As a result of so many foreclosures and a foreclosure system that is overburdened, troubled homeowners are staying in their homes for months or even years without making any mortgage payments. They are simply waiting for the banks and lenders to make them move out legally after going through a foreclosure process. But some states are trying to crack down on this problem and make the foreclosure process go through much faster.
There are currently 26 States that require banks to go through the courts when foreclosing on a home and, in these States, it takes an average or 728 days to complete the process. In the 24 States where foreclosures are not typically handled by the court system, it only takes an average of 550 days to move from the default stage of the foreclosure process to the repossession stage.
Florida is one state where the court system is a part of the foreclosure process and, as a result, foreclosures there take an average of 21 months from start to finish. But, the Sunshine State is now trying to expedite the process. To streamline the process in Florida, some of the state’s legislators are looking at proposals that would keep uncontested foreclosures from going through the courts. These new proposals would allow the banks to repossess homes in much the same way that they repossess cars.
Opponents of these proposals say that the troubled homeowners deserve their day in court if they so choose. State Senator David Simmons says that keeping some foreclosures out of the court system does not solve any problems. He says that the courts need to clear out the backlog of foreclosed homes before any progress can be made on speeding up the process for future foreclosures. In fact, he believes that the banks have been partially responsible for the delay in foreclosures because they simply don’t want to deal with additional properties on their books.
In the case of retirees Neil and Marilyn Strawbridge, the process has not even started. They haven’t made a payment since last year and they still haven’t received a foreclosure notice from their bank. The couple purchased their waterfront home with a pool and three bedrooms 25 years ago but decided to stop making payments when their bank rejected their request for lower monthly payments. The Strawbridges were advised by their lawyer to short sell their home before being foreclosed on which only takes an average of 410 days in Florida, but they have decided to stay in their home until there are legally forced to leave.
If Florida passes legislation to expedite the foreclosure process, other states will probably follow suit. This means that people who are expecting to stay in their home for a year or more without making payments may be in for a rude awakening.