceedings unless the borrower requests that the foreclosure goes through the courts.

The lender must also meet with a borrower, if requested, and the borrower will not be liable for the unpaid portion of the loan if he or she acts in good faith during the non-judicial foreclosure. Under the proposal, a foreclosure could occur in as little as 90-days.

Homeowner advocates say the proposals would strip the borrower of due process.

Victor Tobin, chief judge of the 17th judicial circuit court in Broward County, said the legislation may have state constitutional conflicts.  Chief Judge Blanc said he doesn't want to give up due process for the sake of "expediency."  Both support the $9.6 million budget request.

"It's cataclysmic, to be honest with you," Tobin said about Florida's foreclosure crisis. "It's a catastrophe for everyone."