Judge Israel Reyes is giving the biggest U.S. banks a choice: Wrap up the home foreclosure cases clogging his Miami court, or dismiss them and walk away. Most are walking away, Bloomberg News’ David McLaughlin reports.
“Listen, it’s either settlement or trial today. That’s it,” Reyes, 51, a former homicide detective, said two weeks ago to one lawyer who sought an extension after the homeowner received a temporary loan modification. “This case is over a year old.”
Reyes, a judge for Florida’s 11th Judicial Circuit, is forcing banks to take their cases to trial to clear his backlog of almost 3,000 foreclosures. Instead of moving ahead, the companies are backing down. They’re dismissing their own cases or not showing up to trial because they’re not prepared or, according to lawyers for homeowners, they can’t come up with the evidence required to seize the properties.
Meanwhile, foreclosure activity across the U.S. is plummeting. Default notices, scheduled auctions and bank repossessions affected about 261,000 properties in the U.S. in January, a 17 percent decrease from a year earlier, according to RealtyTrac Inc. Lenders are “bogged down” reviewing foreclosure procedures and grappling with accusations of improper home seizures, RealtyTrac said in a Feb. 10 statement.
Florida’s foreclosure rate — the proportion of housing units in foreclosure or bank-owned — dropped 54 percent from a year ago, according to Irvine, California-based RealtyTrac, which collects foreclosure data.
Foreclosures in Florida are typically approved at the summary judgment stage, before trial. At trial, a bank that’s unprepared to prove its case risks losing. Banks can voluntarily dismiss a case once and refile it. Generally, a second dismissal is final and the case can’t be refiled, preventing the lender from seizing the home, according to Mike Wasylik, a Florida attorney who defends homeowners in foreclosure cases.