Florida’s Senate Banking and Insurance Committee this week approved legislation that would speed up the state’s foreclosure process, a move that would remove some protections for homeowners and could increase the likelihood of bank fraud. The committee, which passed the bill 8-2, passed similar legislation in 2012 that did not advance farther.
The bill is an effort to clear Florida’s backlog of foreclosures that piled up as a result of the financial crisis, but as we pointed out when it was introduced in February, it is likely to have unintended consequences that make it easier for banks to deceive homeowners or process unlawful foreclosures. Banks’ past efforts to speed up the process led to fraudulent techniques like robo-signing, and banks foreclosed on homes they didn’t own, homeowners that were seeking to modify their loans, or because of minor clerical errors the banks themselves had made.
While Florida does have a lengthy backlog of foreclosures, its process is not atypically long. The average Florida foreclosure takes more than 600 days to process, about the same length of time it takes the average home nationally to enter foreclosure.
Consumer advocates have pointed out many problems with the foreclosure bill. In addition to potentially inviting fraud, the bill would remove homeowners’ right to reclaim their property after an improper foreclosure. Instead, they would only be eligible for compensation.