Why Foreclosures Should Be Slower

Down in Florida there’s an effort to hurry the foreclosure process by taking courts out of the process.

According to the St. Petersburg Times, “Gov. Rick Scott, House Speaker Dean Cannon and Senate President Mike Haridopolos all say they are interested in considering legislation to change Florida laws so judges won’t have to referee foreclosures.”

No doubt about it, if lenders don’t have to go through the court system to foreclose you can bet the process would be a lot faster, cheaper and easier. Not only that but most states — “nearly” 30 according to the St. Petersburg paper — already allow lenders to foreclose without a court appearance.

The whole idea reminds one of George Santaya’s definition of fanaticism — that’s when you redouble your effort and forget your aim.

The view here is different: The foreclosure process ought to be right, accurate and fair. Borrowers who do not pay their mortgages must face foreclosure — and lenders who want to foreclose must be able to show they own the note and that the borrower has not made required payments.

As to helping judges avoid the duty of refereeing, that’s what judges do.


As Gandhi said “there is more to life than increasing its speed” and the same is true of foreclosures. The goal is not to be swift, it’s to be fair and just.

As to making the process easy, how much easier could it possibly be? The typical foreclosure takes a few minutes of court time. The rules which govern the process are influenced by lender lobbyists. If you think that borrower lobbyists are involved then name one national or state association which represents borrowers. Name one political action committee (PAC) that exists to advance the interests of borrowers. You’d have better luck enjoying unicorn steaks for dinner.

Truth is, foreclosure ought to require precision and honesty, two things you don’t get when clerks are signing thousands of foreclosure affidavits each day.

Isn’t accuracy a fairly minimal standard when the result of a mistake could be that a family will be tossed out onto the street? Maybe your family?

The shame is not that Florida — a state which ranks among the top ten foreclosure centers in the United States according to RealtyTrac — wants to end protections for families, it’s that “nearly” 30 states have already done so.

The Case For Slow Foreclosures

The foreclosure mess exists in large measure because lenders wrote the rules and federal regulators didn’t enforce even the minimal standards already on the books. The Federal Reserve, in particular, did not use its authority under the Home Ownership and Equity Protection Act to stop “unfair and deceptive acts or practices.”

The reality is that if the state of Florida speeds up the foreclosure process its situation will be worse, not better. Here’s why:

Let’s imagine that protecting families is not an important priority. If you speed up the foreclosure process then at the end of the day you have, ta da, more foreclosures. Not all of the properties which are foreclosed will be sold at auction, which means they will have to be added to lender inventories. Increase the number of lender-held properties and they have additional costs for security, maintenance, insurance and taxes — and reduced profits. Meanwhile, with more foreclosure in communities there’s additional pressure to reduce local home prices.

Is this really good for the state of Florida? Or is speeding the foreclosure process counter-productive?

You be the judge — something they need in the Sunshine State.

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