CALL has been provided a copy of a draft bill entitled the "Non-Judicial Foreclosure Act," which is being proposed by the banking industry.  So far, the Non-Judicial Foreclosure Act (the "Act") has not yet been filed as a bill.  It is anticipated, however, that a bill containing the Act will be filed prior to the start of the Legislative Session in March.  The Act has been getting quite a bit of news coverage recently, so we wanted to bring this issue to the attention of our CALL members. 

 The Act would allow lenders (and community associations) to pursue foreclosures outside of the court system, for foreclosure actions commenced after July 1, 2010.  Under the Act, the lender begins the process by filing a notice of default in the public records.  No sooner than 90 days after the filing of this notice, and no later than one year after the filing of this notice, a second notice is served on the applicable parties and a private, non-judicial sale of the property occurs.  The foreclosure sale ultimately occurs either by auction or by negotiated sale.  The Act also provides for a quasi-mediation/meeting between the applicable parties.  Finally, the party being foreclosed upon has the ability to appeal the process by seeking judicial review within the court system. 

The banking industry is pushing the Act because they believe it will relieve some of the burden on the overwhelmed court system and increase the speed by which the foreclosure process occurs.  The banks further assert that many other states utilize non-judicial foreclosures already. 

 CALL's concerns with the Act are as follows:

• The Act, as currently written, will allow the banks to terminate (and later restart) the non-judicial foreclosure process at any point, without penalty, making the promise of an expedited process somewhat illusory; 
• The cost (up to a $1,900 filing fee) imposed upon foreclosed owners who choose to appeal the non-judicial foreclosure sale and seek judicial review within the court system; and 
• The possible erosion of property rights and the due process of law within Florida. 

 CALL is closely monitoring this potential bill and will let our members know if, in fact, a bill containing the Act is filed.  CALL certainly supports legislation that speeds up the existing foreclosure process, which is ultimately costing community associations throughout Florida millions of dollars in lost assessments.  However, we are concerned about the implications of allowing banks, many of whom have been intentionally delaying pending foreclosure cases for months and years, complete control over the foreclosure process.  CALL will seek to have protective language for community associations added to the bill, in the event it is filed. 

 We will continue to keep you updated on this most important development.  A copy of the draft of the Act that CALL has been provided has been posted on the CALL website (www.callbp.com) under the "Legislation" tab. 

Sincerely,

Yeline Goin and David Muller, Co-Executive Directors
Community Association Leadership Lobby (CALL)