Florida courts struggle to operate amid flood of foreclosures

Nov.November 10, 2009 04:04 PM
From left: Sen. Durell Peaden of Crestview, Sen. Garrett Richter of Naples

The deepening backlog of foreclosure proceedings in Florida courts prompted some lawmakers to advocate an about-face on a new set of rules to finance statewide justice.

As tax revenues plunged due to falling property values and a deep recession, the state’s 67 court clerks have laid off 1,250 of 9,600 employees — 13 percent of the workforce. Salary freezes and furloughs for most remaining workers are now the norm, the state’s court clerks’ association says. The state’s clerks absorbed $123 million in budget cuts over the past eight months, and still face a flood of foreclosures, with more to come.

Nearly one in four Florida home loans is in some stage of delinquency, the highest rate in the nation, according to the Mortgage Bankers Association.

Miami-Dade Circuit Judge Jennifer Bailey, who chaired the state Supreme Court’s taskforce on foreclosures, said Florida was on track to top the 369,000 property foreclosures that clogged the court system last year.

The legislature approved $1.1 billion in new fees last spring — with much of them designed to ease budget woes in the courts. But the cash flow doesn’t do much for clerks, who also have been stymied by new legislation that revised the method for setting clerks’ budgets.

The new system allows dollars to flow to clerks based on the previous quarter’s service needs — a method Leon County Clerk Bob Inzer has called unworkable.

Sen. Durell Peaden of Crestview is among several lawmakers who questioned whether at least portions of the new law should be repealed. Clerks have been under a political microscope ever since the earlier housing boom led to a spike in fee collections that outstripped funding for judges.

The urgency is backed up by the numbers, Peaden said. Through August, 266,000 foreclosures were already filed — with as many as 425,000 foreclosure actions possible by year’s end. The taskforce earlier concluded that Florida’s housing crash was creating a “horrifying” backlog in courts, particularly those in South Florida.

Bailey said that 75 percent of civil court dockets in Miami-Dade for the past two years represent foreclosure cases — with little relief in sight.

“There is a lot of agreement on what the problem is, but there’s not a lot of agreement on the solutions,” Bailey conceded during recent testimony before the state Senate Judiciary Committee.

Three judicial circuits, the 11th Circuit in Miami-Dade County, the 1st Circuit in the Pensacola area, and the 19th on the Treasure Coast, have formed mediation programs over the past year, with the high court panel recommending that such efforts be made mandatory statewide.

The system aims to bring together troubled borrowers and lenders early in the foreclosure process, by devising alternate mortgage payments to keep people in their homes and giving banks and mortgage companies a reasonable chance of maintaining the delinquent loans.

Bailey said mediation has helped reduce foreclosures — and blunt the prospect of a protracted court fight. Bailey conceded judges “don’t have the people to do it,” and don’t expect the state to come up with any money to help mediation programs foster. “The state doesn’t have any money, either,” Bailey added. “We’re not asking for anything other than encouraging mediation statewide.”

Lawmakers want to rebalance the dollars — but may have fueled workforce reductions at a time when the demand on clerks’ offices is peaking. Thirty-one counties have closed branch offices operated by clerks in a cost-cutting move, while other frontline staff members have lost jobs, officials said.

“It’s just shifted the burden everywhere,” said Sarasota County Court Clerk Karen Rushing. “Instead of calling clerks’ offices, people are now calling the courts, the judge, the county commission. We’ve got a problem.”

Sen. Garrett Richter of Naples conceded that the fix approved by lawmakers in the spring may not be working.

“Sometimes, things that you think are put to bed don’t stay asleep,” Richter said.

Related Articles


Mortgage industry chief gets some federal employees back to work with pay

Brightline explores possible station sites in 4 Treasure Coast cities

Mortgage industry latest real estate sector to express alarm over GOP tax bill

Treasure Coast loses another bid to stop Brightline extension to Orlando

Banks lend aggressively on CRE despite downturn fears

Better know a lobbyist: Q&A with Bill Killmer of Mortgage Bankers Association

Demand for mortgages in US fell substantially in Q4

Vestiges of housing bust dot Treasure Coast