Foreclosure Reform Proposed in Florida
The Florida legislature is considering reforms to the state's foreclosure process. According to a report in the Tampa Tribune yesterday, House Bill 1523 would allow non-judicial foreclosures in some cases, unlike the current system which requires the lender to file a foreclosure lawsuit.
Florida law has long been considered by many as too favorable to defaulting borrowers. The judicial process can often take years, and this problem has been exacerbated recently with the steady rise in the number of foreclosures.
Georgia, on the other hand, is a non-judicial foreclosure state which allows a lender to foreclose without court action or approval. This results in a system which is criticized for the opposite reason as Florida, as being too easy for lenders to take away a borrower's property. As a result of this criticism, there are bills pending in the Georgia legislature which would make the process more borrower friendly as I discussed here recently.
In the Tampa Tribune article, the author quoted me about the need to strike a balance between the countervailing forces: protecting the rights of the borrower vs. allowing lenders to repossess property within a reasonable time. It makes little sense that two neighboring states have systems which are so diametrically different.
I believe that the states should comprehensively study the various foreclosure systems utilized in the U.S. to determine which procedures best strike this balance. Just as we have uniform laws for the commercial code and partnership law, we should consider more uniformity in the area of foreclosure law.
