The State of Florida is diverting hundreds of millions of taxpayer dollars to fund a foreclosure system that is succeeding primarily in returning homes in foreclosure back to the banks.   The pressure from Tallahassee to “Clear the Foreclosure Backlog” is turning Foreclosure courtrooms into gladiator pits of chaos, confusion and recklessness that diminishes the dignity of the entire judicial system.

Not nearly enough people are asking the question.

Why?

Why has the state of Florida decided that clearing the foreclosure backlog (as opposed to keeping families in homes) is the priority of the court system? 

Having spent many years traveling to Tallahassee and trying to address the insistence of the legislature that foreclosure laws must change, I still have heard no good answer to that question.  Over and over I hear policy makers say, “real estate is the key to Florida’s economy”. Real estate certainly is and if the homes in foreclosure were making their way into the hands of private parties, to local realtors, to local property investors and ultimately to local families….I could understand why policy makers think “Clearing the Foreclosure Backlog!” is a proper public policy mandate.

But the general public and policymakers first need to understand that their perception of what the end result of a foreclosure case is is not reality.  Most people think that at the end of a foreclosure the “bad” family is forced to move out so that some new and deserving family moves in, starts taking care of the yard and putting up a new white picket fence.  The data here in Pinellas County shows this is not at all the case.

Look at the total numbers for foreclosure Auctions so far in Pinellas County, 2014:

Total Auctions:         1340
Total to Third Pary: 221
Total Bid Amount: $16,410,048.88
Clerk Fees: $260,716.48
Doc Stamps: $650,596.10
The spreadsheet for the data is listed below.  Beyond the very small number of actual money changing hands, the far more curious aspect of the data in these sales figures is the fact that of the 1341 auctions, only 221 of those properties made their way into hands of third party bidders.  Why is this important?  Because this data set reveals the fallacy of the white picket fence foreclosure delusion.  Something is happening with all these foreclosed homes that is not being revealed to the general public.  “The Banks” (we know that in the vast majority of these cases it’s not Bank of America or Wells Fargo or Citi that owns the properties, its Fannie Mae/Freddie Mac or other trusts…”The Banks” are just the straw parties) are taking back title to these homes at the end of the auction.  But are “The Banks” taking possession of the homes?  Well who knows.  We really have no good way of knowing what’s happening with these properties. What we do know is that for a whole range of reasons, “The Banks” are forcing up the auction prices, sometimes with bidding instructions that force them to pay whatever price is necessary to take back title to the properties. The most significant fact revealed in this data set is that third party purchasers are being excluded from the foreclosure purchase market.  Why?  Why are “The Banks” not allowing the market to determine the price of the foreclosed properties.

Click on this link and work through the spreadsheet.  The data tells the most important story in foreclosures that is not being told.

 

The next data set is even more compelling.  The State of Florida is in fact diverting hundreds of millions of dollars away from productive and constructive uses like schools and health care to fund the 2014 foreclosure purge which (see data above) does nothing but reward “The Banks” with more foreclosures.  Take a look at this

Total Number of Foreclosure Auctions Scheduled Pinellas County First Half 2014: 3359

Think about that number.  We could find the budget figure and determine exactly how many millions of taxpayer dollars were spent on foreclosure courts and see just how much each auction “cost” taxpayers.  And when you consider that the vast majority of auctions result in properties being returned to banks, you see that this taxpayer money we’re spending is being spent to return assets back to “The Banks”. Hardly an appropriate use of taxpayer dollars in my estimation.

PinellasForeclosures2014

 

In Pinellas county there were 14,057 foreclosure cases opened in 2012 and 6,712 case “re-opened”  So a “closed” foreclosure case is hardly the end of the story.  Back to that question…how many millions of taxpayer dollars are we spending to fund a court system that closes foreclosure cases for the banks…and then just reopens a vast number of them?

And then this data set.  In 2013, there were 4,437  foreclosure cases dismissed, 5,142 cases disposed by judge for a total number of foreclosure cases “disposed” of 9,632.  Two questions. Divide court expenditures by teh number “disposed” to determine how much each “disposal” cost taxpayers.  But the bigger and more troubling question…..how many of those 9,632 “disposed” will not actually be sold, but will be either returned to “The Banks” or the case re-opened?

That’s the bigger public policy question…the question no one is talking about.

Florida’s court system receives less than 1% of the state’s total budget. But the recession that gripped the United States still forced significant cuts in court budgets and staff positions – even as Florida’s citizens and businesses turned to the courts in greater numbers.

MORE HERE

 

The judicial branch is the last, the only check that citizens have against the gross and out of control abuses we see all around us.  How can we ever expect to have any real justice when we do not have a properly funded judicial system?

One Comment

  • Mark Bowen says:

    Then the Judiciary needs to stop sucking off the Legislature’s teet and start adjudicating each case independently, fairly and impartially according to law regardless of funding. Let the courts shut down because the Legislature refuses to appropriate funding; let’s see how long that lasts. The fact is, the Judiciary is no less controlled by the corporate lobby than any other branch of government; it won’t be until their separate but co-equal feet are held to the fire (no more unlawful policy excuses) that justice will ever be had in our courts (don’t hold your breath).

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