The Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases recently released its final report. Included in the recommendations of the task force (must be adopted by the court) is the concept of "fast-tracking" vacant and abandoned properties through the foreclosure process.

Summary

• Uniformity of forms and procedures statewide should be a goal in terms of affordability and efficiency
• Require the “civil cover sheet” (submitted with filing) to designate a case as residential or commercial; and designate a residential case as homestead or non-homestead property. These categories should be case-managed differently
  • Three types of properties:
    • Borrower-occupied properties / homestead properties: these are the cases most likely to be successfully modified and where most of the financial incentives and focus is geared toward. Because it is difficult to determine at the outset of the case whether the property is occupied, the homestead exemption serves as a clear category.
    • Vacant properties / walk-aways: These are typically walk-aways where no one lives on the property or unoccupied investment property. These should move quickly through the foreclosure process toward sale and re-occupation, to avoid the issues of crime, property value, and community stabilization that such properties bring.
    • Other properties: may be tenant-occupied, or occupied by family members of the borrower, or have unspecified occupants. It is recommended that these properties by given the choice to opt into managed mediation at equal cost to the parties, since communication can sometimes be a problem in these cases as well.
• A central statewide foreclosure website should be established by the executive and judicial branches of the state so that foreclosure information can all be found in one location.
• When a plaintiff serves notice at the subject property, the plaintiff should be required to ask the occupant whether the occupant knows the location of the borrower-defendant (to whom he is presumably paying rent).
• Widespread consumer education is needed on avoiding foreclosure scams and providing clear information on where to report mortgage fraud, scams, and other illegal activity
• The Florida Bar should aggressively prosecute attorney misconduct in foreclosure defense scams and mortgage fraud cases
• Plaintiffs should be required to verify to the court at filing that they are the owner and holder of the note.
• Mandatory managed mediation should be required statewide prior to final hearing
  • Opt out basis (for defendants)
  • Only in residential homestead cases (although it is recommend on an "opt in" basis for other cases where the property is not vacant).
  • Initial cost is paid by the plaintiffs subject to recovery in full in the final judgment
  • Justification/goals:
    • Defendants repeatedly complain about multiple attempts to contact plaintiffs about loss mitigation review without response, repeatedly sending financial documentation etc
    • Plaintiffs have overwhelmed loss mitigation departments who answer random calls about cases they know nothing or little about.
    • Ensures that TARP/HAMP loss mitigation requirements are complied with
  • Establish a managed mediation fee to cover the cost of case intake, counseling, uploading of financial documentation, and for the mediation itself
  • All borrowers in managed mediation should receive certified foreclosure financial counseling and provide their financial documentation before scheduling mediation
  • A common information technology platform should be specified statewide for use in mediation, allowing all authorized parties to exchange and access financial documentation
  • Pre-filing foreclosure mediation should be encouraged since later mediation results in misinformation, confusion, wasted hearing time, and post-judgment motions to vacate
• Lawyers and bar associations should encourage pro bono efforts to assist borrowers and should provide training to attorneys in these matters.
• Additional court staffing is needed but unlikely, thus parties should engage in quality control to help alleviate the backlog
• Plaintiffs should be encourage to seek expedited resolution of “walkaways” and vacant or abandoned property where appropriate, and case management should provide prompt, expedited hearings in such cases.
• Where possible, judges should recognize the financial strain that delays can have on co-defendant condominium and homeowner associations.
• Final judgment language should be limited to actual issues pleaded and proved
• Parties should not be able to unilaterally cancel foreclosure sales set in final judgments without explanation, to ensure that the sale is rescheduled at an appropriate time (relative to the reason for the cancellation) and that the sales process is not being abused.
• Judges should receive judicial education about foreclosure cases.

To view the Administrative Order, the full Report and Appendix A-M, please click here.

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