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Business Observer Thursday, Mar. 5, 2009 12 years ago

Fast and Furious Foreclosures

Courts across Florida are dealing with a foreclosure deluge. One chief judge is trying to speed up the process in his courtrooms.
by: Mark Gordon Managing Editor

Courts across Florida are dealing with a foreclosure deluge. One chief judge is trying to speed up the process in his courtrooms.

Not many people envy Lee County these days, with towns such as Leigh Acres and Cape Coral becoming national foreclosure hotspots.

But Lee Haworth, chief judge of the 12th Judicial Circuit Court, which covers Sarasota and Manatee counties, says they get one thing right: The courts there know how to move foreclosures off the books. Fast.

So fast that Lee County, part of the state's 20th Judicial Court, was recently featured on the front page of the Wall Street Journal as a so-called 'rocket docket,' for disposing of cases at soaring speeds. That sense of urgency is a dire necessity there: Foreclosure filings in the county have jumped from about 2,000 in 2007 to more than 20,000 filings in 2009.

It's not so much the speed, though, as it's the system that has drawn Haworth's attention. That system includes requiring any law firm that files a foreclosure notice on behalf of a lender to have an attorney make an in-person appearance for each filing.

The old way, of allowing attorneys to simply be available by phone, clogged up the system with delays and unanswered questions, says Haworth.

Adds Haworth of the in-person appearance requirement: “It has been a way of life down there.”

That way of living hasn't made its way north to the 12th Circuit and Haworth is trying to change that, pronto. The judge issued a series of notices requiring the in-person appearance late last year, when he says the foreclosure deluge got to be too much for the five judges in Sarasota, Manatee and DeSoto counties working the cases into their general calendar.

But those notices were widely ignored by the major firms in the state that file foreclosures, many of which are in Orlando, Tampa and on the East Coast. One circuit judge told Haworth that in the week after the first notice was filed, only five out of possible 79 attorneys had complied with it.

So last month, Haworth signed an emergency order suspending all telephone hearings for foreclosure cases in Manatee and Sarasota counties. This time, Haworth says he will emphasize the order aspect, not simply a request notice. That rule went into effect March 9.

“I felt the situation had gotten to the point where we had to follow through on the orders,” says Haworth. “I feel like this has gotten their attention.”
It has.

Several attorneys and clerks with firms that file a bulk of the state's foreclosure cases declined to speak officially with the Review for this story, for fear of upsetting the judges they will be arguing cases in front of. But one main issue attorneys in these firms have is that they will have to find, then pay, an attorney for what can amount to a 10-minute hearing.

Haworth isn't only following the 20th Circuit's lead on the in-person requirement for foreclosure filings. Similar rules have been implemented in Nassau, Orange and Osceola counties over the past few months.

The judges in the 20th Circuit, meanwhile, collectively made the move to require in-person appearances about 18 months ago, when they foresaw a boom coming in foreclosure filings, Lee County Judge Michael McHugh says. It no longer made sense for attorneys in places like Orlando and Tampa to “appear” over the phone.

“We felt with the number of cases we were hearing,” says McHugh, “it would be really difficult to correspond with all of the cases by the phone.”

Haworth says he realizes there is bound to be some attorneys and firms frustrated with his order. But his main concern, he says, is the caseload backlog, not the businesses of the firms in the courtrooms.

“The practical effect of my order will cut into the profit margin of these foreclosure mills,” says Haworth. “But until we have confirmed there is widespread compliance, we will keep this order in effect.”

Mediations on foreclosures
Judge Lee Haworth, the chief judge for the circuit courts in Sarasota and Manatee counties, isn't only looking to add some sense of urgency to the foreclosure process in his local courtrooms.

The judge is also seeking a way for Florida homeowners with a homestead to avoid the courtroom for a foreclosure in the first place. He has been working with State Sen. Lee Constantine, R-Altamonte Springs, who is chairman of the Senate Judiciary Committee, to craft a bill that would require mediation before a foreclosure is filed on a homestead. Says Haworth: “I will do anything I can do to push the responsibility back to the people filing the suits.”

The judge first made his pitch in January before a meeting of state senators on the judiciary committee. Constantine said he would take up the cause and try to craft a bill that can make it through the 2009 legislative session.

A small-scale version of Haworth's idea is already being used in the 12th Circuit, which covers DeSoto, Manatee and Sarasota counties. It is done through the Homestead Foreclosure Conciliation Program, which requires lenders to schedule a phone conference with homestead owners in an attempt to resolve the dispute before filing a foreclosure notice.

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