Average time a Foreclosure takes in Florida:  600+ days!  That's a snails pace!

Proposal SB 1890 is one step closer to becoming law in Florida.  And it's a good thing in my opinion.

Two Major Changes this Bill aims to Change:

  1. Speed up Foreclosures:  Any lien holder, 1st mortgage, 2nd, HELOC, etc., could file for a "hastened" foreclosure in cases where the home is abandoned or the mortgage is delinquent.  In these cases a judge can side with the lien holder and file an immediate final judgement notice, which gives only days before a house is taken back by the bank.  This has the ability to go retroactive to ALL home owners currently in foreclosure in Florida.  Some 368,000 home owners. 
  2. Reduced time limit for Deficiency Judgements:  The bill aims to reduce the time period in which a lender can seek the deficiency balance after a foreclosure from 5 years to only 1 year after the foreclosure.  Lenders currently have 5 years to go after the deficiency balance, and they are going after them.  They sell the rights to collect to debt collection attorneys, and these attorneys are relentless.  

If this Bill becomes Law, how will it affect home owners who are currently not paying their mortgage?

  • The free rent is over for those who are seriously delinquent.
  • If you can't pay, you'll have to start short selling ASAP!  No more waiting for the planets to align
  • The 1 year collection period will reduce stress:  At least you know after 12 months that you either have major financial issues or you don't.  As it stands now, you'd be just waiting for the knock on the door for 60 months. 

If this Bill becomes Law, how will it affect short sales?

  • Since Banks want short sales not foreclosures, they'll speed up the short sale process in Florida. 
  • Banks will get serious about offering a short sale to delinquent or soon to be delinquent home owners.
  • Get ready for a "streamlined short sale" that will be offered by many banks who don't want more housing inventory to have to manage, repair, and retail.
  • More incentives offered to home owners for short selling.  Right now some banks are offering cold, hard cash at closing for home owners who agree to short sale.
  • Deficiency judgement time period is the same as in foreclosure, it will be reduced to 1 year from 5 years. 
  • Promissory notes or small cash contributions will become normal "payoff" to the banks in order to avoid any future deficiency balance. 

The one big negative I see from this streamlined foreclosure bill:  Some short sales are extremely complex.  Multiple lien holders, mortgage insurance companies, multiple servicing companies, etc.  In some of these cases, getting all parties on board for a short sale is time consuming to say the least.  If these parties don't get in line quickly, a streamlined foreclosure could take the house during a short sale.  Will that cause more litigation against the banks?  Probably. 

Posted by Brad Officer on
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