Legal News

Want a 15-Second Foreclosure Hearing? In Florida, You Can Have One

By Dan Slater

Earlier today, the WSJ reported that the Obama administration announced new plans to make it easier for up to nine million people to rework or refinance their mortgages, as the White House begins an aggressive effort to stabilize the housing market.

The plan has three main elements: an effort to help homeowners refinance; another effort to help stabilize the housing market through a $75 billion initiative aimed at reaching up to four million at-risk homeowners; and a third element that aims to drive down mortgage rates.

If the plan works, it’ll be welcome news for homeowners in Lee County, Florida, where judges and other officials have come up with their own unique plan for dealing with the crisis. To clear a huge backlog of foreclosures, judges are hearing “rocket dockets” of nearly 1,000 cases a day and calling retired colleagues back to the bench to help ease the workload. Here’s the page-one WSJ story.

The story notes instances of 15- and 20-second foreclosure hearings, in which a judge is likely to ask two simple questions: Are you current on your mortgage and are you living in the home? No paperwork necessary. If the answers, for instance, are ‘no’ to the first question and ‘yes’ to the second, judges give troubled homeowners 60 days to work out a deal with their lender or vacate their house.

The judges say they sympathize with the homeowners’ hardships, but often the cases can be decided after a brief hearing because there are no legal issues in dispute which would warrant a lengthy trial. On the ‘bright side,’ many judges Florida judges are giving homeowners much more time to stay in their houses than the law requires.

“That’s pretty humane considering that many homeowners have been living rent-free for more than a year,” says Robert Hill Jr., a Fort Myers lawyer who represents lenders.

The lawyers are doing well, though, notes the Journal story. They can earn as much as $100 per foreclosure to present cases to the judge that have been prepared by big law firms in Miami and Tampa, which are hired by out-of-state lenders.

Full post as published by Law Blog - WSJ.com on February 18, 2009 (boomark / email).