Florida court system facing $72.3 million deficit

Florida's court system has frozen hiring and is bracing for possible staff furloughs due to a $72.3 million deficit blamed on a shortfall in filing fees after mortgage foreclosure cases dramatically declined.

In 2009 the Florida Legislature increased fees and funneled them into a trust fund to pay for most of the court system's expenses. The trust fund was expected to cover $370 million of the $462 million court system budget.

Most of the fees -- $293.7 million -- were expected to come from foreclosure filings, but they've dropped well below that estimate due to self-imposed moratoriums by many lenders over such issues as lost paperwork and erroneous filings.

Florida foreclosure mediation programs (a sampling)

In December 2009 the Florida Supreme Court issued an administrative order directing all circuits to develop foreclosure mediation programs. The Supreme Court’s order requires courts to allow homeowners to participate automatically in these programs. There are twenty circuit courts in Florida, and each one may select an entity of its choice to administer its mediation program. Circuit courts throughout the state implemented mandatory mediation programs during 2010.

The Collins Center, a state non profit organization, is the mediation manager for six Florida circuits. The data below is from the Eleventh Judicial Circuit, comprising Miami-Dade County. The Eleventh Circuit has by far the highest volume of foreclosures of any circuit in Florida. All foreclosure cases filed in the Eleventh Circuit are automatically eligible for mediation and referred to Collins Center for mediation. Collins Center attempts to contact all homeowners and refer them to housing counselors to prepare for a mediation session.

The Clerk of the Court reports that there were 34,400 foreclosure filings in Miami-Dade Country during 2010.

The following Collins Center data reported for Miami-Dade County only, is for the six months from June 2010 through December 2010:

13,265 cases received (cases referred to mediation upon filing)

6681 unable to contact homeowner

6044 homeowner successfully contacted

2178 mediations conducted (16.4 % of cases received)


Of the 2178 mediations conducted:

1392 reached impasse - foreclosure allowed to proceed

745 homeowner reached written agreement (could be modification or vacate)

219 settled before mediation session

Housing Market Indicators

*** Florida Housing Market Indicators

Florida consumer confidence: 77

Florida existing home median price: $122,200

Florida existing condo median price: $79,400

Florida existing home sales: +14% (month-to-previous-year comparison)

Florida existing condo sales: +36% (month-to-previous-year comparison)


*** National Housing Market Indicators

National existing home median price $158,800

National existing home sales: +2.7% (month-to-previous-month comparison; all housing types)

National (Freddie Mac) mortgage rate 4.87% (all housing types)

GOP back Banks over Homeowners

Leading House Republicans challenged a deal Wednesday that federal and state officials have offered to five big U.S. banks that would change the handling of foreclosures and force lenders to modify more mortgages.

Federal regulators and attorneys general of the 50 states offered the terms to the large banks last week, following extended talks over revelations that the lenders had cut corners and used flawed documents to foreclose on many home borrowers.

Asked about the GOP letter, Treasury, in a statement, said: “The mortgage servicing system we have today is broken, and we should work together to establish a stronger set of standards.”

Under the proposal, which would not need Congress’ approval, lenders could be required to write down the value of their loans to borrowers who owe more than their homes are now worth. They reportedly would be forbidden from starting foreclosure proceedings while a homeowner is trying to modify their mortgage terms, and there would be an independent review if they denied a mortgage modification.

The banks are Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC, which together have about 6 in 10 U.S. home mortgages.

Soaked <$751 Billion> Nationwide

The number of American homeowners underwater (those who owe more on their mortgages than their homes are worth) increased at the end of last year.

About 11.1 million households, or 23.1 percent of all mortgaged homes, were in a negative equity position in the October-December 2010 quarter. Another 2.4 million are nearing that point now, due to high levels of foreclosure and unemployment.

While the picture isn't very pretty for homeowners here in Florida, it's not nearly as ugly as it is in Nevada where roughly two-thirds were underwater in that last quarter, the worst in the country.

Top Florida foreclosure lawyer shutting down firm amid probe

A law firm that once led Florida in foreclosures is shutting down amid an investigation into "robo-signing" and other questionable practices.

A Securities and Exchange Commission filing Monday indicated that David Stern's Plantation-based practice will end operations March 31. The firm once had more than 1,200 employees and handled tens of thousands of foreclosures each year.

Stern's firm is one of several under investigation by Florida's attorney general. The probe focuses on whether false or improper affidavits were filed in foreclosures and whether employees were robo-signers who signed documents without reading them.

A broader national probe is examining how foreclosures were handled during the economic downturn.

Could the 30 year mortgage go away with Fannie & Freddie?

Congress has continually subsidized middle-class mortgages. Fannie and Freddie guarantee that investors will be repaid even if borrowers default -- a promise ultimately backed by taxpayers. Fannie, Freddie and other federal programs now support roughly 90 percent of new mortgage loans because lenders cannot raise money for mortgages that do not carry government guarantees.

If Freddie Mac and Fannie Mae were closed, the rare goal shared by the Obama administration and House Republicans, homeownership in America could change greatly. The 30-year fixed-rate mortgage loan, the steady favorite of American borrowers since the 1950s, but not available in most other countries, could become a luxury product. Interest rates would rise for most borrowers, but urban and rural residents could see sharper increases than customers in the suburbs. Lenders could charge fees for popular features now taken for granted, like the ability to "lock in" an interest rate weeks or months before taking out a loan.

It won't happen soon. Congress must agree on a plan, which could take years, and then the market must be weaned slowly from dependence on the companies and the financial backing they provide.