Federal mortgage giant Fannie Mae more than doubled the amount of time Florida attorneys have to complete a foreclosure, acknowledging the reality of the state's overwhelmed court system and problems with foreclosure paperwork.
Law firms now have 450 days (about 15 months), up from 185 (six months), to move a foreclosure from the first referral to an attorney to a foreclosure auction before fines can be levied.
As of the end of 2010, Fannie Mae had $184 billion in unpaid home loan principal in Florida with a seriously delinquent rate of 12 percent.
According to the new deadlines announced Monday, New York City has the longest time frame to complete a foreclosure at 570 days. Florida and New Jersey are tied for the second-longest.
Monday's change is the second time in less than a year that Fannie Mae has adjusted Florida's foreclosure deadline. It was last increased in August, jumping from 150 days to 185.
"We review them periodically and come up with a time frame that best reflects the existing conditions in that state," Fannie Mae spokeswoman Amy Bonitatibus said.
If law firms don't meet the time frames, they can be fined on a case-by-case basis and depending on the amount remaining on the loan in foreclosure.
Whether the longer deadline will have any impact in Florida remains to be seen. RealtyTrac, a California-based company that monitors foreclosures, estimated last month that the average Florida foreclosure takes 619 days from the initial court filing to bank repossession.
"They can't get foreclosures done in 185 days and I don't think they can get them done in 450 right now," said Boca Raton-based foreclosure defense attorney Ron Kaniuk. "They can tell the bank attorneys whatever they want, but without funding, the courts are going to grind to a slow, pathetic halt."
Florida lawmakers decided against extending a one-time $6 million fund this year to hire more judges, case managers and clerical assistants to clear the state's foreclosure backlog.
The additional help allowed the courts to process 16,972 Palm Beach County cases between June 2010 and February of this year, reducing a backlog of 46,438 cases to 29,466. Statewide, the 462,339-case backlog in June 2010 was reduced by 139,615 cases.
Palm Beach County Chief Judge Peter Blanc is working on a new schedule for his judges to manage the foreclosure cases. He had an additional $640,000 to work with from last year's extra stipend, which runs out at the end of the fiscal year June 30.
"We'll be able to handle it, but I think it will be a little slower," Blanc said about the workload.
Palm Beach County is also still sorting through an estimated 9,000 foreclosure cases previously handled by the Plantation-based Law Offices of David J. Stern.
The company collapsed after being fired by Fannie Mae and Freddie Mac in the fall. The two entities cut ties with the firm following the announcement of an investigation by the Florida attorney general's office and allegations of wrongdoing.
Former Stern employees interviewed by attorney general investigators mentioned the intense pressure to meet lender foreclosure deadlines. One paralegal said screaming matches would erupt between Stern and a top firm employee about the speed at which foreclosures were being processed.
Attorney Gerald Richman, who is representing the Boca Raton-based foreclosure law firm Shapiro & Fishman, said the extended foreclosure deadline may take some of the pressure off processing files quickly.
But he added that a tight timeline "doesn't justify anyone cutting corners."
By Kimberly Miller, Palm Beach Post Staff Writer
Source: Palm Beach Post