The Real Deal Miami

Foreclosures clogging courts, study says

By John Kennedy | August 18, 2009 12:02PM

Foreclosure filings have created a “horrifying” backlog in the state’s court system, with South Florida counties among the hardest hit, a new state Supreme Court study concludes.

The court task force, created by Chief Justice Peggy Quince, is urging that mandatory mediation efforts be launched statewide between defaulting property owners and lenders in an attempt to stem the flood of foreclosures.

“There seemed to be general agreement among the plaintiffs’ representatives that the means to address the backlog of pending foreclosure cases is to provide responsible borrowers and lenders the opportunity to have meaningful contact, thereby limiting foreclosure case volume,” the task force said in its report, which can be read here.

Although foreclosure filings in many of the state’s largest counties have been leveling off in recent months, Florida still has the “third highest mortgage delinquency rate, the worst foreclosure inventory, and the most foreclosure starts in the nation,” the task force found.

Several judicial circuits have formed mediation programs over the past year, but the high court panel is recommending that such efforts be made mandatory statewide.

The Florida Bar Foundation also is receiving $4 million from the state’s settlement with Countrywide Financial to provide legal assistance to defaulting homeowners in Miami-Dade, Broward and Orange counties, where the volume of foreclosure filings is particularly high.

Other steps the task force is proposing include creating a statewide foreclosure Web site to assist homeowners and forming new procedures to accelerate cases through the court system.

But with the state mired in its worst budget hole in decades — one that has already forced deep cuts to the court system — the task force acknowledged that easing the foreclosure crisis is a tall order.

“We live in a state in a budget crisis,” the report said. “Given Florida’s financial situation, it would be a foolish exercise to address needs for foreclosure case managers, additional judges and support staff, special magistrates and court-funded mediation in the absence of any realistic expectation that such recommendations could be funded.”