Florida HB 87, Homeowners, and the Foreclosure Inferno

UPDATE May 14, 12:19 AM EDT  Where is HB 87?  Governor Rick Scott has not vetoed the big bank friendly Florida foreclosures law according nohb87to his 2013 Bill Action web site.  In fact, the law, passed by the Senate on May 3, 2013, is not even listed on the bill action web site.  Since the legislature adjourned on May 3, according to the Florida Constitution, Scott can either veto the bill or sign it.  A third option is to do nothing for 15 consecutive days after the legislature adjourns.  HB 87 becomes law by May 18, 2013, if the governor fails to veto the bill,

Floridians may want to know why HB 87 is not listed on the 2013 Bill Action page documenting the governor’s actions on what one would assume to be all legislation passed by the Florida legislature.

UPDATE:  As of Sunday, 5/12 6:27 pm  EDT, Governor Rick Scott has not signed HB 87.  He has not vetoed it either.  This is the live site for Scott’s legislative action.  Any actions are posted here in real time.

hb87(May 10, 2013) 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?


This article may be reposted with attribution of authorship and a link to this article.

 UPDATE:  As of Sunday, 5/12 6:27 EDT, Governor Rick Scott has not signed HB 87.  He has not vetoed it either.  This is the live site for Scott’s legislative action.  Any actions are posted here in real time.

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Michael Collins

DC area

14 CommentsLeave a comment

  • The banks have an enormous advantage to start with, with foreclosed homeowners often at the end of their money and unable to afford counsel. I hope you’re right, Mike, that this will result in backlash.

    • There’s no reason for this. How far down do they have to drive people? Are the big banks in the business of ruining retirements, charging youth ridiculous overdraft etc. fees, and taking homes in distress, when they helped create the distress? In a word, yes!

  • Florida is a lovely place to visit, particularly in the winter, but the horrible public educational system has produced a state full of morons. I am constantly amazed at the stupidity of the natives when I visit there, which is usually at least twice a year. Fark.com has a whole section devoted to the stupid acts and horrific crimes committed by the knuckle-draggers who dwell there year-round.

    • At one point, I think under Bush, Florida kids were not allowed to take their books home to study. Why? I asked when I was told this strange tory. ‘Because we might lose them,’ was the response. The school district, a large one, didn’t want to pay for ANY replacement books so no homework till the much later grades. But Jeb and the others are all “the education governor.”

      I enjoy Tampa-St. Pete and Miami-Ft. Lauderdale a great deal but they’re not the whole state. They had a great governor once, Chiles, but it’s been downhill since then. Now the government is just awful, as you saw.

      • While I don’t like tha reasoning — “Let’s not carry out our plan if it means kids might lose some books” — I think it’s probably a good thing that kids don’t get homework till later grades. Here in Northern Virginia, the kids get homework starting in, oh, about kindergarten. By about third grade homework dominates kids’ after-school hours, and they lose a sense of self-directedness, focusing only on what is required rather than on where their spirits lead them.

  • This is outrageous. This warrants a massive uprising. Get out your pitchforks, Floridians. It’s time to storm the Bastille (Florida State Capitol).

    • Thank you for reading the article!!! That’s exactly the reaction I had writing about it. How in the name of everything that’s decent can they do something like this.

      Florida has a first rate metro newspaper, the Miami Herald. That’s been the only daily that has covered this and they did it in their blog. This snuck by.

      The delay in signing is significant. The governor is desperate to turn around his low numbers and a veto on this would get him big points on a couple of important levels.

  • Neoliberals sold their supposedly market-based philosophy on the privileges of private property — we’ll be rich and happy in the “ownership society”. Now with MERS and the massive real estate fraud that’s gone on, they’ve undermined the concept of private property protected by the state in favor of feudal rights vested in corporations. The same thing is happening in the fossil fuel sector — companies essentially have condemnation rights over private property for pipeline construction and fracking.

    Not quite the same but related is the student debt issue — loans of questionable wisdom undertaken by children too young to drink that are non-dischargeable in bankruptcy proceedings, so the debtors are subject to economic control for their entire lives.

    We may be getting to the point where these practices are no longer seen as abuses of a legitimate system but as proof that the system is illegitimate.

    • They’re not seen as abuses, by and large, you are so right. HB 87 is a stealth effort sparing citizens the requirement to be fooled. It just happened. I’ve never seen the general mood so quiet and accepting as the last few months.

      I do hope the current crop of students will rise up and say, ‘we don’t owe any money on a fraudulent scheme’ and simply stop paying. There are lots of abeyance’s offered to ease the pain, e.g., delayed payment if you’re out of work, etc. Student’s don’t need to do occupy movement, they have to ‘just say no.’ Warren’s bill on micro interest rates for loans may light up the terrain. Make it retroactive is what I say:)

    • Plus ca change . . .

      In one way it hasn’t changed much: State protection of private property has always, by and large, been for those who have a great deal of property. And the banks have a lot more than the homeowners.

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