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Florida's foreclosure courts set to run out of money June 31

We have spoken before in this blog about Florida’s special foreclosure court. The state set up the courts in 2013 to deal with the huge backlog of foreclosure cases. The system has been somewhat controversial, and it may be going away soon.

The Palm Beach Post is reporting that the funds set aside to create the foreclosure courts around Florida are set to expire on June 31. For homeowners in the middle of foreclosure proceedings, this could mean that their cases will be transferred to new judges, which can be disruptive. But it may benefit borrowers in the long term.

The Legislature budgeted $21 million to create the foreclosure courts, with the funds coming from the National Mortgage Settlement, a settlement of litigation between the federal government and the U.S.’ five largest banks. That money is set to run out at the end of June, at which point new and unresolved cases apparently will transfer to regular courts.

The chief judge of Palm Beach County compared defunding the foreclosure courts to carrying a football to the five-yard line, but not doing enough to get into the end zone. There were just under 110,000 pending foreclosure cases in Florida courts in January 2015, a fraction of the 329,171 active cases in June 2013.

However, the foreclosure court system had drawbacks that some observers said put homeowners at a disadvantage. One attorney compared it to a “wheel of fortune” because different judges presided over a case’s various hearings and motions. The judges may have little knowledge about a particular case, or be overly deferential to other judge’s prior decisions.

So, the disappearance of the foreclosure courts could have both positive and negative effects for homeowners currently dealing with foreclosure.

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