Lenders Foot Dragging on Foreclosures Stick Florida Home and Condo Owners with Association Fees & Taxes- New Potential Law To Counter This Practice

State Representative Katie Edwards (D-Plantation) has sponsored a vital foreclosure bill to protect the interests of Floridians. HB 975 would require lenders to assume responsibility for association fees and property taxes when a foreclosure is filed with the court.

Under current law, homeowners in foreclosure remain on the title. Thus, home and condo owners continue to be financially responsible. Rep. Edwards’ bill would help protect Florida consumers by requiring lenders pursuing foreclosure to take on financial responsibilities associated with ownership. The changes would speed up the foreclosure process that currently lags behind the rest of the nation.

“Mortgage lenders are directly to blame for Florida’s foreclosure crisis and it’s falling on the backs of Floridians. Lengthy foreclosures and minimal responsibility for amounts owed by foreclosing lenders has forced associations to pass staggering amounts of unpaid delinquent assessments on established homeowners,” Rep. Edwards said. “Roughly 21 percent of foreclosed properties sit vacant for years while lenders avoid paying taxes and maintenance assessments by delaying the taking of the title to the property. This is bad for Florida and my bill aims to stop it.”

While a lender may file a notice of foreclosure to safeguard its stake, it is not uncommon for banks to deliberately delay the process of taking back the property. Often because the delinquent home is worth less than the outstanding debt or in order to avoid paying association assessments and property taxes.

Florida has led the nation in foreclosures for the past three years and is third in the nation for the longest foreclosure times. Florida foreclosures take an average of 944 days to complete, more than twice the national average. The foreclosure crisis in Florida has had a profound effect on Florida’s homeowner and condo associations as well as the Floridians who reside in those neighborhoods.

Currently, Florida law allows a purchasing lender to escape the vast majority of the delinquent assessments, much of them accruing during the lender’s own foreclosure process.

“Mounting pressures from these unnecessary delays pile on stress for people already going through a tough situation. These same problems negatively impact associations’ ability to comply with state-mandated fiscal requirements and undermining the delivery of services critical to the upkeep, repair and safety of Florida’s associations,” Rep. Edwards said.

SB 1066 a companion bill was filed in the Senate by State Senator Aaron Bean (R-Jacksonville).

If signed into law the bill would go into effect July 1, 2015.

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