Michael Collins

Justice and basic concepts of law are sacrificed to allow banks greater ease and efficiency in taking possession of your home.

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.

Under HB 87, Section 702.10 (1) (a) (1) (p. 10), a judge will review the complaint without a hearing then issue an order to show cause to the homeowner. At that point, homeowners must show cause why they shouldn't be foreclosed on at a hearing set within 20 to 45 days after service of process (lines 270-274). The outside limit of the response is 45 days after the initial complaint. This is a very short timeline particularly when dealing with homeowner discovery of evidence from a huge corporation like a bank. The 45 day requirement is also in conflict with the Florida Rules of Civil Procedure. Depositions require 30 day notice to witnesses. Witnesses have 30 days to respond to written questions (interrogatories).

To have any chance to prevail, you need an attorney the day the bank files a complaint. That's not all you need on the first day of the foreclosure filing against you. You must know who all the witnesses are and produce written questions sharp enough to get the required evidence. The questions need to go out that very day in accord with the general rules of civil procedures. If you do all this on day one, you may have time to obtain some discovery if the hearing has been set after 30 days and the bank doesn’t attempt to delay discovery, something which banks typically do. Talk about the perfect storm.

HB 87 greatly reduces plaintiff requirements for proof of a mortgage agreement. It is well known that the banks set up their own recording system for mortgages that bypassed normal recording requirements. They did this in order to bundle and sell mortgages leading up the Wall Street crash of 2008. (See ForeclosureGate Deal ). When requested, banks are often at a loss to produce the basis for the mortgage agreement, original documents. HB 87 loosens the documentation requirements to enforce contracts that may be just scraps of photocopied paper. (See HB 87 702.015 (4) lines 125-137, p. 5)

HB 87 closes the door on any objections to errors in the foreclosure process in Section 702.036, (1) (a), lines 162-169 (pp. 6, 7) Finality of mortgage foreclosure judgment.

"In any action or proceeding in which a party seeks to set aside, invalidate, or challenge the validity of a final judgment …, the court shall treat such request solely as a claim for monetary damages and may not grant relief that adversely affects the quality or character of the title to the property,"

Once the judge issues his/her order to show cause at the quickie hearing in favor of the bank and the 30 day period to file an appeal expires, the homeowner can produce undisputable proof that the bank had no right to be awarded the home. In this case, the only damages available are monetary awards. The issue of home ownership and title cannot be changed under the new law. No amount of monetary damages will replace the value of a family home.

Once again, the perpetrators of the biggest transfer of wealth in history are given even more advantages, right where those advantages count, in the law.

Will Governor Scott sign legislation that lets banks take homes with a low standard of proof or will he respond to the needs of the people represented by those signing the petition for a veto ? Nothing less than due process and all that implies is at stake.

Will the Democrats start looking more like the party of Lawton Chiles than Jeb Bush?

Will the media wake up to the cloak of secrecy and the motives for that cloak in time to alert the people?

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